What Is The Best Way To Invest In Gold?

[bracke]

IF the dollar continues to decline there is a good chance that the price of gold will rise.

IF Mr Greenspan is forced to raise interest rates the dollar will strengthen but the value of shares will drop. Would this be good or bad for the price of gold?

Which is the best method of investing in gold assuming that one does not want to hold it in the physical state or buy goldmine shares?

Regards

bracke

 

[anley]

There is a new gold holding stock in London but I don't know its name. Do a search under Gold ETF and you might find something.

Basically as people buy the share the management buy and store physical gold. So the share is backed by cash gold and is not margined etc. This is by far the best and easiest way.

However if you've got a long term view on it why not buy it using a spread bet then your profit is tax free. I've been holding gold like this since last summer and I just bought silver last week. If gold stays strong then I plan to hold these positions possibly for many months if not years.

 

[2468steve]

bracke,anley
the ETF is Gold Bullion Services with ticker GBS.This,as you correctly say is quoted on London market.
A similar equity is avaliable if you have access to the US markets and this is The Central Fund of Canada (CEF).This i believe is a better alternative as this fund also only invests in the actual metal itself,but in this case silver as well as gold.At present i believe their assets are weighted 60% silver,35% gold,5%cash.
To get a better look try this link
http://www.centralfund.com/

hope this helps

 

[CityTrader]

Gold..

.. is generally considered to be a safe haven- in times of war, high inflation or weak usd. Perhaps a SB would be the best way for you to "invest" ?

 

[donaldduke]

SB is tax free, so if you use up all your CGT allowance
on other gains or you think your profits will be huge you might
want to go SB. It only thing is that because the contracts expire
you will have to roll them over..
The leverage of SB also means you only need a fraction in
your account, while an ETF the margin requirements would
be higher, the rest of your money could be invested elsewhere
or earning interest..

 

[anley]

Why not buy the ETF for investment in Gold and the Spread Bet for speculation, say 80%/20%?

 

[bracke]

To Those Who Replied

Thank you for the information you all provided it was just what I was after.

If I decide to go the SB route am I best advised to buy the future which is further away (currently June) in order to give myself leeway for the price to rise?

As I would probably maintain the bet for several months what would be the cost of rolling the bet over each contract period, it is not something I have done before.

Regards

bracke

 

[TWI]

via some SB's certainly with CMC you can buy a cash contract which avioids paying possible contango as with futures roll-over.

 

[anley]

Buying the June would be the right thing to do, as for costs don't worry about it, maybe about $0.50 each time.

 

[bracke]

anley

Thank you for your information.

Regards

bracke

 

[PeterTT]

twalker .. great but you have to pay CMCs "generous" funding costs (adjusting your purchase price upwards everyday) .. think it is around about 6 1/2 pct annualised ? But if you sell short you do get a small benefit ...........

 

[TWI]

For gold bugs, here is a good article
from Richard Russell....a must read.

http://www.gold-eagle.com/gold_digest_04/russell021904.html

 

[bracke]

twalker

I have just read the gold-eagle article by Richard Russell and similar to other contrarians ( www.zealllc.com ) he makes a good case for gold and provides good reasons why the dow is overvalued and going through a bear market rally rather than a new bull market.

But he also points out that no matter what you may think, even though you may be correct "You'll lose your money simply because you're at odds with the market".

The market, irrational or otherwise, rules but sooner or later valuations eventually come home to roost and then its look out above or in the current scenario look out below.

Regards

bracke

 

[ZigZag]

bracke: Seek out and woo a rich woman. Then buy a gold ring. Ensure you calculate a risk/reward ratio.

 

[bracke]

ZigZag

Thank you for your advice but that wasn't exactly what I was thinking about when I was requesting information relating to investing in gold.

Whilst there may be some merit in your suggestion it means I relinquish control of my asset plus the arrangement is a little to permanent for my liking.

Regards

bracke

 

[The Baptist]

Gold advice

Hi

Interesting question on Gold.

As a South African particularly. The traditional best method for leverage was to invest in marginal Mines.

This effectively meant buying those with highest cost of production as they gained the most by an increasing Gold price as they could increase earnings substantially on price increases.

I have Dines investment letter and he graphs Gold ounces to buy a unit of the dow and it appears to imply a substantial; rerating of the two as well. He hints that if all possible meltdowns come to pass in paper as he suggests Gold could rach $3000 - $5000. I await to see this but nonetheless it is interesting.

There is a lot of Gold about and while consumption exceeds production when I last had heard, Australia and Canada and other countries were finding more of it and SA was losing it preminence as the biggest by far producer.

Also Gold is used for storage of value, jewelry and some industrial use in electronics to name a few. With China emerging and yellow gold being choice amongst Asians jewelry and apirational purchases may emerge with India and china and the rest. The Japs have been buying gold bars for a while now in there panic, it is worth mentioning it provides no income however, so you need the dam thing to move at some point.

One thing that always amazes me when The Gold bugs emerge is how rarely people discuss Platinum. 89% of it is produced in SA and most of the rest being found in the old soviet union. Latent storage and investment in overhang metal is minute compared to gold also Platinum has all the features (jewelry etc..) of gold plus extract of uranium (thats right the bomb stuff). If Gold gets to high for extended periods The mines will reprocess there old mine slumps of extract from years ago when extraction was far less effective however it is virtually impossible to reuse platinum as used in catalytic converters it would cost over $600 per ounce if you could only get over the set up cost.

So I personally think in many instances Platinum is the rarer commodity less stocked has all the consumption features of gold with it proving popular for jewelry in the east. Plus 'strategic' uses for governments in dicey times. You can buy platinum mine shares in the same way as gold. There has been a correlation in prices but if anything fundamentally Platinum has decoupled a bit more from gold and has taken smaller hits on the down swings. Maybe some one should run the relative charts from way back as I haven't looked recently (last few years)?

I hope this helps.

 

[TWI]

A few years ago Plat and Gold were trading at Par, I know because I bought the spread and unfortunately was out by the time it got to 10 dollars. I agree that both platinum and Palladium have potentially huge upside with the industrial bias but this has been priced in to some extent over the past few years as the Russians have become more and more aware of their potential to negotiate the supply contracts from Norilsk.
In the future I do think Platinum will become more valuable as the alternative energy market looks for solutions to the declining fossil fuel reserves

 

[papapips]

A few years ago Plat and Gold were trading at Par, I know because I bought the spread and unfortunately was out by the time it got to 10 dollars. I agree that both platinum and Palladium have potentially huge upside with the industrial bias but this has been priced in to some extent over the past few years as the Russians have become more and more aware of their potential to negotiate the supply contracts from Norilsk.
In the future I do think Platinum will become more valuable as the alternative energy market looks for solutions to the declining fossil fuel reserves

The best way to trade GOLD is to learn how to trade it, look up at tradetheeasyway.com email Mike and you will get some precious info...

i.e.

 

[Probafix]

The best way to invest in gold depends upon your thoughts on the overall direction of the economy..