Posted on 10/08/2008 5:41:58 PM PDT by TigerLikesRooster
Gold rallies anew on inflation fears amid rate cuts
By Moming Zhou, MarketWatch
Last update: 4:15 p.m. EDT Oct. 8, 2008
SAN FRANCISCO (MarketWatch) -- Gold futures closed above $900 per ounce Wednesday to tally a three-session rise of 8.8% as investors sought refuge against inflation after major central banks around the world cut interest rates in concert.
The Federal Reserve, European Central Bank and four other central banks lowered interest rates in a coordinated effort to combat world's deepening financial turmoil.
"Coordinated central bank aggressive interest rate cuts should lead to gold surging in value in the coming months" as "currency devaluations look increasingly likely," said Mark O'Byrne, executive director at Gold and Silver Investments. Gold for December delivery gained $24.50, or 2.8%, to close at $906.50 an ounce on the Comex division of the New York Mercantile Exchange. It was the first time the contract topped the $900 level since Sept. 29.
The metal has climbed $73.30 from Friday's closing level as investors snapped up the precious metal as a safe haven amid the financial turmoil.
(Excerpt) Read more at marketwatch.com ...
Ping!
We shall see.........
It’s getting closer to the time where one might want to short gold. Not yet, but soon....
I think we are coming off of a double bottom, and this will be a good time to own gold or gold shares.
HUI, the Amex Gold Bugs Index, was up more than 18% today, after having dropped hard last week, probably pulled down by desperate selling in the general market.
Some people are predicting “to the moon...” or even beyond.
The 10 trillion or so national debt divided by the couple hundred million ounces (they say) we have comes out to the neighborhood of $53,000 per ounce.
There is less than one ounce of gold per person on the planet.
Same thing for silver.
DYODD.
Don’t mean to bum you out over your NXG buy, But you probably could have picked a better gold miner. NXG seems to be one of those companies with a dark cloud following it around. The staked millions on getting their Kemess North project going, only to be shot down by the First Nation (i.e. Canadian Native Americans) Millions invested, wasted for naught. Then last quarterly report or maybe the one before, they divulged they had invested their cash holdings (or a portion of) in mortgage related securities, well we all know how that’s worked out and they took a huge writedown. I owned that company for almost three years, management always said the rainbow was just around the corner. Maybe they have gotten on track, but there is no little supply of disappointed NXG investors. If you bought NXG cause you were looking for a low priced gold stock, you’d probably be better off with AZK, GBN or GSS. Whatever you do, stay away from any companies that are run by Rob McEwen, he hit a home run with Goldcorp, turning it into a multi billion dollar company, but since he left there, everything he’s touched has bee turned to crap. Rubicon (RBY) and US Gold (UXG) are two that come to mind.
Hey, just all my opinion. I have currently 15 different gold/silver miners and I’ve been round the block with most of them.
I've known about the First Nation thing for awhile.
Naw...if I had been paying attention...I'd have bot RGLD at $30....Ha!!
I don't love or hate the juniors...I just think NXG is a buy here.
I know a guy, a good trader that owns 100k shares....but he's underwater for sure. So, I don't take much stock in that...other than I know the guy...and he's got a long time horizon
I darn well could be wrong. Won't be the first time...nor the last.
I'm also short DF....at the moment.
I trade fairly actively.....FReep mail me sometime.
Thanks-
I have always struggled with understanding gold value. Perhaps you can educate me. I'll accept your premise that there is less than one ounce of Au per person on the planet. And much like a Honus Wagner baseball card, that scarcity can certainly drive value.
But in a working economy (let's assume the global financial infrastructure collapses and we descend into chaos while a new economy develops), where is the value in gold? The value still appears to be arbitrary (unlike fiat money which is at least "backed" by institutions capable of making things happen).
Forgive the rambling, but if I own a garage full of gold bricks, and the rest of the country is impoverished (no gold bricks), am I counting on some sort of reversion to humans liking shiny objects?
I understand the industrial uses of gold. But if fiat monetary systems fail, am I to expect a new economy to spring up with scales measuring to the micron on every store counter to count my gold in a transaction?
I am absolutely not being sarcastic; it just doesn't make sense to me. I would think platypus bills are even more rare than gold. Why stock up on gold and not those?
I’m with you. If push comes to shove, a chunk of land has value. Isn’t there a story about trading gold for a sack of potatoes?
In 1958, at the dawn of the `nuclear fallout shelter’ era, Pat Frank wrote,
“The day may come when a pound of tobacco is worth more than a pound of gold.”
I’ve been tracking the spot price of gold/silver for only the last three weeks. Both were trending downward just until today ($856.00 for gold on Tuesday, $900.00 plus today Wednesday) despite all the recent bad news.
Anyway, silver barely hiccupped ($11.28/11.68). A bag of original silver U.S. cartwheels is a great buy IMHO, and a heck of a lot more negotiable if the balloon really does go up, which I don’t think it will.
I recall selling some silver many years ago for $11.00 per oz. It was probably at least 30 years ago. I wonder what an acre of land brought at the time—or a house.
Don’t lose sight of the worth of that farmland or the farmhouse. Lots of farms are for sale.
Food riots happen only in cities. Berlin 1918, anyone?
Other than physical PMs, bullets, beans etc, this is a fund I have faith is going up now.
Support at $20??.........Remains to be seen.
What's the ADV on that puppy? I can't find it right now....
Thanks-
If fiat money goes to its inherent value, as has happened over and over throughout history, we will have a rocky period, very confused, possibly violent.
As equilibrium returns, there will be at first a barter economy. THink of farmers’ markets all over. Nobody will trust any paper money, but they will trust silver and gold. Forget the hypothetical gold bricks, you are right, you can’t make change for them.
That is the purpose of silver. Through most of history, the value ratio of silver to gold has been about 15 to 1. Currently it’s about 75 to 1, an imbalance which I believe will be redressed. Anyhow, “real money” will start with the old pre-1965 silver dime. In today’s dollar terms, it’s worth somewhere over a dollar. Think of a dime as buying a can of soup. That’s the entry level.
Moving up you will have the old quarters, half dollars etc and then one troy ounce silver coins. In today’s terms, about 12 bucks, but soon to move way up.
Then we transition to small gold coins. A 1/20th ounce gold coin is the size of the rim of a .45 caliber bullet shell. Today, that’s worth 45 dollars. Then 1/10th, 1/4, 1/2 and full troy ounce gold coins. For most folks these are the biggest “denominations” we will ever handle. Today a one ounce gold coin is equal to 9 one hundred dollar bills.
There is a good chance that there will be at least a period between the collapse of the old fiat paper regime and the beginning of a new regime, if it comes. Paper just won’t be trusted if the old paper has become “confederate money.”
During that period, gold and silver will be king.
USAGX was beaten down by the same naked shorts on the COMEX. That rigged game is coming to an end. Gold is going way past 1,000, and USAGX will go past 40. That’s my opinion, YMMV.
There are times when gold coins have been traded for a bag of rice, such as during the chaos of the Russian Civil War.
Of course, the ones without gold coins STARVED to death, or did not make it onto the escape train to survival.
There are times when gold coins have been traded for a bag of rice, such as during the chaos of the Russian Civil War.
Of course, the ones without gold coins STARVED to death, or did not make it onto the escape train to survival.
What’s the ADV, Travis?
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