My bold prediction on gold

Then you completely missed the more important point. Gold is high priced because it performs so much better than other materials in many electronic, medical and other applications that it is worth multiples of the price of the other materials. All commodities are priced at the point of their highest and best use. But you're in good company because many if not most people miss that relationship.

 

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not true, it is very conductive and it pounds down into VERY VERY VERY thin foil.

 

gold should be quite stable at $950.00 more or less. but gold is waiting someday within this year to go up 10% to 20% before coming back to around $1,050.00.

 

I'am waiting for gold to get quite unstable and go down where it belongs:secret:

 

Please elaborate, because I really don't know how I feel about gold going up or down

 

I believe the current gold & silver prices are like the real estate market goes up & down . I remember years ago when silver went sky high way over $ 20 an ounce, I had a friend who built a spec house & when he sold it he went out & invested his entire profit in silver , well guess what, back down it went & he had no choice but to sit & sit & sit on that silver for many years & he's still sitting on it. My point is that both gold & silver will go back down in time so don't think you've got to run out and buy right now , if you have a collection that you bought really low now might be a good time to sell if you need or want cash, personally I'd sit on it but that is up to you.:kewl:

 

It already is quite stable at less. This isn't saying much.

I feel once the price breeches 950 and sticks at that base range, it will stoke the market folks into action to see it up for another 'historic high'. I urge cautious buying, not panic-y buying, if that starts happening. Slow and steady purchasing per your budget is a solid way to proceed.

 

It is natural to want a second chance to buy something that is rising in price. I think most people here own some gold but wish they owned more. Sometimes you get another chance, sometimes you don't. Sometimes you get the chance but under such frightening conditions that you can't force yourself to buy. Right now gold is in a consolidation pattern within a bull market. If I had to wager money, I would say that you aren't going to see sub-$900 gold in the physical market even if it trades briefly below that level in the futures market. Time will tell.

 

No I think you missed the more important point - which is Gold is used in many electronic, medical and other applications in spite of its high price because it performs so much better than other materials. In fact the use of gold in these applications diminishes every day as technology advances provide viable cost effective alternatives which lessen its use because of its high price. 22% demand of total production isn't much force for driving prices.

 

Of course it is. Any good economics course will teach you about marginal utility and marginal prices. But if you are so dead set against gold for your own reasons, I don't think you should buy any. In fact, it's a mystery why you are even here in the bullion forum if you don't like it.

 

I think that even if the market stays up in the 9000s, no one trusts this level, and will continue hoarding gold as a hedge. Gold could actually go down temporarily if the stock market tanks in the fall quarter because so many hedge funds, traders, and institutional investors will need to make up for their stock loses by dumping the gold they bought between $300 and $900. It could be the break that many of us little guys need to further bolster our holdings. So I agree with Dan's conclusion, but not his reasons, as I think the stock market and gold will go down together this fall. Afterwards, gold will go back up, and the DOW will languish in a 7000-9000 trading range.

 

Let’s revisit my original post.

“For all you gloom and doomers - how about a prediction that the civilized world will discover that gold beyond its historically ingrained psychological value is really fairly worthless.”



Gold’s marginal utility is the historically ingrained psychological value. The psychology of gold being valuable is the driving force behind 78% of its production being utilized in the manufacture of jewelry. That and the fact it is pretty and will not turn your skin green. It is this marginal utility that is driving the price of gold – not its 22% use in the other listed applications.

 

Clearly the truth!! So why all the naysayers?

 

I hope you are content in your belief. It isn't important to me, but it was important to point out to others your error so they don't do the same. Gold is expensive due to its unique properties and uses. It doesn't have unique properties and uses because it is expensive, which is what your reasoning implies.

But I'm interested in why you are here if you don't like bullion?

 

With Cash for Clunkers all the fiat money is now Honda money, Toyota money, and Ford money! Tee-hee.

 

Where ?

where does gold belong ?

 

In my safe

but good question, where does it belong pappy-o?

 

Heres hoping your friend will be in a position to cash in that Silver soon,i wouldnt be too unhappy to be sitting on a large pile of it right now.

 

The productivity of gold mines varies considerably, but the "average all-in" cost of production is currently about $450/Oz. Companies mine their most productive assets first, so as new production is brought online the "average all-in" cost of production rises.

The question is whether commodity prices will rise more due to falling currency values or increased demand...probably a combination of both. In an orderly market, increased production should keep prices from getting out of hand, but at the same time, raise the floor under prices.

 

I think you are quoting the cash cost of production. This might be acceptable for analyzing older mines, but it understates the total cost of production from exploration through final sale for bringing on new mines today. Thought of that way, a new discovery must be fairly high grade to become economical.