What according to you think is the right time to pay attention to an investment? Yes, you said it right, when they are down and out. Don't you think gold mining companies and gold bullion are in this same situation these days and you should be positive on gold forecast for 2015-2016. Investors have put gold down in their list, despite a contraction in supply and an increase in demand for gold bullion that will ultimately result in higher gold prices. I would suggest you all here don't listen to the news headlines but focus on the long term perspective when looking at gold bullion.
I always get a big laugh from the "experts" who cite a specific set of statistics in order to sell an idea, but ignore the statistics that don't support their theory. Chris
I just read an interesting article last night linked from Esylum. It said India is trying to get their temples to sell their gold holdings to benefit the economy. They believe over a TRILLION dollars of gold is locked up in temples around the country. Just one temple in southern India had over $33 billion worth of gold locked in its basement. I wonder what would happen to the world gold price if such a thing started to occur? Overall, I support the assertion you need to look long term with ALL of your investments. Today I am buying stocks and PM, but 5 years ago I was buying land. Everything has cycles. Btw, no, I am not buying NASDAQ stocks right now, just stocks that have been beaten down in the last few years.
What makes you believe Gold is "down and out" I prefer to think it was a heathy pullback from unsustainable highs. It is certainly not cheap at $1200/oz. Also what evidence do you have to support a contraction of supply and an increase of demand. The World Gold Council reported a 4% decline in demand for 2014 vs 2013 AND supply was flat year over year. Sounds a bit like a recipe for further declines. http://www.gold.org/supply-and-demand/gold-demand-trends
For 2015, I look at the LBMA forecast and think, "Gold is relatively cheap when it's BELOW the average price-target but 'down-&-out' only when below the average predicted low, USD$ 1,085." Almost certainly, the paid experts know better than amateurs posting here. Read what they say: http://www.lbma.org.uk/assets/Forecast 2015_FINAL LINKED.pdf US Gold Coin sales have fallen sharply the last 5-6 years; demand is DOWN, no doubt, and dealer premiums should reflect that >60% decline in Au bullion collectible demand. Don't pay more! Please note: 2015 is a partial year! http://goldandsilverblog.com/american-gold-eagle-bullion-coin-sales-up-sharply-in-march-0579/
Um, why? Were they right in the immediate past? I do not recall any of them correctly calling the high rise and fall of pm. Not that many here did either, (I never thought they would get that high at all), but why are these "experts" and us "amateurs"? I have an MBA in Finance like I am sure many of these people do. Just because they work in the commodity field, (I am assuming), why do they have credentials none of us do? I am CFO of a commodity driven company, TAUGHT MBAs in Finance, but I am still an amateur? I am not trying to brag, or whatever, (which is stupid on the internet anyway), or even saying my opinion has one iota higher chance of success than anyone else here, just asking you what delineates them as "experts"? Most "experts" in my commodity area are blooming idiots that no one who actually KNOWS what they are talking about listen to.
Paid experts = professionals. You can examine their forecasts yourself on the LBMA website. The amateurs here also have a track-record. Look at their Silver Call(s). If fewer than 20% were approximately correct, then this group was overwhelmingly wrong on trend (2014.) "15% right" would be too generous, I think. As it's going, ~33% are already wrong for 2015, and the seasonal months are yet to come. Where does Silver close, -25% below best avg guess here? Ya, the amateurs are wrong.
And what would this "long term perspective" be exactly? You say a lot without actually saying a thing. Nobody day trades gold, so I have to imagine all gold investing is long-term. However, I've read several highly touted articles from the turn of the 19th century that said the same thing about aluminum.
Don't kid yourself. Some commodities traders trade in gold every day . . . if they've been doing it for many years, and made a living at it, they're professionals. Others that trade(d) daily, but have run themselves out of money, or are well on their way, are not. In the middle are many more of us who are not professionals, for which the only safe way to buy is with no contract deadlines by which we must sell. Buying with "long term perspective" is a euphemism for obtaining an open-ended sales date that increases our odds of profiting upon liquidation.
Where would one day trade in gold? Not Nasdaq or the DOW. Nor the S&P500. I'm just curious as to how one might concievebly do so.
You can day trade the ETF GLD. You can also day trade futures on the CME. I am not certain, but I also think you can day trade Gold on the Forex exchange.
Lots of day trading in all commodities on the CME. Like Mike said, many do it professionally. However, that is a game best suited working for a firm with great computer systems and a large bankroll behind them. One unexpected piece of news comes out, and there goes the house, porsche, and children's college funds in the blink of an eye. For us little fish, buy and hold for years or decades, offsetting other risks in your portfolio, is the wisest move IMHO. Although, I am kind of having fun buying 19th century gold coins right now.
Yes, I suppose if ETF's are going to be figured in. But I'd be leary at best betting on futures, as most ETF's do not represent current supply.
Supply and demand don't mean much with precious metals. The supply is electronic, and the demand is leveraged in both directions. Trying to discern what is true in the marketplace would be like trying to measure how deep the ocean is with one eye closed looking at the surface of the water. Precious metals were money for a very long time, and I believe their value will ultimately be determined by the amount of currency in circulation divided by the amount of the respective metal on the open market. I think it's important to being willing to hold your position as long as it takes for metals to regain monetary status. If you're not willing to do that, then you probably shouldn't invest in them lest you be driven to sell at an inopportune time when the next fad comes along. Using the current price as a baseline for comparison is only valid for as long as metals are not money. So if you believe metals are not money, I couldn't tell you when the right time to invest is, but if you believe they are then the right time is anytime you can trade fiat currency for real money to the extent that you are not overextending yourself. It doesn't do any good to be in a position where you have to sell when you don't want to. Personally I avoid all derivatives of precious metals because they are leveraged, and if everybody who owned them cashed them in there wouldn't be enough to go around. I also avoid miners because miners are not going to profit for as long as the price is determined by proxy.
Supply and demand mean EVERYTHING with precious metals. This "justification" that metals are under performing their "true" value because of leverage is all a bunch a hooey.
Yeah, with miners, I would prefer to own the underlying asset over the miner's ability to grow their profits .. but, that's just me
Not to digress from the LONG TERM FOCUS of the OP, but Barclays' analyst points out that bullion sales in the USA are DOWN sharply (trend intact) this year. This contradicts the link I posted above, with April data. http://www.kitco.com/news/2015-04-22/Gold-Silver-Coin-Sales-Down-On-Monthly-Yearly-Basis.html
