Is Gold considered as investment or insurance?

[AlphaQuant]

As I never look at this asset class, may I ask anyone what is the value of gold? How do one assess that it is the right value?

personally, i treat gold as part of FX i.e. it is a currency. u treat it the same way u treat the USD, AUD, EUR, JPY, RMB etc - as part of the currency pair agst the SGD. i treat it as an insurance agst the SGD getting punished - from a low delta event of a rogue govie perhaps.

and since it is insurance which u probably hope never to get paid, it is money that u am prepared to write off for good i.e. sell the SGD, buy the gold and forget abt it - the only time u look at it should be when SGD is really in trouble and u will be glad u have a cheap hedge lying ard.

so the value depends on
1) how much money do u want to ignore forever (take the money, buy gold and wait until dirt hits the fan)
2) what probability do u assign to the SGD getting into a mess (i.e. severe depreciation of the SGD e.g. during the AFC in 97)

[corydorus]

To be fair, if there is a crime and not hard to implement protection, the right authority should step in. I do not buy the notion that investors beware and that's it but no credible actions from authority. Everyone paid tax and has right to seek redress.

[HitandRun]

Though what WB says is the truth, so is how Gold behaves in time of war, super inflation, financial crisis, etc. is also the truth. So people knows buying life insurance is a "losing investment" in the long run too (for most of them), yet why many people still buy? Assets allocation or what for simple folk? Insurance?

Uncle Temperament

That is so true. The true value of gold will manifest itself when there is a crisis. Just ask the Vietnamese boat people, the Indonesians during the Asian Financial Crisis, the Russian Jews when they escaped to America, etc.

In any case, I've got around 5% of my net worth in gold. Fortunately, most of my gold and silver was bought when gold was around SGD750 per ounce and silver around USD10 per ounce. And since the gold price has fallen to an attractive level, the bargain hunter in me wanted to buy some gold coins from UOB Bank today (only the branch at UOB plaza sells physical coins). Guess what, the whole place was so crowded that they stopped issuing numbers for customers to buy the coins......

[pianist]

wow didn't know there is lelong at uob main bank..how e atmosphere there and what the most attractive/demanded gold product over there?

[WolfT]

Though what WB says is the truth, so is how Gold behaves in time of war, super inflation, financial crisis, etc. is also the truth. So people knows buying life insurance is a "losing investment" in the long run too (for most of them), yet why many people still buy? Assets allocation or what for simple folk? Insurance?

Uncle Temperament

That is so true. The true value of gold will manifest itself when there is a crisis. Just ask the Vietnamese boat people, the Indonesians during the Asian Financial Crisis, the Russian Jews when they escaped to America, etc.

In any case, I've got around 5% of my net worth in gold. Fortunately, most of my gold and silver was bought when gold was around SGD750 per ounce and silver around USD10 per ounce. And since the gold price has fallen to an attractive level, the bargain hunter in me wanted to buy some gold coins from UOB Bank today (only the branch at UOB plaza sells physical coins). Guess what, the whole place was so crowded that they stopped issuing numbers for customers to buy the coins......

Not only that, even all the silver coins stock pile in singapore were sold out.

[NTL]

As I never look at this asset class, may I ask anyone what is the value of gold? How do one assess that it is the right value?

personally, i treat gold as part of FX i.e. it is a currency. u treat it the same way u treat the USD, AUD, EUR, JPY, RMB etc - as part of the currency pair agst the SGD. i treat it as an insurance agst the SGD getting punished - from a low delta event of a rogue govie perhaps.

and since it is insurance which u probably hope never to get paid, it is money that u am prepared to write off for good i.e. sell the SGD, buy the gold and forget abt it - the only time u look at it should be when SGD is really in trouble and u will be glad u have a cheap hedge lying ard.

so the value depends on
1) how much money do u want to ignore forever (take the money, buy gold and wait until dirt hits the fan)
2) what probability do u assign to the SGD getting into a mess (i.e. severe depreciation of the SGD e.g. during the AFC in 97)

Let me think hard about what you said. Thanks!

[HitandRun]

wow didn't know there is lelong at uob main bank..how e atmosphere there and what the most attractive/demanded gold product over there?

Didn't hang around for long to figure out the stock situation... My friend tried buying from a US website. They too run of of gold coins. Looks like we have a bifurcated market here. Physical (and long term) buyers were happy to buy during this GREAT sale while financial investors are licking their wounds......

[corydorus]

As I never look at this asset class, may I ask anyone what is the value of gold? How do one assess that it is the right value?

personally, i treat gold as part of FX i.e. it is a currency. u treat it the same way u treat the USD, AUD, EUR, JPY, RMB etc - as part of the currency pair agst the SGD. i treat it as an insurance agst the SGD getting punished - from a low delta event of a rogue govie perhaps.

and since it is insurance which u probably hope never to get paid, it is money that u am prepared to write off for good i.e. sell the SGD, buy the gold and forget abt it - the only time u look at it should be when SGD is really in trouble and u will be glad u have a cheap hedge lying ard.

so the value depends on
1) how much money do u want to ignore forever (take the money, buy gold and wait until dirt hits the fan)
2) what probability do u assign to the SGD getting into a mess (i.e. severe depreciation of the SGD e.g. during the AFC in 97)

Let me think hard about what you said. Thanks!

Just to add there is also element feature it will appreciate unlike paper currency which is always on long term depreciation slope.

[pianist]

And unlike paper currency, gold is not subject intervention?

[Temperament]

And unlike paper currency, gold is not subject intervention?

And almost impossible to destroy except ???