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 Replies: 24 / Views: 2,722 |
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Pillar of the Community
United States
1130 Posts |
Gold briefly went past the $1000/oz mark, before withdrawing back into the 990s.
Silver has surged almost $1 the last 2 days.
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Moderator
 United States
187702 Posts |
It does not look like it would close above 1000, but there are still a few hours left. Interesting.
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Valued Member
United States
57 Posts |
Hopefully this isn't the peak right before the downward slope.
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Pillar of the Community
 United States
1130 Posts |
If the dollar keeps sliding, commodities like oil, gold and silver will go up, relatively speaking.
I just pulled my silver rolls from the sell forum today since it's worth a bit more now. Too bad there were no takers.
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Pillar of the Community
United States
5318 Posts |
" If the dollar keeps sliding, commodities like oil, gold and silver will go up, relatively speaking." The real question is...how much is spot gold/silver driven by the dollar exchange rate? To test that theory, it can't hurt to compare gold against the Euro. Here's one such chart from Bulliondesk.com; or find yourself another. If gold is rising against both the $ and the €, then something else could be at work. Again, I'm not here to deflate anyone's hopes of making a bundle on the metals market, but calling the top is very tricky, especially when there are big players who know much more than any small investor--and will manipulate things to their advantage--not yours. I say this because I've been through several speculative bubbles, and my brokerage business was ruined when the dot-com run caved in. I had to dig myself out of a financial hole, and made a point to learn something about speculative manias. On that note, the current metals market may indeed be one--that's just my call; make your own. I think it would suck if anyone I know bought gold @ $1000 only to have it fall to $800 and not break even for possibly years. Good luck!   |
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Pillar of the Community
United States
2602 Posts |
In my opinion, there are too many pressure points that will keep precious metals high for awhile. Weak dollar, high gas/oil, weakened economy, mortgage crisis. When the fed drops interest rates (I'm guessing it will be 0.75) soon, it could lead to inflationary pressures and a further battered US dollar. All of this plus the continued demand by developing countries (India, China) for precious metals should keep the prices high for at least a few more months and possibly 6-12 months. It is when the economy starts recovering (and I don't think we are close yet, as the recession really just started), gold and silver will tank and probably very hard and very fast.
Personally, I am a seller at current prices, despite what I said above, because prices are at historic highs. But I do think the price can and will go higher still. The price increase will be fueled by a lot of newcomers to gold and silver, because safe haven against the weak dollar.
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Moderator
United States
187702 Posts |
I think the weak US Dollar has global implications. The rise of precious metal values versus other currencies could be from fear: if the "Mighty US Dollar" can fall hard, then so can any other. Precious metals and other commodities will always be seen as a safe haven for many.
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Pillar of the Community
United States
533 Posts |
quote:
Again, I'm not here to deflate anyone's hopes of making a bundle on the metals market, but calling the top is very tricky, especially when there are big players who know much more than any small investor--and will manipulate things to their advantage--not yours.
But the small investor has one advantage. Liquidity. Those big dogs that are buying and selling thousands of oz of gold and silver can't just dump their entire stock of gold on the market. quote:
Hopefully this isn't the peak right before the downward slope.
This is not what a top looks like. This is just a small resting place for it to gather some more momentum. Personally, I say gold will be up at least 25% from here before year end. |
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Pillar of the Community
United States
5318 Posts |
"Precious metals and other commodities will always be seen as a safe haven for many." Or put differently: in times of economic distress and uncertainty, people run up various assets in hopes to hedge their income. The problem lies not in historic market demand/trends, but in the popular consensus that this hedge is a "sure thing". There's always talk of a "new plateau" and reasons are amply given why historic price levels no longer apply. It's that popular perception that drives investor interest, which in turn drives demand and prices up further. Soon, things get high enough that it seems utterly foolish not to do it, because everyone's getting rich, or so it seems! This creates more demand--and eventually volatility. As reference on speculative manias, I'll recommend "Irrational Exuberance" by Robert Shiller, or "A History of Financial Speculation" by E. Chancellor. Please note: this is not a rebuttal to anyone, but simply good information for anyone interested in boom psychology--and protecting themselves against downside risk. Use it as you see fit, and good luck!  Edited by KurtS
03/13/2008 5:31 pm
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Pillar of the Community
United States
2335 Posts |
KurtS...I've read your posts on this with interest & I agree 100%. I've seen this same cycle repeated many times when speculation overtakes fundamentals. When the peak is reached, be it 10% or 50% higher, the drop will be sudden & dramatic. I firmly believe that the drop, when it comes, will be in the 25-30% range, & will happen so quickly that the little guy will be unable to avoid it.
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Moderator
United States
187702 Posts |
quote:
Or put differently: in times of economic distress and uncertainty, people run up various assets in hopes to hedge their income.
Yup, I like your phrasing better!  |
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Pillar of the Community
United States
533 Posts |
quote:
I firmly believe that the drop, when it comes, will be in the 25-30% range, & will happen so quickly that the little guy will be unable to avoid it.
Unless this 'small guy' is doing a small stint in the bighouse for a couple weeks, or his local pawn shop will no longer buy his bullion there is no way he could get totally caught holding his gold for the entire drop. At current levels, a 25% drop would take a minimum of 3-4 days, and that assumes that gold drops the daily limit of $75/oz each day with absolutely no bounce. After the 30's daily trading limits were established to prevent the extreme drops that happened then. (not that a 25% drop in 3 days wouldn't be pretty darn extreme.) |
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Pillar of the Community
United States
1130 Posts |
Thanks for the insight Kurt. I'm being careful not to put all my eggs in one basket. Been burned by the .com craze before and learned my hard lesson.
I do have a "sell trigger" for my gold and silver bullion. If price go higher beyond that, I'll just lick my chops and be satisfied with what I walked away with.
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Pillar of the Community
United States
2335 Posts |
quote:
Unless this 'small guy' is doing a small stint in the bighouse for a couple weeks, or his local pawn shop will no longer buy his bullion there is no way he could get totally caught holding his gold for the entire drop. At current levels, a 25% drop would take a minimum of 3-4 days, and that assumes that gold drops the daily limit of $75/oz each day with absolutely no bounce. After the 30's daily trading limits were established to prevent the extreme drops that happened then. (not that a 25% drop in 3 days wouldn't be pretty darn extreme.)
I was not aware there were limits to how much the price of bullion could fluctuate in a day. Could you point me in the direction of the authority that regulates world wide gold prices? If the drop takes place over 3 days, or even a couple weeks, there will be plenty of little guys that won't believe the trend is downward until too late, or they will think they can sell on the "bounce". But hey, I've been wrong before & I'm sure I'll be wrong again. This could be one of those times. |
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Pillar of the Community
United States
5318 Posts |
I'm glad you guys took my comments as a cautionary note--and nothing more Edited by KurtS
03/13/2008 8:25 pm
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New Member
United States
7 Posts |
Soon the gold value will out pace the collector value on stuff like this... Image:  15indians.jpg75.76 KB |
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Replies: 24 / Views: 2,722 |
Posted 03/13/2008 3:25 pm
15indians.jpg
