Is Gold considered as investment or insurance?

[sgd]

I have been thinking about 'investing' in physical gold for a while now.... Only started on (2) as a hobby but perhaps I better start collecting some bullion coins so that I can sew into my clothes or hide in my shoes in case we have to run away from Singapore like refugees in the future... Hee...

unless one is expecting to use gold as insurance for barter during economic turmoil, but if one is on the run or refugee then is a bad idea.

Gold is harder to carry and conceal even if you use thin gold thread how much can you carry? A pound of gold thread? how would one able to overcome metal detector at airport customs or at border crossing? Just hand lifting your vest alone any customs officer will know something is wrong. They will ask how come you have so much gold sewn into your vest and the game is up

If you are going to run better to just keep precious stones instead, a few small nuggets of emeralds or diamonds the size of 10cts or 20cts less than 100grams will be worth hundred of thousands, undetectable and easier to conceal.

[KopiKat]

I have been thinking about 'investing' in physical gold for a while now.... Only started on (2) as a hobby but perhaps I better start collecting some bullion coins so that I can sew into my clothes or hide in my shoes in case we have to run away from Singapore like refugees in the future... Hee...

unless one is expecting to use gold as insurance for barter during economic turmoil, but if one is on the run or refugee then is a bad idea.

Gold is harder to carry and conceal even if you use thin gold thread how much can you carry? A pound of gold thread? how would one able to overcome metal detector at airport customs or at border crossing? Just hand lifting your vest alone any customs officer will know something is wrong. They will ask how come you have so much gold sewn into your vest and the game is up

If you are going to run better to just keep precious stones instead, a few small nuggets of emeralds or diamonds the size of 10cts or 20cts less than 100grams will be worth hundred of thousands, undetectable and easier to conceal.

Running away like refugee means not going thro' the normal channels.... ie. for whatever reason, you're not going thro' any custom.. You'd then require something of value, the value of which is easily recognizable by the CP (Counter Party), eg. a Boat Man to ferry you out in a hurry. The CP may not believe your gemstone is real and it's also difficult for them to impute a value or even easily encash in times of turmoil... A Bullion coin which can be easily recognizable eg. American Eagles, would be a better bet for using as barter, during the escape...

No doubt, a gemstone would be more useful though when you've safely arrived at your final destination...May be a good idea to have both gems and gold for different purposes and as a hedge.. Hee..

[specuvestor]

Agree.. .when you're grabbing gold and running away it is already dire straits. Countless examples that gold is better medium than any currencies. Precious stones need much higher expertise to ascertain value, so liquidity becomes issue. And people has been been known carrying kilos of gold as refugees. Don't underestimate desperation

And agree UOB bullion seems to be the best way to really invest in gold in Singapore.

[sgd]

if really want to use only gold the only way without any smuggling is to do it now by opening safety deposit boxes in 2 other countries and start buying physical gold to deposit there.

That means you have a game plan when the shtf (Sh** hits the fan ) grab your family no need to pack just take only passports assuming getting out is still not a problem make your way to that destination.

The gold there is not to make you rich, is more like at least you all have something adequate to keep you going longer assuming a bad economic climate where there are no jobs high inflation everything you buy cost a leg - a doomsday preppers dream come true. Of course the bank better still be around.

Having stones means I'm flexible but disposing them will not easy how to exchange 20cts size diamond for a slab of meat nobody has small change for that, having smaller stones than that would certainly help. I will go with the stones way as building up an overseas reserve on gold bullion is going to be darn expensive if doomsday never arrives.

[Behappyalways]

The Chinese don’t declare gold purchases, but it is an open secret that are buying on every dip, as they have to do merely to keep the proportion stable at 2pc of their $3.3 trillion reserves. Chinese managers at SAFE must be licking their chops at this week’s chatter about a Death’s Cross.

I might add that China would have to buy vast amounts of gold to raise the share to 10pc, a figure mooted by some officials in Beijing.

Gold’s Death Cross is a buy signal for China
http://blogs.telegraph.co.uk/finance/amb...for-china/

[CityFarmer]

A comprehensive report of gold market that worth a read for gold investor.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

[keat1979]

Buying gold does not produce any cashflow. And you will only realize the value of gold when the fiat currency loses its value assuming the objective of buying gold is not a speculation and not intended to sell for a profit in short term. From this perspective, gold is more like an assurance than an investment. Like assurance, it is not for everyone. E.g. Insurance against the nose/hips for the actors/actress. In that sense, should gold be just bought by those super rich rather than the ordinary folks?

Can we assume that quite some gold "investors" actually are trading gold for short term profit or purely speculating gold?

so should value investors ever consider investment in gold?

one of the question that always asked in investing in gold or precious metal is that it cannot be valued because it didn't generate cash flow. I would like to disagree on this statement.

Economy continue to produce money due to the human knowledge or industry output, without a gold as a backed to the fiat currency, government would just print money to slave people's life through inflation. Having gold is like a hedge in this scenario

Regarding value investing, said if the gold price corrected to 600 dollars per ounce, would a value investor buy it? if the market price allowed us to see the opportunity, i don't see why we don't wish to invest in a 600 if it takes cost price of $900(assuming) from producter to extract the gold?

[CityFarmer]

Buying gold does not produce any cashflow. And you will only realize the value of gold when the fiat currency loses its value assuming the objective of buying gold is not a speculation and not intended to sell for a profit in short term. From this perspective, gold is more like an assurance than an investment. Like assurance, it is not for everyone. E.g. Insurance against the nose/hips for the actors/actress. In that sense, should gold be just bought by those super rich rather than the ordinary folks?

Can we assume that quite some gold "investors" actually are trading gold for short term profit or purely speculating gold?

so should value investors ever consider investment in gold?

one of the question that always asked in investing in gold or precious metal is that it cannot be valued because it didn't generate cash flow. I would like to disagree on this statement.

Economy continue to produce money due to the human knowledge or industry output, without a gold as a backed to the fiat currency, government would just print money to slave people's life through inflation. Having gold is like a hedge in this scenario

Regarding value investing, said if the gold price corrected to 600 dollars per ounce, would a value investor buy it? if the market price allowed us to see the opportunity, i don't see why we don't wish to invest in a 600 if it takes cost price of $900(assuming) from producter to extract the gold?

Would like to share 2 points

First point, historically, most currencies were based on physical commodity such as gold, but it is no longer true now with fiat monies based solely on faith.

Second point, saying "i don't see why we don't wish to invest in a 600 if it takes cost price of $900(assuming) from producer to extract the gold?" is equally saying i don't see why we don't invest when a stock fall to historical low, since the buying cost of existing shareholders are definitely higher.

[Musicwhiz]

Regarding value investing, said if the gold price corrected to 600 dollars per ounce, would a value investor buy it? if the market price allowed us to see the opportunity, i don't see why we don't wish to invest in a 600 if it takes cost price of $900(assuming) from producter to extract the gold?

I feel this argument is fallacious.

So the cost of extracting gold is $900 using your example. But why would the cost of extracting it be relevant to me as an investor? I should be looking at the cash flows an asset would produce in future to determine the asset's value, right?

So if were offered this gold at $600, as a value investor I should be computing the PV of all future cash flows I would expect from holding this gold. If this value exceeds $600, then I would purchase; if it does not, then I would avoid. Simple back of the envelope analysis.

In this case though, the gold would produce a present value of ZERO dollars - it just sits around and looks pretty. Therefore, why would I pay $600 just to display an ornamental piece? The truth is that people pay the $600 in the hopes that someone else would pay a higher amount for that gold. In other words, people are buying based on perceived value rather than the actual cash flows which can be produced from the gold. This is how it differs from holding shares of a company which pays dividends - it would be possible thus to assign a value for that company which is >0 assuming it is profitable and pays regular dividends into the forseeable future.

[a74henry]

To me, gold is a form of insurance. It rockets up when there is a crisis.

When we are enjoying peace, it is better to invest in equities or bonds. The reason, I have investment in gold is I cannot predict when an economic crisis or war will occur.