Gold to reach $3000

theboz11

A Barrons article today is forcasting prices that high. That is the equal to the 1980's price of $800 Gold. Better stock up now, or miss the boat for another 30 years

wybrit

$3,000!

What time frame does this projection span?

I'm not so sure that's good news. If gold trends that high, it might be because of high interest rates and thus stocks and bonds would fare poorly. It could only be the sign of an upcoming economic bust, no? After all, the early 1980's weren't exactly a time of properity and high employment.

Numismatics

Gold will be $3000 if a cup of coffee is $6.

theboz11

<< <i>Gold will be $3000 if a cup of coffee is $6. >>



Been to Starbucks lately, well almost

Another reason is LOW bank reserves and high demand for jewellery, and China/India demand. It may have nothing to do with OUR stocks and Bonds or even OUR economy. Gold is going up in relation to ALL currencies

RedTiger

<< <i>

<< <i>Gold will be $3000 if a cup of coffee is $6. >>



Been to Starbucks lately, well almost

Another reason is LOW bank reserves and high demand for jewellery, and China/India demand. It may have nothing to do with OUR stocks and Bonds or even OUR economy. Gold is going up in relation to ALL currencies >>



In my opinion, the long term demand from China is the engine that drives this bull market. Their middle class saves 40% of their income, and some of that will go to gold. Gold ownership was legalized about a year ago. It is no coincidence gold is up big during that time frame. Every company in the world dreams of having something that the Chinese consumer wants. Well, gold has deep roots in the Chinese culture, and it is on that list. Go gold.

shirohniichan

If gold even broke $1,000 per ounce, wouldn't mining increase at high levels? Can demand really outstrip supply to that rate?

wybrit

Great comment, Shiroh. I for one feel that $3,000 is speculation not unlike the tech bubble of the late 1990s. If the price does reach that level, sell and run for cover!!!

theboz11

<< <i>If gold even broke $1,000 per ounce, wouldn't mining increase at high levels? Can demand really outstrip supply to that rate? >>



I would say NO. You just don't increase mining overnight or find and dig new mines in less than YEARS. Demand has been outstripping supply for awhile now and articles at Kitco.com have not indicated new mining, in fact South Africa has needed to close mines and Russia is in a world of hurt when it come to new supply. There has been buyouts but no new mines or supply sources.

Wybrit, If you don't have gold or buy the gold now, you won't have it to sell and run for the hills, IF it does get to $3000. So whether it is a speculative BUBBLE or not will make no difference to those that Pooh-Poohed the prospect.

shirohniichan

I imagine the rise in gold prices would not be overnight, so currently closed mining operations would have time to re-open (wouldn't they?). It takes time to find new deposits and open a mine from scratch, but surely there are mines that can be profitable again when gold hits $700 per ounce, even more at $800, and still more at higher levels.

The big question is how much can be pulled out of the ground vs. how much demand there will be. At $3,000 an ounce I think the jewelry demand would shrink and the urge to recycle old jewelry and bullion coins would increase. I'd be glad to sell my common gold at that level and use the money for something else.

theboz11

Shiro

Most gold mines that are in operation are making a profit at $250/oz. They are turning out the gold as fast as they can. There are no closed gold mines that I know of waiting for higher prices. Most if not all are operating at full tilt to keep up with the demand at this level. They don't just sit around and wait for gold to go to $1000 to re-open old mines.

There may be some forms of extraction such as organic mining that may cost more, but I believe that even at $500 they are getting a profit. Man has been pulling Gold out of the ground for millenia and the supply is limited.

shirohniichan

That's interesting. I remember back around 1980 hearing reports that formerly defunct mines were reopening due to the increase in gold prices. Some of it was simply going through tailings to extract gold from low grade ore, but I thought it meant more digging as well.

theboz11

That was 25 years ago and mining has barely slowed in that time period and much more efficient mining including organic has taken place, meaning that there is even less in the ground or tailings. Read some of the articles on Kitco and see what I am saying. The mines are making money hand over fist at current levels. They would be foolish to be sitting on gold supplies until gold reaches a level it has never been to before, It's just not going to happen. People may speculate , but the miners want to make money everyday they have a mine. They sell futures on gold that they have not even delivered and are locked into that price. They are not waiting for $1000+ gold to produce MORE.

RedTiger

<< <i>If gold even broke $1,000 per ounce, wouldn't mining increase at high levels? Can demand really outstrip supply to that rate? >>



Yes, high prices will definitely bring new supplies online. Techniques and areas not worth using will become profitable. However, one thing missing from the equation is that higher prices will drive demand. For the longest time, gold has done nothing, and no investor wants any. With most investments, higher prices increases demand. This is unlike most other products where lower prices attracts buying. With investments (and many luxury items), a higher price, and an upward trend in prices increases demand. When it reaches a tipping point, prices can explode on the upside. Not to say that this necessarily will happen any time soon, but it is what bull markets are made of.

The other thing to consider has already been mentioned, a high gold price often means other areas not doing so well. An investor always has to consider alternatives, and when and if gold hits $3000, a lot of other investments are going to have terrible intermediate performance rankings and look like poor alternatives. Tops are defined by the fewest number of sellers and highest number of buyers, this dynamic doesn't happen without everyone and his brother thinking gold is going to double again, when it hits $3,000.

trozau

I will never look at gold as an investment. To me, it is a hedge for when the SHTF.

Cruzi

The ramping up by opening and expanding the formerly unviable deposits has already happened, they are still unable to meet demand.
Of course production will increase, but how long to catch demand.

For years there has been a consistant warning being given to the gold mining companies. Instead of increasing production through the expensive process of exploration and field development with the huge infrastructure costs involved, they simply bought out another miner and used their mines.

It has reached the point now where they have no targets left to buy and have little preparation for increasing production through exploration. The time lag between the increases in prices and increases in production is going to be longer than normally assosiated with most commodities.




From The Australian Gold Council website..
"...... reflecting a global trend, Australian gold production is likely to fall during the next 10 years as mines close and the pipeline of new projects shrinks. ABARE reported a drop in production in 2004 to 256 tonnes from 283 tonnes the previous year.
There is no doubt that this trend is related to diminishing exploration spending since the mid 1990s. Although budgets in the past two years have improved slightly with the rise in the gold price, reduced spending over the longer term has meant virtually no new discoveries.
The very nature of exploration means that the gap between discovery and production can be long, and this, along with slower permitting, means it will take some time before increased spending is likely to generate success."

"Key factors........include uncertainty about the US economy particularly post Hurricane Katrina, the continuing emergence of Chinese and Indian economies and global economic uncertainty associated with continuing record oil prices.
The release of the GFMS Gold Survey 2005 –Update 1 has also been a positive for the outlook with its analysis of strong physical demand highlighted by demand for jewelry increasing by nearly 200 tonnes in the first half of the year.
The highly regarded GFMS Report noted the strong demand for gold being driven by countries such as India and China, as well as the Middle East."
http://www.australiangold.org.au

coinkat

There are already way too many speculators pushing gold around and the trend of wide daily swings of $10-$20 moves both up and down will be quite common.

wybrit

I will never look at gold as an investment. To me, it is a hedge for when the SHTF.

theboz11

Well Gold is heading much higher today on fear of Dollar weakness. I said gold would hit $500 by the end of the year, and I was telling you to buy gold when it was still in the $300's. You may not want to invest in it but it beat the hell out of the Dow Jones index and others this year. The yield curve has inverted and many now worry about a recession and Dollar collapse. I will forcast $600+ by the end of 06.

CIVITAS

<< <i>I will never look at gold as an investment. To me, it is a hedge for when the SHTF. >>



There are a few people around here that drop in now and then who are hoarding gold in preparation for the post-apocalyptic wasteland that will be left behind by the coming race wars.



(You only think I'm kidding......)

SYRACUSIAN

You may not want to invest in it but it beat the hell out of the Dow Jones index and others this year.




According to kitco, the year to year change is just shy of 16%. I don't know about the Dow, but the Athens FTSE 20 (the index of the 20 most important blue chips of the Greek stock market) has risen more than 50% during this same period, and they're still trading at 50% of their 1999 highs.

I will forcast $600+ by the end of 06.


Not a very risky prediction Dan.


One thing is certain, I'll bet the Bank of England regrets having liquidated an important number of tons in early 2005.

notlogical

Those are beautiful coins in your signature line Mr. Boswell!

shirohniichan

One thing is certain, I'll bet the Bank of England regrets having liquidated an important number of tons in early 2005.

Didn't Swiss and other banks sell much of their holdings in the past few years? I thought the bank sales were behind the low gold prices over the past 5 to 6 years. I guess I should research it.

theboz11

<< <i>One thing is certain, I'll bet the Bank of England regrets having liquidated an important number of tons in early 2005.

Didn't Swiss and other banks sell much of their holdings in the past few years? I thought the bank sales were behind the low gold prices over the past 5 to 6 years. I guess I should research it. >>



You are correct on that account except it has been 20 years of sales ending 3 years ago. They are now starting to increase their reserves again,,this is just the start hence higher prices. Producuction of gold out of the ground has DROPPED over the last 3 years year over year by a substantial amount of TONS. Hence higher prices. South Africa has closed mines that they will not be able to reopen because of earthquake problems. None of this is cause by the US economy or the Value of the Dollar,,,It just is reduced supply, while demand from China and India has gone up substantially.




<< <i>year to year change is just shy of 16%. I don't know about the Dow, >>



The Dow is Flat for the year.



<< <i>Those are beautiful coins in your signature line Mr. Boswell! >>



Thank You

MacCrimmon

<< <i>

<< <i>One thing is certain, I'll bet the Bank of England regrets having liquidated an important number of tons in early 2005.

Didn't Swiss and other banks sell much of their holdings in the past few years? I thought the bank sales were behind the low gold prices over the past 5 to 6 years. I guess I should research it. >>



You are correct on that account except it has been 20 years of sales ending 3 years ago. They are now starting to increase their reserves again,,this is just the start hence higher prices. Producuction of gold out of the ground has DROPPED over the last 3 years year over year by a substantial amount of TONS. Hence higher prices. South Africa has closed mines that they will not be able to reopen because of earthquake problems. None of this is cause by the US economy or the Value of the Dollar,,,It just is reduced supply, while demand from China and India has gone up substantially.




<< <i>year to year change is just shy of 16%. I don't know about the Dow, >>



The Dow is Flat for the year.



<< <i>Those are beautiful coins in your signature line Mr. Boswell! >>



Thank You



>>



Alas, the world of finance does not only revolve around the DOW. I offer the MidCap 400 as an example of an area of equities where increases of 20-25% were recorded from the low of last years pre-XMAS rally to date.

One tidbit to remember - - - Alan Greenspan was a goldbug in the early 60s.

And yes, the Swiss did reduce their reserve level to 40% many years ago, but I don't know how much they hold now, although they probably have far, far more in forex and equities in SBAs than they do in gold.

As to Indians, it seems the middling wealthy have cast their lots in the US via franchise and other business opportunities, not gold.

Gold? Gimme about 3-5% tops. If it goes to $3000-6000 per ounce, lead (constituted as ammo) will have the greater value.

trozau

Ah yes, gold and guns! A couple of must have!

shirohniichan

<< <i>Ah yes, gold and guns! A couple of must have! >>



I have many ounces of 7.62x39 in my garage. I wish I had as much weight in gold.

mrearlygold

trozau

<< <i>

<< <i>Ah yes, gold and guns! A couple of must have! >>



I have many ounces of 7.62x39 in my garage. I wish I had as much weight in gold. >>


7.62X39 VEPR K

mrearlygold

sellsatan

Hmmm... I seem to remember a few darksiders bristling about the guns a while back. Specifically mentioned was this thread on the light side. I also think guns are better to have than gold in a SHTF scenario.

ManyQs

I'd be curious to know just how many people are really prepared for a catastrophic civilization changing event. The key is in that sentence -- preparation. Community, food stocks, medicine, land for growing/raising more food, seed stock, and, yes, the right combination of firearms? First and foremost has to be "community". Without a "community" one wouldn't last long. A sobering thought process isn't it?

ManyQs

Gold at $3,000? I knew I was saving those spam scams for a good reason.



<< <i>Dearest one,

Permit us to inform you of our desire of going into business relationship with you.I believe you are a reputable and trust worthy person I can do business with from the little information so far I gathered about you during my search for a partner in the net and by matter of trust I must not hesitate to confide in you for this simple and sincere financial help. About our life history.

My name is Master Martin the son of the late Dr Michael Omah of the blessed memory. Prior to my father assassination by the rebel forces loyal to CORPORAL FODAY SANKOH of the Revolutionary United Front (RUF),He was the Director General National Gold and Diamond Mining Corporation of Sierra-Leone. Before my father was assassinated,

he instructed me and my siste(Vivian) to move out of Sierra-Leone down cote d´ ivoire abidjan and also to go in his underground strong room where the gold he has deposited in a security company in Abidjan Cote d' Ivoire in one trunk Box as and use my name (Martin) as the next of kin.The amount was US$15.5Million, when we first sent this letter to you, but now due to the tripling of gold prices we have much, much more.

Now are you ready to deal? >>

secondrepublic

Gold will hit $3,000.... right around the time the Dow hits 36,000. At $500/ounce, gold is overpriced. I remember around 1999 and 2000 when it was under $300 - I was telling people to buy at that price, and no one wanted to. Gas was $1 gallon, too, and people were talking about oversupply of both oil and gold.

If you're looking for investments, stay away from stuff that's had such a huge run-up like real estate, gold, oil, etc. Take some risks on disfavored stuff, like the stocks of companies that have gotten pummeled but which could bounce back (GM, Ford come to mind.) There is nothing fundamental driving the rise in gold prices.

mrearlygold

ManyQs, the dog and cat picture is great

ManyQs

<< <i>ManyQs, the dog and cat picture is great >>



Thank you.

Wait a minute, I better qualify that. I didn't take the picture, so I'm just thanking you for showing appreciation of my choice. I sure don't want it to appear I'm taking credit for something I didn't do. Just want to stay honest here. I reckon that's a big part of being a part of the Collector's Community. Just wish I could make an "honest buck" so I could collect some of the great stuff I see in the images on this board, or read about. Visiting this forum is sort of like window shopping, or as I recall they used to say in Korea, "eye shopping". Wonder if they still do?

I'll say something else; you sure got a heck of a lot of posts there, Tom!

another edit by newbie ManyQs: Well, Tom, this isn't meant to take away from my notice of your 10K plus posts, but I sure feel like the newbie I am. Just noticed someone in the stamp forum that has 66K plus posts. That is one very serious number when it is the count for the number of posts on a forum. Unbelievable!!

laserart

<< <i>

<< <i>ManyQs, the dog and cat picture is great >>



I'll say something else; you sure got a heck of a lot of posts there, Tom!

another edit by newbie ManyQs: Well, Tom, this isn't meant to take away from my notice of your 10K plus posts, but I sure feel like the newbie I am. Just noticed someone in the stamp forum that has 66K plus posts. That is one very serious number when it is the count for the number of posts on a forum. Unbelievable!! >>



77431 coinhead1
66072 clw54
61212 XpipedreamR
58750 mdwoods
52573 kieferscoins
42848 Russ
42206 cosmicdebris
41383 jonesy
40845 coincop
38715 laserart

But that doesn't necessarily mean they've posted about coins or stamps in all their posts. Come over to Open Forum and see what I mean.

Cruzi

<< <i>There is nothing fundamental driving the rise in gold prices. >>



Exuse me but I thought increase in demand was a fundamental driver, silly me.

secondrepublic

<< <i>

<< <i>There is nothing fundamental driving the rise in gold prices. >>



Exuse me but I thought increase in demand was a fundamental driver, silly me. >>



Increase in demand is a "driver" of higher prices, but you need to look for the _reason_ -- the fundamental driving force/forces.

Cruzi

Reason for increased demand is increasing wealth of Chinese ( plus Asia in general), it is estimated that there is already 176 million very rich Chinese, this figure is meant to double in the next few years, add this to increased buying in Japan over the last 3 yrs to offset deflation/inflation. Not to mention to over 1 billion Indians who use gold as a basic measure of wealth storage. As more of the Asian nations become richer, the demand for gold is increasing, not just for jewelry but for industrial purposes, most of today's consumer electrical items contain a minute amount of gold, yes, minute but multiply it by millions of units and it adds up very quickly. combine this with the introduction of the Euro, and the decline of the US$ and you have your reasons for demand.

We are witnessing the unpinning of the gold price/ US$ relationship. No longer is the US$ the only alternative, in fact it is becoming the least favoured alternative to physical gold , not only to instutional investors but to Governments.

So the combined doom and gloom version previously required ( ie collapse of US economy) is not needed for gold's continued strength.




Best equivalent I can think of is Oil Price, previously the US was main customer for world's oil and thus influenced price , ie warm US winter = lower demand= lower prices, like what happened in 1998 when oil was around US$12 bbl. Now increased demand out of Asia (read China), means the US has little influence over oil price, ie demand has dropped in US but increasing demand from China has lead to sustained increases.
Same for gold.

ManyQs

<< <i>
But that doesn't necessarily mean they've posted about coins or stamps in all their posts. Come over to Open Forum and see what I mean. >>



Yes, I was over there earlier today trying to post an educational piece, but then ran into the word censor software. You know those little yellow flags. I don't think Hathcoock (Of course, that should be one "o".[Absolutely ridiculous!]) will appreciate finding out his name is banned. I guess I could understand the "shiite" word without the "e", except that I swear the last episode of "Father Knows Best" was when I was just a wee one. Then when I tried to post anyway the software asked me to please return to the past with my browser button and correct my grave transgression I found the software had taken care of the problem for me by deleting it all. Very frustrating given the length of the piece and the time spent posting it. Anyway, I might try again. I think there are some folks over there in need of a bit of basic information about Iraq they seem to be missing. I'll see you over there.

And about this subject of gold, India has the most gold within its borders that's out of the ground -- jewelry. I also know that all igneous rock contains gold, but most in tiny, tiny amounts. And the industrial uses for gold don't just depend on its value in electroncs because of its amazing resistance to corrosion. It is also highly resistant to bacteria, hence its use to fix teeth, and its use as stents inside our bodies. How about its special light reflecting ability and use on coockpit (Note that double O. Friggin amazing, eh!?) windows and some office buildings.

Yep, no reason to buy a gold ring -- plenty of gold already around you.

Testing something -- co'ckpit.

mrearlygold

<< <i>

<< <i>ManyQs, the dog and cat picture is great >>



Thank you.


I'll say something else; you sure got a heck of a lot of posts there, Tom!

another edit by newbie ManyQs: Well, Tom, this isn't meant to take away from my notice of your 10K plus posts, but I sure feel like the newbie I am. Just noticed someone in the stamp forum that has 66K plus posts. That is one very serious number when it is the count for the number of posts on a forum. Unbelievable!! >>





Yes and sometimes I wonder

mrearlygold

<< <i>

<< <i>

<< <i>There is nothing fundamental driving the rise in gold prices. >>



Exuse me but I thought increase in demand was a fundamental driver, silly me. >>



Increase in demand is a "driver" of higher prices, but you need to look for the _reason_ -- the fundamental driving force/forces. >>





Yeh the fundamental is the majority of the world has virtually zero confidence in the dollar. ( or the countries policies in general at this point)