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    Hi everyone,

    I'm thinking about investing some of my money into gold bars and I wondering if its good idea or not?


    Do some research... There is no yes/no answer to any investment else we'd all be rich. You need to think about when you intend to buy and when you plan to sell. Once you know your position then you need to decide how much to invest based on the current level of risk. For a long position, just taking a quick look at the 5 year chart I can see a downward trend testing resistance line (gold is dropping right now). Whereas looking at the quarterly chart for a mid term position I can see the symmetrical triangle pattern which is a continuation pattern. As I type, it's reaching the apex and should break out to the upside. As always watch out for a pullback by validating the breakout first. if yes then only then look to make a buy order to sell within 10 months. (I use the 2.5x trend rule) and perhaps even a long position as well, seeing as we'd be breaking out the 5 year resistance as well, subject to fundamental analysis.

    The first question you need to ask yourself is what are you buying gold for? As a longer term hedge against inflation and risk? or as a short term investment to make capital gain on?

    Gold has been the Mecca of risk hedging and inflation hedging for the past 5,000 years, so for that purpose and considering the current global financial climate it is a smart bet. Gold has always had value and always will have value.

    A good suit in 1900 cost you 1 ounce of gold or £10. A good suit in 2016 will still cost you 1 ounce of gold, but you'd have to part with £900. Yes the gold price fluctuates but it is a great store of value and isn't devalued by inflation like fiat currency is.

    Another question I'd put to myself is where else would I put my money if not gold?

    The stock market and bond market have enormous bubbles in them at the moment, and some bonds are even paying negative interest. I wouldn't want to put my money into the stock/bond market at this moment in time because you'd be entering at the peak of a bubble just before it crashes. Hold gold, sell it after the crash and then buy stocks on the cheap.

    Banks aren't a wise option either, although they are probably a safer bet than equities and bonds. You currently get basically 0% interest if your money is in the bank, and many central banks across the world (The Bank of Japan, European Central Bank, Swiss National Bank and Swedish Riksbanken) have negative interest rates. It is unlikely that negative rates will hit high street customers, but it is a telling sign that they are unlikely to raise rates anytime soon and just how sick the global economy is.

    Nations across the world are also buying or repatriating their gold in massive amounts (China, Russia, India, Germany etc). Whilst national macroeconomic policy is very different to individual finances, I still think it is a telling sign that a lot of smart money is moving into gold whilst it is cheap.

    A lot of nations are worried about the dollar and are trying to reduce the amount of dollars they hold in foreign reserve and replace it with gold. If the dollar does collapse, watch the gold price very carefully.

    Gold potentially could do very well when the next financial crisis hits, with many financial commentators saying it could go to $5,000 an ounce or even $10,000 an ounce. Who knows if it will or not, but there are certainly enough people saying that and enough worrying global indicators for that to be a possibility. If things do cash, I can certainly see gold reaching its previous 2011 high of $1950 again. At the very least gold would protect your wealth in a crash, which could be lost were it in the markets or even in a bank that went under.

    Gold peaked in 2011 and probably hits its bottom in December 2015. Since then it's up 10% and still represents good value for money in terms of buying at the moment. For people waiting for gold to go below $1,000 before they buy it, I can see them waiting for a very very long time.

    Silver is very undervalued at the moment compared to gold (see gold to silver ratio) so has the potential to be a better speculative investment and had a phenomenal week last week on the markets. The downside of silver is that it is more volatile than gold as a commodity, you have to pay VAT (so it needs to go up 20% before you break even) (gold is VAT free) and can be affected by industry as it is an industrial metal as well as a monetary metal.

    I would always buy physical gold if you choose to go that route and avoid paper gold and gold ETFs etc. There are lots of horror stories at the moment of there being more than 100 claims to every ounce of gold in the paper market; needless to say if everyone wanted to claim their gold at the moment many people would be disappointed. The adage is always "if you don't hold it, you don't own it". I'd buy physical and stick it in a safe.

    If gold did skyrocket (nice position to be in!) you may be liable for capital gains tax. It is worth noting that 1 ounce gold Britannia coins are capital gains tax exempt as they are legal UK tender. Yes you pay probably £30 an ounce more than bullion bars but probably easier from a tax perspective. I'd probably buy by the ounce (best value for money) and buy gold Britannia coins.

    Hope that helps! People may disagree with me, but I do hold gold myself and put my money where my mouth it. Even conventional wisdom is that any good investment portfolio should have 10% in precious metals as a safety net.

    (Original post by jameshburton)
    Hi everyone,

    I'm thinking about investing some of my money into gold bars and I wondering if its good idea or not?

    i would say coins are better as you have better liquidation but bars are worthwhile if you are looking at anything over a decade the same with large coins or the other route is to buy a load of scrap and send it to these guys at the website below and they will trade you gold bars for you gold at spot price unlike any other dealer

    I cant imagine its easy to sell them off if you wanted the money back

    Selling gold is really easy and you can normally just sell it back to the bullion dealer you bought it from; you'll typically get 97% or 98% of the spot price.

    Gold can seem a little iliquid as an asset but in many ways that it a bonus as it encourages you not to sell it on a whim.
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