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We had a few discussions about gold a while back, but at the time it was stuck in a range and no really going anywhere. Since then it has quietly slipped up to $1200 an ounce. Gold bulls are coming on CNBC predicting prices anywhere from $2500 to $5000, and in the not too distant future.
So (with my usual skill of buying at the absolute top), I'm thinking of dipping my toe in again (probably wait for a correction, though).
What do you guys (particularly Breand) think is the best option right now? GLD? GLD options? Big miners? Small miners? Miner ETFs?
Year to date, here's some of the winners:
ABX +26%
GLD +36%
NEM +37%
GG +42%
AUY +80%
NAK +110%
RBY +295%
Or last month:
RBY +13%
GLD +15%
NAK +19%
GG +22%
ABX +28%
NEM +29%
AUY +30%
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Bullion and make sure you have it in hand. I started investing when it was around $200/troy oz.
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Im like you. Jump in at the top and ride it down!!  I for one am not betting either way. But if I had to guess, I would say that Gold is close to its peak right now. However, while gold is at a high, inflation adjusted price of its peak in 1980's is like $2200 in today's dollars, so half of what it is at today. However, when I like at historical inflation adjusted graphs, its just a blip in the graph. Meaning as fast as it went up, it went down. That smells funny to me, and if people are counting on a blip, or trying to manipulate the market into a blip, then I'm staying away.
As I understand it (I would like to hear from Breand as well), conventionaI wisdom today is that when the federal reserve prints more money / pumps more money into the economy, the value of the dollar decreases, and in turn the price of gold goes up.
My understanding is that the reverse also holds true. As the dollar strengthens, then the price of gold will drop. So for me, I ask my self what do I think will happen the next year. Will the fed print more money, or work towards making it stronger. I think they will not let the dollar get much weaker. Therefore, I think gold will not go much higher.
![[Image: gold_all_data_o_usd.png]](http://goldprice.org/charts/history/gold_all_data_o_usd.png)
Here is the price in inflation adjusted dollars.
![[Image: gold-REAL-dollars.gif]](http://www.ritholtz.com/blog/wp-content/uploads/2009/10/gold-REAL-dollars.gif)
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Yeah, in 1980 it was a "superspike", which many are saying could happen today. The trick would be selling at the peak...
However, this time around it is more a fundamental story than a speculative one. Foreign governements are diversifying into gold in a big way, particularly China, which is the real story. Will they move back into dollars if it strengthens? I'm not so sure. It's obvious to me that even if the fed causes a brief rally in the dollar next year, the long term prognosis for it is down, down, down...
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I read an article that says the normal ratio of silver's worth to gold, that silver is very undervalued right now and expected to go up since gold has maxed out.
Anyone else?
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Diggles Wrote:I read an article that says the normal ratio of silver's worth to gold, that silver is very undervalued right now and expected to go up since gold has maxed out.
Anyone else?
I don't know, but I would never invest more then 5% of my net worth in gold or silver. I couldn't sleep at night knowing that, any day, someone could discover a big mine somewhere and devalue your investment over night. At least when investing in good solid business with long term competitive advantages, you know that you won't wake up tomorrow to hear news about a new soda company that overtakes coke in 1 day.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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nm.
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Diggles Wrote:I read an article that says the normal ratio of silver's worth to gold, that silver is very undervalued right now and expected to go up since gold has maxed out.
Anyone else? I like silver - I've invested in the base ETF (SLV), as well as some of the miners (SLW and CDE) in the past. Silver has actually outformed gold by a big margain this year so far (+68% vs +36%).
I don't think gold has maxed out, though.
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I invest in silver as well it is scarser than gold and has more real world utility. It has one good pro of being in smaller denominations but one big con of taking up much more space dollar for dollar with it's gold counterpart. Again, I'm talking bullion because I believe it's the only true way to invest in either.
"You cannot invade the mainland United States. There would be a rifle behind every blade of grass." - Admiral Isoroku Yamamoto
Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state.
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Spread my work ethic not my wealth.
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Thudz Wrote:I invest in silver as well it is scarser than gold and has more real world utility. It has one good pro of being in smaller denominations but one big con of taking up much more space dollar for dollar with it's gold counterpart. Again, I'm talking bullion because I believe it's the only true way to invest in either. I don't just invest in gold and silver through stocks either...Tiffany, Blue Nile and my wife also make sure I have plenty invested in the real thing...
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Grieve Wrote:Thudz Wrote:I invest in silver as well it is scarser than gold and has more real world utility. It has one good pro of being in smaller denominations but one big con of taking up much more space dollar for dollar with it's gold counterpart. Again, I'm talking bullion because I believe it's the only true way to invest in either. I don't just invest in gold and silver through stocks either...Tiffany, Blue Nile and my wife also make sure I have plenty invested in the real thing...
lol, yea I'm into those gold investments. But the interest is very lucrative
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Vanraw Wrote:Grieve Wrote:Thudz Wrote:I invest in silver as well it is scarser than gold and has more real world utility. It has one good pro of being in smaller denominations but one big con of taking up much more space dollar for dollar with it's gold counterpart. Again, I'm talking bullion because I believe it's the only true way to invest in either. I don't just invest in gold and silver through stocks either...Tiffany, Blue Nile and my wife also make sure I have plenty invested in the real thing...
lol, yea I'm into those gold investments. But the interest is very lucrative
Its kind of silly that you guys are referring to those "investments" as investments. Lets see any one of you try to cash out one of those "investments." I'd love to see a five minute video of you sneaking into your wife's jewlery box in the middle of the night.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison
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Dustie Wrote:Its kind of silly that you guys are referring to those "investments" as investments. Lets see any one of you try to cash out one of those "investments." I'd love to see a five minute video of you sneaking into your wife's jewlery box in the middle of the night.
Its all about the interest the investment pays....
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Dustie Wrote:Vanraw Wrote:lol, yea I'm into those gold investments. But the interest is very lucrative
Its kind of silly that you guys are referring to those "investments" as investments. Lets see any one of you try to cash out one of those "investments." I'd love to see a five minute video of you sneaking into your wife's jewlery box in the middle of the night.
You fail to realize not all returns on investments are in currency.
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Gold will continue to do well as long as the US continues to devalue its currency.
gold prices will not come crashing anytime soon, and $2000 an ounce by this time next year is reasonable.
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Dustie Wrote:Its kind of silly that you guys are referring to those "investments" as investments. Lets see any one of you try to cash out one of those "investments." I'd love to see a five minute video of you sneaking into your wife's jewlery box in the middle of the night.
Well, it's funny to laugh about now, but 60 years ago, European Jews were paying off German soldiers with their wive's jewelry to look the other way so they could flee the country. I take my wife's jewelry collection very seriously because in the end it's something that has tons of value in small packages. I just bought my wife a Cartier watch for Xmas she desperately wanted, and it really pisses me off deep down because the thing is so damn expensive and in the end, it's only stainless steel. If Im gonna shell out that kinda cash, it should be a precious metal or have diamonds. Name recognition wont mean much when the zombie apocalypse comes.
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Grieve Wrote:Yeah, in 1980 it was a "superspike", which many are saying could happen today. The trick would be selling at the peak...
However, this time around it is more a fundamental story than a speculative one. Foreign governements are diversifying into gold in a big way, particularly China, which is the real story. Will they move back into dollars if it strengthens? I'm not so sure. It's obvious to me that even if the fed causes a brief rally in the dollar next year, the long term prognosis for it is down, down, down...
I'm thinking if you havne't invested in Gold, you might get another leg as the people who've already invested in gold, now begin to invest in the $.... I'm assuming, if something like this is going to happen before Hyper-Inflation sets in (over supply of the $, right?), we should see some huge volitility (another big market correction, depending on how fast the dollar move is...followed by another bull run until the $ finds support?)?
EDIT: And for silver, doens't silver shine in recession & depression because of its Industrial aspect and governments tendency to invest in infrastructure, wage war, and emerging markets capitalizing on cheap imports?
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amins Wrote:Grieve Wrote:Yeah, in 1980 it was a "superspike", which many are saying could happen today. The trick would be selling at the peak...
However, this time around it is more a fundamental story than a speculative one. Foreign governements are diversifying into gold in a big way, particularly China, which is the real story. Will they move back into dollars if it strengthens? I'm not so sure. It's obvious to me that even if the fed causes a brief rally in the dollar next year, the long term prognosis for it is down, down, down...
I'm thinking if you havne't invested in Gold, you might get another leg as the people who've already invested in gold, now begin to invest in the $.... I'm assuming, if something like this is going to happen before Hyper-Inflation sets in (over supply of the $, right?), we should see some huge volitility (another big market correction, depending on how fast the dollar move is...followed by another bull run until the $ finds support?)?
EDIT: And for silver, doens't silver shine in recession & depression because of its Industrial aspect and governments tendency to invest in infrastructure, wage war, and emerging markets capitalizing on cheap imports?
I think you're missing the point that when people dont trust paper money in bad times, silver is the MOST COMMON form of currency in the history of the world. virtually every great society has used silver coinage.
Silver production has been flat for at least 30 years, and the past 5 years been at least 15% under the demand. once all the stockpiles are used up and supply cant meet the industrial demand, it can only go up.
throw in the fact that silver cannot be reused/recycled like gold and you should be good.
i dont have the money to throw around, but I think silver will be up to 35 per once by 2011
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Diggles Wrote:throw in the fact that silver cannot be reused/recycled like gold and you should be good. Eh? I don't think this part is true. Did a quick search and there are places on the web that will sell you equipment for recycling silver as well as places offering to buy up old film and so forth so they can recycle the silver out of it.
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Slamz Wrote:Diggles Wrote:throw in the fact that silver cannot be reused/recycled like gold and you should be good. Eh? I don't think this part is true. Did a quick search and there are places on the web that will sell you equipment for recycling silver as well as places offering to buy up old film and so forth so they can recycle the silver out of it.
yes but industrial applications like photography destroy the silver and cannot be reused. granted its on the decline, its not like gold
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I think i got that point, maybe I just didn't convey myself enough.
Silver, Gold, Diamonds...precious metals/stones, all serve as a means to counter/hedge against Inflation... If given a choice, people will invest in Gold rather than Silver.
Some of interest though is Silvers duelistic properties: Industrial & Precious Metal. How people view that metal, in this case Silver, will determine it's movement.. if more people see its benefit as an industrial metal moreso than gold, they'll invest more into gold for inflation vs silver... As well, most know that silver is a catlyist for development and in 'tough economic times' because of its utility: governmetn has a tendency to invest in infrastructure (roads, houses, industrial), and/or abroad (emerging markets) in order to stimulate the economy.
So, because of how the deck is stacked, how will people see silver this time around? Will they take it out because gold is a better inflation tool or will they keep it in because of its industrial uses and see a recovery along the way?
Taht's all i was try'n to say about precious metals, inflation, and the dollar, which i'm still not sure if i conveyed what i was try'n to say about inflation/hyper-inflation and the overall US market movement in relationship to its $ movement...
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Thudz Wrote:Bullion and make sure you have it in hand. I started investing when it was around $200/troy oz. Where do you buy through? Apmex?
I've heard of people getting good deals through eBay but then I imagine you'd have to worry about counterfeiting.
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Slamz Wrote:Thudz Wrote:Bullion and make sure you have it in hand. I started investing when it was around $200/troy oz. Where do you buy through? Apmex?
I've heard of people getting good deals through eBay but then I imagine you'd have to worry about counterfeiting.
I've only ever purchased through Monex. They haven't failed me yet.
<!-- m --><a class="postlink" href="http://www.monex.com/prods/index.html">http://www.monex.com/prods/index.html</a><!-- m -->
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check out the Perth Mint, Europac has always recommended it. The gold is insured, triple AAA rated and backed by the Australian govt, and they store it for you for free.
<!-- m --><a class="postlink" href="http://www.europac.net/investment_perth.asp">http://www.europac.net/investment_perth.asp</a><!-- m -->
I didn't see you were looking for my opinion on the whole matter. Personally I think gold is at peak right now, and may drop slowly over the next two years, and then ramp up when our next inevitable crash comes, maybe in 2-3 years. The next bubble will be the dollar bubble and it will be very ugly when it bursts. Gold should skyrocket. So if you are looking long term, it's probably fine to buy, but I feel it will drop a bit over the next year.
I have investments in NEM, which has done well this year (but so has everything else) and I own some GLD, which has also done well. I have actually not taken the leap yet into buying bullion, I would probably go with Perth, but it has a minimum 10k investment which Im not ready to go for. All of the other places Ive seen grossly overprice their gold. If Im paying anything more than 10% of current prices Im just not gonna do it.
I still love my PGH, best long term investment I ever made...it might be a bit too high now tho, but I bought low and I get a monthly dividend from them, I believe it's 8 cents a share?
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Breand Wrote:check out the Perth Mint, Europac has always recommended it. The gold is insured, triple AAA rated and backed by the Australian govt, and they store it for you for free.
<!-- m --><a class="postlink" href="http://www.europac.net/investment_perth.asp">http://www.europac.net/investment_perth.asp</a><!-- m -->
I didn't see you were looking for my opinion on the whole matter. Personally I think gold is at peak right now, and may drop slowly over the next two years, and then ramp up when our next inevitable crash comes, maybe in 2-3 years. The next bubble will be the dollar bubble and it will be very ugly when it bursts. Gold should skyrocket. So if you are looking long term, it's probably fine to buy, but I feel it will drop a bit over the next year.
I have investments in NEM, which has done well this year (but so has everything else) and I own some GLD, which has also done well. I have actually not taken the leap yet into buying bullion, I would probably go with Perth, but it has a minimum 10k investment which Im not ready to go for. All of the other places Ive seen grossly overprice their gold. If Im paying anything more than 10% of current prices Im just not gonna do it.
I still love my PGH, best long term investment I ever made...it might be a bit too high now tho, but I bought low and I get a monthly dividend from them, I believe it's 8 cents a share?
I personally don't let anyone store for me. Kinda defeats the whole reason why I invest in precious metals.
"You cannot invade the mainland United States. There would be a rifle behind every blade of grass." - Admiral Isoroku Yamamoto
Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state.
-Thomas Jefferson
Spread my work ethic not my wealth.
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