Gold

[superfrank]

Somebody once paid me a due debt in silver, this was back when silver was $5 an ounce. I put it in a safe depost box in the bank. Time to get it out I think!

Keep it for a rainy day - paper gets very soggy in the wet!

[Euler]

You can always invest in hard assets, like property. At least they yield something and that is where their value is derived from. Gold and Silver doesn't yield anything, the only reason you would own it is because you think somebody would buy it from you at a higher price.

[superfrank]

But property has very high transaction costs, poor liquidity, maintenance costs, poor yields and is still way overpriced (IMHO).

[Iron]

Warren Buffett shuns gold as an investment - http://www.telegraph.co.uk/finance/mark ... tment.html

I like Charlie Munger's comment: "There's something peculiar about an asset that will really only go up if the world is going to hell."

Jeff

[Iron]

I wouldn't be going long at the moment, based on the current chart.

It looks like a classic reversal setup: a strongly trending upward market combined with a hammer doji.

If I were a contrarian trader, I'd put in an order to go short a couple of pips below today's low.

Jeff

[Photon]

The assumption that gold is bought purely for investment purpose is wrong. The main driver of demand of gold is jewellery which makes up c. 70% of demand. Continue steady demand, albeit slightly weakened by price increase, is exacerbated by investors looking for increasingly allusive yield since shares and property market has taken a bit of battering a late. Normally gold price was inversely related to oil price. Whenever oil price spiked upward gold price took a dive. However, that relationship is seem to have been broken down. People have seem to be predicting peak of gold price for at least 4 to 6 years now but have been proven to be wrong. I'm not advocating that the gold price would continue to rise ad infinitum but its more resilient than most people realise.

[superfrank]

The old Wall Street adage to always keep 10% of your wealth in gold and hope that it does not work remains wise.

[Euler]

Sell when people are greedy and buy when they are fearful and that makes me think that gold is a sell.

[Iron]

Are people not fearful of the economic situation though (which is presumably part of the reason why they're buying gold)?

BTW, I'm surprised you're not in Omaha this week, particularly given the rubbish racing we've been having!

Jeff

PS Shouldn't it be the other way around, ie prices of a stock or commodity rise when people think there's easy money to be made, and fall when they panic when they're long on an instrument that's falling in price?

Sell when people are greedy and buy when they are fearful and that makes me think that gold is a sell.

[Euler]

I'm always fearful of the economic situation but worrying about it hasn't made any positive difference to me in the last 40 years.

[superfrank]

Sell when people are greedy and buy when they are fearful and that makes me think that gold is a sell.

I see loads of ads etc for people wanting to buy gold but none from people wishing to sell it to me.

I might be wrong but I think the bull market in precious metals has several more years left in it. Sovereign debts of the west are too big to ever be repaid by conventional means. Bonds are the biggest bubble.

[superfrank]

I know Buffet hates gold, but he was once a fan of silver!...

[RideTheLightning]

There is more to Gold and Silver than just looking at whether people are fearful or not. Look at the economic fundamentals AND the geopolitical situation. WW3 is on right now and it will soon be upgraded to a limited Nuclear War. If you think people are fearful now, that is nothing to what is coming. Everyone is born into a geopolitical chessboard and the planning involved takes into account 5/10/20/30/50/100 years plans. Many prominent analysts involved such as Brzezinski have stated this. In his book The Grand Chessboard published in 1997 he stated that The US/NATO alliance needed a Pearl Harbour type event to go to war in the Middle East, and as luck would have it 9/11 happened and they got what they wanted. Over the last 6/7 years you have had the privately owned, heavily financed CIA run foundations fomenting revolutions in the former Soviet states such as the Ukraine and Georgia and now they have stepped it up big time in 2011 in North Africa and the Middle East. Another False Flag event will happen in the US and that will lead to invasions of Iran and North Korea. All the great empires in history have fallen due to 2 primary factors: The devaluation of their currency and over extending themselves abroad. Both these factors are heavily inplay at the moment. It is important to remember that the ruling oligarchy are not nationalistic - they are internationalists. They are using the US military to bring 2 key countries firmly into their World Wide Web and once that is done the US will totally collapse.

What do you think will happen to Gold and Silver then?

[sweetybt]

Which 2 countries?

Luxembourg and?

[Iron]

My suspicion that gold may be turning around in price (at least temporarily) is supported by today's graph.

Jeff