Bullionvault v ETF Securities: the battle for gold investors

With all the hysteria surrounding gold....ie...large sections of the financial dailys talking about how to invest, people saying it will go to $2000, new gold-based ETFs coming out and even German vending machines selling it!!...seems like more and more of a bubble every day. Obviously bubbles tend to last longer than people think and to try and pick the top can be perilous but once something reaches this sort of level of attention then you're probably best ignoring the herd of sheep and staying well away.

All the time the Dollar gets weaker the price of bullion will rise. Its not a bubble its just that there is a finite supply of gold and central banks can print as much money as they like. If a central bank wants to buy say 200 tons of gold it just prints the money to pay for it. Gold price goes up due to demand and fiat money falls due to increased money supply. Also people argue "gold yields nothing". Well neither does cash right now.

Bullion vault is good but is such an unbelievable pain in the arse if you have cause to change your bank acccount.

sheep come in flocks not herds

@ Anonymous 1.

Anonymous 2 is spot on.

It's obvious that central banks intend to inflate their way out of their debts (Mr Bean's comments for example cannot be construed as anything else) by printing more paper money. Gold's not a bubble it's merely reflecting that fact. In any event if you're nervous, what's wrong with a stop loss on you ETF? That's what they're for.

Maybe anon1 you've missed out on the gold rally but I wouldn't worry as it's a long way to go yet.

A group of sheep is called a flock, herd or mob....at least according to Wikipedia! :-)

@ Geoff Leake - No we have actually been long Gold for a while as I have a trend-following approach and I agree with both you and Anon 2....the fundamentals back it up. My point was simply that when you have this kind of hysteria, it usually tends to do the opposite. Crowds and herds (or flocks!) are usually wrong!

Any views on when gold stocks will tank? I'm in gold via ETF Securities' PHAU and gold shares via Blackrock Gold and General. I'm expecting the latter to nose-dive when the heat comes off gold, so am much more concerned about the 'bubble' in those shares rather than in the gold price. Any views on that?

The goldminers equities are a leveraged play on the gold price . Leveraged because they own the raw material the price is moving up or down on, in this case gold.

The relationship does not always move logically though. I saw this one described as "tick and tock" and thats not too far from the truth as the gold price moves up generally before the equities do.

If interest rates rise and/so inflation falls, together with a strengthening Dollar you'd want to be out a bit speedily then I'd think.

I'd reckon thats a good way away yet though.

With so much interest in gold, given the fluctuations in the values of most major currencies and in problems in the banking sector at the moment, is it not possible at some point in the near future, with so many gold mining companies digging at at a frenzied pace that we might have much increased production resulting in...you know what?

Of course Gold wont hit $2000 an ounce otherwise Gordon Brown, the man who abolished boom and bust, would not have sold off the nation's gold reserves when he did !

Jezzer...I had a large holding in Blackrock and managed to get out just before the recent peak selling @ £15.92. I notice today following another $20 fall in gold the sell price is down to £15.47. I did this in anticipation of a pull back in the gold price of about $100 at which point I would look at getting back in as it clearly has further to rise and all indicators point to increased demand leading to year end - particularly if the US brings in QE2 in Nov - So you have a choice, sit tight and it should come back or trade the pullback. Note this is really only worthwhile if you can get a full refund on the purchase charges [I use Hargreaves Lansdown] as the spread is nearly £1.00 a share [purchase price today = £16.34]

Dear Rob, If the 2nd largest ETF has attracted $50 billion then all ETFs must have attracted over $100 billion, not the $80 billion you state. Where do you stand in the bubble debate? Should you include the warning "Investments may go down as well as up"?

Check this out guys, I am in the US, I use Bullionvault for trading purposes only and usually take a longer term position. They have some pretty decent fees but like one guys said it is a bitch trying to change bank accounts.

I trade commodities as well and take physical delivery of both Gold and Silver. More silver than Gold because of the current deficit of the inground silver. Silver is being downplayed right now, So I am loading up on the shiny white metal instead of the shiny yellow metal. This article is just general in to show you what the ETF's and a Gold/Silver VAT is doing, don't get side tracked and loose the big picture.

Silver's demand in price will be reflected in it's price very soon. Just like one of the PM analyst said that one day your gonna wake up and silver is at $1500 and Gold at $9000 just because of the events that had built up to that point, namely Fiat money taken it's course and played itself out of favor again. Don't loose focus of what is happening, do your research and read books, like Mike Maloney's book on The Guide To Invest in Gold and Silver, what he has predicted in his book has been dead on up to this point.

I learned a lesson a long time ago from The Richest Man In Babylon, take your advise from people who's daily job is in handling money and make profits. This is a very unusual time in Human history where the whole entire planet is on this toxic fiat currency bull and everybody has drunk the KoolAide. So do yourself a favor utilize these places and tools such as ETF's BullionVault, GoldMoney, Futures, Currencies ,Gold and Silver mining stocks as just tools. Get your hands on some physical Silver and very little gold. Silver will be bigger than real estate and this is not a bubble, this will last for many years to come. When the asset classes change then you just trade your silver for other assets. Hope this made sense and hope you take heed to this, stop bickering over what these clowns are doing and take action in building your own Ark. THE STORM IS COMING!!!

@blank3

Of course Gold wont hit $2000 an ounce otherwise Gordon Brown, the man who abolished boom and bust, would not have sold off the nation's gold reserves when he did !

I blame him for that submarine running aground. I think it was Gordon Brown who spilled the beans to wikileaks. I've read that Gordon Brown is a friend of Sepp Blatter. Sid Perks would never have had that heart attack if Tony Blair was still PM. He has the some of same initials as GeorgeW, I think that proves it.