How To Invest In Gold Now – Buying And Selling Gold, Coins, Bars, Shares, Mining, ETFs

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Down, up, down, up – the price of gold is back where it was two days ago

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It’s been over two months since I last posted, and the price of gold is now almost exactly $100 lower than at the end of my last posting!

Having hovered around $865.00 in the early hours of Thursday morning, when trading opened in New York it shot up by about $20 to nearly $885.00, crossed above that line briefly around midday, lost half its gains again by mid afternoon, and was sitting between $881.00 and $882.00 just after 6 o’clock in the evening New York time.

In other words, the gold price on Thursday evening is back where it started on Tuesday morning, when it dropped from a whisker over $880.00 to just above $860.00 when New York opened and stayed there for 48 hours.

 Nothing spectacular to report for the moment then, watch this space!

Gold getting closer to $1,000 an ounce

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Quoting Money Week today (i.e. Money Morning): “Spot gold hit a new record high for the fourth day straight today. The yellow metal soared as high as $984.60 in Asian trade, up from $973.30 in New York late on Friday. Silver tracked gold higher to break through the $20 mark for the first time since November 1980, and was last trading at $20.16.”

I just took a look at the 24 Hour Gold Chart and the gold price has currently dropped again slightly to $981.50 – no, after refreshing the page its up 10 cents again already at $981.60.

So who knows what will happen by the end of the day, and especially by the end of the week.

I couldn’t resist refreshing the page again before finishing this post, and yes, it’s gone up another 10 cents to $981.70…. and now $981.80 – better just get this finished or I’ll be here all day!

(Just had a final peek… down again to $981.50, oh well…)

“Gold could hit four figures”

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The market has started to look at gold as money again rather than just a commodity, writes Ed Bugos (Whiskey and Gunpowder) in an article on the Money Week website.

He forecasts “a $1,200-1,400 high for gold” in 2008, “that will break the bond market’s back, and make stocks cheap again”.

He says he is “also looking for an intermediate bottom of the dollar, big corrections in the energies and base metals, and a global recession”, continuing “It is still timely to buy the dips in gold prices and to accumulate sound mining assets – though good share values are becoming more difficult to find”.

Under a sub headline “Gold Is Sounder Money!” Bugos quotes an excerpt from an article “Gold Is the New Global Currency” in the Financial Times of January 8, 2008, which he uses to highlight the “increasingly frequent theme in the leading financial papers” that the market “has once again started looking at gold as money, rather than as a mere commodity”.

He also cites John Kaiser of the Kaiser Bottom-Fishing Report, who “believes the market is nearing a flashpoint where the sceptical public finally turn into believers and come rushing in”. Kaiser “reasons forecasts for gold [of] $2,000 are more plausible now that it is but ‘a mere double’”.

If gold is being considered as “money”, gold coins are probably as good a way as any to acquire it little by little, e.g. when there is a dip in the price, and gradually build up a stock over time as prices rise.

Incidentally, spot gold this morning was $900.40, up from $884.70 in New York last night.

Gold … the market never sleeps … even on a U.S. holiday

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With the U.S. markets closed for the Martin Luther King Day holiday, this Monday stock markets around the world got the jitters after (perceived)? bad news on Friday and dropped their … well, their prices.

Everyone is unsure if the U.S. really is going to go into recession and just what that means for them.

Unusually, this was not reflected in an equal and opposite move upwards in the price of gold.

According to the Kitco live trading chart I mentioned a few posts back, the spot gold price ended the day in London at $866.00, having “stood at $868.60/869.80 (U.S.) per troy ounce by 11:56 (GMT), compared with $881.90/882.60 in New York quoted late in New York on Friday”, as Canada’s “Globe and Mail” points out.

In this regard, the “Globe and Mail” says in a report today that “Dealers said that gold’s fall from the record highs was partly driven by investors and funds seeking to cover margin calls from losses in stock markets due to the recession fears.”

To put things in perspective, the paper precedes this with a quote from James Moore of TheBullionDesk. com:

“Commodities opened the year spectacularly, it’s only natural really that we see some profit-taking as the gold market was very long. The currencies have been the main factor this morning,” analyst James Moore of TheBullionDesk.com said.

“We’re seeing a period of consolidation. I don’t see this as a reason for panic, given that there are concerns about the U.S. economy and the potential for recession plus the fact that interest rates there are expected to be cut,” he added.

A couple of days ago in a post we had some comments of analysts on what gold was doing and what investors in gold – whether in the precious metal itself in the form of gold bars, gold coins or gold jewelry, or else in gold stocks and shares or alternatively gold ETFs – should or should not be doing right now.

As was pointed out, sometimes the question is really, are the analysts giving it to us like it is, or do they have some other agenda.

In this regard I came across an interesting downloadable audiobook on gold called “Gold, Hard Money, and Financial Gurus”.

As the synopsis says, after covering the question “To what degree should investors seek security in gold, or in other kinds of hard money”, in the second part of the presentation the audiobook discusses “the financial writers and gurus whose analysis and comments reflect, and sometimes influence, the world of finance and economics.”

“Gold, Hard Money, and Financial Gurus” is one of a series of 12 called “Secrets of the Great Investors” – if you type that into the search box on the page as I did – without the “quotes” – you get an overview of the whole series.

If you do a lot of commuting by car, train, subway or whatever you might find this an interesting way of filling in the time, or you can just listen on your computer straight after downloading. Silence may be golden, but good information is worth it’s weight in gold!

Gold has risen 50 percent in the past year

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With the price of gold reaching “another all-time high” today at $914, as the BBC points out, it has increased 50 percent over the past year. The weaker dollar has been making a contribution to the rise, making the precious metal more affordable to holders of other currencies.

Other contributors, the broadcaster quotes analysts on its website, are “expectations of further cuts in US interest rates, high oil prices, and […] speculative trading”.

Robin Bhar, metals analyst at UBS Investment Bank, says it is “human nature to buy into a market that is already showing strength” and that “most fund managers have a herd mentality and they are just attracted to gains”.

For this reason he advises against taking a major position in gold at this moment: “Gold could go higher still, but we don’t think this is a right time for buying.”

Darren Heathcote of Investec Australia in Sydney also sees “room for gold to go higher”. “We are in an uncharted territory, really”, he concludes.

The question of course remains whether the statements of analysts can be taken at face value, or whether they have their own agenda.

It is definitely worth taking a more differentiated look at the various options for investing in gold. Obviously there are going to be differing criteria for e.g. gold coins or gold jewelry, on the one hand, which can be acquired in small volumes if the right opportunity comes up and whose value will be affected by other issues such as age or rarity, or the shares of gold mining companies on the other, which will to a great degree be affected by the individual circumstances of the particular entity involved. Gold bars and gold ETFs are another thing altogether.

Meanwhile other precious metals are also up, with platinum reaching $1,587 an ounce in Monday trading and silver touching a 27-year high of $16.58.

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Credits: Work From Home | Matteo Turchetto | Andreas Viklund