Gold Investing

Yes. There aren't really any pro's or con's.
Gold has always been the reserve in bad times, that's when it goes up in value. In good times it can drop a bit, but tends to stay fairly static. In all the years that i have bought gold i've never lost on it. It's really not a lot different to buying shares, buy low and sell high.
If you have never done it before though, you do need to be completely on top of world share prices so as to anticipate the best time to buy gold. The reason for that is the buy price has a massive impact on what you can make over the long term and even more so over the short term.
If there is any secret involved it's to have a good relationship and a lot of trust between you and whatever dealer you are buying or selling to. Over time you will learn when to sell, because until you do sell you won't make anything. For me, i buy and sell regularly making small amounts each time. I think that hanging onto gold for long periods of time only really works for the very wealthy and governments. For small scale investors you have to keep your eye on it all the time, there have been quite a few times over the years that i would have needed to sell if i hadn't kept my eye on things and would have made a loss. Not much of a loss, but a loss is loss.

 

Gold is of course an up and down market.24kt is currently at £1307 an ounce,last August it peaked an all time high of around £1560. Another peak was in September 2011 when it got to £1170.The main drawback is that you lose much of your gains in commission to who buys it from you,they will want their profit too!
A sovereign which sold for £350 on eBay today would leave you with just £304.
Worth a dabble in a small way,of a few thousand perhaps,could do better than banks at 0.25%!

 

Although I have never dabbled in metals, we may be experiencing relatively high inflation in the next 6 months (good for gold in times of high inflation) unless BoE intervenes heavily by raising base rates (traditional way to control inflation by central banks) which may push gold prices down. It’s too much of a gamble !

 

Yes. I invested in a kilo bullion just before Brexit. I still have it even though I could have sold a year or so ago at a considerable profit, more through luck than judgement, because of the fall in the pound following Brexit. The best place to buy, that I found, was Bullion by post. You will not really get it anywhere any cheaper as it is based on the spot price. Just checked and I would make about £10k if I sold now.

At the moment it is hovering around a historic high so possibly not the time to buy. A significant component of the Gold price is the pound dollar exchange rate as gold is priced in dollars per ounce. So if the pound falls against the dollar the gold price will, normally, rise by roughly the same, but not always.

It is worthy of note that you will be paying a significant premium on buying, check the daily prices for both buying and selling to see the difference on any of the major Uk retail sellers. The cost of buying decreases slightly the more you buy, as with most things. You will need a rise of about 7%, from memory, before you even break even.

Gold should really be only a small part, say 10%, of your overall investment strategy and you may well keep it for 10 years or more and make nothing.

Anyone who tells you that they can sell you gold at below "spot" price is lying and is out to scam you. You can also go for leveraged online trading in Gold, for example CFD's, this is a mugs game and you will in all likelyhood lose the lot.

Another alternative is investing deirectly in Gold miners' shares or Gold ETF's but we are now getting into a slightly different area than the reall shiny stuff.

 

Gold has been falling quite a bit lately,3.5% since June 1st,So anyone wealthy enough to have a kilo would in theory have lost £1,500 in that short time,and £9,000 since last August’s peak! However if purchased at a low of say late 2015,when it was £23,000 a kilo it would have gained £18,000 at today’s price.
It’s a matter of timing and a bit of luck...

 

I got quite a big bag of gold coins but, its decreasing in value a lot as now and then i dip into it and each the chocolate inside of them!

 

Yes, I bought at around 29k, from memory, and today I can sell today at (just checking) nearly 40k. Short time ago would have been quite a bit more, but it's the same with any investment, catching the high is more luck than skill.

 

Best sort ! Can’t eat the real stuff as King Midas found out !

 

I have so many questions about the practicalities of this.

1) My wife looked at this (mainly for her parents) and wasn't sure how to assess the reliability of places selling gold.

2) If you decide to sell it, assuming you need to find a broker?

3) Most curious - do people keep this in a bank/safety deposit - or a safe at home?

 

It really depends on how much you were considering buying,if a lot you might need a safe installed,or place it with a bank,house insurance wouldn’t cover it unless as jewellery items.
You could go for sovereigns,or Krugerrands from EBay for example,Full 8 gram sovereigns now selling at around £320 each,and Krugerrands £1,250,The problem is when you want to resell,you lose a good bit on commission costs,or a dealers profit margin.Gold is falling this week,and hard to say where it will go in future.

 

I used bullionbypost, been around a long time, very professional, certainly not a hole in the wall operation. They will also buy back immediately. Buy and sell prices live and updated by the hour.

I won't say where I keep mine for obvious reasons but if you do keep it at home it only requires a bit of imagination to hide it where it will not be found unless someone decides to spends days with a metal detector and dismantles your whole house. For example a 1kg bar is about the size of two cigarette packets, you could plaster it into a wall for example! (no I haven't done that). Really depends how much you have as to how where you keep it. If it's only 100g or so really easy to secrete about the house. Obviously you could keep it in a bank's safety deposit if it is a significant amount, for a smaller amount it wouldn't make sense to do that financially.

I suppose one of the disadvantages of a safe is that you are flagging up that something is inside of value.

Just out of interest they are selling sovereigns for £320 and buying back for £290, this is fairly typical. So you need a 10% rise in gold to just make your money back.

On a related issue; when entering into any significant financial transacation with any company look up their latest accounts on Companies House. The company I referenced has a turnover of £210m.

 

I once heard a tale from a friend that his granddads house build in the 1800s had gold coins plastered into the walls. Only no one knew which wall. Tale is when the house got demolished in the 70s and a new house built, the owners supposedly stood watch as each wall was flattened. Sad to say nothing was found, not even a few coppers .

 

I remember seeing in Las Vegas a vending machine that sold different sizes of gold bars I was so tempted to buy a few think it was in the Golden Nugget

 

I use Chards of Blackpool to buy and sell physical gold, good prices and very fair.
Another option is Glint, sign up for an account and you can load your account with cash and then buy gold, dollars or Euros. You can then designate which choice will be used as currency for spending.
I'm sure I've not explained it very well but a visit to their site would be worth your time.

 

Personally I wouldn't touch them, if this is Glintpay that you are talking about. You don't actually hold any gold yourself and they say they are holding gold in Zurich in amounts of 1kg upwards. You cannot get your hands on it unless you pay a premium.

Red flags all over the place for me.

Edit: Just found them on companies house. They were recently in administration (insolvency) and posted a loss of 2.5 million in their latest accounts, avoid!!

 

Maybe I am being conservative but the last accounts posted were not promising and the structure appears complicated, multiple connected companies. I would be interested in their latest accounts since insolvency which have not been posted. Last accounts year end 2019.

Administrative expenses of £2.7 million on a turnover of £200,000 is frightening!

When I invest in gold I prefer to have it in my hand rather than relying on someone saying they have invested it for me. It would also be interesting what price they are offering for gold, most companies show live prices on their site, they don't unless you sign up.