Gold Price - Where is it heading?

[Mr Z]

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."

Sorry, again you are wrong, gold has met the conditions to be called a sound investment since the early 2000's. Any reasonable analyses of the macro situation from that date would have lead you to incorporating gold into your portfolio. It certainly was very evident to me at that time and it is still very evident that this has quite a way to go.

Just because you don't get it doesn't mean it ain't so.

BTW. We look due for that correction again... I don't think it will be that deep given what is going on.

 

[NewTrade]

About 2K/Oz is where its heading

I can't believe it has hit 1900 already

 

[aclassic]

BTW. We look due for that correction again... I don't think it will be that deep given what is going on.

Mr Z, would you mind, even if only for a retrospective future laugh, hazarding predictions of:

Duration of dip.
pog end 2011
pog mid 2012
pog end 2012
pog end of mad rush and when?

There's a challenge.
I'm off to the bank but don't tell anyone.
cheers.

 

[explod]

It is not hard to work out as the price of gold has gone up an average of 30% per year since 2001. And as the monetisation of debt looks to continue so will the price of gold go up on its current trend.

We have had a fair bit of it this year so I am calling US$2,200 2011

2012 about $2,900
2013 " " 3,900

roughly of course, but as the general investment community is now taking a little bit of notice it my go up exponentially further.

And we are nowhere near the mania of the dot. com for example, when the taxi driver insists on buying, only then will it hit the top and be time to sell.

 

[aclassic]

roughly of course, but as the general investment community is now taking a little bit of notice it my go up exponentially further.

And we are nowhere near the mania of the dot. com for example, when the taxi driver insists on buying, only then will it hit the top and be time to sell.

Many thanks explod.

 

[Tysonboss1]

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

2, In fact it is not a very good inflation hedge MOST of the time,

3, other conditions need to be present for gold to fly.

4, We have those conditions present today and for the foreseeable future.

1, yes there has been inflation, but not in the 100's of % since 2000.

2, Yes I know, hence why I will never hold it.

3, Agreed, a large fear driven speculative bubble must exist.

4, Well, maybe. who knows

 

[Tysonboss1]

It is not hard to work out as the price of gold has gone up an average of 30% per year since 2001. And as the monetisation of debt looks to continue so will the price of gold go up on its current trend.

We have had a fair bit of it this year so I am calling US$2,200 2011

2012 about $2,900
2013 " " 3,900

roughly of course, but as the general investment community is now taking a little bit of notice it my go up exponentially further.

And we are nowhere near the mania of the dot. com for example, when the taxi driver insists on buying, only then will it hit the top and be time to sell.

Ha ha ha XD

I think Robots is a more conservative investor than you.

 

[notting]

And we are nowhere near the mania of the dot. com for example, when the taxi driver insists on buying, only then will it hit the top and be time to sell.

Well their setting up ATMs to deliver gold coins to the general puplic who are panicking about their banks.
Seems pretty bloated to me. But then again you could argue that that is a demand that was not there before from the man in the street.
It's a bit early to call IMO

 

[explod]

Ha ha ha XD

I think Robots is a more conservative investor than you.

Do the sums? they speak for themselves, as do the fundamentals.
And wait till the sentiment really sets in.

And a nice "ha ha ha" to you too.

 

[Billyb]

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.

I agree with you, gold is perhaps one of the least riskiest places to be right now. May I ask why you chose to sell gold and buy silver?I am always worried about silver, I am tempted to buy it as it is trending up right now, but I am always reminded of the great silver crash around 1980. Gold came down slowly, but silver just got smashed to bits very quickly.

3, Agreed, a large fear driven speculative bubble must exist.

What if this bubble keeps going for another 3 years before it 'pops'. Wouldn't it have been better to be in the bubble for those three years than out? No one knows when this bubble is going to pop, but with current conditions chances are it wont pop SOON, so you might as well be in the bubble than out of it.

 

[explod]

I agree with you, gold is perhaps one of the least riskiest places to be right now. May I ask why you chose to sell gold and buy silver?I am always worried about silver, I am tempted to buy it as it is trending up right now, but I am always reminded of the great silver crash around 1980. Gold came down slowly, but silver just got smashed to bits very quickly.

A good question. My choice of gold over silver is because of the ratio difference at this time. Historically this ratio has been that the value of one ounce of gold was equal to 15 ounces of silver. At this time, not checked it for a week, but from memory it is about one ounce of gold equals 40 or so ounces of silver. I expect from my own studies that silver will return to this mean average again. Some calculations will soon make this reasoning clear.

The spike in silver in 1980 was because the Hunt brothers tried to corner the market and the rise from just a few dollars to $50 happened in a very short time and of course collapsed even faster. Very different to today where we see silver climbing gradually, albeit with some volatilty recently.

I did have gold bars up till about two years ago and cashed in when the price was at Aus$11,500 an ounce and purchased silver then at Aus$15 an ounce. Silver has increased by more than 300% since then but gold has not yet doubled. So I am pleased with my decision and comfortable about holding for the time being. I did put a lot of study and thought into bullion back in 2002 and as a result obtained a personal vault in a location only half a block away from a bullion dealer. I am able to cash in or change my positions within an hour. Stocks for example take up to four days to settle. So if I thought the sky was going to fall in, action could be taken immediately.

Historically silver has been used in coins, like gold, as part of currency and many people still have a high regard for it in this way. But I do have a very avid interest in the gold market as it is a big indicator of currency changes, it can be seen to act on general market sentiment and on major civil unrest or international tensions. So it is a fascinating study and it is worth your while in Googling up and learning about its history as money which dates back nearly 6000 years.

 

[DB008]

Gold Tumbles in Metal’s Biggest Decline in a Year

http://www.bloomberg.com/news/2011-08-23/gold-declines-from-record-above-1-910-as-some-investors-sell.html

Gold dropped the most in a year as some investors sold the metal after signs of slowing growth spurred a rally to a record $1,917.90 an ounce.

The relative-strength index of futures in New York has topped 70 since Aug. 8, a signal to some investors that prices were poised to decline. Bullion has jumped 14 percent in August amid speculation that Federal Reserve Chairman Ben S. Bernanke will signal further measures to stimulate the U.S. economy later this week and as debt crises spurred demand for haven assets.

“Gold looks very bubbly,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “Gold’s going to continue to suck everybody in. There’s too much risk of a wicked correction lurking around the corner to enter the trade right now.”

More from the link above....

 

[aclassic]

Gold Tumbles in Metal’s Biggest Decline in a Year

http://www.bloomberg.com/news/2011-08-23/gold-declines-from-record-above-1-910-as-some-investors-sell.html



More from the link above....

First part of that article is quoting stockbrokers looking for any news to spur share trades I reckon.
But then the article goes on with:

UBS AG raised its one-month gold forecast to $1,950 from $1,725 and increased its three-month outlook to $2,100 from $1,850. Yesterday, the bank’s physical sales to India, the top global buyer, were the highest since May 10, according to UBS analyst Edel Tully said.

Bernanke is scheduled to speak Aug. 26 in Jackson Hole, Wyoming, at an annual conference sponsored by the Fed Bank of Kansas City.

“In the long-term, gold is attractive,” Zeman of Kingsview said. “Fiscal deficits are completely out of control. It’s no wonder that investors are losing faith in paper money.”

What do you make of that?

 

[DB008]

^Make of that what you will. I am just cautious of Gold as it has had a very big rise this year. If/When it pops, it will drop very fast.

 

[aclassic]

Thanks DB008

I wonder if we are seeing Mr Z 's correction atm?

 

[Tysonboss1]

What if this bubble keeps going for another 3 years before it 'pops'. Wouldn't it have been better to be in the bubble for those three years than out?

i personally would prefer not to.

But hey, there is nothing illegal or immoral about out right speculation, and it can be fun while you ahead in the game.

But always keep in mind the rules of speculation.

- never speculate with more than you feel comfortable losing
- never add more funds into speculative pursuits because they have been running in you favour ( if anything start drawing down)
- never lose sight of the fact your speculating or fall into the trap of thinking your making sound investments.
- never gamble seriously treat it as a past time or entertainment.

 

[notting]

http://www.theaustralian.com.au/bus...-to-record-level/story-e6frg91x-1226120239966

Argument for the bulls. May still fly a bit.

I am a bear on gold.
Looking for some shorts - St Barbara looks nice any others that are high but not that great you guys might know of?

 

[Billyb]

Gold Tumbles in Metal’s Biggest Decline in a Year

http://www.bloomberg.com/news/2011-08-23/gold-declines-from-record-above-1-910-as-some-investors-sell.html



More from the link above....

All these reported needs to define what they mean by 'gold is looking bubbly right now'. If by bubble they mean, it could soon drop from $1850 to $1650, and the come back up then OKAY, that's reasonable. Long term holders can handle a small temporary fall like that. If by bubbly they mean it's gonna drop right back to what it was 10 years ago and not come back again for another 20 years, then that's not logical IMO. It's been going up for 10 years, why the heck would it all of a sudden trend down that much when fear is at the highest it's been since the GFC.

i personally would prefer not to.

But hey, there is nothing illegal or immoral about out right speculation, and it can be fun while you ahead in the game.

But always keep in mind the rules of speculation.

- never speculate with more than you feel comfortable losing
- never add more funds into speculative pursuits because they have been running in you favour ( if anything start drawing down)
- never lose sight of the fact your speculating or fall into the trap of thinking your making sound investments.
- never gamble seriously treat it as a past time or entertainment.

You talk about speculation as though it's a bad thing. Gold goes up based largely on speculation. The prices of businesses, aka stock prices, as well as prices of just about everything else that's traded, change daily largely because of speculation. You are making a fundamental error by singling out gold in that respect. But you either take advantage of that speculation or you don't. You either take the risk or you don't. No risk, no return. It's as simple as that.

 

[explod]

Very well said Billyb.

And interestingly, those thinking it is going to tank give no fundamental reason for it doing so.

As the US$ dollar continues to be diluted in value by the expansion of credit and helecopter Ben's money printing, gold will continue to fly higher. Corrections will be small and short lived from now on, for those reasons.

 

[disarray]

Gold Tumbles in Metal’s Biggest Decline in a Year

market is volatile!

news at 11