Sorry in advance for randomness I have only been watching precious metals for a little while, but it seems to not be following the trends of going up when stocks drop. Is this due to industries slowing down because of the "scare"? I hear people say not to play gold silver ratio. I think it will somewhat correct eventually. No I do not think it will ever be major profits, but I think it does have potential to make some. Am I wrong? I am wanting to sell some gold here but do not have the required number of posts, do replies to other threads count towards the number? Or is it only newly created threads? Anyways it is nice to be here and I hope to learn and grow here. Thanks for having me
for some reason many people think gold is 100% directed correlated to the stock market. As you have noticed, This is of course incorrect. In a stable economy Gold is much more reverse correlated to the US Dollar Index. If you do a long term chart of Gold vs DOW or US Dollar Index .. well, depending upon your start and end date you can make it look how you want to convince yourself of anything. But generally, going back in time, the stock market has been going up since, basically forever. So technically by now gold should be free and worthless, right? Gold is also considered a "haven" investment, in scenarios of instability, which is what we've had now for a while. For instance, back when gold was under $1300 many in the oil industry were moving their funds out of oil and into a more "stable" gold - for "wealth storage". of course, now across the world the Impact of the Covid19 is "fear" and gold, once again is considered a "fear" asset. But keep in mind Gold is used for other means too. People put their money into gold to get the appreciation. And gold at some point is a physical asset, so supply/demand comes into play. Also you have to keep in mind the gold price is normally based on New supply, not aftermarket supply which just follows suit with spot price. The latest dump of gold prices has been correlated to the transfer of gold to cash to pay off called margins/options and other equity related investments. Also, since gold is a storage of wealth. Apparently many are "cashing" in while it's still high and converting to Cash. As when you need to buy stuff, you need cash. Gold is pretty much useless in times of need .. as stores, etc identify cash and not gold which many doomsday people skew towards. Many will say it has value but until stores, etc take Gold .. that means Gold has to be converted to cash before usage. Sure there are few and far exceptions with barter but in general you need cash as that is identified as "money". There are so many "impact" items related to Gold, that it is difficult to answer as the correlations change over time dependent upon the impact issues. ETFs has made it easier to get in/out too, which also skews it's use as a wealth storage and thus skews it's real value. There's many threads that go over this, and the CSR. Always keep in mind, there is always a premium to be paid to buy/sell and move Gold. And a price for secured storage, etc. So always keep that in mind. In times of "panic" and you need to sell gold there may not be a place open to sell it to convert to cash, then you basically get what ever happens. About 12 years ago I *had* to sell some PM. But no one was buying, so I had to accept a big discount from spot for the Cash. When ppl buy/sell in a volatile market you are also transferring Risk to that person buying (they could lose money by the second), so expect them to take that into account in their buy price. So at certain times, spot price may not mean much.
I rushed and bought to early for 17$ a ounce 10 ounces then a day later I see silvers 14.60 a ounce at the time of this post.
Cash is King Bitcoin even dumped. I think the highest value thing you could have right now is Toilet Paper. just kidding, kinda. Silver is a heavy manufacturing metal. With manufacturing being shut down there is now an abundance of Supply ... with lower demand. Thus the crash in silver price. Plus many ppl are going into cash. The investors doing that are moving into cash in order to move into equities when the time is right to get the surge up. I sold out of my profitable equities now 6 weeks ago? and I'm just waiting and watching the economic waves.
You need to watch the markets longer before acting. Welcome to CT. A post is a post so it won't take you long to sell on this forum.
There's a three way tug of war affecting the price of gold right now. There's the panic buying and selling. There's the softening demand from industry which is bracing for a global recession and there's the effect of share dumping propping up both gold and government bonds. When big money sells shares that money doesn't go under the sofa cushions. It has to go somewhere and that's usually the precious metals market and T-bills. Rasiel
It is for 'normal posts'. We do not count ones with less than a line as the B/S/T threads are very enticing for bad transactions. When you read the threads at the top of those sub-forums, you will see the restrictions. Too many people have claimed to having lost on deals with relative newcomers. Put St. Gaudens $800 and a lot of fools will do so. Most people on here are extremely honest, but the forum and owners are not responsible for these transactions. Be cautious both B/S. Jim
Thanks so much for taking the time to explain. There are so many theories about what influences gold. Some say stocks, some say dollar, others say oil. The only other time I sold gold was a few years ago, sold a few krugerrand and a few gold maples for $1000-1100. It was rough but needed the cash at the time. I've done a bit of PM selling, but mainly silver. Stepping into gold is a bit different, but with many similarities. I did not consider the industries slowning due to restrictions on importing/exporting. That's the piece I was missing.
The bit about manufacturing makes perfect sense. I had considered that with platinum prices, but for some reason didn't consider gold or silver demand within different industries. While I want to disagree that cash is king.. at times it is. Every asset is going to have highs and lows.
