What recommended reading to you offer to the new gold investor?
braddick
Posts: 24,116 ✭✭✭✭✭
What websites and articles written that you deem worthy for someone who is fresh into investing in gold?
These forums are wonderful and some of the current links to other like minded thinkers is terrific, but perhaps there are other sites you would offer as suggested reading?
These forums are wonderful and some of the current links to other like minded thinkers is terrific, but perhaps there are other sites you would offer as suggested reading?
peacockcoins
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Kitco's Gold Forum is worth a look...........
Kitco Forum
Kitco.forums and goldismoney.info have some very interesting threads/discussions/analysis on the metals. But I've found that the majority either misdirect and clutter one's thoughts or are just pure noise. The only exceptions I would make are for the charting posts by QuadG, Hawkeye, Strawboss, Stefanmo, Silverrex, Kingofgold, and Motley Fool's MinedOverMatter.
roadrunner
"Technical Analysis of Commodities" Edwards & Magee, the old school bible, decades old and still a reasonably good foundation for the novice.
A solid foundation in world economic history would be of value. Most living Americans have never seen really hard economic times and can't fathom how quickly things can change, and how radical the change might be.
I've also signed up for the Kitco Forum. Anyone here care to share what your handle is over there?
peacockcoins
<< <i>A solid foundation in world economic history would be of value. Most living Americans have never seen really hard economic times and can't fathom how quickly things can change, and how radical the change might be. >>
The Great Wave: Price Revolutions and the Rhythm of History by David Hackett Fischer is both informative and very readable, not at all thick.
Having said that, precious metals are probably 2/3 or more of my net worth, and I'm totally comfortable with that.
I knew it would happen.
<< <i>"Popular Delusions and the Madness of Crowds" Mckay, centuries old, short and interesting
"Technical Analysis of Commodities" Edwards & Magee, the old school bible, decades old and still a reasonably good foundation for the novice.
A solid foundation in world economic history would be of value. Most living Americans have never seen really hard economic times and can't fathom how quickly things can change, and how radical the change might be. >>
Very good advice! Beware of gold sites where people sell gold! Also be aware that any advice you get in a forum like this can be very "polarized."
Discounted for inflation: I note that today's prices are currently about 1/2 of the 1980 highs when discounted for the inflation that has occured since 1980.
courtesy of Tulving...comparison of prices vs. 1980 highs discounted for inflation
I knew it would happen.
Metal ----- 1980 High Prices ---- Adjusted For Inflation
Gold ----- $850.00 --------------- $2,275
Silver ----- $49.00 -------------- $132.00
Platinum --- $1,070.00 ------- $2,865.00
Palladium --- $250.00 ------- $669.00
<< <i>That's a great chart. I pasted it below. Silver is actually WAY below the 1980 highs. The other PMs are about 50% lower. And this is using the government's official inflation figures, which a lot of people believe under-report inflation; if you use the figures from Shadowstats the "Adjusted for Inflation" number would be higher. Metal ----- 1980 High Prices ---- Adjusted For Inflation Gold ----- $850.00 --------------- $2,275 Silver ----- $49.00 -------------- $132.00 Platinum --- $1,070.00 ------- $2,865.00 Palladium --- $250.00 ------- $669.00 >>
I believe 1980 should be completely ignored. That was just a Hunt brothers play.......probably never to be repeated again in history.
But, what do YOU think?
We are a world market now~ China, India etc....
But, what do YOU think?
The Hunts started dabbling in silver in 1970. By 1973-1974 they had amassed a very large Comex silver long position. The Hunts were quite active up until early 1979 and had NOT done enough on their own to get silver any higher than $5/oz. Gold did better and there were no Hunt brothers pushing gold from 1971. Therefore the Hunts could be considered a failure after 5 yrs of pushing silver to a lousy $5/oz. The FEDs also started creating roadblocks in front of them making it harder to push the market.
In early 1979 the Hunt brothers hooked up with big Arab money and came up with a bigger scheme to corner the physical silver market. So in less than 10 months the price of silver went up nearly 10X....but if you blinked you missed it. In the time they did that the price of gold also went up 3.5X. Silver has a habit of outperforming gold substantially at the end of commodity bull cycles. The same thing was noted from 2007-2008 as silver blew past gold...with no Hunts anywhere in sight. The same performance should be expected towards the end of the current commodity cycle.
I would agree that silver would not have reached $50 w/o the Hunts. But it would have reached $30 or so on its own accord. Let's not also rule out fundamentals which continue to see above ground silver inventories being depleted while gold supplies only continue to increase at 1-2% per year. Eventually the gold to silver ratio has to approach a much lower number than 60-1. 5-1 to 10-1 would be much more in line with what is naturally found in the earth's crust as well as the amount traded daily on the London bullion market. And who's to say there aren't some Hunt brothers' replacements out there today that are well disguised? Warren Buffet socked away 120,000,000 ounces of silver in the 1990's and most analysts didn't even know he had a position until 2003-2004 when he was "urged" to give it up....supposedly to help fund the SLV startup. Buffet's hoard was equivalent to the Hunt's physical hoard (plus they had futures contracts to give them a total of 200,000 net ounces). Yet Buffet did this when there was far less silver to be bought. The US bullion stocks were still substantial in the 1970's though long depleted today. There could easily be another Buffet or two out there, or even a sovereign nation hoarding silver for the past decade. I'd be surprised if there wasn't.
600 yr gold/silver chart with ratio
Note that in the later 1400's silver reached a 1998 $USD adjusted high of >$800 oz as the European silver mines were depleting. New world silver supplies continued to work on dropping the price. Eventually the all time low in 1998 dollars occured at around $4/oz in the late 1990's. If world silver supplies are nearing depletion or if the cost to extract it deeper into the earth's crust becomes prohibitive once again it would make sense that the new number would be between $4 and $800/oz.
roadrunner
I think that $50 silver should be ignored, however I wouldn't ignore the trend in 1980. If the Hunts hadn't made themselves a target of the CFTC, there is a very good chance that the price would have continued up, more slowly.
All that gold and silver accomplished was to draw attention to the crying need for Paul Volker (or someone like him) to attack inflation aggressively with ultra-high interest rates and the huge change in margin requirements, which was indeed a killer for the Hunts.
I knew it would happen.
I look into goldprice.net for current gold rates,bullion gold prices,spot gold prices,rare coin pices etc...