What Kind Of Gold Or Silver For Investment?

[wtw2]

Hi Guys.

When it comes to investing in gold and silver a lot of people say buy "Physical". Does this mean that I buy SCRAP gold and silver and stock it up in a safe in my house or buy gold or silver BULLION/COINS and keep them in a safe etc?

If for example I wanted to buy £10000 of gold bullion and I didnt want to keep this in a safe at home, if I was to keep it in a bank vault or some other form of safe keeping, I obviously would have fees to pay for keeping it there. Now lets say I had £10000 cash in a bank account, even though the interest rate is very small, I wouldnt be paying the fees to store £10000 of gold bullion, so I would still be better of with the cash in the bank gaining interest.

So how is keeping gold bullion in a bank vault a better investment when I have to pay monthly/annual fees to keep it there in the first place??

Im of course missing the bigger picture here, but need someone to explain it to me

[SpectrumFX]

Hi Guys.

When it comes to investing in gold and silver a lot of people say buy "Physical". Does this mean that I buy SCRAP gold and silver and stock it up in a safe in my house or buy gold or silver BULLION/COINS and keep them in a safe etc?

If for example I wanted to buy £10000 of gold bullion and I didnt want to keep this in a safe at home, if I was to keep it in a bank vault or some other form of safe keeping, I obviously would have fees to pay for keeping it there. Now lets say I had £10000 cash in a bank account, even though the interest rate is very small, I wouldnt be paying the fees to store £10000 of gold bullion, so I would still be better of with the cash in the bank gaining interest.

So how is keeping gold bullion in a bank vault a better investment when I have to pay monthly/annual fees to keep it there in the first place??

Im of course missing the bigger picture here, but need someone to explain it to me

The idea is that you buy the gold on the expectation that there's going to be some sort of currency devaluation (hyperinflationary event) which will seriously reduce the spending power of any cash holdings you may have.

If you don't think that's going to happen then it's a terrible idea, because you've exposed yourself to fluctuations in the gold price, and have to cover the costs of holding the gold.

So if you think we're heading for significant inflation buy gold (and/or other assets). If you don't then don't buy gold.

The big question is, are we heading for inflation, or deflation?

I don't know the answer to that one, but it's been argued to death on these forums, so there's plenty to read up on in the archives.

Have a read around, form an opinion, and act accordingly

Edit to add: Some people make a living (or lose it) trading various things, and these people might buy gold simply because they've analysed the market and think that the price is going to go up. I wouldn't recommend trading gold ( or anything else) unless you've got a very good understanding of what you’re doing, or you've taken some proper financial advice from a suitably qualified financial adviser.

Edited July 2, 2010 by SpectrumFX

[wtw2]

The idea is that you buy the gold on the expectation that there's going to be some sort of currency devaluation (hyperinflationary event) which will seriously reduce the spending power of any cash holdings you may have.

If you don't think that's going to happen then it's a terrible idea, because you've exposed yourself to fluctuations in the gold price, and have to cover the costs of holding the gold.

So if you think we're heading for significant inflation buy gold (and/or other assets). If you don't then don't buy gold.

The big question is, are we heading for inflation, or deflation?

I don't know the answer to that one, but it's been argued to death on these forums, so there's plenty to read up on in the archives.

Have a read around, form an opinion, and act accordingly

Edit to add: Some people make a living (or lose it) trading various things, and these people might buy gold simply because they've analysed the market and think that the price is going to go up. I wouldn't recommend trading gold ( or anything else) unless you've got a very good understanding of what you’re doing, or you've taken some proper financial advice from a suitably qualified financial adviser.

Thanks for the good explanation. Yeah im reading on here peoples opinions for both.

Cheers w.

[tiggerthetiger]

Hi Guys.

When it comes to investing in gold and silver a lot of people say buy "Physical". Does this mean that I buy SCRAP gold and silver and stock it up in a safe in my house or buy gold or silver BULLION/COINS and keep them in a safe etc?

Im of course missing the bigger picture here, but need someone to explain it to me

£10,000 is only about 11 Krugerrands. So why not keep them in a heavy and decent safe at home.?? How many times in your life has your house been broken into.?

Gold has risen at a pace the last ten years. I wouldnt like to say that it will carry on rising but if you think it will then why not take a chance and sell in five years.

Noone can say for usre wha will happen.

Edited July 2, 2010 by tiggerthetiger

[NotMyHouse]

£10,000 is only about 11 Krugerrands. So why not keep them in a heavy and decent safe at home.?? How many times in your life has your house been broken into.?

Who needs a safe? How many places must there be in a house to hide eleven Krugs? You can put them in your water cistern in the roof and they'll be quite fine up there. Just don't let on to ANYONE that you have them.

[tiggerthetiger]

Who needs a safe? How many places must there be in a house to hide eleven Krugs? You can put them in your water cistern in the roof and they'll be quite fine up there. Just don't let on to ANYONE that you have them.

So if you get ran over and die...?

[Quiet Guy]

Hi Guys.

When it comes to investing in gold and silver a lot of people say buy "Physical". Does this mean that I buy SCRAP gold and silver and stock it up in a safe in my house or buy gold or silver BULLION/COINS and keep them in a safe etc?

If for example I wanted to buy £10000 of gold bullion and I didnt want to keep this in a safe at home, if I was to keep it in a bank vault or some other form of safe keeping, I obviously would have fees to pay for keeping it there. Now lets say I had £10000 cash in a bank account, even though the interest rate is very small, I wouldnt be paying the fees to store £10000 of gold bullion, so I would still be better of with the cash in the bank gaining interest.

So how is keeping gold bullion in a bank vault a better investment when I have to pay monthly/annual fees to keep it there in the first place??

Im of course missing the bigger picture here, but need someone to explain it to me

Hi Wtw2

I'll try to answer some of your questions:

Q. "Now lets say I had £10000 cash in a bank account, even though the interest rate is very small, I wouldnt be paying the fees to store £10000 of gold bullion, so I would still be better of with the cash in the bank gaining interest."

A. I think there are two reasons that people buy gold in some form:

- One is that there is real concern about a monetary system meltdown due to eceonomic mismanagement that destroys the value of savings.

- The other is that gold has performed paricularly well priced in pounds over the last decade (try playing with the 1 year, 5 year and 10 year buttons at http://www.kitco.com/gold_currency/charts.htm?GBP)

Critics of gold holders might say that people who worry about currency crises are nutjobs and gold is just another bubble. Make your choice.

Q. "When it comes to investing in gold and silver a lot of people say buy "Physical". Does this mean that I buy SCRAP gold and silver and stock it up in a safe in my house or buy gold or silver BULLION/COINS and keep them in a safe etc?"

A. You definitely don't want scrap. You wants bars or coins. I prefer sovereigns or brittanias because they have legal tender status which is exempt from CGT.

Regarding storage, you could use Bullionvault (http://www.bullionvault.com/) or allocated storage at Bairds (see "Can you store my gold for me?" at http://www.goldline.co.uk/faqPage.page)

The idea behind holding gold directly is to eliminate counter party risk i.e. there is no chance that the party you trust to hold your gold goes bust. On the other hand, the purchase cost of buying physical will always be highest; expect a 15% differential between buying and selling physical so you cannot expect to profit this way in the short term.

Lastly, I think it's worth pointing out that even one of the most famous gold bulls, Jim Sinclair, expects gold prices to become very volatile in the future. Gold might not be a good investment for nervous people

[Guest spp]

SILVER at $17 is just stupidly cheap! Coininvestdirect goes by spot, spot = paper price.

MELT THE WITCH...BUY PHYSICAL SILVER.

http://news.silverseek.com/SilverSeek/1210917480.php

The banksters days are almost up.

Edited July 3, 2010 by spp

[Lagarde's Drift]

So if you get ran over and die...?

Well, you wouldn't need the gold then, would you?

[tiggerthetiger]

Well, you wouldn't need the gold then, would you?

Nope....and your heirs wouldnt benefit at all from it...unless you are tighter than a ducks proverbial

['Bart']

Well, you wouldn't need the gold then, would you?

Got to admit, there's a certain logic to that.

If you have a will and appointed an executor, you'd probably be advised to let them in on it.

[tiggerthetiger]

Got to admit, there's a certain logic to that.

If you have a will and appointed an executor, you'd probably be advised to let them in on it.

Thats true enough....something like : I bequeth all my worldly goods and the 10 krugerrands which are secreted away in the water cistern in my loft to ...

Probably need a witness to go with the executor up into the loft

[newbonic]

Got to admit, there's a certain logic to that.

If you have a will and appointed an executor, you'd probably be advised to let them in on it.

...else there's may be a very happy (but dishonest) plumber fixing the water tank at some point in the future. Sort of like a naff 21st century version of a buried Roman gold hoard.

[wtw2]

Thanks guys for the replies.

I have access to a lot of scrap silver at the min (KGs). Might but it and use the money to purchase some gold coins or even some silver bullion.

[Take Me Back To London!]

SILVER at $17 is just stupidly cheap! Coininvestdirect goes by spot, spot = paper price.

MELT THE WITCH...BUY PHYSICAL SILVER.

http://news.silverseek.com/SilverSeek/1210917480.php

The banksters days are almost up.

Those Austrian, U.S. and Canadian "Master Boxes" containing 500 silver ounces, look tempting, even more so with the European 7% VAT rate for silver coins, if you get them shipped to a non-UK address.

[audi tt]

so what about diamonds? how have they done over the last ten years? info anyone?

[Scott Sando]

so what about diamonds? how have they done over the last ten years? info anyone?

Diamonds are not rare at all its just that the people who own the rights to them keep market supply scarce. There's big warehouses full of them sitting in tins. Rumor has it that the people who mine them actually burn them off in incinerators there's so many.But if you want to believe that carbons a rare commodity then go ahead fill your boots.

['Bart']

so what about diamonds? how have they done over the last ten years? info anyone?

Isn't the problem with diamonds these days is that there is a way to make diamonds artificially. De Beers will doubtless keep pushing the line that a "real" diamond is better, and where things like wedding rings are concerned, they'll probably succeed.

[Grimbert]

Diamonds fail in one test to determine their suitability as money / a store of wealth. They lack fungibility. No two diamonds are exactly the same, so you can't swap them for other diamonds easily, whereas all my American SIlver eagles are the same.

[wtw2]

Will they ever find a method in the future to replicate Gold and Silver?

Silver is a great industrial metal for superior conductivy for 1 of many reasons.

If its going to be in such high demand in the future for industrial use you would think that they could replicate its properties

thus ending the demand for it?

[HighHeight]

The best fold investnent is the physical gold. Goog fees to buying and selling gold here