Gold News from Kitco! Will gold continue to go up??

. .and fear.

Oil should be its main comparative market, and absent major financial shocks and fear it tends to follow.

 

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Today, we would have to add, shills/doomsday/to-the-moon and their opposite ilk, who run pump and dump campaigns.

Jim

 

Gold will never see $875 again!

 

Oil has nothing to do with gold. At times they move in lock-step, other times they diverge (like the last few months).

 

"Nothing to do with gold"? Huh? If oil goes to $130, do you think the miners will keep mining if gold stays the same? There is a direct, variable cost associated with the price of oil and gold cost to miners. I would GUARANTEE you that if oil were $130 and gold $800 an ounce new mine production would nearly cease, (maybe a few extremely low production cost mines would continue, and you would get some from copper mines assuming copper went up dramatically with oil).

However, this is where it gets messy. Inventory could very easily cover this deficiency for a long time, something like a central bank lower their reserves. However, absent market fear, central bank actions, etc., as a BASELINE gold should always follow oil really. Make oil $20 a barrel for another decade and we could very well see $800 gold again. Maybe someday when Caterpillars are all electric this correlation would break, but I do not see it today. Today I see lowering interest rates and fear on the minds of Chinese, British, and a few other areas of the world.

 

If there is a shock like that, yeah, there would be an impact. But you are talking about CORRELATION in the past and while the two have tracked for weeks or months at a time, overall -- especially of late -- the correlation is very low.

The factors that would push oil to $130 -- supply shock, not global demand increasing -- would negatively affect MINERS but not necessarily impact the price of gold. It MIGHT -- but it's not a 1-to-1 lock.

The price of gold has detached from the performance of the mining stocks, as you are probably aware.

It depends on WHAT moves the price of oil, not the move itself. Is it a supply or demand move ? Big difference.

 

We have always had them in this market Jim. You know that. I remember VCR tapes circulating around in the 70's with their pump and dump campaigns. unfortunately this market has always been rife with con men wanting to sell you massively overpriced gold, wanting you to send money in and failing to deliver, or even worst those who promise to store it for you and when push comes to shove investigators find out there never was a "vault" with anything in it.

Gold is a fine contra asset. Those who wish to buy it should do so over a long haul. They should have been buying it the last few years when I was posting here that now is the time to buy, when no one was looking. Always buy physical metal, buy from a respected dealer, and store in a SDB or someplace safe. My opinion anyway.

 

These stupid little arguments that you people get in are such a waste of time. You must be retired and have nothing else to do?

 

I would respectfully disagree about oil and gold correlation. I never look at this correlation in short term, of course, as I wrote, inventories can distort this for quite a long time. I am talking about a baseline assumption for long term performance. A lot of things will affect short term performance, (to me a couple of years is short term, I invest for decades, not days). As a base, you have to factor cost of production, and the most important variable cost of production is oil. Now, layer on 20 other factors and you have the gold price. Of course for a year or two they could have negative correlations even, but long term they economically must correlate at some point.

 

What was the point of this?

And no, not retired. I am a very senior executive at a billion dollar firm. How successful are you?

I take short breaks at work and this is my relaxation, to try to help others in trying to become educated in the market.

 

I have noticed of late that you seem to like to call folks here stupid more often than not. I have to guess that you believe that your opinion is the only one that matters on this subject? Bring it on Einstein, let's hear your perfect answer to all of this. Otherwise, build yourself a bigger sand box and go pet a pony. But stop using insults and learn a little respect on this forum. BTW, I had 47 years in the work force and earned my retirement, have you?

 

Says the person whose fights-picked-per-post ratio is surely among the highest on the site.

 

The trend seems to always reflect on the Stock Market. When the Market is up, gold & PM's become stagnent. When the Market dips, PM's often increase a bit. Personally, being a bit older, I'd like to see PM's back to the 50:1 ratio with a steady climb where we can enjoy collecting, trading and selling knowing our investment is solid. Sometimes the roller coaster ride gets a bit too nerve racking for me!

 

"Will Gold continue to go up?"

The real question is..."Will the Dollar continue to go down?"

High Gold = Weak economy
Low Gold = Strong economy

Which do you prefer?

 

But-but-but a Very Highly Placed Official just argued that a strong dollar (corresponding to low gold) is a bad thing, because it makes American exports less competitive!

 

Now you're bringing foreign currencies into the mix. A strong dollar relative to the Yen (or Euro, or Yuan, etc) can still be weak relative to gold...(unfortunately).

Our "Very Highly Placed Official" is referring to the strong dollar relative the the ultra weak currencies of our trading "partners"...not gold. We should probably stop there.

 

?

The dollar is strong versus all other currencies, but weak versus gold? But gold is not a currency, it's a commodity. Gold cannot be "strong" toward the dollar, unless you are saying any inflation just means they are "strong" towards the dollar. Most people simply say its price went up.

 

And we aren't the only ones.

 

Stupid is as stupid does, oh wait, that's in a movie or does that apply here as well? I don't know as I've worked 48 years, served my country and I'm sure I've earned my retirement as well. I'm enjoying my free time but I still work in my antique shop among other things.

 

When we have a surplus that may be true. When the USA needs to import, they have very common patterns. Sellers of gold often convert to gold when they get dollars, if and when they think the dollar is weak, or going weaker. The dollar as an exchange currency may also be nearing its end days. The EU has long sought to eliminate the near monopoly of the dollar as the currency for settlements. With tariffs and sanctions the concept of depository receipts has come forward fast, and likely will gain traction over the next 2-3 years. Gold will spiral in dollar terms if that happens.