gawguy Posted June 24, 2009 Report Share Posted June 24, 2009 I want to invest in gold, but not store it. I want it to be safe, obviously. What is the best way to invest in gold? GG Link to comment Share on other sites More sharing options...
HeartThais Posted June 24, 2009 Report Share Posted June 24, 2009 If you are just talking about low-cost speculation, you can go with a gold ETF. However, gold ETFs are not really "safe". They inherently have risk of fraud and counterparty risk. They could be ponzi schemes and there's enough evidence to make me nervous. They could be robbed by or from the custodians. They might have leased all their gold and in case of disaster, won't be able to get paid back. They are probably not even physically audited. If you are thinking about gold as a hedge against disaster, the only safe thing to do is buy physical gold and store it close by. Although the risk of an ETF is small, it is very highly correlated with the kind of disaster that you would be hoping gold would protect from. For example, if the GLD custodian has leased out all their gold, it's during a financial disaster when they are unlikely to get it back. It's like the cliche of buying insurance on the Titanic from someone on the Titanic. But if your primary goal is speculation and not risk-hedging, ETFs are the cheapest way to go that I know of. Link to comment Share on other sites More sharing options...
cavanami Posted June 24, 2009 Report Share Posted June 24, 2009 Hardly a best way...ETFs, who knows and how to get your "money" out when you need it??? Keeping physical gold...maybe the neighbor comes over with a 12ga shotgun and lightens the gold from you...hard to win in this, IMO. Link to comment Share on other sites More sharing options...
HeartThais Posted June 24, 2009 Report Share Posted June 24, 2009 With an ETF, you just sell it like you do a normal stock. That's why it stands for Exchange Traded Fund. The daily price is marked to whatever gold fixing it follows. The risk is if it is suddenly discovered that the underlying fund can't track because of fraud or other issue. And then your ETFs could become worthless. But until that day comes, getting your money out is as simple as calling your retail broker. They do have lockboxes of course. And there are some services that will sell and vault the gold for you but none I can recommend. I've just found out from google that you can buy from a swiss bank inside the Zurich airport and vault it there tax-free. From what I've seen, you pay about .5% in bid/ask spread by buying those thai gold bars which I believe come in 10 baht bars. For a retail investor, that seems reasonable enough until you get together enough money to start buying London exchange accepted bars (400oz and 1kg). Link to comment Share on other sites More sharing options...
gawguy Posted June 24, 2009 Author Report Share Posted June 24, 2009 Thank you all for intelligent replies! I see there is no truly safe way to do this. I would have to think about hiding place in more detail. The Thai 10 baht bars? How do you know they are pure and the exact weight? How many ounces or grams are they? So then what about gold mining stocks? GG Link to comment Share on other sites More sharing options...
HeartThais Posted June 24, 2009 Report Share Posted June 24, 2009 The way I look at a gold-mining stock is breaking it down into two components. The first is like owning a call option on gold which represents the future value of gold in the ground. The second is owning a construction-related company that profits from the actual delivery. So, it's not a straight gold play. If the gold-mining company can't get loans to build out infrastructure, they will go bankrupt and will have to sell their gold options separately. If their production costs go through the roof, their profitability falls so it is affected by things that affects all related businesses like oil prices, material costs, and transportation costs. And because it is really an option on future gold to be found, it behaves like an option and is more volatile than the underlying, straight spot gold. But maybe you want that. Say you really want to make a heavy bet on gold. You can use the inherent leverage of the gold mining stock and then lever them up even more by buying them on margin. And then buckle up and enjoy the ride. Link to comment Share on other sites More sharing options...
Torneyboy Posted June 24, 2009 Report Share Posted June 24, 2009 Yeah ..not a good idea ..imo Link to comment Share on other sites More sharing options...
dddave Posted June 25, 2009 Report Share Posted June 25, 2009 Speaking of gold, a Thai lady friend has some gold jewelry bought in the USA by a former BF. She wants to sell some of it but US and European gold is not the same as Thai gold and she is not sure where she can get it appraised properly in Bangkok. Anybody know? Link to comment Share on other sites More sharing options...
cavanami Posted June 25, 2009 Report Share Posted June 25, 2009 China Town. Yaowat Street, many gold shops, shop around. Link to comment Share on other sites More sharing options...
zzzz Posted June 25, 2009 Report Share Posted June 25, 2009 Keeping physical gold...maybe the neighbor comes over with a 12ga shotgun and lightens the gold from you...hard to win in this, IMO. Keep guns and ammo in a home safe instead [and maybe some pieces of silver]-- i.e., if law allows. ETF gold is OK as an inflation hedge but if SHTF, gold may not be as important as weapons. Link to comment Share on other sites More sharing options...
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