Gold vs Property

[boz]

True, but it's rare to get a margin call on a house.

you get a sort of margin call when you don't pay the mortgage.
These days is quite safe to play on gold futures and you would need 1000$ on your account to trade 100,000$, so, if it gets to 101k$ you double and if you get to 99k you lose the lot.
another good thing would be that if you have 100k you can put 99k in a saving account and you get 4-5% interest and you top up the money in case you risk the margin call on gold. It is probably a good way to make money from holding gold. the risk is that if the world gets in real trouble that gold could disappear once the exchange backing it is insolvent. But I believe you have that sort of risk also on etf and even holding a home

 

[WinstonWolfe]

These days is quite safe to play on gold futures and you would need 1000$ on your account to trade 100,000$, so, if it gets to 101k$ you double and if you get to 99k you lose the lot.

Hey Boz.....you in Melbourne or on the shores of Lake Como these days?

hmmmmm....so I am using $1 to toy with $100.

so when gold futures move down 1%, I have a 100% dd and am busted.
so stop losses should be set at what????

 

[boz]

Hey Boz.....you in Melbourne or on the shores of Lake Como these days?

hmmmmm....so I am using $1 to toy with $100.

so when gold futures move down 1%, I have a 100% dd and am busted.
so stop losses should be set at what????

Still living in Melbourne, but this long weekend I am a couple of hours away...

I have to say that I don't usually trade the gold future and my gold holding are through gold share mining, I am a bit disappointed about the last year rise in those shares (they underperform the main share indexes) but I think they'll do better this year then other index like asx200 or S&P500.
If I would hold gold future I wouldn't be much worried about stop loss, you would have to make sure you have enough money to cover your losses, a bit like a home: you don't buy 1 mil$ home with 10k$ holding, you would have more money available if needed.
The bottom line is that If gold drop in price is because FIAT money gets more attractive. If you feel you need to hedge against gold holding you would need to hedge also against your FIAT money

 

[Sunfish]

Boz. Would love to find a few more of these:

My entry was $1.50. I have just sat on them since.

I hope this will show. It is from Stockhouse and I don't know if it will load for "visitors".

 

[Aaron Sice]

can someone tell me why banks lend more against shares in companies at the mercy of emotion than they do housing?

 

[Sunfish]

can someone tell me why banks lend more against shares in companies at the mercy of emotion than they do housing?

Do they? And why is the ability to borrow so highly rated? Emotion doesn't effect the price of solid, profitable shares as it does property, surely?

I guess I'm old, but I prefer profit to debt.

 

[Ausprop]

if someone else is sevricing your debt, then the debt becomes profit, be it shares or property or widgets

 

[VYBerlinaV8]

can someone tell me why banks lend more against shares in companies at the mercy of emotion than they do housing?

It's easier to sell down shares than a house...

 

[Ausprop]

It's easier to sell down shares than a house...

true, plus who knows what a house is worth anyway. it's all about what the right noddy will pay if you catch them on a good day

 

[Ajax]

Hi Sunfish,

that position on Redback Mining is magic. I hope you bought a heap at $1.50 (even if it was only a small holding it would now be worth a considerable amount).

Am reading comments that Perseus MiningRU (which also has TSX listing) could be another Redback in the making.

PRU is sitting on 7 million ounces of gold with 10 rigs drilling and 250km of drilling planned for this year. PRU will be included in the ASX200 form 22 March 2010.

I'm biased of course as I have a large position in PRU.

 

[Sunfish]

. I hope you bought a heap at $1.50 (even if it was only a small holding it would now be worth a considerable amount).

It's a boootifull chart, isn't it? Sorry about the boast, but no one I know could give a rat's so I just had to post it somewhere.

There is enough in it to buy a Florida condo and that's an interesting thought.

 

[Ajax]

Hi Sunfish,

I've found many people aren't interested in shares or hearing about someone else's success or enthusiasm with a particular share. I'm slowly learning to not say too much but just have to post somewhere. When I mention I've done ok in recent months most tell me (with sincerity) to get out while I'm ahead.

Ajax

 

[Piston Broke]

A major characteristic of property is that it has much more collateral value than gold. Even now many banks will give a no doc loan for 60% of equity hardly any questions asked. Try that with gold.

I've given up correcting this sort of rubbish long ago.

Once again I rang the four major banks (just to make sure nothing has changed) and asked them how much would they lend me with 100K of gold bullion as security.
I spoke to investment loans, home loans and personal loans.

They all gave the same answer:
We don't lend against gold. Period.

All of them stated:
"We do lend against Real Estate based on current valuation."

So if you have 100K of gold, you need to sell it at a discount at pay the associated fees.
If you have 100K of Real Estate, many banks will lend you $60,000 lo-doc no LMI.
"That sort of rubbish" is exactly they way banks see it.
Utopian ideas & fantasies of what constitutes currency cannot be banked, nor borrowed against either.

 

[ianvestor]

They all gave the same answer:
We don't borrow agains gold. Period.

Do they lend?

 

[WinstonWolfe]

I spoke to investment loans, home loans and personal loans.

Commsec margin lend up to 65% LVR for GOLD on the ASX, at a fixed rate of 8.65%pa.

 

[Piston Broke]

Commsec margin lend up to 65% LVR for GOLD on the ASX, at a fixed rate of 8.65%pa.

Oanda let me trade gold with a margin of 2%, but do you think they take gold bullion for a deposit in my account? No chance.

Comsec will let you trade leveraged gold @ 65%LVR.
Will they take gold bullion as a deposit for a trading account?
I will ring them tomorrow and ask them.

 

[Piston Broke]

Called Comsec today (more than once), in essence:
PB: Do you take gold bullion as a deposit for a trading account?
CS: You can trade gold bullion securites
PB: Yes but can I open an account using gold bullion, for the value of that gold bullion?
CS: I don't think so, but I'll put you onto XX.
XX: XX
PB: Can I open an account using gold bullion?
XX: You mean trading gold?
PB: No, using gold bullion instead of cash or cheque as a deposit for it's market value?
XX: No. You need to go to a mint and exchange it first.

I still need more reasearch, I will call the gold traders & mints and see if they will exchange 100k of gold bullion and on what terms next.
But one things seems pretty clear, the majors dont lend on gold bullion.

 

[steveadl]

You got too much time on your hands PB?

 

[JulieW]

Can anyone tell me how or where to buy gold that avoids the 10 almost percent surcharge that the gold dealers add to the deal (e.g 'buy' 1347, 'sell' 1251) - and take delivery of it, not just buy paper promises for potential tungsten cored bars?

 

[Sunfish]

You're unlikely to find what you want. It's not that easy.