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Impact of real estate slump
MoneyLA
Posts: 1,825 ✭
My friends who trade equities (stocks) are smiling because they say that the drop in real estate prices is shifting investment capital into stocks.
Gold and silver prices have dropped, and the gold rush of earlier this year has ended. Gold is still pretty pricey but now no one is talking about a record high price being set, or even a return to $850, as they did six months ago.
Silver remains severely undervalued to gold-- and silver never even rose to the traditional 14-to-1 gold to silver price ratio that we saw when gold was $850 and silver was $50 back in 1980.
The economy is softening (not crashing, not declining, but softening) and higher interest rates at banks are still luring money away from other non-interest paying investments (such as collectibles).
Okay. So where is the coin market now?
I'd like some thoughts, please. Alan Mendelson
Gold and silver prices have dropped, and the gold rush of earlier this year has ended. Gold is still pretty pricey but now no one is talking about a record high price being set, or even a return to $850, as they did six months ago.
Silver remains severely undervalued to gold-- and silver never even rose to the traditional 14-to-1 gold to silver price ratio that we saw when gold was $850 and silver was $50 back in 1980.
The economy is softening (not crashing, not declining, but softening) and higher interest rates at banks are still luring money away from other non-interest paying investments (such as collectibles).
Okay. So where is the coin market now?
I'd like some thoughts, please. Alan Mendelson
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Comments
There are any number of traders who feel this was just a correction in a bull market for gold and silver. The excess had to be wiped clean after the exponential rise from $530 right to $730. I feel that has pretty much been done. A close above $600-$615 will take gold to another level. $675 by the end of the year and a new high next year is certainly plausible. The US dollar and 10yr Treasury could be turning down once again as we speak. A number of factors will change following the elections. It was no coincidence that gold was taken down hard and kept under $600 until November 7th clears. Central Bank gold selling, swapping, leasing, is all non-transparent.
Let's not forget Goldman Sach's efforts of reducing the weighting of unleaded gas futures by 75% in their commodity index just a few months back. This certainly helped to propel gas prices down for the fall as institutions and funds were forced to sell 75% of their gas futures to comply with the new ratio. Just business as usual for GS.
All the above bodes well for another run in the coin market. There is just too much money slushing around not to find its way to hard assets (and coins). January just may turn out to be a strong month PM's and coins as it has each of the past few years. Your stock friends are smiling now but at some point, the market has to commence its next major downleg. The coin market is fighting the slowing of the US economy and the impending (or current) recession.
However Asia is doing better and may help to prop things up longer than in the past. Those guys are still growing at a high rate.
This might get more discussion on the Coin Forum than the Registry.
roadrunner