Gold

[whoami]

ETCs track the prices of commodities, not the exchange rates. The price of the fund in any currency will reflect the price of the commodity, not the currency it's traded in.

Oh dear. You can lead a horse to water but... etc :angry:

Look, PiXeL8r explained the process very well and with more patience than I would have mustered. Go back and read that post again until you understand how it works and in the meantime stop posting ignorant rubbish as though it was fact - there are many people who read this thread for info to act on and the last thing they need is disinformation clouding the water.

Those of us with some inside track on the subject are trying to help everyone else here squeeze a little extra juice from their investment cherry. If you want to buy a sterling ETF, that's fine, it won't hurt at all, it's what most people do. But if you want to factor in an extra few % over time to counter the falling pound, then buy the $ version of your commodities fund (if it's available - most are) and you will gain some serious extra pennies when the time comes to sell.

Here's a simple explanation for the benefit of the wider audience. All commodities are priced in dollars. Period. When you buy a dollar ETF (e.g. those available in the drop down list at ETF Securities ) as opposed to a sterling ETF, you're buying dollars with pounds sterling. Period. It's a Forex trade with a gold chaser on the side. Period. You now own dollars, although they may appear as temporarily converted pounds on your running account. When it comes time to sell, your dollar ETF is converted back into pounds sterling at the then prevailing rate and those pounds are credited back to your account. It's another Forex trade with a gold chaser. Period.

Now, as everyone in the business agrees, the pound is expected to drift down against the dollar over the coming months (some say by quite a lot), which is the same as saying the dollar will rise against sterling. So it makes sense to buy dollars now if you can, and be repaid in weaker sterling later and gain a Forex advantage over time. It's like doing two trades at once. Simple. It's a no-brainer. And who knows, you might do quite nicely out of your gold investment too.

[DisplayNameChanged]

It is common knowledge a divesified portfolio in differing asset classes never made anyone rich.

But then again it is unlikely to make you poor.

[PiXeL8r]

Oh dear. You can lead a horse to water but... etc :angry:

Look, PiXeL8r explained the process very well and with more patience than I would have mustered. Go back and read that post again until you understand how it works and in the meantime stop posting ignorant rubbish as though it was fact - there are many people who read this thread for info to act on and the last thing they need is disinformation clouding the water.

Those of us with some inside track on the subject are trying to help everyone else here squeeze a little extra juice from their investment cherry. If you want to buy a sterling ETF, that's fine, it won't hurt at all, it's what most people do. But if you want to factor in an extra few % over time to counter the falling pound, then buy the $ version of your commodities fund (if it's available - most are) and you will gain some serious extra pennies when the time comes to sell.

Here's a simple explanation for the benefit of the wider audience. All commodities are priced in dollars. Period. When you buy a dollar ETF (e.g. those available in the drop down list at ETF Securities ) as opposed to a sterling ETF, you're buying dollars with pounds sterling. Period. It's a Forex trade with a gold chaser on the side. Period. You now own dollars, although they may appear as temporarily converted pounds on your running account. When it comes time to sell, your dollar ETF is converted back into pounds sterling at the then prevailing rate and those pounds are credited back to your account. It's another Forex trade with a gold chaser. Period.

Now, as everyone in the business agrees, the pound is expected to drift down against the dollar over the coming months (some say by quite a lot), which is the same as saying the dollar will rise against sterling. So it makes sense to buy dollars now if you can, and be repaid in weaker sterling later and gain a Forex advantage over time. It's like doing two trades at once. Simple. It's a no-brainer. And who knows, you might do quite nicely out of your gold investment too.

LOL

[Goldfinger]

Very brave of you to say so, on this thread. FWIW, I believe there is a 70/30 chance you are right.

I believe that gold could go up, was well as down. The chances for it are exactly 50%. But I don't say by how much and on what time horizon.

Edited February 22, 2008 by Goldfinger

[ImNotAllThere]

The odds of winning the lottery jackpot are no longer 14 million to 1

It's just 50/50.... you'll either win it, or you won't

[Goldfinger]

http://www.ft.com/cms/s/0/5dbc2800-e09f-11...?nclick_check=1

“The fight against inflation is being sacrificed in G7 countries to avert the risk of recession and investors are likely to seek gold as an inflation hedge,” said Mandy La Grange of Nomura, who forecasts gold to average $1,000 this year.

100% guaranteed.

[Goldfinger]

Maybe a monster move will soon be upon us.

http://goldismoney.info/forums/showpost.ph...amp;postcount=1

This chart is still yesterday. Today

February 22, 2008

Change

1 m 0.2836% +0.0353

2 m 0.3330% +0.0386

3 m 0.3568% +0.0326

6 m 0.6163% +0.0674

1 y 0.6379% +0.0662

A 10% more spike. Taking 6mo and 1yr to highest level in one year timeframe.

Note that everyone of these peaks (spiky times) were followed by BIG gains in gold price.

A rough $100 gain.

Great times ahead 1000 is coming. Maybe they will drop at 5:00 AM schedule. I hope so with all long gold stock portfolio, because if it drops i plan to make my first gold future trade on new account.

Dry powder ready.

Also, look at silver lease rates. The bottom is so in now.

Edited February 22, 2008 by Goldfinger

[pmaupoil]

Has anyone got the following graphs as I do not want to search through 484 pages. I know I saw them some time ago.

DOW/GOLD, OIL/GOLD, UK property/GOLD and US property/GOLD.

Thanks in advance. I will save them this time.

BTW, you are all debating at the moment on whether it is going to go down or up in the short-term. A litlle tip: I just bought last night so it is more likely to fall...

[Goldfinger]

Has anyone got the following graphs as I do not want to search through 484 pages. I know I saw them some time ago.

DOW/GOLD, OIL/GOLD, UK property/GOLD and US property/GOLD.

...

Browse the link (charts) in my signature, and you should find it all.

[deadly_doc]

ermmm, as I don't know much about investing in gold, I would just like to ask what factors affect the price of gold and how?. Thanks

[R K]

Question is, how hard is 'hard'?

Several people in recent weeks (or is it just one or two who've said it often? ) have suggested seeing $850 or even $800 again before gold rises to new heights.

$850 is on the edge of what would feel to me like a 'hard' drop, and $800 is definitely 'hard'. $750 would feel a bit like what happened towards the middle of '06.

I wonder how 'hard' is the the drop that you think there's 70% chance of?

My problem is not really understanding the reasons behind the gold price except in the very vaguest terms. In other words, I can see it's plausible that gold will rise over the coming months and years, but sometimes it seems like people around here say things more on a par with 'it'll be $917 by next Tuesday lunchtime,' which is impressive, especially if they turn out to be correct!

You need to add a time-frame to all of this. For people like GF he has a long-term buy and hold physical strategy. So a $100 fall or rise makes little difference over a 5/10 yr time frame because his conviction is for a very significant long-term rise. Dips are for buying.

Some people, myself included, find the shorter-term movements (days and weeks) and the reasons for them, interesting and profitable, but not for physical. Buying/selling and holding costs would not permit profitable trading short-term in physical bullion.

I have said many times I admire GF's buy and hold long-term strategy and subject knowledge. That doesn't however preclude a shorter-term time horizon for those that are interested in that subject too. I would have thought there was room enough for everybody.

[drunkincharge]

You need to add a time-frame to all of this. ....

newbie question-apart from eft's and spreadbetting are their any other metods of short term trading out there apart from physical?secondly say i wanted to put the equivalent of buying and holding 1 oz of gold in the form of a speadbet is that the same as a £10 per dollar change with £1000 in behind it ?

edit: or should that be £10,000 -not a clue-please help

Edited February 22, 2008 by drunkincharge

[scott666]

ermmm, as I don't know much about investing in gold, I would just like to ask what factors affect the price of gold and how?. Thanks

When people that know nothing about gold start looking to invest in gold it's a VERY bullish sign. Does this answer your question?

[Ologhai Jones]

Dips are for buying.

That pretty much sums up my view at present.

I currently have a pending order on Bullion Vault priced at £14900/kg just in case I happen to be sleeping, eating or otherwise AFK if/when such a price is reached any time soon.

That finger-in-the-air price may turn out to be too high (i.e. a short-term correction drops below that level and I could've bought cheaper), or too low, in which case the order will never complete...

[deadly_doc]

When people that know nothing about gold start looking to invest in gold it's a VERY bullish sign. Does this answer your question?

errmmm errmm

[drunkincharge]

newbie question-apart from eft's and spreadbetting are their any other metods of short term trading out there apart from physical?secondly say i wanted to put the equivalent of buying and holding 1 oz of gold in the form of a speadbet is that the same as a £10 per dollar change with £1000 in behind it ?

edit: or should that be £10,000 -not a clue-please help

bullion vault-d'oh!

but the spread bet question still stands

[Impartial]

But then again it is unlikely to make you poor.

That is why due dilligence is absolutely necessary.

[R K]

newbie question-apart from eft's and spreadbetting are their any other metods of short term trading out there apart from physical?secondly say i wanted to put the equivalent of buying and holding 1 oz of gold in the form of a speadbet is that the same as a £10 per dollar change with £1000 in behind it ?

edit: or should that be £10,000 -not a clue-please help

[/quote

You would multiply the £ per point by the price. So £10 at 950 = £9500 investment/stake at a ratio of 1:1 in 1 oz as far as price movements are concerned. There would be a very small price spread, and some small cost to hold over a longer time frame.

Others can comment on the best way to hold 1oz of physical.

[jimmy_joe]

Here's a simple explanation for the benefit of the wider audience. All commodities are priced in dollars. Period. When you buy a dollar ETF (e.g. those available in the drop down list at ETF Securities ) as opposed to a sterling ETF, you're buying dollars with pounds sterling. Period. It's a Forex trade with a gold chaser on the side. Period. You now own dollars, although they may appear as temporarily converted pounds on your running account. When it comes time to sell, your dollar ETF is converted back into pounds sterling at the then prevailing rate and those pounds are credited back to your account. It's another Forex trade with a gold chaser. Period.

My assumption is based on the value of the fund going down as the dollar increases, because there is a fixed amount of the commodity held by the fund. If the value of the commodity increases then the value of the fund will increase and provide a return in all currencies.

Here are some numbers, lets say you buy 1 ounce of gold in an ETC:

£/$ = 0.5

£/gold = 450

$/gold = 900

fund price is $9.00

buy fund for £450 (= $900 = 100 units)

--

$ increases 10%. gold stays the same.

fund price is now 8.18

£/$ = 0.55

value of holding = 100 * 8.18 * 0.55 = £449.90

--

gold increases 10%. $ stays the same.

fund price is back to 9.00

£/$ = 0.55

value of holding = 100 * 9.00 * 0.55 = £495.00. <-- gone up in line with the price of gold.

If this is wrong then could you give a numeric example to show what's really happening?

Edited February 22, 2008 by jimmy_joe

[marmite]

Friday fun picture.

Picture borrowed from another gold related forum. This is one members small change !!!!!!!!!!!!!!!!!!! beats the copper jars that we all have

[PiXeL8r]

If this is wrong then could you give a numeric example to show what's really happening?

Where you are going wrong is that the dollar won't increase, the pound will drop faster making the exchange rate better. The faith is dropping out of fiat currencies.

Here's an example

you buy an ETF in gold which is traded in dollars. Exchange rate 1.92

£100 gets you $192 dollars

$192 buys you GOLD ETF @ whatever price

Time passes you sell your ETF. Exchange rate is now 1.70, Gold ETF is now 10% higher

$192+10%=$211.2/1.7=£124.23

So as you can see a 10% increase in gold $ ETF has meant a 24% increase for the pound.

I am not saying that is going to happen but the general feeling is that the dollar is weakening and the pound will weaken more. If that happens you get a double gain, hence the comments. It's a forex play as well as a gold play.

This is not a recommendation for ETFs though, read Jim Sinclair's comments on Gold ETFs and possible market manipulation.

[Killer Bunny]

Question is, how hard is 'hard'?

There is a chance that gold could come down to 750/800. If the $ rises... Remember the $ has been attacked with force from the Fed yet it has not plumetted.

[Bardon]

So as you can see a 10% increase in gold $ ETF has meant a 24% increase for the pound.

I am not saying that is going to happen but the general feeling is that the dollar is weakening and the pound will weaken more. If that happens you get a double gain, hence the comments. It's a forex play as well as a gold play.

This is not a recommendation for ETFs though, read Jim Sinclair's comments on Gold ETFs and possible market manipulation.

That is impressive.

[PiXeL8r]

There is a chance that gold could come down to 750/800. If the $ rises... Remember the $ has been attacked with force from the Fed yet it has not plumetted.

I was listening to Bob Hoye on CWR today and he mentions a similar price.

What makes you think the dollar will gain strength at the moment?

[jimmy_joe]

Where you are going wrong is that the dollar won't increase, the pound will drop faster making the exchange rate better. The faith is dropping out of fiat currencies.

Here's an example

you buy an ETF in gold which is traded in dollars. Exchange rate 1.92

£100 gets you $192 dollars

$192 buys you GOLD ETF @ whatever price

Time passes you sell your ETF. Exchange rate is now 1.70, Gold ETF is now 10% higher

$192+10%=$211.2/1.7=£124.23

So as you can see a 10% increase in gold $ ETF has meant a 24% increase for the pound.

I am not saying that is going to happen but the general feeling is that the dollar is weakening and the pound will weaken more. If that happens you get a double gain, hence the comments. It's a forex play as well as a gold play.

This is not a recommendation for ETFs though, read Jim Sinclair's comments on Gold ETFs and possible market manipulation.

I know the dollar isn't on the way up, in my example I just wanted to show it increasing relative to sterling. An example with £ and $ going down at different rates and gold doing up would be too hard to think up nice easy numbers for.

In your example, what is the change in the sterling price of gold? If it's 24% then the currency of the ETF is not relevant, is it? That's what I was getting at - the ETF tracks the price of the commodity in whatever currency you care to mention.

"£100 gets you $192 dollars"

If you start by assuming you're buying gold, which is what you really are buying, then it's easier to ask the question: Why is the same quantity of gold worth more in sterling when it's valued in dollars than when it's valued in sterling?

Edited February 22, 2008 by jimmy_joe