Thoughts on buying Gold at £1400/oz + A new norm or time to sit back and wait?

[BackyardBullion]

Doing some thinking for future video topics and this is one I have been mulling over in my mind for a while. 

My thinking for 2021 and ahead for the rest of the decade is that we will be seeing some serious economic fallout from the Covid Crisis. 

As we all know Silver is on a hiatus at the moment due to premiums being increased now that VAT free silver is not very practical to come by (new anyway, 2nd hand market will flourish I have no doubt - but that is a topic for another thread).

But Gold - how do we feel about buying with spot price around £1400?

Since I have been buying gold I have seen the low of £900/oz and the high of £1569/oz 

Buying the majority of my gold at around the £1000/oz mark always makes me think twice about buying in the current climate - but then I remember feeling the same way when a year ago Gold was sat around £1200/oz mark. 

If gold dropped to £1200 I would be buying and buying and buying - at £1400/oz I do not feel bad about buying the new releases of coins or special interest pieces that I see come up for sale - but part of me always wants a better price. 

Which brings me onto the final point and question - how do you feel about buying at £1400/oz?

For me I see it as low risk/high reward. If gold goes down after my purchase at £1400/oz I will likely see it as a further buying opportunity and not lose much sleep over it. The long term benefits for me outweigh the short term risks. 

Thoughts?

[Rll1288]

Its one of those subjects and viewpoints that falls into the "Depends". Personally I can't see the World economies being great for the next few years which would suggest that PM's should do well and people (i.e. smart investors/funds) will keep a portion of their investments in them. Obviously it depends on risk appetite and a lot of these funds will be trying to balance returns against that and will move between low risk into a higher yielding asset. It used to be a mixture of cash, equities and others now, as we see FIAT currencies being devalued, PM's equities and other. The Other being very high risk assets.

I do think we are on a plateaux with PM's and especially gold and the longer it stays here with this future uncertainty then buying at 1400 would be less of a risk as long as you see it not going back to the days of $900. For someone who joined the PM stacking late its something that I am aware of but will stick to my own "stop losses" and profit levels and will go on that, with a view that its a wealth protection. Cash in deposits its virtually worthless and promotes taking more debt on 🙂. I have always viewed stacking as keeping a long term position as a base, looking for times when opportunities arise i.e. those items were its possible to make a quick turnaround profit and improving my overall portfolio e.g. Special editions like Music legends etc..

You will definitely see corrections and pull backs, but at present I believe its a new world we are in and new influences and uncertainces; those of which creates knee jerk reactions and if I am reading PM's right they have been fairly stable (within in reason based on this years moves haha). My biggest concern on PM values though are the potential moves into new assets that will replace the old FIAT currencies i.e. Bitcoin. As we continue to go into a cashless society it may have a direct effect and its interesting on how that would affect PM's. 

and I fully agree with you last statement if it goes down its a potential buying opportunity as it will average the overall portfolio 

[GBStacking]

Have been having exactly the same thoughts myself as i picked up a 1oz gold Kangaroo just before Xmas but most of my gold is back from when i could get it at £1000 per oz. I've put the kangaroo in the long term retirement stack so I'm pretty sure inflation will have off set the price I'm paying now so am not losing too much sleep over it.

If gold drops to £1200 or below, i will also view this as a buying opportunity, pretty much all my efforts are going into gold this year, at least till the secondary silver market stabilises a bit and unless the GSR changes a fair bit, I'm still content to hold my silver without feeling the need to convert it to gold.

As for how i feel overall about £1400 an ounce, i can only really sum it up by saying, I'd feel better if it was £1200 but if it was £1600, I'd be wishing I'd bought more at £1400. I'm focused on the long term rather than short term flips.

[Darr3nG]

I'm planning to keep stacking Gold (sovereigns) at whatever spot price, throughout 2021.

If the GSR falls below 70, I'll offer up some more silver for gold trades too.

[Kman]

If you really wanted to talk about in-depth I think you would need to go through

• how the global monetary system works aka Eurodollar, repo market, collateral 
• is gold a fear or inflation asset
• 2007/8 financial crisis
• commercial bank behaviour since 2008
• central banks, QE and bank reserves
• bond yields 
•  economic outlook going forward

 

 

 

[goldhunter]

I am comfortable buying gold at £1400, but in the form of Proof Britannias as they can be purchased around spot+10%, a kind of bullion+ coin.

So these could benefit from both a rise in the gold price and a renewed interest in their numismatic qualities going forward.

 

[sovereignsteve]

I have been watching the gold price for years. I have seen commentators speculate on the direction it will take and many chartists analyse it to death. Everyone has an agenda.

I have yet to see anyone predict it with consistency whether by fundamentals or technical analysis.

If you believe in holding gold, keep buying if you can afford to within your overall portfolio, whatever that may be.

A little analysis is allowed in order to try and buy the dips, if you must😉

[dicker]

Personally, I will keep on buying.

I don't try and time my purchases, I just try and buy at set intervals. (Pound cost averaging).

Best

Dicker

 

[Rll1288]

2 hours ago, sovereignsteve said:

I have been watching the gold price for years. I have seen commentators speculate on the direction it will take and many chartists analyse it to death. Everyone has an agenda.

I have yet to see anyone predict it with consistency whether by fundamentals or technical analysis.

If you believe in holding gold, keep buying if you can afford to within your overall portfolio, whatever that may be.

A little analysis is allowed in order to try and buy the dips, if you must😉

Analysis is based on looking at the past to predict the future. Markets are based on aligning their strategies based on this. If you look at the Gold price since 1982 it has, effectively go in one direction... Up. I agree predicting the movement is really just really a function of those people in the markets who look for trends to adjust investment strategies etc. It would be interesting to over the lay the price movement of gold since 1982 against the cost of living / inflation and see what the true value might be. I suspect that the price today reflects the economic times today and that its not much different over the years. It would be good to see if the statement "stack gold/silver" to protect wealth is correct i.e. if it has done as I am hoping it has and will be for the future. The only true asset that would have paid dividends now, would have been a part of a Defined Benefits pension scheme where it wasn't based on marker investment, but a guaranteed increased by the Pension supplier ( saying that because I cam out of one kid 80's and regret it to this day )

[AppleZippoandMetronome]

I can see why you would want to make a video about this as it is quite a difficult topic. I too believe the economic conditions moving forward are going to be pretty dire but I stopped buying gold in any real quantity back in June or so due mostly to the price. I moved a lot of money around last year putting it into physical purchases mainly gold and land. I don't trust it being kept in non physical assets - something I've always been weary of but especially now.

The reason I more or less stopped buying gold though is becuase of how off everything feels to me right now. One doesn't need to look far to see how prices have risen for other assets/collectables/investments, etc. It feels to me almost like people are desperate to move money into something - anything - whether that be property, gold, silver, Bitcoin, vintage video games and all other collectables, etc, etc, etc. I think it was @Kman if memory serves me right who asked some months back if we were in an everything bubble. I think we are and that leaves it really hard to know what one should do with ones money. All of the price rises can't be actual indications of true value and I feel it'll at least partially go pop at some point.

[Isitreal]

Being new to buying Gold coins, £1400/oz is pretty normal to me but I guess to those that were buying at £700/oz these prices may stop you from buying more. I'm into British motorbikes and I used to buy them 20 years ago for £100 for a BSA or Triumph but now have to buy them at £1000 for a knackered bike. Not sure what I'm trying to say here but things change and things go up in price. I might say the same thing in 20 years time i.e. I used to pay £1400/oz in the 20's but have to pay £2500/oz in the 40's. If that makes any sense. 

[StackemHigh]

I was buying at £700 thinking it was expensive. Should i or shouldn't i.

Still asking myself the very same question when pulling the trigger on a purchase.

I've always kept FIAT incase the boiler blew up or the car needed a wash!

[Robda1986]

I'm currently debating with myself as to pull the trigger on 10-15 sovs but I know if I do gold will drop like a sack of potatoes 

[dicker]

Just now, StackemHigh said:

I was buying at £700 thinking it was expensive. Should i or shouldn't i.

Still asking myself the very same question when pulling the trigger on a purchase.

I've always kept FIAT incase the boiler blew up or the car needed a wash!

Same here....So I try and spread out my out my purchases.  I do however wince at not buying more Sovereigns earlier on in my investing career.  

[dicker]

4 minutes ago, Robda1986 said:

I'm currently debating with myself as to pull the trigger on 10-15 sovs but I know if I do gold will drop like a sack of potatoes 

Yes, that is what happens to me.  Also whenever I watch England play cricket they collapse.

[Booky586]

2 hours ago, dicker said:

Personally, I will keep on buying.

I don't try and time my purchases, I just try and buy at set intervals. (Pound cost averaging).

I couldn't agree with you more. I'll buy slow and steady, looking out for quality in the region of 3-10% over spot, being selective on the best I can get.

It's a long term plan towards retirement and hopefully it will reap some rewards in the distant future.

[Pete]

I have somewhat similar views as I personally think gold is now over priced so I am not buying.
When gold saw a steady climb over 3 months starting late May 2019 from around £1,040 per oz to £1260 at the end of August, I chose to unload gold with a decent return.
That was endorsed when gold started to fall over the next 3 months ending mid December 2019.
It then climbed monotonically during 2020 to £1,500 before dropping to around £1,400 today.
In hindsight selling in the summer of 2019 was premature but selling just before the 50% climb would have been a disaster.

There is no way of predicting the future price of gold but considering the global stock markets are recovering quite quickly and the fundamentals are strong there is more recovery to come. Governments have borrowed eye-watering sums of money and vast sums of cash are sloshing around in personal wealth so infrastructure, property etc is due to boom. The have-nots however will continue to suffer and those without good jobs will be on the side-lines but the big money I reckon will be invested in property and stocks. There will be bargains in buying up closed prime retail stores and maybe convert failing high streets into property as the demand outstrips the supply.

Investors always want to make more money and retain wealth so do you buy gold hoping it will appreciate, or hold its value, or do you buy global stocks like pharmaceuticals, energy, construction etc. I think the latter will win so gold will flatten or fall as the big investors in gold take profits as they move their cash into other asset classes.

The runt in the pack is Platinum and this metal is overdue a big correction and for me is my predicted bright future if only you could buy without VAT and without ridiculously high dealer margins right now. As for the stock market, like with my gold, I am converting significant chunks into cash because there is no certainty of anything right now. Better safe than sorry during volatile and uncertain times.

[MrTT]

Atm i buy only higher grade numismatik gold coins. Instead of buying bullion gold at this high prices.

I like to buy a nice older gold coin i can enjoy. 🤠🤠

For bullion , i only buy silver. 

[Coolsmp]

Gold seems to the best/only way forward for precious metals buyers due Brexit debacle. Ive sold out of my silver stack and only buying gold from now on and will continue to do so irrespective of price. The only exception im making is to finish my 10oz Queens Beast collection (2 left) to fill the stunning box which Alun made.

[Bars]

I only started buying recently so seems like a good price to me 🙈

[Rat]

4 hours ago, dicker said:

Personally, I will keep on buying.

I don't try and time my purchases, I just try and buy at set intervals. (Pound cost averaging).

Best

Dicker

 

This^^^

I don’t have a massive budget for Gold but I have been buying slowly but regularly for the last 3 years mainly sovs and 1/4 oz. One thing I did see happening last year was the premium on some of the larger bullion gold coins coming down so I took the opportunity to swap some of my collection for larger coins (such as my favourite Mexican 50 Peso).

Going forward I intend to stick to this strategy and continue to ride the roller coaster!

[dicker]

15 minutes ago, Coolsmp said:

Gold seems to the best/only way forward for precious metals buyers due Brexit debacle. Ive sold out of my silver stack and only buying gold from now on and will continue to do so irrespective of price. The only exception im making is to finish my 10oz Queens Beast collection (2 left) to fill the stunning box which Alun made.

It is an interesting one.  I think there will still be a healthy trade in silver, particularly silver that is already in the UK. I will continue to buy Morgans, and buy the odd interesting coin but it’s 999 Au for me along with Sovereigns that I like.  

[dicker]

2 minutes ago, Rat said:

This^^^

I don’t have a massive budget for Gold but I have been buying slowly but regularly for the last 3 years mainly sovs and 1/4 oz. One thing I did see happening last year was the premium on some of the larger bullion gold coins coming down so I took the opportunity to swap some of my collection for larger coins (such as my favourite Mexican 50 Peso).

Going forward I intend to stick to this strategy and continue to ride the roller coaster!

Good stuff Rat!

[BackyardBullion]

Thanks for all the awesome contributions all - it is very nice to see this kind of discourse 🙂 

[dicker]

I hope you don’t mind me posing this in your thread BYB...it amuses me and I thought I would share   

My wife despairs about my PM habit.  She is by training an accountant and relatively “feisty”.  I try and make a monthly purchase which she has just about got used to, however if I have been “bad” and have bought other items from the forum etc, I make sure I am away from home on the last Friday of the month when she does the accounts. 

She has usually calmed down by the Saturday morning, and I always repeat the same thing comparing my habits to those of our friends:

Roger has a mistress and burns through money taking her to the Maldives and Dubai as well as supporting his family

Ben buys a brand new BMW every year which depreciate terribly 

And your dear husband buys gold which is as good as cash.  A tier 1 asset, what’s not to like about that?

I am usually forgiven   🙂

Best

Dicker