gold trading advice

[redson]

As a relative newbie, i bought bullion and shares in PHGP in 2008 as a long term investment. THis year I want to augment this by averaging into gold each month. I believe Gold will hit $2000 this year at some stage.

I've got £5000 to risk and am looking at spread betting SPDR Gold trust (GLD). Averaging at £1.25 a point each month with stops below $1400.

I started modestly last week and am already in profit so far, but would be interested in any thoughts on whether it might be better to buy shares in GLD, or find another vehicle with better risk/reward.

 

[anley]

Can't fault your idea but always check to see if it's cheaper to spread bet the current Gold contract (now Feb, soon to be Apr) and then keep rolling it over. Don't use the rolling spot contract though for long term holdings as it's very expensive (daily interest etc). Only use those contracts for trades of less than a week.

If you do roll a contract over (on expiry) get the broker to roll rather than you as it's cheaper.

Folks, don't discount spread bets for long term investments, they can be great tools to use.

 

[anley]

IG offer Gold at just £1 a point (1 point = $1 movement in Gold).

 

[redson]

Can't fault your idea but always check to see if it's cheaper to spread bet the current Gold contract (now Feb, soon to be Apr) and then keep rolling it over. Don't use the rolling spot contract though for long term holdings as it's very expensive (daily interest etc). Only use those contracts for trades of less than a week.

If you do roll a contract over (on expiry) get the broker to roll rather than you as it's cheaper.

Folks, don't discount spread bets for long term investments, they can be great tools to use.

On IG, rolling spot contract = DFB? They also offer mar-12, jun-12, sep-12. So I should use Mar-12?

 

[anley]

Yes, rolling spot = DFB so no good for long term investments, use it for short term trades ( a few mins to under a week).

Gold doesn't use those months, it goes Feb-Apr-Jun-Aug-Dec. IG will only offer 2 contracts at anyone time, the current front month (currently Feb) and the DFB. So if you want to go long today you go long the Feb and then next week when Feb expires you auto-roll into the3 next month which will be Apr and so on. 4-5 rolls a year.

I'm not saying that the futures will be cheaper than using the ETF but all good traders look at all the possibilities and work out which one will be the cheapest. I would think it would be futures though, that's what I would do anyway.

 

[redson]

Yes, rolling spot = DFB so no good for long term investments, use it for short term trades ( a few mins to under a week).

Gold doesn't use those months, it goes Feb-Apr-Jun-Aug-Dec. IG will only offer 2 contracts at anyone time, the current front month (currently Feb) and the DFB. So if you want to go long today you go long the Feb and then next week when Feb expires you auto-roll into the3 next month which will be Apr and so on. 4-5 rolls a year.

I'm not saying that the futures will be cheaper than using the ETF but all good traders look at all the possibilities and work out which one will be the cheapest. I would think it would be futures though, that's what I would do anyway.

futures using GLD or spot gold?

 

[anley]

The futures contract is a price against the cash, in my opinion it's the best market to trade for exposure to Gold. The ETFs are controlled by the investment banks so you can't really trust them 100%.

Mind you, the Gold paper market (futures) is also controlled by the investment banks so is probably a disaster waiting to happen.

have you thought about using Buy Gold Bullion Online at Live Gold Prices with BullionVault, there you buy real Gold, you own it and control it. That's the best way to buy Gold (aprt from coins/bullion in your hand) but no leverage is offered.

 

[redson]

Yes I own most of my gold through Bullion vault. But I wanted to augment that by trading an ETF or similar tax free on a spread bet.

 

[ronblack]

As a relative newbie, i bought bullion and shares in PHGP in 2008 as a long term investment. THis year I want to augment this by averaging into gold each month. I believe Gold will hit $2000 this year at some stage.

God luck but I have no reason to believe that gold is going much higher given the slow downward-revised, world growth. But who knows? Maybe you are right. Here is some TA.

 

[new_trader]

The futures contract is a price against the cash, in my opinion it's the best market to trade for exposure to Gold. The ETFs are controlled by the investment banks so you can't really trust them 100%.

Mind you, the Gold paper market (futures) is also controlled by the investment banks so is probably a disaster waiting to happen.

have you thought about using Buy Gold Bullion Online at Live Gold Prices with BullionVault, there you buy real Gold, you own it and control it. That's the best way to buy Gold (aprt from coins/bullion in your hand) but no leverage is offered.

'Best' is relative. I think the best way to own gold is through the Perth Mint Certificate program.

1) FREE storage
2) Insured by LLoyds
3) Government Guaranteed.

Overview | The Perth Mint

 

[angelnish]

Some people are predicting that euro will drift further down to par with the US dollar by the end of 2012. Therefore, while Gold should appreciate versus the US dollar over time, it will go up even faster against the Euro. that's why it is recommended to go long Gold and short Euro...

 

[resin17]

You can get some gold warrants (calls) with smth like 2000$ and expiry 2015 or so.