Gold is the New Bubble Market

Gold/Silver took a kicking today which seems odd because the FTSE/DOW are down so are people being forced to cash in metal to bail out hedges or are TPTB playing games.

You would think people selling shares would buy up metal if only the paper version of the stuff.

On hot days icecreams should not go down but what do i know.

[edit on 1-7-2010 by LieBuster]

Remember to buy in the dips. This just means it's on sale...

You know i cant stop thinking about that commercial "dollars for gold " where this silly girl is selling what gold she had and buying some shoes...
There's something phony about this.Dont trow your gold away! It's worth gold.

When 4 rolls of copper cents worth 2$ and 1 pound of copper worth5$... What do you do? You do the math
But it's illegal to destroy legal currency right ?

reply to post by LieBuster


The drop in gold was due to a fraudulent naked shorting bank action.

It occurred over a few minutes of time.

You'd think they would at least trying to space out the shorting so its not so obvious.

Looks like there was a liquidity squeeze as well.

www.zerohedge.com...

[edit on 1-7-2010 by mnemeth1]

Can we not get the banksters to do another Gordon Bronw and get them to flood the market even more with paper gold which would force the price for the real stuff down so we can mop up.

Play them at their own game and releive them of all reserves.

i see the price of Silver is still diving and i'll jump in if it ever gets as low as $12 so call me up if your getting cold feet at that stage.

reply to post by LieBuster


Silver is still a bargain at $20 an ounce.

The price silver is at, doesn't make since if you look at the historical trends between gold and silver.

If we stopped mining gold today, we would have enough recycled gold to last the entire population of earth for over 300yrs. Gold is not as rare as it used to be, its value was based on its rarity, now its based on its demand.

People think that holding onto gold will make them money. Apart from making jewellery, gold is a pretty useless metal. Sure its making money at the moment but its only value is its demand. If demand dries up you have a piece of paper or a heavy paper weight.

No Governments still have thier currency back by Gold reserves anymore, everyone has liquid currency markets.

Gold is not as rare as it used to be,

Gold never was rare.
Its the extracion that caused it to be rare.

100 years ago we did not have the heavy equipment we have today nor the chemical processes to leach it from rock.

The mines 100 years ago took a set amount of man power to extract one ounce.

Now the same ounce can be extracted with 1/100 of the man power
but at the higher equipment cost and fuel cost.

In the US less then 1/10 of 1% of the gold that is economically mine-able has been mined.

Now gold is rare because its environmentally expensive to mine.

In the US we can recover gold from ores with less then .02 ounces per ton or 1 ounce of gold in 20 tons of ore. this is the break even line at $1225 a ounce at a mine with 5 million tons of ore.

Originally posted by kruzz

No Governments still have thier currency back by Gold reserves anymore, everyone has liquid currency markets.

World banks still hold gold reserves so i don't think its as easy as you think to break the 5000 year old connection between money and gold.

Your small change on the other hand if your in the UK is not even made from copper because the money is worth less than the melt value.

Originally posted by kruzz
People think that holding onto gold will make them money.

Not true. People hold actual gold as a hedge against manipulated paper currencies.

If your paper dollars were devalued to $0, my gold or silver could be traded world-wide for services, goods, or some other foreign currency.

Just like all bubble investors, gold bugs do not listen to reason. The links to currency and inflation are not what they percieve. Like all bubbles it will end badly for PM investors. Then these boards will be full of conspiracies about the rigged gold trade. I give it until about October until the free fall begins in earnest.

I told you copper was going up.
Its up 5% this week and breaking 200 day outlook.

Gold is under-valued by about 45 times its current value.

That's TIMES not PERCENT

The real value of gold is around 50,000 an ounce if one discounts the leverage used in the gold markets.

The actual physical holdings of the EFTs is around a 2.3% physical to paper ratio.

Hear me now and believe me later, the dollar is junk.

Let’s call POG (Price of Gold) the average market price for all gold, that is to say paper gold and real physical gold which is the price quoted as the “gold price” each day. If there is, let’s say, only one ounce of physical gold backing each 45 ounces of “gold” that are sold in the market through the selling of unallocated gold then the price will be suppressed. Forty five ounces will cost $54,000 at POG=$1200/oz. But if this is made up of 44 ounces of worthless paper promises for gold and one real physical ounce then the effective price paid for the real ounce is $54,000/oz. If the investor never takes delivery he doesn’t realize his investment is backed by just one ounce not 45 ounces...

Real physical gold supply is estimated at 4000t per year (mine + scrap +dishoarding). The ratio of total gold traded to real physical gold traded is

180,555/4,000=45

This means that there are indeed on average about 45 ounces of “gold” traded in the market of which only one is a real physical ounce. In other words the trading of gold is backed on average by only 2.2% of real physical metal. Just like in our wine example if we consider that paper gold is worthless then real gold is worth 54,000/oz.

[edit on 22-7-2010 by mnemeth1]

reply to post by pirhanna


I think I'm correct in saying that gold prices have always had a strong negative correlation with the stock market. So, it really is no new bubble market. It does this whenever stocks are weak. I imagine it is the same for many other intrinsically valued commodities.

Another lively gold discussion that seems to have taken off a bit better, in this thread:

gold...

Hope no one minds, but again, a bit more info in the other thread so far.

And NO, gold is not the next bubble.

Get informed, by going to other informative threads perhaps, do a bit of your own research, and then, for fun, come back here and reread some of the silly things that have been spouted off by those who know nothing about gold (the majority).

JR

Where can I buy the sort of gold and silver and copper coins that would be good for barter after meltdown?

2nd line

reply to post by Student X


Unless you are planning on spending a lot, then my recommendation is to just go to eBay. You can still find some great deals out there.

The only problem might be if you're not too sure of what to bid, or if some of the fixed price listings are fair or not. But you can comparison shop, and get a feel for what might be fair in that market place, which is probably safer than walking into a coin shop. Coin dealers can be worse than pawn brokers, and can smell a newbie a mile away. Their job is to get some of your money, before you walk out the door. And many are pretty good at it, so watch out for them.

For a more solid eBay example, you could put "coins" in your search box, and see how many thousand come up. If you are thinking silver, than add that word too, "silver coins", should trim down the number of listings. Maybe try a third word, like "best silver coins", or "silver coins lot", maybe that will get you down to just a few pages of stuff to check through.

So then, just click on stuff that looks interesting, that seems to be in your price range, but don't bid yet, don't buy, just see what is offered first.

Next, when you've found a few examples of what you might like, jot down the price that looks like you might have to pay, but before buying, go to the "completed" listings, and look for similar closed listings, things that have already sold. You can even sort them by price too.

What you often find is that you actually find things selling for less money than you might have thought possible.

But don't stop there. Once you found a thing you want, be sure to double check the seller's feedback, see what other people are saying, maybe others have bought some of their coin lots before you, and will warn you about any potential problems.

So now, you have a "real" figure to shoot for when bidding, you won't go too high this way, and you'll likely pick stuff up at close to a fair market value, and you'll hopefully avoid "bad" sellers too.

Good luck!

JR

Originally posted by JR MacBeth
reply to post by Student X

 

Unless you are planning on spending a lot, then my recommendation is to just go to eBay.

How much is a lot? I was planning on spending a few thousand. I'm not much of an eBayer.



[edit on 2-8-2010 by Student X]

reply to post by pirhanna


Gold has not gone up in value..... fiat currencies have gone down in value.

Fiat monetary units are the bubble, the largest bubble in human history in fact.

Ask yourself this...

Central Banks regulate fiat currencies backed by nothing, not even gold or silver...why then, do Central Banks own the VAST majority of gold bars and bullion?

I'm afraid the 'new bubble' is information and knowlege.

Especially in technology.

We've closed down tech schools all over the country because there were not jobs to support them.

Meanwhile, our smartest folks are beating their heads against the wall trying to keep up - running on a treadmill going nowhere.

It's not a good situation.

Everyone expects a gold bubble. Don't they? It seems to me they have for a while now - the whole ride up.

I tend to think the bubble to fear is the one you don't expect, but I prove myself wrong. We all knew the housing bubble was long overdue but it was too fun to ride the train and no one wanted to get off.