GOLD

Been in the stock market for 25+ years now, and have never seen such strange things as of late. That is the market dropping from -2% to nearly -10% in less than an hour, and then back again. And then today, I see the Nasdaq, down more than 5% while the S&P and Dow are down in the 1%+ range. What is going on here?

Gives me more impetus to buy gold. Gold is genuine, hard, there is no amount of BS that can change its' long term worth.

KHONDAHM wrote:

KHONDAHM wrote:If you wait a couple of weeks it may drop down to just under $1200 or so, but will rise again rather quickly if it does. Plan on holding it for a few months or longer to see any decent "profit" though.

Ok, we're in the dip. Prepare to buy.

May 21st, 2010 - 4:39 pm | by GoldAlert
Gold Prices

GOLD PRICE NEWS - The gold price declined $6.31 to $1,177.65 as the price of gold fell amid a continued rebound in the euro currency against the U.S. dollar. Over the past five days the gold price dropped $52.78, or 4.3%, capping off another tumultuous week on Wall Street.

time to buy??????

Heck yeah! Buy buy buy! The dip was profit taking in the Crimex (the manipulated paper gold market) by traders. A 4%+ off the high is a gift. It could dip another 1% or so, but it will spring back on negative news, find an equilibrium, then continue trending up again. We'll hit $1400+ before the year is out for sure. If one is aware of and understands the catalysts, it's a slam dunk.

im in luang prabang, laos. went to the china market today, there were a few jewelry shops that i had a look at as i wanted to purchase a gold bracelet, i spotted one that took my fancy, the chinese lady didnt speak much english except for (ok).. she weighed the bracelet that came up as 13.2g, so now i wanted to know the purity of the gold so i asked the lady this (as easy as i could for her to understand), weres the hallmark / stamp i said, she repied ok, ok, look here.. so i looked at what she shown me & the hallmark was stamped ( ok ) is in OK

"A one-dollar bill in 1913 is worth 3-cents in purchasing power today, $100 is worth just $3. During this same time gold miners increased the supply of gold, but certainly not at the rate that paper money was printed, and the increased supply was balanced against an increase in the population. Which is more valuable, the shiny metal or the crinkled paper?

Against a 1980-high of $850/ounce of gold and $49/ounce of silver, the inflation adjusted value should be $2275/ounce for gold and $132/ounce for silver. Yet gold today (May 2010) is selling for ~$1200 and silver ~$18 an ounce. (The price of silver has seemingly dropped since 1980 because of the Hunt Brothers hoarding of silver to manipulate the market in the early 1980s. Prior to this market manipulation, silver was selling at ~$5.00/ounce.)"

http://www.lewrockwell.com/sardi/sardi168.html

They are many and varied opinions about investing in gold or silver.

Yes, siree. IMHO, folks need to get over the hump of looking at the two as commodities and get back to looking at them as currencies. Moving off the gold standard was a paradigm shift. Time to shift back.

This is a good thread and I hope it continues. There seems to be people who understand it a lot more then I do. I appreciate that.... and hope to learn from it.

I did notice there was a lot of talk about jewelry, but I intend to buy gold bars. It is standardized pricing with only 100 baht difference between buy and sell. No need to haggle with anyone. The prices are usually taped to most windows everyday and sometimes changed a few times per day.

The following is part of an article on gold which may be useful. It also contains a half-dozen links to other gold-related articles.

The overwhelming majority of the world’s gold supply is hoarded by someone. The annual demand for destructive uses of gold, e.g. dentistry or irrecoverable industrial use is minuscule and can be met out of annual mine production. The importance of hoarding applies as well to money or any other financial asset as to gold. Take, for example shares of equity of a corporation. Like gold, financial assets are not “used” as in “used up”, they are hoarded. The price of any asset is set by the competition between asset hoarders and dollar hoarders as they balance the sizes of their hoards (otherwise known as accounts or portfolios). The question is, what price will existing gold hoarders choose to increase their stockpiles of money, and at what price will existing money hoarders choose to increase their stockpiles of gold?

Read more: WSJ Does Not Understand How the Gold Price is Formed — Mises Economics Blog http://blog.mises.org/12836/wsj-does-no ... more-12836#ixzz0pMX38wmZ

Analysis of WSJ article on gold...
http://www.acting-man.com/

When I first read this article I thought it was plausible, now, a year and a half later, it seems possible. If the markets break down yet again, it will become probable...
http://www.moneyandmarkets.com/the-g-20 ... tion-27996

Gold up 20.25 (1.7%) yesterday to 1227.75 (dollars per oz).

As said previously the price is affected by the dollar exchange rate and also when currencies have problems, some people tend to resort to Gold. The problems with the Euro may well be fuelling the stronger Gold price.

as always - one part wants the price to go up and the other part that it will go down

but the truth is, when gold price crash, it will go very fast - a lot faster than you have seen was happend in the stock market - the story tell, it is very difficult to come out off gold when it crash and for sure it will happend, only a question when
the price can go 50% up but also fall to the half

wiking wrote:as always - one part wants the price to go up and the other part that it will go down

but the truth is, when gold price crash, it will go very fast - a lot faster than you have seen was happend in the stock market - the story tell, it is very difficult to come out off gold when it crash and for sure it will happend, only a question when
the price can go 50% up but also fall to the half

And just what, pray tell, would be the catalyst? Hmmmmm?

The catalyst will be the end of the inflationary period like at the end of the 70s.

Assets in 80s and 90s stoked prices MASSIVELY, everything became overpriced, houses, stock markets. The assets increased due to big debts. These debts cause prices to increase to stupid levels. After the dotcom bust, the massive debt bubble started to unwind.

There are 2 ways to reduce prices to sensible levels

1. DEFLATION to reduce prices,which would cause massive social tensions because nobody would invest, because tomorow goods will be cheaper than today,

2. Print more money, reduce it's REAL value. People will not notice this happening,

I would keep an eye on the Dow Jones / Gold Price ratio chart to see when the end of the inflationary period will cease. You can see from this chart that after the dotcom bust, gold started to increase in price, investors "locked in" their stock market gains from the 80s and 90s by investing in gold and avoided the eroding of that wealth. For gold to REALLY shoot up, there must be some sort of global tension like war. Or someone trying to corner the market (like for Silver in the 70s).

For most of the time, gold is a very BAD investment, but for relatively short periods, it is highly profitable. Personally i think Silver better, as it is used by industry too and will increase in value during any economic upturns too. But it is more volatile than gold !

You get credit for effort, but there are quite a few flaws in your analysis. To begin with, cause and affect and money supply. I've posted ad nauseum about all that already and won't launch into an arguement about it. As for gold's decline in the 80's, respectfully, you may want to do the research about that...