Gold within a hair of new record high in $s (Metal of Kings)

As for being edible farmland doesn't taste very good. It doesn't put much food on the table if you don't have seed.

 

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To me gold is around its historical average in real terms and silver above. While the argument that silver is an "industrial" metal is valid, to uses that have made it go up have been investor "consumption" of coins and solar energy. Those are the only new uses for it. I believe solar will go down with loss of subsidies, and am afraid of all of this investor inventory what it may do in the future to prices if there is another "hot" investment idea come around, (and there always is).

Gold is a one trick pony, but that trick works for it. It is desired as "money" or at least a store of value in Europe, middle east, and far east. If one only wanted to protect wealth I would think this may be the safer bet.

If you REALLY want a metal with industrial/monetary uses, I would look at platinum. Much more rare than gold, higher industrial usage by far, and also a history as a store of value. If you want a "rare" modern coin, look at the platinum mintages.

 

Wealth protection is, I think, one very valid reason to own gold. Whatever happens to the US dollar, an ounce of gold will always be worth an ounce of gold. The US dollar is incredibly weak right now. The average person in the US seems oblivious to this. Within the last couple of years, the New Zealand dollar was worth 50c. Now it is at aroung 82c!

 

Gold hit an all time new high today denominated in dollars. If you are holding lots of silver and not much gold, time to rethink your strategy.

 

I did say it. Everyone has their emotional reasons for purchasing bullion. However as a bullion investor one has to have accepted several non-mainstream ideas. If one has done that, then there hasn't been a bad time to buy gold in a very long time. As long as the gubment fails to do the hard things to fix the economy, you can continue to count on this happening.

 

I am old enough to know that throughout most of the 80's buying gold was a bad idea even in nominal terms. In real terms, since 1980 there has not been a good time to buy gold until 2000 to present. All other years were major losers in real terms. I do not know how long a "long time" is to you.

 

The 1980s was an excellent time to stock up on Gold. If you had purchased gold at the nominal amount of $250/oz, which equates to about $90/oz now, you would have made a windfall in gains.

 

Have you seen the gold chart throughout the 80's? I don't think that price was available until the 1990's. Why would anyone have bought in the 1980's and lost so much in real terms?

 

They didn't lose anything. Plot your graph on the in(de)flated value of the dollar and you will have your answer. Even forgetting that, you are posting a graph from 30 years ago. I hope you realize this is beyond the investment lifetime of most adults. I was in my teens at the beginning of that chart and wasn't investing then.

Also why didn't you go back 1 additional decade where gold was $32/oz? It's easy to pick and choose data points to support an argument as this proves. I stand by my argument there hasn't been a bad time to buy gold in a very long time IF you are an investor.

 

I was going back to 1980 because from that point and for 20 YEARS gold was a bad buy. I measure a good or bad buy based upon cost versus sell minus inflation. Those were dark years for gold, and only the 2000's have been good. Saying that gold FOR A LONG TIME has been a good buy is simply not true, you would have had money devaluing in nominal terms, let alone real terms, for 20 years until you started seeing any type of return.

I agree with you nominally gold will go up over a 30 or 40 year window, but that is not guaranteed in real terms, or over short terms. If you bought almost any year between 1980 and 1999 you would have lost nominally, (more in real terms), by 2000. How can that be judged "good buys"?

Today's price I am sure nominally will be higher 30 years from now. Whether that means in real terms it is a profit IDK. I am just reacting to your statement about gold being such a good buy for so long.

 

This is the price of gold since it has been legal for Americans to own it starting in 1971. It doesn't show it, but chart shows it starting at $32/oz.

The vertical line shows approximately where the US government started selling AGEs ~1986 which is 25 years ago. Prior to this, it was difficult for Americans to obtain gold. Most buyers in those days had to resort to Krugerrands. (very infamous SNL sketch about this from late 1970s that has been purged from Internet)

For practical purposes, I will say stand by my statement there hasn't been a bad time to buy gold and especially so for anyone who is reading this now. If you were fortunate enough to buy gold in the 80s and held onto it, great for you.

 

Just taking the 1986 price you have a dot on of $365.80 and adjusting taking it to today means you made, at "today's all time high" less than 6% return. This is even too high, since you have to deduct storage fees every year, and then deduct capital gains. All of this while sitting on the highest gold prices in history. Now tell me how buying gold in the 1980's and being underwater for a decade or longer was such a good buy?

Sorry I just disagree. I bought my silver and gold in the 1990's as a portfolio hedge. If I would have had to sell in 2000 I would have taken a bath. Anyone buying today could very well have to spend another 10 or 20 years before they again see a real return. Will they? I honestly do not know, but neither does anyone else.

That is all I was saying. Anyone who, during a 20 year time frame ending just a decade ago, bought gold would have LOST MONEY EVEN IN NOMINAL DOLLARS, let alone real dollars, if they needed to sell, and many did. Life happens, and sometimes you have to sell regardless of market conditions. Because of that, volatile investments like commodities always have to be considered riskier if held in isolation.

 

Gold ... an historical perspective.

Yesterday, on a talk radio show, a guest dealer of PMs pointed out that gold has and will continue to retain its constant purchasing power regardless of its price.

For examples, he pointed out that in Biblical times an ounce of gold would purchase 300 loaves of bread. At current prices, an ounce of gold stills buys 300 loaves. In 1920, an ounce of gold would buy a good quality business suit. Today, it will do the same.

Any thoughts about this perspective and how it applies to coin collectors?

 

As I said above, anyone can cherry pick dates but the conclusions they draw are only valid for the specific situation given. If I had bought an AGE in 1986 and held it to now, I would have realized a gain of 336%. Even if I take into account the CPI my gain would have been 165%. My storage fees for this small amount of gold would have been nil and there is no taxation over the years until I sell it. (given there is no record there could be 0 taxes but that is a different discussion)

This is not a bad rate of return if you ask me. I continue to stand by my statement there has not been a bad time to buy gold. Of course plenty of people give reasons for not buying gold. That chart of historical prices isn't one.

 

Oh, for Bible's sake.

Here, have a white bread index: http://qrc.depaul.edu/djabon/cpi.htm

In 1980, an ounce of gold went for $800. That would buy almost 1600 loaves of bread.

In 1981, an ounce of gold went for $500. That would buy a bit under 1000 loaves of bread.

In 1982, $300; about 570 loaves.

In 1990, about $400; 580 loaves.

In 1999, about $300; 340 loaves.

Today, $1560. Where do you suppose your PM dealer is buying bread at $5.20 a loaf? I don't get the cheap white stuff, but I'm still looking at close to 800 loaves per ounce (on sale).

But I have no way of knowing whether the 2010-2030 chart is going to resemble 1959-1979, or 1979-1999. And neither does anyone else.

By the way, from 1980 to 2000, the dollar lost more than half of its value -- prices increased over 115%. Over that same period, gold lost almost two-thirds of its value in dollars -- in actual buying power, it lost almost 85%.

Perhaps over infinite time gold is a good inflation hedge. Over any particular finite interval, though, it's unpredictable. Period.

 

Thx for the reality check =] I like gold better already, not that I didn't before, but still not better than silver heh. Other things silver has are best thermal conductivity and most reflectivity.

Today some key support levels were broken for gold so it could keep going up. Buying yesterday wasn't such a bad idea if your plan was to sell today (or to hold indefinitely IMO). After the hit the Euro took I was surprised that there wasn't more USD strength. It is doing a bit better these days, but that wasn't enough to stave off the metals. Japan's currency got more of the safe haven benefit than ours, which isn't exactly good for their exports.

 

Precious Metals, at least to me, represent a safety net for other investments. Usually when the stock market takes a big hit, precious metals will show a rather large gain. I have been increasing my % of PM in my portfolio mostly due to the financial unrest currently shown in the business sector, but I still am heavily invested in the market. My goal is to have a diverse enough investment portfolio that a loss in one investment is offset by a gain in others. I sure hope that is what I'm doing.

 

In 1980, an ounce of gold went for $800 for only a very brief time. The AVERAGE price for the year was $612, and the lowest price was $474. You could have bought at the low and sold at the next year's high of $599 and made a nice profit.

http://www.taxfreegold.co.uk/goldpricechart.html

 

Here is some more information about the properties and uses of gold:

http://geology.com/minerals/gold/uses-of-gold.shtml
http://www.webelements.com/gold/

 

It has always been legal for Americans to own some gold. Even during the confiscation days of the 1930s, people were allowed to keep $100 face value of gold coins, and any amount of gold jewelry. By the time I started buying gold in 1968, the only real remaining restrictions were on bullion and certain foreign gold coins (special import licenses were required to purchase 1960s-dated foreign gold coins, so, for example, I would not have been able to order the 1967 Canadian Centennial $20 gold coin directly from Canada). On December 31, 1974, however, all restrictions on gold ownership by US citizens were removed.