Gold! Always Believe In Your Soul…

Oct 10, 2008 -

With the financial mess the world is finding itself in, it’s hard to decide where to put your money other than stuffing it under the matress – not the best idea in Scouseland!

Over the past few weeks I’ve been reading more and more about investing in Gold and after a bit of last minute research, stuck a Gorilla (two monkeys or a bag of sand) into BullionVault.com.

I don’t actually have a lump of the stuff in my pocket, nor do I have a secure deposit box in some foreign country where I keep it. Its all managed by BullionVault who own the bars as bars are usually 12.4kg each and the professional market doesn’t allow you to own part of a bar. Obviously, having enough money to buy a whole bar is something only SuperAffiliates could do, but even then you still need that relationship with a formally recognized vault to look after the gold while you own it.

So is it a safer option in the current climate? Who knows! The graph above shows how the price has changed over the past 30 years, but it seems to be a bit of a safer investment (long term) than gambling with shares in companies that were once thought to be secure. The return can be just as good too, if not better! My £1,000 investment is now worth £1,071 which is a better return in 48 hours than any savings account.

Free Gold
I chose BullionVault after seeing an article on the BBC website that offered any new account holder a small amount of free gold and cash. This was before any financial details were asked of me, allowing me to see how the buying and selling of Gold works via their website. Well worth a punt if you have a few quid spare and even if you don’t you can play the REAL gold market without spending a penny!

http://www.driving-experiences.co.uk/ Wardy

I’m going to give bullionvault a look over and may put a bit of money in there myself. Keep us updated on how the price of your gold rises and falls :)
http://www.leemccoy.co.uk Lee McCoy

The thing is, doing what everyone else is doing go us into this situation in the first place.

As you point out the price of gold has gone up shit loads already. But the price of gold isn’t only affected by speculators as an alternative to equities but as a commodity used in industrial production. As the economy slows then there’ll be less demand for gold from that area.

You’ve also got to consider the increased production of gold as prices has risen will increase supply and affect the price of gold in a deflationary way.

If everyone else is saying “buy gold”, I’ll buy something else!
http://www.webaffiliate.co.uk Chris Frost

Lee I would agree if you were after short term, however as I mention “safer investment (long term)” I would expect to ride out any knock-on effect from the slow economy. Most metals work in the same way.

On the positive side, there isn’t an unlimited supply so as you say the demand may increase, the supply may not be there which will increase it further. Its not an endless pit unlike share options.
http://www.leemccoy.co.uk Lee McCoy

“On the positive side, there isn’t an unlimited supply so as you say the demand may increase, the supply may not be there which will increase it further.”

Only for another few hundred years ;-) Gold is mined just in the same way as Oil, they don’t supply as much as they can produce. They keep it back to keep the price high.

The thing is we move from bubbles in one thing to another. The thing is to watch for fads. I hear tulip bulbs are a good investment ;-)
http://www.leemccoy.co.uk Lee McCoy

Also, don’t forget that gold is priced in dollars. If there is more demand for dollars the exchange rate will not be in your favour. Just as if the pound weakens against the dollar because of a lack of demand for our currency – then any profits could be wiped out.

That’s why the increase in the price of oil was worse for us as its priced in dollars and the dollar weakened against Stirling and made it more expensive than it would have been if the exchange rate stayed the same.
http://www.webaffiliate.co.uk Chris Frost

“Also, don’t forget that gold is priced in dollars.”

Thats why Gold investors will allow you to play multi markets (London, New York and Zuirch) while at the same time pitching 3 currencies (GBP, USD and Euro) against each other :)
http://www.driving-experiences.co.uk/ Wardy

Hows it looking the moment. Just had another look at gold prices and they look to have dropped about $200 in the last week or so!
http://www.webaffiliate.co.uk Chris Frost

Gold is still on the rise long term :)

As the pound continues to weaken, the price continues to be driven up. The demand is constantly increasing and production isn’t being over exploited.

Over the last 3 months, I’ve made 3 investments which means over all, I’ve seen a return of 18%. Somewhat better than a savings account, and a lot better than RBS shares (£1000 in Sept now worth £60!).
http://www.webaffiliate.co.uk/blog/about-me Chris Frost

Its now been a year since my initial investment, and subsequent drip feeding and only yesterday Gold hit an all time high.

I’ve been lucky enough to see an ROI of just over 10%. Far better than any savings account could return over a 12 month period.

News is that Gold looks like its to continue to rise in price, with “experts” suggesting it could hit $1,100 ou.

REMEMBER IT CAN ALSO GO DOWN IN PRICE!
http://www.broadbandwatchdog.co.uk/ Mark

I think the vast number of adverts on TV asking for people to send in unwanted gold plus a number of websites and affiliate programmes on the same thing seems to indicate how much gold is in demand. I never invested in gold in the end but it’s still soemthing I keep my eye on