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Inflation Impact On Gold And Silver

 
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Author Previous TopicReplies: 13 / Views: 798Next Topic  
Valued Member
United States
409 Posts
 Posted 10/24/2021  6:20 pm Show Profile   Bookmark this topic Add jaxenro to your friends list Get a Link to this Message
Do you think the increased inflation rate in the US will impact prices?
Bedrock of the Community
Australia
19345 Posts
 Posted 10/24/2021  6:59 pm  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
Yes, absolutely.
Nevertheless no real value profits can be made on re sale, unless the bullion value rises faster than the inflation rate. You may still have to pay Capital Gains Tax on the profit margin above the inflation rate.

Some bullion investors try to illegally avoid CGT, by simply ignoring it, and not declaring the profit.

Buy/sell spreads also have to be considered.
Valued Member
United States
409 Posts
 Posted 10/25/2021  03:37 am  Show Profile   Bookmark this reply Add jaxenro to your friends list Get a Link to this Reply
No cap gains impact as I don't sell nor am I looking for profit

I would be happy if it simply holds its real value versus inflation
Pillar of the Community
United States
4220 Posts
 Posted 10/25/2021  07:17 am  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply
No. Barely keeps up with inflation as it is.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
Pillar of the Community
United States
2706 Posts
 Posted 10/25/2021  8:40 pm  Show Profile   Bookmark this reply Add Oldfordman to your friends list Get a Link to this Reply
Yes.
Valued Member
United States
251 Posts
 Posted 10/26/2021  5:52 pm  Show Profile   Bookmark this reply Add Dowhat to your friends list Get a Link to this Reply
I just add, stack not for sale. This is your hedge against inflation. Inflation, devaluation of the dollar, replacement of the reserve currency, and crypto tell me keep it all, as it will soon be gone. But you will have something many people wish they did put away. Demand now exceeds production already.
Have you noticed copper supply and demand. Same scenario.
Exchanging PM for fiat money is just plain stupid, IMHO.
Bedrock of the Community
Australia
19345 Posts
 Posted 10/26/2021  6:33 pm  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
To put it another way, relative to my earlier post,
bullion prices will rise in dollar terms, if the dollar suffers from inflation,
(provided all other factors which affect price remain the same, which never happens).

It is apparent to me that not just the U.S., but also most of the rest of the World is facing a period of higher inflation rates. This means that the exchange rate between major currencies will remain within acceptable limits. If follows from this condition that bullion prices will rise against all major currencies, but the real value of bullion will not change much.
Pillar of the Community
United States
2438 Posts
 Posted 11/08/2021  09:25 am  Show Profile   Bookmark this reply Add thq to your friends list Get a Link to this Reply
In the mid 1990's I sold 4 common gold eagles for $200 each and bought a nice Breitling watch, which I'm wearing right now. Common gold eagles now trade at $1000, and I could still buy a comparable watch by selling 4 of them.

Gold has kept pace with watches anyway. Over the last 25 years, gold has had its ups and downs, but the long term trend has been up. It will probably continue that way, but who really knows? Watches on the other hand have gone up in price steadily.

For me the value of the metal is in being able to use it buy a watch, or a collector coin, or pay for health insurance. It has been a pretty good inflation hedge.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
11/08/2021 10:42 am
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Canada
532 Posts
 Posted 11/10/2021  12:13 pm  Show Profile   Bookmark this reply Add vonigohcr to your friends list Get a Link to this Reply
@sel_69l


Quote:
You may still have to pay Capital Gains Tax on the profit margin above the inflation rate.


Not sure I agree with you. I get it that all jurisdictions are different but here in Canada, inflation doesn't matter when it comes to calculating CGT. Assuming that all lifetime limits and other thresholds have been addressed, if I purchase a commodity for $100 and later sell for $110, the $10 of gain is subject to CGT. It matters not that inflation has impacted the price of the commodity during the period that I held it. Were that the case, if the current purchase value of the commodity is $105 then the CGT would be based on $5 or if the current purchase price $115, then a $5 capital loss would apply... That is not the way that taxes in Canada (at least) work. CGT is based on any capital gain between purchase and selling price regardless of other factors.

This is the reason that investments that don't exceed inflation are so nasty... any gain in raw value is taxable regardless of whether there is a net drop in purchasing power... the taxation applied only reduces your returns further.
Bedrock of the Community
United States
10245 Posts
 Posted 11/30/2021  9:35 pm  Show Profile   Bookmark this reply Add TNG to your friends list Get a Link to this Reply
Weird precious metals prices today with out of control inflation. Palladium is at the lowest I've noticed in the longest time. ( I don't own any )
So much for hedge against inflation today.
Looks like a window to buy but can it get a lot worse? Crazy?
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Canada
4138 Posts
 Posted 11/30/2021  10:50 pm  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
Average price of gold when the gold standard ended
in 1933 was 26.33 per ounce for the entire year .
That amount invested at an average rate of 6 per cent
compounded semi annually ( 89 years ) is today
Worth USD $5075.46 .
An ounce of gold today is roughly $1800.00 .
Even though I sell precious metals as part of my business ,
I do not , will not , and never have invested in them .
In my opinion gold is nothing more than a hedge and silver
Is simply awful. As an investment vehicle PMs are brutal .
Most super rich invest in Real Estate or the Markets .
Pillar of the Community
United States
4220 Posts
 Posted 12/01/2021  12:08 pm  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply
Gold selling today for same price that it was ten years ago.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
Pillar of the Community
United Kingdom
2563 Posts
 Posted 12/26/2021  05:13 am  Show Profile   Bookmark this reply Add DavidUK to your friends list Get a Link to this Reply
Gold has been under achieving. When PMs go on a bull run they really do, the trouble is they sit doing nothing for long periods. The fact that gold is the same as ten years ago makes it quite attractive... its over due for a pump and a good time to accumulate in my opinion.
Valued Member
Canada
77 Posts
 Posted 12/30/2021  08:30 am  Show Profile   Bookmark this reply Add sbr to your friends list Get a Link to this Reply
I think that a long base is bullish as well .. It seems most asset classes have their time in the sun. Arkk funds had an amazing year last year not so good now . Our best money made at the start of the pandemic was in Fang stocks and large blue chip dividend stocks. House prices on the prairies were stagnant for 25 years ,then poof up 150 % over a few years. " The longer the base the better the race" as long as you are not investing in Discer manufacturers . Best to be diversified and I think precious metals are part of that.
Edited by sbr
12/30/2021 08:33 am
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