Posted on 02/26/2007 8:33:10 AM PST by Grampa Dave
METALS STOCKS Gold rises, boosted by Iran dispute and oil prices
By Myra P. Saefong & Polya Lesova, MarketWatch Last Update: 11:22 AM ET Feb 26, 2007
SAN FRANCISCO (MarketWatch) -- Gold futures rose as much as $5 an ounce Monday as higher crude-oil prices and Iran's continuing standoff over its nuclear program boosted the metal's safe-haven allure. Gold for April delivery was up $2.50 at $689.20 an ounce on the New York Mercantile Exchange, after peaking at $691.80. On Friday, the contract touched a seven-month intraday high of $691.90 before closing up $3.70 at $686.70 an ounce, a gain of 2.1% for the week. Gold rallied again "as oil provides background support, while Iran's nuclear program continues to draw safe-haven hedging," said James Moore.
(Excerpt) Read more at marketwatch.com ...
Because Imanutjob and his Democrat allies have been busy telling all who would listen that the US is bogged down in the Iraq misadventure and can't spare a dime.
The media was busy listening to them.
"Because Imanutjob and his Democrat allies have been busy telling all who would listen that the US is bogged down in the Iraq misadventure and can't spare a dime.
The media was busy listening to them."
You may have nailed why this has been happening.
Thanks, George.
The US can always cover the shortfall by printing more dollars, or almost as craftily, extend lending with a variable rate attached, to put more dollars into circulation so prices "go up" commensurate with the "rise" in price of gold.
The amount of gold in the world expands only slowly, compared to how fast currency can be printed up.
Keep in mind - an ounce of gold still buys about as much of the basic goods and services today that it always did. There may be some local dislocations, but comparing the price of commodities to the price of gold is a pretty good yardstick.
Check your local real estate listings, and compare price of a house in 1960 with the price of the same house today in 2007. Then compare average salary required to buy that house then with the average salary required to buy that house today.
IMO, gold is headed for new highs. However, it won't get there overnight.
I don't believe that is an "apples to apples" comparison. I would expect the average home size today to be larger than the 1960.
If we are buying more, we should expect to be paying more.
It could there real quick if the Iranian nutjobs have a screw come loose, and we or our allies get attacked in a shipping lane or worse.
Yes, or any other catastrophic event, which is why it's wise to have some gold and silver among one's assets.
...If we are buying more, we should expect to be paying more.
--and when we compare real square foot prices to real wages, and we find that home prices are flat.
Every single day the financial "journalists" have to come up with an explanation for price movements. With regard to gold, on days when it rises it's usually attributed to geopolitics and oil, and on days when it declines it's due to 'profit-taking' and oil.
My advice? Disregard all of these rationalizations.
Gold is gradually rising long-term because of emerging-market central bank's 'diversification' of foreign reserves. Short-term, anything can happen, but the market appears to want to test the May '06 highs.
I purchased gold bullion and gold coins when gold was in the low $400.00 range to broaden my portfolio. Additionally I'm also in the Vanguard precious metals fund ... still and all, I should have snapped up more gold in the $400.00 range, at nearly $700.00 it's getting close to the top valuation wise.
Bump
In 1999, I bought 10 1/10 oz American Eagles on eBay for $265 including shipping! I bought a lot more at $288 and more just north of $300. Unfortunately, I didn't load up on silver the same way when it was below $5/oz. I did get some palladium under $200/oz, though.
I have held shares of ASA since 1999, and currently also hold GDX and GLD.
Not yet ready to sell.
I've been able to trade the Canadian junior market very profitably for over three years - I've been cashing and re-investing since January '04. Currently, my metals big bets are on SPM, EDV.WT, and MDL, all Canadian-listed.
Silver will go up more than gold percentage wise. It's still very cheap at 14.75, Silver will likely go into a shortage at some point in the future as it keeps getting eaten up for industrial uses. I've been buying quite a bit of it lately, I have some very nice American Silver Eagles, old Morgan dollars, Peace dollars etc. Bottom line is all commodities are appreciating.
I've got some silver, but I'd like to have much more - maybe 3% of my assets in silver, 5% in gold.
When I first showed my wife my silver hoard, she surprised me with her hard-money appraisal of fiat currency- something like, "maybe someday, we could pay off our mortgage by handing them one of these..." [holding up a 10oz ingot of silver]
Hmmmm, you're right, maybe so!
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