Key Post Is gold a good investment?

Macbookair

Registered User
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12
Silver is now at almost a 5 year low. Any advice on best place to buy and whether bars or coins? I have approx €1500 to invest.
 

landlord

Registered User
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954
W Buffet......
"Gold 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"

From seeking alpha......
"Paper currency is nothing but a piece of paper with some ink on it..Someone cuts a tree, manufactures a piece of paper and pours some ink on it..Then we cut down more trees, build large buildings to store that paper and pay people to stand around guarding it.. It has no utility. Anyone watching from Pluto would be scratching their head"

I have been invested in gold and silver bullion and heavily invested in gold/silver related stocks now since the start of 2016. It appears that technically speaking both gold and silver have recently broken out of 5 year bear markets. 71% up on portfolio so far. I think I timed my entry perfectly.....partly luck, but partly a real fear over world debt to GDP and central banks continuing money printing and in ability to deal effectively with this debt.
Any thoughts ?
 

MrEarl

Registered User
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2,241
Hi,

Just wondering, how are people buying and holding gold these days ?

  • there is an attraction to holding the physical gold, but also a need for appropriate security, there are obvious shipping costs etc. Then there is the question about whether to hold actual bars, or coins (with coins often having a lower true gold content etc.).
  • holding certificates for deposits at the likes of the Perth mint seems a more secure and convenient method, but the Irish "doomsday preppers" wouldn't be happy if they needed to get their hands on their gold quickly, due to some catastrophe.
Then there is the question about whether there is actually any real point in physically buying gold at all, or whether one might be better off buying a product that tracks the price of gold (I imagine there are ETFs for example, although I've not looked).

I would welcome some comments and observations from others as I think I'm ready to start putting a little money into gold, as part of a 7-10 year strategy.

Many thanks.
 
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landlord

Registered User
Messages
954
I would hold the physical personally with easy access, especially in the event of a financial meltdown or a major geopolitical event. I use Goldcore in Dublin which has great rates and an extremely reliable delivery service, however there are others. Don’t forget silver too!!! I buy coins and bars.
I also have a significant crypto holding (digital gold) as I do not know which will prevail in the event of geopolitical/financial meltdown.
 

Nickname

Registered User
Messages
22
@Mr Earl. I think it depends on your outlook and personal preference about protecting against major drop in stock market/currency (like the great recession 2007/2008) value OR complete collapse of "Fiat" currency.

For the type of physical goal, it depends how much you want to buy... for small amounts gold coins (e.g American Eagles) are probably best as they relatively easy to reseller as out buyers can validate integrity and content without expert input which is expensive. Also you can add and subtract from you holding rather than trying to get rid of bars. However coins you are more than likely getting less weight per euro spent. Look into the the cost of buying and selling as you be getting less than the "spot price" at both ends and if you add storage or delivery this can bring down your yield. Also if you are insuring at home consider that too.

I think that for physical gold you need to really consider security. Securely storing is costly either installing a safe or paying a vaul to store on your behalf. Storing at home is also problematic (i) from people you know friends, family, etc. (ii) from people who may by chance break into the place where you store gold (iii) people who may target you having found out you are storing large amounts of gold (either by friends blabbing or delivery person dropping of packages or trying to sell buy from other vendors/people). All these may be low probability risks but when you are trying to hedge against every major currency collapsing than they are probably equally likely.

I don't know enough about ETCs or Funds tracking gold price but I am sure they offer lower cost (so higher yield) and more liquid.

For the people touting doomsday scenarios I don't think there is any point in hedging against those events with gold. IF you are so certain this happening wouldn't it be better to quit your job travel the world enjoying yourself before every asset class turns to mush and the whole world ends up like Venezuela?

FYI - I don't hold much gold and compared to some of the posters I have a basic knowledge. So most of the above is personal opinion.
 
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