I can understand the idea behind gold being a good investment because it is an inflation hedge and will not be subject to the devaluation of western currencies. But in the past 4 years according to CMC spreadbet it has gone up from $300 to $900 - that's as much as houses have risen! Yet nobody talks about a gold bubble?

I think this is a very interesting question.

I can certainly understand the excitement of folks who are already into gold (particularly if they bought anytime prior to last summer), but starting to buy gold at in excess of $900 when, as you say, it has already risen so much, is a scary business; it is for me at least.

The main reason for the scariness in my case is that, in all honesty, I only have the word of others as to what gold is likely to do in the future. I personally have no idea where it's likely to go or why.

I'm fearful of missing the gold boat, but (again personally) have no sure idea where the boat is heading!

You've answered your question - this bull market has still got legs! We haven't hit the Euphoria stage - accumulate. Plenty of value in the junior miners as they haven't followed the bullion price up yet.

really? Very interesting.
What are some examples of junior miners please? And can you buy shares in them in the UK (Ideally CMC but i think CMC only deal in large cap companies)

thanks

Like any other investment, do tons of research BEFORE making a committment. I read that huge gold thread on the main page right from the start (no joke), read and listened to financial news websites, spoke to the physical bullion dealers myself before I started to make my first investements in gold. This is the key really...try to understand what you are getting yourself into. The first time, I bought ONE 1oz krugerrand (spelling?) and I was crapping my pants thinking am I going to lose all my 350 pounds worth of gold. This bull run is definately not the faint hearted. Prices will rise and dip and there will times where you start to sweat ("sh*t; shall I sell now before the price drops more?" etc). No one truly knows how far prices will go, but from my understanding we haven't really started yet. This gold bull is only getting warmed up.

So basically, follow the gold price closely, try to get a feel of the direction of the prices, check out the Technical Analysis posters on forums such as Kitco (excellent charts), read loads, and when you think you've got a good handle just dive in. And I mean dive in. You don't make any money by being a wimp. I should know

I've been investing in gold and silver for a couple of years. The juniors are cheap relative to the metals price but you need to do your research - have a look on GEI http://www.greenenergyinvestors.com/ there's a wealth of information. Most people start with investing in the metal itself. I originally invested in physical as the ETF's weren't trading. The problem you face is that metal price has risen but the real value is in the juniors - as a novice I wouldn't recommend steaming straight into the Venture exchange. A good way is to pound cost average into the ML Gold and General fund - so if the price falls you buy more units. For the record my current junior favourites are GPR, GBS, IPT & EDR. I hold others on AIM but Canada is the place to be - TD Waterhouse can trade all these stocks.

You're kidding! Have you read the "Gold" thread? (It's on the Main Discussion Forum, for some reason.)

We'll have hit Euphoria when every man and his dog steams in. Cabbies will be advising you which juniors to buy. Nice moves up yesterday on EDR and GPR.

Edited to add: Wow a whole 9000 posts in 12 months - the general public really have got to grips with precious metals!

Has this ever happened in the past?

I remember holding a gold and general unit trust in the late 70s. I think it was Fidelity. At the time I also held Fidelity Japan and Special Situations.

I sold out the gold UT for what I considered a decent profit, well before the top. However, I remember those who still held gold investments when the price was dropping like a stone too. Thankfully I sold early. The same with the Japanese market. Some people are still holding Japanese UTs from when the Nikkei was trading over 35,000.

Cabbies have NEVER been telling people what gold junior stocks to buy. My recollection from the first time round is that people were scrabbling to OFFLOAD their jewellery not BUY it. If you want to call that euphoria go right ahead. Fast forward to a country that knows gold far better than we do - India. What are they doing right now? They're selling they're jewellery as fast as they can.

Gold may well double or quadruple who knows and for how long, but the minute the FED starts raising again there could be the mother of all drops. All the charts I have seen on here have been the very extreme of what may happen. A couple of people may go balls out and make a lot of money. But don't forget that like with any other market there has ever been, there will always be people who buy right at the top. It is a certainty. It won't be the clever money.

I have to say that it sounded pretty unlikely.

Oh dear