I see places like Cash4Gold (which is a relatively new company I believe) and tons of other places buying gold. I can't drive down the street without seeing "WE BUY GOLD!" signs all over. I can't say I remember it being so in your face awhile back, either I didn't pay attention before or this level of marketing and company interest is a relatively new thing. Plus with the news of China buying gold. Do these people know something the general public doesn't? The way I look at it, if these people ARE "in the know" it would appear that they're trying to accumulate as much real wealth as possible with the exchange of giving people what will one day be worthless paper. You'd have to have quite a bit of money to start a company that solely buys precious metals. I'm not sure how it works, maybe they're just looking for profits like every other company but it's got me suspicious and really considering investing in some gold for myself.
Most likely you've hit on it with "either I didn't pay attention before". Doubt that the signs would have left much impression if gold was a subject of little interest to you. Just as an exercise I plotted this comparative chart of the price of the gold etf, coded GOLD, against the share price chart of Woolworths (WOW). Chart extends to 10 years. You can see that WOW has shown a slightly better capital gain than GOLD over the decade time frame. Admittedly you'll get varying results according to the time frame you use. If you'd bought $13500 worth of physical gold at the start of that that 10 year period: 1/ You would have paid more than spot 2/ If you stored the metal yourself you would have had a big hassle hiding and securing it and might have got it stolen for your troubles anyway 3/ If you had it vaulted elsewhere you would have been liable for transport storage and insurance costs. So that's all costs, risk, and no sweetener. If you had bought $13,500 worth of WOW (1000 shares) at the start of that that 10 year period: 1/ No costs other than minimal brokerage 2/ No possibility of theft 3/ Dividends paid over the decade on 1000 WOW shares = $10,130 fully franked. Fully franked effectively means that most of that dividend payout was tax free Decade Chart of GOLD versus WOW GOLD: brown line WOW: black line
Well I thought about this first a few years ago before gaining any interest in precious metals. I noticed the Cash4Gold places becoming a hot commodity on every street corner it seemed like.
