Taking Profits in Gold

By: Adrian Ash | Fri, Jan 11, 2008
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"...Go on - choose where you'll keep your profits. Then sell your gold if you dare..."

IMAGINE YOU'D been smart and put some cash into gold.

You didn't need to buy before the Gold Market took off. Buying gold at the start of last month will do fine.

Six weeks on, your imaginary self now shows a profit of 14% in terms of the Dollar. Measured in Euros you stand some 13% higher. Versus the Canadian you're 16% up. Your return in terms of the British Pound comes a shade under one-fifth in less than a month and a half...

Too hot, too fast? You were smart in December; now it's time to get smart again.

So you look at the charts...and you decide to take a profit in gold.

I mean, it might all be over below $900 per ounce. The loss of confidence in central bankers could suddenly reverse this weekend. Sentiment in the credit markets could return like sub-prime never happened.

Oil quadrupling...grain prices at record highs...surging demand for copper from China...all the reasons for today's rising Gold Price might evaporate with a few choice words from, umm, well from Ben Bernanke or Hank Paulson.

Hell, even bond prices might come down - driving yields above the inflation rate and putting a stop to the destruction of wealth in your mutual and pension funds.

So you choose to get out of gold. It's time to take profits

Question: Where will you now put your money?

Hmmm...maybe you should switch into stocks? Yes, so the S&P now stands more than 10% off its top of the summer. The slump took a while, too...ticking first lower then higher, but never quite high enough to prevent a grinding loss for investors.

Kind of sounds like the Tech Crash, but with finance stocks leading. Things change though. Or rather, they might do...even if Bernanke's fresh promise of cheap money failed to stem the slide this week.

What about bonds? Sure, yields are now below inflation. But everyone loves a regular income - the bond bull-market proves that, especially if you count the gains in the shrinking Dollar.

Or you could hold your wealth in real estate. Prices turn when no one expects it, remember! And no one expects Florida, California or even London house prices to turn higher any time soon. Least of all potential home-buyers waiting for prices to fall further before they dare to get in.

No? Well okay...simply keep your gold profits in cash then. You know, cash like the Dollar, or the Euro, or Loonies, or Pounds.

Just decide first which currency you trust to hold value. Go on - make your choice and then sell your gold.

 


 

Adrian Ash

Author: Adrian Ash

Adrian Ash
BullionVault.com

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the head of research at BullionVault, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

About BullionVault

BullionVault is the secure, low-cost gold and silver exchange for private investors. It enables you to buy and sell professional-grade bullion at live prices online, storing your physical property in market-accredited, non-bank vaults in London, New York and Zurich.

By February 2011, less than six years after launch, more than 21,000 people from 97 countries used BullionVault, owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical silver (US$129m) as their outright property. There is no minimum investment and users can deal as little as one gram at a time. Each user's unique holding is proven, each day, by the public reconciliation of client property with formal bullion-market bar lists.

BullionVault is a full member of professional trade body the London Bullion Market Association (LBMA). Its innovative online platform was recognized in 2009 by the UK's prestigious Queen's Awards for Enterprise. In June 2010, the gold industry's key market-development body the World Gold Council (www.gold.org) joined with the internet and technology fund Augmentum Capital, which is backed by the London listed Rothschild Investment Trust (RIT Capital Partners), in making an $18.8 million (£12.5m) investment in the business.

For more information, visit http://www.bullionvault.com

© BullionVault 2006-2014

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events - and must be verified elsewhere - should you choose to act on it.

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