I'm really enjoying this thread - of course all of us are right - some of the time. Those thinking gold will go up for a while yet have plenty of evidence for that, while on the other side there are those that are saying "If it was that easy, we would all be betting on it".
So am I. I still don't see the evidence! Most articles you guys post and countering each other 'rampant inflation' and then 'all this points towards deflation.' Gold is a store of wealth right? Therefore it's the inflation/deflation that matters.
UU, yes gold is volatile, but I can usually wait to get the timing right when buying or selling OGC, so that is a good thing. I've only just started to see how the dynamics for gold work, and how linked the two are. It has become easier to predict what might happen (I'm still no good at it). One other really good thing about gold is that there are many who write their comments on its direction, whereas an individual share might be lower in support on the web.
As long as you usually get the timing right you'll be in the money EZ. :-)
I am unlikely to hold gold at home when I can own shares in a miner. But you should not own shares in that industry without keeping an eye on the gold price and its direction. It's a leveraged gold investment, but it works both ways.
As owning a company in any industry would be. I wish some of these companies would reduce their risk and hedge their gold price. Look at NAV. They could add significant shareholder value by hedging a portion of their production so they don't become such a high leveraged play. I guess there is no reason why I couldn't self hedge. Still, there is operational risk for this start up.
$1226 bout time it started moving $1300 here we come
Could well be JB, you never know.
It's not because of a better yield, expectations of better earnings, improving economy, etc, the reason gold is going up is because - gold is going up.
Clearly none of has a crystal ball with regards to the price movement of gold.
But there are a few factors we know about, e.g. the mass quantitative easing of fiat currencies.. it's the results of this that are hard to determine in the long term. This world is far more interconnected than ever before and we move money into and out of currencies/asset classes with never before seen speed.
The amount of speculation WILL increase in the markets and the average middle class earner will get burned. We've seen this countless times in history. I'm not saying its a cycle or anything. More a tendency given the correct conditions.
What would you suggest someone with NO understanding of all things financial do in the above circumstances. How will they ride this storm? They will not trust the financial experts...
This is a real fear millions of mum and dads have. This is one reason why I think they will turn to gold.
Its understandable that Skol finds it hard to understand people's fascination for gold. But like elZorro said, the perception exists and unless you can think of a way for this perception to evaporate overnight (especially difficult given the vested interest of so many who have gold holdings) then this will remain a constant.
Think outside your own square for a second. Not everyone has the technical no how that you guys do. Which I must say is really great. I am getting there but it takes time and dedication. I have stocks (up 79% in 11 months - taken a killing recently - stop losses kicked in) but put that down to luck.
But yeah basically i am asking if you guys can put on your behavioral finance hats for the average person. Who will they behave?
looks like I'm not the only one with 1300 prediction
(Kitco News) -- Worries about a fragile U.S. economy are likely to keep investors shifting toward gold and could push the metal to fresh record highs near the $1,300 area by year-end, analysts and traders say.
December gold futures early Tuesday peaked at $1,231.10 an ounce on the Comex division of the New York Mercantile Exchange, their strongest level since late June. They eventually settled $2.10 higher at $1,228.30 an ounce.
As of 3:36 p.m. EDT (1936 GMT), spot gold was 60 cents higher at $1,226.10.
Mike Daly, gold and silver specialist with PFGBest, looks for gold to “go much higher” than the record hit earlier this summer due to uncertain U.S. economic conditions and a still “fragile” environment in Europe, where sovereign-debt issues were a major focus earlier this year. The peak for a most-active Comex futures contract was $1,266.50 back in June.
“Economic numbers here, such as housing and jobs growth, have been very negative,” Daly said. “That is giving savvy investors globally a lack of confidence in fiat currencies. Most people right now, who have disposable income, are preferring to get into more tangible assets, primarily gold and silver, for a safer-haven investment.
“They see that gold and silver and precious metals in general have retained value better than most commodities over the last couple of years.”
Kevin Grady, a trader on the Comex floor with MF Global, cited continuing foreclosures are a harbinger of further support for gold, since it shows many Americans are still struggling amid weak economic conditions. In fact, with a federal-funds-rate target of zero to one-quarter percent, the Federal Reserve is essentially offering “free money” to banks with the hope lending will jump-start the economy, he said. Yet, many Americans are not able to borrow, unless they have a high credit rating and cash for large down payments.
“And the people who have money are saving,” said Grady, who looks for $1,300 gold by January. “People are holding onto what they have.”
Meanwhile, government debt continues increasing.
“I think it's a slow grind, but gold should go much higher from here,” Grady concluded.
Michael Gross, broker and futures analyst with OptionSellers.com, described his company as “cautiously bullish” on gold on ideas that any economic recovery could be “spotty.” Still, the metal could experience “fits and starts” rather than moving up in a straight line. He figures gold could “modestly eclipse” the highs from June in the foreseeable future and later in the year potentially hit $1,275 or even push $1,300.
Further support may come from political uncertainties in the U.S., with congressional elections this fall, as well as debate among lawmakers on whether to continue some or all of the Bush Administration tax cuts due to expire at the end of the year. This could put some pressure on equities and prompt some movement into gold, Gross said.
“Uncertainty tends to be good for precious metals,” Gross said. “If people are not sure what to do with their money, they put it into gold. That seems to be the safe and conservative bet, and we expect that to continue in the second half of the year.”
Investors are “tired” of the uncertainty in which government or central-bank officials suggest improvement in the economy, with their comments followed by weak jobs data, Daly said.
“There is so much fear based on what is going on in Washington,” said Bob Haberkorn, senior market strategist with
Lind-Waldock who also anticipates $1,300 gold yet this year. “You're getting new investors looking at gold and silver.”
Charles Nedoss, senior market strategist with Olympus Futures, looks for further U.S. dollar weakness, which in turn tends to support gold. Investors often buy the metal as a hedge against a softening greenback, plus a weak dollar makes commodities less expensive in other currencies and thus can boost demand.
Low market-set interest rates, as a result of a soft economy, may result in an eventual retest of the 80 area for the dollar index, Nedoss said. It currently stands just above 82.
“I just don't see that turning around,” said Nedoss, also anticipating $1,300 gold. “I think the economy is showing us now that it's fragile enough that it can't withstand higher rates.”
Seasonal Factors Could Provide Additional Support
While analysts describe macroeconomic conditions as favorable, the calendar is approaching the time of year when gold tends to get a seasonal boost.
“We're getting closer to the (autumn) wedding and festival season in India,” Daly said. “That is normally a time when gold spikes a little bit.”
September and October tend to be strong months for silver and gold alike, Haberkorn said. “Of all years, from an economic standpoint in this country and around the world, I think an upside move is more than warranted,” Haberkorn said.
Once the gift-giving season winds down in India, physical buying of gold often continues ahead of Christmas in Western nations and later the Chinese New Year.
Still, Gross cautioned that the economy will remain the key catalyst more-so than any seasonal tendencies. In recent years, gold has traded “almost exclusively” based on economic expectations, he said.
“I would expect that to continue,” Gross said. “Any physical (seasonal) support would certainly help gold, but we don't see that as the potential major price determinant for gold over the next several months.”
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Greetings JB, nice post there. Here's a gift idea for you Skol:
Once the gift-giving season winds down in India, physical buying of gold often continues ahead of Christmas in Western nations and later the Chinese New Year.
How impressive would that be, to give someone an ounce of gold to keep (or a gold coin), as a Christmas present.
I think $1300 is on the light side as a near-term target. It's already reached $1260 recently, so that would be just 3% higher than the dollar value high, which of course is not inflation adjusted.
Last edited by elZorro; 18-08-2010 at 12:57 PM.
Reason: Typo
Greetings JB, nice post there. Here's a gift idea for you Skol:
How impressive would that be, to give someone an ounce of gold to keep (or a gold coin), as a Chrismas present.
I think $1300 is on the light side as a near-term target. It's already reached $1260 recently, so that would be just 3% higher than the dollar value high, which of course is not inflation adjusted.
Aaaah, no thanks EZ, I won't be jumping on board the gold 'investment' bandwagon. The hoarding's likely to stop any day and I don't like getting my fingers burned.
Most of the reasons to hoard gold have gone away (war with North Korea, H1N1, Macondo Well plugged, banks OK, no hyperinflation), but I have to give goldbugs credit, where there's no reason to own it they'll find one and the latest is the season is wrong apparently, the chart is looking good and confiscation just around the corner.
They'd have to be the most optimistic group anywhere, even resorting to a spoon-bending type of philosophy, psyching gold higher with posts like 'gold's going to $1650' or 'gold will finish the year at $1366'.
JB's guru, Peter Schiff has been crying the hyperinflation wolf for years, for so long in fact only the goldbugs haven't given up on it, but if they get depressed there's always the goldbug catastrophe websites to cheer them up. The catch-cry is quantative easing (the goldbugs favourite words) and while printing has been occurring no meltdown appears imminent in fact I would say that the best thing about the GFC I can think of is that thousands of bankers found themselves looking for a real job.
I was down at the Docklands in London on the day the Lehman Bros bankers were given their marching orders and watched them take a walk. Even the FT a few days later had no sympathy, given that these 'experts' had leveraged their assets 35 times.
Posted by Skol: I was down at the Docklands in London on the day the Lehman Bros bankers were given their marching orders and watched them take a walk. Even the FT a few days later had no sympathy, given that these 'experts' had leveraged their assets 35 times.
Skol - Brilliant post, I thought that one about the Christmas gold would get you going..
I am also not so keen on the financial sector. I have been denied funds at crucial times, and on the other side when I did put money into Tower's super fund, there was some fine print, that we were never shown.
A graph would have spelt it out: stick your money in here and leave it with us to earn a paltry amount (sometimes losses) on the stock market, we'll charge you another 7% p.a. for the priviledge, and if you want your money back well before you retire, we'll simply take 60%-35% of the capital as well (sliding scale). We waited until Tower dished out shares to everyone, and sold as soon as we could. We just about broke even after paying in for several years. And that was Tower.
No that right SKOL Silver is a much better investment percent wise even my Silver bullion holding is up over 20%pa in real buy sell free market terms an thats the stupid metal that goes into so many important parts of your planes that cannot be replaced by other metal of the same Quality
I heard on news recently their has been 26 Airlines gone toes up over the last year.
But back to GOLD the big Gold picture --the trend is your friend
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Isn't that a great looking graph? I was looking for something on silver and found bonds instead: are treasury notes an indicator of bad times ahead? Gold also recommended.
Yeah the USD is doomed an with it the mass of debt attacted watch the many debt laden nations work to create their new currency within the next 5yrs an off-load their debt laden fiat currencies esp if the US starts it off lets hope the new currencies have some real backing
How they will do this will be what they are currently planning just like "the mass weapons of mass destruction of IRAQ" for the reason to invade an control -I'm sure they come up with some reason to collaspe/bankrupt etc an to start a fresh just like the yank home owners they have massive debts they can't afford just walk away with declared bankruptcies a way to start again debt free..
Last edited by JBmurc; 18-08-2010 at 08:01 PM.
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Originally Posted by elZorro
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