I am one of the MD's of Gold and Silver Investments Limited.
I have been reading this thread intermittently over the weeks and have enjoyed it.
In the light of increasing demand due to
Record & Unprecedented US Trade, Budget & Current Account Deficits
Rising Oil & Energy prices
Overvalued Property Markets
Record Consumer, Mortgage and National Debt Levels in the US & much of the western world
Recently Rising Interest Rates in the US and globally
A depreciating and declining US dollar - the global reserve currency
Geopolitical Instability and 'The War on Terror'
Increasing Pensions Difficulties and the 'Demographic Timebomb'
Increasing global investor demand for safe haven assets & Central Bank demand for gold in order to maintain full faith and provide stability to currencies and monetary reserves
and decreasing supply:
Mine production is stagnating, many have closed down. It takes 10 - 15 years to take a mine to production.
Central banks sales have slowed and in some cases reversed.
High Energy prices making mining an expensive proposition
Environmental legislation stymies mine development
It is estimated that all of the above ground stocks of gold could fit into a 20 Meter high cube, it is very finite.
I am amazed that anyone remotely informed does not see the merits of diversifying at least some 5% - 10% of their portfolio to gold bullion or other gold related investments.
With regard to the best way to buy gold – it depends on your motivation as one’s motivation for buying gold is fundamental to helping one distinguish between and evaluate the various options available.
Are you a speculator, investor or saver? Do you wish to take a short term speculative position in gold? Are you investing for the short, medium or long term?
Or are you diversifying, saving or using gold as a form of permanent financial insurance?
If you are speculating and have a short term horizon and want to go long and short then go with the ETF. The ETF is a paper derivative that tracks the price of gold and one does not own the underlying physical asset ( thus it is akin to spread betting without the leverage involved) . Also the 0.4% to 0.5% per annum charges and stamp duty make the ETF ideal for short term speculators and not for investors with a medium to long term outlook.
If you are investing then the Perth Mint Certificate Programme is a superior vehicle as you get an AAA rated government gold certificate from one of the wealthiest states in Australia in your name and there are no ongoing annual administration or storage charges which will eat into the value of the investment over time.
Diversification is key and a little speculation on the ETF, an investment in the Perth Mint Certificate and bullion in an allocated account or taking possession of a small amount of physical bullion is wise.
Happy Christmas and a peaceful and prosperous New Year to All