If the price goes down a few hundred bucks per ounce then I hope the Fed creates some more money out of thin air to buy gold. That will keep the price up, and if there's a finical crisis in the future they can sell the gold then. Interesting how the Fed can seemingly create gold out of thin air. Of course, central banks have been doing that for a long time.
Gold has dropped over $65 an ounce and is under $1,500 as of 11:30 am eastern time today. Maybe the article I posted yesterday is valid, or maybe the article itself is causing the selloff.
I was watching Fox business and a while ago they were saying the best historical indicator is that the market has a long ways to go yet. Of course, if I believed that 100% I would sell off all my other investments and buy stocks. Not going to do that, but I have invested more in stocks just in case the market goes way up.
It could be that investors (not doomsday preppers) see stocks going up for a while yet and they are selling off gold to take advantage of the trend. If so, then gold could be headed down and if we get into panic selling it could go under $1,000 an ounce. Fear works both ways and it's a more powerful motivator than greed.
My personal opinion is that our Federal Reserve is nearing the end of their easy money, low interest rate policies of the past few years. Sometime over the course of the next 12 months I believe we will see interest rates start to rise. Since gold pays no interest or dividends, I think it will have a difficult time competing with rising rates. Could the sell off in gold now be a precursor to rising rates? I believe so, as any investment market is a discounting mechanism for future events.
If the price goes down a few hundred bucks per ounce then I hope the Fed creates some more money out of thin air to buy gold. That will keep the price up, and if there's a finical crisis in the future they can sell the gold then. Interesting how the Fed can seemingly create gold out of thin air. Of course, central banks have been doing that for a long time.
Who wants it to go up? This was engineered because the central banks wanted to add more gold to their inventories at fire sale prices before the dollar collapses. The smart folks are taking advantage. It won't last long.
Yea, but shiny metal or green ass wipe - take your pick.
rather silly to think that you have just 2 choices.
Shiny metal is just that.. shiny metal. As much as the gold bugs want it to be more.. they are left with shiny metal. There is no guarantee that people will barter for shiny metal. Food, medical supplies, skills, protection.. people will all barter for those.
If the price goes down a few hundred bucks per ounce then I hope the Fed creates some more money out of thin air to buy gold. That will keep the price up, and if there's a finical crisis in the future they can sell the gold then. Interesting how the Fed can seemingly create gold out of thin air. Of course, central banks have been doing that for a long time.
Who wants it to go up? This was engineered because the central banks wanted to add more gold to their inventories at fire sale prices before the dollar collapses. The smart folks are taking advantage. It won't last long.
That's Al Gore logic. If it gets cold it proves global warming, if the dollar strengthens against gold it proves the dollar is ready to collapse.
Yes smart folks are going to take advantage once gold hits bottom and they'll be able to buy a lot more of it because they didn't buy when gold was over $1,700 as some on 24hr were advising.
Half of the price of gold is a fear premium, which has been coming out of the price in the last few weeks as the stock market rally continued. As gold drops below key levels it triggers automatic selling, which drives the price lower. Now fear is running the other way and investors are getting out to avoid a blood bath, which drives the price down more and increases the panic.
The best bet to stop the decline in gold prices is if NK launches a missile or some other conflict erupts that threatens world trade and economic activity.
The fact that the USD index hasn't really moved today supports your comments about the fear premium. TRH is far off the mark in his analysis of what is happening and why.
Longbob and MacLorry, it's evident you both are students of the game.
my take is the US$ is the prettiest of the ugly sisters, it seems to me the US$ could strengthen for some time to come as folks look for "safe haven" status.
but is being in US$ a good move? does the FED buying have no effect upon what a greenback is worth at some point?
buy low sell high is a pretty easy concept, but a mite harder in actual application from my experience
it seems the US$ is a very good place to be currently aka cash is king
but is it a smart move for the long haul, is supply vs. demand an outdated concept?
it seems to me the FED is vastly increasing the supply, but demand is as strong as it's been in some time.
if you can help a poor old country boy understand these simple concepts I'd be much obliged.
mind you I'm not asking for free investment advice, I'm just curious as to how and why the dollar is in such great shape considering the actions of the FED
Supply and demand is never an outdated concept. The US isn't alone in the printing of their currency. The gold bugs that I have seen on here seem to forget that factoid. What is also lost in the mix is the improving balance of payments with our burgeoning energy boom. I am not saying this is going to bring down energy prices, but it will change the economics and fear premium (for the US at least) for years to come.
There will be some point down the road where the Fed will indicate they are either slowing down or stopping the QEs. I wouldn't want to be holding gold when that happens.
You are correct that the US had become a "safe haven" and this helped the greenback when Europe went into their troubles like we had. That strengthened the dollar. Now we have the domestic energy play helping.
Get ready for China's implosion to further help the dollar as they seek a safe haven for capital. I bet there are some serious discussions going on behind the Fed doors that they will ease up on the purchase of bonds and let the Chinese do it. This will be a quiet form of backing off the latest QE.
And who gives a flip if the Chinese own a bunch of our debt. We OWE them the money. Not the other way around. That is not to be construed as me supporting us being in debt, but the old saying goes "If you owe the bank a little money then you have a problem. If you owe the bank a lot of money then they have a problem."
I bailed out of the mutual fund "Permanent Portfolio" on Friday. This fund is comprised of a mix of gold, silver and Swiss Franks, US treasuries and some high grade equities. I was just getting a bad feeling about the direction of gold and treasuries as interest rates rise.
Gold bugs thrive on a sense of panic to push their view that gold is the safest investment of all. But who�s panicking now?
On Monday gold saw its biggest decline in 30 years as institutional investors, mostly mutual funds and the like, dumped the precious metal like a load of dirt.
And hedge funds have reportedly been betting on a gold decline for months, foreshadowing the steep decline of the past few days
�It�s difficult to say with gold what the actual value is. It�s not an industrial-based commodity. It�s worth what people say it�s worth,� Schork said.
�There�s blood in the water,� said Schork.
Blood in the water is usually a buy signal, but I want to wait for the market to find the bottom. Better to buy at a little higher price on the rebound than to jump in too early and become part of the blood bath.
Longbob I have stayed out of these gold conversations (and most other conversations tbh) but I think I have noticed some of the same things you have.
Trouble is that China is so opaque and bereft of good data that it will be impossible to tell if that is the source of this or not for a while. If ever. Still it kind of looks like Asia is the source of this latest round of risk off and China in particular. Looks like you have a lot of folks worried if China's thirst for commodities might be played out for a while. They may have finally cracked just a bit.
Add to that the extraordinary number of gold investors in the market for all the wrong reasons... well it kind of got messy in a hurry.
I don't particularly like conspiracy theories and this time is no different. The Fed may indeed hold a lot of gold but this time there isn't just a pump/dump in one category. Gold and silver and oil are all taking a beating back of the woodshed. At lest to me that implies that this one is a bit different.
The metals selling websites are all crashing and burning with the number of folks clamoring to buy. Their servers can't handle the volume.
I am surprised you can hear that over the screams of the knife catchers who have bought every dip on the way down.
Ah well, they aren't alone. Been a whole lot of folks who ~finally~ backed the truck up and loaded down in stocks. 4 years into a historical bull market. With landmines going off all over the globe. And conflicting economic indicators flashing green and red all over the place.
When you have a market this dependent on Fed largesse it is VERY tough to find a safe place to hide.
if you know of a safe place to invest would love to know. I got out of the market at 14000 and stop buying gold at $1300. Sold off gold last December.
So much contradictory info, misinformation out there now very difficult to find a place to put investments.
Originally Posted by Penguin
Originally Posted by The_Real_Hawkeye
The metals selling websites are all crashing and burning with the number of folks clamoring to buy. Their servers can't handle the volume.
I am surprised you can hear that over the screams of the knife catchers who have bought every dip on the way down.
Ah well, they aren't alone. Been a whole lot of folks who ~finally~ backed the truck up and loaded down in stocks. 4 years into a historical bull market. With landmines going off all over the globe. And conflicting economic indicators flashing green and red all over the place.
When you have a market this dependent on Fed largesse it is VERY tough to find a safe place to hide.
if you know of a safe place to invest would love to know...
I'll make you a deal, if I find one I'll let you know about it.
I've made some terrible investing mistakes in the last several years. I got out of the stock market right before the crash in 2008. (Very good move)... but then I stayed in bonds. (Not a good move) I continued to buy stocks with fresh money from the crash onward (Good job) and even took a good bit of the gains off the table when the all time highs came in. (Great job) But I left a lot of it on the table. (Bad move!!!) Went long energy in 2008. (Good job) But also invested in alt energy (Shakes head sadly)
I guess I am a lot like quite a few folks. Sometimes I do smart things and sometimes I do dumb things. The crash in 2008 and the housing bubble bust were so easy to see it was scary. Now? An absolutely unprecedented market.
Long term I still believe gold will be a good investment. But IF this is a symptom of bad things in foreign lands taking shape I have to remember what happened to gold the last time we had a serious market correction/crash. Gold wasn't immune, it was tanking like everything else.
Maybe I am just a cautious person? I'm sure as hell not someone who could sell investment advice.
You can put me on that need to know list , if you would, Penguin.
+1
I went into a stable value fund around DOW 14000 after catching a 5% gain in January, missed the last 800 point run up. I'm waiting to re-enter stocks, but I'll be patient. If I catch another 5% this year I'll be ecstatic .... .
You can put me on that need to know list , if you would, Penguin.
Will do... man talk about waiting for a horse to come in.
I guess one of the biggest lessons I have learned in investing may not be applicable to anyone but me. It is this: I have a certain personality and for me to have any peace of mind I have to stay within the bounds that my personality is comfortable with.
I am so cautious with money that it just isn't in my nature to take huge gambles and when my Spidey sense goes off I follow it. Sometimes I win and sometimes I don't but I never forget my planned retirement age. Never beat them in the quarter mile.
If you are looking for a safe haven then you truly have to define what you mean by safe haven. Safe can mean liquidity, stability, inflation protection, etc.... Those things can be independent of each other.
I feel a better approach to investing is that each and every investment you have must have a compelling reason to be in your portfolio. Whether it is any that I mentioned or say dividends for example. If the compelling reason you own an investment is for rising dividends then ask yourself in times of turmoil "Has the compelling reason changed?" If not, don't sell and maybe consider adding to the position.
If it has changed then you must figure out a way to unwind the position if it is not at a point of fortunate liquidation. You can bet that every investment that you own (or just about) will have a time of turmoil and these gut checks are important.
if you know of a safe place to invest would love to know. I got out of the market at 14000 and stop buying gold at $1300. Sold off gold last December.
So much contradictory info, misinformation out there now very difficult to find a place to put investments.
There is no ONE safe place to put your money. I invest in TIPS, muni-bonds, and stocks. All my investments pay dividends, some each month, some each quarter, some at the end of the year. Today with the stock market down sharply I'll lose money on stocks, but the increase in TIPS will more than likely cover the loss and I'll have an overall gain for the day. I make money on the dividends while the value of different types of investments seesaws back and forth.
I buy and sell as investments rebound off the bottom or ricochet off the top. Think of it as a ratchet system that climbs the wealth tree. The bigger the waves the faster it climbs.
Yes, it takes some work to know what to do and when, and you have to keep an eye on what the Fed is planning so you don't get caught invested in the wrong thing at the wrong time.
Be cautious on the TIPS. There are two components to TIPS. The interest rate and the inflation adjustment. Since there are two, then the interest rate is very low.
This low rate causes the TIPS to have an unusually long duration. What they don't tell you about TIPS is that a rising interest rate environment to combat inflation will crush the TIPS value due to the long duration.
You should be good on the muni bonds for a while depending on issuer.
Yes, there's risk in TIPS, but I have made a load of money in them. The trick, as with any investment, is to know when to buy and sell. The good news with TIPS is that the Fed gives lots of warning as to what will trigger it to move one way or the other.
The Fed mainly controls the short end of the market. They cannot control a more normalized yield curve on the longer end as easily. That is what can sneak up on the TIPS.
The yield is so low on TIPS that there's little downside risk from that aspect. TIPS are being used as a safe-haven when stocks are in retreat, like today. Unlike gold, there's no built-in spread between the buy and sell price of TIPS and if you hold them through a mutual fund, they pay dividends.
The yield is so low on TIPS that there's little downside risk from that aspect. TIPS are being used as a safe-haven when stocks are in retreat, like today. Unlike gold, there's no built-in spread between the buy and sell price of TIPS and if you hold them through a mutual fund, they pay dividends.
The trick will be to sell them at the right time.
The yield being so low is exactly why there is a risk of downside in rising interest rates. The low rate creates an unusually long duration. Long duration bonds react inversely to interest rates.
It really starts at about the 2:45 mark. The interviewer brings up the ability to get out of them quickly if needed. You can see the manager's hesitation of even he being able to do it in a timely fashion.
I realize you have done well in the TIPS and you should have with the longer duration favoring them with lowering rates. My comments about caution is when rates rise due to inflation. That is what can take the TIPS investors by surprise.
I think I believe MacLorry's experience over yours.
Don't trust me. Do what I did. Call them and ask why the online process that's normally smooth is constantly crashing during the sale process. They'll tell you it's heavy volume. Then try getting an agent on the phone, or even getting one to call you back. Same deal. Unusually heavy sales volume is the reason they'll tell you.
For every boom there is a bust, this sort of thing goes on all the time, The real question is when the Bloom comes off the Chinese Rose, were is the prices of a lot of commodities are going to decline. Look what has happened with ammo, their has been a lot of panic buying you could almost say ammo has become a commodity of sore something that can be traded for other goods and services. At some point its going to go bust, these things always do. Its the herd mentality, get people to panic, and in a panic people tend not to make good decisions. Lest face it with gold you had a lot of heavy advertising to buy it because of well you can name any issue you want. Gold will end up were the market place wants it. So you are fine right now if you bought all your gold at 200 an oz, you are not if you bought your gold at 1800 an oz. Its sort of like what happened with silver in the 1980's when a couple of Texans tried to corner the market. They dam near when bankrupt as I recall.
Only problem is gold prices haven't been in a boom. They've been a simple mathematical response to expanding currency supply. What's happening now is emotion-driven. Eventually, reality sets back in, however.
I think I believe MacLorry's experience over yours.
Don't trust me. Do what I did. Call them and ask why the online process that's normally smooth is constantly crashing during the sale process. They'll tell you it's heavy volume. Then try getting an agent on the phone, or even getting one to call you back. Same deal. Unusually heavy sales volume is the reason they'll tell you.
I am sure it is heavy volume due to sale. You said "The metals selling websites are all crashing and burning with the number of folks clamoring to buy."
The markets today say there weren't enough buyers in case you missed it.
I still believe MacLorry over you. He is reasoned, intelligent, and has a clue.
I think I believe MacLorry's experience over yours.
Don't trust me. Do what I did. Call them and ask why the online process that's normally smooth is constantly crashing during the sale process. They'll tell you it's heavy volume. Then try getting an agent on the phone, or even getting one to call you back. Same deal. Unusually heavy sales volume is the reason they'll tell you.
I am sure it is heavy volume due to sale. You said "The metals selling websites are all crashing and burning with the number of folks clamoring to buy."
Very funny. The selling was being done by the sites. Folks crashing the systems were trying to pick up bargains.
The yield is so low on TIPS that there's little downside risk from that aspect. TIPS are being used as a safe-haven when stocks are in retreat, like today. Unlike gold, there's no built-in spread between the buy and sell price of TIPS and if you hold them through a mutual fund, they pay dividends.
The trick will be to sell them at the right time.
The yield being so low is exactly why there is a risk of downside in rising interest rates. The low rate creates an unusually long duration. Long duration bonds react inversely to interest rates.
It really starts at about the 2:45 mark. The interviewer brings up the ability to get out of them quickly if needed. You can see the manager's hesitation of even he being able to do it in a timely fashion.
I realize you have done well in the TIPS and you should have with the longer duration favoring them with lowering rates. My comments about caution is when rates rise due to inflation. That is what can take the TIPS investors by surprise.
Thanks for the info. Like I said the trick will be to sell them at the right time.
if you know of a safe place to invest would love to know. I got out of the market at 14000 and stop buying gold at $1300. Sold off gold last December
Here is my recommendation. . . . can't recommend it enough. Very safe. Max you can lose on any single stock pick is 7-8%. Gains are unlimited but recommended to be take at 20-25%.
In overseas trading Tuesday gold prices rebounded by 1.2%. We'll see what happens today and if the US markets tick up it might signal some sort of bottom has been reached.
Up sixty-two dollars so far this morning. I hope you all took advantage of yesterday's one day fire sale. I sure stocked up. You can bet the central banks did, too.
Up sixty-two dollars so far this morning. I hope you all took advantage of yesterday's one day fire sale. I sure stocked up. You can bet the central banks did, too.
By the time the stock market closed today gold was up just $12.52 from yesterday's historic fall. Given the DJIA recovered more than half its loss today, I'm cautious about buying gold at this time.
I know there's lots of speculation as to why gold has been on the decline since its 4th quarter 2012 level, but historically investors move money to where they get the best return for a given level of risk. If that's what's driving the price of gold then if the stock market rally continues gold's drop will continue. Seeing the stock market rising is likely what turned the price of gold back down from earlier highs today.
I'm not sure "buy now or be priced out forever" is going to work this time around for gold.
But eventually it will be the US' turn at the devaluation trough and gold will shine again. Trouble is Japan jumped into the trough with both feet a few weeks ago, China looks like they are cracking and need to do likewise, and Europe looks like they are next in line. May be a long wait till we get our chance again.
Up $33.00 since yesterday's close at this point. Early morning buying drove it up to $60.00+. Bargain seekers got their buys in, then it dropped, but still up $33.00. But this short term stuff is pretty meaningless in the big picture, as was yesterday and Friday.
If the price goes down a few hundred bucks per ounce then I hope the Fed creates some more money out of thin air to buy gold. That will keep the price up, and if there's a finical crisis in the future they can sell the gold then. Interesting how the Fed can seemingly create gold out of thin air. Of course, central banks have been doing that for a long time.
I'm not sure "buy now or be priced out forever" is going to work this time around for gold.
But eventually it will be the US' turn at the devaluation trough and gold will shine again. Trouble is Japan jumped into the trough with both feet a few weeks ago, China looks like they are cracking and need to do likewise, and Europe looks like they are next in line. May be a long wait till we get our chance again.
Will, DW12 has a very interesting report by a silver/ gold 'expert' on pp3 of the thread "Re gold FMV at $800". It's a little long, but the last part is talking about the shut down of some of the US largest gold/ silver mines. Barrack gold ownership in question and the other suffering landslides and closing. I will re-check and more accurately explain.
Like I posted yesterday, yes gold will eventually go over $5,000 an ounce if the Fed just holds inflation at their target of 2 to 2.5% per year. Of course, everything will increase in price as well.
Predictions without time frames are worthless. As an example, I predict the price of gold will drop to zero in the future. Prove me wrong. If humans cease to exist there's no market and with no market nothing has value because value is a human concept not found in nature.
please remember, if bankruptcies occur, money is destroyed. so, it's a balancing game....create money to replace money that is destroyed,as the "dance" occurs around the rose bush.
This Silver Doctors, a specialist in the metals markets says this drop in metals is to help banks pick up metals cheap and that the Comex and Lbma will be closed real soon after an impending financial event and no more buying of gold or silver will be allowed. They steps are taking place to shut down future production. Bill Holter , a metals specialist says Barrack res. big buy of the giant mine co.Pescua (sp) Lama due to' unclear title' is on hold.
He also reports that the kennecott giant copper mine which produces a lot of gold and silver is 'closing due to landslides'.
What i want to know is: If the economy is so bad like it has been why has gold stayed below 1700?
Just seems that if it was such a good hedge it would be higher.
They can lower the price at will by flooding the market with "paper gold and silver." It creates the illusion of more gold and silver than there really is, thus lowering the price. This, however, can only be carried on so far.
What i want to know is: If the economy is so bad like it has been why has gold stayed below 1700?
Just seems that if it was such a good hedge it would be higher.
They can lower the price at will by flooding the market with "paper gold and silver." It creates the illusion of more gold and silver than there really is, thus lowering the price. This, however, can only be carried on so far.
Professional investors don't deal in physical gold mainly because of the buy/sell spread. Rather, they deal in securities tied to gold. Nevertheless, these instruments set the market price of gold no different than if it were physical gold. Try selling your physical gold for anything above the "market price" and you'll get laughed at.
So if the big crash comes in our lifetimes how much will gold be worth? Answer, there won't be a fixed price. If you're starving to death how much gold would you give for food? If you need to defend yourself how much gold would you give for a gun or ammo? Being it has little use in such a scenario, no one is going to show up at your door desperate to trade goods for your gold.
Because a lot of folks are a hell of a lot less worried about inflation when the central bank starts talking about coming off of their bond buying spree? That's as good of a guess as I have.
Unless we do something monumentally stupid (like lifting the restriction on crude exportation) I look for the dollar to have a lot more strength until this round of massive oil drilling investment plays out. There's a lot of domestic oil production that is helping to put a floor under the dollar (in my very amateurish opinion). This will take a while to run through.
Barring calamity I can't see gold breaking out with the Fed backing off(so they say), domestic oil production adding strength to the dollar, and the rest of the world in serious financial trouble.
It would be nice to be able to buy it at bargain basement prices. It's folks like yourself that create conditions for these sell-offs, for which I'm grateful. Market reality, however, will ultimately not be cheated. You can't continue to double and triple the fiat currency supply without the long-term price of real commodities rising, particularly a commodity like gold.
Wow, gold is now down to $1,276. Your analysis is as good as anyone else's that I've seen. I sold off last week and will likely stay out of the market until the Fed decides what it's going to do. Problems is that given their dual mandate the Fed can't predict what the Fed will do.
It would be nice to be able to buy it at bargain basement prices. It's folks like yourself that create conditions for these sell-offs, for which I'm grateful.
You're welcome.
Originally Posted by The Real Hawkeye
Market reality, however, will ultimately not be cheated. You can't continue to double and triple the fiat currency supply without the long-term price of real commodities rising, particularly a commodity like gold.
If by long term you mean more than 10 years the economy will adjust without too much disruption. Consider the inflation of the 70's and early 80's as an example.
For as long as the government keeps printing money, we'll have these back and forth discussions. It'll be two years before we can really have a handle on which way things will go. In the meanwhile, everything will be up and down prompting further guessing as to who's on the mark.
In the meanwhile, secure and protect whatever your investment vehicle might be. Those that do will be on the mark.
I thank the financial Gods I bought real estate in this area. I wish my clients could pay in cash.
Wow, gold is now down to $1,276. Your analysis is as good as anyone else's that I've seen...
Yeah when it comes to explaining what has already happened in the market it seems like all of us can come up with something. Ask us to predict next week and we all suck equally.
Gold had its run. I think it will have another one though it may be a while coming. But it is so responsive to politics and the central bank that predicting how it will move long term means predicting how the political system and the Federal Reserve are going to behave long term... not easy to do!
One thing I believe would be good for all of us who are investing for retirement/future is to take this as a great opportunity to examine who we listen to and what their track record is. There are a TON of people who bought into the gold rally late and/or also completely missed the rally in the stock market. And there are a ton more who are sitting around waiting for a hyperinflationary event that just ain't in the cards (I'm looking at you Peter Schiff!).
After a while being early is just plain being wrong. There need to be consequences for those who misguide you just like there are consequences to your portfolio for listening to them. Just a thought.
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