Gold Price - Where is it heading?

[wayneL]

Yes it is. If you buy somthing with the sole intention of selling it for a higher price next week, next month or next year you are speculating.

An investment attitude looks to the asset itself to generate the return, But gold produces no return outside of selling it to a bigger idiot in the future,

Whether you buy shares, realestate or any other asset if you a simply looking to flip it for a higher price later you are speculating.

So are retailers speculators?

 

[Tysonboss1]

1, past performance is not an indicator of future results



2, what price do you personally believe gold should be?

1, sometimes it is and sometimes it isn't, But i fail to see how this relates to the comment I made.

I was saying that nothing fundamental has changed with gold, it is still just gold, the same non reactive, pretty, heavy metal it has always been. and in 100 years it will still be just gold. it's not magic it is just a commodity whose price flucutates both up and down over time. Offcourse inflation of the money supply should maintain some upward pressure, but not like we have seen.

2, As I said it will flucutate, I would suggest it would maintain it's relative value overtime in an inflation adjusted way, maybe some where around $800 in todays money.

But look it goes with out saying, when you buy a low yielding investment, ( gold is zero yield), you must only do so when there is low chance of suffering a loss in capital value.

Gold at current trading prices does not offer safty of priciple in my veiw at this time.

 

[Tysonboss1]

So are retailers speculators?

They are traders,

and whether they make a profit is determined by how well they understand the supply and demand dynamics of the products they are retailing, and how well the manage their relationships with suppliers and customers.

I am a retailer, and yes when deciding whether to stock a new product that I am unsure of demand, I am in a way speculating, and some times end up clearing stock at a loss.

 

[wayneL]

They are traders,

and whether they make a profit is determined by how well they understand the supply and demand dynamics of the products they are retailing, and how well the manage their relationships with suppliers and customers.

I am a retailer, and yes when deciding whether to stock a new product that I am unsure of demand, I am in a way speculating, and some times end up clearing stock at a loss.

So speculators are retailers?

 

[disarray]

1, sometimes it is and sometimes it isn't, But i fail to see how this relates to the comment I made.

that's the problem

I was saying that nothing fundamental has changed with gold, it is still just gold, the same non reactive, pretty, heavy metal it has always been. and in 100 years it will still be just gold.

it's not the nature of gold that is determining it's price. it's the nature of man that is determining it.

Offcourse inflation of the money supply should maintain some upward pressure, but not like we have seen.

so you've factored in every possible input into the system have you? considered political changes, economic restructuring, social conflict, currency risk, excessive credit, unsupported derivatives, financial mismanagement, fraud, price manipulation, speculation, public perception, resource availability, resource extraction and consumption, and the lynchpin of the whole thing - "trust", and come to the conclusion ....

I would suggest it would maintain it's relative value overtime in an inflation adjusted way, maybe some where around $800 in todays money

clever man. give me a time frame and i'll acknowledge you guru should it come to pass. or send my girlfriend who believes in astrology and crystals over to you for a reading.

But look it goes with out saying, when you buy a low yielding investment, ( gold is zero yield), you must only do so when there is low chance of suffering a loss in capital value.

Gold at current trading prices does not offer safty of priciple in my veiw at this time.

thanks gordon gecko

 

[Tysonboss1]

So speculators are retailers?

No,

5cents is a coin, But that does not mean all coins are 5cents.

You asked are retailers speculaters, and the answer was somtimes.

 

[wayneL]

Thanks for your received wisdom

 

[wayneL]

Tyson

If someone buys a house where the rent does not cover the mortgage, are they speculating?

 

[Tysonboss1]

1, it's not the nature of gold that is determining it's price. it's the nature of man that is determining it.



2, so you've factored in every possible input into the system have you? considered political changes, economic restructuring, social conflict, currency risk, excessive credit, unsupported derivatives, financial mismanagement, fraud, price manipulation, speculation, public perception, resource availability, resource extraction and consumption, and the lynchpin of the whole thing - "trust", and come to the conclusion ....



3, clever man. give me a time frame and i'll acknowledge you guru should it come to pass. or send my girlfriend who believes in astrology and crystals over to you for a reading.



4, thanks gordon gecko

1, Thats the problem

2, Some of those are unimportant and most that are important are un knowable which leads people to speculate the outcomes and creates wild mispricings, I'll steer clear thanks,

3, I can't tell the future, all I can do is try and establish what things are worth to me, a lump of gold is worth little to me, If you gave me a KG I would sell it today and use the money else where.

4, Thank Graham, it's straight out of his classic text.

 

[Tysonboss1]

Tyson

If someone buys a house where the rent does not cover the mortgage, are they speculating?

Yes,

 

[disarray]

Some of those are unimportant and most that are important are un knowable which leads people to speculate the outcomes and creates wild mispricings ... I can't tell the future, all I can do is try and establish what things are worth to me

yet your entire valuation and viewpoint is based on things staying as they are now. or more accurately, as you think things should be. it's all these unknowables you dismiss that are what is driving the price of gold and by having a narrow vision you are limiting your definition of value.

if the system was stable and economics worked and humans were reasonable and people told the truth and the news was always accurate then sure, gold shouldn't be worth much. but the system isn't, economics doesn't, humans aren't, people don't and the news isn't.

gold is almost an emotional play now, not your emotions, but everyone elses. by buying gold and silver i'm investing in FUD. if you've got got facts and figures on that and can chuck in a geopolitical slant, i'm all ears.

 

[Tysonboss1]

by buying gold and silver i'm investing in FUD. if you've got got facts and figures on that and can chuck in a geopolitical slant, i'm all ears.

Do you have facts and figures on that.

 

[Tysonboss1]

yet your entire valuation and viewpoint is based on things staying as they are now.

No, your entire valuation and viewpoint is based on how things are now.

I know their are problems around the world, But I believe we will get passed them, and if you believe that then you believe the fear will subside and with it the price of gold.

 

[Billyb]

Dissaray hit the nail on the head IMO.

Who cares if emotions/fear/speculation are driving gold? The only thing that matters is that GOLD IS CURRENTLY LIKELY TO BE PROFITABLE, based on data from the previous 10 years of our lives. TEN YEARS. That's a lot of data in our favour. If you think the bubble is going to pop now - then all you are doing is trying to predict the future which you CANT possibly know - the bears have been trying to do this for the last 10 years in fact - saying "gold is in a bubble and it will pop soon" every single time they were wrong. What's the chances they are right this time? It's only the 1000th time they are making that prediction. Even if they are right their hit rate is 0.1%. I like those odds. Alas, eventually they will be right and gold will start going down, but by that time evidence will probably be starting to appear that this will happen (markets will stabilise and gold will start trending down) so there will be the chance to get out before it gets ugly.

1. No, your entire valuation and viewpoint is based on how things are now.

I know their are problems around the world, But I believe we will get passed them, and if you believe that then you believe the fear will subside and with it the price of gold.

1. They always are, no one can predict the future so my theory is act on what you know now- and what I know now is that gold has been giving profit to holders for 10 years and the probability of that all of a sudden changing now (during this market turmoil) is very low.

Corrections are expected. I hope gold corrects a little more than it has - to normalise back to a healthy trend. Silver is starting to show, IMO, that just because the price suddenly drops in a short period of time (which some people call 'bubble bursting') does NOT mean that the upward trend has stopped.

2. Yes history shows we always make it through, one way or another. In the meantime gold is doing what it is supposed to do, go up in value when people are pooing themselves.

 

[explod]

Yes it is. If you buy somthing with the sole intention of selling it for a higher price next week, next month or next year you are speculating.

An investment attitude looks to the asset itself to generate the return, But gold produces no return outside of selling it to a bigger idiot in the future,

Whether you buy shares, realestate or any other asset if you a simply looking to flip it for a higher price later you are speculating.

You just do not seem to get it Tysonboss1.

I am not speculating.

One could convert all assets into money and park it under the mattress. Most would say this is not speculation but preserving your money safely. However with real inflation well above the officially released figures, the ever expansion of debt and the printing of money, paper money is losing value.

One could take out a term deposit and gain 6% interest per annum. In the great depression and in Argentina many people did not ever get their money back when things really went pear shaped.

Or one could buy gold and silver and store it under the bed and gain on the current trend of 10 years, 30% average per annum.

In fact it is not even investing let alone speculating, it is just holding onto the real value of the money you put into it.

And as I have repeated, "the trend is your freind untill the bend" and the up trending channel is very much intact. To break the trend it would take a breach of $1,500 and on the current growing demand for this safe haven that is very unlikely.

However I am always at the ready to cash in but pretty sure that day is a long way off.

 

[explod]

The following link discusses the current correction against that which occurred in 1978/9. With the charts discussed it fairly well supports some of the points made in my last post instant.

http://www.gotgoldreport.com/2011/08/letter-to-dennis-gartman-about-the-cortes-chart-.html

 

[Tysonboss1]

In fact it is not even investing let alone speculating, it is just holding onto the real value of the money you put into it.

No doubt you can put the physical gold in a safe place for 10years and it will still be there, But whether or not you can sell it at todays record levels depends on alot of factors, many of which are not guaranteed as you seem to believe.

Inregards to selling up into cash and placing it under the matress, if you look back at my comments you will find I have never suggested this, I have only compared gold to other assets which will achieve the same inflation protection while also generating income.

Saying that, holding cash under the matteress would have been better than holding gold under the matteress for over 2 decades if you bought in the late 70's peak.

 

[skc]

Down $200 in 2 days None of the support levels put up more than a few hours of resistance.

Next support ~$1670 will be tested tonight by the looks. And then it's ~$1625 and $1575.

Amazing just to watch.

 

[cynic]

I have only compared gold to other assets which will achieve the same inflation protection while also generating income.

Were you aware that it is actually possible to lease gold?

 

[Tysonboss1]

Were you aware that it is actually possible to lease gold?

Yes I am aware that central banks lease gold to each other at rates of less than 1%, Not really enough to get me to by into an over valued asset, which is pittiful compared to what you can earn on other assets classes with the same inflation hedging and are currently less frothy.

But people are talking about holding physical under the materess because they don't trust the central banks, so leasing gold is not really an option for them