Posted on 09/22/2014 7:50:29 PM PDT by MeneMeneTekelUpharsin
Gold shined brightly at the beginning of 2014, with bullion prices jumping by about 13% from New Year’s Day until mid-March. But since spring, and particularly since July, gold prices have been on the decline. Last week, the precious metal settled near lows not seen since Christmas 2013. So should investors consider this sell-off as an opportunity to buy precious metals on the cheap? Or is gold really tarnished for some time to come? Sadly for gold bugs, it’s the latter.
There’s always a big argument for gold as the only alternative amid overpriced stocks, a weak U.S. recovery and a fragile dollar that will collapse at any time. If you want to make those arguments in the face of the facts, feel free to scroll down to the comments section and make fun of my receding hairline. But for those interested in reality, it’s important to note how much those arguments have missed the mark over the past few years and how they ignore recent data to the contrary. The stock market, U.S. economy and the dollar are all doing quite well. Judging by recent data, all three look like they will improve.
Here’s why I wouldn’t expect gold to rebound anytime soon, and why the outlook for this precious metal is quite tarnished:
(Excerpt) Read more at marketwatch.com ...
Normally I would think that the rising dollar would kill the price of oil and kill drilling that’s raising US production. But the Saudis and the Russians are so dependent on high oil prices to pay for their patronage systems that I think they’ll shave production to keep prices up.
And it will work for awhile.
But US oil production will go up by 1 million barrels a day through 2019 if oil prices stay above +-85 dollars a barrel or so.
So eventually OPEC and the Russian will not be able to shave production.
However, falling oil prices have always stimulated worldwide demand for oil.
So there is a virtual pattern here if you can intuit it that’s going to lead to a decades long surge in prosperity. The inverse of what happened in the 1970’s.
I just bought some silver eagles. It’s nice to hold something with intrinsic value in your hands.
And I may need to use them for bartering and melting down for werewolf bullets when the zombie apocalypse begins.
At a little under $25 each, taxes and shipping, that’s not too bad. They’re pretty, too, and George lets me pet ‘em.
-PJ
Those guys on TV are still telling me to buy gold. Are they lying?
It is interesting the way people analyze markets on only one side. I agree that if the US dollar continues to get stronger, that’s bad news for gold.
However, it would be bad news for stocks as well. All these multi-nationals will be less able to export as much due to how expensive a strong US dollar would make their goods, and whenever they translate their profits from their operations overseas, they will translate into fewer US dollars thanks to the strong US dollar...hence lower earnings!
So, again, if the US dollar continues its strength, it’s bad for gold, but also bad for the US stock market.
Gold doesn’t tarnish. That’s silver and brass.
Classic truism!
that’s a beautiful picture for anyone who’se income increases with falling fuel prices. And likely that picture will get prettier.
However, it would be bad news for stocks as well.
...............
but foreign money will just pour into US assets including stock because the rising dollar
Just as a trivial pursuit, do you think more smoke, or more mirrors?
Since mirrors usually reflect something that is actually real, I say "more smoke" -- since smoke is entirely ephemeral, apparently substantial, then suddenly gone, like a fart in the wind. The present economic numbers do not reflect reality at all. They paint an imaginary picture. They resemble smoke a lot.
If the S does HTF, which we all expect it to do, gold and silver will be recognized mediums of exchange. Especially US coins and Eagles.
It may well be that trying to buy food, medicine or gas with US cash would be akin to trying to use Atlantic City Casino money.
for 3+ years I’ve watched gold tank as the US market opens... and jump up after the close.
this has been the result of direct manipulation of the gold market to help minimize the damage on the dollar. they were originally doing this by dumping gold onto the market in the morning... but they eventually ran out of other peoples money (gold).
sometime last year I believe they started buying the gold at the end of the day and selling it at a loss the next morning. it doesn’t really matter... as the money was just printed anyhow
3 days ago the big story was how the super rich are looking to move their money into gold bars. which means... they need us to dump the gold back onto the market so they can snap it up.
so what’s this story worth? nothing. they’re trying to scare up more gold on the market
I agree. The numbers aren’t misleading, they are a criminal fabrication.
“If the S does HTF, which we all expect it to do, gold and silver will be recognized mediums of exchange. Especially US coins and Eagles.”
According to Bosnian war/siege survivor Selco this is not correct. Same for Ferfal a survivor of the first Argentine economic collapse. According to them ammo and food were more valuable than gold.
I am buying if it goes <$1000/oz.
I don't see where either has talked much about monetary exchange in their situations. For a long time the US dollar was the "gold standard" and could be used from Australia to Zimbabwe. What if it's worthless tomorrow?
If it’s worthless than I’d prefer to have the stuff I’d need it for stored up. Even if the country declared bankruptcy and restructured debt the dollar would still be used. Now it might lose comparable value against what it formerly was but that can also be hedged with market investments. Imo in any situation where gold would be necessary for commerce the USG would first declare it illegal as tender to protect the dollar.
Feel free to prepare as you wish. Definitley food, guns, ammo, rural land, meds, fuel, power.
Your ping list will probably appreciate it if you would pass it along to them.
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