Is It safe Yet?

Planchet

Ok, so I quoted from Laurence Olivier from one of my favorite movies, Marathon Man. But this is a serious question. I have wanted to buy some gold. Not much by many of your standards, but it would be alot for me. I think that I may have waited to long. With the price above 1900 an ounce I am starting to think that there is a much larger downside risk then an upside reward. My goal in purchasing gold is to achieve diversification and have something that will protect me in the event of inflation. I would expect it to take at least several years to be able to purchase a meaningful position. So do I start now or wait and do I put everything in at once or go in slowly. BTW I am only interested in gold, not silver or other precious metals. Thanks, Planchet

jmski52

At $1,500 I would have told you to go slowly because of the runup that gold has had. At $1,900 I would tell you the same thing. And no, it is not safe yet. You have to take a position, or not. That's true at any price level.

If you have dollars hanging around, in my opinion they are more at risk than is gold. I don't know when we will hit an equilibrium, but I don't think this is it. Surely, at some point the momentum will shift against gold.

Still, I don't see any solutions to our longterm problems and until I do, nothing besides metals seems like a better idea. Unless you have a producing farm, the rest is risky - in my opinion.

nibanny

If you think it will take you several years to get to your goal, start stacking now little by little and you won't care about your first purchase at $1900 because you will buy at $1800 and at $2000 as well.

MsMorrisine

no one knows where gold is going.

here is gold in a weekly change price chart



1500 - 1650 was a nice move

1600 - 1900 is a scary move.

jmski52

MsM, if you print out that chart onto a piece of paper and then step back from it about 20 paces, it isn't quite so scary.

roadrunner

Gold is now 30% above the 200 day moving average. It's only been there twice before over the past 10 yrs (April-May 2006 and March 2008).
Both of those times ended badly with 25-33% pull backs.

I'd feel a lot safer buying silver here or even GDX/GDXJ. Buying into a parabolic move isn't usually a good move unless you have insider information. Could this be the
big kahuna move in gold like in Dec 1979-Jan 1980? Maybe...but more than likely it's not.

roadrunner

derryb

<< <i>BTW I am only interested in gold, not silver or other precious metals. >>


I'm banking on a greater percentage return with silver.

OnlyGoldIsMoney

My gold DCA is right around $1,100. I'm willing to take the risk of adding some more at $1,900/oz. A pullback to $1,500 would be bother me.

If I did not have a gold position before today I would be more than a little reluctant to start buying at $1,900.

COINB0Y

I am always safe.....I have a lot of these..sold some Gold today...buy some PUTs in morning...buy some more MCD on a pullback ;>

DorkGirl

So buy 10th ounces. Not a lot of downside, but a bit of a premium. Get in the game. I bought at $700 an ounce and thought I was crazy....

DorkGirl

But I also bought at $400, $500, etc. Get it?