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  1. #11
    Join Date
    Dec 2007
    Location
    Vienna, Austria
    Posts
    2,662

    Default

    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!
    Last edited by Austrokiwi; 22-05-2008 at 09:36 PM. Reason: typo

  2. #12
    Join Date
    Apr 2008
    Location
    Christchurch, New Zealand
    Posts
    1,125

    Default

    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.

  3. #13

    Default

    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
    Last edited by Mark_B; 23-05-2008 at 12:26 PM.
    Comments may not be relevant to individual circumstances. Before making any investment, financial or taxation decision you should consult a professional adviser.

  4. #14
    Join Date
    Jun 2005
    Location
    Auckland
    Posts
    5,086

    Default

    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.
    DFTBA

  5. #15
    Join Date
    Apr 2008
    Location
    Christchurch, New Zealand
    Posts
    1,125

    Default

    Quote Originally Posted by Mark_B View Post
    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

  6. #16
    Join Date
    May 2008
    Location
    Manukau Auckland
    Posts
    1,049

    Default Gold $1,200 - $1,300 Dec 2008

    Quote Originally Posted by cube View Post
    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.
    My thoughts are as follows
    Inflation
    China India increasing purchases

    - Inflation is a lot worse than governments are letting on. In my household for example I have had give my wife an extra 20% a month to cover grocercies and gas (increased over 12 months ago). I don't think my wife just decided to get a little looser with the shopping, I believe it is because costs of food, household neccessities and gas have increased by more than the offical 3% - 4% than our govenment is telling us.

    Inflatation leads to errosion of paper money value. I think there are enough bright people out there that also realize this and are protecting their net worth by buying gold as gold is a traditional hedge against inflation.

    Indian China increasing purchasing but mining of gold stable to decreasing

    Unlike paper money, which governments can just keeping printing to their hearts content. Gold needs to be mined from the ground. And the volume of mined gold has not increased for years but Gold demand is growing as India and Chinese citizens incease their wealth and start purchasing jewerly and investing in gold.

    Shane Dennison

  7. #17
    Join Date
    Apr 2008
    Location
    Christchurch, New Zealand
    Posts
    1,125

    Default

    Here's the simple buy/sell chart from iTulip:



    Here are some charts from Zeal LLC which cover the real inflation rate:




  8. #18
    Join Date
    Dec 2007
    Location
    Vienna, Austria
    Posts
    2,662

    Default

    Quote Originally Posted by Mark_B View Post
    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.


    M
    I have seen others deride those who purchase gold because of the doldrums of 1980-2001. The problem is those people do not understand why you should have gold and silver as part of your investment portfolio. Esentially Gold and Silver are a wealth conservation measure ( an insurance policy), gold especially is the ultimate form of payment. Even with the 1980-2001 period gold maintained its purchasing power: fiat money did not. The current boom was a bonus but was not why I purchased.

  9. #19
    Join Date
    Apr 2008
    Location
    Christchurch, New Zealand
    Posts
    1,125

    Default

    I've just come across this. I haven't listened to it all yet, but I get the impression it is very well worth listening to. You can also read it. Nice charts too.

    Ben Steil giving a talk.

    Is the Dollar Doomed?
    http://www.resourceinvestor.com/pebble.asp?relid=42915

  10. #20
    Join Date
    Apr 2004
    Posts
    778

    Default savy investors

    I highly recommend looking into OGC.nzx for a solid share investment into the rise of gold currently OGC are down at very low prices which IMHO will not last for long.
    50% return over the next 12months could well be likely As OGC ramps up there 3rd mine which will soon lift there production from 250,000oz to closer to 500,000oz or at current Gold prices OGC's will make over $500,000,000 gross gold revenue(not including Copper,silver production)
    Currently OGC Market cap- 260mill


 

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