Gold closed above $400...can the $400

KollectorKing · December 1, 2003 4:04AM

price be sustained? If so what's the next level? Predication for 12/04?

Deadhorse · December 1, 2003 4:50AM

1) Yes

2) $415.00 by year's end

3) $465.00 by 12/04 with silver trading at $8.00

4) $625.00 by 12/05 with silver trading at over $11.00

Let the bullion haters begin the bashing!

KollectorKing · December 1, 2003 5:19AM

Do I hear $850 for gold, and $50 for silver

LAWMAN · December 1, 2003 5:33AM

Up, up and away. Here we go again.

baccaruda · December 1, 2003 5:41AM

Gold will remain stable for the next 10,000 years or so. It's a good bet that 10,000 years from now, gold will buy about the same goods and services it would today.

fountainheadgold · December 1, 2003 6:05AM

wayneme · December 1, 2003 7:27AM

Gold will remain stable for the next 10,000 years or so. It's a good bet that 10,000 years from now, gold will buy about the same goods and services it would today
i agree but the big question is will the US Dollar

DCAMFranklin · December 1, 2003 7:43AM

I'm very happy with my profit in my PCGS MS-69 Gold Eagles, the very best part of the rise in gold is the cause and effect. The cause of course is the fall in the dollar relative to the euro. The effect will be the fun of watching the Frogs and the Germans choking on the impact.

I'd look for gold to hold the $400 level and continue to rise during '04.

baccaruda · December 1, 2003 8:06AM

i agree but the big question is will the US Dollar

Absolutely not. That's why gold is a good hedge against inflation - not good for long-term growth.

jpumper · December 1, 2003 8:16AM

Right baccaruda!!! Gold is rising due to inflationary pressures right now, gold and gold stocks should have their heyday soon since its begun already. Gold to 475 and silver to 6.25 by mid next year depending on the inflation %. If Alan Grenspan starts to raise interest rates, (which I suspect he will soon) then he already knows the damage HAD ALREADY occurred. Its his defense move to curb spending.

coinpage · December 1, 2003 8:47AM

Yes , the dollar is going down the toilet

$407.00 on 12/31

trozau · December 1, 2003 8:55AM

If all the US dollars in current circulation were to be backed 100% by the gold reserves that the US government is supposed to have, it would equate to $160,000 per troy ounce of gold.

link to article

LAWMAN · December 1, 2003 9:12AM

Gee, maybe it has something to do with the US deficit and a Congress that is spending like a drunken sailor?! Gold rising is not exactly a confidence vote.

wayneme · December 1, 2003 9:13AM

Absolutely not. That's why gold is a good hedge against inflation - not good for long-term growth.

have you watched the dollar lately [value] and seen the debt lately
and where do you think we'll be in a few years when the boomer retire shortly
or may be just look at China or the on going war
do you think this will change shortly
and the dollar will carry the day
the easy and only way out of these mess's is a very weak dollar the die is cast
gold is good my thoughts

haletj · December 1, 2003 9:25AM

$450-$470 by early to mid January, then back to $415-$425 shortly after.

roadrunner · December 1, 2003 1:05PM

I don't believe anyone took up Jim Sinclair on his $100,000 offer back early in the year that gold would close above $400 on at least one day in 2003. This is now a reality. All I can say is that I've been reading what Sinclair has been saying for 2 years now and it's all been coming true. While he cannot forecast the week to week trends or even month to month with 100% accuracy, he has been dead on with the basic trends and substantiates it with sound reasons. Here's one for the geezer patrol!

I suspect a $500/oz close in 2004 will be the next bet. It will be easier to get to $500 than it was to break $400. The lid is off. The shorts are running for cover and they have exhausted much of their ammo trying to keep the lid on at $400. I fully concur that this is a long term bull. And one that could last far longer than most think.

roadrunner

trozau · December 1, 2003 1:12PM

Got gold?

Goldog63 · December 1, 2003 1:20PM

I predict there wil be a coorection this week or next to the low $390s. Then back up to 420 or so by January. I'll say 475 is a good bet for 12-04.

cladking · December 1, 2003 1:35PM

<< If all the US dollars in current circulation were to be backed 100% by the gold reserves that the US government is supposed to have, it would equate to $160,000 per troy ounce of gold.

link to article >>

...and if the debt were monetized it would dwarf this number.

cladking · December 1, 2003 1:39PM

The correction is in. The central banks are not done manipulating the price of gold, they
are merely done with trying to hold $300. Look for another concerted effort when it gets
around $550. They'll hold it there for awhile.

Gold has been in a downtrend for nearly two centuries. This long term trend will reassert
itself at some point but in the meantime it's price will come to reflect the deterioration of
the currencies over the last couple of decades.

DCAMFranklin · December 1, 2003 2:41PM

<< gold stocks should have their heyday soon since its begun already >>

Jpumper- Where have you been the past 12 months? Gold stocks don't follow the price of gold. They lead the price of gold.

Newmont Mining

The ship has sailed.

1957joe · December 2, 2003 4:38AM

I say $300 in a year

eagle7 · December 2, 2003 4:54AM

Those who fight a rising market lose out. Doesnt matter what the market is. Gold and silver are going up and have been for about a year and a half. All the people who have been bagging gold have wasted their time and breath and lost out on the initial rise. Listen up. Dont fight a rising market. Number two, lets distill this down to the nitty gritty. Forget about all the fancy reasons. There is only one reason gold and silver are rising. There are more buyers than sellers. This goes along with not fighting a rising market. Dont waste brain cells trying to figure out why. Just jump on and enjoy the ride or stay off to the side and be a naysayer. Twenty Libs in PCGS 63 and 64 holders are already thru the roof and climbing rapidly higher. Twenty Saints are now playing catchup. Other pre 33 gold in 63 or higher grade will boom quickly as gold stays above 400 and climbs higher. Lot of folks on this forum hate gold. That wont change what actually happens one iota. Quit fighting it and enjoy the ride.

dollardude · December 2, 2003 5:02AM

1. Yes
2. $400
3. $410

If you had invested in the S&P 500 index at the beginning of this year, you would have made about 20% on your money so far. Since the stock market began, it has averaged about 12% per year. I still say gold is a HORRIBLE long-term investment. For about the past 100 years, it has averaged less than 5% per year. HOWEVER, if you guys and gals insist on doing this, PLEASE do your basic investing FIRST BEFORE you do any high risk investing. I will repeat the "basics" here:

1. Save $1,000 CASH IN THE BANK as a beginner emergency fund
2. DEBT FREE except your house, if you own a house, i.e., NO credit card debt, NO car debt, NO student loan debt, etc.
3. Save 3-6 months of expenses as CASH IN THE BANK ($10,000 is a reasonable goal)
4. Invest 15% for retirement (good growth stock mutual funds and paid for real estate; matching 401k/403b FIRST, then Roth IRA, then non-matching 401k/403b)
5. Save/invest for kids' college, if you have kids (save if <5 years, invest if 5 years or more)
6. Pay off the house early, if you own a house
7. GIVE and SAVE like you never have before

If you can honestly say you are at least past "baby step" 5, only then would I consider doing high risk investments like gold. I really don't think that most forum members who are talking about investing in gold have actually done these basics. Do you have a student loan, a credit card, or a car payment? If so, you haven't done the basics first.

DCAMFranklin · December 2, 2003 5:34AM

Hey Dollardude- What is the 3-year annualized return for the Vanguard 500 Index fund? How about -6.22%. Someone that had money in that low cost, tax-efficient fund lost 47% of their value from the end of the 3rdQ '00 to end of year '02. With a 10% annual return, they will back to even in 6.5 years. Oh boy!

dollardude · December 2, 2003 5:44AM

DCAMFranklin, I just did some rough math on my calculator. The 10-year track record of the Vanguard 500 Index Fund (VFINX) is somewhere around 125% return. Gold has returned about 3% in the past 10-years. There's just no comparison for a good long-term investment. Yes, you can look at specific periods in history and pick out the poor performing times, but hindsight is 20/20. There is no reason to believe that gold will be a good long-term investment in the future, and there is every reason to believe that good growth stock mutual funds and paid-for real estate are good long-term investments for the future.

Edited to Add: I just thought of something. That 3% (or whatever the exact number is) that you made on gold over the past 10 years is probably closer to 0%. I only looked at the spot price. I didn't account for your expenses in owning gold, i.e., buying commissions, selling commissions, storage fees, insurance, etc.

DCAMFranklin · December 2, 2003 5:44AM

Barrick Gold, in response to lawsuits, said today it will not enter into additional hedging commitments and has adopted a no-hedge policy. This is very good for a true marketplace.

Story

DCAMFranklin · December 2, 2003 5:57AM

<< Vanguard 500 Index fund? >>

Value today is LESS than it was at the end of 1998. Five years and NO return.

fishcooker · December 2, 2003 5:59AM

and there is every reason to believe that good growth stock mutual funds and paid-for real estate are good long-term investments for the future.

This is far from unbiased opinion. If you understood valuations you wouldn't make this statement. If you think Gold is too risky, you wouldn't be within a mile of growth stocks!

Secondly, I am surprised that after only 2 years of bear market decimation, the unabashed "growth stock" ideology is back. But hey, maybe some forgot the BS they were fed in the '90's..........

dollardude · December 2, 2003 6:08AM

<< Value today is LESS than it was at the end of 1998. Five years and NO return. >>

There is no comparision between the historic performance of good growth stock mutual funds versus gold. Gold has not even kept up with inflation in the long run. Do some basic research at Morningstar or other good basic investment web sites. If anyone does insist on investing in gold, PLEASE do so only AFTER you have done the basics of investing that I outlined above. I will respectfully agree to disagree, and leave it at that.

eagle7 · December 2, 2003 6:18AM

Disclaimer. Past performance does not predict future results. Not in the stock market and not in the gold market. The very fact that gold is not a steady investment vehicle should make people sit up and take notice when it has risen as fast and by as much as a percentage as it has over the past year and a half. I prefer to look forward, not backward. I do however think that the best way to invest in gold is with numismatic quality pre 33 gold coins in PCGS or NGC holders in the grade of 63 and above. These coins are thin, few people have much quantity and they will rise in huge multiples over the price of gold when gold gets above 450 an oz. When that will be who really knows, but I think it will be sooner rather than later.

Goldog63 · December 2, 2003 7:06AM

Dollardude,
While I generally agree with your saving goals, I do believe gold fits in the Investment/Saving portion. Every investment has a risk/reward ratio. Growth stocks and real estate are high risk, high return investments. Cash in the bank & gold are thought of as low risk. Gold is not a high risk investment but a solid real asset that may go up and down, but wil always hold value! A diversified portfolio should include gold along with equities, real estate etc... I notice that except for real estate all of your investing is tied to the government. Some of us would feel uncomfortable with that. In some kind of financial/political meltdown you'd be sunk. They may even take your properties.

I'm sure you will do fine with your investment mix but those of us who believe in gold will too.

TWQG · December 2, 2003 7:11AM

It would be just as easy for your government to seize your gold as your property.
No risk? What about buying at an eight year high? You don't think that's risky?
I personally think this is a time to sell gold not buy it.

wayneme · December 2, 2003 7:38AM

I notice that except for real estate all of your investing is tied to the government

you have to realize real estate is set by interest rates which is set by the gov
people have a window they will pay interest rate affect that the most
but every one should not take these ideas personal
we can all make up our on minds as to gold own or not it is nice to see a place like this to air these ideas
THANKS YOU all

dollardude · December 2, 2003 7:54AM

<< A diversified portfolio should include gold along with equities, real estate etc... I notice that except for real estate all of your investing is tied to the government. Some of us would feel uncomfortable with that. In some kind of financial/political meltdown you'd be sunk. They may even take your properties. I'm sure you will do fine with your investment mix but those of us who believe in gold will too. >>

If there was a financial meltdown, I actually believe that real estate will have more value than gold. People would be trading goods and services that they could use. You would need food, clothing, shelter (real estate), and water. I don't think gold would have much value if there were a complete financial meltdown and total collapse of the economy. You can't eat, drink, live in, or clothe youself with gold.

<< You have to realize real estate is set by interest rates which is set by the gov >>

I disagree. When interest rates are high, people buy houses. When interest rates are low, people also buy houses. Interest rates do, however, sometimes have a short-term effect on the price of housing.

<< No risk? What about buying at an eight year high? You don't think that's risky? >>

I agree. The simple "buy-low-sell-high" investment advice alone should tell you that now is the WORST time to buy gold.

wayneme · December 2, 2003 10:36AM

You have to realize real estate is set by interest rates which is set by the gov >>

I disagree. When interest rates are high, people buy houses. When interest rates are low, people also buy houses. Interest rates do, however, sometimes have a short-term effect on the price of housing.

what do people pay for real estate [ thier incomes ] which has a set limit for the area adjusted by the interest rates set by the gov so in effect the prices are effected by the interest rate
low interest rates higher prices higher rates lower prices to hit the price people will pay
supply and demand set by interest rates
i don't believe we'll see a melt down i do see a long term lock down in dollars value or lowering of
and raise in the value of the rest of the worlds

dcarr · December 2, 2003 11:10AM

1. Yes
2. $411.00
3. $488.00

Since others have been giving their investment advice, I'll give mine.

I've seen the charts of the DOW from 1934 on (so-called 12%/year growth). Funny how they always "forget" about that '29-'34 period. And isn't it "convenient" how over the years, weak/bankrupt companies have been dropped from the DOW and stronger companies brought in. That sure helps the DOW look a lot better over the years doesn't it ! If you had put your money in the orignal DOW companies, a lot of your money would be gone because a lot of those companies are gone.

This may be heresy to some, but I say buying stock in companies that you have little or no control over is UNWISE. Warren Buffett never buys stock in a company unless he gets a major controlling interest.
Buying into mutual funds is even worse. It is like forking over your money to someone you hardly know, trusting them to look after it. Company executives and Wall Street have proven over the last few years that they can not be trusted. Company insiders are selling stocks like never before - way more than they are buying. What do they know ? And now the latest mutual fund scandals ...

Real estate is not necessarily a good investment either. Interest rates have a HUGE impact on house prices ! It is all in the affordability of monthly payments. Buying houses is a lot like buying bonds. If interest rates are high but about to decline, real estate is a good investment (just like bonds). Of course, right now, we have the exact OPPOSITE situation. Everyone needs a place to live, but don't expect the value of your house to go up from here (or even hold it's current value). The only real estate that MIGHT be worth investing in at this time would be productive agricultural land, or something with water or mineral rights.

So here is my list of observations/recommendations (in no particular order):

1. Don't play the bank's and Wall Street's rigged games. DO NOT borrow money (except possibly for a house). Do not invest in mutual funds or any companies that you are not INTIMATELY familiar with.

2. Cut out the middle man (the bank) ! If you have assets, cash them out to pay off debt. For example, it makes no sense to have high-interest debt and an IRA. Get out of that circle.

3. The absolute LAST thing you should put your money into right now is US dollar-denominated bonds.

4. "Growth" stocks and funds are, by their nature, extremely risky.

5. Gold is not so much an "investment" as it is a safe and secure "asset".

6. The US economy is on a very shaky foundation. Our finances are increasingly being dictated by foreigners. And those foreigners (Asia, for example) have a much stronger affinity for gold than Americans do.

7. If you had purchased silver at the beginning of the year, your total return would be more than 20% .

8. Do not borrow money to invest, or invest on margin. Margin (leveraged) investing actually weakens your position. The big professional COMEX traders know this, and they have been "running" the small longs for years. Better to take your time, study your position, then make your move, and hold firm until your goal is met.

9. Don't be afraid to go the contrarian route and look for "sleepers" (like palladium, currently).

10. The present economic landscape is unlike anything the world has seen before. Previous economic experiences do not apply here.

PS: A lot if interesting discussion in the gold/metals markets goes on
here

zenny · December 2, 2003 11:31AM

thanks Daniel, one of the best posts i've seen in a while.

ps. always enjoy seeing your designs.

z

fishcooker · December 2, 2003 11:54AM

The economic/investment advisor I trust the most says that this last week his mutual fund sold all precious metal shares. He does not believe the near-term investment odds favor Gold. That makes me sit up and take notice!

But personally, I bought in low enough that I can wait and observe the future for weakness, rather than predicting it and trading now.

Since we're talking Growth Stocks, my research shows the S&P Growth Index off 37% over the last 3 years. Only off 16% over 5 years, though that is a staggering loss vs Treasury Interest. Easily a 40+% difference in returns considering capital gains due to falling interest rates. It may be 2010 before the growth stocks catch my T-bonds and cash........

roadrunner · December 2, 2003 1:45PM

DCarr, very wisely said. The 100 year "performance" of the stock market is a rigged game. Trying to assume that the huge industrial growth our nation put out in the first half of the century is continuing today is tomfoolery. Dollardude is hung up past history that has no bearing on what is happening today. We are in a long term down cycle for stocks. They are going to suck big time for another 5-15 years. Gold has its spots for 5 years or so out of every 20. This is one of those spots. The price performance of stocks is a joke. So is our CPI and published GDP numbers. Dudes like dollardude won't figure out that all this hype is just that, until it is way too late.

Slice it any way you like but we are in a commodities bull market from tin and wheat to soybeans and gold. The central bankers have lost control of the gold bubble. There will be no fight at $550.

roadrunner

dollardude · December 2, 2003 1:56PM

<< Dollardude is hung up past history that has no bearing on what is happening today. We are in a long term down cycle for stocks. They are going to suck big time for another 5-15 years. Gold has its spots for 5 years or so out of every 20. This is one of those spots. The price performance of stocks is a joke. So is our CPI and published GDP numbers. Dudes like dollardude won't figure out that all this hype is just that, until it is way too late. >>

I am not hung up on the past. I am looking at BOTH the past and the future. The future tells me that equities and PAID FOR real estate are STILL the way to go. The world's and the U.S.'s economy are starting to recover. So, people will get better jobs and spend more on their home than before. This tells me that the future growth is in equities and real estate.

If you want to be rich, do what self-made millionaires do to get there. Don't listen to a bunch of BROKE financial experts. If you want to become wealthy, you have to do what wealthy people do. I would challenge you to interview 5 self-made millionaires. Ask them what they invest in.

fountainheadgold · December 2, 2003 2:02PM

Gold is a no brainer as long as our gov deflates the value of the dollar, which will be at least another year . gold could go to $2000.00 if they are not very careful. once they loose the train look out.

stock market is only paper, i made a fortune in ebay from the get go. sold and bought gold. Paper is paper gold is real

Deadhorse · December 2, 2003 3:26PM

Interesting, over the past few months we've had a number of these threads and what I notice more than anything else is that there are fewer and fewer of the anti-bullion people posting to them.

Draw your own conclusions.

I'll tell you what I made a decision to do just today. My home is mostly paid off, I am going to take out virtually all the equity and refinance it all over again.

Now I'm not a rich man, just a regular guy, but this will give me well in excess of 6 figures and ALL of this is going to go into gold and silver bullion within the next 45 days. I do think we will have a slight downturn in late January as that has been traditioinal.

I'm betting that in 18 months I will have a far, far greater return on my bullion investment than I will have paid out on a low interest loan on my refinanced home.

In fact, I expect to be able to pay off the mortgage and have a substantial return left over. I may hold off for 2-3 or even more years depending, but I have come to the conclusion that this is my best shot at catching onto a bull market the likes of which I will probably never have another chance again at.

That's what I call putting my money where my mouth is, and it is a reflection of how strongly I believe this bullion market is going to rise in the short term.

Call me crazy, call me ballsy, but when this turns the way I think it will, just make sure you call for an appointment first.

dcarr · December 2, 2003 3:59PM

<< If you want to be rich, do what self-made millionaires do to get there. Don't listen to a bunch of BROKE financial experts. If you want to become wealthy, you have to do what wealthy people do. I would challenge you to interview 5 self-made millionaires. Ask them what they invest in. >>

I'll bet most of them invested in their OWN successful business, and not in stocks.

Bochiman · December 2, 2003 4:15PM

Actually, I think they invested in themselves/their business and/or real estate.
Many people have made a bundle from the right real estate purchases.
I wish I had the knowledge for that, and the finances to do it as well.

supercoin · December 2, 2003 4:20PM

Ok Deadhorse -- you're freakin' crazy!

But if you want to go completely over the edge, you can control MILLIONS of dollars worth of gold/silver with that same money using metals futures contracts. Thereby greatly increasing your chances of becoming flat broke or filthy rich in short order.

Even if you don't want the extra leverage (and I would hope in your case you don't -- putting your whole house on the line is crazy enough!), futures contracts are by far the most efficient way to trade metal... very low buy/sell spreads, no delivery issues, no storage and insurance fees, no risk of loss, earn interest on your money while controlling the same amount of metal, etc.

Good luck with it. Don't forget the little people when you make it big. Might want to set aside a tin can and a carboard sign just in case, though.

baccaruda · December 2, 2003 9:09PM

I'm not anti-bullion but you have to understand what gold is - a commodity. Commodities are ALWAYS traded in the short term. If you tie up large amounts of physical gold or silver for long-term investment (actually holding commodities is "speculation" not investment) purposes you are invariably making a mistake.

An ounce of gold is an ounce of gold and that's all it will ever be. It's not sitting in the safe deposit boxing growing or making babies, it's a stagnant commodity. This is not to say that gold won't go to $1000/oz ove rthe next 6 months, but you can bet 10 years (or 10,000 years) from now gold will buy roughly the same as it will today - unless someone figures out how to mine it more cheaply.

Deadhorse · December 3, 2003 1:39AM

<< Ok Deadhorse -- you're freakin' crazy!

>>

Thanks, I've given this alot of thought, my kids are grown, I make a very good income and I see very little downside with a possible tremendous upside.

In the last 18 months I'm up over 22%, but I will be able to more than double my holdings in this manner and I think it's the way to go.

No futures markets for me, just old fashioned bullion. Storage isn't an issue for me, so we will see. I'm having the papers drawn up as we speak and today I will sign off on the deal.

At the current prices, I believe gold is dirt cheap and silver is damn near free. Sometimes you just gotta go for it!!

wayneme · December 3, 2003 2:12AM

if you want to play gold or what ever the best play is options on a contract you only risk
what you put down
you can control a bunch for little money but time is not on your side
so buy near or in the money
the system will not melt down in the usa the goverment will not let it
this is a way to play the market and not get hurt but still play
after you earn some you can roll out and play with the earnings
these are just my thoughts
a guy works a long time to earn his house

cointagious · December 3, 2003 2:16AM

<< futures contracts are by far the most efficient way to trade metal... >>

superc-
options! fixed downside risk and virtually the same upside potential as futures.

baccaruda · December 3, 2003 2:25AM

Futures and Options are the same animal I think - and yes, they are the much better way to go. Holding a piece of paper rather than the actual metal kind of goes against everything a person believes in who would buy gold anyway - so I can understand it I guess.

Gold closed above $400...can the $400

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