Tuesday, February 6, 2007

Gold – An interesting alternative to Bricks ‘n’ Mortar

Why Individual Investors and Institutions should Diversify into Gold

Gold returned 24.75% in 2006, rising from $497 to $620 per ounce. It completed its 5th year of gains and is up by more than 140% in the last 5 years.

Posted by enuii @ 07:02 PM (454 views)
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7 thoughts on “Gold – An interesting alternative to Bricks ‘n’ Mortar

  • “By Mark O’Byrne, Managing Director Gold and Silver Investments Limited”.

    Beware a VI! I would be more interested to understand why these schemes which give you ownership of physical gold are better than Exchange Traded Funds (ETFs), which are in fact backed by ownership of the metal. If the financial system has collapsed so that you cannot sell your ETFs, I am not sure that you will find many people willing to give you something useful such as a loaf of bread for your gold.

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  • Yes, I like a bit of gold myself but some of the VI stuff I read makes your average EA seem pretty impartial!

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  • waitingfor hpc says:

    where can i go to buy some gold and what is the best way any ideas – i have 88% of my money in £’s.

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  • You can either buy gold directly, invest in a mining company, or in a fund specialising in precious metals. There’s more about this in the book “The Oil Factor” by Stephen Leeb. I’ve lent my copy to someone else but can find the info if you need it.

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  • dohousescrashinthewoods says:

    paolo88888 You have a point and I am keen to acquire some gold ETFs (GLD?).
    My only hesitation is that ETFs are a form of derivative and that’s a little too close to the mass global liquidity bubble. If banks go down it could concievably fall over.

    waitingfor hpc: The best site I have found for physical gold is bullionvault.com. A friend is using it and says it appears to be straightforward. Spreads are tight, liquidity is good, 0.8% commission on transactions and the $4 per month for storage and insurance. Providing you put in a few K that looks pretty reasonable. He is putting in a few hundred, which he accepts isn’t enough to make money, but it’s for his own education in investing.

    I think the argument for gold is that, bespite the bull run so far, the $ and £ are overvalued – backed by debts and empty vaults. It stands to reason then that reserves in Russia, China and the Middle East will continue thir gradual movement out of falling currencies into other assets, including gold. (I am no expert however)

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  • I have invested in gold by buying ‘shares’ in gold. Any good share dealing site will allow this. Search for Lyxor Gold Bullion. Purchases are, I beleiev, backed up by real gold purchases.

    I have quite a large investment in gold, but I must say that this article is nonsense. “Gold returned 24.75% in 2006” doesn’t have any bearing on what it will do in the future – in fact if anything he makes it sound like gold is in a bubble.

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  • Albertini Albertino says:

    OK, taking the story at face-value, gold has appreciated by 25%. Except I’m English. I use £.

    So, at the start of last year, an ounce of gold at $497 was probably worth about £310 (I took £1=$1.60 as a rough guess). Since a dollar is worth four-fifths of fook-all now, that same ounce of gold at $620 is now worth about £318 (£1=$1.95).

    Thus, for us Britishers, Gold Price Inflation is running at around 2.6%.

    Woo.

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