$3,000 Gold Price Forecast from Merrill Lynch/BOA

Discussion in 'Bullion Investing' started by GoldFinger1969, Apr 21, 2020.

  1. FryDaddyJr

    FryDaddyJr Junior Member

    yeah anybody. It takes awhile to acquire. will you really sell?
     
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  3. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Who knows....some of my bullion, maybe. I'd probably not sell my numismatics or semi-nums unless they went parabolic like 1979-80 or 1988-90.

    You could have a major "bid" in the market for decades as hundreds of millions of Asians, Chinese, and Indians become middle-class....could be lots of gold buying. Measured against Central Bank selling, existing gold stocks, and annual mine production, a supply/demand analysis should be able to tell us where the tailwind and headwinds are.
     
  4. kaparthy

    kaparthy Supporter! Supporter

    Well, it is all over the WWW:

    Kitco (of course): https://www.kitco.com/news/2020-04-21/Bank-of-America-calling-for-3-000-gold-in-18-months.html
    Bloomberg: https://www.bloomberg.com/news/arti...-gold-target-to-3-000-as-fed-can-t-print-gold
    Yahoo Finance
    https://finance.yahoo.com/news/price-gold-fundamental-daily-forecast-104047053.html
    Business Insider
    https://markets.businessinsider.com...timulus-bank-america-double-2020-4-1029113912

    So, is it news? Is it push?
    And if you read the details, $3000 is their 18-month ceiling forecast. I would not wait 17 months to buy, but you have a few days.

    For myself, I am looking at the price level. As all prices rise, so will wages, which are, after all, just another price. In fact, depending on who you are in the markets you work, you could push your wages up ahead of the curve.

    Forget wheelbarrows of paper money. It's all electronic.

    A thousand years ago, Bill Bradford of Liberty Coin asked me to consider a "time machine" challenge. If you could go back, say, to 1916 and get a roll of 1916-D dimes and hold on to them, how long would have to hold them to make any money on them? 50 years? 60? 70? But if you could make 1% a day for 60 years, you could not calculate the return (10^95, actually). Buy and hold is a losing strategy. You make money by trading.
     
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  5. FryDaddyJr

    FryDaddyJr Junior Member


    or you could have bought coca cola stock, or shell oil
     
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  6. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Yeah, except you need to be right most of the time and most people are WRONG most of the time.
     
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  7. kaparthy

    kaparthy Supporter! Supporter


    Again, from 1916 forward to the eve of the 1980s when we had the discussion, that period includes the Depression years. The Dow Jones Industrial Averages did not regain their 1929 level until 1954. In the mean time, you could have run a coin store, as did Max Mehl, Thomas Elder, and many others. You could have done many other things and made money in many other ways.


    Well, yes, when it comes to "day trading" the stock markets or playing with commodities futures. But, obviously, your barber, auto mechanic, coin store, ... they all seem pretty good at guessing that you will pay them rather than go into it for yourself.

    We had this discussion at work one day. My rhetorical question: "Why isn't everyone a brain surgeon making a million dollars a year?" It is not just for lack of skill or intelligence or opportunity, or (as you suggest) ignorance of the markets.

    And, actually, perhaps it should bear some investigation as to whether "most people" are "wrong most of the time" when you consider that most people (at least in the post-industrial nations) are mostly doing very well over time, gaining wealth, improving their standard of living.
     
  8. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Market-timing is very difficult. You need to get OUT...and then get back IN.

    Very few people can do one correctly.

    Two ?
     
  9. GoldFinger1969

    GoldFinger1969 Well-Known Member

    From RBC:

    Today’s report from the World Gold Council highlighted that
    the COVID-19 pandemic has done two things for gold demand, firstly, it slashed consumer demand to date by ~28% y/y, but
    also precipitated a massive inflow of investment demand that when added with consumer demand, pushed total demand up ~1% y/y. While we had long thought that elevated prices could hold back demand, that factor has been heightened given recent price action, and the bigger factor at play on the consumer side is the ongoing stay-at-home orders amid the pandemic, which have essentially closed off the retail channel.

    Of course China and India, which are the largest consumer
    markets, saw 65% and 41% y/y reductions in total jewelry
    demand over Q1. On the other side, ETPs saw some of the
    highest quarterly inflows in years, with nearly 300 tons added to holdings globally. We expect these trends won’t stop with Q1 or even Q2 as investment demand seems likely to outweigh declines in consumer demand for the time being.
     
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  10. kaparthy

    kaparthy Supporter! Supporter

    RBC =? Royal Bank of Canada?
    RBC=? RBC Capital Markets?
    RBC=? RBC Wealth Management?

    Whoever they are, the largest fraction of gold consumption is in jewelry. Coins are a distant second. In many places, her gold jewelry is every woman's personal store of (household) wealth, separate from her husband's.
     
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  11. GoldFinger1969

    GoldFinger1969 Well-Known Member

    RBC = Royal Bank of Canada
     
  12. GoldFinger1969

    GoldFinger1969 Well-Known Member

    I did an analysis of this for BARRON'S years ago:
    • Yes, the overall price index took until 1954 to get even.
    • But...if you re-invested dividends, you were even by 1942.
    • And...if you bought more each year equal to your purchase at the 1929 DJIA high (IOTW, at the worst time of the year) and re-invested your dividends, you were even by 1936. :D
     
    Last edited: May 2, 2020
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  13. fretboard

    fretboard Defender of Old Coinage!

    So, I'm curious!! :D Any of you guy's buying gold right now??
     
  14. kaparthy

    kaparthy Supporter! Supporter

    I know. I saw it. I left it out because it disproved my thesis.
     
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  15. GoldFinger1969

    GoldFinger1969 Well-Known Member

    You didn't see my BARRON'S piece, did you ? That was like 20+ years ago !!
     
  16. GoldFinger1969

    GoldFinger1969 Well-Known Member

    No, my PT job stopped so I'm in a holding pattern.

    If I was working FT right now, I'd be buying, yes.
     
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  17. kaparthy

    kaparthy Supporter! Supporter

  18. kaparthy

    kaparthy Supporter! Supporter

    No, I found this from Business Insider in response to the 2008 crash
    https://www.businessinsider.com/hen...nly-took-5-years-to-recover-after-1929-2009-4

    But yours is probably archived. I have found old articles of mine by putting in a direct URL instead following menus. In one case, I had a problem with the company. They paid me for some articles but not for all of them. We went around on that; and they said they would just remove all of my work. But it was still there. They kept telling me that it was not and I kept sending them links showing that it was. That was about 2001.
     
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  19. medoraman

    medoraman Supporter! Supporter

    Thank you!

    No one in the lazy press gets this right. They always compare dividend versus non dividend stocks and pronounce the non dividend ones the better investment. They conveniently ignore dividends, since that requires mental thought and work to report accurately. At most, they say something cutesy like "well the loser investment does give you a little money to spend each year". They completely ignore value of reinvestment compounding, the benefits of the financial discipline imposed on the firm that pay out dividends. Catastrophic valuations like Uber, We, and Enron cannot happen if the firm needs to generate cash for shareholders.

    I am so sick of bad financial reporting. I am glad to hear your position sir.
     
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  20. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Thanks...but in fairness, the recent 10-20 years dominance of growth over value stocks is very pronounced.

    I'm a Value guy but you can't argue with the numbers. Just check out the NASDAW vs. the DJIA/S&P 500 since late-March.
     
  21. masterswimmer

    masterswimmer Well-Known Member

    I too have been a proponent of growth & income stocks for years. Always DRIP the dividends. Its paid off nicely.

    In the last few years I've been investing in monthly dividends as well. That's been a great play. Not only does one of these pay dividends monthly but it's a dividend aristocrat.

    Looking for growth stocks isn't all that difficult. There are plenty out there. Adding dividends to the mix just makes sense.

    My grandsons are 4 y/o and 2 months old. I've already set up UTMA accounts for them. Funded them to DRIP and set up automatic monthly deposits into them. Hopefully they'll have a decent college fund after 18 years of this strategy. I've got another grand on the way and it'll be the same setup for that one.

    I also bought each of them piggybanks that we deposit into each time we see them. This lets them see the savings grow right in front of their eyes. UTMA is great, but that's not something they understand yet. Personal finance is one of the legacies I want to instill upon them.
     
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