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

Discussion in 'Bullion Investing' started by fretboard, Sep 4, 2019.

  1. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Why do you think that ?

    Oil is a commodity that trades based on GDP growth, transportation, heating, etc. It is unique in that it is a liquid and hence valueable for ease as a fuel (vs. gases or solids).

    Gold is a commodity used in jewelry and susceptible to Central Bank buying/selling, Chinese/Indian buying/selling, etc.

    They don't and CAN'T economically correlate because only 1 is tied to the economy and the other is a speculative commodity.
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  3. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Trust me, I worked as an energy analyst, and the price of gold meant as much to oil prices as the status of the Designated Hitter in baseball. :D

    At times gold tracks oil 1-for-1....other times, and over long periods, they have NOTHING to do with one another.

    Look at the stock market and bond yields. For DECADES, inversely correlated: falling bond yields = rising stock prices. Ever since the 2008 Crisis, a direct correlation. For good reasons.:D
  4. -jeffB

    -jeffB Greshams LEO Supporter

    I would assume @medoraman's reasoning is that energy costs dominate the cost of mining -- with the amount of material you have to go through to extract gold from even rich ore, I'd expect the same. But I haven't even compared the price histories, never mind dug deep into the economics of mining, never mind compared mine production to reclamation (which should take a lot less energy).
  5. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Actually, it's a good point to make. But it's more relevant to the share prices of GOLD MINING COMPANIES and not gold production.

    When gold went to $1,800/oz in 2011, the companies were supposed to be making a mint because their (cash) costs were $1,000 an ounce or lower. But their overall costs zoomed as energy and labor and supply costs increased. The managements spent BILLIONS on shareholder destructive investments that did nothing for the price of their stock (i.e., Barrick Gold, Newmont Mining).
  6. medoraman

    medoraman Supporter! Supporter

    Gold miner's stock is a very weird animal. It's highly valued by funds for its negative beta, so always overvalued and not really based upon gold mining fundamentals.

    But you are right, I heard of truck drivers getting over $200k in the minefields during the heyday. It is overall variable costs that matter if the mine is to continue to produce long term, and energy by far is the largest variable cost by far. That was my point that @-jeffB made clearer than I did.
  7. myownprivy

    myownprivy Well-Known Member

    No one called anybody stupid, but someone did call your conversation here stupid. Who are any of you to analyze the factors contributing to gold going up or down and whether oil prices or the strength of the US dollar contributes?

    What it all looks like to me is a bunch of geezers shooting the breeze at the local bar. And the only people who have time to do that at 11am on a Friday are retired folks, alcoholics, and the unemployed.

    I for one didn't read any of your posts word for word because they are such a complete waste of time. However, if any of would cite your points with online articles from reputable sources it might be worthwhile. I know seeing a link in your post will make me do a double take and consider taking your point seriously.
  8. medoraman

    medoraman Supporter! Supporter

    Who the heck are you to call a conversation stupid, who the heck are you to call us old geezers, and who the heck do you think you are questioning our "ability to analyze the factors"?

    No seriously, who the heck are you? I am a CFO professionally, with CPA, CMA, CFP, and other certifications, two Master's degrees in business/finance, and a Doctoral Candidate for a Doctorate in Business. Please let us know your high and mighty credentials so that we may be impressed.

    I guess you can't get your assistant manager to give you a break from the drive in lane, and you are just mad you cannot be in the internet as much as you would like. I would post scholarly articles for you, as many as you would like, but am not sure you could comprehend them.

    Edit: language. Btw, if you want to question who I am, I will give any moderator my LinkedIn profile, or company website listing. Seem to be dodging the question @myownprivy concerning your "expertise" that enables you to call the rest of us old geezer. Btw, I am 50, not quite retired as you assert.
    Last edited: Sep 14, 2019
  9. -jeffB

    -jeffB Greshams LEO Supporter

    Dude. Stop digging.
    Randy Abercrombie likes this.
  10. myownprivy

    myownprivy Well-Known Member

    I could tell you who I am, but why would you believe me or my credentials? Similarly, why should anyone believe yours? By posting articles we provide support for our arguments that anyone anywhere can verify. Then the conversation will stop being stupid and a waste of time.

    PS I am the head of the international monetary fund, and I like Dr Pepper.

  11. GoldFinger1969

    GoldFinger1969 Well-Known Member

    We're expressing our opinions, whether they are good or bad.

    FWIW, I think the points here are as valid as those made by PM experts, several of whom I have worked alongside for years.

    Or people who take a keen interest in financial markets.

    So you want me to footnote stuff ? Sorry, not happening.

    And if you were to take as Gospel stuff that has a citation -- when the citations could be even more horsebleep than the posts themselves -- well, maybe it's not our posts that are the waste of time, right ?

    I freely admit when I am speculating or guestimating...and when I have an informed POV with direct expertise (i.e., bond markets, stock valuations, global financial trends) I note it. I am not an expert on everything, but on those things I have studied for decades and worked in the field, I think I have something to offer.

    If you disagree, that's your perogative.
  12. medoraman

    medoraman Supporter! Supporter

    Biggest thing, really, is if people do not like a post or thread, simply move on. I cruise around other areas of CT. Sometime I just read since I do not have anything to add, or have no idea what they are talking about, or simply disagree but do not want to get into it. As much as I may disagree with someone, ( a few members here like @InfleXion) I have disagreed with at times but sought to have an informative discussion of alternative views.

    I guess what I am saying is either read others posts and be willing to engage in CONSTRUCTIVE dialogue, or simply move on. No need to call names while admitting you did not even read the posts you are making fun of. Six year olds do that, and I know as I have one at home. :)

    Edit: The reference to you Inflexion was not meant as disrespect. It was actually respect, as you have your opinion and would calmly discuss it. I respect anyone who wishes to calmly discuss their opinion, and maybe both of us and everyone reading the conversation can learn something.
    Last edited: Sep 14, 2019
    tommyc03, GoldFinger1969 and -jeffB like this.
  13. masterswimmer

    masterswimmer Well-Known Member

  14. medoraman

    medoraman Supporter! Supporter

    On a lighter side, I bought the 2016 quarter ounce SL gold today. Dealer friend had a pretty one for a little over melt. Considering buying the half and tenth ounce tomorrow.

    My crystal ball is broken. I buy when I feel like, trying to not get sucked up into euphoria, but not backing away just because it is up some either. I nearly stopped buying Amazon because it got over $300 a share years ago, and that price scared me for some reason. If you believe long term in an asset, buy what you can when you can, and don't stress about ups and down, (unless all of your coworkers are talking about it, that is always a sign to sell).
  15. yakpoo

    yakpoo Member

    Some may argue that gold is the only real currency.
  16. Nathan401

    Nathan401 Quis custodiet ipsos custodes? Supporter

    Christine Lagarde?
    Numinaut likes this.
  17. GoldFinger1969

    GoldFinger1969 Well-Known Member

    I didn't know Christine liked Dr. that true ?

    I know she liked austerity policies and was totally ignorante of The Denominator Effect. :D
  18. fretboard

    fretboard Defender of Old Coinage!

    And some would have a very good point! :cigar: Let's not forget what happened in Zimbabwe! ;) I'm not saying it could happen here but if someone in Zimbabwe had gold when this happened back in 2008-10, they were probably in pretty good shape! tmoney.gif :D


    On 1 August 2008, the Zimbabwe dollar was re-denominated by removing 10 zeroes and ZWD 10 billion became 1 dollar after the re-denomination. On 16 January 2009, Zimbabwe issued a ZWD100 trillion bill (100,000,000,000,000 ZWD). A roll of toilet paper in Zimbabwe costs $145,750, which is about 69 American cents.
    GoldFinger1969 likes this.
  19. medoraman

    medoraman Supporter! Supporter

    And some would point out the hundreds of billions in lost economic growth per year lost tying an economy to some random commodity. There are so many recessions and depressions tied to shortages of gold through history as to not be countable. Why should your paycheck go down 10% because a major mine ran out ore? This is a very likely outcome if our economy was tied to some metal.

    Yin and yang. Not enough people talk about how much poorer all of us would be under the gold standard, but talk a lot of (real) things like avoiding Zimbabwe, Hitler, Communist Russia, etc. To me the answer is leave the economy on fiat money, and take some of that and convert to storable commodities.

    The whole argument why a commodity cannot be money I won't get into.
    -jeffB and GoldFinger1969 like this.
  20. longnine009

    longnine009 Most Exalted Excellency

    Your fired.
  21. GoldFinger1969

    GoldFinger1969 Well-Known Member

    We are NEVER going back to a gold standard, pure or modified or otherwise.

    The reason we used gold in the first place was because at least it represented a fixed standard of value with a defined set of information. That information was that $20.67 could be exchanged for 1 ounce of gold. This was important because information travelled much slower in the 19th and early-20th centuries: telegraphs lagged by minutes, sometimes financial information took hours to be received.

    A currency could plunge 50% and it would take minutes or hours (even days) to reach the exchanges and the general public. Today, that same infomraiton is disseminated to millions of individuals within seconds, hundreds of millions within minutes.

    Today, that same fixed standard of value is via the faith we have in central banks, justified or not. We know that the purchasing power will be defended (inflation is a no-no). The dollar can be exchanged for goods and services, even payment on the national debt. :D

    Tying monetary policy to a commodity is to surrender fiscal and monetary control to the vagaries of a commodity. This is the crux of the problem in Europe with the ECB controlling monetary policy (in lieu of a gold standard) and supplanting national central banks. Countries no longer have the ability to engage in an EXTERNAL SHOCK ADJUSTMENT (i.e., inflation, currency devaluation, etc.) in response to financial or economic stress and must rely on INTERNAL SHOCK ADJUSTORS like falling wages, rising unemployment, etc.

    Internal adjustments are LIGHT-YEARS more difficult to withstand than external ones -- just ask the Greeks or Italians. :D

    The Denominator Effect (National Debt / GDP) is tied to monetary flexibility since GDP growth (real + nominal) is tied to the monetary aggregates.
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