Gold
Gold, a store of wealth for millennia, has been on a safe and even upward trend for years. However, the past few months has seen an acceleration in value (today's date 29th April, 2024). While it is nice to be proven right, and to have gained personally, we've also helped a lot of people invest in gold over the years. Feels satisfying that they made the right choice in the metal, and in me. I also have a queue of people to buy their gold at full international 'spot' price, should any ever decide to sell. That's good business. But really, anyone could have seen that the price was lower than it should've been. Everyone involved in the gold business was of the same mind for the past few years - and stocked up/traded accordingly. It made no sense that gold traded in the $1,600 to $1,900 range per ounce over the past three years or so. Far too low. Deserving instead to trade in the $2,000 plus region, at least. This has now been corrected. Some now state that gold could reach $3,000 an ounce. This I would not like to see as it's translating a calm steady asset into something more volatile, Bitcoin Territory, as the Financial Times termed it over the weekend.
With recent investor enthusiasm it should perhaps touch the $2,400 level, in a possible second round of buying yet to come. As of today's date, gold trades just above $2,300. It's the usual, crowd sees a train, Hey, Let's All Jump on the Train. But at $2,300 its still not a record price at all. There's value left, and still safe to purchase as an investment at the $2,300 to $2,450 level. Anything over this you'll just be treading water. Solid, but no big upside over time - other than as a mild, but attractive, tax free (if bought in coin) hedge against inflation. If it's an instant profit you're after, a 'gamble', gold buying at over $2,450 isn't the answer. With inflation factored in, gold has traded at $3,000 plus many times in the past. Honestly, I can't see it quickly reaching this figure, or going far beyond it. Yes, hitting $2,500, this is likely, maybe even hitting $2,750, but nothing too much more than that. Unless of course Russia, China, North Korea, Iran or Israel let off a small tactical nuclear bomb to make a statement (Five, five countries presently going through 'events' where access to, and a big signal, might be an attractive option). Then gold will go to the sky. Being the major crisis hedge it is. I don't think there has been such a high risk of this happening since mankind invented this weapon.
Nobody has a magic pair of Tell me the Future Googles but gold should, going forward, trade naturally in the e2,300 to e2,500 range - if no major disaster visits the world and not too many newbies crowd in.
As with a lot of 'in vogue' investments there's plenty of newly minted experts on the block, throwing out the advice, and with nothing invested themselves, no skin in the game. Beware from whom you get your gold buying advice. On a practical buying physical gold level, also beware the plenitude of outlets offering to buy and sell gold. Where potential investors can err badly is in the price they either pay for it, or sell it. Seems obvious, but most retail outlets offering to buy or sell gold offer disastrous rates. And the recent proliferation of online websites offering the same service pose the same potential disaster of significant price-risk and purity.
As a solid proven hedge against inflation a simple example to illustrate this point. About twelve years ago a lady came into the auction room with an Edwardian oak rolltop desk that she wished to sell in one of our antique auctions. We took it in. While setting it up for the public view a few days later we had to remove the top from the base. There, hidden behind a drawer, a thick rolled up bunch of old Irish £50 punt notes, to the sum of £7,300. I rang the lady to tell her what we had found. Delighted, the following day she called by to collect the most fortunate find.
As we were chatting she told me that shortly before her father, a local shopkeeper and publican, had died, he had hidden this money behind the drawer for ‘safekeeping’. While she was over the moon for us to discover it, she had unfortunately lost out badly. Inflation had done its dirty work. When her father died in 1976 the then present-day spending power of that money was e52,000. Had her father instead possessed the foresight to buy the equivalent in gold, £7,300 punts of gold in 1976 purchased from my predecessor, this sum would have gotten him 59oz of gold, equal to 3.6lb weight (approximately 5.2 square inches in volume). Had this been instead placed behind that drawer today it would been worth e117,150 for his daughter, or himself had he lived. To spend any way they pleased.
Not to sound too much like a financial advisor, but over any length of time cash dies. And gold prospers. This has been the trend since time immemorial. Gold makes sense - it's a straight-forward, internationally traded, liquid commodity with it's own daily, internationally publicly listed, and followed, selling price. With plenty of people to buy it, and no third party risk.
If you have gold to sell please contact us. Should you wish to buy gold, please contact us. Either-way, as buyer or seller we absolutely guarantee you the very best price achievable,
Damien Matthews.
E-mail: [email protected]
Tel: 046 9240568
