Gold Fever (2011, transaction, buy, sell)

[rlxin]

Ok, after watching/reading a bunch of Paul/Schiff, I have to admit I have a bit of gold fever. My knowledge of how the markets work is very limited, but what they are saying seems to make sense.

All this money they are printing will bring about inflation in the coming months, years. Inflation drives the price of precious metals, commodities, and other goods/services up. As far as I understand it, thats how it works, correct?

So, should I buy gold? If no, why?

If yes, what kind? stocks, bullion, other?

Iv also learned that about 80% of the gold mined is used for fine jewelery/watches. I have an uncle who has been in the jewelery business for 40 years and he said demand/sales have declined 30%-40% in 08, and he expects it to drop the same amount in the next 12-18 months. How will this effect the price of gold?

[Thatguywho]

I think with the fed rate at zero and the economy slowly slipping you will hear the words 'hedge against inflation' one more time by the medai.

I think it may be one more gold spike early this year so the big guys can unload their stock...then I think by april/may it should be over.

I would say buy gold when it is under 400...and wait for booms like this one and then sell it.
I would never suggest buying at, near, or shortly after a boom price.
Gold has never been in this range before and one more spike can happen..but I personally believe it will tank.

If you invest, prepare to uninvest. Gold is not a long term investment (unless you talk 100 years)...it is for making money on boom/busts. Now is the boom, not the time to buy.

Only my opinion.....keep reading others.

[cohdane]

Physical gold was more in demand and selling at a higher price than "paper" gold in recent months. In fact, many gold brokers had to suspend shipments of gold coins because they ran out.

The gold ?doomers? believe Comex is going to default and not have enough gold to cover all the delivery requests. They're basically saying physical gold is the only way to go unless you want to be stuck holding worthless paper:

http://meltdown2011.wordpress.com/ca...mex-countdown/

I personally understand very little of this, but it is what it is. Perhaps someone here can explain it more clearly/accurately.

On the holding value side? I think any investment in anything at this point is a crapshoot. No one has any idea what the government, OPEC, China, asteroids from outerspace or anything else is going to do. If you decide to buy it or not, don't look back--- your guess was as good as any high-priced economist's.

[AnesthesiaMD]

Originally Posted by rlxin

Ok, after watching/reading a bunch of Paul/Schiff, I have to admit I have a bit of gold fever. My knowledge of how the markets work is very limited, but what they are saying seems to make sense.

All this money they are printing will bring about inflation in the coming months, years. Inflation drives the price of precious metals, commodities, and other goods/services up. As far as I understand it, thats how it works, correct?

So, should I buy gold? If no, why?

If yes, what kind? stocks, bullion, other?

Iv also learned that about 80% of the gold mined is used for fine jewelery/watches. I have an uncle who has been in the jewelery business for 40 years and he said demand/sales have declined 30%-40% in 08, and he expects it to drop the same amount in the next 12-18 months. How will this effect the price of gold?

If you really want to read up on it, Kitco has a popular forum among goldbugs. Just do a google search for "Kitco gold forum" and follow the link to discussion forum. You have both pro and con arguments there although it is probably about 70% pro. People there often post links to keep up to date on current newsworthy gold events. It is not unlike this forum.

[Oildog]

Originally Posted by Thatguywho

I think with the fed rate at zero and the economy slowly slipping you will hear the words 'hedge against inflation' one more time by the medai.

I think it may be one more gold spike early this year so the big guys can unload their stock...then I think by april/may it should be over.

I would say buy gold when it is under 400...and wait for booms like this one and then sell it.
I would never suggest buying at, near, or shortly after a boom price.
Gold has never been in this range before and one more spike can happen..but I personally believe it will tank.

If you invest, prepare to uninvest. Gold is not a long term investment (unless you talk 100 years)...it is for making money on boom/busts. Now is the boom, not the time to buy.

Only my opinion.....keep reading others.

Agree with post, the time to buy is when is unpopular to do so. There are many commodity buyers sitting on it wanting the price to go up a little so they can move out of position....

Actual bullion, coins or bars are hard to get. Most is traded paper. I think if interested in precious metals look at silver or platinum. IMHO.

[Woof]

It's generally not considered to be a good investment, it's more a preserver of capital.

You know how all the big corporations are buying govt bonds even if they end up having to pay for the privilege? That's because they want to put their money somewhere safe where at least it won't die in a falling stock market. It's the same sort of thing with gold.

Gold will always have some value, even if civilization totally collapses. Young ladies want wedding rings, men want watches or other displays of wealth meant to allure mates.

So park a little of your money in precious metals, just in case paper money (which is only backed by consumer confidence) becomes relatively worthless (see hyperinflation in Zimbabwe for an example).

In case of a shattered economy, you could sell off some of your precious metals a little at a time to cover expenses you couldn't afford otherwise, such as a hospital stay, a dozen eggs, or property taxes.

[AnesthesiaMD]

Originally Posted by Woof

It's generally not considered to be a good investment, it's more a preserver of capital.

Anything is a good investment if you time it right.
People who bought gold 5 or 6 years ago are laughing all the way to the bank. Gold does fluctuate to extremes, but it never strays for too long. It spends most of it's time rising with inflation. If you can say anything about it, it's stable. In ancient Rome, a 1 ounce gold coin roughly bought a toga, a belt, and a pair of sandles. Today, 2,000 years later it roughly buys a suit, a belt and a pair of shoes.

[ndfmnlf]

Today, 2,000 years later it roughly buys a suit, a belt and a pair of shoes.

Have you actually tried buying a suit, belt, and a pair of shoes using gold? Which retailers accept gold? Curious minds want to know....

[AnesthesiaMD]

Originally Posted by ndfmnlf

Have you actually tried buying a suit, belt, and a pair of shoes using gold? Which retailers accept gold? Curious minds want to know....

I'm not sure of the point you are trying to make. So you have to sell the gold for dollars at the current rate before buying your clothes. And?

[ndfmnlf]

Originally Posted by AnesthesiaMD

I'm not sure of the point you are trying to make. So you have to sell the gold for dollars at the current rate before buying your clothes. And?

The point I'm trying to make is if you have to sell your gold for paper money before you can make a purchase, then that kind of defeats the purpose of having gold as currency. Sure, gold might be a stable reserve (a questionable proposition given that the price of gold today at $850/0z is where it was in 1980), but assuming you are correct, how can you use gold efficiently to buy stuff if you still have to convert it to fiat currency to make a transaction?