Skip to comments.Gold & Silver Are Moving Higher… Much Higher! Says Analyst
Posted on 08/04/2011 8:57:51 AM PDT by SeekAndFind
Every day is a good day to buy gold of late. It's an intoxicating state of affairs for those of us who already own the barbaric metal, which is exactly the problem. Being inordinately giddy over an investment, what Tony Montana called "getting high on your own supply", generally ends quite poorly.
The question isn't so much whether or not gold has worked. It has. The question is if it's too late to enter or if this is a prudent time to take some profits. With the fundamentals widely understood, Breakout turned to technical analyst Peter Lee of UBS to give us the picture from the view of a chart analyst. His opinion isn't likely to sober up the bulls.
"Gold is headed higher," Lee says. "Gold is a great call. We don't think it's speculative at these current levels." Discounting for inflation Lee sees the most precious of metals heading into the $2,000's.
His view gets slightly more bullish, at least for a trade. "Historically the last move up on a commodity based rally is a parabolic move." Are we entering that portion of the gold rally now? Hard to say. Gold has moved away from it's trendline and moving average but hasn't done anything resembling the spectacular spike silver made in April. Since gold's rally started, notes Lee, gold has repeatedly tested its uptrends and moving averages and held every time, leading to ever rising moves. Lee isn't betting against it happening again.
Touching on Silver, Lee sees it consolidating its multi-year move in a range from the mid-30's to low-40's. He says these are your levels to watch for a short-term trade. But the long term outlook is for a big move higher, that eventually sees silver prices climbing to $100/oz.
(Excerpt) Read more at finance.yahoo.com ...
Where the top is is anybody's guess...
For patient investors just buy Gold now as far as Peter Lee is concerned.
Lee's bottom line: Buy gold on dips, or just about any day. Don't bother making it complicated by trying to do so in non-dollar denominated currencies (e.g. buying gold in Euros as a bet that the Euro will drop faster than the dollar). Buy the SPDR Gold Shares etf (GLD) for the liquidity.
Physical is the only way to go, IMO.
What about exchange-traded funds like GLD and SLV? It’s not always easy for the small investor to own physical gold and silver.
Have been buying physical gold and silver for the past 8 years.
Family and friends have told me they would like to invest in gold but can’t afford it. They don’t realize that physical gold is available in smaller amounts (1 gram, 2.5 grams, 5 grams, 10 grams, etc.). Haven’t purchased any gold recently, but believe there are several small gold refineries selling 1 gram of 24K gold, with assayers certificate for around $70 - $80 at present.
If the US were on the gold standard, how much would an ounce cost? I know it would be ridiculous, but I’m just curious.
See post #4.
“Lee’s bottom line: Buy gold on dips, or just about any day.”
“Just about any day” is right.
The huge and undeniable megatrend of the ongoing trashing of the dollar makes timing the purchase of PMs a relatively moot point.
Gold and silver physical, the REAL safe haven!
Thanks for that info, but how does one take a gram of gold to the supermarket to buy groceries? I’m just wondering about the relative ease of cashing in that gold vs. the selling of shares of GLD, which can be done in an instant through an online brokerage account.
If you take the 14T national debt and divide by the 288,000,000 ounces they say there is you get abt 49,000 dollars per oz.
But they just bumped the limit, so if you take 16.8T and do the math you get about 58,000 dollars per ounce.
And these numbers for debt are not counting the unfunded liabilities like SS, etc.
RE: Its not always easy for the small investor to own physical gold and silver
Why not? If you have the money to buy ETF GLD and SLV, what’s to stop you from buying physical?
APMEX, KITCO and GOLDLINE are just some of the places where physical gold and silver can be bought.
The purists don’t like those funds, they are backed by derivatives, not REAL gold or silver. In fact, the general opinion out there by purists is that these funds were made to draw off the pressure on the physical and keep the prices down.
If you wish to play the stock, just know that some people will be able to withdraw the physical from these funds, but that buyer will need a large stake in those stocks to do so. And when those large holders want THEIR physical, guess what happens to that stock? Down it goes.
Start with silver. Start small. Do it with a long term perspective. That is how I survived the brutal drop in 2008. We had bought in the summer, and down it went. We still have that physical.
Thanks. That’s even higher than I feared.
“Thanks for that info, but how does one take a gram of gold to the supermarket to buy groceries?”
Ok, I know you weren’t asking me, but I felt like I should answer. The Answer is: “You don’t....yet.” Using gold and silver is becoming more and more popular (6,000 years is hard to shake). In Utah, it is now recognized as legal tender, but for now, only U.S. minted gold and silver coins (Eagles). In Idaho, you can now pay your state taxes in silver (for sure) and gold (IIRC). Farmers in my area accept gold and silver at the farmer’s market (An ounce of silver will buy 3 weeks worth of baskets from one, and an ounce of gold will buy you one years’ worth of produce from the same farmer, as one example).
The fact is that the use of gold and silver as barter are steadily moving up, and for use as currency is on the uptrend. Now, that having been said, most do not buy precious metals for daily shopping, but the same can be said of ANY OTHER investment. Also, you can sell physical gold and silver at local shops, usually at spot or just under, but there are advantages to cash, debit and precious metals, and drawbacks to all.
But with a guaranteed loss in cash, and no certainty in an ETF (they’ve sold more than they’ve got), PM’s are the way some people wish to go. There’s inherent flaws in ALL currency, but people have gone to gold and silver for thousands of years for a reason (Men like women and women like shiny things). To each his own.
“...but how does one take a gram of gold to the supermarket to buy groceries?”
If it is going to be like Argentina, you don’t. You take it to the black market, or if things aren’t totally out of whack, you take it to the coin dealer and exchange it there.
The value is in the historical truth that when fiat money is losing value, gold and silver will keep theirs. The same amount of dollars will buy so much groceries today, will not buy those same groceries next year.
Bulliondirect.com (I have no affiliation), is also one of the best bullion dealers in my opinion (have worked with them), and are quite a bit less expensive than anyone I’ve found. If anyone happens to be interested, “Inflation.us” has a review of the major bullion dealers, here:
“The value is in the historical truth that when fiat money is losing value, gold and silver will keep theirs.”
Absolutely correct. I did a price comparison a few months ago. While dairy, meat, bread, etc. have doubled and tripled, so has silver in the same time (I don’t compare gold). The prices vary a little based on what you price and exactly when, but essentially the value of PM’s relative to other goods remains fairly constant, it’s the value of the dollar that is dropping.
You keep your physical PMs until THE DAY that you intend to buy something, go to an exchange, get the wheelbarrow full of paper dollars that your dime is worth, and go buy bread.
(WSJ article, no posting allowed.)
And I just bought on the dip in silver.
GLD and SLV claim to be physically backed but many in the know think they’re lying. I prefer DBS which is based solely on futures and I don’t have to worry about it. The problem with DBS is the way it’s taxed so I’m only in it in my Roth. Outside a Roth, create your own physical stash.
Taking profits? The problem is that gold is the only real money now. If you take profits, what do you put it in? USD, Swiss Francs, overseas equities, real estate (farmland?), ammo?
Another money metal is Pt which has been relatively flat.
Look at that volume spike just before noon!
PPT on the job? Dow off “only” 281 now.
If you have the money to buy GLD and SLV, DON'T!!! These are what as known as "paper gold" and "paper silver". Stay far, far away from these ETFs. Visit www.tfmetalsreport.com for the lowdown.
Hmmm, good question.
Took me a few minutes to formulate a response. Here it is:
Had to do some searching to find a refinery website. Visit: www.mygoldgram.com and look at the gold bars they sell. The bars come in a sealed case that is roughly the same size as a credit card. The case has a serial number and assayers certificate on it which confirms that it is indeed 1 gram (or whatever size/weight) of 99.99% pure gold.
If and when the dollar collapses and people are using gold and silver for commerce again, you are going to need small denominations of gold. At $1700/oz, a 1 oz. gold American Eagle coin is worth far more than a loaf of bread or an entire shopping cart of food. Personally, I don’t know anyone that spends $1700 in one trip to the grocery store. So, let’s say you go to the store and purchase $200 worth of groceries. How is the cashier supposed to give you your $1500 in change since neither you or the grocery store will accept paper money. Smaller denominations will be necessary. 1 gram of gold at current market price is worth $55. That is enough to buy groceries, or put gas in your car, etc. And trust me, if the dollar collapses and we go back to a gold standard and are using physical gold for commerce, people and businesses will accept that 1 gram of gold without hesitation.
Now, I don’t know if the dollar will collapse and that isn’t the reason I purchase gold. I purchase gold as means to protect my wealth (or what little wealth I have). I mainly purchase 1 oz. American Eagle coins and 1 oz. gold bars. I only offer the idea of 1, 2, 5, and 10 gram bars as a suggestion to people who cannot or do not believe they can afford spending $1700 for 1 oz of gold. The smaller sized bars are great for a small investor or somebody that is just getting started (which is what I did at first when it was relatively inexpensive 8 years ago). As things are now, the smaller bars can always be sold quickly at a pawn shop, on eBay, a jewelry store, or even resold back to a gold refinery.
Hope that makes sense. Sorry but I’ve been up all night working and need to get some sleep. Can’t really tell if what I said is sensical.
Dear FReepers in the know- my husband and I have a bit of cash set aside. Will it be worthless in a few years? Should we buy land with it? Gold? Silver? I’m sorry if I sound clueless but, you know, we just work and save our little dollars, but I don’t want to turn around one day and it’s gonna be worthless.
Gold and silver aren’t really worth more, your dollar just buys less.
Thanks for the response. A lot of good information there. I will look into it.
I was refering to the gold chart In Yo-Yo’s WSJ link.
Retired, but in the same boat. Asset preservation with decent liquidity is becoming a tough thing to find.
Maybe not gold, but silver coins are readily available to even the small investor. Gold coins come in pretty small deniminations too, like 1/10 ounce (I think).
The ETF’s are probably fine...maybe I’m too paranoid.
What about our SEP and IRA accounts? What are the options? Thanks.
Swiss America can put your IRA or other “qualified” funds into physical gold.
Now, since they are qualified funds, you MAY NOT take delivery of the physical metal, they must hold it for you.
It gives you the inflation hedge against this bunch crashing the dollar, but if you think the system is going to collapse to the point that you’ll not be able to recover those assets from the investment company,
you might as well take the hit on taxes, take the distribution, and buy the metal yourself.
Don’t use/abuse gold like that. Just use junk silver (pre 1964 dimes and quarters, which are 90% silver) for buying food, small ticket items, etc.
Find a coin dealer in your area that buys and sells ‘junk’ silver. Most buy and sell very used coins based on their silver content. These are coins pre-1964, most of which were 80% silver. Do your homework as to what a silver coin is worth in terms it’s silver value rather than it’s face value. (Factor in sales tax if your dealer charges it)
A website that helped me understand things better in the beginning was;
Hope this helps.
BTW, you may not be able to buy groceries with a krugerand, But most will know a real siver dime when they see one.
I do have problems with the idea of owning precious metals in an account (that is, in your IRA) that is really partnered with the US Government. The feds could change the rules on your IRA, confiscating it and converting its assets into an account invested in risky and worthless US T-bills. Such a risk is known as a counter party risk. I don't trust the feds. Best to own your PMs outside of an IRA, so you own it free and clear. Best also to have physical possession of it, as well. Don't store it in a safe deposit box. Hide it in a safe place, in YOUR possession. Hope this helps.
Stay away from those Buggers, some that promote themselves as Gold and Metal funds, don’t even own any metal. If you are going to get into the metal market, take delivery of the physical metal, don’t rely on someone else to store it for you.
Just called my local coin supplier, no soap, he has no Gold or Silver coins, he has some 100 oz and 1000 oz silver bars but no small coins, also bullion silver, such as pre 1964 dimes quarters and halves are harder to find than hen’s teeth Check Grand Pa, he might have some gold or silver teeth you could sneak away from him.
Yes, of course not.
The only way I would ever use gold for food, gas, etc., is if it was all I had available to me.
“Historically the last move up on a commodity based rally is a parabolic move.” Are we entering that portion of the gold rally now? Hard to say.
Gold is up about 15% per year for the last 10 years. Some years more, some less.
Parabolic is like in 1979-80: A new record high, followed by quadrupling in price in 1-1/2 years, including a 25% rise in the final two weeks.
Which has no relation whatsoever to the current run—up, even the recent faster run-up that has a number of similar counterparts during the 10-year bull.
there are several small gold refineries selling 1 gram of 24K gold, with assayers certificate for around $70 - $80 at present
Much wiser is to buy silver if you can’t scrape together a few thousand a year to buy a one ounce coin, or to buy 1/10th ounce coins.
gainesvillecoins.com has low prices on surprisingly small quantities.
If the US were on the gold standard, how much would an ounce cost?
They seems good. gainesvillecoins.com beats them on price by a little bit, and are excellent to work with. If you’re spending five figures at a time, tulving.com is the best.
How is the cashier supposed to give you your $1500 in change since neither you or the grocery store will accept paper money?
Civilization has mastered this millennia ago. It’s not rocket science.
Dear FReepers in the know- my husband and I have a bit of cash set aside. Will it be worthless in a few years? Should we buy land with it? Gold? Silver? Im sorry if I sound clueless but, you know, we just work and save our little dollars, but I dont want to turn around one day and its gonna be worthless.
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