Gold is Back!!

I see your point, GX, but have to diagree as well. Anyone who comes to this, or any online forum for investment advise, is being completely irrisponsible. People may give out opinions and personal experiences here, but that shouldn't be taken as a literal guideline as to how to invest or purchase anything.

As for being sued, nobody posting in any forum has been sued over slander and lost. Same goes for Ebay. If this were the case, who's to say when someone posts a coin pic here looking for opinions on grade and the majority of us agree it's MS 64 and the person submits it to be graded and it comes back as AU, does that person have a right to sue us for misrepresentation? I think not. It's absurd.

We discuss metals here because, of all things....coins are made of metals, and it does have a direct and profound impact on the hobby and out buying and selling.
Guy~

 

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If you say forums have never been sued before, I'm afraid that's not the case. Cointalk has been threatened to be sued in the past. A seller claimed that he lost his reputation as a user here claimed that he was selling counterfeit coins where he hasn't (or maybe he was). Post was deleted after the threat. Not a funny case and I'm not talking bulls here. There was another major case of a TPG slabbing company suing a forum but I can't quite remember what happened to the case off my head. I'm sure the admins remembered it.

Thing about metal prices is, you or I or anyone don't have control about it other than the major players. If prices jack up, you say "c'est la vie" and continue on with your life. There is nothing you can do about it unless you happened to own a mine and mine the minerals yourself, exploit and sell them or stockpile. What is REALLY troubling is when prices drop for a bit and people think it's a bargain to buy and resell. Or worse still, there are some that think it will go might higher. How much more different is this to a stock market? Not a lot to be honest. I'm sure you didn't intend it that way but some recent posts are suggesting otherwise. I really don't want to be near anyone who lost a lot of money on bullion prices.

 

Like I said, nobody has been sued and lost over a forum post. People sue over everything these days, but they usually don't win. Find a single example of where a forum was succesfully sued and I'll change my stance.
Guy~

 

I fully understand your point and it isn't anything new. That's why I indicated to ctrl that the amount of silver coming from personal sources wasn't really important to pricing. Also, I doubt that most finance experts know much about geology or the physical supply and demand of metals. They've been calling the top in metal and energy prices for three years. Someday they'll be correct, but their customers and followers will be broke by then if they aren't already. "Don't invest in commodities sir, it's risky. We recommend that you overweight your portfolio with solid investments like Bear Sterns common stock.":secret:

 

You may win if somebody sues you, but you lost... all the money you pay to defend yourself. Attorneys, or good ones anyway, start out at least $400.00 an hour, and it racks up quickly. It frankly is not worth going there.

 

coleguy, appearently ACG did sue and lost but the defendants had to pay for their defense costs. It's full of nonsense but it happened.

Thanks Cloud, that's all I wish to point.

I have to apologize if I have provoked the thread. I come with a background of geology and mining engineering and I'm covering the financial aspects of it. Let's admit it, geologists yell at mining engineers for not trying to understand that if you don't design a mine carefully with geological constraints - you have a roof collapse. You'll be flatten as a pancake if you happened to be inside. Mining engineers dislike accountants as they discount too many factors and then input some insane rate of return that investors are expecting. Accountants just hate the amount of uncertainties that mining engineers provide which makes accounting very difficult. What do you get? A bunch of unhappy men working together to share a common goal to make profit. Not quite healthy but that's how life is (isn't it)

I'm not saying that we shouldn't discuss about bullion pricing - it's just that it's not appropriate in this forum without the right people. It's like trying to get a plumber to fix a car. Yea sure, might work? That said if people are able to explain why prices went up and down due to critical events, that is something I am very keen on reading as well as able to convince others why prices are going as it is. For example in platinum, Johnson Matthey does an excellent review of what is happening: http://www.platinum.matthey.com/publications/116403639025852.html It's free by the way.

Something like: infrastructure in S. Africa isn't able to keep up with electricity demand, therefore unable to keep up with production rates. South Africa dominates over 50% of production and is a key factor. A new deposit has been found in Zimbabwe and is under development, production expected to be ready in 2012. Etc.

Now that is the gold - information.

 

Don't apologize. Your posts are very informative and bring a viewpoint to the discussion that most people can't access any other way. But you're never going to get people to stop trying to figure out whether they are paying too much or getting a bargain compared to what future prices are likely to be -- even if it can't be done.

 

Don't know what the owner gets from the refiner but it's worth enough to make a trip to the north side of Chicago from Indiana. Probably a 40 mile trip with high gas prices and the headache of traffic.

As for buying the average rate is 10 times face value for junk silver. Bigger sellers can get 11 times.

Refiners want at least 500 ounces of silver I believe. Not sure on gold but he buys a lot of jewelry too.

What ISN'T sold to refiners usually ends up in the hands of other dealers. I figure he probably gets 11 times face for what he bought at 10. These are always at least $500 face value bags.

Gotta tell you this Cloudsweeper. It's a real eye opener being on the OTHER side of the counter at a successful coin shop. Big trades happening all the time.

As for world coinage it's usually a win situation. As I stated, we don't have time to go through the stuff that walks in. ESPECIALLY world coinage. He doesn't specialize in it and the book to look it up in is HUGE as any world collector can attest.

A lot of the World proof sets turn out to be minted at the Franklin mint. Some beautiful stuff actually and frequently .925 fine. These he just basically tosses out an offer and %95 of the time they take it.

When time allows I look it up for silver content and value. This is when some beautiful proof coins end up in the melting bucket. Nothing like cracking out a PR69DCAM coin and tossing it into a bucket.

Of course I could probably buy a lot of this stuff cheap but if I don't have a buyer it will just sit in my house. How's that for ironic?

If silver spikes again I may actually crack open a bunch of 2003 Silver Proof Sets. I can get more at melt than I can selling the set and that's just plain sad.

clembo

 

For those of you who think that this is an advice column: it ain't.

That said:

Gold opened up today: +$13.60 to $895.40
Silver was also up: +.25 to $16.93

This is only an alert, this is not the real thing. This is only an alert.

No gold was killed in the posting of this alert.

No advice given, taken, or accepted.

 

How do I know that no gold was injured or worse yet, killed, because of your report? What consequential proof can you offer? Hopefully it is better than that damnable WMD report a few years back.

 

Give me a break, you have about 2 people getting killed or about 17 fatally injured for every ton of gold mined globally. If you say NO ONE dies from mining, you haven't seen anything yet. It's not much different from blood diamonds - just less people getting killed. Give some respect for those miners who work so hard only to get killed in the worst way possible - falling rocks, rock blasting gone wrong, air blast, long exposure to dust, radioactivity, heat, etc. Yes, we'll just walk over their corpses.

For more information, please read this site. http://www.kitco.com/ Again, I read, prices mean nothing unless you read the workings of what is going on.

 

One issue that might really be driving the rise in gold prices, is that Venezuela has announced they will not permit the two new mines to open, so that they can concentrate their resources on oil exports.

 

That's not really the reason. China, currently the world's largest gold producer is interested in buying a large amount of BHP Billiton's share and it is likely that it's not a small figure. China recently together with the US government bought up to 10% of Rio Tinto's shares and that shot up the gold prices back then.

Oil prices is also part of the reason as operational and shipping costs have increased. And then you have large companies doing hedging instead of selling on spot prices etc. Again, this is not the right forum for this. This is a better one: https://www.kitcomm.com/

 

Gold is currently over $900/oz. again. It is having a little run up today. For how long? Interesting....

 

Can you post a link to verify that the US government purchased shares? Not an opinion, but some sort of official confirmation. To the best of my knowledge, this would be illegal.

 

Anyway you look at gold is a commodity and always will always be valuable as "money". Changes occur in price but it will always continue to rise in value. This is for a multitude of reasons. One is our fiat currency isn't directly tied to any fixed ratio of gold or hard money by the federal reserve. Therefore the buying power of the dollar will change, reflecting the amount that is issued as credit by the banks. This in turn changes the amount of dollars it takes to buy gold and other commodities. Hence the buying power of the dollar changes, while commodities continue to rise. This is a result of the federal reserve actively debassing the dollar and printing so much they are throwing it out of helicopters. They also feel the need to bail out there buddies on wall street like Bear Sterns with government bonds ie: creating more money by creating debt. The American people have no say in these decisions and its destroying our economy. Companies went out of business all throughout our American history, and better companies emerged stronger as a result.

So as long this active practice of destroying the value of the American dollar continues, the dollar will continue to get weaker and gold will stay the same, which is up.

The days of 700$ an ounce gold are over. In 1964 a silver quarter could buy you one gallon of gas, right about 25 cents for a gallon of gas. SO take that same silver quarter today, if you didn't spend it in 1964, it contains 0.18084 oz. of pure silver. Today 5/16/08 silver is trading at a little under 17.00$ an oz. say 16.95$. So for melt that quarter is worth about 3.07 cents. Thats pretty close to what a gallon of gas is worth today, without gas taxes. See so the price of commodities stays relatively constant. Its the dollar that isn't tied to any real hard money, such as strict reserve ratios or a standard, and experiences huge inflations as a result of the federal reserve. The buying power of your hard earned saving is robbed through inflation, if you keep it all in dollars that is.

 

Commodities can fall in price. The buying power of gold in 1980 still has not been reached again. Holding only gold through the 20 years since then instead of having diversified investments more heavily weighted toward equities would have lost you money.

 

A couple of comments...

To krav83, I like gold a lot, but it isn't money -- although some goldbug sites like to say so. To be money, something has to act as a medium of exchange [gold isn't], a measure or standard of value [gold isn't], and a store of value [gold is pretty good here]. So until you can go to the supermarket, see food priced in grams of gold, and pay in gold, it isn't money.

To ctrl, when you measure anything from the peak historical price, the same argument can be made. A diversified stock portfolio has lost money when measured from the peak too. Same with real estate. If you measure gold from the 1980 peak, it looks bad. If you measure it from the price a few years before or after, it looks more acceptable. Also keep in mind that gold should not be compared to business investments. It should be measured against currencies. Which has more buying power -- an ounce of gold purchased 5 years ago, or the equivalent number of dollars? No contest. The Dow Jones Industrial Average was 1000 in 1965 and under 900 in 1982 not even counting the effect of inflation. Not too good for those holding a portfolio of diversified investments. It all depends on your start and end point in time.

 

My point was simply that gold does not "only go up".

And I think it's perfectly valid to measure gold against other investments. Until it becomes a medium of market exchange again, that's what it is. It's a commodity just like oil, rice, coal, etc. Each commodity has it's own properties that make it something special, and it's clearly the same with gold.

 

Cloud, I'm still searching for the article - there is a possibility that I may have misread (most likely did). It was clear that when BHP Billiton announced that they were planning to takeover Rio Tinto, the US and Chinese government expressed large concerns, if not clearly expressed their unhappiness over the whole deal as it would create a large oligopoly company with very few competitors left. Chinalco and Alcoa bought a sizeable 12% stake in the company.

This was a recent article about the whole deal: http://www.businessweek.com/globalbiz/content/feb2008/gb2008021_775042.htm

The impact of these two large companies clashing does have a notable impact on commodity prices. The only other notable mining company that is that large is Anglo-American but they deal mainly with platinum group metals and gold (maybe diamonds if I remember right). Xstrata is on the list as well but I can't remember what else they deal other than coal.