Is gold a good investment

cisco

Registered User
Messages
35
would it be a good idea to buy gold now.
anyone know if this can be done online.
 

soy

Frequent Poster
Messages
701
There is a very extensive thread on everything you could ever want to know about Gold as an investment. Try a search for Gold using search function in the menu bar on the top of this page.
 
S

sam1

Guest
Yea gold is a good buy when all the real estate prices and stocks are taking a beating... gold prices seem to be maintained high.. so it should be a good investment.
 

dunkamania

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186
Gold is priced in USD, so saying its price seems to be maintained high ignores the moves in EUR/USD
 
L

lemur

Guest
would it be a good idea to buy gold now.
anyone know if this can be done online.
Cisco - You can buy physical at either Goldmoney.com or Bullionvault.com. They also store it v cheaply for you.

You can buy gold futures with the spreadbettors if you know how to speculate on the price action.
 

smiley

Frequent Poster
Messages
464
Warren Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

In 1977 Buffett was also quoted as saying about stocks, gold, farmland, and inflation: "stocks are probably still the best of all the poor alternatives in an era of inflation - at least they are if you buy in at appropriate prices."
 

george.shaw

Frequent Poster
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252
Warren Buffett is a very smart man but not all knowing and not God .

He clearly has a blind spot regarding gold. This may be his downfall and the believers who follow him downfall. His lack of diversification and overwhelming focus on stocks is likely to lose him a lot of money in the coming years, as it has in recent months.

‘A beginner's guide to investing in gold’ is worth a look at:
http://www.moneyweek.com/investments/precious-metals-and-gems/a-beginners-guide-to-investing-in-gold.aspx

Gold is a safe haven asset and the only asset class that is not someone elses liability and this is why it is thriving in the current environment and ws one of the only asset classes to be up last year. It will likely reach its inflation adjusted high of $2,300 per ounce in the next few years.
Gold is the only finite currency - as JP Morgan once testified to Congress, "Gold is money and nothing else". Even more pertinently and more recently Alan Greenspan said "Gold still represents the ultimate form of payment in the world. . . . Fiat money, in extremis, is accepted by nobody. Gold is always accepted" (Speech to Senate Banking Committee in May 1999).
This is a very important consideration when central banks internationally are printing currency on an unprecedented scale.

‘Gold to rise for eighth consecutive year’
http://www.telegraph.co.uk/finance/personalfinance/investing/4162212/Gold-to-rise-for-eighth-consecutive-year.html .

Merrill Lynch says rich turning to gold bars and not etf’s for safety
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4177766/Merrill-Lynch-says-rich-turning-to-gold-bars-for-safety.html
 

33cl

Registered User
Messages
21
I bought €34,000 worth of gold in Feb 07, it's now worth just over €40,000 which is a 17% gain. Not great but better than any regular savings accounts here and what with the continuing global financial crisis and the dollar decline, I'm holding on to it. If you look at charts of the gold price in € and $, they've followed a fairly similar pattern in the last 8 years, despite € strengthening vs the dollar. Gold & silver = ancient and trusted form of currency worldwide and classic hedge against inflation, where as Euros and Dollars not backed by gold = fiat currency created out of thin air practically.
 
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jimbobman

Guest
deflation will bring down the price of gold over the next few years
 

george.shaw

Frequent Poster
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252
Jim bob: "deflation will bring down the price of gold over the next few years."

No one has a crystal ball Jimbob and you are likely to be proved very wrong.

2008 saw possibly the worst deflationary crash since the 1930's with major property markets and equity marlets down between 20% and 50% and yet gold was up some 7% in US dollars, 10% in euros and over 40% in sterling terms.

Also worth recalling that during the Great Depression, the Dow Jones fell by 90% and property markets by some 50% and yet gold rose by 60%. The dollar was backed by gold and Roosevelt devalued the dollar and revalued gold by 60% from $22/oz to $35/oz.

Thus even during the worst deflationary crash in modern economic times, gold handsomely rewarded those who owned it.

As ever best to be properly diversified and be prepared for all scenarios - deflation and a possible systemic crash, stagflation and hyperinflation.
 

Chris

Frequent Poster
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1,323
I agree with goerage.shaw.
The low inflation and possibility of deflation is mainly due to lots of companies going out of business and the subsequent closing down sales (in my opinion). What also has to be considered is that prices rise when there is more money competing for a limited supply of goods and services. With all the bailouts around the world, printing presses will be working overtime in the next couple of years (especially the US one with a predicted $1trillion this year). Monetary inflation will inevitably lead to price inflation, with a possibility of hyperinflation.
Bottom line is that a well diversified portfolio will include gold regardless of economic environment, and it is a very good 'insurance' against hyperinflation (however large or small that possibility may be).
 

george.shaw

Frequent Poster
Messages
252
Might be an idea to look up the meaning of the word "likely" Dunk.

A case of attacking the man and not the ball me thinks - and this is the second time.

Askaboutmoney Forum guideline 19 might be apposite
19. Please stay on topic

Obviously have an issue discussing the actual thread which is whether "gold is a good investment".
 

george.shaw

Frequent Poster
Messages
252
1. Was just reading about your namesake last week Aristotle - in a book called ‘Gold: The Once and Future Money’
2. http://books.google.ie/books?id=m82jozV3Qw4C&pg=PA22&lpg=PA22&dq=plato+slave+gold+money+aristotle&source=web&ots=MOVU5Q2E8K&sig=T_wJ7uAPe0YQYaDiC-TKIhhNOvE&hl=en&sa=X&oi=book_result&resnum=2&ct=result#PPA19,M1

Great story of how Plato thought money did not need to be gold and or silver and advised the King of Syracus to use tin and to put a higher fiat value over the intrinsic value of the tin. The currency quickly failed and the economy collapsed and Plato was promptly sold into slavery by the king.

Plato’s pupil Aristotle rejected soft money and debased currency and believed that money should be gold and silver coinage and not base metal or paper. He advised Alexander the Great and Alexander adopted his hard money system which helped lead to a monetary system based on silver and a stable economy throughout the Mediterranean and in the Middle East.
 

Askar

Frequent Poster
Messages
302
Were cocoa beans not currency at some stage in the Inca empire of South America?

Why would gold or silver work any better as a currency then tin?

How, practically speaking, would gold insure you against hyperinflation? Can you get your gold bars and melt them down into little pieces and start bartering for your dinner??

I suppose the bulls have to find something to get excited about.
 

george.shaw

Frequent Poster
Messages
252
Gold is the only currency that has retained value throughout history and that is because it is extremely rare. If all the gold in the world were refined (made 0.9999 pure) and formed in a huge cube it would fit nicely on centre court on Wimbledon or beneath the Eiffel Tower.

Basic law of economics is supply and demand. Gold supply is only increasing at some 2% per annum and rate of increase is decreasing whereas international money supplies are growing at between 10% at low end of spectrum to 100's of percent at high end of spectrum.

The supply of gold is very small unlike tin and is finite unlike cocoa beans - more cocoa beans can be produced and crop substitution can take place.

Paper money is not finite and is increasingly being printed and supplied at unprecedented rates which will see the purchasing power of all paper currencies greatly diminished in the coming years. The price of goods will not go up rather our purchasing power will fall sharply once the vicious deflation we are currently experiencing abates.
 
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