gold

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Trustmeimadoctor

Original Poster:

12,526 posts

154 months

Saturday 14th November 2015
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Hello people
I just bought myself myself first gold using signature gold from royal mint. Is it a decent way of doing it or am I better off doing something else? I'm only talking small amounts nowhere near an ounce

Cheers for any help

oldaudi

1,306 posts

157 months

Sunday 15th November 2015
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Can you say how much you purchased, in what form and how much you paid. This will help me work out if you did well.
I used coininvest bullionbypost and bulkionvault

williaa68

1,527 posts

165 months

Sunday 15th November 2015
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It isnt the cheapest but it isnt the most expensive either. One challenge will be how you pay the storage fees though. If you pay them by selling gold the fee is effectively 1.65% as there is a sell back margin of 1%, custody charges of 0.5% plus VAT. That's expensive. For small quantities you may be better off taking physical delivery. For larger an ETF is the cheapest way to go but then if your gold is a financial hedge against the end of the world then an ETF isnt the best idea. As above, a few more details would help.

Trustmeimadoctor

Original Poster:

12,526 posts

154 months

Sunday 15th November 2015
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Only £100 so far but was thinking of just putting a spare 100 or so a month away or what ever I have left really

hashtag

1,116 posts

153 months

Sunday 15th November 2015
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Investing in gold will not return you a profit!

For example I sold some sovereigns last week and got £165.00 each for them.

If I was to buy sovereigns last week I would expect to pay £180-190 per coin.

You need at least a 10% increase in gold value to get your money back.

Gold prices a not going in the right direction at the moment!

£100 per month may get you a 1/2 sovereign per month. To get the best price save the money each year and buy a dozen at a time, you may get a better deal!

oldaudi

1,306 posts

157 months

Sunday 15th November 2015
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Agree. Buying a few grams a time regardless of coin or bar is very expensive. To take part in the physical market at that volume is very expensive. You pay over the spot price to buy and any dealer will offer you well under spot price when you sell. You could do several things, either save the cash and enter the physical gold market when you think the price is low enough and buy in volume or just buy when and as you can and take the hit with the mark up price. If you keep the gold long enough and the gold price goes up then this may cover any dealer charges.

I guess ultimately you need to understand why you want to be in the gold market. You won't get any yield or return on boxing physical gold. It's a hedge against any other shares, funds or investments you hold. As the financial market falls the gold spot price tens to increase therefore protecting you from your loses on your other investments.

For me gold does a number of things. I store physical gold and I have gifted it to my children, it's off the financial market and no one knows how much I have therefore it's gonna be impossible to trace any inheritance tax I should be paying. I also hold lots of non bullion coins so it's classed as a collection. I also trade with bullionvault and pay in currency when I can and buy gramma when I can and it soon mounts up. They offer physical delivery at 100g.

I guess you really need to understand what your financial goals are holding gold. Gold doesn't really get near spot price to buy until you get to 100g at a time. If you do this you then need to think how you will get out of that position should you need the currency. There are other ways to use gold in your portfolio if you don't already. You could spread bet the spot price, pay into an etf or pay into a fund that hold gold miners. This will allow you to take advantage of both a falling and increasing gold price without being stuck with small coins. All carry risk of course but if done well can offer a return. I like to spread bet gold and then take the winnings to buy gold, after several old shielded back gold sov certain years at the moment!

Edited by oldaudi on Sunday 15th November 20:02

Trustmeimadoctor

Original Poster:

12,526 posts

154 months

Sunday 15th November 2015
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Thank you for your replys but honestly it's way over myself head. I came to doing it because it was mentioned on the radio and I thought ooh I might buy some gold.

Portfolio I have none I do have some poly pockets though wink

I gather from what you have said don't bother it's not worth it in small amounts especially if you don't know what your doing like me! I may just buy a coin with a nice image on it for sts and giggles.

sideways sid

1,371 posts

214 months

Monday 16th November 2015
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You've bought something which provides no income, which costs you money to store/insure, and with a massive spread between buying and selling prices so that you need a massive increase in the price to sell without losing. Arguably that massive increase in price may only happen when everything else is in trouble anyway!

Two suggestion:

If you want exposure to gold price, buy shares in gold mining companies. Do your own research etc, but at least you will have the chance of dividend income, and can sell at reasonable spread. Again, you probably want to start with a bit more than £100.

If you're worried about volatility in other markets and want to hedge against it, check the VIX Index, which basically rises in value as the US Stock Market falls in value.

As you say, buy a couple of gold coins because you like them. £100-worth is not going to change your life in the event of Armageddon!


nikaiyo2

4,672 posts

194 months

Monday 16th November 2015
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Trustmeimadoctor said:
Thank you for your replys but honestly it's way over myself head. I came to doing it because it was mentioned on the radio and I thought ooh I might buy some gold.

Portfolio I have none I do have some poly pockets though wink

I gather from what you have said don't bother it's not worth it in small amounts especially if you don't know what your doing like me! I may just buy a coin with a nice image on it for sts and giggles.
Haha dude you sound like me, that's exactly what I do. TBH it might not be the smartest way to do it, but when I have a few £ left at the end of the month I buy a Britania, Sovereign or any random 22ct+ coin that I like the look of on Bullion by post. They are quite cool and it's more fun than putting extra in an ISA, and I figure if I hold onto it for 20 years I will do ok from it.

I bought a kilo bar of silver this month, mainly because it was quite a big bar with some weight to it, that was the only reason for my purchase... It was bigger than any of the gold I can afford lol

Trustmeimadoctor

Original Poster:

12,526 posts

154 months

Monday 16th November 2015
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Suppose with a kg it makes a flashy paperweight smile

Ozzie Osmond

21,189 posts

245 months

Monday 16th November 2015
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Don't you have to pay VAT when you buy silver? If so you'll need a 17% increase in value just to get back where you started!

(I think gold bullion is VAT free)

anonymous-user

53 months

Monday 16th November 2015
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Ozzie Osmond said:
Don't you have to pay VAT when you buy silver? If so you'll need a 17% increase in value just to get back where you started!

(I think gold bullion is VAT free)
Yes, you have to pay VAT when you buy Silver which makes it a terrible investment. You are already paying over the spot price when you buy it and then you have to add 20% on top of that.

As has already been said, buying gold as an investment is not a good idea. The reason you buy gold is as an insurance policy for when the Zombie apocalypse happens. If you are buying less than a Troy Ounce at a time then you are definitely wasting your money as you will be paying more per gram of gold and you will only ever get spot price when you sell (assuming you sell to the same dealer you sold to)

As has already been said, you are buying the gold over spot price and selling the gold for under spot price. That means the gold has to increase in value by quite a margin just to get your money back. If you have bought gold in the last 5 years, then the gold you are currently holding is worth less than you paid for it.

As an example, the spot price on www.bullionbypost.co.uk is currently £713.07 per Troy Ounce. The cheapest 1oz bar they sell is currently £748 so you have already lost £35 on the deal.

I got all excited about gold and actually went and bought an Ounce of Perth Mint gold in a nice little plastic case. My plan was to buy one or two every month but since buying it I have watched the price of gold fall. When I went and bought it another guy was also buying one, and he was telling me how now was the time to buy. The spot price fell by about £50 over the next 2 weeks!

Buying gold is almost like a cult and it definitely sucks you in. I have watched loads of videos on youtube of people showing off their stacks and I had a fantasy of having a box full of identical Perth Mint bars in a row.

So far I have lost around £75 on my single Ounce of gold but for me it was a cheap lesson to learn. I will be selling it very soon and then I will never have to think about gold ever again!

Most people who hold gold are expecting there to be some major world financial melt down and for gold to increase massively in value. I think the Greece situation was the closest we have been recently and the gold selling websites could not keep up with demand when it looked like Greece were going to get kicked out of the EU. Of course, nothing actually happened and the value of gold pretty much stayed the same.



nikaiyo2

4,672 posts

194 months

Tuesday 17th November 2015
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Ozzie Osmond said:
Don't you have to pay VAT when you buy silver? If so you'll need a 17% increase in value just to get back where you started!

(I think gold bullion is VAT free)
Yeah TBH it's not really that good an idea, at least I have a good idea what to do with it now biggrin

Guvernator

13,105 posts

164 months

Wednesday 18th November 2015
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I always here the the words, you buy gold as insurance for economic meltdown\end of the world\zombie apocalypse. The thing is, in the event of such a scenario, why would useless bits of shiny metal be worth anything at all?

oldaudi

1,306 posts

157 months

Wednesday 18th November 2015
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Guvernator said:
I always here the the words, you buy gold as insurance for economic meltdown\end of the world\zombie apocalypse. The thing is, in the event of such a scenario, why would useless bits of shiny metal be worth anything at all?
Well they might be of value to trade for food or other goods. Assuming the whole Internet went off line the vast majority of us would die in a few weeks. We wouldn't be able to get our fiat currency out of the bank and therefore able to buy anything. "prepping" for such a scenario is a whole other forum but I think learning a trade in your spare time for such a situation will have more value than gold or silver.

jeff m2

2,060 posts

150 months

Wednesday 18th November 2015
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We have had a decent number of mini disasters, planes crashes and one shot down. A very unstable Middle East and a floundering Latin America .
Europe growth is not where one would hope. And a 9% sell off in October
Gold is at 1,070
So if all those events did not elevate gold one has to wonder what it will take to get it to "whatever your target is"

In December Yellen may eventually raise the US Dollar int rate, making the Dollar more attractive and therefore making gold less so.

If you do want to buy Gold maybe hold off until Yellen makes her mind up.

stongle

5,910 posts

161 months

Thursday 19th November 2015
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oldaudi said:
Well they might be of value to trade for food or other goods. Assuming the whole Internet went off line the vast majority of us would die in a few weeks. We wouldn't be able to get our fiat currency out of the bank and therefore able to buy anything. "prepping" for such a scenario is a whole other forum but I think learning a trade in your spare time for such a situation will have more value than gold or silver.
Quite, the correct hedge for the apocalypse zombie or otherwise is assault rifles, bullets and Duracells. Bit like having any kids under 5 really. Must be quite difficult leg it from zombies, if you have 20kg of gold in your Bergen.

As for financial crashes. Traditional thinking would be negatively correlated assets, but if a CCP or other GSIF goes Lehmans is going to look a trip to the sweetie shop.

DonkeyApple

54,929 posts

168 months

Monday 23rd November 2015
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Guvernator said:
I always here the the words, you buy gold as insurance for economic meltdown\end of the world\zombie apocalypse. The thing is, in the event of such a scenario, why would useless bits of shiny metal be worth anything at all?
In such a situation there are two scenarios:

A) the gold doesn't exist as the storage vaults will have been emptied.

B) you have just been holding it for the people with guns who will take it from you.

Gold is for Central banks and to help offload ugly daughters.