i think you should specify between gold the stock, and gold, the physical asset. in times of uncertainty (and these certainly are), gold bullion is always a safe bet. in history, gold only looses value when there is a tremendous amount of it in circulation (which is difficult to achieve when gold is a rare element) when spain brought back gold from the new world, boat loads of it, it was immeditely circulated into the spanish economy. it created mass amounts of deflation, made gold worthless...so unless we come across a lot of physical gold and immediately circulate it, gold WILL always be a safe bet for ensuring that you have value in this economic cluster-f.

Originally posted by Terces_Pot_Evoba
i think you should specify between gold the stock, and gold, the physical asset. in times of uncertainty (and these certainly are), gold bullion is always a safe bet. in history, gold only looses value when there is a tremendous amount of it in circulation (which is difficult to achieve when gold is a rare element) when spain brought back gold from the new world, boat loads of it, it was immeditely circulated into the spanish economy. it created mass amounts of deflation, made gold worthless...so unless we come across a lot of physical gold and immediately circulate it, gold WILL always be a safe bet for ensuring that you have value in this economic cluster-f.

You are about to find out how wrong you are. Production of gold is going sky high with these prices. The market wil be flooded. Once the last scared sucker buys his buillion and stashes it in his closet safe, gold will fall back into the 3-400's again. It happens every time. The cost of a round trip trade in buillion will keep people from taking profits. As a result they will be sitting on it with a loss for the next couple of decades until we get another huge scare.

Gold simply has no use that makes it worth anywhere near what it is now selling for. Gold is like tulips, tech stocks and real estate. Learn your lessons or keep losing.

Let's try to get some perspective on this:
The Glenn Beck and other right wingers have been hawking gold for some time, espousing the decline of the world as we know it.
Should you be as fortunate as they, go buy the gold.
If you are like me and live weekly, buying foodstuff is the only way to go.
Ask you and yours an honest question, can I do I, will I, have the where-withall to trade miniscule chunk of my gold for food?
Or should I be the guy that decides a piece of gold is worth me and mine eating for the next two months.

Is it the gold bubble or the dollar bubble that is about to pop?

What if the gold prices are going up in responce to everyone's growing realization that the dollar is on it's way to hyper-inflation?

The govt has been spending money at a far greater rate than what is brought in by taxes for decades now. The current administration has ramped up the spending to unprescedented levels, resulting in the monitizing of the debt.
This means no one is buting our debt anymore and the govt is just printing the dollars it needs to cover expences. Any idiot can see this is the definition of inflation.

As confidence in the dollar goes down, the price of gold will continue to rise. Only by reigning in spending and seriously restricting lending practices will we be able to save the dollar.

If we can reduce the dollar supply and stabilize our currency, then, and only then, will the price of gold begin to fall. As the price of gold falls, the buying power of the dollar will rise.

In the end, gold investors will retain the buying power of their original investment.

I believe the price of gold is the best indicator of inflation. The skyrocketing price of gold today is a sign that our currency is rapidly loosing it's value.

[edit on 4-12-2009 by FortAnthem]

I think gold could go much higher over the next year or so. However, like another poster said, if inflation does not completely destroy the dollar, the gold market will be flush, and the price of gold will come crashing down like....Well, like a ton of gold bricks.

I disagree with the 30% correction call primarily on fundamentals....but I agree that the long-term trend remains fully intact. My focus is on short-term trades & low risk entries.

In contrast to the OP' long-term weekly , I'll post a short-term GLD daily depicting what I saw happening on Wednesday prior to Friday's pullback. Then I'll comment on what I see moving into next week.




Wednesday's break above the upper end of the channel (bearish hanging-man candlestick in star position) signaled that a pullback was imminent.

Here's what happened....




Thursday's close below the hanging man = exit trading positions...Friday we got the sharp reversal.

Referring back to the first chart , I expect a maximum 10% correction to the blue line , lasting approx 2-4 trading days...low-risk re-entry @ 106-ish. This would equate to a max pullback in spot Gold 1080 - 1090 approx.

*Not advise...with Gold , anything can happen*






[edit on 5-12-2009 by OBE1]