Gold Price - Where is it heading?

[Billyb]

Sorry, I just have to pull you up their.

The word speculation should be used inplace of investment.

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."[

No 'investment' alive today promises safety of principle, or an adequate return. Not even a term deposit or US treasury bond. Don't kid yourself! There is always some degree of speculation, at this point in time gold is being driven upwards by speculation but just about every risky investment goes through times like this.

 

[explod]

No 'investment' alive today promises safety of principle, or an adequate return. Not even a term deposit or US treasury bond. Don't kid yourself! There is always some degree of speculation, at this point in time gold is being driven upwards by speculation but just about every risky investment goes through times like this.

Do you consider physical gold to be risky?

 

[aclassic]

Sorry, I just have to pull you up their.

The word speculation should be used inplace of investment.

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."[

Hey I can't argue with you on that Tysonboss1. Wrong terminology - I am definately speculating.

Except for this next year, I rarely have any cash on hand to invest or speculate with and all this global turmoil, panic and perception stuff just seems like one of those times when I have the rare opportunity to make an extra quid.

I'd welcome your advice on an alternative speculation or investment.

cheers.

 

[disarray]

But please go ahead and explain why it is different this time.

because this time global economic systems are on the brink of collapse. i understand the points you make but they are predicated on maintaining the stable framework on which our modern economic system rests. this current system is built on debt, confidence and fiat money. unfortunately the system has now been so distorted by government interference / banking manipulation / humans being short sighted greedy retards (like always) that it either needs a serious recalibration or it will fall over.

either way i see the "value" of gold as something ALL humans have ALWAYS agreed on, and in times such as these, when systems are wobbling, money is going to want a solid foundation to park itself on while it rides out the shocks. i think gold is the best foundation available at the moment.

everything you say is correct "in theory", but we are witnessing a generational, systemic change brought about by reaching the limits of the systems capacity. until the next wave of tech comes through to increase / more efficiently utilise available resources, we are pretty much running full tilt on resource consumption / utilisation / population growth / environmental sustainability / financial sleight-of-hand etc.

this is the fall of rome baby. may you live in interesting times.

in my humbly bearish opinion of course

 

[Tysonboss1]

No 'investment' alive today promises safety of principle, or an adequate return. Not even a term deposit or US treasury bond. Don't kid yourself! There is always some degree of speculation, at this point in time gold is being driven upwards by speculation but just about every risky investment goes through times like this.

I agree that no single capital allocation in isolation can promise absolute safety of principle, but an investment operation as a whole that is based on sound principles along with a margin of safety and some basic diversification can promise safety of principle by preventing any permanent loss of capital.

 

[Tysonboss1]

Except for this next year, I rarely have any cash on hand to invest or speculate with.

What? why don't you normally have any money to invest.

And if you do find money hard to come by what do you want to squander it by speculating, the house always wins in the end.

 

[aclassic]

What? why don't you normally have any money to invest.

And if you do find money hard to come by what do you want to squander it by speculating, the house always wins in the end.

Right or wrong, I have only been a wage earner and the rest is rather personal ie health,kids and relationship.

I appreciate and have taken note of your view.

thanks.

 

[Billyb]

Do you consider physical gold to be risky?

Yes of course there. Let me think of a few risks (unlikely, but nonetheless risks)

-If you store it in a bank vault or at the Mint then you are assuming that your gold is safe there. That is risk.
-Governments can confiscate or force you to sell your gold back to them at a low price. It happened in the US during the great depression and there's not guranantee governments wont do it again, because when times get rough governments can do silly things.
-In order to prevent this from happenening, you can hide your gold from the government by storing it at home - that is risk also
-Then there are the normal risks associated with the possibility of the value of gold dropping unexpectedly, having to find a buyer etc

 

[Tysonboss1]

Right or wrong, I have only been a wage earner and the rest is rather personal ie health,kids and relationship.

I appreciate and have taken note of your view.

thanks.

I am sorry to hear about any health concerns you have,

But being a wage earner is good for investmenting, just spend less than you earn each week and invest the saving and you will do well.

 

[explod]

Yes of course there. Let me think of a few risks (unlikely, but nonetheless risks)

-If you store it in a bank vault or at the Mint then you are assuming that your gold is safe there. That is risk.
-Governments can confiscate or force you to sell your gold back to them at a low price. It happened in the US during the great depression and there's not guranantee governments wont do it again, because when times get rough governments can do silly things.
-In order to prevent this from happenening, you can hide your gold from the government by storing it at home - that is risk also
-Then there are the normal risks associated with the possibility of the value of gold dropping unexpectedly, having to find a buyer etc

Yep agree, knew of all those possibilites. So tell me what is increasing in value and is safer than gold?

Bearing in mind it is up 300% in five years and with the money printing going on this momentum is most likely to keep the trend in its upwards bias.

And by the way I sold my gold bars two years ago and converted to silver bars and a lot of silver coins in a place where no one will get to them.

 

[Tysonboss1]

So tell me what is increasing in value and is safer than gold?

Bearing in mind it is up 300% in five years and with the money printing going on this momentum is most likely to keep the trend in its upwards bias.

See thats a big problem with human emotions.

We see large and consistent gains as proof that an asset class is a safe and a good investment, even though such a bull run may mean it is now infact over valued and a large correction is due.

and conversly.

We see large falls in an assets prices as an asset being risky or unsafe, and not that it is probably worthy of our attention because the recent falls have made it a bargin issue and it is due to have healthy returns.

 

[Tysonboss1]

Bearing in mind it is up 300% in five years and with the money printing going on this momentum is most likely to keep the trend in its upwards bias.

wouldn't this have upward pressure on all real assets outside of cash, ie. real estate, businesses, mines, farmland and all the commodiites.

And if this is the main reason for investing in gold, would it not be more wise to hold some other physical asset that will have the same longterm hedge against the dollar, but can be bought now at discounts rather than highs, and generate income along the way.

 

[explod]

See thats a big problem with human emotions.

We see large and consistent gains as proof that an asset class is a safe and a good investment, even though such a bull run may mean it is now infact over valued and a large correction is due.

and conversly.

We see large falls in an assets prices as an asset being risky or unsafe, and not that it is probably worthy of our attention because the recent falls have made it a bargin issue and it is due to have healthy returns.

We follow trends and this trend is up. Have you read Michael Covels "Trend Following" find details of it here http://www.michaelcovel.com/

Purhased it four years ago and I follow it.

Everything is risky and the sky may fall in too, but physical bullion in the hand on current trends is about as less risky as you will find.

With most of the world now encouraging the devaluation of thier paper money I know what is best for me. Others may make thier own choices and unlike some on the forum do not infer advice to anyone. We should focus on the topic, the "Gold Price - Where is it heading?"

 

[explod]

wouldn't this have upward pressure on all real assets outside of cash, ie. real estate, businesses, mines, farmland and all the commodiites.

And if this is the main reason for investing in gold, would it not be more wise to hold some other physical asset that will have the same longterm hedge against the dollar, but can be bought now at discounts rather than highs, and generate income along the way.

These other assets you mentioned are in a lot of cases loaded in or effected by debt, gold in the hand has no debt. You could borrow to buy it of course but that would defeat the purpose. Gold is merely a store of value. And who's worried about 6% interest, which is probably less a number than real inflation when gold is up 50% for the last 12 months. And the fed heads will keep it going up as the underlying very wealthy, Rothschilds and co., will be up to their necks in gold.

There of course will come a time when property for example will have another day, but that is not now, it is going sideways, if you like on the charts. And the time will come when I will liquidate my bullion to move into these other tangible assets but for mine it is not now the time.,

However we are off topic, we should be discussing gold itself on this thread and where it is going.

 

[awg]

wouldn't this have upward pressure on all real assets outside of cash, ie. real estate, businesses, mines, farmland and all the commodiites.

And if this is the main reason for investing in gold, would it not be more wise to hold some other physical asset that will have the same longterm hedge against the dollar, but can be bought now at discounts rather than highs, and generate income along the way.

If things get very bad as in the 1930s USA Depression, my understanding is that gold shares did well, and paid DIVIDENDS.

Better Depression economists than me might be able to comment further

I agree certain diversifications as suggested sound sensible,( have em) but they arent as small as a chocolate bar, and cant sell them over the counter today.

Due to the fact that Gold represents such a tiny fraction of Total Investment, if there were to be a substantial piling in by retail investors worldwide, then crazy growth might occur.

I think that is happening now, which I consider unfortunate to a some extent, but what can you do but try and stay on the right side of the equation?

Another point is I dont see any of the assets you mentioned to be undervalued at present in the cycle, by any means, (just like gold) but there is less prospect of a violent upward spike (unlike gold)

 

[RandR]

I have one simple question for anybody currently holding physical gold (not silver .. as I actually believe that to be a useful product)

When do you plan to sell ? Im curious, what price or percentage point increase are you holding out for ? Is your plan to achieve a certain margin / hold until the passing of macro events / hold forever etc ...

Dont mistake me and think I dont believe gold will continue to increase in the current environment, as I believe it will, Im just completely unsure about how much and for how long, and so Id rather back the knowns I think I know, (the inevitable pop) then the unknowns I think I dont know. (for how long and how far gold will continue to rise)

 

[DB008]

Not sure if this has been mentioned in the gold thread, but an interesting development nonetheless.



Golden Retrieval: Chavez wants his billion back




(explod - clear your inbox)

 

[explod]

Thanks for posting up DB008. And the following via the GATA website makes clear the potential of Venezuela's gold repatriation putting an absolute rocket under the gold price.

Comments ought also be of concern to those who do not actually have possession of the physical.

http://www.thegoldstandardnow.org/

http://www.gata.org/node/10321

 

[Tysonboss1]

. Gold is merely a store of value.

Yes, exactly.

Which to me means that any such monumental rise in the 100's of % over a relatively short time frame should be veiwed with caution.

Some thing that is to be considered a store of value can only be a store of value if it is bought close to it's longterm historical price adjusted for inflation. Gold has massive, massive inflation already priced in. if this doesn't happen, or takes 30 years to happen, you will see big price falls and question how mauch value you have stored.

Gold, does nothing, it just sits there. the only rational way it can double in value is for the world economy to double in size (without new gold reserves being found) or for inflation to half the value of the currency ( But then all real assets will go up at the same time, while also generating returns)

 

[Mr Z]

Oh cripes... LOOK at the US money supply since 2008. The inflation has happened, it is history... now the effects are following.

NO that is not the only rational way it can double in value, you are completely misunderstanding golds role in the system, it is not solely an inflation hedge. In fact it is not a very good inflation hedge MOST of the time, other conditions need to be present for gold to fly. We have those conditions present today and for the foreseeable future.