Investing in Gold: What's Up With The Price of Gold?
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- čas přidán 2. 08. 2024
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The price of gold has surged recently and so in this video we’ll look at the reasons behind that, but also what it tells us more generally about the economy and markets, and whether we might expect the price to fall just as sharply. Finally, we’ll look at how investors can buy gold and whether I think gold is a good investment.
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Timestamps
00:00 Introduction
00:26 Why has gold risen so much?
05:49 What is this rally telling us about the US?
11:15 Will gold crash now?
13:26 How to buy gold
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Gold has historically soared most during periods of war. The fact that the Shanghai gold price is USD40 higher than London should tell you who is buying the gold.
Thx Ramin for all the work, dont listen to people who protest for taking up sponsorships while you provide so much value for free trough all the years. Greets from Zagreb.
Thank you @massafelipe8063
If you're talking about it then it's already too late to get in.
Gold is up 13% in a month.
World Gold Council is always pushing Gold.
True, I'm up 24% this year. Depending on your style could be good for deploying the gains when equities drop.
Not if it's a long-term shift in trend. If so, then it's only too late to make a quick buck off the initial pop, but not too late to benefit from the long-term move.
NO Buy the ETFs NOW
Rubbish, not when you think of timescales of 10+ years
Gold moves in cup and handle cycles. put up a weekly chart, the cup is about 10 year where it literally does nothing, then ramps up, then another 10 yr cup and handle. It retraces to where resistance becomes support and then jumps
Gold will go to 4k as the next target
Hope so. If it goes I will get closer to buying a house!
😮 im up 40% since buying in 2021 ...
Im shocked at the price as its bern stagnant for 2 plus years 😮
Sell it while you are ahead
I started buying in 2017 but in etfs and they haven't shifted much. Should have bought bars.
well explained and easy to understand. thank you sir!
You are welcome! @wucwug
Wow most informative video I have watched since the surge of gold price
Thanks @Simonpt2000
Signs of a change of heart from Ramin? Warming up slowly to the yellow metal, we'll make a goldbug of you yet.
That fun portfolio clearly needs some junior silver miners to keep your heartrate up :D
I think I can see where Gordon Brown sold all of our gold on the cheap !
Oh god don't! Remember he actually announced WHEN he was going to sell it all!
At least he saved the world 😂
Under instruction from the US fed
He didn't sell ALL the gold, he sold some of it (around half of the UK reserves) to diversify the reserves, which is sensible risk management (portfolio diversification). It was exchanged for interest paying currency reserves, euros and USD, whereas gold of course doesn't pay an income. The timing of course was terrible, although that's clearly more obvious with the benefit of hindsight than it may have been at the time.
"UK reserves are there mainly for precautionary reasons - to intervene in currency markets to stop a run on sterling or to pursue monetary policy objectives. "
Meaning that if you needed you access the reserves you would have to sell the gold anyway, at a time and price which you had no control over.
"Any attempt to sell off large amounts quickly risks driving down the world price, which is what happened after Mr Brown’s announcement in 1999, leading to an international agreement between central banks to restrict further sales. A precautionary reserve asset held for intervention purposes whose price is likely to fall the instant it is used to intervene is singularly pointless. "
Charge him with Treason!
"cant predict when gold will crash".... Usually you can; after videos like this fill up my sub timeline. Right on que !
Yes, the supply of Treasuries is a concern. Treasuries tanked in 2022 due to inflation (and QT). It failed as a hedge.
Thank you for a great explanation.
You are welcome! @OmarTravelAdventures
Hi Ramin, could you please clarify the new isa rules regarding moving funds from 1 platform to another...
If i put this years allocation of 20k into vanguard for example but in 6 months time i decided i would like to transfer the funds to 212 as i would like to buy individual stocks or some other non vanguard fund would this movement of funds be within the current isa rules?
Great video, Ramin. I wonder what you think of the possibility that countries will resort, once again, to currencies backed by gold? This may explain why central banks have been buying it up in large quantities. Given the rate of money printing/Gvt. spending going on leading to inflation, I believe there will come a point where confidence in many major currencies will hit breaking point. Having currencies backed by gold may be the only means of restoring confidence in a clearly broken system.
Did you guys see the price of gold today? It's skyrocketing!
Part of a move in commodities in general
I have moved 30% out of my long term etf holds to go long gold, silver and copper as a medium term trades
Some of the soft commodities seem to have moved first
Cocoa looking like a meme coin
Cocoa was a poor harvest. Metals will stay in the ground until someone spends the money to dig them out. The viability of that depends on the cost of fuel and labour (although I suppose a company could build a solar powered Gold Mine).
Yes, holding gold - but a very small portion of portfolio - is wise, especially for long-term and even better if you will be DCAing it. I do see somewhat of a risk for gold very very long-term associated with space mining, but that is such a huge unknown I am not actually factoring it in my investing decisions right know.
Gold came out of ETF's to buy BTC , you can see that in the flat gold price for a while after BTC ETF's started to be approved..... Even that wasn't enough to dent the price caused by other factors.
thank you, Ramin 🇺🇸🇬🇧
You're welcome @rayok434
Humphrey and Graham are dropping in to Costco and getting 1oz for $2399.99 and they get bonus card points.
Have a great weekend Pensioncraft!
Thanks @GavinLawrence747
Ramin power!
Thanks @moltennail
Often we spend a lot of effort deciding what is the best buy for the money. We have many tools to analyze the purchase point part.
Several of my financial savvy friends point out we do not have good tools for determining the best selling price.
Any thoughts on this avenue?
Excellent video Ramin, as always.
I added some gold to my SIPP / ISA via Invesco Physical Gold (SGLP) back in October and have seen ~ 25% increase in value 🤑. Last week I sold 25% of my holding to crystallize some of the gains, having observed (as stated in the video) that historically these sharp peaks tend to be following by a sharp fall. However I'm still holding a reasonable chunk as I like the hedge / diversification aspect of gold, especially in these crazy geopolitical times. Just being a pedant, I notice this form of asset is termed an ETC (exchange traded commodity) rather than an ETF.
Could you do a similar video on Silver?
"stock prices while I'm doing this video are still doing quite well"
Always level and objective commentary. Feels like the sub-message is that investing in gold is gambling. I’ve been attracted to it as a balance to portfolio. E.g. weird portfolio or golden butterfly, but long term investment strategy feels like it should exclude it.
Bought some awhile ago - now silly prices . Too
Pricey for me now
I'm surprised you didn't mention the "Brown Bottom". That was the time to buy.
Since you mentioned miners, to an extent the cost of gold is set by the cost of mining which in turn is set by the cost of fuel, machinery, and labour. In a TV programme years ago the manager of a gold mine said they only made about a 10% profit after paying for all those.
How about mining stocks? Why the price gap between GDX and Gold?
Gold stocks are surging too
I bought gold 2 years ago when it was out of favour and inflation was low for $1649 currently $2388 with Goldman Sachs’s expecting it to reach $3000 I hope it gets there soon 🤞
Ah, I held $20 St Gaudens from 1992 until 2018, nearly 26 years.
I'd like to say it was worth it, but holding dividend bearing stock would have been a better bet.
Lotsa risk in holding physical gold, always at risk of loss or theft, plus there is storage costs, and it has no yield.
Granted it is very alluring, and the gold bug sales folks are very good at their jobs, it's actually hard to sell it when you want to do so.
Perhaps Pim van Vliet's paper "The Golden Rule of Investing" is of interest to you.
It must be good time to sell actual gold like jewellery? Which I've never worn and never will.
The best thing about gold is that is never goes to 0 so good safe bet for pensions if there is another crash you will have something left to liquidate.
And an ancient Egyptian would have understood it thousands of years BC. Probably not the the ETF but in Jewellery definitely.
Ive read that another factor in the rise of gold could be people in China and India looking for capital preservation, esp in China with its' property problems. Having been a bagholder in the past however, I am not bullish from here personally.
This might make a bit more sense given the following silver trend.
Yes, I am surprised he didn't mention that. This is from Metals Daily website:
Commodities expert Ross Norman reckons he might have found a key driver in the (gold) rally: China.
“The perhaps unsurprising answer to the mystery buyer … is China … just a lot more China than we might ever have imagined. On the face of it, yes retail demand is hot, and the central bank bought just 5 tonnes last month (that's roughly half one days gold mine production) - so great some headlines, but not really all that significant.
More impressively 124 tonnes was drawn down from the Shanghai Gold Exchange, which is seen as a proxy for domestic demand, taking Q1 offtake to 522 tonnes - very impressive and roughly double what we would expect to see. Meanwhile ETF gold demand remains small by any comparison. Great - but still no biscuit.
Our view that an options play is a contributory factor still stands, but again not sufficient to account for the price action we have seen.
Where the demand seems to be coming from is actually from the Shanghai Futures Exchange (SHFE) - often wrongly regarded as the smaller brother of the Shanghai Gold Exchange (SGE).
Daily gold turnover on the SHFE last year averaged $13.89 b/day (=billion dollars per day) - well behind London's LBMA average turnover at $78.91 b/day and New York's CME at $44.3 b/day.
And then things changed in March 2024, just when the gold price went through an inflection point. Business on SHFE essentially doubled in a month and then doubled again to nearly $40 b/day. That's headed for roughly half the size of the London market in 2 months."
yes, i am living in beijing and i can confirm this is true. My bank has put a big cabinet with gold bars on display and a big sign with the price per gram. Its a big deal here
I think rates might end up being held rather than cut, and I believe the price of gold will probably settle around 2500 til the end of the year.
You stated that the US market is overvalued. Ex MAG7 it's actually good value historically.
Why is gold seen as a safe hedge at the moment rather than a good money market fund. Particularly as gold is high and may correct?
It's just a question of over how long you are talking about. Short term it's not compared to MMFs but, longer term, history shows it to have been. However, there is always increased confidence in gold compared to something like a MMF which are generally poorly understood.
Read up on what happened to money market funds during the 2008 crash - it’s not completely safe and it’s not a hedge.
@@laarm888 I have read about that and I can find no report of any consumer investor losing money. How much did people lose?
But can etfs really push up the price of gold? Some etfs are derivatives I'm guessing, so if the demand for the physical really spikes maybe it'd cause it to go up?
Physical ETFs buy gold and store it. As long as investors keep buying, gold goes up in price.
@@george6977 Allegedly
It's recommended to hold up to 5/6% Gold in the portfolio. Better in ETF.
GLD is backed by real Gold.
Well, regardless of what the market does in the nearest future, gold will always be the most reliable means of storing wealth. Overtime it has proven to be more inflation proof than both the dollar and other means of wealth storage
This is kind of silly if you actually look at its historical volatility
Maybe you ought to have mentioned the arbitrage between the west and China due to higher premiums, meaning any price manipulation (if any) will end this year
I agree that there is unwarranted criticism by some people on the comments.
Hi Ramin. When considering options for investing in gold, I think it’s also important to consider an ETCs (Exchange Traded Commodities) option as well as tracker or gold miner ETFs. Especially Physical ETCs where your investment is backed by gold that is physically held in storage (the price of the ETC is directly related to the gold spot price minus the fund’s spread - which equates to the fund’s fee relative to an ETF’s TER).
Awesome. Better off with Italy Pietro Boselli Italian Thomas.
I had a gold ETF in my portfolio for a while but it was such a small amount and was "crashy" as Ramin would say so I got out of it years ago
Bought gold and mining stocks years ago when it was 30-40% cheaper. You guys are too late for the train
I disagree with your assement on the poor performance of gold. using somewhat more realistic timeframes e.g. beginning of May '72 till today SPX and Gold have about the same nominal performance. Accounting for tax on stocks and tax free gold holding your gold comes tax free while stocks need to make up the e.g. 25% capitals gains tax. Considering the aforementioned than Gold even significantly outperformed the SPX... In recent years e.g. 2019 to today gold had a >11% CAGR if you measure it in stocks value after tax
I LOVE GOLD.
Much better then paper/ plastic money.
Technically speaking Gold has broken out of massive cup and handle pattern. Probabilities based on that pattern are it goes up further. Furthermore its in wave 3 of 5, so if you're not invested wait for the pullback and then get in for the 5th wave higher. Glad I put my defensive money into Gold. I'm up 25% in a matter of months whilst bonds have gone nowhere and I think that's set to continue for the foreseeable.
Why 5? Why bonds going nowhere for the foreseeable?
@@jam99 elliot wave theory.
@@mattinterweb Well, I'm convinced... not.
@@jam99 you do you pal.
Gary' Economics argument is that there is still a LOT of money held by the wealthy that needs to go somewhere, some of it from the COVID stimulus. Now that interest rates are falling again, it'll be asset prices that will rise, gold included.
Just like 2007/8, there's a huge amount of stress built up in Western economies that people can see (accident waiting to happen vibes), so the rich/sensible are demanding more safe haven assets.
Now do the Cocoa story ?
LOL at 16:30 😂 why are you comparing 200 years when most people live 70 and the gold price was fixed to the dollar for much of that. Come on man, be fair.
I bought early-mid 2000s when Gordon Brown sold the UK's, and my small stack was bought at an average of £250/oz. Now nearing £2000 and I'm targeting £5-10K at some point before 2040. The global situation worsens as the financial economy goes wild. Some wild reality checks are coming. It's 2007/8 again so people definitely should consider some safe heavens as part of their portfolio.
The countries who have real sound money are the ones buying gold. The US EU UK are mainly bankrupt
Time to take profit if you own Gold.
Non western Central banks are buying gold, the feds ability to " manage" the price of gold is getting more limited. Russia among others want to get to a point where oil is tradable in non Dollar , preferably gold backed currencies.
Buying/Selling Gold is more speculation than investing
The same with many other things like property, but that is losing its lustre. Gold will undoubtedly outlast a new build flat in London.
@@MrDuncl No, it's not at all the same as buying property. Residential property is a home for someone. Commercial property is an investment in a business.
Buying and storing Gold doesn't have any utility whatsoever. You're just relying on the fact that it will retain value because it's rare and beautiful.
@@GonzoTehGreat I agree that Residential property SHOULD be a home for someone. However, recently many people seem to have turned it into a speculative investment. Especially since banks are far more likely to lend out money to buy property than gold.
BTLers relied on capital gains more than they did on rent. Anecdotally, there is an empty house in this road which hasn't been a home for anyone for over six months because the sellers can't accept that, just like gold, prices can go down as well as up.
@@MrDuncl True, the UK BTL market has indeed been problematic since ~2010, partly fueled by low interest rates making it too easy for investors to speculatively seek growth, especially in areas like London.
If gold is moving because central banks buying it and a potential fight with the USD, why is silver following a similar trend?
Central banks do hold silver as well. Read what they did with a load of the Feds silver during the Manhattan Project (used it to make giant electromagnet if you are wondering).
Proof that these metals have actual uses.
@@MrDuncl Thanks, @MrDuncl, I didn't realise they hold substantial silver, too. Gold and silver are used a lot in industrial and the electronics industry, and silver much more so than gold I believe. Gold is mostly used for bullion and coins. Is it something like 10% gold is used industrially, compared to about 50% for silver?
I have physical gold and so far I wish I'd never bought it!
Why?
@@jam99 the spread on coins is insane
@@GavinLawrence747 which type? Not true of sovereigns and britannias (UK legal tender). And I wouldn’t worry too much about paying more than spot price when it’s CGT free.
@@GavinLawrence747 Yes, the spread is high, less if you shop around but still high. But physical gold in the hand is a very long term emergency reserve investment. Physical gold is not something any average person should be regularly trading in and out with.
@@jam99 yeah, exactly. I have some coins and some silverware. Along with some credit cards its defcon 1 status.
I'd much rather own a bit of land with a clean scottish spring on it than bars of gold :)
"Gold and Silver are money. Everything else is credit." J.P.Morgan
Try paying your taxes in gold or silver; they are not accepted as money, the way they were 2000 years ago.
@@george6977 If you did not know, Gold is not for paying taxes. Gold is to avoid taxes, keep and increase value, all without the government knowing how much Gold you have.
@@george6977 Every other day there seems to be an advert on the radio for "Cash for Gold" and similar helpfully telling you that they will buy your unwanted gold jewellery "even if it is broken" (how generous 🙂). Just make sure you don't cash in more than you need to pay your tax bill as in a couple of years the £s they give you will be worth less.
He did say this when all relevant currencies were on the gold standard, mind you
@@rjScubaSki Mind you that "money" mass printed on paper is just paper. Gold cannot be destroyed or printed. A cow that cost 10 oz of Gold 5000 years ago is still 12 oz of Gold.
off to argos to use my gift cards
I enjoy looking through old newspaper adverts and catalogues. In 1990 you could buy a 16" 9ct Gold necklace for £10. The cheapest 9ct Gold necklace in Argos is now £45. If it isn't a good investment a woman can always wear it.
@@MrDuncl Golden advice that
$61bn extra supplement package for US deficit spending just passed, ladies and gents. Hold onto your gold. Oops, that's right, you don't have any...
TLDW: "I wouldn't buy it myself, but what goldbugs do in the privacy of their own homes is none of my business"
1 trillion dollars added every 100 days
Gold down next week.
Thanks for the convincing analysis.
The ownership of gold by etf is an oxymoron
...perhaps, but it's been a profitable oxymoron for me! 😄
Seems Ramin is still not a fan of gold.. with the great irony that the main alternative (bonds) have been slaughtered.
But how did anyone expect anything different from e.g. gov bond funds given that interest rates were so incredibly low for so long? The stupid mantra of safety in bonds during a time of 0.5% interest rates was just that, stupid, but most financial advisors don't understand what they are talking about, they just regurgitate.
@@jam99 they shouldn't have - bonds got to the point of offering return free risk, as the joke went. But people got wedded to the ubiquitous stock/bond combo narrative.
Getting back to gold - it absolutely should have a place in every investors' portfolio. 10% minimum, and up to 25% is fine. 75/25 stock/gold portfolio works better than an equivilent 75/25 stock/bond as the gold portfolio does something useful when the rest of the portfolio has a hard time. Whack the numbers into a backtester if you don't believe me.
Next 2 yerars 1oz £3000 I'm more than sure 😂
5000 kg of gold would be a lot bigger than that. A cubic meter is usually around ton of most liquids.
Why aren't you talking instead about the recent and ongoing S&P 500 crash?
I assume this was recorded last week, hence statement: 1:30
What 'crash'? The S&P 500 is only down 5.9% from its peak last month on March 28, so it's back to where it was the month before that in February - just 2 months ago. It's still up nearly 5% YTD and is still up almost 25% from the October 23 low less than 6 months ago...
There have been 28 falls of 5% or more from a high, since the GFC March 2009 low - in other words it's a normal occurrence and plenty of people have been expecting a pullback to happen this month as the rally had got extended. Rallies don't go on forever and stock markets don't go up in a straight line...
In Q1 S&P 500 had the tenth best Q1 ever recorded, so a minor 5% drawdown from that is hardly unexpected and not a crash, although it may still go on to 'crash' it hasn't done so yet.
"Crash" :)
@@mellowmarkable OK, so far!! No evidence that this downturn has finished yet, we'll have to see what happens next week. A 5.9% drop is pretty hefty! I hope you're right, but it seems that the US stock market is driven by psychopaths who buy and sell in the billions for the fun of it! Oh, there is a name for them isn't there? Hedge fund managers and derivatives traders. Total psychos.
Maybe because 5% is not a crash.