# Is the 'Gold Rush' over?



## JTLP (15 August 2008)

Sheesh...hasn't the old Au taken a battering in recent times. Will the magic $1,000 mark be broken again? Will the US dollar continue to ruin my round the world trip?

U.S looking to raise rates to combat inflation...Aus cutting rates...oil dropping due to demand (or lack of)...what's everyone think?


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## Uncle Festivus (16 August 2008)

Yes, yes & no....

No, yes & yes.....


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## bean (16 August 2008)

For true gold bulls thank you for starting this thread.

What do I mean?

Gold Bulls know


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## Nyden (16 August 2008)

bean said:


> For true gold bulls thank you for starting this thread.
> 
> What do I mean?
> 
> Gold Bulls know




Yes, because Gold Bugs couldn't *possibly* be wrong. Every and any indicator is one that indicates an upward movement.

Gold headed down? Oh, it's just part of some <insert bias wave | T/A  here>.
Gold headed up? It's finally matching inflation, no stopping it now! Upward to $3000!
Gold headed sideways? She's getting ready to break out this time!

People getting bullish on gold? About time the average punter is seeing the true value in gold, definitely heading up.

Folk getting bearish on gold? A counter indicator play! Sell the house, put it all on gold!


Give me a break. Gold has been, & still is a dog of a performer; just look at it's chart over the last 20 years. The odd spike up - followed by sharp downtrends; it is *not* a good investment position. More so a panic-position for the ignorant.

Gold is a relic of a different time; no - not the middle ages. Rather, the time of the depression and World Wars - a time when folk were less-informed. A time when it was not as easy as pressing a button to purchase / sell stock - whilst god was probably easier to obtain (prior to bans).

Why would the masses *ever* turn to gold in this day & age? No dividends, no regulation, no interest, not backed by any government (like our 4 big banks are)

In fact; I would take a punt that quite a high % of gold bugs are somewhat older folk? I guess now would be a time to remember that experience doesn't always lead to wisdom; at least when applying scenarios from 70 years ago.

Gold bugs have made one of the fundamental mistakes of investing; falling in love with their buy.



What a great long-term buy, put everything on it guys


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## roland (16 August 2008)

Hey nyden, I think just looking at a chart tends to skew the whole argument. It's not like you can't bring up many other charts that look very similar ...


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## Nyden (16 August 2008)

Yes, but roland - my point is that gold has basically nearly been at the price it's at now - over 25 years ago! How many stocks can you say that about?

It's because gold has no required demand. Tomorrow - the world could suddenly decide to abandon gold, and society would not suffer the least for it. My point is that gold has been at $900 before; and fallen all the way down to $200 - and it could happen again.

That is an appalling performance by any standard; & it points to a potential future cyclical movement - easy come, easy go with gold.

Oh, and those charts don't look anywhere near similar. They're required commodites; and as you too can see - I don't see any rapid spikes / plunges that even remotely compare to the plunge of gold from 900 to 200 - over a 20 year period! Factor in inflation, and my gosh - what a loss.


My question is; how low does gold have to go before the 'Bugs finally give up hope? $700? 600? 500? ... $250?


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## bean (16 August 2008)

Nyden said:


> Yes, but roland - my point is that gold has basically nearly been at the price it's at now - over 25 years ago! How many stocks can you say that about?
> 
> It's because gold has no required demand. Tomorrow - the world could suddenly decide to abandon gold, and society would not suffer the least for it. My point is that gold has been at $900 before; and fallen all the way down to $200 - and it could happen again.
> 
> ...




Gold like anything moves in cycles.  Short or long term.

Gold has a demand - investment - monetary
Why would the world suddenly abandon gold.  For thousand of years they have had the chance yet its still there. Still doing the same thing.
Currencies do not last for a long time.
Take Australia our latest since the mid 60's.  And its had plenty of changes during that time.  imagine if there were no credit cards or bank transfers  i think we would have 1000 dollar notes by now.

How low would POG have to go.  The answer to that question I don't know.
But when Gold goes to a BEAR market.  I will let you know.

In Elliott terms wave 3 is the best longest.  Gold has not even started that yet.
POG will be 1000 and over soon enough, but first has some unfinished business to do to end wave two.

Shorts in Gold and Oil beware!!!


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## Uncle Festivus (16 August 2008)

Nyden said:


> Give me a break. Gold has been, & still is a dog of a performer; just look at it's chart over the last 20 years. The odd spike up - followed by sharp downtrends; it is *not* a good investment position. More so a panic-position for the ignorant.




Poor wittle Nyden - somebody miss out on the run from 2000 did they? See, I picked my date to compare returns too


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## Nyden (16 August 2008)

Uncle Festivus said:


> Poor wittle Nyden - somebody miss out on the run from 2000 did they? See, I picked my date to compare returns too




No, I was too young back then ... 

Aside from that - we're not picking specific time-frames here, at least I'm not.

30 years  is a very long time; not some specific frame of time of which things have gone bad. In fact, 30 years is nearly half of our life expectancies - so if an investment does this poorly over a period of half a human life, it quite honestly isn't worth it.

Ah, so in order to make solid gains from gold - a very specific time-range needs to be set ... sounds more like a spec stock. I prefer investments that appreciate in value, & stay there. 

Again; I have no issue with people investing in gold - and I am of course pleased when people make money from any investment. What *angers* me is how stupid, & stubborn a lot of gold bugs are - in their undying & unwavering belief that it is a 100% bet that gold is going up.

People have been spouting this nonsense since gold was at 900-1000; and now we're into the high 700s - a 20% loss from 1000. Perhaps 20% means nothing to Gold bugs who believe it's headed to $5000 - but I sure as heck know that if I had been a holder, I wouldn't still be spouting off how great it is 

You're of course entirely unbiased though Uncle, what with the gold bullion in your picture, & the sudden snap-to-defense.

Yet another prime example right here on this thread - from bean



> In Elliott terms wave 3 is the best longest. Gold has not even started that yet.
> POG will be 1000 and over soon enough, but first has some unfinished business to do to end wave two.




Gold *will* be 1000 and over soon?
It's this attitude right here - which could very well lead gold down to 200. There are *many* holders with these sorts of beliefs - and if the POG keeps heading down .... and true bugs like bean finally turn bear; nothing at all would be holding the price up.

I don't normally indulge in schadenfreude, but I confess that I am at the moment :


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## So_Cynical (16 August 2008)

Nyden said:


> Why would the masses *ever* turn to gold in this day & age? No dividends, no regulation, no interest, not backed by any government (like our 4 big banks are)




Not backed by any government and yet the Central Banks seem to like collecting it.

http://en.wikipedia.org/wiki/Official_gold_reserves


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## Uncle Festivus (16 August 2008)

Nyden said:


> No, I was too young back then ...
> 
> Aside from that - we're not picking specific time-frames here, at least I'm not.
> 
> ...




I can sense that the pressures of the current climate are having an effect on you with your anger and resentment, and I have taken that into account as well as your youthfull inexperience. 

I can assure you that when the time is right ie when you are buying gold, I will be selling it. 

What is money & where does it come from? When you know that you will understand?


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## Nyden (16 August 2008)

Uncle Festivus said:


> I can sense that the pressures of the current climate are having an effect on you with your anger and resentment, and I have taken that into account as well as your youthfull inexperience.
> 
> I can assure you that when the time is right ie when you are buying gold, I will be selling it.
> 
> What is money & where does it come from? When you know that you will understand?




Nope, no pressures on me in the slightest actually - I'm doing very well : Putting away lots of savings, living life just fine.

I wish I could assure you that I wouldn't ever be buying gold; but I'm not as stubborn as some gold-bugs.

You can boil my anger down to some of my more narcissistic tendencies; & my desire for control 

Gold bugs just ... bug me 

Oh, and I'm all too aware that money is just printed; but just as money is always being printed ...  gold is always being dug up. Granted, that source is finite; but so is everything else here.

I would like to reiterate that I do wish all investors well. I would also like to add - that gold bugs could indeed be right; & it could very well hit 10,000. My anger is focused on those that state this as *fact*. That nothing in this world could prevent the mighty climb to the top. The reason I lop all of them together; is that even the more rational investors never seem to correct these extremists; and back them when it suits.


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## MRC & Co (16 August 2008)

Nyden said:


> Aside from that - we're not picking specific time-frames here, at least I'm not.




What do you mean Nyden?

You HAVE to pick your timeframes in certain markets.  Even gold bugs are doing so and now they see the financial crisis (derivatives/sub-prime and so on) or potential rampant inflation (looking to be easing now), as their fundamental reason.

While I am far from a gold bug at the moment (infact had shorts on it lately), I believe a long fade play is in the making and will be watching closely Monday/Tuesday.

If you asked a 60 year old in 1930 invested in the stockmarket since he was 20 if 'time in the market' rather than 'timing the market' is the correct mantra, I'm sure he would slap you around the chops.  No matter if you are investing fundamentaly or technically, you have to time the market in some aspect. 

So if your not picking at least general timeframes, then you may as well quit while your ahead (if you are).


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## bean (16 August 2008)

Nyden said:


> Yet another prime example right here on this thread - from bean
> 
> 
> Gold *will* be 1000 and over soon?
> ...




But I am a BEAR at the moment.  My posts re the POG have been bearish.
In every BULL market there are corrections along the way.
Gold is especially good at shaking out the week hands.  
Thats why when it rises it moves with force and leaves the unbelievers at the station.  Then the next correction comes along and POG can drop a lot and the unbelievers and those that got in late are again the first out and it will keep shaking till you are all out and will do so until everyone of you are in.
And the True Bulls by that time will be turning to Bears


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## IFocus (17 August 2008)

Nyden said:


> Yes, because Gold Bugs couldn't *possibly* be wrong. Every and any indicator is one that indicates an upward movement.
> 
> Gold headed down? Oh, it's just part of some <insert bias wave | T/A  here>.
> Gold headed up? It's finally matching inflation, no stopping it now! Upward to $3000!
> ...





Nyden sounds like you are bored, you will be run out of town talking like that


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## explod (17 August 2008)

Nyden said:


> Gold bugs just ... bug me
> 
> .




Good stuff Nyden, but you need to get it all out.  Some times the bug is best cured by more bugs.   Feed some more info for some diagnosis.


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## professor_frink (17 August 2008)

Nyden said:


> Yes, because Gold Bugs couldn't *possibly* be wrong. Every and any indicator is one that indicates an upward movement.
> 
> Gold headed down? Oh, it's just part of some <insert bias wave | T/A  here>.
> Gold headed up? It's finally matching inflation, no stopping it now! Upward to $3000!
> ...




The one thing you have to give the gold bugs Nyden is they can take a drawdown in their capital A LOT better than their share investing cousins do. Have a look at the gold thread, they have barely blinked as gold has lost 25%. 
A 25% decline in the XAO and you'd think it was the end of the world according to quite a few people on the forum!


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## IFocus (17 August 2008)

professor_frink said:


> The one thing you have to give the gold bugs Nyden is they can take a drawdown in their capital A LOT better than their share investing cousins do. Have a look at the gold thread, they have barely blinked as gold has lost 25%.
> A 25% decline in the XAO and you'd think it was the end of the world according to quite a few people on the forum!




Excellent point Professor


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## Nyden (19 August 2008)

I was bored, yes :
I still stand by my opinions though.

Too true professor; I don't know how they take a 25% loss so gracefully - and can accept it as some sort of normality!

I do of course appreciate that market timing is everything; but gold is supposedly renowned for being a stable-strong preserver of wealth? At least from my point of view - the charts just don't reflect this in the slightest over a long-term view.

Gold is perhaps a fantastic trade, but a god-awful investment.


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## Dowdy (25 August 2008)

Nyden said:


> Oh, and I'm all too aware that money is just printed; but just as money is always being printed ...  gold is always being dug up. Granted, that source is finite; but so is everything else here.




Also todays money is manipulated and money is created from debt. The more they print, the more it becomes worthless. History has shown fiat money always fails in the long run.

Companies can go broke. Banks can collapse. Governments can go bust. Fiat money can get hyperinflation. Gold will never become worthless. 


I believe Silver is a better investment, though, but gold will go up too.


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## wildkactus (25 August 2008)

The thing with gold is it will always have a worth, 
some people who are buying it (physical delivery) are doing so as a doomsday insurance policy, not an investment.

If the current world as we see it does not exist tomorrow, ie WW3 or the such, gold will become one of the currencies of the day.

There are some older and not so old people here in hong Kong that have vast sums of jewelry just for this reason, as it was the only way during WW2 they could easily move there money around, as they where forced from there homes.


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## Trembling Hand (25 August 2008)

Nyden said:


> Too true professor; I don't know how they take a 25% loss so gracefully - and can accept it as some sort of normality!



 25% Nah! thats just the first point to average down!!



Dowdy said:


> Companies can go broke.............. Gold will never become worthless.



 Very true but many of the Gold plays will become worthless. Which makes the game of being a gold bug not such a great one. While the Bugs go about collecting their bits and pieces waiting for the end of the world they are failing to see that they are collecting not gold but Dung!!


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## Uncle Festivus (25 August 2008)

Trembling Hand said:


> While the Bugs go about collecting their bits and pieces waiting for the end of the world they are failing to see that they are collecting not gold but Dung!!



That could be why everyone can't wait to get rid of their paper dollars and swap them for something that *usually* holds its 'value' ie real estate or at least doesn't depreciate as fast as paper money. The trouble for Americans is that usually reliable assets are deflating (housing) while consumables (food & fuel) are inflating. There is no store of wealth for them any more.

It's not the end of the world, just a stress test of the worlds default currency due to continued & excessive debasement - until something else comes along?


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