Posted on 01/02/2014 7:00:11 AM PST by SeekAndFind
Gold had a tumultuous run in 2013 but don't expect any respite in the new year, said UBS, which anticipates double-digit percentage losses over the next 12 months.
"For investors who have gold, it's just going to be an awful year again," said Dominic Schnider, head of non-traditional asset classes at UBS Wealth Management, who sees the precious metal falling to $1,050 an ounce this year, 13 percent below current levels.
"People have been talking about [the Federal Reserve's] taper, but I would really think about rate hikes. If you make a 12-month forecast you need to look into 2015 and rate hikes are on the cards," he said. A rising interest rate environment typically makes owning gold more expensive as it is not an income-producing asset.
With the global economic growth and inflation mix looking promising in 2014, the risk-reward balance is now skewed toward risky assets, Schnider added.
(Excerpt) Read more at cnbc.com ...
It’s not the value of the gold which is changing.
So in other words this year will be a good time to buy?
>>> I wonder if the amount of gold being produced at various locations might exceed new demand ?
More like the amount of dollars being produced against demand.
If gold does have double digit losses, it’s a buying opportunity. Many of us are NOT into the short term buying/selling, but are investing for when the dollar does crash - and it will.
certainly makes sense that gold will fall when the fed keeps pumping trillions into the economy. (at least, that’s what they try to tell us on cnbc).
no... it’s still way overpriced.
Silver is the better bet right now i think.
I've seen various estimates that the break-even production cost for silver is in the mid-20's. Have you seen any numbers lower than that?
In theory the suppression of precious metals could carry on until Western Banks have literally sold their last ounce - but in practice the stopping point will be sooner than that. I think 2014 will see the end.
In the meantime I'd just like to thank the BIS and the Fed for all the Silver I've been able to buy at insanely cheap prices.
are you buying ingot or 90% ? ...and where?
that is the attitude of a true gold bug!
buy low!
>>> I’ve seen various estimates that the break-even production cost for silver is in the mid-20’s. Have you seen any numbers lower than that?
Silver is a better bet because it will be in higher demand than gold when the dollar collapses... so production costs are irrelevant. Silver works better for coinage than gold.
Historically, the silver to gold price ratio should be 1:6.
What is it now?... 1:61?
I really don’t see how silver can drop much lower than production costs, so when we finally get a serious correction, the gold owners are going to really be hurting, and the silver owners are going to be rich.
for gold to go down, or weaken, the dollar would have to strengthen...
what exactly is making the dollar stronger?
i can buy the argument that the dollar is stronger compared to other currencies, as they’re all racing to the bottom by diluting their currencies in an effort to lessen their debt...
but at no point is the dollar getting stronger.
i would also start to ponder the impact of bitcoins on the dollar, as people can move in/out of btc or gold fairly easily.... thereby reducing demand on gold
President Franklin Roosveldt made it illegal to own Gold in the 1930's. People had to turn it in at some ridiculous price ... or go to jail.
Executive Order 6102 is an executive order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States". The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.
From Mark Twain ... "Hide your wallets, Boys; the legislature's back in session."
I’m with you. I don’t see how you can lose if you are buying close to 20 an ounce.
Looks like a bitcoin chart.
RE: what exactly is making the dollar stronger?
Let’s put it this way — IT’s ALL RELATIVE. In the world of the blind, the one with one (even myopic) eye is king.
The U.S. government’s finances are bad. But the predicament of other major governments is far worse.
Western Europe could break up. Eastern European countries could default. Japan has double the debt burden of the United States.
So in a global beauty contest of major investment centers, it’s the United States that wins the prize — the prize of the LEAST UGLY.
U.S. Markets Are Most Liquid Haven in Times of War
The U.S. also wins the prize as the most liquid large haven in times of spreading global conflict; and right now we are headed into a rapidly rising cycle of conflict: Wars, cold wars, hot wars.
Look at Iraq! We thought we had saved Iraq from disaster. But now it’s plunging into a second civil war.
Look at the Syrian civil war and how it is spreading to neighboring countries!
Look at Iran and Saudi Arabia! Any nuclear pact that we make with the Shiite government in Iran will enrage the Sunni government in Saudi Arabia, dragging them into war or war-mongering.
Look at the new cold war emerging between Russia and the West — including major battles over former states of the Soviet Union like the Ukraine, Georgia and Moldova.
And consider East Asia: We have China, South Korea, North Korea and Japan all now arming themselves to the teeth, all escalating a four-way Cold War so quickly that experts now fear armed conflicts could break out at almost any time.
Here’s the key: No matter what the final outcomes of these regional confrontations, a tremendous amount of GLOBAL scared money is going to flow into U.S. stocks.
Also, despite Obama and despite the mostly skeptical posters here in FR, U.S. Economy Improving
As we’re tired of knowing, the U.S. economy is growing for all the wrong reasons and in the wrong way — funny money, hot air, giant bubbles. But right now, the inescapable fact is that it IS improving.
Finally, the Stock Market is Rising ( TO RECORD HIGHS ).
Most U.S. stocks are going up. That is the prevailing trend.
How long will this trend last? How far it will go? These are questions that are definitely worth debating. But they are not issues that will pertain to our current investment decisions. What counts the most for us right now is that the dominant trend IS up.
So, given this, people are abandoning gold and INTO the US stock market. The US stock market is priced in US dollars. Higher stock market, more dollar buying, more dollar buying, higher dollar.
How long this will last, I do not know.
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