Gold bottom and what to do when we get there

I assume the bottom for gold is about 15% below the current inflation defined price (~$50 below spot currently). That puts it around $996.80. That actually looks like a shock when I see it actually calculated out.

I'm thinking that actual selling price of gold on the retail market won't dip below $1050-$1100, regardless, as dealers will simply increase premiums in the short run.

Anyhow, I was wondering, given gold is *supposed* to be a hedge, should I buy pools when we approach $1000, due to liquidity, or should I buy physical and fight for $1070 or lower prices?

 

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It would be a mistake to assume gold has a bottom. It's real bottom is a fraction of that $996. Gold spent a long time under $600 and it wasn't that long ago.

You are right as the price falls premiums generally increase but they generally normalize. The stock swings have probably kept all metals higher than they should be at the moment, but it is a mistake to think they can't go lower than x

 

It's anybody's guess right now.

 

I'm not saying it won't *ever* go below that point. I'm saying it's a short run bottom before data corrects itself. That's why I'm curious about whether the premiums will have enough time to normalize.

 

It is not going to go below an inflation adjusted value. The problem is when do you start counting. I bought gold below $700 about 8 or 9 years ago (after it had already been higher). Not sure what the inflation has been (officially) over that time but whatever it is seems like a decent stab at the minimum going forward.

 

Looks like gold is still giving back for some of it,s earlier gains, kind of like the
Slot machines here in Vegas, put allot in and get some back, oh and let,s not
forget about the free buffet...LOL

 

I realize this is going off topic... but they still have free buffets? I thought they're only comped for visitors who stay on property these days.

 

The big thing in Vegas now is the so called reward cards, you put them in the machine and build up points, but just a gimmick in the long run, they just want
you to feel like there giving you something back for all the money your feeding
the machine, $250 buffet dinner that you can get for $9.99....LOL

 

I saw a chart on Street.com recently where their PMs guy said there is no real level of support until $1170. If that doesn't hold, the next level is $950. With the overseas worries failing to move the needle upwards, it's a time to be real cautious, IMHO.

 

PM,S all across the board are in the crapper as of this moment the only one that
Is holding is Rhodium @ $1,040

 

And that is exactly the time to buy. Never buy when everyone is piling on because that is a sure sign it is nearest a near-term top.

 

To be fair, you'd likely have to start with 1991 or 1995. The Reagan-era inflation numbers make everything look underpriced relative to inflation.

 

https://finance.yahoo.com/news/gold-drops-strong-jobs-report-200530703.html

 

I wonder what prices would look like tonight without the North Korea problem. It certainly hasn't boosted prices as a lot of international conflicts tend to do. There may be just enough buying this time around to keep the bottom from really falling out.

 

The most disciplined thing to do for the average hedger is just to spend a set amount on gold out of what they plan on saving/investing for the year. As has been said over and over and over again, this should be only 5-10% of one's investments. For most Americans, that's going to be buying only an ounce or two per year.

That's great if you can make your yearly buy on a "dip," but let's be honest: if you're just an average person hedging your investments by buying a couple ounces of gold a year, saving $50 by buying on a dip isn't really worth all the hassle and effort of following the market each week.

 

Jason.A: I'm trying to buy about $40k in gold, so saving 15% per ounce is significant to me. It means I can get 40 troy ounces instead of merely 33.

 

I feel that it is 90% US economy and the rest is world politics.The economic recovery, both in stability of metals and the USD was due to tight regulations, especially on the financial institutions and their derivative instruments that were designed to not succeed, except for the Big Banks, and not all of them did. Things improved, The USD made tremendous gains after regulations were restored, over all major currencies, in fact maybe too much economical strength, as it has led to the regulations that made it so , to now being removed with more to come, so it will quite possibly be the wild , wild , west once again with the economy, and the smaller income individuals ( under $250,000/yr) will be the ones in trouble. Look at the increase already in home loan interest and housing prices. If you already do not have a cushion, it will be a very hard time coming IMO.

 

Edit: I should know better. Actually, I do.

 

Puh-lease, everybody. Leave your lay opinions about North Korea out of this, please.

 

I only brought up North Korea as a factor that could affect markets. I didn't intend to stir up anything beyond that, especially a political pontification session that the site doesn't permit.