Full Version: Idiot's Guide To Investing In Gold
Could anyone provide some help for a precious metals dope (like me) to get into the game of investing in gold? Where do I start? What do I do?
Gold Idiots guide – is the idiot the person reading the guide or writing the guide?
I am no gold expert but I looked at investing in gold recently and this what I found out, there are many options to investing in gold but personally I found these three options the most interesting:
1 Buy physical – 1oz bullion coins cost 5-15% more than gold price (less if you are buying in quantity), you can sell them I gather for about 3% less than the gold price, so this option costs 8-18%. They are a number of different bullion coins - Krugerrands tend to be cheaper, UK Britannia coins look prettier but a bit more expensive. Coin collectors buy “proofs” and sovereigns, not something I am interested in. See www.atsbullion.com or www.taxfreegold.co.uk ( I haven't used them but I have read many people who have).
2 Buy Investment or unit trusts – these tend to invest in gold miners more than physical gold.
Examples are Merrill Lynch Gold and General, Investec Global Gold – there are others.
There are pros and cons for investing in miners, apposed to gold itself. For example they tend to be more volatile than gold itself, but in theory they should go up more than gold if the price of gold increases, unless energy costs sore. (The cost of mining stays the same, so an increase in the gold price is pure profit, but if energy cost more then so does the mining). The funds might invest in stuff other than gold miners.
3 Buy shares in Gold Bullion Securities – symbol GBS – this is a London listed company whose only asset appears to be a load of gold in a HSBC vault, so in theory the price of the shares should reflect the price of gold.
What I haven’t got my head round is that the gold price is fixed in dollars, so the value of gold in sterling can change as the dollar pound exchange rate changes.
I am no gold expert but I looked at investing in gold recently and this what I found out, there are many options to investing in gold but personally I found these three options the most interesting:
1 Buy physical – 1oz bullion coins cost 5-15% more than gold price (less if you are buying in quantity), you can sell them I gather for about 3% less than the gold price, so this option costs 8-18%. They are a number of different bullion coins - Krugerrands tend to be cheaper, UK Britannia coins look prettier but a bit more expensive. Coin collectors buy “proofs” and sovereigns, not something I am interested in. See www.atsbullion.com or www.taxfreegold.co.uk ( I haven't used them but I have read many people who have).
2 Buy Investment or unit trusts – these tend to invest in gold miners more than physical gold.
Examples are Merrill Lynch Gold and General, Investec Global Gold – there are others.
There are pros and cons for investing in miners, apposed to gold itself. For example they tend to be more volatile than gold itself, but in theory they should go up more than gold if the price of gold increases, unless energy costs sore. (The cost of mining stays the same, so an increase in the gold price is pure profit, but if energy cost more then so does the mining). The funds might invest in stuff other than gold miners.
3 Buy shares in Gold Bullion Securities – symbol GBS – this is a London listed company whose only asset appears to be a load of gold in a HSBC vault, so in theory the price of the shares should reflect the price of gold.
What I haven’t got my head round is that the gold price is fixed in dollars, so the value of gold in sterling can change as the dollar pound exchange rate changes.
Thanks for the start 
QUOTE
What I haven’t got my head round is that the gold price is fixed in dollars, so the value of gold in sterling can change as the dollar pound exchange rate changes.
I know what you mean. On a certain day the price can fall in dollars but be largely unchanged in Sterling.
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