How do you invest in gold?

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Do you actually buy gold, or do you buy paper certificates (like stocks) representing the gold?

If you actually buy the gold, do you buy gold coins, or what, and from where?

Are gold coins more likely to increase in value higher than the price of gold since they are "further-processed?"

Where/how can I track/chart the past and present value of gold?

Is there a ticker symbol that closely follows the value of gold?

If you have to buy actual gold "pieces", how do you store them and how do you cash cash them in?

What is the average increase in gold value each year?

What about silver?

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@Buffalo,

Buffalo wrote:

Do you actually buy gold, or do you buy paper certificates (like stocks) representing the gold?

You can buy gold jewelry, gold coins, gold ingots, gold futures, shares of companies that mine or process gold, shares of mutual funds that invest in those companies -- there are a large number of ways that you can invest in precious metals, either directly or indirectly.

Buffalo wrote:

If you actually buy the gold, do you buy gold coins, or what, and from where?

Gold coins can be bought from a number of sources. Do an internet search for "gold coins" or check the Yellow Pages for "coin dealers." In the US, some major banks sell gold coins that are issued by the US Mint.

Buffalo wrote:

Are gold coins more likely to increase in value higher than the price of gold since they are "further-processed?"

I have no idea.

Buffalo wrote:

Where/how can I track/chart the past and present value of gold?

Check here.

Buffalo wrote:

Is there a ticker symbol that closely follows the value of gold?

I don't know if any exchange handles gold itself, but commodity exchanges in Chicago and New York handle gold futures. On the Chicago Board of Trade, the ticker symbol is YG, on the New York Commodities Exchange, the symbol is GC.

Buffalo wrote:

If you have to buy actual gold "pieces", how do you store them and how do you cash cash them in?

Store them under your mattress, or in a mayonnaise jar buried in the back yard. Cash them in at any coin dealer.

Buffalo wrote:

What is the average increase in gold value each year?

Going back how far?

Buffalo wrote:

What about silver?

It's a chemical element with the symbol Ag and the atomic number of 47.

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@Buffalo,

You can really leverage your investment if you go for mining companies. If gold is priced at $100.00/oz (for example), and recovery costs are $95.00, it's a profit of $5.00/oz. Should gold rise to $101.00/oz, that's a 20% increase of profits, all else remaining equal.

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@Buffalo,

Buffalo wrote:

If you actually buy the gold, do you buy gold coins, or what, and from where?

You can purchase gold from the US Mint also. They only ship within the United States and the following :
Puerto Rico, American Samoa, Marianas Islands, Guam, and the United States Virgin Islands.

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@Buffalo,

If you are truly looking at gold as an investment, forget it. Stocks have always outperformed gold. As a matter of fact, there was a study done on investments, and it found that art work increased in value more than gold or stocks. But how many of us are art experts?

We own many art works, and some have increased in value - quite a bit, but they were not purchased as an investment, but of art appreciation.

2 Replies

@cicerone imposter,

From Wiki:

Year to
31st
Dec. Gold Price
(US$/oz) Silver Price
(US$/oz) S&P 500 [1] Dow Jones
Industrial
Average [2] Money
Supply M3 [3]
(US$ bn) Average US
Farm Wages [4]
(US$/hr) US Govt Debt [5]
(US$ billions)
(adjusted to
2006 dollar)[6] (adjusted to
2006 dollar)[7]
...........Gold....................................DOW
1910 20.67 421.84 0.54 11.02 59.60 2.6
1920 20.67 208.79 0.54 5.45 71.95 25.9
1930 20.67 249.04 0.33 3.98 164.58 16.2
1940 34.50 500.00 0.35 5.07 131.13 43.0
1950 40.25 335.42 0.80 6.67 235.42 257.4
1960 36.50 248.30 0.91 6.19 58.11 615.89 315.2 290.2
1970 37.60 195.83 1.64 8.54 92.15 838.92 677.1 389.2
1980 641.20 1567.73 15.65 38.26 135.76 963.99 1,995.5 3.50 930.2
1990 423.80 654.01 4.17 6.44 330.22 2,633.66 4,154.6 5.52 3,233.3
2000 272.15 318.68 4.60 5.39 1,320.28 10,786.85 7,117.7 8.10 5,674.2
2005 513.00 529.41 8.83 9.11 1,248.29 10,717.50 10,191.4 9.51 8,170.4
.................Gold............................................................DOW
2008 1,002.00 979.04 14.59 14.29 1,288.14 11,869.65 Undisclosed 9.87 9,090.9

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There are also mutual funds that invest in gold and gold bullion.

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@cicerone imposter,

gold was a good buy in the 1960's when an it was selling for canadian $35 an ounce - and hardly anybody wanted it . some claimed it was just good as a doorstop - but the "super-rich" (saudis , indians ... ) have usually stashed some of their money in gold - coins or large bullion .
if you are buying small ingots of gold , the "essay fee" charged by commercial buyers when buying it back can be quite high and wipe out your profits .
as always : INVESTIGATE BEFORE YOU INVEST !!! and that goes double for gold , art and other similar investments .
large amounts of gold and other "priceless" investments are usually only covered minimally against theft , fire etc. by your standard household insurance policy . you have to pay a hefty premium for insuring more than minimal amounts gold etc. .
safe-deposit boxes aren't always safe , either . during hard times they can attract "safe-crackers" and the bank usually doesn't cover you against such losses - check before you stash it .
best to stash it in your back pocket and surround yourself with "loyal" (well paid) security agents - btw. you'll have to pay them too - drat !
hbg

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@hamburger,

hbg, What you say about buying and selling gold and the fees charged is true; that's something gold dealers do not reveal in any of their ads.

Also, if anyone learned anything about gold jewelry, they never provide the weight of the gold they are selling. The only people really making money on gold are the dealers of gold. Buyer beware.

As for art works, never buy based on "investment," but because you love the art work. If it happens to increase in value, so what? It'll probably be left for your heirs anyway. I made an inventory of all our art works with purchase price and latest estimated market value. On a couple of them, the artist wants over $100 to tell you the value, but I'm not about to pay that much since I'm not in the market to sell.

And finally, gold value increased by 48Xs during the same period the DOW increased by 145Xs, and I'm talking about today's closing.

1 Reply

@cicerone imposter,

Another thought about investing in gold. People invest in gold in the hopes of protecting themselves against (gasp) inflation. Guess what? Most people aren't worried about inflation; they are worried about keeping their jobs and their homes, the higher price of food and fuel, and just plain survival. Have you seen what happened to the price of gold during this see-saw market? Gain some, lose some, and just about remain neutral. If you bought gold, do you think you would get the same amount back when you sell?

Are you an expert in the buying and selling of gold? Even with all the ups and downs of the stock market, those who play the market daily are - yup - broke. During the tech bull and bust, those who played the market also lost, even though many bragged how much they were making on paper. Did you hear back from any of them after the bust? It was estimated that about 90% of those playing the market lost, and the other 10% may have broken even - if they were lucky.

1 Reply

@cicerone imposter,

imo holding (hoarding is the better word , i believe) gold is not meant to be an INVESTMENT .
it's simply meant as an emergency fund that you can (possible) carry with you .
as an example : some jewish people that had to flee germany managed to get some gold out when they had to flee .
of course , you had to be rich enough to have some gold and you had to leave early enough to be able to get out of germany .
similarly , some germans fleeing east-germany when the soviet troops pushed into germany , managed to get some gold out . again , you had to have gold and you had to leave early enough .
for most other people , keeping gold is likely not useful .
(the problem is , people want to buy gold in a panic situation - at which time the gold is expensive . as i said earlier , when it was selling for $35 an ounce , hardly anyone wanted to buy it . )
hbg

3 Replies

@hamburger,

seems that some "investors" are really getting scared and buying gold - i wonder how much gold is being held in saudi-arabia and neighbouring states (by those that can afford it) .
hbg

http://www.theglobeandmail.com/servlet/story/RTGAM.20081010.wpreciousmetals1010/BNStory/energy/home

Quote:

Reuters

October 10, 2008 at 7:16 AM EDT

LONDON " Gold climbed 2 per cent to a 2-1/2 month high in Europe on Friday as tumbling stock markets prompted investors to seek safer assets such as bullion. Spot gold was quoted at $918.15/921.65 (U.S.) an ounce at 0929 GMT against $911.50 an ounce late in New York on Thursday. Earlier it touched a session high of $931 an ounce, its strongest level since July 29.

“The weakness in the stock markets in Europe sent gold higher to take out the $930 level,” said Peter Fertig, a consultant at Dresdner Kleinwort. “But as equities recovered from initial lows, gold came down a little.”

“Currently it is fear that is dominating,” he added. “We are seeing a flight to safety. It is only gold that shines.”

1 Reply

@hamburger,

i was just a bit curious re. gold and saudis .
since they've been selling plenty of oil , they've also been buying some extra gold .

http://goldnews.bullionvault.com/Goldbug/gold_general/saudi_demand_for_gold_booming_18416306

Quote:

Saudi demand for gold 'booming' - Monday 7th January 2008
Sales of gold in Saudi Arabia saw a near 17 per cent rise last year, according to the World Gold Council (WGC).

Speaking to Reuters, WGC Middle East, Turkey and Pakistan managing director Moaz Barakat said that the market for gold in the region is looking "positive" after also experiencing a 30 per cent surge in sales value in 2007.

Reasons for the sales increase included higher demand from tourists and rising Indian transactions, he remarked.

"Increasing demand from tourists lifted the market and if Dubai, the heart of the UAE, was not affected by volatile prices in September and October, we would have seen better figures," Mr Barakat went on to add.

Two gold and jewellery events are set to take place in Saudi Arabia next month, according to the Gulf Daily News.

These will take place between February 20th and 23rd at the Prince Sultan Grand Hall of Riyadh's Al Faisaliyah Hotel, and between February 26th and 29th at the Jeddah Hilton Hotel.

since i was rather busy shovelling snow in february , i was unable to attend the two sales events .

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@hamburger,

The majority of people who buys gold doesn't have the metal in their homes; it's a piece of paper or "certificate."

1 Reply

@cicerone imposter,

ci wrote :

Quote:

The majority of people who buys gold doesn't have the metal in their homes; it's a piece of paper or "certificate."

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4931723.ece

but at least one person sold his house and turned it into gold bullion (NOT PAPER) . you can always carry a few kilos of gold in your rucksack but not your house . <BIG GRIN>
hbg

Quote:

Business at ATS Bullion, which sells bullion from an office near the Savoy hotel in Central London, has more than doubled in the past couple of weeks. One of its customers recently sank the entire proceeds from the sale of his house into a set of £16,100 1kg bars, each little more than the size of a Twix.

just make sure it's a goldbar and not a TWIX !

http://www.taquitos.net/im/sn/Twix-UK.jpg

1 Reply

@hamburger,

WOW! That twix bar represents $32,000 in gold.

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LOL! I just found this "How do you invest in gold?" post I made back in 2008 about buying gold. Too bad I didn't buy any back then!

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@hamburger,

Here's another thought about hoarding gold. What happens when all those people who own gold try to sell in the open market? Guess.

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@Buffalo,

hi its very good options for future investment in gold or precious metals , if you want to do long term investment for future then i prefer to gold fund ,gold ETF .but for short term you can bye gold coins .check purification of what you want it may be in GOLD or silver .

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