Gold

[englishoak]

hands down although this year i am looking (more or less) at red figures only. but something similar happened to gold. an ounce was 669 dollars on 2nd of january and today's price is 657 dollars. so... where's the beef?

Yeah But the beef came before Jan did'nt it ? like you said this year your looking at red. Gold is just another part of a porfolio. Some think it will go up some think it won't. I think it's an insurance policy NOT an investment.....

Edited August 18, 2007 by englishoak

[j_cheung]

Great reply Naam

j_cheung, what kind of figures are we talking about when you 'buy fractional ownership of companies'? Because I'm talking about buying small amounts of gold each month, say B10-15,000, could this amount of savings be better put into 'buy fractional ownership of companies'? I think not, but correct me if I'm wrong...

By fractional ownership of companies, I meant the purchase of publicly listed Gold and/or precious metals mining companies and/or jewellry dealers. They both hoard the stuff and have the management savvy to sell on the wholesale and retail markets. Putting 120K to 180K Baht a year into such reputable companies could provide an admirable long term capital gains as well as a steady stream of dividends (as opposed to just shelving the yellow stuff in a deposit box or vault). But again that's my preference.

[JaiGuru]

It Is OK Dr. Naaam please tell all of us with what you got a bigger yield, na. Or is that your big litlle secret?

If you will forgive my rounding… It looks like you roughly doubled your money in 5 years, giving you an annualized return of around 14.4%.

About a month ago, I looked up the 5-year annualized returns for funds in my portfolio. You prolly won’t find these funds on anyone’s list of the hottest funds in the world, but in they seem to offer consistently good returns. And they are:

BPTRX – 18.54% - Baron Partners Fund

CSRSX – 23.55% - Cohen & Steers Realty Shares

DODFX – 24.51% - Dodge & Cox Intl Stock Fund

EGINX – 30.65 (3 Yr. Annualized Return) – AIM European Growth Inv

FAIRX – 16.65% - Fairholme

GABAX – 17.26% - Gabelli Asset

PRASX – 25.16% - T. Rowe Price New Asia

RYOCX – 8.80% - Rydex OTC Inv

VTSMX – 14.15% - Vanguard Total Mkt Idx

VWIGX – 19.65% - Vanguard Intl Growth

The 10% more than gold that was returned by funds such as CSRSX, DODFX, and PRASX may not sound like much, but if you had invested $10k in gold 5 years ago you’d now be sitting with about $20k, whereas if you had invested the same amount in any of the three funds you’d now have around $30k. I wouldn’t suggest anyone do that, BTW… But it does illustrate how much better one could do.

There’s really no secret. I’m sure if you spend a little time on Morningstar you could find many funds that beat the pants off mine, but I’m not looking for the best funds, just funds that deliver consistently good returns.

[VegasVic]

Point taken, it would be a different story if I'd bought, say, in December 1998 and sold it now

So are all these people in Thailand (and elsewhere) buying gold and sticking it in their 'safe' misguided?

people who hold "some" gold as investment are definitely not misguided. it's also a matter of individual investor's taste what percentage of total net to hold in gold.

personally i like gold very much... around the neck, the wrists and the fingers of my wife.

In a balanced porfolio, gold (generally stock in gold producers) has a place of perhaps 5%. The trouble with gold bugs is that they a have been prepetually telling anyone who will listen that the world is coming to an end or a depression worse than the 1930's is just around the corner. Back in the spring of 2006 when gold hit $725/ounce all the gold bugs were touting that in less than a year we would see $1000/ounce gold and that $2000/ounce gold would not be far off, of course gold is currently trading at around $660-$670/ouunce, so not only would you have lost money in gold but while you were losing your money you wouldn't have been earing any interest or dividends. Gold bugs are usually right about once per decade, hel_l even a broken watch has the correct time twice per day

[joeuk1]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

[JaiGuru]

will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

I ran a quick search of the on-line prospectuses of a few the funds I'm invested it, and the word 'gold' didn't pop up once. Hopefully it’ll stay that way; I don’t invest in mutual funds to buy gold.

Although managers of large funds have some high-class problems (such as having and incredible amount of money to invest), there’s a good chance a few might think this is a buying opportunity.

*I* do...

[VegasVic]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

[joeuk1]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

The fundamentals will win out the day on the medium to longterm on the precious and base metal markets , in the short term its too had too call with any conviction even by you the markets will be order driven and the next big moves will be made when the big fund managers decide what they want to do . If the fund managers take money out of stocks and put it into gold then the market will only go one way and thats up . Am i still bullish at 650 i am sitting on the fence getting splinters in my bum its too hard to call .

JB

[Carmine6]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

The fundamentals will win out the day on the medium to longterm on the precious and base metal markets , in the short term its too had too call with any conviction even by you the markets will be order driven and the next big moves will be made when the big fund managers decide what they want to do . If the fund managers take money out of stocks and put it into gold then the market will only go one way and thats up . Am i still bullish at 650 i am sitting on the fence getting splinters in my bum its too hard to call .

JB

Seriously, unless you own futures contracts, put the gold in a safe and forget about it for 10 years.

[joeuk1]

The bears have had there <deleted> handed to them for a long long time , the same sad traders that were bearish of the dow back in 1989/90 at 3000 points , the same sad traders that were bearish of gold at 400 dollars not too long ago .

If gold comes off 50 bucks they will feel they have the market right only thing is these same bears have had it wrong for the last 20 years .Bloody amateurs have been calling property prices down in the uk for the last 20 years and the price has gone up 4fold in the last 15 years .

JB

[VegasVic]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

The fundamentals will win out the day on the medium to longterm on the precious and base metal markets , in the short term its too had too call with any conviction even by you the markets will be order driven and the next big moves will be made when the big fund managers decide what they want to do . If the fund managers take money out of stocks and put it into gold then the market will only go one way and thats up . Am i still bullish at 650 i am sitting on the fence getting splinters in my bum its too hard to call .

JB

There are not any big fund managers that are even considering taking money out of equities and putting it into gold, such insanity is just wishfull thinking by someone who is invested in gold. I hope you enjoy those splinters because the best you can hope for is that gold will hold in this area ($625-$675), while worldwide markets work through this liquidity situation and move further upwards!

[joeuk1]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

The fundamentals will win out the day on the medium to longterm on the precious and base metal markets , in the short term its too had too call with any conviction even by you the markets will be order driven and the next big moves will be made when the big fund managers decide what they want to do . If the fund managers take money out of stocks and put it into gold then the market will only go one way and thats up . Am i still bullish at 650 i am sitting on the fence getting splinters in my bum its too hard to call .

JB

There are not any big fund managers that are even considering taking money out of equities and putting it into gold, such insanity is just wishfull thinking by someone who is invested in gold. I hope you enjoy those splinters because the best you can hope for is that gold will hold in this area ($625-$675), while worldwide markets work through this liquidity situation and move further upwards!

So if there is a meltdown in the stock markets where will they invest the money .

You seem a bitter man re hedge funds just read your post in another thread were you a back office clerk that worked at a failed hedge fund and put out of work ?

JB

[JaiGuru]

I was one of those banging the drum for 800 dollar gold , the mkt settled at 650 last nite the next move will be order driven will the big fund managers take money out of the falling equities market and put it into gold ? or will they sell profit making gold positions to finance losing equities and commodity positions .

That is the million dollar question .

JB

Right now inflation is under control in most of the world, as a matter of fact there are many areas (including the U.S.) that deflation is a real possibility should there be an economic downturn. If gold is going anywhere in this type of environment over the next year it is going down not up!

The fundamentals will win out the day on the medium to longterm on the precious and base metal markets , in the short term its too had too call with any conviction even by you the markets will be order driven and the next big moves will be made when the big fund managers decide what they want to do . If the fund managers take money out of stocks and put it into gold then the market will only go one way and thats up . Am i still bullish at 650 i am sitting on the fence getting splinters in my bum its too hard to call .

JB

There are not any big fund managers that are even considering taking money out of equities and putting it into gold, such insanity is just wishfull thinking by someone who is invested in gold. I hope you enjoy those splinters because the best you can hope for is that gold will hold in this area ($625-$675), while worldwide markets work through this liquidity situation and move further upwards!

So if there is a meltdown in the stock markets where will they invest the money .

You seem a bitter man re hedge funds just read your post in another thread were you a back office clerk that worked at a failed hedge fund and put out of work ?

JB

Fund managers of diversified US stock funds keep about 4% of assets in cash as a result of money flow and to cover redemptions without having to sell holdings.

As an oversimplified general rule, fund managers sell over-valued or non-performing stocks, and buy under-valued stocks or stocks they think will do well in the current environment.

Some fund managers think an excessive cash reserve is a bad thing, after all, customers gave them the money to invest and not to sit on it. Still other fund managers might think raising cash is a good thing in response to unfavorable market conditions so that they may take advantage of some good deals if there should be a market downturn.

Either way, the cash is going to get used, and I should think it’s unlikely that the average fund manager would speculate on gold short-term.

If there is a melt-down and fund managers have cash, they’ll go shopping to buy the best stocks they can find at a lovely discount. They may even sell some of their dogs to buy quality.

And before you start flaming me, I may indeed be bitter and out of work, but bitter is my normal disposition, and I’m out of work only because my mutual funds have done well enough to enable me to retire at a tender early age.

[sonicdragon]

I strongly disagree with the idea that the best way to have exposure to gold is through stocks in mining companies. For one thing, by doing so you are implicitly accepting the market's valuation of future operations of the company in question. Such valuation is subject to many things other than the value of gold - general market sentiment, geo-political issues affecting the areas in which the company has it's mines - these issues will tend to increase the correlation with shares in other non-related companies (something that is usually unwanted when investing in gold). Then there are company specific issues (company leverage, known reserves, exploration for new reserves, operations management, fraud to name but a few), and the fact that many mining companies are involved in many other mining activities, while the pure gold plays tend to be small, illiquid and less transparrent.

Of course, for someone who is aware of the above, those factors might increase the desirability of investing in a mining company, but for someone whose stated objective is to diversify their investment portfolio, I don't believe it is the right idea.

FWIW I am not a gold bug, but I don't make disparranging condescending remarks about them. Everyone is entitled to their opinion (without being . My opinion is that gold deserves it's place in a diversified portfolio. In my case I own a bullion fund and it represents 8% of my portfolio.

[j_cheung]

I strongly disagree with the idea that the best way to have exposure to gold is through stocks in mining companies. For one thing, by doing so you are implicitly accepting the market's valuation of future operations of the company in question. Such valuation is subject to many things other than the value of gold - general market sentiment, geo-political issues affecting the areas in which the company has it's mines - these issues will tend to increase the correlation with shares in other non-related companies (something that is usually unwanted when investing in gold). Then there are company specific issues (company leverage, known reserves, exploration for new reserves, operations management, fraud to name but a few), and the fact that many mining companies are involved in many other mining activities, while the pure gold plays tend to be small, illiquid and less transparrent.

Of course, for someone who is aware of the above, those factors might increase the desirability of investing in a mining company, but for someone whose stated objective is to diversify their investment portfolio, I don't believe it is the right idea.

FWIW I am not a gold bug, but I don't make disparranging condescending remarks about them. Everyone is entitled to their opinion (without being . My opinion is that gold deserves it's place in a diversified portfolio. In my case I own a bullion fund and it represents 8% of my portfolio.

That's why I kept on harping on company minority OWNERSHIP as opposed to gold hoarding and/or stock flipping. As an owner, you have to be intimately aware of the above risks & on managment's devotion in lowering operational costs and improving production efficiency. Putting one's time & efforts in researching a particular publicly listed company with promise is much more rewarding.

[Martin]

I am neither a gold bug nor a detractor of gold bugs, as I can see both sides of the argument.

However, I would be wary of holding savings as contributions to an ETF. That would put one at the mercy of government edict.

Leaving out the spike in gold prices at the time of Russia's invasion of Afghanistan, gold seems to have generally maintained its purchasing power in real terms over the decades. It is neither a 'nice little earner', nor a 'nasty little loser'.

That spike is an eye-catcher on the graphs, but does it really represent much of substance?

I doubt if there was much volume traded in that period.

[Carmine6]

I am neither a gold bug nor a detractor of gold bugs, as I can see both sides of the argument.

However, I would be wary of holding savings as contributions to an ETF. That would put one at the mercy of government edict.

Leaving out the spike in gold prices at the time of Russia's invasion of Afghanistan, gold seems to have generally maintained its purchasing power in real terms over the decades. It is neither a 'nice little earner', nor a 'nasty little loser'.

That spike is an eye-catcher on the graphs, but does it really represent much of substance?

I doubt if there was much volume traded in that period.

This website has a inflation adjusted gold price. It is unfortunately a tiny graph so hard to make out, but the performance other than the last 5 years has been very bad.

http://goldprice.org/inflation-adjusted-gold-price.html

The gold price is also graphed in other currencies as well.

http://goldprice.org/gold-price-history.html

This other website graphs how many ounces of gold it takes to buy the average US house. For 20 years it was better to own real estate, then starting 5 years ago, it was better to own gold. Graph on the right is ounces of gold to buy the average US house.

http://www.investmenttools.com/median_and_...d_in_the_us.htm

Edited August 24, 2007 by Carmine6

[waldpyk]

alas . too often questions are asked on TV without enough information about the personal situation

that said i would rather invest in other precious metals like platinum ed.

but buying a small amount in gold coins - 1/4 and 1/2 ounce , not the 1/1 - is not investing but wisdom

if you don't like the word wisdom change it for insurance

by small amount i mean anything between 2 and 5 thousand euro

less has no purpose , more creates his/her? own risk

[JaiGuru]

... buying a small amount in gold coins ... is not investing but wisdom

Puh-leaze...

if you don't like the word wisdom change it for insurance

That struggles to keep up with inflation? Not my idea of insurance.

If things go as wrong as the Doom & Gloomers say it will, gold won't help. You'll need guns!

[bartender100]

Not quite the same,but I've been picking up stock in a little gold mining company listed on the AIM market in the UK, Glencar (GEX) I'm hoping its going to be my ticket back to LOS.they are about 8.5p at the moment,but drilling reports out soon are expected to be very good. DYOR.

[VegasVic]

Not quite the same,but I've been picking up stock in a little gold mining company listed on the AIM market in the UK, Glencar (GEX) I'm hoping its going to be my ticket back to LOS.they are about 8.5p at the moment,but drilling reports out soon are expected to be very good. DYOR.

Personally I don't think that gold is going anywhere in this current environment of a worldwide slowdown (a recession if you listen to the doomsters) as inflation is low in most of the world and deflation could be a real problem in some areas. However if you are determined to put your dollars to work into a gold mining company, I was given a name of a stock last week-Yamana Gold (AUY-NYSE) that was in the 9's and closed today at $10.41. Check it out and do your due dilligence, if I was forced to buy a gold producer this would likely be the one FWIW , Good Luck

[Thaipwriter]

I make my money trading picks from the HUI Amex Gold Bugs Index. I tend to buy into Freeport McMoran (FCX) Agnico Eagle (AEM) when the index has fallen to its support level at about 322 or below. I move into short positions at around resistance at 368 adding any other stock from the 14 that make up the Index that looks overbought/ expensive.

This Index goes up and down all the time and its volatility is perfect for earning easy money.

FCX dipped to an incredibly cheap 67 $ down from 95 $ during the recent sell off. its bounced back nicely and now sits at about 87 $ and will pass 100 $ when the HUI fires up again after this sub prime carnage gets tidied up

There seems to be a belief that the American goverment is capping the gold price by heavy periods of selling which then cause the HUI index to fall back sharply. I for one believe there is a strong possibilty that there is some truth in this because, lets face it the Dollar has only on worldwide threat to its throne as world currency...gold. (forget about the EURO, incase your thinking that).

[jonjon]

This is a Thai orientated forum yet all the postings are about gold as a commodity !

May I be permitted to ask two questions very relevant to Thai gold investors.

Clearly only some one resident in the Land of Smiles can answer...ie our resident guru and expert Dr Naam.

1. The price of gold in Thailand is clearly linked to and based on the world market price as set in London and New York. My question is whether the price in Bangkok is based on the onshore baht rate or the offshore baht rate ?

2. Gold is normally sold in Thailand at a purity equivalent to 22 carat, unacceptable internationally.

Is it easy to buy 999 purity gold bullion bars in Bangkok and / or internationally accepted gold coins such as the Kruger rand, Canadian Maple,,UK sovereigns etc etc with small spreads ?

Thank you.

[chrissimone]

I was also thinking about buying some gold. I was going to start a post, but found this one. I was wondering if it was ok to buy some gold and bring it out of the country, also If I can sell it later for the market price, either in the US or thailand. I was looking at buying gold bars a while ago and it looks like if I took possession I would need to have it tested before I could sell it. I was looking at less than 100,000 baht.

it just seems that everytime I have a little money, someone comes and takes it.55555555555555. Chris.

[jonjon]

No reply to my earlier question on the gold price in Bangkok. Surely someone can reply ?

Just takes a few calls to yaoarat and a check on the London fix !

Depending on the reply THERE IS AN AWEFUL LOT OF MONEY TO BE MADE in view of a complete reluctance outside Thailand to accept Thai banknotes at their forex value for some explained reason ( Bkk Bank, London currently will not even quote a rate for baht notes)

Perhaps the reason for a lack of response is that the people in the know do not want the facts to get out as they are coining it at the moment and do not want to share their huge profits!!

[Naam]

This is a Thai orientated forum yet all the postings are about gold as a commodity !

May I be permitted to ask two questions very relevant to Thai gold investors.

Clearly only some one resident in the Land of Smiles can answer...ie our resident guru and expert Dr Naam.

1. The price of gold in Thailand is clearly linked to and based on the world market price as set in London and New York. My question is whether the price in Bangkok is based on the onshore baht rate or the offshore baht rate ?

2. Gold is normally sold in Thailand at a purity equivalent to 22 carat, unacceptable internationally.

Is it easy to buy 999 purity gold bullion bars in Bangkok and / or internationally accepted gold coins such as the Kruger rand, Canadian Maple,,UK sovereigns etc etc with small spreads ?

Thank you.

i have to disappoint you Jonjon as i have no idea what the thai domestic gold price in Baht is and of course i have no idea whether that price is based on onshore or offshore rate.

what i know for sure is that 999 finegold is available in a number of goldshops in Bangkok in form of bars but mostly with weights in "tolas" (must be imported from the Gulf) and not in grams.

[Naam]

Depending on the reply THERE IS AN AWEFUL LOT OF MONEY TO BE MADE in view of a complete reluctance outside Thailand to accept Thai banknotes at their forex value for some explained reason ( Bkk Bank, London currently will not even quote a rate for baht notes)

please explain, we are all listening

and after your explanation i will try to explain that with your theory mentioned above there are neither huge nor any profits possible except if the international gold price moves up after you bought

[jonjon]

Nice to hear from you Doctor

Nope..not really about gold but about arbitrage between THB & THO

We all know by now after numerous postings in this forum about the ridiculous 15 percent spread on baht notes outside the Kingdom.....ridiculous as no other strong and stable currency in the world has such a huge spread...(Not even unconvertible ones such as the remiimbi which has a one or two point spreads at Super Rich..).

My point is that were the Bangkok baht bullion price to equate to the THO then large sums could be made selling this bullion in say Singapore ,

This could well be happening at the moment hence silence about this in the Thai press.

Hence the need for the two phone calls and quick calculation mentioned, which will either kill the idea stone dead or offer fabulous wealth to someone in the know.

This of course leaves out the question on what the law is in Thailand regarding the export of bullion although its clear that if money is to be made it will be done whether or not the law permits it, the Thai Malay border being as leaky as a sieve..

Over to you, Doctor...

Depending on the reply THERE IS AN AWEFUL LOT OF MONEY TO BE MADE in view of a complete reluctance outside Thailand to accept Thai banknotes at their forex value for some explained reason ( Bkk Bank, London currently will not even quote a rate for baht notes)

please explain, we are all listening

and after your explanation i will try to explain that with your theory mentioned above there are neither huge nor any profits possible except if the international gold price moves up after you bought

[simcity]

Nice to hear from you Doctor

Nope..not really about gold but about arbitrage between THB & THO

We all know by now after numerous postings in this forum about the ridiculous 15 percent spread on baht notes outside the Kingdom.....ridiculous as no other strong and stable currency in the world has such a huge spread...(Not even unconvertible ones such as the remiimbi which has a one or two point spreads at Super Rich..).

My point is that were the Bangkok baht bullion price to equate to the THO then large sums could be made selling this bullion in say Singapore ,

This could well be happening at the moment hence silence about this in the Thai press.

Hence the need for the two phone calls and quick calculation mentioned, which will either kill the idea stone dead or offer fabulous wealth to someone in the know.

This of course leaves out the question on what the law is in Thailand regarding the export of bullion although its clear that if money is to be made it will be done whether or not the law permits it, the Thai Malay border being as leaky as a sieve..

Over to you, Doctor...

Depending on the reply THERE IS AN AWEFUL LOT OF MONEY TO BE MADE in view of a complete reluctance outside Thailand to accept Thai banknotes at their forex value for some explained reason ( Bkk Bank, London currently will not even quote a rate for baht notes)

please explain, we are all listening

and after your explanation i will try to explain that with your theory mentioned above there are neither huge nor any profits possible except if the international gold price moves up after you bought

Thai gold is hard to sell in Australia , the only place who will take it are Asian gold shop but you will lost money on the transaction .

Same in Thailand, better to buy from a reputable shop , when time to sell go back to same shop.

Some shop do not take gold from other shop!

it is why Yalawat is reputable over all ..

[jonjon]

You are absolutely right Simcity...thats why I asked about 999 gold or internationally acceptable gold coins from Yaoarat otherwise as you say, the scheme wont work....assuming that is that the price is based on the onshore baht rate.....the THO as Bloomberg designates it.