Sign of top in gold....?
bidask
Posts: 14,017 ✭✭✭✭✭
Sales of gold coins by the U.S. Mint have risen to their highest levels
since December 2008, with coin dealers reporting that business is booming
thanks to demand from investors unnerved by Europe's sovereign-debt problems
and a sharp decline in stock markets.
So far in May, the U.S. Mint has sold 158,000 one-ounce 2010 American Eagle
bullion coins, according to the agency's website. This is already more than
double the full-month total of 65,000 for May 2009.
Gold, trading at around $1,200 an ounce, has hit record highs in recent
weeks, even as other commodities have fallen sharply, as investors seek assets
that are thought to retain their value during volatile times. The increased
demand for gold coins, which tend to be purchased by private investors who
want to hold physical metal, indicates that the concerns about the deepening
financial problems in Europe are weighing on an increasingly wide swath of
investors.
"We've seen a tremendous uptick in investors looking toward gold for their
portfolio," said David Beahm, vice president for marketing and economic
research with New Orleans-based coin dealer Blanchard and Co. "It's been like
that for a couple of years now. But just over the last two or three weeks, it
has exploded."
His company's gold-bullion coin sales are up 60% so far for this year
compared to 2009. He described the current demand as the strongest since the
aftermath of the Lehman Brothers collapse in autumn of 2008.
"May has turned out to be quite a surprise," said Scott Thomas, president
and chief executive of American Precious Metals Exchange in Oklahoma City.
"The stock market has declined, and people are continually looking at gold and
silver as alternative asset classes."
Gold is typically viewed as a store of value during times of economic and
political upheaval. The market's main focus this month has been debt woes in
nations such as Greece and Spain. Fears over a simmering dispute between North
and South Korea in recent days have added to gold's safe-haven appeal.
The following story was published on Thomson ONE:
For information on Thomson ONE go to www.thomson.com/financial
Even prior to the recent volatility, gold prices were on a several-year
uptrend on expectations that fiscal-stimulus and monetary policy aimed at
reviving the global economy would mean a pickup in inflation.
Andrew Schectman, owner of Miles Franklin, based in Wayzata, Minn., said
demand for gold coins has been especially strong from Western Europe. There
are only a handful of mints around the world that distribute gold coins en
masse, with the U.S. being one of them.
He described a tightening coin market in which buyers are holding on to the
coins rather than turning around and selling as the price of gold keeps
rising.
"There is no secondary market," he said. "They [coin holders] are motivated
by fear, not greed. So when you're afraid, you hold on and don't let go."
The U.S. Mint's website shows that one-ounce Eagle gold bullion coin sales
for the year to date have reached 489,500, up 18% from 413,200 as of the end
of May 2009. Even though a few business days remain in May, the monthly total
of 158,000 is already up 55% from the second-highest monthly total of the year
so far, which was 102,000 in March.
Coins themselves are a rising but still-small percentage of the overall gold
market. Official coin sales amounted to 234.4 metric tons in 2009, while total
investment demand was 1,270.9 metric tons, according to World Gold Council
data. Jewelry was the largest single use at 1,747.3 metric tons.
-By Allen Sykora, Dow Jones Newswires; 541-318-8765;
allen.sykora@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most
important business and market news, analysis and commentary:
http://www.djnewsplus.com/nae/al?rnd=CJK/vZ01ZaV9+cGOiFl4Ng==. You can
use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
05-25-10 1738ET
since December 2008, with coin dealers reporting that business is booming
thanks to demand from investors unnerved by Europe's sovereign-debt problems
and a sharp decline in stock markets.
So far in May, the U.S. Mint has sold 158,000 one-ounce 2010 American Eagle
bullion coins, according to the agency's website. This is already more than
double the full-month total of 65,000 for May 2009.
Gold, trading at around $1,200 an ounce, has hit record highs in recent
weeks, even as other commodities have fallen sharply, as investors seek assets
that are thought to retain their value during volatile times. The increased
demand for gold coins, which tend to be purchased by private investors who
want to hold physical metal, indicates that the concerns about the deepening
financial problems in Europe are weighing on an increasingly wide swath of
investors.
"We've seen a tremendous uptick in investors looking toward gold for their
portfolio," said David Beahm, vice president for marketing and economic
research with New Orleans-based coin dealer Blanchard and Co. "It's been like
that for a couple of years now. But just over the last two or three weeks, it
has exploded."
His company's gold-bullion coin sales are up 60% so far for this year
compared to 2009. He described the current demand as the strongest since the
aftermath of the Lehman Brothers collapse in autumn of 2008.
"May has turned out to be quite a surprise," said Scott Thomas, president
and chief executive of American Precious Metals Exchange in Oklahoma City.
"The stock market has declined, and people are continually looking at gold and
silver as alternative asset classes."
Gold is typically viewed as a store of value during times of economic and
political upheaval. The market's main focus this month has been debt woes in
nations such as Greece and Spain. Fears over a simmering dispute between North
and South Korea in recent days have added to gold's safe-haven appeal.
The following story was published on Thomson ONE:
For information on Thomson ONE go to www.thomson.com/financial
Even prior to the recent volatility, gold prices were on a several-year
uptrend on expectations that fiscal-stimulus and monetary policy aimed at
reviving the global economy would mean a pickup in inflation.
Andrew Schectman, owner of Miles Franklin, based in Wayzata, Minn., said
demand for gold coins has been especially strong from Western Europe. There
are only a handful of mints around the world that distribute gold coins en
masse, with the U.S. being one of them.
He described a tightening coin market in which buyers are holding on to the
coins rather than turning around and selling as the price of gold keeps
rising.
"There is no secondary market," he said. "They [coin holders] are motivated
by fear, not greed. So when you're afraid, you hold on and don't let go."
The U.S. Mint's website shows that one-ounce Eagle gold bullion coin sales
for the year to date have reached 489,500, up 18% from 413,200 as of the end
of May 2009. Even though a few business days remain in May, the monthly total
of 158,000 is already up 55% from the second-highest monthly total of the year
so far, which was 102,000 in March.
Coins themselves are a rising but still-small percentage of the overall gold
market. Official coin sales amounted to 234.4 metric tons in 2009, while total
investment demand was 1,270.9 metric tons, according to World Gold Council
data. Jewelry was the largest single use at 1,747.3 metric tons.
-By Allen Sykora, Dow Jones Newswires; 541-318-8765;
allen.sykora@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most
important business and market news, analysis and commentary:
http://www.djnewsplus.com/nae/al?rnd=CJK/vZ01ZaV9+cGOiFl4Ng==. You can
use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
05-25-10 1738ET
I manage money. I earn money. I save money .
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
0
Comments
IMHO gold will yo yo in a tight range for awhile.I believe that i may hit new highs by the end of the year...maybe in the 1400.00-1500.00 range.
A true sign of the top as many old timers will agree is when there is undue exuberance in the direction pricewise of a commodity.Everyone saying it will go up without limitation.For example in golds case, statements like I expect 2000 to 5000 gold next year.When this type of statement is made everywhere you turn the end is near.Many dont sell because they want to sell at the top.Many fear that selling too early will cost them more profits.
Another sign of the top is when everyone you talk to is buying.Using money that is really meant for another purpose ie:ira money , emergency cash cushions , college funds is a terrible idea and should never be done.
In any commodity market such as gold----bulls will make money---bears will make money---but pigs will get slaughtered.
Most still don't.
Not even close to a top yet.
One reliable sign the top is in.....One ounce of Gold = DJIA
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Experience the World through Numismatics...it's more than you can imagine.
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
Based on what? or is it a guess.
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<< <i>
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
Based on what? or is it a guess. >>
Is it ever anything but a guess regardless of whos saying it? Even if its based on something its still wrong enough often enough that its as good as a guess.
When I make my first ever gold bullion purchase, we will be at a top. I have not done so yet so we are not there yet. I have started thinking about it so a top is near. I will post and do everyone that favor when i do.
Everyweek that person has been wrong.
Picking tops is a fools errand in my opinion.
One day someone will get it right.
In the meantime, a lot of folks have missed a great run so far fearing the top or that gold is too expensive
I doubt that 5% of the adult population has ever owned an ounce of gold or have have seen one.
When you own gold as wealth insurance and not as an investment and you do not fear gold going down or that a top is in place. If it goes down you can insure your wealth for less.
Those who buy gold to flip or on spec will also be the weakest hands that generally get shaken out.
There is a huge difference in paper gold and physical gold. Know why you own each.
JMHO.....MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
I am far from a gold bug, but I would be willing to bet that you were wrong. If there were a security that I could purchase to bet my side of that deal, I would buy it.
Sure it might still go up; $1,500? 2,000? Who knows, but at a certain point, people like me are saying, IT'S TOO EXPENSIVE! I CAN'T AFFORD IT!
<< <i>If I could accurately predict the future price of gold, I would not be wasting my time here in a chatroom. >>
I think you still would
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Since so few Americans buy gold I'm not sure if this is a reliable sign of a top. The GLD inventory is at an all time high of 1267 tons of which 47 tons was added in the last 24 hrs! And it's basically gone up since the day it come on line in 2004. A lot of that US mint gold is probably heading overseas to fill European and Asian demand. If demand last peaked in Dec 2008 during the end of the deleveraging crisis with gold in the $800 range what does that say about today when gold has not just finished correcting 33% from an all time high? This current correction has only pulled back 7%. A 33% pullback from $1249 would be $837.
Considering that that gold has been hitting new highs (ie topping) against the Euro, Cando, Aussie Dollar, etc,....it seems reasonable that if anything, gold has been lagging vs. $US Dollar. What happens when the dollar takes an extended correction?
roadrunner
eruo and if it continues to drop it will give buyers a good window to buy befor it starts its next historic clime. Broker hype or good advise?
I think he maybe on to something so look for the dip if the eruo tanks again and buy was his advise to me?
____________ = FORMULA FOR GOLD
STUPIDITY
Camelot
<< <i>
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
I am far from a gold bug, but I would be willing to bet that you were wrong. If there were a security that I could purchase to bet my side of that deal, I would buy it. >>
There is a way to do that trade--selling puts on GLD or on gold futures. However, it takes a good deal of paper work to set up that kind of account. Most brokers will have a high margin requirement, and the pay out is rather small, after all that leg work.
/edit to add: it is unlikely for gold to form a major top, when there are new threads on the forums, either calling for or asking about a top. That said, strong retail demand for gold coins ain't a sign of a bottom either.
<< <i>
<< <i>If I could accurately predict the future price of gold, I would not be wasting my time here in a chatroom. >>
I think you still would
MJ >>
Um, you might be right.
<< <i>
<< <i>
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
I am far from a gold bug, but I would be willing to bet that you were wrong. If there were a security that I could purchase to bet my side of that deal, I would buy it. >>
There is a way to do that trade--selling puts on GLD or on gold futures. However, it takes a good deal of paper work to set up that kind of account. Most brokers will have a high margin requirement, and the pay out is rather small, after all that leg work.
/edit to add: it is unlikely for gold to form a major top, when there are new threads on the forums, either calling for or asking about a top. That said, strong retail demand for gold coins ain't a sign of a bottom either. >>
Too complicated for me. I was hoping that Josh would just bet me straight up.
Let's pretend that we are in a roadrunner cartoon, and you are Wiley E. Coyote who has just run past the edge of the cliff. Is the cliff wall going up?
I knew it would happen.
<< <i>
<< <i>If I could accurately predict the future price of gold, I would not be wasting my time here in a chatroom. >>
I think you still would
MJ >>
I agree, but he would be doing it from a beach house in Tahiti or the Caribbean.
And, trips to coin shows might be a thing of the past (as well as wonderfully snappy write-ups).
We should not encourage him to go into bullion futures.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
If gold hits $2000 in the next 2 years, then we could be at A top. Only 3% of the citizens in the US of A currently own gold. Worldwide I'm sure it's under 1%, with 1% being 70 million people.
I look for gold to hit $1500 within 2 years. Only a guess, but a pretty reasonable guess.
$2000 gold? That should take a few more years barring catastrophe.
I sure wouldn't be putting money needed in the short run into it... But it seems ok as a <5% diversification of long-term money.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Alms, anyone?
Anyone?
Bueller?
Too complicated for me. I was hoping that Josh would just bet me straight up.
That would be nice!
roadrunner
The average financial investor limits his commodity investments to 5% on average, I have more than that in silver... but I just love coin collecting.
the next 5 years. Could be a wild ride, but one I am looking forward to.
<< <i>The average financial investor limits his commodity investments to 5% on average. >>
What a mistake that's been since the year 2000.
Price the DJIA in Gold from 2000 to the present and the Dow has crashed miserably.
In 2000: DJIA 10,000 Gold $250
One 'unit' of the Dow bought you 40 ounces of Gold.
Today.....multiply these 40 ounces of gold (40 x $1200) = 48,000 and this is what the DJIA should be. It's at 10,000 today. I'd say the Dow has crashed big time valued in 'gold dollars'.
and they still say 'only 5% in Gold"........what brainiacs these financial investors are
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
unless the FED can figure out how to print gold, I see little chance of gold being lower than now in 10-20 years compared to US dollars
what are you comparing it to?
<< <i>
<< <i>The average financial investor limits his commodity investments to 5% on average. >>
What a mistake that's been since the year 2000.
Price the DJIA in Gold from 2000 to the present and the Dow has crashed miserably.
In 2000: DJIA 10,000 Gold $250
One 'unit' of the Dow bought you 40 ounces of Gold.
Today.....multiply these 40 ounces of gold (40 x $1200) = 48,000 and this is what the DJIA should be. It's at 10,000 today. I'd say the Dow has crashed big time valued in 'gold dollars'.
and they still say 'only 5% in Gold"........what brainiacs these financial investors are
I am a futures trader by profession and it is so frustrrating trying to pull people away from stocks. This country is brainwashed by stocks to a point where I cannot believe. If I break even for a client trading futures or currencies then I am "just churning or spinning my wheels". If I drawdown 5% "the sky is falling". But what do these same clients say when the dow is cut in half? "BUYING OPPORTUNITY!"
<< <i>I base my opinion on the rate in which Gold grew immensely during the past 1.5 years. There hasn't been a precedent in this rate increase in gold's history. I'll take you up on that bet, but I will increase my time until the end of this year. It's growth rate is unstable and resembles that of the stock market, housing market, and oil. It's true that if the demand stays while there's a limited supply $ will increase, that's basic economics but unless you know what backs gold you could be setting yourself up for failure. Again, this is just my opinion, and we'll see where it leads.
The average financial investor limits his commodity investments to 5% on average, I have more than that in silver... but I just love coin collecting. >>
I would argue that, although gold is a special case (no major industrial uses), it is an alternate currency. Is gold going up, or is everything else going down in relation to it? But it is certainly not the only commodity that has seen major moves: oil (XOM); is oil also a currency? I think so, silver (Silver Wheaton SLW), platinum (Impala Platinum IMPUY) and PGMs in general, rock salt (check out Compass Minerals CMP's long-term track record), cement (Cemex), copper (Southern Copper/Freeport McMoRan), the list goes on and on. One could construct a pretty nifty portfolio out of some of these ideas (and the miners/producers behind them), of course given your risk tolerance and how much other diversification you can stand. As always, do your own homework and make your own best judgment for your situation. I would say my "commodities" position (in this broad sense) is about 20%, with lots of good long-term mutual funds as a backstop. I don't think it's really very risky; in fact, I sleep like a baby at night (well, the Benadryl helps).
It's true that you can always invest in commodities, they have specific markets for it. But I feel that this is turning into a "Thoughts on investment" thread rather than Spotting the sign of top in gold. But if we're talking about different industrial materials to invest in, I am for coal.
When the Financial crisis hit in the Fall of 2008 and silver dropped from $21 to $11 overnight, I can say with complete honesty that I didn't lose 1 second of sleep that night.
Why? Because I knew it would rebound and overtake that amount in the future.
I hope I don't come off as a 'know-it-all', and I certainly don't consider myself the type, but it truly amazes me that other people just don't see that in our current situation (and ultimately the hyper-inflation near future scenario), having a good proportion of one's investments in PM's (I would say at least 50%) is the most wise and prudent decision you could make.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>If I could accurately predict the future price of gold, I would not be wasting my time here in a chatroom. >>
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
exposed to violent emotional surges and declines.
Camelot
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>I put gold at $900.00 in the next three months. It will be very interesting to see where it goes from there. Just my humble opinion. >>
I am far from a gold bug, but I would be willing to bet that you were wrong. If there were a security that I could purchase to bet my side of that deal, I would buy it. >>
Ticker GLD you can buy or short it.
Successful Trades: Swampboy,
He must not think the market has topped.
MOO
TD
<< <i>
<< <i>If I could accurately predict the future price of gold, I would not be wasting my time here in a chatroom. >>
>>
Really? Why not? What else would you be doing with your free time that you choose not to do now?
peacockcoins
Why I Don't Trust Gold
by Brett Arends
Thursday, May 27, 2010
provided by
This is a very sad day for me.
In Part One of this series, when I argued that gold might be about to go vertical, I made a whole bunch of new friends among the gold bugs.
And now I'm going to lose them all.
That's because even though I think gold might be about to take off, I don't recommend you rush out and put all your money into gold bars or exchange-traded funds that hold bullion.
And this is for one simple reason: At some levels, gold, as an investment, is absolutely ridiculous.
Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
And that's not the half of it.
Gold is volatile. It's hard to value. It generates no income.
Yes, it's a "hard asset," but so are lots of other things—like land, bags of rice, even bottled water.
It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.
As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.
I get worried when I see people plunging heavily into gold at $1,200 an ounce. What if the price goes back to where it was just a few years ago, at $500 or $600 an ounce? Will you buy more? Sell?
My concerns about gold go even further than that.
Let's step inside the gold market for a moment.
Everyone knows the price has risen about fivefold in the past decade. But this is not due to some mystical truth or magical act of levitation. It is simply because there have been more buyers than sellers.
Banal, but true—and sometimes worth repeating.
If the price rises you'd think there must be a shortage. But data provided by the World Gold Council, an industry body, tell a remarkable story.
Over that period the world has produced—or, more accurately, recovered—far more gold than anyone actually wanted to use. Since 2002, for example, total demand for gold from goldsmiths and jewelers, and dentists, and general industry, has come to about 22,500 tonnes.
But during the same period, more than 29,000 tonnes has come on to the market.
The surplus alone is enough to produce about 220 million one-ounce gold American Buffalo coins. That's in eight years.
Most of the new supply has come from mine production. Some, though a dwindling amount, has come from central banks. And a growing amount has come from recycling—old jewelry and the like being melted down for scrap. (This is a perennial issue with gold. I never understand why the fans think gold's incredible durability—it doesn't waste or corrode—is bullish for the market. It's bearish.) So if supply has consistently exceeded user demand, how come the price of gold has still been rising?
In a word, hoarding.
Gold investors, or hoarders, have made up all the difference. They are the only reason total "demand" has exceeded supply.
Lots of people have been buying gold in the hope it would rise. But the only way it can rise is if still more people buy it, hoping it will rise still further. And so on.
What do we call an investment scheme where current members' returns depend entirely on new money brought in by new members?
A Ponzi scheme.
Yes, as I wrote earlier, gold may well be the next big bubble. And that may mean there is big money to be made in speculation.
But I don't trust it as an investment.
How can you square this golden circle? I'll tell you in Part Three.
This is the second part of a three-part series on gold, "The Gold, the Bad and the Ugly." Next up: The way to play gold.
Write to Brett Arends at brett.arends@wsj.com
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
yeah right, I have to laugh at that one
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>Price the DJIA in Gold from 2000 to the present and the Dow has crashed miserably.
In 2000: DJIA 10,000 Gold $250
One 'unit' of the Dow bought you 40 ounces of Gold.
Today.....multiply these 40 ounces of gold (40 x $1200) = 48,000 and this is what the DJIA should be. It's at 10,000 today. I'd say the Dow has crashed big time valued in 'gold dollars'.and they still say 'only 5% in Gold"........what brainiacs these financial investors are >>
You have selected pricing points with a pro-gold bias. Show us the performance of gold vs the DJIA from the peak price of gold in 1980 through the low point of gold in 2000 and the results will be much different.
CG
<< <i>
<< <i>Price the DJIA in Gold from 2000 to the present and the Dow has crashed miserably.
In 2000: DJIA 10,000 Gold $250
One 'unit' of the Dow bought you 40 ounces of Gold.
Today.....multiply these 40 ounces of gold (40 x $1200) = 48,000 and this is what the DJIA should be. It's at 10,000 today. I'd say the Dow has crashed big time valued in 'gold dollars'.and they still say 'only 5% in Gold"........what brainiacs these financial investors are >>
You have selected pricing points with a pro-gold bias. Show us the performance of gold vs the DJIA from the peak price of gold in 1980 through the low point of gold in 2000 and the results will be much different.
CG >>
you guys just don't get it. All these 'anti-gold' guys bring this time period as an example. Well, you'll be surprised that I actually agree with you for these years.
I have said so many times that if you invested in Gold from 1980 to the year 2000 you got hammered. Not only that, you also missed out on the largest stock market bull cycle in history
But the economic conditions of that 20 year time span is so much different than this twenty year period (2000 to 2020?)
But you don't see the large market trend.....
Take your time period of 1980 to 2000.
We both agree that it was terrible to own gold and great to own stocks.
Another way to explain this...In 1980 Dow:Gold ratio was basically 1:1 (they equalled each other as Gold was $850 an ounce and the Dow was around 880).
The next twenty years saw gold drop and the Dow zoom ahead, until the 'stock peak' in the year 2000 where the Dow:Gold ratio was 40:1 (Dow 10,000 and Gold $250).
Since the year 2000, Gold has 'gained ground' on the Dow and has increased its 'relative' strength to a ratio of 8:1 (Dow 10,000 and Gold $1200).
Don't you see what's happening???
Gold will continue to 'outpace' the Dow and will eventually hit a ratio of 1:1 (both Equal). Maybe even surpass the 1:1 ratio (ie 1/2:1)
I ask you: Where would you want to put your money today? or put it another way....go ahead and invest in other sectors, I'll go 100% with PM's and clean up.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Right now, gold is neither. Gold will more than likely continue to creep upward. Buy the dips and sit it aside.
Silver may be a better option for you if you are on a Poor Man's Budget or more interested is percentages.
It is my opinion that now is not the time to heavily pursue PMs. A better alternative is residential real estate. The $8k tax credit for first time buyers has expired. With that in mind, look for properties that:
A.) Have been on the market through the tax credit period and not sold. The logic being, "If previous potential buyers weren't willing to pay the price at X amount with an $8k incentive, I lowball X percentage less than asking and expect a counteroffer."
-or-
B.) Foreclosures. They are bank owned. Banks aren't in the real estate business. They want out from under that property ASAP. Lowball, expect a counter, counter their counter, they either accept or you move on.
Buy low and sell high- PMs are somewhere in the middle whereas real estate is in the gutter.
What references did you use? At a quick glance I can find several instances where gold's climb in the last 1-1/2 yrs reflects previous history. Try 2005-2006 or 2007-2008. Those are very similar in % gain as well as slope to the current move from Nov 2008. The first move from $425 to $735 was just as impressive a move as when gold went from $650 to $1033....or from $700 to $1226. Wait until gold puts in a truly steep climb as it did in 1979 where it more than tripled in less than a year from $250 to $850. There were also steep moves up in 1860, 1933, 1973, 1982, 1999 as long as we're on that subject. In 1860 the price of gold more than tripled in just a couple of months at the start of the Civil War. Frankly, there's lots of precedent for sharp moves in gold. And in some cases it lasted years. The more the currency is debased, the more unstable the political environment, and the less confidence people have in the govt, the more "unstable" gold becomes. Also remember that we're talking gold in US Dollars here. If we tossed in other currencies there would be dozens of examples of gold climbing off the charts as currencies devalued. The fate of all currencies is to eventually go to zero. There has never been an exception nor can there be when politicians and bankers are involved.
Gold's current position is similar to where the Dow was in the early 1990's at the 2500-3000 level.....4-5X from the bottom in the late 1970's. Gold's growth rate mirrors the instability of fiat currencies. To say that gold is "unstable" is like saying that the cart tipped over the horse.
roadrunner
WH