Gold: 1st quarter stats

[Austrokiwi]

I know this isn't property related but I recall some saying you should have a little gold put away. The latest industry stats are interesting for any gold bugs out there:
Although in value terms gold rose 20% the actual demand in tonnage terms dropped 16% ( year on year) this is the lowest in 5 years ( I believe thats when the current run started!) Jewellery demand for gold declined 21% ( year on year) thats the lowest since 1993. Supply went up 6%. I'm guessing the gold price has outstripped demand......probably because the price has just got out of range of the normal physical buyers

[whitt]

That is interesting

[Shane D]

I know this isn't property related but I recall some saying you should have a little gold put away. The latest industry stats are interesting for any gold bugs out there:
Although in value terms gold rose 20% the actual demand in tonnage terms dropped 16% ( year on year) this is the lowest in 5 years ( I believe thats when the current run started!) Jewellery demand for gold declined 21% ( year on year) thats the lowest since 1993. Supply went up 6%. I'm guessing the gold price has outstripped demand......probably because the price has just got out of range of the normal physical buyers

When you say demand dropped...are you referring to consumer demand for Jewerly??

Investment demand for gold is WAY bigger than jewerly demand as people around the world look to protect their assets against inflation.

Gold will continue to rise for the next few years until the world major governments get serious about tackling inflation (i.e USA).

I will openly predict Gold will be $1,200 - $1,300 USD an ounce by 2008 Dec.

Gold is still cheap today. The Gold/Oil ratio is at historic lows. Presently it takes 7 barrels of oil to buy an ounce of gold. Historically the number has bounced between 10 - 15 barrels of oil to buy an ounce of gold.

Something to think about.

Shane Dennison

[Austrokiwi]

When you say demand dropped...are you referring to consumer demand for Jewerly??

I will openly predict Gold will be $1,200 - $1,300 USD an ounce by 2008 Dec.

Gold is still cheap today. The Gold/Oil ratio is at historic lows. Presently it takes 7 barrels of oil to buy an ounce of gold. Historically the number has bounced between 10 - 15 barrels of oil to buy an ounce of gold.

Something to think about.

Shane Dennison

Sorry I should have stated where the stats came from. The statistics I quoted come from the World Gold Councils 1st quarter 2008 report. The tonnage I referred to is the total world wide purchasing of physical gold, So while the dollar value of gold investment has gone up the actually amount of physical gold sold has dropped. I have been an investor in physical gold and I started in 2002/2003.....I believe the initial gold increases that started in 2003 were deserved and were catch up on the previous 2 decades doldrums. This year I have become distinctly nervous and have cashed in some of my holdings. The reason being the creation of Gold Based ETFs in the states created a surge in prices, that coincided with the surge in commodities. The fed dropping interest rates also fed gold purchasing, over the same time. I believed the same as you till about February this year when the prices no longer started to make sense to me (sorry I can't explain why: Take it as personal gut feeling) The stats I quoted are the first I have seen that match's my current uncomfortable feeling about gold. Once the federal reserve starts to raise interest rates, and the ECB starts to drop them ( both will happen this year) I would expect that considerable selling pressure will go onto gold.

[k1w1]

How many 1kg blocks of tasty cheese has it historically taken to buy an ounce of gold, cos' 10 bucks says it used to be less than it is today.

[Austrokiwi]

Forgot to add The Jewelery stats refers to purchasing of physical gold by Jewelery manufacturers

[Austrokiwi]

How many 1kg blocks of tasty cheese has it historically taken to buy an ounce of gold, cos' 10 bucks says it used to be less than it is today.

Tell me the 1KG price of Cheese in 2004 and today and I'll answer you other wise you can calculate it your self. Gold in Dec 2004 in NZ$ was $650 ( ignoring daily fluctuations) this week Gold has been floating around NZ$1170-NZ$1189

[Shane D]

blocks of cheese

Tell me the 1KG price of Cheese in 2004 and today and I'll answer you other wise you can calculate it your self. Gold in Dec 2004 in NZ$ was $650 ( ignoring daily fluctuations) this week Gold has been floating around NZ$1170-NZ$1189

I think k1w1 may be referring to (taking the mickey out of) a comment today by John Key about proposed government tax cuts (or lack of tax cuts).

sorry I can't give a link to the NZ Herald story as I don't have the required # of posts that allows me to post links.

[Austrokiwi]

Cheers I read that Article this morning while I was having my breakfast Coffee. I think just from the change in gold prices K1W1 is right the increase in a one K block is probably far less than the increase in an oz of gold.............but Gold can come down in price far faster than a block of cheese!!

[Steve Netwriter]

Bill,
WGC & Nadler: enemy combatants
There used to be a guy in the town where I grew up who seemed decent enough, but had this one incredibly annoying habit. He would cheerfully greet you, then immediately bust his butt to tell you about all of the sorrow and misery of the local town folk. He would eagerly inform you of who contracted cancer, or which wife left her husband, or whose nephew just got killed in a fatal auto accident. I think he enjoyed being the bearer of bad news. It seemed the worse the tragedy the happier he was to tell you. After thoroughly depressing you he would then depart with some inane remark about the weather. As I got older I learned to avoid him. I didn't want to know the sorrow and misery of people I barely knew. I think that just about sums up what Jon Nadler is all about. He cheerfully greets you, delivers depressing gold news, then leaves you with his trite "happy trading".

The World Gold Council once again shoots the gold industry in the foot http://www.commodityonline.com/news/...ls.php?id=8534
and Jon Nadler is ecstatic. He gleefully reports on their amazing load of garbage. It is beyond comprehension how people (alleging to be) representing gold's interest do everything in their power to discredit gold. This is no accident, and time will be the ultimate judge of their fraudulent propaganda. The WGC and Nadler seem to be talking up a SHORT position in gold, not a long position. There is no way you would say these idiot things if you were long gold, or heavily invested. Once again the silence from the mines who support the WGC is deafening. Anybody invested in these mines should be flabbergasted. Thank God I'm not invested in them.

GFMS, WGC, CPM Group, Virtual Metals, Jon Nadler, and Jeffrey Christian are enemy combatants; traitors to the cause of free gold. They are more insidious than mainstream media because they cloak as pro-gold organizations. Unfortunately for them the economic winds are shifting. It's getting harder to deny the conspiracy to hide inflation, and suppress gold. Now even Paul Farrel of CBS MarketWatch says government statistics and data are nothing more than one big fraud, meant to mask true inflation and hide how terrible the economy truly is. Sound familiar?

http://www.marketwatch.com/news/story/governments-numbers-racket-about-blow/story.aspx?guid=%7BF91A0843%2D69B4%2D4C0C%2D92CE%2 DB835D9907945%7D&dist=TNMostRead

Better order a tin foil hat for Paul Farrel. Pretty soon Nadler is going to have to pass out a couple million of them. So many reasons for Jon to slink away, so little time. If my hometown is any indication people will someday walk 3 blocks out of their way to avoid him.
James Mc


http://www.lemetropolecafe.com

--------------------

Beware the misinformation peddled by those who wish to see gold stay down.

I think there's a good chance that Shane will be proved right.
If not, it won't take much longer.

Gold & silver are retracing the recent dip very nicely. But expect this sort of thing:




I think you ought to read this:

James Turk on Gold: The Ultimate Inflation and Catastrophe Hedge
May 21, 2008

http://seekingalpha.com/article/78214-james-turk-on-gold-the-ultimate-inflation-and-catastrophe-hedge?source=feed

Steve

[Austrokiwi]

Thanks For that post
I do believe Gold has more upside than down in the medium to long term. And I have also thought (Personal opinion) that for the last 10 years inflations stats have been creatively calculated and are hiding the true devaluation of money over time. The issue for me is has the "beer been poured too fast" this year. If it has some foam will have to be "blown off" before more can be poured ( I hope the metaphor is clear) I am awaiting ( my yearly catch cry) for the Indian wedding season to see what happens to the physical buying of gold. I would note this time of year is usually weak; but I haven't seen that this year!

[Steve Netwriter]

You're not the only person I've come across who is waiting.
Personally I follow Jim Sinclair, and he suggests buying and holding. Or long and strong
He thinks trying to trade in and out for anyone but an expert is a mugs game, and ends up giving money to the cartel.
After this last dip I've learnt a lot. It's always good to learn.
I'm afraid I won't give up our gold/silver insurance policy no matter what. IMO it's OK to increase/decrease the size of your 'policy' according to whether you think gold/silver are overbought or oversold, but then you're only risking a small part of your policy.
I prefer changing the gold/silver ratio. Near the 'tops' reduce the % of silver, and near the bottom, increase the % of silver. That seems to me to be the safest and least risky way to vary your 'policy'.

What worries me, is that despite it being a wild ride, at some point if everything I've read is right, the price will just take-off. Either that or something really bad will happen. And I don't think anyone should be totally exposed to paper money in that situation.

I suspect the dip to US$850 was the best buying opportunity this year. There were just so many indicators pointing to a turn upwards.

The inflation stats are a joke now. Even the mainstream media are openly laughing when they report them.

Re the seasonality of gold. Jim thinks at times like this it is far less important than normally.

Anyway, good luck with your timing.

[Mark_B]

To anyone seduced by the gains in the price of gold that have occured in the past 7 years or so - please remember that over the period 1980-2001 Gold was the investing equivalent of money down the drain.

All I am saying is that at least invest with your eyes open to the fact that for a large part of recent history gold has been an ineffective hedge against inflation.

But, if you chose to invest in gold, then I honestly hope it pans out for you (pun intended).

As with anything, caveat emptor.

M

[cube]

I will openly predict Gold will be $1,200 - $1,300 USD an ounce by 2008 Dec.

Because Gold is more valuable or because the $ is weaker?

Interesting programme on the BBC yesterday about how the current commodities bubble is being driven by money rather than fundmentals - wheat is more expensive not because there is a shortage of wheat, but because there is a shortage of wheat futures contracts.

A gallon of gas in Ghana costs 1% of the annual average wage.

[Steve Netwriter]

To anyone seduced by the gains in the price of gold that have occured in the past 7 years or so - please remember that over the period 1980-2001 Gold was the investing equivalent of money down the drain.

All I am saying is that at least invest with your eyes open to the fact that for a large part of recent history gold has been an ineffective hedge against inflation.

But, if you chose to invest in gold, then I honestly hope it pans out for you (pun intended).

As with anything, caveat emptor.

M

Mark,
I agree with your caution. I think anyone investing in whatever needs to do research and understand the investment they are thinking of going into.
That applies to investing in housing, stocks, trading in currencies etc.

I think the main thing is to understand is that everything goes through cycles. At some times it might be best to go into houses, at another stocks, and at other times it might be best to avoid all of those and invest in one of the few non counter-party investments which act as a safe haven, and that means gold/silver.

At the moment, for anyone in NZ with NZ$ IMO that means looking at how an NZ$ denominated asset will fare compared with other 'currencies'.

It's not all about looking for gains though. Gold/silver also act as an insurance policy. That's why many experts suggest always holding some. Maybe 5 to 10% of your liquid portfolio. Just in case.

One of the fundamental indicators for gold/silver is the real interest rate. That is what you can get from the bank minus the inflation rate.
In the US that is negative, and that means anyone saving in a deposit account is losing money. They would do better to buy a lump of gold and stick it in a safety deposit box. And that is what some are doing.

Steve