Thoughts on Gold

[rxcknrxll]

There's another thread on gold right now but it's a little cluttered, so I wanted to start clean...

From what I've heard so far, most of you seem to be of the opinion that gold has kind of reached it's peak. It's killing me, because I can see it both ways. I do real estate. With property I can pull the trigger because I know the vehicle. With gold, I have a mentor that's got me looking at it, and now I'm trying to broaden my scope a bit but have gotten all confused. He's convinced me that by looking at the dow:gold ratio, you can plainly see that gold may very well have a lot of growth left. Also, people said that gold was crazy high when it was 350. So what gives?

Any thoughts/criticism are appreciated.

 

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[ab9usa]

Unless something unforseen happens gold will keep going and going and going.
My compny Lion Canyon LLC in AZ has 2,640 acres. We are currently aerranging 160mm to go into full production. hardest part is to keep financial folks from tyin to screw u out of it.

 

[kidgas]

The thinking is that gold is a finite resource that is not used up after it is mined unlike some of the other commodities (like oil or silver which have major industrial applications). So, gold cannot be created out of thin air, like fiat currency. Relative to the fiat currencies gold becomes a store of value. It allows you to maintain your purchasing power. Someday, the currency that we know will cease to exist. Look to Germany in the early 1920's and 30's and Argentina in the 1990's. The gold that you possess can be converted into whatever new currency is being used at a more favorable exchange rate. This is of course a gloom and doom scenario, and hopefully, is unlikely. However, you cannot argue against retention of purchasing power in times of monetary inflation. Personally, I think gold can go a lot higher and the Dow:gold ratio will bottom around 7-10.

But, what if gold doesn't go up? Well, that means the dollar is likely gaining strength relative to other paper currencies. It means the US is attracting foreign investment. Inflation may be lower. Maybe interest rates are increasing. The stock market could be stabilizing or increasing with a more optimistic economy. Then the paper assets that I hold will be increasing in value.

The point is that gold shouldn't be the only thing in your portfolio, so if it continues to rise, great; if it falls back to $300, great!

 

[rxcknrxll]

I've read more about Germany than Argentina, but I know what you mean...the possibilities are pretty insane. It seems (I hope anyway) that our government would be sophisticated enough to stave off an entire collapse (not trying to get into politics here). But currency without backing is basically doomed as I understand it. It's just a matter of time.

I agree with you that gold could potentially go quite a bit higher. As I understand it, it's kind of a non-investment in that there really isn't any potential for gain. Or am I missing something? I mean if gold hits $2-10k let's say...so what? It basically means I have the same amount of money...there's no real gain there, just more dollars, right? It seems gold really does make sense almost any time you can afford it, would you agree with that?

I'm considering buying gold obviously. I have rental property, but I have not ventured into paper assets at all so far. I guess my main question would be how to really get rich in today's market. Ha! It seems like a great place for people who already have some scratch to play with. I have some but not enough to take advantage of all the deals on real estate I see. It's disappointing I feel like I'm at a buffet...but looking through the window from outside. But I'm doing what I can...focusing on education and investing what I have as competently as I can.

It seems to me the best place for me to invest right now may be in my own business. I'm ranting now...sorry. I appreciate any and all input, and thanks for the discussion so far.

 

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[ab9usa]

There's another thread on gold right now but it's a little cluttered, so I wanted to start clean...

From what I've heard so far, most of you seem to be of the opinion that gold has kind of reached it's peak. It's killing me, because I can see it both ways. I do real estate. With property I can pull the trigger because I know the vehicle. With gold, I have a mentor that's got me looking at it, and now I'm trying to broaden my scope a bit but have gotten all confused. He's convinced me that by looking at the dow:gold ratio, you can plainly see that gold may very well have a lot of growth left. Also, people said that gold was crazy high when it was 350. So what gives?

Any thoughts/criticism are appreciated.

The only real way to do Gold is to own the mine. Thats what Lion Canyon is all about, 2,640 acres with 2,317 adjoining in option. Gold will go to 2,000 in our lifetime.

 

[ab9usa]

The only way to be in gold is to own the mine. We have 2,640 acres, worth more than 8 B with gold at $600.00. Took 5 yrs to get to this point. Our cost to recover is $5.43/yd. Today, gold is $29.80/gm. We average 7 gms per yd. $208.64/yd. Knock gold down to $300.00, we still do $67.74/yd. Still a lot of money. 40-50 yrs.

C. NICKELSON
MANAGING MEMBER

 

[rcardin]

Interesting and it got me thinking after reading the other thread. I decided to start buying very small amounts for a long term hold. Probably won't make a lot but if you are going to collect anything it may as well be something that has potential to go up in value.

My 11 year old daughter is wanting to spend her money on the latest collectible. Right now it is littlest pet shops. I showed her the apmex link online and now she wants to collect Silver because she can get more for her money. She knows she can't get much in gold so she chose silver instead. She thought it would be pretty cool to have a bunch of those molded silver bars to collect.

 

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[kidgas]

Read an article that options will soon be available for trading on GLD. I will keep an eye out for this development.

 

[kidgas]

Kitco - Commentaries - Brian Hunt

Here is a commentary on the oil:gold ratio. If you think oil will remain above $120 or so long term, then gold might be considered inexpensive. Something to think about.

 

[rxcknrxll]

Kitco - Commentaries - Brian Hunt

Here is a commentary on the oil:gold ratio. If you think oil will remain above $120 or so long term, then gold might be considered inexpensive. Something to think about.

I'll look into that. I appreciate the continued feedback on this thread. Thanks everyone. Sometimes I feel like such noob

 

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[randallg99]

if the carnage continues in financials, lowering rates might be the route...

ben is in a jam not many people envy

 

[randallg99]

not only the amount that the Fed needs to pony up, whether it's 40bil or a tril, but the market caps for banks are dropping to such low levels...

keep in mind, besides the money spent to shore up the banks, the Fed is also allowing lower grade collateral to shore up the brokers....

I just thought of the Fed buying the corporate bonds so that there is some recourse.... but the companies have no problem ditching the government whenever possible it seems....

I personally believe we'll approach the trillion mark by the time it's over....

lastly, oil pricing seems to have taken a back seat to the financial crisis

 

[rxcknrxll]

ben is in a jam not many people envy

I wouldn't want his job. :smx4:

 

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[Happy]

I am seriously thinking about adding gold, in a physical sense, to my portfolio for the long term. Sadly I do not know the first think about what is involved in buying or selling the actual gold.

1) Are there certified gold brokers?
2) How is physical gold sold? (Coins, bricks, nuggets)
3) What type of fees are involved?

Can anyone recommend any additional educational resources on this type of investment?

Thank you.

Mike

 

[MJ DeMarco]

Easiest, most liquid way is to buy the GLD ETF via your brokerage account.

I am buying gold for insurance, a hedge, not to make money -- there is a difference.

 

[g-dogg]

i think gold will appreciated against the current weak dollar. especially over the next 2-3 weeks.

if you have an account with oanda (forex broker) you can speculate on gold. thats how i do it.

 

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[Runum]

:greenchainsaw: :icon_super:

 

[PaulRut]

Yup GLD spider is the easiest. GLD - SPDR Gold Trust (ETF)

I've picked up a bit of physical gold via coins. You can buy them through a broker but to me, the safest route is to pick them up right from the mint! You can buy US gold coins online....just google 'US Mint".

So, when the USD is worth the paper it is printed on, I'll have some gold coins to spend on milk and bread.

 

[randallg99]

Yup GLD spider is the easiest. GLD - SPDR Gold Trust (ETF)

I've picked up a bit of physical gold via coins. You can buy them through a broker but to me, the safest route is to pick them up right from the mint! You can buy US gold coins online....just google 'US Mint".

So, when the USD is worth the paper it is printed on, I'll have some gold coins to spend on milk and bread.

guys - GLD has tax ramifications that are much different than ordinary stocks... beware... many people have no idea about this, and the audit becomes a field day for the IRS...

>>In the United States the ownership of physical gold is considered the ownership of a collectible. The ownership of a share of GLD is considered the ownership of gold and therefore also treated as if you own a collectible. So why does that matter? Because the long term capital gains tax rate on collectibles is 28% and NOT the more favorable 15% afforded to capital gains on stocks.<<

 

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[randallg99]

any way you slice it.... gold should move a big leg up from here....

any form of the bailout being approved is gonna create an inflationary environment.

not to mention as banks continue to close, the flight to gold for safety is going to increase

just my opinion.

 

[china]

I am seriously thinking about adding gold, in a physical sense, to my portfolio for the long term. Sadly I do not know the first think about what is involved in buying or selling the actual gold.

1) Are there certified gold brokers?
2) How is physical gold sold? (Coins, bricks, nuggets)
3) What type of fees are involved?

Can anyone recommend any additional educational resources on this type of investment?

Thank you.

Mike

If you want to buy physical gold, here are two good places to read and learn (and buy from)

golddealer.com
apmex.com

tulving.com is good if you want to buy a LOT of metal at one time. He doesn't deal in small quantities.

Basically, once you decide you want to own gold, you have to decide what kind of gold you want to own. There are different premiums for each type of coin. THAT's what you have to pay attention to. (I love Isle of Man's gold cat coins, but they are way outside my budget most of the time!) Most of these websites show you what the spot price is and what you have to pay over that to get a coin.

Also, when you sell a coin, you usually get over the spot price too because there are fabrication costs involved -- so you usually buy over spot but you sell over spot too.

 

[china]

Easiest, most liquid way is to buy the GLD ETF via your brokerage account.

I am buying gold for insurance, a hedge, not to make money -- there is a difference.

Great, but if the dollar collapses, you own a piece of paper.

Secondly, physical metal and paper metal have been divergent recently. You are aware of that, yes?

Paper metal has been a pretty price that everyone wishes they could buy at and physical metal is what you actually have to pay to own a piece of metal.

The more whacked out the US financial system becomes, the more you will see a difference between physical and paper metals.

 

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[china]

Physical gold sales cut off once again: FT.com / MARKETS / Commodities - Gold coin sales halted after retail rush

(Funny too -- the paper gold price keeps falling while you can't find the physical metal in any quantity.)

 

[Happy]

While trying to educate myself on the possible purchase of some form of gold, I came across this site, which has some interesting information for those that may be interested in a similar investment and/or hedge: Investing in gold; gold investing; about investing in gold

I found the following articles helpful:
Gold IRA acount, gold in an IRA; gold backed, gold based IRA account
Gold Investment, gold investments: gold investment information
Gold bars: gold bars, gold bars for sale, buy, buying, bullion bars

Mike

 

[RJP]

Wealthy investors hoard bullion:

FT.com - Wealthy investors hoard bullion

 

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[Analyzer]

Great, but if the dollar collapses, you own a piece of paper.

Secondly, physical metal and paper metal have been divergent recently. You are aware of that, yes?

Paper metal has been a pretty price that everyone wishes they could buy at and physical metal is what you actually have to pay to own a piece of metal.

The more whacked out the US financial system becomes, the more you will see a difference between physical and paper metals.

You are wrong sorry. The gold ETF is composed of physical metal (not like minning stocks, or gold futures).

Unless there is fraud somewhere the "piece of paper" actually corresponds to a certain ammount of gold. Doesn't depend at of the dollar. If dollar goes to 0 (zero) the company running the etf could liquidate it and send the gold to the paper owners

What you might be seeing is an movement where out of irrational fear people flock to something they can have a hold of like physycal metal.

btw, I think that anyone that trully believes the whole economy is about to collapse should be buying guns and canned food, not gold

 

[Analyzer]

Physical gold sales cut off once again: FT.com / MARKETS / Commodities - Gold coin sales halted after retail rush

(Funny too -- the paper gold price keeps falling while you can't find the physical metal in any quantity.)

Actually the article says the cause of the lack of bullion is the ETFs ("paper gold"):

The scarcity of gold coins comes as investors in bullion-backed exchange traded funds (ETFs) have amassed a record 1,054 tonnes of bullion, becoming the largest holders of gold after the reserves of the US, Germany, the International Monetary Fund, Italy, France and Switzerland.

 

[kidgas]

The lack of physical supply is real, while the "spot" price is based upon futures (just another form of paper or leverage). It could be that we are witnessing a de-leveraging process in the gold futures market at the same time that deleveraging is occuring in other markets as well.

 

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[kidgas]

You do have to wonder about the potential for fraud with the ETFs.

 

[Analyzer]

You do have to wonder about the potential for fraud with the ETFs.

... and the potential of theft with physical gold :smxB: