Hello everyone,

I’ve saved around £5k, and now I’m looking to invest it somewhere where I can get some good return. It’s not a huge amount so I’m thinking to start with investment in Gold. I’ve been following Gold trend from past 4-5 months and have seen that it did hit more than $900 and came back to norm. Now once again recently I’ve read several articles suggesting that Gold is gona shoot again.

So just want a suggestion is it the right time to buy Gold or wait for few more days?

Also could you guys tell me few basic techniques of Gold trading? Btw I’ve decided to use bullianvault.

Regards
Faraz

I am pretty much new to the game also. I can offer a little advice, though there are others here who are better informed. I think now is as good a time as any to buy. Gold has consolidated at this level. In my opinion it is likely to go sideways for the summer... though no doubt will still be volatile. Buying and holding some coins is the way to preserve your wealth.

As for trading, others might be able to help you with that. I only buy and hold. Personally, I would hate to trade gold as it is so volatile and I do not have the nerves for it. For me gold is primarily a divestment out of cash and the best way to preserve wealth today.

Good luck with your investments in gold.

I know what you mean. For weeks we've had "dollar is stronger", the a few days later "dollar weakens", then stronger, then back to weakening again, with gold going up and down as a result (at least according to Kitco).

Good coin thread here.

I am not the right person to give you full answers, but do you even know what you mean by 'trading'? Are you going to play every day to catch the 'ups' and 'downs' so you can try and make a few quid, or are you looking for a medium to long term investment that has fairly good chances of decent return? Decide which you want then do your own research, although you don't really have enough capital to do efficient short-term trading (unless you want risky betting).

To answer the OP, roundabout now seems as good a time as any to buy, but again do some research. Loads of info here and elsewhere.

Yep. I only go long and stay long. Looking at the graphs in the market these days looks like it is having a heart attack. I wonder how long it can all last. Got to feel sorry for those traders. Must be hellish.

Wasn't the right time to invest in Gold 1997 or thereabouts?

Mid 1999 if you want to split hairs:

http://www.pensions.gold.org/assets/file/p...hart/index.html

Still doesn't mean it can't go up some more!

if you look at the spike around 1980 and then adjust for inflation, a similar peak today would be around 2300$/oz

There are many reasons for buying gold. However, every time I look at the fundamentals, I come back to the same conclusion; it is an essential part of an asset portfolio.

Also don't forget Silver. Silver has different industrial uses and hence the global 'stock' is being eroded. Indeed, an increase in demand could come from solar cells which use silver because of it's superior conductivity.

silver ramp over

edit - some ramps links for you:

http://www.moneyweek.com/file/28810/why-th...et-to-soar.html

Silver price: declining supply

Before looking at the demand side of the silver equation it is important to consider the supply side.

In 1900 there were 12 billion oz of silver in the world. By 1990, the internationally respected commodities-research firm CPM Group say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to about 300 million ounces in above ground refined silver. It is estimated that 95% of the silver ever mined has been consumed by the global photography, technology, medical, defence and electronic industries. This silver is gone forever.

http://re.jrc.ec.europa.eu/pvgis/doc/paper...al_1percent.pdf

last para: In general 1% PV electricity is possible, even 2%, if
energy saving measures are introduced. In order to avoid
material shortages production capacities for silicon
feedstock have to be ramped up at the same growth rates
than solar cell production. New cell and module designs
need to be introduced to avoid a dominating dependency
on rare materials like silver.


thanks to the guys on the NI Forum for the last link

In my opinion one should not panic buy, particularly when gold is shooting up, but to build up a stash by drip feeding into the market.

This following was a topic of a Money Morning email last week, 11/6/08, which pondered on the idea of Gold going to $6,250 and $8,500 an ounce based on inflation and the circumstances of the 1970's and now -



From the late ‘80s until now, that sleazy operator inflation barely got a mention, though we were living through two decades of never-before-seen money supply growth. Who cared? He was serenading stocks and houses and we were getting richer. “That’s nice,” we said, “but ssshh”.

But now the old cad has dumped poor, dear housing and stocks for a new lover: commodities – food, metals and energy – and polite society is outraged. “How could he?” we are all saying. And that’s part of the problem – the fact that we are all suddenly talking about inflation. The genie is out of the bag and it’s going to be impossible to get him back in.

That hasn’t prevented the world’s top central bankers from going on a concerted genie-suppressing effort. Bernanke, King and Trichet have all spoke out on the subject this week. But it is too late for that. Pandora’s Box has been opened.

In the long-term it does not matter what central bankers say. What matters is what they have done. Gold and oil are going to go a lot higher. But how high? I’ll tell you. Perhaps $8,500 for gold and $400 for oil.

Here’s why…
The first thing to note is that Federal Reserve chief Ben Bernanke’s words last week and again this week did send the gold price down. We must thank him for that – he’s given us another buying opportunity. As I said before, I still see $850 an ounce, or just below, as an obvious floor, and that is where I – and probably half the world’s hedge-funds – have placed my buy-orders.

Central bankers can’t talk down inflation

But despite all the rhetoric, nobody has actually done anything yet. Is Bernanke really going to raise rates by anything significant, just as we head into a derivatives crisis? Even my granny’s budgie knows you can’t raise rates when a business downturn is accelerating. Trichet’s hands are similarly tied. Despite the German terror of inflation, the problems in Spain, Ireland and Italy are just too pronounced. Mervyn King also seems to understand the inflationary danger we are in, but can you see him embarking on a major rate-raising cycle with the spectre of Gordon Brown breathing down his neck like some ghoulish character out of Lord Of The Rings?

So instead they are concentrating on ‘inflation expectations’ – the perception of the problem. But if your house is going down in value, if your salary is not rising, (indeed if your job is under threat), if your pension pot has emptied and your earnings are buying you less and less each year, it does not matter how loudly the central bankers shout about it - everything around you, from the wind in the trees to the traffic, will be screaming inflation.

How typical of today’s authorities to be more worried about the perception of inflation than inflation itself. It is like being more concerned about the employment numbers – or what people think of the employment numbers – than with the serious problem of unemployment. It shows the shallow world of soundbite and lazy policy in which we now live. Sooner or later it will come back and bite us all, but by then it will be too late.

Mark my words, inflation is about to accelerate as the authorities attempt to deal with this now-inevitable derivatives crisis. I would advise you to keep your eyes on the inflation train coming down the track, rather than the butterflies on the buddleia on the sidings that the central bankers would have you look at.

The next big bubble – and it ain’t commodities

Why, oh why would anyone buy a bond or a gilt? You might get yields of 3%, 4% or 5%, but the cost of living is patently rising by so much more than that. Virtually guaranteed to lose purchasing power, it just doesn’t make any sense.

So why are people buying them? It’s because bonds are perceived as safe. But I can’t help but think now that the inflation genie is out, more and more people will come to realise the truth about the declining purchasing power of their money and move their funds elsewhere.

There’s been endless talk of commodities being in a bubble. Oil is in a bubble, we hear. But supply has to exceed demand in a bubble. In the case of oil, it doesn't. Last February for the first time in the history of the world demand for oil exceeded production – that situation has remained the case for 90 days. But there is no supply shortage of bonds. And you have to question the real value and use of the underlying asset.

The bubble, if it’s anywhere, is in bonds and they, in my humble opinion, will be the next one to pop.

So how high will gold and oil go?

Well, history shows us what is possible.

The most obvious time to look to for parallels is the 1970s. Then the gold price went from the artificially suppressed price of $35 an ounce to $850. That is a rise of, give or take, 2,500%. A similar 2,500% rise from the artificially suppressed 1999 low of $250 would take us to $6,250. That is what happened before.

However, there are lots of differences between then and now: in those days interest rates were higher, the threat from derivatives was not as pronounced, debt was lower, there was not such a global crisis in banks, money supply growth was not so out of control, and crucially, Gordon Brown and Ben Bernanke were not in charge. So perhaps $6,250 is a little conservative.

Michael Hampton, who is the best trader I know, uses all sorts of cycles and technical indicators in his work and is continually looking for fractal (repeating) patterns. Among other things, he has what he calls his simple ‘ten for’ rule. Let me explain.

He argues that a 1970s dollar had about ten times the value of a 2000 vintage dollar. For example, the S&P averaged around 100 in the 1970s. It is over 1,000 this decade. Similarly the Dow averaged around 800-1,000, while for the Noughties that figure is around 10,000. Gold began the ‘70s at $35, it began the ‘00s at almost $300.

By the same reckoning, he argues that if gold went to $850 last time, it could spike to $8,500 this time.

He uses the same argument for oil. It went from low single-digits to $13 by the end of the 1974 oil crisis. Now oil has gone from $10 to over $130. By the end of the decade oil went from $13 to almost $40. So Mr Hampton, not unreasonably in my view, has a possible eventual target of $400 for oil (which he sees by 2012-13, by the way).

Some food for thought.

Two of the people in the article post on here. (Michael Hampton = Dr. Bubb, Dominic Frisby = Frizzers.) So I guess you can ask them directly.

My view is that if you are buying gold for insurance then anytime is the right time. After all you wouldn't buy car insurance after you had crashed your car, or life insurance after you had died.

i am also looking to invest in gold and fancy investing in physical coins. Can i ask if anyone knows the amount you loose by selling them back, ie what would you typically pay as a premium to the dealers including purchasing them.

the other thing that worries me is if gold got to say the dizzy heights of $3-5000 per ounce who would be buying it at that price physically, surely demand would fall away and trying to cash out could be difficult?

Read this article from the very top of the last gold bull market.

http://www.time.com/time/magazine/article/...,923918,00.html

Thx for that , very interesting.

wonder how this equates to today, havent got the figuers to hand to do the comparison.

"Seven pounds of the metal would pay for a typical American single-family home. A suitcase of bullion would buy an oil tanker of crude."