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Comment by notyourday | Hacker News Reader

> Then the difference in price must be the small markup that branded stamped gold bars get.

The bid/ask spread on the gold bars at the same dealer is close to 30%. The other markup is peanuts.

That's why it gold as the "investment" is mostly sold via day time infomercial on second rate TV networks ( the ones that currently broadcast in 480i ) and second rate cable channels as well as promoted by the likes of Glenn Beck right next to "have your own seed bank so you can plant your own garden for food when the economy collapses".

JPM made a lot of money serving those outfits but for it gold bar is just a blob of a certain weight and certain purity.

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You are looking at the wrong dealers, the non "scam" dealers for say 1 ounce gold coins have a 3-5% difference between their buy and sell prices. https://www.providentmetals.com/1-oz-us-american-gold-eagle-...

These are not gold bars.

Someone else suggesting gold as an investment is Ray Dalio, who runs the world's largest hedge fund. As part of a portfolio, it helps because it's a largely uncorrelated asset that tends to do well when everything else is crashing.

Of course, if you're doing that you're probably going to buying GLD or IAU, which closely track the spot price of gold. Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%.

> Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%.

Which does not provide delivery of the gold bars.

In a negative-interest-rate environment, gold is also more attractive, since 0% interest is better than -X% interest.

This graph comparing 20 year total returns suggests another reason gold is considered by some to be a worthwhile “investment”:

https://twitter.com/charliebilello/status/116655914552655052...

I asked a discount broker about buying physical gold back in the 90s and was told it would cost about 10%.

"about 10%" becomes about 15% to buy. That's from spot price up.

When you want to sell it, it will become "about 10%" from the spot price down aka about 15% in reality.

Now do the algebra.

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