Spot said:d998
Have been stewing over the same type of view.
Come up with holding the physical in it's various forms only
If one of the main reasons for holding gold is inflation, then surely any margin the miners make is going to be wiped out by rising costs (juniors excepted)
The time to be getting into the major/mid cap miners is probably over and time to start accumalating the physical on major dips is here.
A second point, "social democracy with a fiat currency, all roads lead to inflation." is quite true, and of course dates back to the mid-1940's where structural reforms were enacted to expressly limit, or prevent, episides of unemployment and deflation seen in the 1930's, viz. The Employment Act of 1946, and later The Full Employment and Balanced Growth Act of 1978 were passed into Law.
Inflation, and the threat of inflation are therefore at the front of many investors thinking when looking at asset allocation. Gold it has been argued is a hedge against inflation, and by default, a depreciating currency. Inflation however would be more accurately defined as a reduction in purchasing power, and while that certainly includes a depreciating currency, this can in an environment of increasing productivity be misleading.
Therefore, the question still not answered, is Gold, a worthwhile investment, and at what price?
wayneL said:Do you mean the stuff that jingles in your pockets or one of the various proxies, e.g. ETFs?
Spot said:d998
Was under the impression "inflation" is always caused by a increase in "money supply" -- overall rising prices are a reflection of this -- not the cause.
Of course there can be rising prices in selected areas due to demand/supply but this should be short term and balance out in other areas.
As the piece you posted pointed out - is money supply drying up? - you can check out the US M2 @ St. Louis. Fed and going by the data it has been in decline.
Hence the reason I stated I will only be buying Gold on any major declines and no miners.
kennas said:I think the fact it's tested $620 several times now and rebounded that it might climb higher from here. Not convinced, but more than a 50% er for me.
Yeah, Kitco. I'm just doing it in $US. Probably should be doing in AUD also.....Kauri said:Hi kennas
Is that on the kitco C charts?? On the spot OHLC charts I use 620 doesn't really show up. My bias is that AU is on the way up also,I am looking for confirmation and an entry opportunity if and when it happens.
kennas said:I wonder if all this consideration is pointless???
Yeah, I think there is time and it's important to be set, in order to load up Chicken's truck. I want to try and get in early though. I probably still have too much gold in the portfolio atm but like you I'm long term bull and am prepared for some short term pain for the long term gain.nizar said:I gave up trying to predict moves in gold a long time ago, especially short term ones. Long term i still think up. WHen it starts running, no1 knows.
At the latest, gold i suspect will run next year when the FED cuts rates. That means no more support for the USD, and gold should run.
I figured im just gonna wait until gold runs. When the May high is broken, ill consider getting some goldies. After all, its its gonna to the $000's, then we have plenty of time to get set.
Gold Rises for Second Day as Dollar Slump Boosts Metal's Appeal
By Christopher Donville
Nov. 22 (Bloomberg) -- Gold rose for a second day as a slumping dollar boosted the appeal of the metal as an alternative investment.
Gold, sold in dollars, generally moves in the opposite direction to the U.S. currency, which dropped today to a five- month low against the euro. The dollar fell on speculation the Federal Reserve will lower interest rates as the economy cools. Gold is up 21 percent this year, while the dollar has fallen 7.2 percent against six major currencies.
Bears stand their ground! Gold and Silver prices ended little changed from yesterday, after tests of weekly highs were made in today's session. December Gold closed up 30 cents at $629, off a range of $627 to $635, low to high. Gold rallied along with the Euro versus the US Dollar early in the session, but Gold was unable to hold on to the gains, despite the Euro remaining firm into the New York dealing close. The bears rejected prices above $630 today, which suggests that Gold is not ready to break out of its trading range of $615 to $635. Momentum on the daily charts is sideways/down, as it has been since 11/13, but December futures have been unable to break down and close below critical support levels of $620, $610, and $600. Resistance remains at $630 and $637 respectively. Gold is likely to remain within the bounds of the well-worn trading range of the past few weeks.
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