Dear All (especially Gold-Bugs!)

do you hold physical? Obviously that's nice- you can look at the shiny lump of heavy metal!

Or, do you keep virtual gold at say BullionVault?
IMHO, BV seems to be quite safe from a calamity point-of-view, but maybe GF/CGNAO disagree??

(by the way, what does CGNAO stand for!!??)

Physical so you can show friends when they pop round for coffee!!

Presuming that your intention is to hold gold, rather than to trade it...

Physical means your gold exists and you're certain it's yours. You can test it with a Fisch device if you like. There is no intermediary whose failure or fraud might come between you and your property.

Virtual means you're trusting a web server, the people behind it, and the infrastructure of the web. What contingency plans will you have if you go online one day and your account has been emptied out, or the website has disappeared, or if there's a major internet failure meaning you can't get access at all? How can you be confident that the people running the website are doing everything they claim?

I'd much sooner trust an established physical bank (in a suitable jurisdiction) with any significant amount of gold, but perhaps Bullionvault et al have some guarantees or credentials of which I'm not aware?

I don't have any gold, physical or otherwise, but having been wondering if, from a financial prudence point of view, it would be sensible to buy some very small gold coins, to hold against real global financial disaster scenarios.

Presumably people holding a few gold coins have done well over history if events occured like the Weimar inflation in Germany, or collapse of banking in Eastern Europe.

I'm not suggesting (before I get outraged emails) that we are on the point of collapse. Just that in terms of a diversified portfolio, over a 10 to 30 year horizon, it could make sense to have a few small (hence easy to convert into food, fuel, whatever), gold coins of an easily recognised brand (not sure what, Krugerands, sovereigns, etc.) Perhaps £1k worth?

Any thoughts?

• If you trust no-one: physical (in your personal possession, NOT in your back garden )
• if you trust some people (i.e. institutions): physical (in an offshore safe/vault)
• If you trust a fair amount of people: allocated gold (such as bullion vault, gold money etc)
• If you trust a reasonable amount of people: unallocated gold (such as ETFs, gold mining shares etc)
• If you trust most people: put you cash in a building society (Nationwide is the best IMO)
• if you trust everything, everyone has ever told you - including that bird on the TV: put your cash in a bank (like Northern Rock).

Any questions?

As you move to smaller coins, the premium generally increases. Eg here are the current krug prices from Bairds

Krugerrand 1oz £411.50
Krugerrand 1/2oz £210.50
Krugerrand 1/4oz £114.75
Krugerrand 1/10oz £47.75

And even a 1/10 oz coin isn't exactly pocket change. Bullion silver coins might make better day-to-day spending money, though sadly you end up paying a hefty premium (for UK legal tender) or VAT

It's not so much about the absolute number of people you trust, more about how you credit-score them

Thanks for the info.

Does anyone on here keep a few of the smaller ones - just in case? Or is that a crazy idea - one which is "out where the buses don't run." One that only begins to appear to make any sense at all when you've spent too much time looking at housepricecrash.co.uk

CHRIS
If you have a little look around on the bullionvault.com site theres a presentation that explains most things about buying gold.

http://goldnews.bullionvault.com/

The gold needs to be stored in a vault as soon as it touches private hands it looses its integrity. In other words it has to be professionally tested to prove its purity. All costing money making your investment less effective.