GOLD and silver have hit all-time highs – and experts are urging everyday people to check their “drawers and jewellery boxes”.
Gold hit $4,603.87 and silver hit $84.69 today amid a renewed push for safe haven assets following growing tensions in Iran and the prospect of US military action — and the US Justice Department launching a criminal probe into US Federal Reserve chairman, Jerome Powell.
Experts have shared how you can get involved yourself in the gold rush.
Jim Tannahill, Managing Director at London-based Suttons and Robertsons, said “everyday people” have an opportunity if they own gold or silver.
He added: “These all time highs are creating real opportunities for everyday people. If you already own gold or silver, whether physical or digital, these levels give you options. You can sell and lock in a profit, or use what you own as security for a short-term loan without having to part with it permanently. It’s also well worth checking drawers and jewellery boxes.
“Old, broken or unwanted jewellery can be worth far more than people expect at today’s prices, and if you’re unsure whether something is real gold, it can be tested for free and valued by carat. Getting exposure to gold doesn’t have to mean stocks, funds or bullion.
“Well-bought second-hand gold or platinum jewellery is an often-overlooked option. It’s something you can wear and enjoy, with the added benefit of holding its value or rising over time. In the UK, there can also be tax advantages, as many jewellery items sold under £6,000 are CGT-free, and UK legal tender gold coins such as Sovereigns are exempt altogether.”
Worth checking drawers and jewellery boxes
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, urged caution in investing in gold or silver.
He continued: “With precision metal prices at all time highs it’s tempting to jump in and buy the metals directly or through an Exchange-Traded Fund (ETF), an investment fund that holds a collection of assets. But unlike other traditional investments there’s no compounding of interest as these don’t generate any return other than capital growth.
“The best play here is to find a stock or a fund that broadly invests in companies that work in that sector; gold and silver miners are typical but it could be other areas too. The world is getting more dangerous, and precious metals are always a good hedge.”
Be cautious
David Belle, Founder and Trader at Fink Money, advised investing in company stocks rather than gold or silver itself.
He added: “Rather than outright buy the commodity, I much prefer to buy the miners. This way you have a much better understanding of margins and cash flow, rather than buying the original product.
“When you’re just buying a commodity, you’re more at the whims of macro, whereas when you’re buying a company that does things with said commodity, you’re sort of protected by a board and specialists who have a motivation to make money.
“This motivation then translates into a higher share price (we hope). This is why in my investing framework I look for strong balance sheets and good CEOs/boards. It allows me to have a much stronger view on a market that can translate into better trading profit.”
Chasing returns rarely ends well
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, offered some advice to people who have gold in their possession.
She continued: “Gold and silver making fresh all-time highs is exciting, but it is also the sort of price action where I would urge people to sit tight and keep their heads. In strong trend markets, momentum can overshoot what looks ‘reasonable’ on any valuation metric and then snap back hard on profit-taking and positioning.
“Should people raid drawers and jewellery boxes? It can be worth checking, but do it methodically. Separate items by hallmark (if any), weigh them, and get more than one quote from reputable buyers.
“Be cautious of high-pressure ‘cash for gold’ style operations and be clear whether you are selling as scrap (melt value) or as a collectable/piece of jewellery (which can be worth more). Sentimental value is real too — once it is gone, it is gone.”
Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, urged caution.
He added: “Before you dive into buying something that’s shot up significantly, think carefully about what your aims are and what you could afford to lose. There’s no guarantee that something that has risen will continue to do so.
“Chasing returns rarely ends well. If you do want to speculate then there are funds that invest in the mining companies or exchange traded funds (ETFs) that invest directly in the metal.”
Photo by Scottsdale Mint on Unsplash.
