Is Gold considered as investment or insurance?

[Satchmo]

On the topic of buying gold, any difference in getting physical gold, gold certs or maintaining gold accounts in the banks?

[d.o.g.]

On the topic of buying gold, any difference in getting physical gold, gold certs or maintaining gold accounts in the banks?

YES. Buying physical gold attracts GST. Buying a gold ETF does not. I am not sure about gold certificates and gold accounts.

Physical gold has security risk - it can be stolen.

A gold ETF may have counterparty risk. Some ETFs own the gold directly and store it in vaults, some own the gold only indirectly via swap agreements. If the ETF does not actually own the gold, it only owns a claim against someone else for the gold (or the equivalent value of the gold), and that someone may not make good on that claim.

Gold certificates and gold accounts also have counterparty risk since all you really own is a claim against the certificate issuer/gold account administrator for said amount of gold.

[sgd]

If gold is traded in GLD/Sing$ then it makes sense. but gold is traded is USD.

Lets say US$ tanks then Gold will rally, lets also say after US$ tanks it also depreciated deeply against Sing$

so if you sold your gold ETF and converted from US$ back to Sing$ would you have made any much gains?

But if you bought physical gold and stashed it in your bed post and gold rallied then your gains are real if you sell your gold direct into Sing$.

[aspeed]

the exchange rate risk is always there be it ETF or physical gold, cos the value of gold (in S$) for your physical gold (or any form of gold) is still directly translated from POG in US$.

over last few years, price of gold (in US$) has increased much more than drop in US$ exchange rate to S$, so in S$ term there is still net increase.

no GST if you buy gold cert. but when you convert gold cert to physical gold, need pay GST.

[corydorus]

Gold is a good preservation of wealth and can act as a buffer for spikes and troughs provided you have complementary - other investments, that may move opposite direction. If is in same flow better still.

Returns can be relative. Definitely for me is an Insurance and maybe a damper. And that's what i need for now i think.


Cory

[Temperament]

the exchange rate risk is always there be it ETF or physical gold, cos the value of gold (in S$) for your physical gold (or any form of gold) is still directly translated from POG in US$.

over last few years, price of gold (in US$) has increased much more than drop in US$ exchange rate to S$, so in S$ term there is still net increase.

no GST if you buy gold cert. but when you convert gold cert to physical gold, need pay GST.

Hi,
No GST if you buy physical gold in HONG KONG & stored in HK's Banks.
i nearly do it a few years ago. But i do not like HK's $ peg to US$. Even then i would have made a "bundle" if i have done it?
Well no use crying over spilt milk

[Temperament]

I think the price of Gold will usually reflects the current psychological value given to fiat money and the economy of the world. But i think if US$ being the world's accepted currency of trade, keeps on depreciating, the price of gold will remain high, or go higher. i don't know why gold is treated or comparable to other commodities like oil, crops from the farm, etc. since biblical time. Actually its a metal with limited commercial use except jewelery.

If you have the spare $, physical gold is definitely an insurance item.
The only problem with this insurance is its cash value may become less not more when you need to surrender it for your cash flow problem. So like equities if you can choose when to sell them is very important. In fact, so are the rest of the things.

[freedom]

with insurance, what you are looking for is protection, not income/gain. but with investment, what you are looking for is income/gain.

although a lot of people said they are buying gold for insurance, most of them are actually investing in gold, or considering gold as investment-linked insurance?

[Musicwhiz]

Gold reminds me of a share price which has run ahead of its "fundamentals". Haha. And to me, since there are no cash flows associated with Gold, I still do not consider it as a viable investment.

[Temperament]

Ah...,
You are right in a way, physical gold is not pure insurance, neither it's an investment. It's does not have earning, cash flow, etc.. like a company. i think it is more like an investment in a commodity yet its a stand-alone commodity unlike other commodities; Ah..., i am getting myself into a corner. But i know if you can choose when to sell gold, just like every other things is the best.