Sorry, couldn't resist.
Posted on 05/19/2010 5:52:33 PM PDT by Comparative Advantage
When gold prices turn skyward, like they did for the past two weeks before some recent flattening, some mix of greed, fear and uncertainty are likely ruling the market. What better time to remember what really drives prices over the long-term: market fundamentals. Through that lens, gold might not be such a hot investment.
The gold market works much like any other, with supply and demand eventually equalizing, and runaway prices returning to long-term averages. Since 1980, the price of gold has averaged about $440 an ounce in U.S. dollars. But much like U.S. home prices over this decade, it can take some time for prices to return to normal.
Barclays Wealth in London predicts gold will fall to a fair value of $800 an ounce by 2012, as investors eventually dump it for riskier trades; Societe Generale, the French bank, in April 2009 predicted $800 gold by the end of 2010, though it has reversed its stance since then. Analyst John Nadler of gold deal Kitco predicts gold will fall to $900 in 2011.
(Excerpt) Read more at money.cnn.com ...
Gold is not an ‘investment’.
Sorry, couldn't resist.
Does anyone really believe this?
Taking inflation alone into consideration, ignoring how difficult it is to mine gold, the value should be around $2,250 per ounce! (Starting at $20 per ounce in 1900.)
Gold @ $800.00 an ounce?
What are these guys smoking?
I’m betting an ounce of gold is better than a pocket full of paper promises......but I’m not a professional.......just an observer of history.
Gold is properly priced considering the world’s economy and its debt. The price will continue to increase.
The thing to worry about with gold is the tungsten bars thinly covered with a layer of gold. (Nearly?) Impossible to detect without cutting the bars.
The author is quoting Nadler, the biggest shill for federal fiat alive today. Disgusting.
Tell me more.
The $dollar has been appreciating in value this month. The know-it-alls explain: “It’s flight to quality...” Yikes. If the $dollar is the only “quality” that’s left out there (and it is fatuous fluff, vapor and dreams), then there’s only one real repository of value, and that is precious metals. Forget all the paradigms we’ve had for currency/gold byplay over the past 200 years. This is a brand new ballgame now.
I read that it's possible to tell them apart by using an ultrasound machine; the boundary layer between gold and tungsten will reflect some sound waves. But I suspect that there is no interest in the industry to test gold, simply out of fear that some of their gold bars are fake. Much easier to keep pretending that they are all good.
Gold, AU, is a commodity no different from any other commodity, I tend to think the powers that be are not fans of all of the cash being parked in gold, even when Central Banks are raking in cash from loaning their reserves in the carry trade.
That said, this is a case of Govt fiat vs Public perception, and there is no end to the stupidity of the public’s perception.
funny how the article doesn’t account for inflation
$440 back in the 70s is about $1200 today (don’t have the inflation calc handy to get the exact number)
looks like the soros crowd hasn’t finished buying their gold... they are doing what they can to push/keep the price down
as for market fundamentals... $13 trillion in debt does nt get much more fundamental... unless you want to play with the $110 trillion in unfunded liabilities
the traders are still trading... trying to get that last dollar before TSHTF
From a technical analysis standpoint, this correction had to happen, and was expected. Gold had risen in an almost parabolic curve recently, so profit taking was inevitable. Nothing goes straight up. Everything moves in a zig zag fashion.
The price of Gold is testing a key support level. Gold will likely stabilize over the next week or so as it digests the recent drop in value then start to head north again.
It won’t see $800 in phony money again.
hey that's some nice provisions you have there.
I tell you what, I'll give you this shiny piece of yellow metal for the lot. Wadda say?
No mister, what the the hell am I going to do with that?
Can you eat it? Can you plant it? Can you ride it?
Ok Ok says the yahoo, I'll give you 5 shiny pieces of yellow metal for the lot.
Yea, like that makes a difference.
The IRS considers it a collectible...
Quite and accomplishment.
Some I know, having loaded up on as much ammo as they think they can reasonably shoot, are branching out into calibers and gauges for which they own no gun, to use as trade goods.
I'd be glad to trade 5 rounds of .30-06 for two cans of beans to someone who saw five chances to harvest a cwt of venison in that li’l pile of brass and copper.
Gold? Maybe after some sort of society has been reestablished. Maybe.
Yea I know.
The Gold story reminds of Jack and the Beanstalk.
His mother sent him to buy food and he came back with ‘magic beans’. But look how shiny it is mother!
That’s what gold is to me. It is like buying magic beans or tulip bulbs.
Just my opinion, no offense intended to anyone.
Yes, brass and lead are the true precious metals...;-)
Gold is dirt. It can be stacked in bars or other forms like coins. It can be used for ornamentation which is another form of holding gold.. It can be used in manufactured products so it does have some quantifiable value. When you look at the supply side of the equation, there sure is a lot of it stacked in piles all over the world. My hunch tells me that we are looking at another bubble about to pop.
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