Skip to comments.Gold hits $700 for first time since 1980
Posted on 05/09/2006 3:27:39 PM PDT by Capitalism2003
NEW YORK (Reuters) - U.S. benchmark gold futures scaled a new 25-year high at $700 an ounce on Tuesday, boosted by relentless investor buying powered by geopolitical concerns and expectations of further price gains ahead, dealers said.
By 11:30 a.m. EDT, June delivery gold on the New York Mercantile Exchange's COMEX division was up $20.10 or 2.9 percent at a session peak of $700, which marked the loftiest level for futures since September 1980.
Nope, no inflation here..
Move along now.
Why oh why didn't I buy silver at 4.50. I nearly did :(
Does that mean those stupid BUY-COIN commercials will freakin' stop already?
Clean mad for the muck called gold.
So if I bought gold in 1980 I just broke even.
Looks like a spike. Getting in here would be a tremendous gamble.
It's not too late to pick up a little...
However, the hype on TV and the internet gives me pause. It reminds me of the net stock mania in 1999.
If there is ever a financial collapse, food and bullets will be worth more than gold.
If you bought gold at the top of the market, you won't break even until $850 as I recall.
But if the person who bought gold at $850 in 1980 and somehow managed to sell it at breakeven today would have sustained a loss because gold hasn't even kept up with inflation.
That $850 oz. of gold would have to sell for about $2200 today in order to recover the real value of the original $850.
I bought my niece a Golden Eagle around May for graduating from college. It was about $420 then. Should have picked one up for myself.
Does this mean that if I bought gold in 1981 that I can finally sell and make dollars (*not* adjusted for inflation)?
A better bet would have been buying my house in 1981, which would have gained 500% or so by now. About the same for buying a DOW index fund.
Over the long term, gold is a lousy bet. Unlike real estate, which has already all been discovered, gold is still being discovered daily. The higher it goes, the more they'll dig, limiting how much it can go up. And as gold recovery gets more efficient, gold could actually decline in price (as it has in real terms), till the point we've mined the whole earth.
Yep and they are in China and India and have more money to spend these days....and they are buying it up....as well as are their governments...
Question is are their governments selling off their FRNs reserves to buy gold and other metals?
Over the long term, gold is a lousy bet.
Especially if times got REALLY bad - like 1930s bad -and the gov't seizes your gold again!
No. NFW. When the stock market had gone so crazy that commodities brokers started advertising ("Do you know how much you could make if wheat were to rise by just ten cents?") on The Howard Stern Show, I knew the end was near.
I was wrong. That was in 1997.
I don't understand. Could you say more about why the gold price means that the dollar is doing well?
At the current prices, gold is already a lousy bet. It's real value was exceeded after gold passed $550. After that point, gold purchasing became purely speculative.
It is out of balance with reality, and will crash hard when the conditions propping it up disappear. Primarily, the Chinese economic expansion. If anything should happen to cause a crash over there, the floor under gold prices will drop out.
Could you rephrase that? Your statement is true, it meets the definition of "information", but that's all.
Are you claiming Tokyo market has not seen similiar change when priced by the Yen?
I still remember my roommate in grad school during the Iran hostage rescue disaster. He was completely into money, and when he awoke the morning of the debacle and I told him what was being reported on the news, his first words were, "BUY GOLD!"
I told people to start buying gold when it was near 300 an ounce. I'm not a genius, but you could see with steady rising oil prices that it would eventually spike up. Now though, is difficult to call. On the radio today was a statement that gas is likely to fall 75 cents a gallon by Labor Day. If true, that should let some air out of Gold. However, we will still have some inflationary effects, and there is still the tension in Iran. What to do, what to do. So I will boldly predict, uh, something may or may not happen to affect the price of gold in the next few months.
The price of gold is at least partly based on confidence in the stability of the USA. That must be dwindling.
It's almost entirely being driven by young men in Asia looking to...ahem...score. Apparently, the female desire for shiny adornments is cross-cultural.
There hasn't been a significant increase in supply, but (legitimate as opposed to speculative) demand has skyrocketed. Supply will probably expand in the coming year as mining operations ramp up, and that means (a) prices will stabilize, and (b) there will be a LOT of hucksters shouting "BUY GOLD!" in a last squeezing of the grapes...
Hell, it reminds me of the gold mania of 1980-81. But we're not supposed to notice that.
Thank you. I'm amazed it took 13 posts to make that point.
Supply and demand are in play here, because a lot of young men across Asia (a) now have money in their pockets, (b) are courting the affections of various young ladies, and (c) discovering that sweet young things tend to like receiving shiny adornments.
The worldwide demand for jewelry has simply skyrocketed in the past couple of years, and the remaining slack in supply has now been taken up.
Why $550 ? What do you mean by real value ?
There are a lot more people who think the gold buyers are panicking and laughing at them.
I think too many of them are listening to the "Buy Gold" commercials that are running rampant on all the radio talk shows.........
Generally, I never take financial advice from talk radio commercials.
I'm not invested either way, but I don't think the commodities market is even close to a top. There have been four commodities bull markets in the last 200 years. The average lenth of each of them was 14 years. Energy and metals have been going up since 2001. We are 5 years in with several more to go. You will know when we are close to a top when most people you know think that commodities only go up, just as they thought that stocks only go up before the crash in 2000. We will have a correction, but this commodities bull will not end until we see inflation adjusted new highs.
We had people here who thought that, when gold hit 400. And they thought that even more when gold hit 500. When gold hit 600 they were convinced they were the only sane ones left. Good to know they're still around.
re. gold & dollar relation.
Well, yes and no. The relationship is not causal, although it can be. In the case of today the simultaneous decrease in dollar exchanges and increase in gold are related only by circumstance. Besides, the dollar exchange drop is nowhere comparable to the gold/dollar increase.
Like oil, gold is up because of 1) demand in Asia; 2) insecurity in geopolitics. Were the dollar related to this, its value against other currencies would have dropped vastly more than it has. The dollar's recent drop v. the yen and the euro is more about expectation that the Fed will slow its interest increases, thereby making dollar holdings less attractive. However, as with the dollar drop of last year there's a limit. The problem is that things based in dollars are too valuable, especially US Treasuries and the U.S. stock markets. Investment in the U.S. remains the best quality investment in the world. There are higher returns elsewhere, but the U.S. stands as the global hedge.
Oil and gold prices reflect international consumption and international tensions. The dollar value is down due to the same, but the reality of U.S. economic and political strength keeps getting in the way of dollar bears who hope for a more drastic drop that would correlate to the gold/oil prices.
When investors wake up in xx months (place your bets here; I'm thinking early Autumn) and find that the world has not ended, both oil and gold will drop. The dollar probably won't change much either way.
You mean like Gold being the lead story night after night on the evning news ?
....or do you mean like people are lining up around the block to buy/sell Silver and Gold at jewelry stores and coin shops ?
.... or do you mean Gold and the DOW are getting comparable in price ?
I don't think we have reached a mania stage yet.
When talk radio commercials hype it ad nauseum, we've PASSED the mania stage.
Industry is already ramping up to dig up more gold, because at $550 an ounce digging it out of the ground is profitable. That's going to be its stabilization level.
I love gooooooooooooooooooold!
What is the POG in Euros?
I hate to ask a dumb question, but where is the best place
to sell an American Gold Eagle, if you wanted to cash
it in for $700? I paid around $275.
Exactly. Adjusted for inflation or measured against the Dow - you lost your arse!
Go to your local coin dealer.