Is GOLD still a good choice?

[Mega]

Is Gold still THE choice for beating inflation or is it now past its best?
Mega

[Tulpen]

Re: Is GOLD still a good choice?

No one obviously knows the future.

My guess however is that gold is in a bubble. Too many people think that gold is the best way to hedge the short and midterm future, too many people think that it's a straight path to $1000 then $2000 and then the moon.

I believe oil will collapse once the reality of recession kicks in and with oil gold will collapse as well.

[metalman]

Re: Is GOLD still a good choice?

No one obviously knows the future.

My guess however is that gold is in a bubble. Too many people think that gold is the best way to hedge the short and midterm future, too many people think that it's a straight path to $1000 then $2000 and then the moon.

I believe oil will collapse once the reality of recession kicks in and with oil gold will collapse as well.

obviously i'm biased, but i've been hearing that same argument since 2003 when gold was 350, then 450, 550, 650, 750...

some day the argument will be correct... when the reason for the rise is no longer true: that currency depreciation as a prime method to reflate the credit bubble is over. rather, looks to me like it's off to a whole new round.

remember, gold was flat for a year until august 07. what happened then?

[GRG55]

Re: Is GOLD still a good choice?

Is Gold still THE choice for beating inflation or is it now past its best?
Mega

Have a look at a very long term chart of gold (you probably already have!). It's not even back to the same nominal level it was at 27 years ago. When it's 2 or 3 times the last high, then maybe I'll start thinking it's overvalued. :p

By the way, I heard all the same stuff about oil all the way up. The grossly overpaid Wall St. analysts are absolutely THE worst forecasters of these markets.

[metalman]

Re: Is GOLD still a good choice?

Have a look at a very long term chart of gold (you probably already have!). It's not even back to the same nominal level it was at 27 years ago. When it's 2 or 3 times the last high, then maybe I'll start thinking it's overvalued. :p

By the way, I heard all the same stuff about oil all the way up. The grossly overpaid Wall St. analysts are absolutely THE worst forecasters of these markets.

amen. google search: "what gold bubble?"

[Orforded]

Re: Is GOLD still a good choice?

Are you referring to US or global recession? If limited to US do you think that demand for oil from emerging economies, i.e. China and India will keep the price of oil up? Then if oil stays high despite US recession doesn't gold look like a good bet.

[Tulpen]

Re: Is GOLD still a good choice?

Are you referring to US or global recession? If limited to US do you think that demand for oil from emerging economies, i.e. China and India will keep the price of oil up? Then if oil stays high despite US recession doesn't gold look like a good bet.

I think that if there is a recession in the US the emerging economies will be hit hard as a consequence.

[Guest]

Re: Is GOLD still a good choice?

I think gold is great cause you can bury the stuff under a bush in your back yard, have it steadily grow in value, (if it's the right decade) and you get to starve the stock brokers of commissions all at the same time!

What could possibly be more satisfying? I want to see the stockbrokers looking all gaunt and emaciated, while my non-stock investments are plumping up. Then I'm happy.

[metalman]

Re: Is GOLD still a good choice?

I think gold is great cause you can bury the stuff under a bush in your back yard, have it steadily grow in value, (if it's the right decade) and you get to starve the stock brokers of commissions all at the same time!

What could possibly be more satisfying? I want to see the stockbrokers looking all gaunt and emaciated, while my non-stock investments are plumping up. Then I'm happy.

good exercise digging it up and burying it again. do it a dozen times a day.

as allie fox said in paul theroux's "mosquito coast " said when his son found him endlessly trying to start an outboard motor he found in the jungle,

"dad, why do you keep trying to start that? it has no spark plug in it?"

"it keeps me sane, son"

[GRG55]

Re: Is GOLD still a good choice?

No one obviously knows the future.

My guess however is that gold is in a bubble. Too many people think that gold is the best way to hedge the short and midterm future, too many people think that it's a straight path to $1000 then $2000 and then the moon.

I believe oil will collapse once the reality of recession kicks in and with oil gold will collapse as well.

Mine is not a very sophisticated analysis, but I would point out that nominal oil is now close to two and one-half times its previous high. Many base metals have seen similar behaviour. Gold, however, has not participated. I don't think there's a compelling case to link future price behaviour (next year or so) of gold and oil too tightly.

As to Mega's original question, there is no doubt that a decision to acquire gold today is more difficult than it was a few years ago. EJ has made this observation in a post elsewhere on the site, and its probably well worth digging that out and re-reading it.

[zoog]

Re: Is GOLD still a good choice?

Mine is not a very sophisticated analysis, but I would point out that nominal oil is now close to two and one-half times its previous high. Many base metals have seen similar behaviour. Gold, however, has not participated. I don't think there's a compelling case to link future price behaviour (next year or so) of gold and oil too tightly.

As to Mega's original question, there is no doubt that a decision to acquire gold today is more difficult than it was a few years ago. EJ has made this observation in a post elsewhere on the site, and its probably well worth digging that out and re-reading it.

Well, a couple weeks ago, the Mr. T Gold Indicator was showing a rare double sell signal...

http://www.minyanville.com/articles/index.php?a=15012

[santafe2]

Re: Is GOLD still a good choice?

Is Gold still THE choice for beating inflation or is it now past its best?

This year's large run-up in the price of gold, and oil for that matter, is as much a story about a weak US$ as it is about a strong gold market. In US$ terms, gold is up about 35%, but in Euro terms, gold is up about 20% this year, Canadian 15%. I would expect those trends to moderate next year which will put some price pressure on gold from a US perspective. But if you live in a country with an, up to now, stronger currency than the US, your chances in 2008 are likely better than they are here.

That said, the wild card for 2008 is the, now apparently world wide problem with the financial economy. If it creates a recession and and the CB's respond with yet more inflation, that's likely good for gold. If it creates a lot of fear, that's also good for gold long term. But for now, there is a lot of investment in gold as a short on the US$. If the dollar is really bottoming out for now, that should bring more sellers into the market.

I like gold long term but shorter term I don't think it's possible to tell if gold is consolidating here or if it will move down another 10-15% before rallying again. As much as the CBs might hate it, gold likely very far from its ultimate top.

[Mega]

Re: Is GOLD still a good choice?

This IS good info guys, just the way i read it. My feelings are that Gold will fall a bit, then rise then the US will go into a bad receesion. Oil will start to fall, then suddenly they suss that demand has hardly fallen.

at that point Oil/Gold etc will sail up.

Mega

[renewable]

Re: Is GOLD still a good choice?

It took Volker to give the dollar a good real rate of return to stop the last gold bull/bubble. It's hard to see Bernake doing the same. One of the central bankers must do so eventually, though :confused:

[touchring]

Re: Is GOLD still a good choice?

If the interest freeze plan does go through, what real rate of return can we expect for the dollar investments? If interest rate can be frozen, who wants to put money in?

At least physical gold can't be frozen.

It took Volker to give the dollar a good real rate of return to stop the last gold bull/bubble. It's hard to see Bernake doing the same. One of the central bankers must do so eventually, though :confused: