Gold 2024: How low can it go?

[GoldDiggerDave]

Gold really needs to see a £200 bump in GBP.   The US election is setting out to be one of the most craziest in modern history with states barring Trump from running not just one way traffic other states may bar Biden from running.   If we were ever gonna see the US eat itself alive 2024 is looking like the contender.  

[Kitalon]

I'm sorry I've already run out of my daily allowance of likes but thanks for this @katyc 🏆 But if the general long-term trend in gold is set to increace (say at 6-11% a year) how would spreading payments out like the DCA concept be really any better than a one-off investment, whether you buy at a high of 1700 or low of 1500 (if 'any time is the best time' to buy). At some point 1700 will eventually become low. Spreading out payments to average costs would surely mean that you're only going to be able to buy less gold as an asset. In my mind it feels better to just lock it in at the right time (say when/if it falls to around 1500) and be done with it. Granted there is always the possibility that gold may eventually go downwards but that's a risk we all take. This is purely academic for me because I'd have to wait for my investments to mature before I can buy in (and I don't want dead money hanging around doing nothing for months to wait to be re-invested). I suppose everyone's circumstances are different and different methods suit people differently for their long-term goals.

 

[Bigmarc]

4 hours ago, Kitalon said:

I'm not sure I follow. Surely it's better to wait until gold is cheaper so I can buy more than I could today?

Quiet difficult to predict a bottom but also makes no sense buying so close to it's all time high if you have none. If I had a wad load of money I would allocate a portion of it at different stages from it all time high (10% 15% 20% down). You may not get it all but you would have accumulated some. 

The end of the day it's your money and may not be wise to dump it all at a certain point but also wise to try and get as many ounces as you can. 

As for people saying they pound cost average. Type in to the search bar "truck" and see how many members say back up the truck when the price has dropped. It's not honest advice if you claim to do both. 

[FriedrichVonHayek]

14 minutes ago, Bigmarc said:

As for people saying they pound cost average. Type in to the search bar "truck" and see how many members say back up the truck when the price has dropped. It's not honest advice if you claim to do both. 

Why can't you do both?

I buy every month and if there is a big drop I'll try to buy more.

In reality nobody knows what the price will do in the short term.

[BLOOMMAN101]

3 hours ago, GoldDiggerDave said:

Would you want 50k in the bank with a 5.25% yield year on year of 50k in gold bullion? 
 

 

25k and 25k atm for me

[Kitalon]

35 minutes ago, Bigmarc said:

Type in to the search bar "truck" and see how many members say back up the truck when the price has dropped.

I'm not familiar with the terminology but I'm assuming it's means buying more when the prices are low or something?

I would never put all my eggs in one basket and would only invest what I could afford to lose. But I've had another thought, an advantage of a well timed bulk investment in gold bullion could potentially save £1000s in various premiums and postage (and hassle with all the faff of being in for deliveries) 😄

Edited January 1 by Kitalon

[Bigmarc]

12 minutes ago, Kitalon said:

I'm not familiar with the terminology but I'm assuming it's means buying more when the prices are low or something?

Pretty much what you wanna do. Price drops and you want to back your truck up, fill it full of gold and leave. 

14 minutes ago, Kitalon said:

an advantage of a well timed bulk investment in gold bullion could potentially save £1000s in various premiums and postage (and hassle with all the faff of being in for deliveries

All depends on what you are trying to achieve. Most it's just an insurance policy (me included). 

[Bigmarc]

44 minutes ago, FriedrichVonHayek said:

Why can't you do both?

You can but one is pound cost averaging (set amount per month)and the other is not (getting over excited). 

If you start backing up the truck on a dip then surely you have broken the rules of pound cost average on a hope that gold still continues to go up or go you buy even more on the following dip and more again on the next dip. 

 

[FriedrichVonHayek]

1 minute ago, Bigmarc said:

You can but one is pound cost averaging (set amount per month)and the other is not (getting over excited). 

If you start backing up the truck on a dip then surely you have broken the rules of pound cost average on a hope that gold still continues to go up or go you buy even more on the following dip and more again on the next dip. 

 

Not really, if I think something's on sale I will buy more of it.

I'm sure you do the same in the supermarket if there's a deal on something you buy all the time.

[katyc]

2 hours ago, Kitalon said:

I'm sorry I've already run out of my daily allowance of likes but thanks for this @katyc 🏆 But if the general long-term trend in gold is set to increace (say at 6-11% a year) how would spreading payments out like the DCA concept be really any better than a one-off investment, whether you buy at a high of 1700 or low of 1500 (if 'any time is the best time' to buy). At some point 1700 will eventually become low. Spreading out payments to average costs would surely mean that you're only going to be able to buy less gold as an asset. In my mind it feels better to just lock it in at the right time (say when/if it falls to around 1500) and be done with it. Granted there is always the possibility that gold may eventually go downwards but that's a risk we all take. This is purely academic for me because I'd have to wait for my investments to mature before I can buy in (and I don't want dead money hanging around doing nothing for months to wait to be re-invested). I suppose everyone's circumstances are different and different methods suit people differently for their long-term goals.

 

I guess the answer is because you can never be 100% sure it will bull because there are so many black Swan events that can flip the economy on its head overnight. Hence the DCA approach mitigates risk either way (explained nicely in the link I sent). I guess it's down to your stomach for risk.

[katyc]

Although the middle east situation, the rates coming down, inverted yield curve, lack of M2 money supply, stagnant retail sales (ignoring the media and looking at the true picture - adjusted for inflation) etc all point to recession.

[katyc]

I went in quite aggressive buying in 2022/3. Intention was to dollar cost average. But addiction to the shiny stiff set in 🙈. Now I've spent up and just buy bits here and there.

(Then, when I got a safety deposit box, I realised I should have just kept to basic bullion - with the premiums as low as possible - because I rarely get to see it 🤦🏼‍♀️)

[katyc]

2 hours ago, FriedrichVonHayek said:

Why can't you do both?

This 🙌

E.g. have a goal of one sovereign per month (as a DCA goal) + buy an extra one or two sovs when prices have a significant slump (assuming funds permit). It's a good way for dollar cost averaging to work even more in your favour.

[Bigmarc]

1 hour ago, FriedrichVonHayek said:

Not really, if I think something's on sale I will buy more of it.

I'm sure you do the same in the supermarket if there's a deal on something you buy all the time.

The op started by looking for a entry point, everyone said pound cost average is the best way, it's only fair to point out that many buy big on a dip. People on here already have a position and the op wants a position but not in at the top. 

 

[Luketeach]

Just my two pennies for the OP as I was in a very similar situation a couple of years ago. I spent ages waiting for the right time to go in and agonising over that entry point. I also felt like I was late to the party compared to the veterans on here with enviable entry points. I went for a big spend over a short time. On the surface a couple of years later it looks to be working out as in at 1450 and now hovering around the 1600 mark.

However in hindsight I wish I had spread the purchases out as suggested by others. Not so much from an investment point of view as I take the opinion it will trend up over time regardless as long as you hold. But for the fun of buying. The joy of making a shiny purchase and then waiting for the mail. Also there are so many products and forms the shiny can take my taste has changed massively from seeing sales come and go and I wish now I hadn’t spent big all in one go and now not having the firepower to grab something awesome when I see it. If I could go back spreading the investment into chunks would be the way I would go 😊. 

[Roy]

7 hours ago, Kitalon said:

Thanks for your advice. I'm sadly not in a position to be able to buy monthly due to a rather drastic cut in salary but I do have one significant savings pot.

I'd wait until your salary recovers. Gold is ATH, you might need the savings if printer go brrrr...

6 months expenses saved?

Yeh boring Roy, but good sleep is important 👍

Edited January 1 by Roy

[Kitalon]

...Yes, I have all my finances in order, safety net, other investments, etc, if I didn't I wouldn't be starting to look into bullion as wealth preservation.

It has been really valuable hearing everyone's input, thank you all🙏, and it will certainly inform my way forward whichever direction I end up taking. But I will certainly be giving this pound cost averaging concept some further thought and investigation.

Edited January 1 by Kitalon
Redacted - too much information

[JohnA1]

Also lets not forget that the 'dip' is only visible as we're looking backwards.

The day of the dip you don't know that it's a dip, you only know that the price is lower than the day (or week) before. It could drop again the next day (or week).

Or it might go up, making you look back a week later and say 'I bought at that dip'

20/20 hindsight, nice innit😁

 

As for the All-time-high BS, that is only true for those who look at graphs treating the 1980 dollar/pound the same as the 2023 dollar/pound.

But they are nowhere near comparable, are they? So many goods have doubled in price in the past few years..

Edited January 1 by JohnA1

[Kitalon]

13 minutes ago, JohnA1 said:

Also lets not forget that the 'dip' is only visible as we're looking backwards.

Indeed. I know that past performance is no indication of future results, however we can estimate an appropriate point at where we might wish to come in. Which is why I was originally asking how low we think it may go, and I feel that I now have my answer, and much more to consider besides. 🙂

[Sovhead]

Within £50 quid gold won’t go lower it’s only going to rise imo, I never wait to try and “buy the dip” I buy all year round to stack and it’s served me well.

[MonkeysUncle]

2 hours ago, Kitalon said:

...Yes, I have all my finances in order, safety net, other investments, etc, if I didn't I wouldn't be starting to look into bullion as wealth preservation.

It has been really valuable hearing everyone's input, thank you all🙏, and it will certainly inform my way forward whichever direction I end up taking. But I will certainly be giving this pound cost averaging concept some further thought and investigation.

Best thing you can do. The price fluctuates so buy on several occasions spread out at intervals to minimise nasty shocks.

The other point to add to this is that as gold is priced in US dollars you also have currency fluctuations to take into account unless you're Stateside.

I will be dribbling a few quid into gold this year, but not much. Will probably end up buying 3 or 4 Sovereigns scattered through the year.

[SilverDrum]

I miss such bold predictions as @wonger made...

On 24/07/2020 at 13:36, Wonger said:

USD target 140 as ive already posted more than once

 

[Kitalon]

33 minutes ago, MonkeysUncle said:

The other point to add to this is that as gold is priced in US dollars you also have currency fluctuations to take into account unless you're Stateside.

I don't quite understand, can you elaborate?

From my perspective I'm in the UK dealing with the XAU to GBP exchange rate. How does USD come into it? 🤔

[apachebleu]

10 hours ago, GoldDiggerDave said:

Would you want 50k in the bank with a 5.25% yield year on year of 50k in gold bullion? 
 

 

 I know the smart answer is the the 5.25% yield but I'll take the gold, its just more exciting 

[stackerp5]

12 hours ago, Fenlander1 said:

spot price is a little less important to a collector.

True. I've sold multiple 3g silver ancient Roman Imperial coins for £100+ on and off the forum...
How do you price history?

My 2p: if you are thinking long-term and have a lump-sum or savings, maybe £ cost averaging. Buying once a month or every fortnight, buy what is in your means. I would recommend think future price and liquidity. Will you need to sell a full 1oz coin to meet your needs, or would selling a sovereign, or a half sovereign be better? I think entry price is important, but if you're looking for long-term then trying to find the bottom to buy-in is kind of a loser's game - in the sense that it's tough to know the true bottom of the market. 

Plus, when I buy, spot tends to drop after  

Which makes looking at spot in the short-term a bit painful

Fortunately I've not sold gold at a loss  

Edited January 2 by stackerp5