David Fuller's view I bought another equal sized gold (weekly & daily) unit this afternoon, this time paying $1735.6, including dealing costs, for a February 2013 position. This increased my total long position in bullion futures by 12.5%. My other gold futures are in the expiring December contract and they will be rolled into the February contract early next week.

Technically, this is a trading position because I am long futures contracts. However, in my mind gold is also an important investment, and has been over the last eleven years and counting. For a UK citizen gold futures are the most tax effective means of playing this market. I also regard gold futures as the most efficient and probably one of the safest ways to participate in this market.

This latter comment may surprise some of you but I will explain. Gold mining shares are much more risky than the actual metal because of all the uncertainties and rising costs of mining. I also worry less about the financial security and integrity of IG (my spread-bet broker) than I would about actually holding bullion. That can be expensive; safety is always a concern, and unfortunately but unsurprisingly the number of fake gold bars appears to be increasing with bullion's price. One can get carried away with the use of leverage in futures markets but the solution to that potential problem is to trade well within the limits of one's capital. The biggest abuses of leverage occur within financial institutions where some dealers will gamble recklessly in pursuit of instant wealth.

I should also introduce an important caveat, regarding spread-betting in the UK and some other countries. If you lose money spread-betting, and many people do, those losses are not offsetable against profits made elsewhere. Therefore, for those of you interested in spread-betting, it may be best to use it mainly when you have a high level of conviction. Of course that view should be considered subjective and it may not be justified by events. I do not know anyone, myself included, who has not lost money on some of their 'high conviction' bets. That is another reason for why investing is such an interesting and challenging business.

Lastly, while spread-bets in precious metals can be conducted in several different reserve currencies, I prefer to use the USD because it is most widely followed and remains generally soft, except during 'risk-off' periods when 'crisis' perceptions run high. Holding physical gold in a strong currency will ensure underperformance. However, if I am still holding gold and other precious metals via spread-bets in USD when the bond market bubble bursts, I may need to reduce exposure to the sector because the greenback will most likely be viewed as a temporary safe haven.

Returning to the precious metals markets, I am also long silver, platinum and palladium futures. I will gradually increase my exposure in precious metals, assuming these markets perform in line with my expectations. My strategy will be to leverage up when I can protect earlier purchases with comfortably in-the-money trailing stops. I also intend to reduce overall exposure when prices look overextended and susceptible corrections. Needless to say, it is easier to write about all this than to put it into effective practice in the heat of the battle with one's own emotions. But nothing ventured - nothing gained, as they say.