Buy, Sell, Hold: Should You Trade Gold Today?

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Published : July 19th, 2011
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Category : Gold and Silver

Go ahead – sell gold. Just so long as you know a secure store-of-value to hold instead...

BY ALL MEANS
sell gold today. Just don't be a schmuck and 'take a profit', says Paul Tustain, founder & CEO of BullionVault.

That's supposed to be when you exit something volatile to revert to a stable store of value. You'll hardly be doing that when you trade your gold in for Dollars, Euros, Yen or Pounds.

So yes, have a great holiday, or a new car. Maybe sell some gold to buy some interesting shares or, better still, a business. If there's anything you want to spend on – trivial or serious – sell some gold and do what you want to; you've earned it. Your gold is buying you about three times what it would have 5 years ago. You've created the opportunity for yourself, so don't be too cautious. Use it!

But don't sell if the most imaginative thing you can think of is to hold currency – or worse, bonds. Our currencies are not some absolute unchanging yardstick of wealth. They're junk.

Not that everyone realizes this yet. Though maybe they're starting to.

Most people out there are still trying to accumulate money. So trade with them. Give them what they want for something you want. Buy something – and let them have your money! There's only a few years left, maybe months, until the damned stuff becomes truly repulsive; until possession of currency becomes a headache presenting anyone who has it with the immediate problem of getting rid of it. Fast.

With QE3 (yes, it's coming) or any other of the wacky economic plans out there, our money is shedding purchasing power, month by depressing month. That's the approved and orderly process, here in the UK for instance, of 5% inflation and 0.5% interest rates (subject to tax, remember). Central banks and finance ministries hope you and about a billion other people in the developed West will quietly tolerate the permanent drip drip drip of lost value from your life savings. They're also hoping it won't get disorderly.

If it does, people will be begging you to take their money away. Yes – begging you. They'll be saying:

"Here, have the fruits of my lifetime of thrift...My $20,000 for your ounce of gold. Please – it's a fair price. It's the lump sum value of my pension. I got it on the day I retired. I paid into the company scheme for 40 years for this sum, and I'll give it all to you for that 1 ounce of gold. Pleeeeease..."

Attractive money? Repulsive money? It's all about whether or not it retains purchasing power, and it's a very, very big deal that the money squirrelled away for 50 years, and by a billion people, is now transparently unfit for that purpose.

 

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Settlement-systems specialist Paul Tustain launched BullionVault in 2005 to make the security and cost-efficiencies of the professional wholesale gold market available to private investors. Designed specifically to meet his own gold ownership needs as a risk-averse investor, BullionVault now cares for over US$1bn of client gold property, all of it privately owned in the client's choice of low-cost, market-accredited facilities in London, New York or Zurich.
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