Category Archives: Precious Metals Investing

precious metals investing

Gold: Not Just for Nutjobs

By: Zoe Tustain, BullionVault

Squirreling away a gold reserve no longer seems nuts…

THERE ARE some who seem to think only western speculators buy gold – either that or paranoid conspiracy theorists preparing for Armageddon.

This couldn’t be further from the truth. In fact, China and India alone account for more than half of the world’s gold demand, while central banks – not exactly known for being gung ho – are increasingly using their reserves to buy gold.

In fact, the world’s central banks bought more gold in the first half of this year than they did in the whole of 2010, according to figures published by the World Gold Council.

Away from the debt-laden economies of Europe and the US, both advanced and developing nations have added to their official gold bullion reserves:

  • South Korea almost tripled its gold reserves by buying 25 tonnes of gold in the last two months.
  • The Bank of Thailand bought 27 tonnes since March.
  • Mexico bought over $4 billion worth of Gold (about 90 tonnes) in the first quarter of 2011.

And it’s not just central banks. All across the world, private individuals are choosing to store more of their wealth as gold.

Take India. The world’s largest gold market last year spent a staggering 2.5% of its GDP on gold. Four years ago the figure was only 1.5%. The implication is clear – as India’s economy grows, Indians are putting a bigger slice of their income into gold.

In economic terms, Indians’ marginal propensity to buy gold – the share of additional income allocated to the metal – has gone up.

In 2006, Indians on average spent around $1.40 of every extra $100 they earned on gold. By 2010, this had jumped to over $7.

We find the same story in China – source of the world’s second-largest private gold bullion demand.

In 2010, the percentage of GDP spent on gold in China was a mere 0.4%, a figure dwarfed not only by India, but also neighboring Vietnam – where the equivalent of 3.1% of GDP was used to buy gold in 2010.

But if we look at China’s marginal propensity to buy gold we see the same sort of growth.

Four years ago, for every extra $100 of income in China, less than one third of a Dollar went on gold. By last year it had jumped to $1 – lagging behind India, but still a remarkable rate of growth.

Individuals in these emerging powerhouses have increasing confidence in gold and are willing to invest more of their money in it.

“Paper money is increasingly worthless and they are worried about inflation” explains Shi Heqing, an analyst at state-backed metals consultancy Antaike in Beijing.

Hardly surprising – China’s consumer price inflation rose to 6.5% in July – up from 3.3% a year earlier.

But why are people choosing to buy gold? Of all things, why an industrially useless piece of shiny metal?

Because, in a sense, it’s uselessness is what makes it so valuable. Because it has no industrial use – and because, unlike paper money, it cannot be produced from thin air via “quantitative easing” – its stock is stable over time.

Thanks to these properties, gold has proven itself as a store of value over thousands of years. And with returns elsewhere so difficult to attain – thanks to low interest rates and stock market weakness – investors are now more interested in preserving capital than chasing return.

So it is not a random choice that has led so many to buy gold. They’re choosing gold because it works.

They may be squirreling away a winter reserve, but these days, that’s not nuts.

Zoe Tustain

Zoe Tustain is working as a research assistant at BullionVault, the No.1 gold and silver ownership service for private investors.

(c) BullionVault 2011

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.

Gold Value: Where to Now?


Gold value presentation from Paul Tustain of BullionVault

Gold remains materially under-valued, says BullionVault founder and CEO Paul Tustain – even now, after 6 years of almost continuous price rises.

Based on historical data, in fact – plus his expectations of future inflation – Paul Tustain believes the true value of gold is nearer $3,844 per ounce today.

Leading finance columnists have already called his gold value analysis “a bold view…giving more reasons to buy gold.” Paul’s new 5-part presentation shows why. You can download this video here, for free.

Part 1 – Gold fundamentals (17 mins)

Part 2 – Debt and Keynes (17 mins)

Part 3 – Commodities & our standard of living (10 mins)

Part 4 – Western currency devaluation (24 mins)

Part 5 – Valuing gold (23 mins)

Gold, says Paul Tustain, can “rescue your finances when things go badly wrong.” Its value today comes because “our governments have behaved very irresponsibly,” he believes, “and we’re now not so different from the ‘banana republics’ which have lurched from crisis to crisis over the last 100 years.

“I think our future is likely to look a bit like their past.”

Paul Tustain’s gold value of $3,844 is not a prediction of its future price; it is what BullionVault’s analysis says the precious metal is worth today on a risk-adjusted basis, calculated as an actuary would value insurance.

Gold’s value is open to debate, of course. So you can challenge and judge what you think gold is worth for yourself, using the Gold Value Calculator which Paul created for his research.

Download the Gold Value Calculator used in Part 5.

Please Note: This presentation 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.

Gold, silver and rare earth; which is right for you?

Gold, silver & rare earth

Which has the strongest trend right now?

In today’s video we will be looking at the gold market, analyzing the silver market, and finally, checking into the rare earth market.

Before you look at the video, you may want to consider doing this as an exercise: Write down which market has the strongest trend – up or down. Then rate the markets. Number 1 ……..Number 2 …….Number 3 ……. Once you see the video it will become clear to you how we rate these markets. It might surprise you.

If you’re using MarketClub’s “Trade Triangle” technology the answer is simple and you’ll discover it in a matter of seconds. If you haven’t used our “Trade Triangle” technology, this will be a good exercise for you to look and see just how powerful this technology is and how it can help your trading.

We all know that gold has had a big move, but so have silver and rare earth stocks. So what’s next?

I hope this video helps outline some ideas that you can put to good use in the future.

As always our videos are free to watch and there are no registration requirements. All we ask in return is that you Tweet about us and share this video with your friends. Also, please feel free to comment on our blog.

Enjoy the video and every success in trading,

Adam Hewison
President of
Co-founder of MarketClub

GoldMoney Moves into Palladium


Greetings fellow precious metals investors. I have good news for those of you who enjoy the convenience of precious metals storage providers such as GoldMoney. The news is that the team at GoldMoney have announced that they are now offering another precious metal to their clients – Palladium. So thus far they’ve got Gold, Silver, Platinum, and now Palladium. That pretty much completes the precious metals quartet in my opinion. I still prefer gold above all the others but I may look into buying some Palladium sometime in the future and precious metals dealers/storage providers like GoldMoney provide a very convenient and safe way to invest in precious metals.

Here is a brief quote from GoldMoney’s press release:

“As part of our ongoing focus on improvements to GoldMoney’s
services, we are pleased to announce the further expansion
of our precious metals selection. In addition to gold,
silver and platinum, you can now buy palladium for storage
in our Hong Kong vault – another great way to diversify and
optimise your precious metals portfolio with GoldMoney.”

As you can read your Palladium will be stored in Hong Kong which IMO seems like a pretty safe place to keep it. It’s not Switzerland but I guess it comes pretty close.

For more details regarding GoldMoney or their products/services/etc please see their website.


Gold, Silver, Platinum…W.T.F.?

Precious Metals

Brad Stafford here in place of Adam Hewison and I have a great new video for you. I’m sure many of you read that title and your mind went in the gutter, but today I’m going to show you a whole new meaning for this acronym and how it applies to gold, silver, and platinum.

These three markets have a lot of volume, government implications, and technicals lining up for potentially great trades. Gold makes a record high, then pulls back. Silver is inching towards an all-time high level and platinum is making people rethink their decision to go with a white gold wedding band.

Where do you stand in these markets and maybe more importantly, where should you stand?

Click here to find out what W.T.F. really stands for and what does it have to do with gold, silver, and platinum?

You’ve got to watch the video to find out.

Brad Stafford
Director of Marketing & MarketClub

Own and sell silver at BullionVault


Greetings to all ye precious metals investors! I bring good news. BullionVault, one of my favorite bullion storage providers, has just announced that, in addition to gold, their clients can now buy and sell silver as well. The silver will be stored in their London vault. Yep I know, I too would much prefer a vault in Switzerland, but I’m sure that choice will come sooner or later. Here is a copy of the e-mail I received from BullionVault’s president, Paul Tustain:

Dear BullionVault user,

You can now buy, own and sell silver at BullionVault, storing it
securely at low cost in the London vault.

It works in just the same way as you already deal and hold
gold. There is no VAT sales tax to pay. Our fees – detailed below
– are the lowest you will find.

We will be telling the wider world over the next few days and weeks,
but want to give you early access. Given the recent price action,
however, there may be something of a rush.

So to keep the market balanced, access is being widened on a
first-come, first-served basis.

If you are keen to trade silver, PLEASE REPLY to this email.

You will then join our priority list, and receive email notification
the moment that silver dealing is activated on your account.

All funded BullionVault clients will be enabled by January 2nd. If
you are happy to wait until then, there is NO NEED to reply.

Here are the facts you need:

#1. Silver Dealing Commission
Runs independent of gold, but is charged at the same rates. So
you’ll pay 0.8% on your first $30,000-worth of silver, 0.4%
on the next $30,000 and so on, regardless of your gold holdings.

#2. Silver Custody Charges
Also independent of gold, but slightly higher, because silver takes
up more physical space in the vault. You’ll pay 0.04% per month on
the silver you hold (minimum $8 charge). The annual rate is 0.48%.

#3. Silver Vaulting, Larger Deals & Withdrawal
Silver is available in London only for the time being. Larger
orders for one tonne or more (approx. $500,000) can be dealt
direct on main market. Please telephone for details.

As with gold, physical withdrawal out of the vault is available but
not recommended. On silver, it will cost 10% plus VAT (currently
15%) and is only possible in whole 1,000-ounce bars.

If you have any questions or need any assistance, please contact us and
we’ll be happy to help.

To join our priority silver waiting list, PLEASE REPLY to this email.

Kind regards,

Paul Tustain
Founder & CEO