Theories continue on rapid gold price plunge

Originally posted by Ameilia

Originally posted by ownbestenemy
reply to post by Cinrad

 

What "rapid" plunge? I am curious as what constitutes as a "plunge". Unless outside forces interject, the price of gold will be directly tied to ts supply and its demand.

To the facts, it had a 4% drop; how is that a plunge?

edit on 9-8-2013 by ownbestenemy because: (no reason given)

To the facts, it has actually fallen from $1800 to $1200 in less than a year. Quite a bit more than 4%.

Gold 1 Year Chart

Study up, then you might be able to respond appropriately to what the original post is referencing.

1800 was maybe a bit steep to begin with. it was at 400 not too long ago. In a panic ppl buy gold. When they see a better investment they sell.

reply to post by geobro

It used to be that your "paper" money (actually more cotton and linen) represented real gold and silver (on demand) also. But realistically all commodities that are exchange traded are basically 98%~ paper where most contracts to buy or sell are offset without delivery. The metals market is a little worse than the norm (but it is easier to store PMs than "live cattle" or "crude oil" in your house .

reply to post by ANNED


Im in on gold at $900 an ounce, I believe we will see a market correction down to about $800, but i think dollar cost averaging from $900 down to the bottom would be alright.

Originally posted by phishfriar47
reply to post by ANNED

 

Im in on gold at $900 an ounce, I believe we will see a market correction down to about $800, but i think dollar cost averaging from $900 down to the bottom would be alright.

Why wait? I buy 5g every week.

This thread is too painful to continue reading. I've been a modest stacker for a while now and it would have been nice to hear from someone who knew what the hell they were talking about. "Supply and demand"? "Modest plunge"? This is sooo simple. The spot price of Au and Ag have been manipulated and suppressed for years in order to prop up the dollar. For a lower-tier player like me, that's all I need to know. "Supply and demand" has had NOTHING to do with the spot price of metals (or anything else) in my lifetime (b. 1953). Au and Ag have always, historically, without exception, been a lousy short-term investment but a reliable long-term hedge to preserve wealth, especially in troubled times. We can trust in Au and Ag's proven track-record over the past 6,000 years, or we can trust the here today, gone tomorrow opinion of the "experts." Au and Ag is still available at fire sale prices. Anyone who can't see the value of an ounce of Ag @ +/- $20 has lost his wits.

reply to post by MeTarzan


You're correct, Supply and Demand is a simple concept which is absurd when you consider folks cannot get the simple basics correct. And I'm a little confused by your post, are you aware the US stopped using the gold standard to support it's dollar in 1933? That's 20 years before you said you were born. You've never seen this nation on the gold standard, and furthermore, no nation on Earth is on the gold standard as we speak.

Did you mean something other than the US backing the dollar with gold?

Gold, what can I do with it? Can't eat it or drink it. Can't send it to pay my mortgage or car payment. If I took a hunk to the store for whatever they would just give me a goofy look. I know it's been around forever and comes from a place far far away and shiny.....but.... Good ole Ben Franklins work for me.

reply to post by SPYvsSPY


You trade the shiny stuff for many of those Franklins. And when the economy collapses, you can always keep those Franklin's for toilet paper.

Originally posted by NOTurTypical
reply to post by MeTarzan

 

You're correct, Supply and Demand is a simple concept which is absurd when you consider folks cannot get the simple basics correct. And I'm a little confused by your post, are you aware the US stopped using the gold standard to support it's dollar in 1933? That's 20 years before you said you were born. You've never seen this nation on the gold standard, and furthermore, no nation on Earth is on the gold standard as we speak.

Did you mean something other than the US backing the dollar with gold?

Actually, we were on the gold standard, as I understand it, until Nixon closed the gold window ('71?) which meant the US would no longer redeem paper dollars for gold. FDR made it illegal to "own" gold, but the dollar was still "backed" by gold. Gold is artificially propping up the dollar in the sense that were the dollar allowed to trade for what it's actually worth (nothing), the price of gold would sky-rocket. Strong dollar = weak gold, and vice versa. In other words, artificially suppressing the value of gold makes the dollar look like a better investment than it actually is. But the system's been tinkered with for so long, none of the fundamentals, like "supply and demand," apply anymore. We haven't had a "free market" since 1913, so it's anyone's guess what the outcome will be. Having said that, understanding that there are no guarantees, the "safest" bet for preserving wealth in troubled times has always been Au and Ag. That's how I see it, anyway. I try to keep it simple and not get too bogged down in the fine print. In a worst case scenario where by mismanagement, sinister motives, or natural disaster the dollar collapses, there's no way to know what our Au and Ag will be worth in the future. But, we DO know what a dollar will be worth: Nothing.

reply to post by MeTarzan


Sir, I respectfully disagree. The United States abandoned the gold standard in 1933.

On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.

www.history.com

And you're quite correct that we have not had a free market IN THE US for 100 years, but its very naive to assume the principles of supply and demand don't control commodities. No one alive today knows what a free market is like to operate in.

Originally posted by NOTurTypical
reply to post by ANNED

 

You realize there is a finite gold supply correct?

The population of the Earth is not finite, the demand increases daily.

FINITE! ! ? ?

what percent of this finite resources has been mined?

1-3% max..


WHO CONTROLS the MINES ?? that is who controls the price!!

price goes up? price goes down? the amount MINED determines it ALL>.

and "PAPER" gold is the next reason,

Originally posted by HanzHenry

Originally posted by NOTurTypical
reply to post by ANNED

 

You realize there is a finite gold supply correct?

The population of the Earth is not finite, the demand increases daily.

FINITE! ! ? ?

what percent of this finite resources has been mined?

1-3% max..


WHO CONTROLS the MINES ?? that is who controls the price!!

price goes up? price goes down? the amount MINED determines it ALL>.

and "PAPER" gold is the next reason,

Unless you made alchemy work, yes, gold is a finite metal.

The gold in the Earth is not on the market, therefore has no effect on supply side economics.

Originally posted by NOTurTypical
reply to post by MeTarzan

 

Sir, I respectfully disagree. The United States abandoned the gold standard in 1933.

On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.

www.history.com

And you're quite correct that we have not had a free market IN THE US for 100 years, but its very naive to assume the principles of supply and demand don't control commodities. No one alive today knows what a free market is like to operate in.

edit on 10-8-2013 by NOTurTypical because: (no reason given)

edit on 10-8-2013 by NOTurTypical because: (no reason given)

Well, that was informative, and very annoying, will have to revisit the issue, thought I had it about right. Off the gold standard before the formation of the IMF and World Bank? Doesn't sound right, but the quote is plain enough. I'll look for myself, but what did Nixon do? The way I remember it (not personally, I was a long-haired 18 year old at the time, what the heck did I know) Nixon took us off the "gold standard" and away went the printing presses, we can print as much as we want. It was Bretton Woods (44-45?) that decided that in order for US dollar to be the world's reserve currency, the US had to promise to redeem dollars in gold. That tells me we were on the gold standard all along, but I'm just talking off the top of my head, deserves another look, want to get it right. Thanks for the tip.

The price of gold is controlled by fear and nothing else. Fear that the economy is going to collapse, fear of war, fear of Nibiru...what have you.

Honestly, if the economy collapsed tomorrow and someone offered you shiny metal for your deer meat, would you take it? I would think the deer meat would be worth more than all the gold in the world since it can feed your family. Trade will be the key. A jar of homemade shine would get more groceries during a SHTF scenario.

Heck, I could use lead more than gold, I can make the lead into balls to shoot deer so I could trade for some shine!

Seems odd that, gold was going up and up during a time when folks thought the world was going to end. Now that 2012 has come and gone, gold is starting to go back down as peoples fears are subsiding. I'm sure there will be some other fear to build the price back up, just wait.

Originally posted by NOTurTypical

Originally posted by HanzHenry

Originally posted by NOTurTypical
reply to post by ANNED

 

You realize there is a finite gold supply correct?

The population of the Earth is not finite, the demand increases daily.

FINITE! ! ? ?

what percent of this finite resources has been mined?

1-3% max..


WHO CONTROLS the MINES ?? that is who controls the price!!

price goes up? price goes down? the amount MINED determines it ALL>.

and "PAPER" gold is the next reason,

Unless you made alchemy work, yes, gold is a finite metal.

The gold in the Earth is not on the market, therefore has no effect on supply side economics.

the gold in the mines IS... REPEAT... IS FACTORED INTO THE VALUE OF GOLD.. let me rephrase.. the ANNOUNCED discoveries of GOLD in the ground DOES.. repeat DOES affect the value of gold,.

It would be ridiculous to think else.

reply to post by HanzHenry


Gold FUTURES!

(Paper gold)

Originally posted by NOTurTypical
reply to post by SPYvsSPY

 

You trade the shiny stuff for many of those Franklins. And when the economy collapses, you can always keep those Franklin's for toilet paper.

Thing is though you would have had to apply the ages old "buy low sell high" law to make any franklins. If you bought high....well now you are losing franklins.

Originally posted by Logarock

Originally posted by NOTurTypical
reply to post by SPYvsSPY

 

You trade the shiny stuff for many of those Franklins. And when the economy collapses, you can always keep those Franklin's for toilet paper.

Thing is though you would have had to apply the ages old "buy low sell high" law to make any franklins. If you bought high....well now you are losing franklins.

Depends how long you hold it before you sell.

I would never advise keeping precious metals for an investment strategy like that. Play the stock market lottery for that methodology. My metals is for my retirement, so my initial investment was looking at a 50 year return minimum.

I have pounds at this point, I always spend my raises on gold, and tax returns. I'm buying 3/4 an oz a month.

reply to post by NOTurTypical


I'll stock up on my franklins, you stock up on your paper gold. I can take mine to the corner and purchase things, could you? If the economy collapses neither will work well but *cib*. Also chunks off gold would be uncomfortable. Could reuse them I guess. That economy collapse thing is always a good fake. If you had cash money during the great depression you were the man.

This is an example that works for me. Guy down the road bought a fully loaded fifth wheel a few years back. Now he over extend himself and needs franklins bad! I purchased this wonderful like new camper for 15% of what he paid for it. I flashed cash and his eyes got big. I would say if I showed him some paper gold certs or a shiny chunk that would not have worked. My franklins did their job *CIB*