I love gooooooooooooooooooold!
Posted on 05/09/2006 3:27:39 PM PDT by Capitalism2003
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.
WOW ! Paid radio commercials. You know I have seen a couple of TV commercials too.
Is Gold on the cover of Newsweek or Business Week ? Are people at the water cooler talking about Gold ? These are signs of a mania.... not radio commercials.
Industry is already ramping up to dig up more gold, because at $550 an ounce digging it out of the ground is profitable.
It takes on average 6-7 years to go from discovery to digging out of the ground. The industry will not be bringing large new supplies online for several more years.
A lot of mines were simply shut down, no need for discovery. They're ramping up for 2007 delivery.
Real value is what I consider the value to be minus the effects of speculation.
I place my opinion of what the real value is at something lower than the speculators.
In my opinion, the real value represents the most likely price the commodity will settle at when balance is restored to the market through natural, free market forces. Such as when the effects of the current prices begin to affect consumption.
It is not a reference to a Marxist concept or older economic concept of real or intrinsic value. Value is ultimately decided by the consumer, and prices are set according to demand and supply concerns.
Examples of the phenomena of real, or I guess a better term might be "normal" value, is evident all around us. At the moment, the supply of money chasing the supply gold is high, but this is not a normal state. Gold is also not a static resource, and eventually conditions will change and the price of gold will drop because the conditions which led to the rise in price aren't permanent. The conditions leading to the rise in price are in my opinion unsustainable. When the buying frenzy is over, there will be a lot of people holding onto gold that won't be valued equal to the price they bought it at for a long while.
Leastwise, that's my opinion.
Sorry, I misread your original post. I read "going down pretty good" as "going pretty good." Oops.
Thanks!
eBay...you will be able to get about the spot price after fees and shipping.
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