I would love to see a chart of the correlation curve and this is what I found. It can be argued that gold is not only behind the curve but does in fact have a long ways to go up.
With apologies to John Paul Jones "the price has just begun to rise"
Posted on 09/30/2010 6:57:03 AM PDT by SeekAndFind
Paulson, who is considered one of the most successful hedge fund managers worldwide, has made statements that the double digit inflation will “kill” the bond markets by enhancing the prestige of the gold markets. He expressed the estimation that the price of gold can easily pass the $2,400 per ounce limit reaching up to $4,000 an ounce within 2012. The billionaire hedge fund manager was speaking at an event in the University Club of New York.
At the same event, Paulson said that currently more than 80% of the placements are associated with gold, either in the form of ETFs (SPDR Gold Trust), either in cash or in shares of the industry, including shares of AngloGold Ashanti, Barrick, Gold Fields, IAMGOLD, Kinross, NovaGold and Randgold Resources. During his speech he said that the price of gold is in close correlation with the monetary base since he began to follow the path of gold. The monetary expansion alone could lead the price of gold at $2,400 an ounce while he said that is likely to see it reach up to $4,000 / oz. To support his assessment, he said that in 1980 gold prices rose 100% more than the dollar’s decline would justify.
At the same time, the ascending rate of gold continued on Thursday reaching the $1,314.80 an ounce after the closing yesterday at $1,310.30. In the spot market, gold traded at a new historic high while the price of the December contract was found up to the $1,316.20.
Silver also displays similar trends as it remains on 30 years high levels and for the first time since 1980 it “touched” the $22.02 an ounce on the spot market. The price of December contract was found up to $22.05.
At the same time, significant gains made for platinum and palladium. Specifically, platinum traded at $1,653.00 an ounce and is only 5.9% below from the year high of $1,752.00 which occurred on April 26th. Palladium is trading at 565 dollars per ounce, $6 below the year high of $571.
The majority of my wealth is in retirement accounts, which I cannot touch for years. Of that, I'm almost 50% in cash and bonds. What can I do? Something tells me that buying "paper gold" won't cut it.
The way I see it is Liberals hate it. So it must be a good deal.
I don't get the point. It's the same with any investment decision and all investments are a hedge against inflation.
Boy, that's just the way people used to talk about real estate just a few years ago. In two years, gold might be $4,000 or $400 per ounce and I don't know which. I do know that when these trades unravel, they can unravel pretty quickly and I do know that people don't go broke selling an appreciated asset too early.
Anyways you go, you're gambling.
Hmm, I don’t know enough about the US system of retirement accounts to give you sensible advice.
But if you can get your accounts shifted or re-focused towards investments in commodity stocks, then that should be a big help.
RGLD or Barrick Gold are excellent Gold majors who own physical mines or the royalties thereof.
Avoid gold ETFs though - those really are like Gold IOUs, and the ETF companies don’t actually own enough physical gold to cover their liabilities in the case of a sudden gold spike.
Cash and bonds are usually the thing you want to retire on. We are - however - hitting a short unpleasant window in history where that simply isn’t true.
Hope this is helpful.
Just as a footnote...The IMF meets in Washington Oct.8-10. Three days of meetings. Trust some will be reporting on this on FR.
Lead and Brass are better investment hedges against catasrophic collapse than Gold or Silver.
Another day, and another GOLD Pump and Dump ad to get people to buy even higher prices.
but isn’t the GLD etf backed by physical gold?
Lead and brass count as “the usual domestic commodities FReepers love”. By all means stock up.
A dollar collapse will lead to violence. It won’t be like an end of the world movie, but people will try and steal your stuff.
And - please note - if my examples of Argentina/Mexico are sound, the people trying to steal your stuff will include the police. Please be ready for that.
You could buy smaller denominations (1/10 0z, 1/4 etc). You could exchange larger for smaller coins, you could exchange it for silver. I have all of the above.
Yes indeed, but most ETFs don’t have a 1 to 1 correspondence between physical bullion held and shares of gold issued. Your shares are also backed with cash and ‘other instruments’.
ETFs are something like a fiduciary issue of gold backed currency. If they are leveraged they could be caught out by a shift in the gold price and the destruction of their cash assets - and then they could go bankrupt rather than get you your money back.
More likely - your ETF share value would simply fail to faithfully track the gold price as it spiked upwards.
This doesn’t make ETFs a bad investment (still much better than cash!) but it does make them inferior to Gold and Gold mines.
RE: Anyways you go, you’re gambling.
For those who own Gold exchange traded funds ( e.g. SYMBOL : GLD ), which tracks the price of gold, there is a way to manage risk.
Many people tell me that owning ETF is not the same as owning physical gold, because what you have with ETF’s are simply electronic certificates assuring you that your shares are backed by physical gold in the iShares vaults.
However, the advantage of owning ETFs is you can trade them like you do stocks.
I bought GLD when gold was $880/oz. We all know it is $1300/oz now or around that figure. I have already made a ton ( metaphorically ) of money in this ETF. So what do I do ? I simply ask myself the question -— AT WHAT PERCENTAGE PROFIT AM I WILLING TO PART WITH GOLD IF GOLD DOES DROP IN PRICE ?
In my case, $1230/oz is a nice figure to take profit.
So, I put a limit to sell at $1230/oz. If Gold does drop significantly in price to what you said, my electronic account automatically sells my gold shares holdings and I still make a huge profit.
If Gold continues to rise, I will continue revisiting my limit sell order and adjust it accordingly.
That’s how traders manage their risk.
But you can only do that if you own iShares, not physical gold.
I would love to see a chart of the correlation curve and this is what I found. It can be argued that gold is not only behind the curve but does in fact have a long ways to go up.
With apologies to John Paul Jones "the price has just begun to rise"
what about the tocqueville gold fund. This seems to be a good way for someone to get their feet wet without as much risk since they have gold but they also invest in mining companies. Thoughts?
I shorted futures this morning at 1318.15. Will cover 1298
Do most metropolitan areas have reputable dealers you can buy from locally? I don't like the mail-order idea.
shorting at 1318 is probably a good idea. there may be a slight pullback. however, I’m bullish longterm.
the only way this country gets out of debt is to monetize it. Defaulting or raising taxes to pay it off will result in war or revolutionary war. Investing in currency printing press companies.
......but as a store of wealth......
The implication is that if you have no wealth it can’t be stored and owning gold is therefore not possible and to the masses the devaluation doesn’t matter.
That is why it is being done. Those with gold and other hard assets will ride the inflation up. those who depend on wages will struggle but will also rise as wages rise with the inflation/devaluation. Tax revenue will increase with the increase in wages.
Those holding fixed $$ investments will be the ones to suffer. That would be the banks. They have received their pay off up front.
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