Sell gold, buy oil?

bidask

Your thoughts?

roadrunner

The gold to oil ratio is currently near the high end of it's 10 year trading range. Within 1-3 yrs this would be a good play. But in the short term oil will probably continue to be ravaged by the falling world economies. Gold will likely keep on outperforming oil during this period. There's a current glut of oil...yet I don't see supertankers (or Brinks trucks) being filled up with excess gold waiting for prices to recover.

roadrunner

jmski52

I'd say, buy gold and buy oil. However, from the reports I'm hearing, oil isn't expected to bounce back like I'd have thought.

But, I'm still not convinced. We're not going to eliminate the demand for petro products, no matter what the foolish environmental/junk science lobby says.

ajbauman

MY plan is to start buying well performing, oversold oil companies in about the beginning of Q2 2009 for nice 10 - 15 year holding periods.

Preferrably some with some nice dividends and/or whatever Warren is buying. I know he bought a whole bunch of COP a few weeks back.

But I'll continue to acquire gold a good prices and hold for about the same time period, or until I need it to pay for food when the USD collapses!

fishcooker

Geesh if you can seriously plan a 10 year hold on anything you're doing good.

ajbauman

<< <i>Geesh if you can seriously plan a 10 year hold on anything you're doing good. >>



I'm still relatively young so I can "plan" to hold that long... whether I do or not is a different story

Cladiator

Don't think I've got room for oil barrels in my safe and SDB.

2ndCharter

I agree, gold fits a whole lot easier in my bank's Safe Deposit Box.

renman95

Does it come in coin form?

mrearlygold

You taking physical delivery of oil?

Placid

Supposedly it costs $50-$65 a barrel to produce oil depending who you ask. So it does seem like a bargain if that is true.

COINB0Y

You taking Delivery?

ajbauman

<< <i>Supposedly it costs $50-$65 a barrel to produce oil depending who you ask. So it does seem like a bargain if that is true. >>



I've also read that it costs about $17 an oz to produce silver

storm888

<< <i>Supposedly it costs $50-$65 a barrel to produce oil depending who you ask. So it does seem like a bargain if that is true. >>




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"...Still, Saudi costs for producing oil are the lowest in the world: according to Ali Al-Naimi, the cost to produce one barrel is less than $2. ..."

TWO-DOLLARS



Money For Nothing

MoneyLA

for those of you with "long term horizons" for investing in oil now----

why would you buy it with the idea of holding for many years just to turn a profit??

why not wait until oil starts to make its move up and THEN buy? Why risk holding oil while the price is flat or even moves lower?

I'd appreciate reading your reasoning on this.

secondrepublic

How would you define "starts making its move up"? In any given day, oil can move up temporarily and then close down. What level of upward move would trigger your buy decision?

DoubleEagle59

You can't lose by doing both (in my opinion).

cohodk

Trade oil. Dont own oil.

The bubble has burst. The chart of oil over the next 10 years will look just like the Nikkei from 1990 and the Nasdaq from 2000. You know how markets work.

garsmith

Oil doesn't set well in my safe deposit box; so I would rather have a physical PM than a piece of paper saying I am part owner of a oil well smoewhere.

MoneyLA

secondrepublic asks: "How would you define "starts making its move up"? In any given day, oil can move up temporarily and then close down. What level of upward move would trigger your buy decision?"

that's pretty much my question. I wouldn't know when to buy oil to make a profit. I see oil in a general down trend now, but I know oil could turn around at any moment and return to recent highs.

OPEC says it needs oil to be in the 60-80 dollars range just to make a profit, and it cant make a profit with oil priced where it is now.

so I am open to suggestions here? what are target BUY prices and given that target BUY price what is the projection for a profit?

thanks

storm888

It is safe to average into DIG over time. The oil companies will make money
no matter what the price of oil is. In fact, many of the crack-spread watchers
are sure that $90 oil is more profitable - on a percentage basis - than $140 oil.

You can hedge a crash with DUG.

Everybody should have a few USO lottery tickets, for the next run.
You must average into them, though.

As the coming depression creeps forward, I will not be surprised to
see sub-$20 oil.

If nat-gas continues below $5, UNG should be safe on the long side.
It might even be safe now.

To figure out the dynamics of oil - and other commodities - you need
to become a mini-expert in the ways of "contango and backwardation."

ALL positions should be gathered a little at a time, unless you are daytrading.

ttown

In depressed ecomonies oil companys don't make money off of oil or even natural gas. The big companies are into chemicals,fabrics,fibers and fertilzer that's how they hedge, cheap oil is tons of money for those sectors.

derryb

Eventually. Not yet. When the time is right, ETF USO is the play. Be patient, but be vigilant.

Placid

So who bought oil when it was in the mid 30 range? Grats you doubled your money in 6 months.

fishcooker

USO is an awful ETF, in my opinion. Been there, done that.

ttown

Well most of us buy companies not oil. I purchased BP at $36 and some change and it's up to over $49. Now am I going to hold it all year? NO, I'll sell as the summer progresses and come back in right about the time we're all worried about heating. There's alway a stong move as school gets out and then stability usually only to drop a bit late in the summer giving you a chance to average back in Sept- Nov.

coynclecter

If you want to play oil then get into domestic producers.

The big companies, those that buy oil overseas will just pay more as the price goes up so they will not have any big gains by an increased price.

dbcoin

USO ETF is terrible. OIH, Oil holders ETF is better

Fidelity has a Select Energy fund which has done well, FSENX. I also like their Select Natural Gas Fund, FSNGX

OPA

<< <i>So who bought oil when it was in the mid 30 range? Grats you doubled your money in 6 months. >>



and made 30% during the month of May .... double congrats.....
You silver buyers, didn't do bad either...22% gain.
Gold buyers realized a 9% gain during the same period.

For the month of May...Oil is the winner.. any prediction for June? Whose crystal ball is still accurately woikin?

coynclecter

And how did our pension fund trustees do with GM stock.......ehhhh. hold on let me check. Yep they deserve bonuses Im sure.

roadrunner

Oil will still do well on it's way to $80 but gold is about to overtake it for the month of June. After that depends on the news coming out of the financial centers.

roadrunner