Gold/silver as an investment

[mushypeas193]

Look into the fraud that is paper money, Gold and silver will always have some value. For me the price is too high at the minute wait for the price to fall, and it will fall.

[RichK]

> and basically its value keeps on growing.

 

Being serious, please have a good careful think about any such statements. Nothing grows in value indefinitely. Eventually every commodity finds its value and corrects in price. I know many people who though house prices would never fall again. They said I was an idiot for doubting them.

[Vague_Boy]

Does anyone know of or have been involved in investing in some silver/gold, Basically you buy some gold/silver and then sell it a couple of months after when the value goes up.

 

I'm "long" gold and silver, by which I mean I buy the stuff then plan to hold onto it for years.

 

Be aware than when you buy gold or silver, you pay above the "spot" price, and when you sell you receive below the spot price (that's how goldsmiths etc. make their money). You might buy a 1 oz coin for £900 but if you were to sell it straight away, you'd only get say £850 for it. In such an example, you would need to hold on that gold until the buyback price reached at least £900+ just to break even.

 

For physical gold, sovereigns are good. They are VAT free and capital gains tax exempt.

 

I buy gold from the following places:

 

Bairds of London

CoinInvestDirect

The Gold Bullion Co.

 

My silver I buy online from a company called Goldmoney, who store it in a vault for me. This is an allocated account.

 

The advantage of buying silver from Goldmoney is that no VAT is due, since they are based in Jersey.

 

If you don't understand the difference between allocated and unallocated accounts, DYOR (do your own research).

 

Most people are put off by the volatility of gold. I remember one guy wondering if he'd made a mistake buying gold at $740 an an ounce when it quickly plummeted to $590 an ounce. I wish, oh I wish that I could buy gold at $740 an ounce today.

 

For this reason gold and silver are not for most people.

[Vague_Boy]

Being serious, please have a good careful think about any such statements. Nothing grows in value indefinitely. Eventually every commodity finds its value and corrects in price.

 

This is true. You need to be unsentimental about investments. People were quite happy to treat their homes as investments, as long as they were going up in value.

[plekhanov]

Hi there,

 

Does anyone know of or have been involved in investing in some silver/gold, Basically you buy some gold/silver and then sell it a couple of months after when the value goes up. Where would you buy genuine gold/silver it from? Iv heard that some people keep it in the banks and basically its value keeps on growing.

 

Thanks!

A friend of mine has made a living dealing in metals including but not primarily silver & gold for several decades, I was at his house last week & he showed me a graph of how silver prices have risen so massively recently not because he was advising me to invest but because he regarded it as so insane as to be noteworthy to someone like me who has little interest in such things.

 

He firmly stated that he regarded this as a bubble driven by unsustainable speculation that is surely going to burst, the only question is when. He is in the process of getting rid of his remaining silver as he can't say for sure when the bubble will burst he just knows it is in all likely hood in the near future.

 

The value of Silver is rising now not because of any sustainable demand but because people thinking like you are buying with the expectation that "its value keeps on growing" so they can sell it in a few months for quick & big profits. The problem is that as soon as enough people realise this is a speculation driven bubble the price will plummet leaving those holding silver with big losses. If you buy silver in the near future there's every chance you will be one of those people left holding silver when the crash occurs.

[Dimitri 11]

Is your friend offloading his gold for those reasons too or is it just silver?

 

Edit: I am presuming he has gold as he is a PM dealer but if he doesn't, did he offer you an opinion on gold?

[callippo]

I put just about all my investment money in gold in 2007. It was obvious the value of the metal wasn't going to decrease.

[Cyclone]

http://www.telegraph.co.uk/finance/commodities/8494041/Silver-loses-shine-in-20pc-tumble.html

 

Silvers bubble is bursting as we speak.

 

Silver – which has suffered its biggest three-day fall in 28 years – plunged from a peak of almost $50 an ounce last Thursday to a low last night of below $40.

[Cyclone]

Many thanks! Would you recommend that I buy bars of silver from that place on London rd then?

 

Did you? If so you've just taken a big hit over the last week.

[I1L2T3]

IMO

 

1. Buy physical to hedge against inflation. Keep it somewhere safe_ e.g. Safety deposit. You don't need a lot, just enought to protect against a doomesday day hyperinflation event. Sovereigns are best. I don' see this element as investment but rather as protection.

2. Once you have built a level of protection then your investment can start. This for me is where the likes of bullionvault, mining stocks and ETFs come into play - basically when you can trade easily, online or on the phone.

 

that said I don't trust the ETFs at all - if there is any truth that PMs are in a bubble then ETFs are where the pumping up has been happening.