Customer Reviews

Investing in Gold: The Essential Safe Haven Investment for Every Portfolio

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A lot of books on gold are written by cranks, but this book is a delightful exception. Jonathan Spall is a professional who has been involved in trading commodities, including gold, for more than twenty-five years. He knows what the markets are really like, and what the industries around gold really do. This delightfully concise book will provide you with a solid understanding of the basics of what gold as an investment is really all about in the West and around the world.

While he does not cover the history of gold in various world civilizations, he does take you through the basics of how gold is mined and refined around the world. I found the information fascinating. He also explains why gold miners pre-sell or hedge the value of their production.

Spall then takes us through government uses of gold and which nations hold their reserves in gold and which in foreign currencies. You then get a quick tour through the markets of borrowing and lending gold and banks which hold gold reserves for various purposes.

So what does this mean to you? Well, you can invest in gold and the author shows you the various gold exchanges around the globe, how they trade and what they trade. You can also invest in Exchange Traded Funds (ETFs) that allow you to purchase allocated gold but trade it like stock. Of course, you can buy gold that you can own. This is mostly done in jewelry. Outside the West most of the gold jewelry is of much higher fineness than our jewelry and is mean to store wealth more than it holds sentimental value. Spall explains why this is so, but it mostly has to do with the lack of trusted financial institutions as places to store wealth.

He then takes you through a few of the common gold myths and the realities behind them, why gold prices are trading higher now (there is no single reason) and how you can expose your portfolio to gold for various investment goals.

Pretty neat book.

Reviewed by Craig Matteson, Ann Arbor, MI

I purchased "Investing in Gold" for the purpose of gaining a better understanding of the precious metal's (or gold) market and how best to invest in it as a hedge against inflation. The author is no doubt an expert in Gold. However, he spends the vast amount of his attention to describing mining operations and the amount of gold acquired by various countries, etc. When you get to the last chapter, if you last that long, there is a short discussion of how people invest in gold, but no clear recommendations. I see ad after ad on TV and radio recommending that I buy Gold. I still do not know how to do that without getting ripped off. The book was a waste of time and money as far as I am concerned.

Gold draws a great deal of comment fueled by fiery passion, and often instigates discourses based on rumor, conspiracy theories and gossip. Allow Jonathan Spall, an expert on precious metals, to disprove the lingering myths about gold with his interesting, helpful little book. While Spall's treatise doesn't quite carry you on a complete tour of gold's role throughout human history, it does usher you down into the mines and through the gold refiner's fire. His ability to explain the basics of the gold trade so clearly may be based on his writing skill, but it also reflects his years of experience explaining these ideas to nonspecialists. The only math he uses involves the simple equations used to calculate gold prices. While you may already be familiar with some of Spall's information, getAbstract recommends his broad introduction to gold to those who are interested in all facets of the prized metal, from its extraction to its sale.

Disclosure: I know Jon Spall, having worked with him for a couple of years and being an enthusiastic subscriber to (and correspondent with) the daily "Barcap Commodity Comment" mailing list which he edits.

Indeed, it's on the strength of that excellent electronic publication (highly recommended if you can get on the mailing list) that I got to know him: It's fascinating and informative but most of all hysterically funny and decidedly un-corporatised overview of the markets (all the more credit to Barclays Capital for sanctioning it) from an excellent fellow with long experience of the markets who happens to be sitting in the front line as it happens. As you can probably imagine has been essential, if excruciating, reading over the last eighteen months as the markets have ritually disemboweled themselves.

No better a time, therefore, to be bringing out a publication extolling the virtues of the traditional last bastion of safety in an uncertain world, gold. Since the abandonment of the gold standard oft dismissed as a fossilised anachronism, in these days of seemingly uniform cratering across asset classes gold, like Keynes, is staging a bit of a revival. Even hedge funds - those that are left, that is - are piling in. And gold is what Jon Spall knows best. He's been in the market for a quarter of a century, and this book distills that learning, and the sort of context that you don't usually get in a business book - there's much learning here on mining techniques, hedging, transport and the history of the market - and with the sort of jaunty tone that Commodity Comment faithful will enjoy - sample excerpt: "the task of explaining the many properties ascribed to gold to an alien would not be easy" - though consciously toned down for sober, old economy, publication. If I had a criticism it would be just that - it doesn't quite give you the full flavour of Jon Spall in all his fairy-at-the-bottom-of-the-garden-shooting glory, but that's very definitely a minor niggle. As the book develops the level of technical detail increases - there's an interesting chapter analysing the current performance of gold in the market turmoil - but the detail is never overwhelming (it hardly could be as the book weighs in at under 200 pages)

Bang up to date with the zeitgeist in including an FAQ as well as a glossary, this is as good a place as any to start if gold is what you're about.

Olly Buxton

This is one of the most authoritative books on the inner workings the gold market that you are likely to encounter. In it, you'll learn a great deal about how the world's central banks, the International Monetary Fund (IMF), "bullion banks," the gold "market makers," and the world's gold producers (mining companies) operate in the broader gold market. In doing so, and if you aren't a sophisticated gold trader, you may find, as I did, that you know far less about these organizations and their operations and concerns than you thought you did. I had no idea, for example, that until recently the gold producers, through their attempts to hedge their profits and acquire operating capital, were the major drivers in the price of gold. Neither did I know that the world's central banks have a real problem in keeping gold in reserve, since gold bars produce no income; or that their efforts to overcome this problem have often been construed as manipulating the price of gold.

You will learn all this and much more by reading this book, but be warned: If you have a casual interest in the subject you will likely learn much more than you expect, and much of what you learn may be of interest but of little apparent value to you. I say that because, if you are like me, you never really expect to own a gold mine, refine gold, or work with national governments to buy/sell gold by the tonne (1000 kilograms).

Nevertheless, In my view: anyone seriously considering investing in, or simply buying some physical gold, would be wise to read this book, if for no other reason than to get a greater insight into how gold functions in the real world, its problems and the problems it presents, and how it is viewed by the world's governments and the world's leading banks --- all apart from any national or international crises.

My only criticism of the book is that the author, by necessity, was forced to deal with some very abstract activities. He made the best attempt he could to explain them, but in many instances he did so simply by relating them to other similar activities which were just as obscure. This may be due to the fact that the book was derived from information which the author prepared during his 25 years in the gold business to help educate and orient people new to the field --- but people already possessing some related knowledge of the subject.

Bottom line: This is a very informative book which lets its readers peek behind the curtain and see gold as the insiders see, buy, sell, loan, and trade it. And, to top it off, in the book's final chapters the author explains various ways in which his readers, now armed with this new knowledge, might invest in gold if they choose to do so --- but he makes only one serious recommendation. Stay away from silver.