Gold?
02-05-2009, 01:20 AM
#41
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hmm.. ive got this gold chain from hong kong sitting in my room somewhere.
i wonder what its worth now.
probably isnt 24k gold
if it is, its quite heavy!
i wonder what its worth now.
probably isnt 24k gold
if it is, its quite heavy!
02-05-2009, 10:36 AM
#43
The sizzle in the Steak
Commodities bottomed...or near bottom? 
02-10-2009, 04:21 PM
#44
I feel the need...
Investors Boost Bets Gold to Reach $1,000 on Turmoil
Gold speculators have increased their bets this year by 24 percent that prices will reach $1,000 an ounce by April.
Open interest in options that allow the holder to buy gold at $1,000 by April surged to 9,934 contracts as of Feb. 6 from 8,005 at the start of the year on the New York Mercantile Exchange’s Comex division. Mounting financial turmoil is boosting demand for the precious metal as a haven. Since Jan. 15, the price of the option has almost doubled, outpacing the 12 percent gain in gold futures.
Goldman Sachs Group Inc. and UBS AG raised their forecasts for gold last week, citing the increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation. Gold’s rally may signal investors are less optimistic that President Barack Obama will be able to revive growth, even after the U.S. committed $9.7 trillion to solving the financial crisis.....
Open interest in options that allow the holder to buy gold at $1,000 by April surged to 9,934 contracts as of Feb. 6 from 8,005 at the start of the year on the New York Mercantile Exchange’s Comex division. Mounting financial turmoil is boosting demand for the precious metal as a haven. Since Jan. 15, the price of the option has almost doubled, outpacing the 12 percent gain in gold futures.
Goldman Sachs Group Inc. and UBS AG raised their forecasts for gold last week, citing the increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation. Gold’s rally may signal investors are less optimistic that President Barack Obama will be able to revive growth, even after the U.S. committed $9.7 trillion to solving the financial crisis.....
02-12-2009, 04:14 PM
#45
I feel the need...
Shorting Gold: 12 Reasons Making The Case For This Contrarian Investment
by Louis Basenese, Advisory Panelist Senior Analyst, The Oxford Club
http://www.investmentu.com/IUEL/2009...ting-gold.html
If you’re a self-professed “Goldbug,” feel free to read no further. Or at least spare me your hate mail. Because no matter what I say today, I know you’ll cry foul… or something much more colorful.
But for those of you with an open mind - especially after my last three contrarian predictions proved dead accurate, read on.
Because it’s time to start shorting gold!
You won’t find many, if anyone else, making this case. But as the first reason of 12 below reveals, that’s precisely why you should give it more credence.....
But for those of you with an open mind - especially after my last three contrarian predictions proved dead accurate, read on.
Because it’s time to start shorting gold!
You won’t find many, if anyone else, making this case. But as the first reason of 12 below reveals, that’s precisely why you should give it more credence.....
02-12-2009, 05:49 PM
#46
Moderator Alumnus
02-20-2009, 10:25 AM
#47
The sizzle in the Steak
Gold hits $1,000
Too much money printed around the world...too few goods.
Too much money printed around the world...too few goods.
02-20-2009, 09:52 PM
#50
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ohh man i love gooooooooold...
02-20-2009, 11:04 PM
#51
Suzuka Master
Join Date: Dec 2005
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Personally, I think now isnt the time to buy. BofA stock is much cheaper.
02-22-2009, 09:29 AM
#53
Senior Moderator
don't put any money into big banks... http://www.cnbc.com/id/29286263
JP Morgan Chase and Wells Fargo are going to be around for awhile... as will some other big banks.
03-19-2009, 10:58 AM
#55
The sizzle in the Steak
...and the Fed keeps printing the money....
06-04-2009, 05:49 PM
#57
I feel the need...
Buffett Gets ‘Comeuppance’ After Gold Outperforms
By Claudia Carpenter
June 4 (Bloomberg) -- Berkshire Hathaway Inc. Chairman
Warren Buffett is getting his “comeuppance” after rejecting
gold as an investment four years ago, according to Marc
Westlake, head of wealth management at Dublin-based bullion
brokerage Gold & Silver Investments Ltd.
The CHART OF THE DAY shows gold more than doubled since May
2005, while Berkshire Hathaway’s Class A shares gained 6.8
percent. Buffett said at the company’s annual meeting in May
2005 that he wouldn’t get rid of assets for “a hunk of metal
which had no real utility other than to people that are fleeing
the dollar.”
“The point is gold has preserved a chunk of wealth that
would have been otherwise taken down with other financial
instruments,” Westlake said by phone from Cork, Ireland, on
June 1. “Maybe what we’re seeing is Warren Buffett’s
comeuppance.”
Buffett didn’t respond to a request for comment left with
his assistant, Carrie Kizer.
Gold has climbed 9.4 percent this year as investors sought
a haven from declines in the stock market and, more recently,
the dollar. The Standard & Poor’s 500 Index of shares has
climbed 2.6 percent this year.
Buffett transformed Berkshire Hathaway over four decades
from a once-failing textile manufacturer into a $139 billion
investment and holding company. While gold has doubled since
1988, shareholders in the company have seen the value of their
investment surge almost 25-fold.
For Related News and Information:
Top commodity stories: CTOP <GO>
Technical analysis of gold: GOLDS <Cmdty> BTST <GO>
For non-energy commodity charts: TNI CMDX CHART <GO>
Commodity forecasts: CPF <GO>
Top metals stories: METT <GO>
June 4 (Bloomberg) -- Berkshire Hathaway Inc. Chairman
Warren Buffett is getting his “comeuppance” after rejecting
gold as an investment four years ago, according to Marc
Westlake, head of wealth management at Dublin-based bullion
brokerage Gold & Silver Investments Ltd.
The CHART OF THE DAY shows gold more than doubled since May
2005, while Berkshire Hathaway’s Class A shares gained 6.8
percent. Buffett said at the company’s annual meeting in May
2005 that he wouldn’t get rid of assets for “a hunk of metal
which had no real utility other than to people that are fleeing
the dollar.”
“The point is gold has preserved a chunk of wealth that
would have been otherwise taken down with other financial
instruments,” Westlake said by phone from Cork, Ireland, on
June 1. “Maybe what we’re seeing is Warren Buffett’s
comeuppance.”
Buffett didn’t respond to a request for comment left with
his assistant, Carrie Kizer.
Gold has climbed 9.4 percent this year as investors sought
a haven from declines in the stock market and, more recently,
the dollar. The Standard & Poor’s 500 Index of shares has
climbed 2.6 percent this year.
Buffett transformed Berkshire Hathaway over four decades
from a once-failing textile manufacturer into a $139 billion
investment and holding company. While gold has doubled since
1988, shareholders in the company have seen the value of their
investment surge almost 25-fold.
For Related News and Information:
Top commodity stories: CTOP <GO>
Technical analysis of gold: GOLDS <Cmdty> BTST <GO>
For non-energy commodity charts: TNI CMDX CHART <GO>
Commodity forecasts: CPF <GO>
Top metals stories: METT <GO>
06-04-2009, 06:31 PM
#58
The sizzle in the Steak
Do the Commodities dance 
06-17-2009, 11:27 AM
#60
Gold sold like chocolate from German vending machines
TG-Gold-Super-Markt aims to introduce the machines at 500 locations including train stations and airports in Germany.
The company, based near Stuttgart, hopes to tap into the increasing interest in buying gold following disillusionment in other investments due to the economic downturn.
Gold prices from the machines – about 30 per cent higher than market prices for the cheapest product – will be updated every few minutes.
Customers using a prototype "Gold to go" machine at Frankfurt Airport on Tuesday had the choice of purchasing a 1g wafer of gold for €30, a 10g bar for €245, or gold coins.
A camera on the machine monitors transactions for money laundering controls.
Thomas Geissler, who owns the company behind the idea, said: "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything.
"Gold is a good thing to have in your pocket in uncertain times."
Interest in gold has risen during the financial crisis, particularly in Germany, according to GFMS, the London-based precious metals consultancy.
Retail demand reached an estimated 108 tonnes in 2008, up from 36 tonnes in 2007 and 28 tonnes in 2006.
Jens Willenbockel, an investment banker who saw the machine while passing through the airport, told the Financial Times that he believed there could be a market for the venture.
"Because of the crisis there is a lot of awareness of gold," he said. "It is also a great gift for children – for them getting gold is like a fairytale."
http://www.telegraph.co.uk/finance/f...-machines.html
The company, based near Stuttgart, hopes to tap into the increasing interest in buying gold following disillusionment in other investments due to the economic downturn.
Gold prices from the machines – about 30 per cent higher than market prices for the cheapest product – will be updated every few minutes.
Customers using a prototype "Gold to go" machine at Frankfurt Airport on Tuesday had the choice of purchasing a 1g wafer of gold for €30, a 10g bar for €245, or gold coins.
A camera on the machine monitors transactions for money laundering controls.
Thomas Geissler, who owns the company behind the idea, said: "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything.
"Gold is a good thing to have in your pocket in uncertain times."
Interest in gold has risen during the financial crisis, particularly in Germany, according to GFMS, the London-based precious metals consultancy.
Retail demand reached an estimated 108 tonnes in 2008, up from 36 tonnes in 2007 and 28 tonnes in 2006.
Jens Willenbockel, an investment banker who saw the machine while passing through the airport, told the Financial Times that he believed there could be a market for the venture.
"Because of the crisis there is a lot of awareness of gold," he said. "It is also a great gift for children – for them getting gold is like a fairytale."
http://www.telegraph.co.uk/finance/f...-machines.html
06-17-2009, 12:41 PM
#61
The sizzle in the Steak
^^ That's nuts!
09-14-2009, 06:33 PM
#62
I feel the need...
Gold Hedges Only Against ‘Catastrophic’ Inflation
By Halia Pavliva and Nicholas Larkin
Sept. 14 (Bloomberg) -- Gold, trading within 3 percent of
an all-time high, is best at protecting investors from
accelerating consumer prices only during “catastrophic”
inflation periods, said Jon Nadler, a senior analyst at Kitco
Inc. in Montreal.
The CHART OF THE DAY shows that from March 1979 to April
1981 inflation held above 10 percent and gold as much as
tripled. According to Westport, Connecticut-based Birinyi
Associates Inc., that correlation has mostly broken down.
In the four years through March 1991, for example, the
inflation rate climbed to 4.9 percent from 3 percent, while the
precious metal lost 16 percent to about $355 an ounce. And from
May 2001 to November 2003, the rate halved to 1.8 percent as
gold rallied 21 percent.
“The truth is that gold does well in protecting people’s
wealth only from catastrophic inflation episodes,” Nadler said.
“Gold does not do very well at all in preserving purchasing
power amid ordinary inflation conditions.”
Gold’s inflation-adjusted record is $2,199, set in January
1980, according to a calculator on the Web site of the Federal
Reserve Bank of Minneapolis. The metal, often bought as a store
of value in times of financial turmoil, traded at $1,010 an
ounce in London on Sept. 11. The record, set in March last year,
is $1,032.70.
“Anyone who bought gold at $845 in January 1980 would
need to net more than $2,300 today just to break even,” Nadler
said. “The current rally in the metal is very much an
inflation-anticipatory event.”
(To save a copy of the chart, click here.)
For Related News and Information:
Top commodity stories: CTOP <GO>
Technical analysis of gold: GOLDS <Cmdty> BTST <GO>
For non-energy commodity charts: TNI CMDX CHART <GO>
Commodity forecasts: CPF <GO>
Economic forecasts: ECFC <GO>
Top metals stories: METT <GO>
Sept. 14 (Bloomberg) -- Gold, trading within 3 percent of
an all-time high, is best at protecting investors from
accelerating consumer prices only during “catastrophic”
inflation periods, said Jon Nadler, a senior analyst at Kitco
Inc. in Montreal.
The CHART OF THE DAY shows that from March 1979 to April
1981 inflation held above 10 percent and gold as much as
tripled. According to Westport, Connecticut-based Birinyi
Associates Inc., that correlation has mostly broken down.
In the four years through March 1991, for example, the
inflation rate climbed to 4.9 percent from 3 percent, while the
precious metal lost 16 percent to about $355 an ounce. And from
May 2001 to November 2003, the rate halved to 1.8 percent as
gold rallied 21 percent.
“The truth is that gold does well in protecting people’s
wealth only from catastrophic inflation episodes,” Nadler said.
“Gold does not do very well at all in preserving purchasing
power amid ordinary inflation conditions.”
Gold’s inflation-adjusted record is $2,199, set in January
1980, according to a calculator on the Web site of the Federal
Reserve Bank of Minneapolis. The metal, often bought as a store
of value in times of financial turmoil, traded at $1,010 an
ounce in London on Sept. 11. The record, set in March last year,
is $1,032.70.
“Anyone who bought gold at $845 in January 1980 would
need to net more than $2,300 today just to break even,” Nadler
said. “The current rally in the metal is very much an
inflation-anticipatory event.”
(To save a copy of the chart, click here.)
For Related News and Information:
Top commodity stories: CTOP <GO>
Technical analysis of gold: GOLDS <Cmdty> BTST <GO>
For non-energy commodity charts: TNI CMDX CHART <GO>
Commodity forecasts: CPF <GO>
Economic forecasts: ECFC <GO>
Top metals stories: METT <GO>
09-16-2009, 03:15 PM
#63
The sizzle in the Steak
Gold closes at all-time high today. 
10-01-2009, 06:09 PM
#65
I feel the need...
Gold Tells You U.S. Bubble Hasn’t Popped Yet
If you owned stocks and gold and had to sell one, which would it be?
The Standard & Poor’s 500 Index has gained almost 60 percent since its low on March 9. Gold is near a record price. I know a fair number of people who would keep the gold.
I’ve never been a gold bug myself. They get no respect. They are associated with survivalists, conspiracy theorists and nutcases. They are always looking for the hyperinflation that never comes. Gold bugs pay a premium over the metal price for gold and silver coins on the notion that they will need the currency, come the Apocalypse.
On the other hand, the relationship between gold and financial crises goes back centuries. In the aftermath of the credit-bubble bust, we confront a Moby Dick-size pile of leverage and the question of whether this is inflationary or deflationary. So it’s worth considering what the price of gold may be telling us.....
The Standard & Poor’s 500 Index has gained almost 60 percent since its low on March 9. Gold is near a record price. I know a fair number of people who would keep the gold.
I’ve never been a gold bug myself. They get no respect. They are associated with survivalists, conspiracy theorists and nutcases. They are always looking for the hyperinflation that never comes. Gold bugs pay a premium over the metal price for gold and silver coins on the notion that they will need the currency, come the Apocalypse.
On the other hand, the relationship between gold and financial crises goes back centuries. In the aftermath of the credit-bubble bust, we confront a Moby Dick-size pile of leverage and the question of whether this is inflationary or deflationary. So it’s worth considering what the price of gold may be telling us.....
10-19-2009, 12:18 PM
#66
Карты убийцы
Gold at $2,000 Becomes Inflation-Adjusted Bullseye for ‘80 High
By Pham-Duy Nguyen
Oct. 19 (Bloomberg) -- Gold’s rally to a record means prices are still 53 percent below the 1980 inflation-adjusted peak.
While gold rose 19 percent this year to $1,072 an ounce on Oct. 14, consumer prices almost tripled in the past three decades, eroding the metal’s value. Bullion hasn’t kept pace with the cost of bread, fuel or medical care. In 1980, gold hit a then-record $873 an ounce. In today’s dollars, that would be $2,287, according to the U.S. Labor Department’s inflation calculator.
Record government debt and interest rates close to zero percent are pushing gold higher for a ninth straight year, and options show investors expect the rally to continue. When prices reached all-time highs, the contract with the most open interest was the December call to buy the metal at $1,200. The contract to purchase at $1,500 an ounce was the third biggest.
“Gold is not at any peak,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages $58.5 billion in mutual funds and brokerage accounts. “The world’s money supply has increased and gold hasn’t kept pace,” he said. “We’re now in a period where gold is catching up.”
The U.S. Dollar Index, which measures the currency against those of six major trading partners, fell on Oct. 15 to the lowest level in 14 months, and has dropped about 7 percent this year. President Barack Obama has increased the nation’s marketable debt 22 percent to $7.01 trillion to revive growth.
Preserving Value
Gold bulls say today’s record borrowing and low interest rates mean the government will have to accept faster inflation as the economy recovers. Investors buy bullion to preserve value during times of turmoil and economic stress.
Financial institutions worldwide have reported credit losses and writedowns of about $1.62 trillion since the start of 2007, when the credit crisis began. Group of 20 governments have pledged about $11.9 trillion to ease credit and revive economic growth, according to the International Monetary Fund.
“Gold is the hedge against currency devaluation,” John Brynjolfsson, of hedge fund Armored Wolf LLC, said in a Bloomberg Television interview from Aliso Viejo, California, on Oct. 7. He predicted bullion will top $2,000.
Banks have raised their gold estimates. On Oct. 9, JPMorgan Chase & Co. said the metal will average $1,006 an ounce next year, compared with an earlier projection of $950. Deutsche Bank AG forecast an average of $1,150, up 32 percent from its estimate in July. Barclays Capital said Oct. 12 that “prospects for a run at $1,500 should not be underestimated” next year.
Understated CPI
Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based Shadowstats.com. He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.
Gold futures for December delivery closed Oct. 16 at $1,051.50 an ounce on the New York Mercantile Exchange’s Comex division, gaining for a third straight week.
“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.
The cost of living in the U.S. rose 0.2 percent last month, the Labor Department said on Oct. 16. Compared with a year earlier, consumer prices fell 1.3 percent. The CPI will drop 0.5 percent this year, before rising 1.9 percent in 2010, reflected by the median estimates of 61 economists in a Bloomberg survey. Annual increases averaged 2.8 percent a year in the past decade.
Purchasing-Power Adjustment
In March 1980, inflation surged to a 14.8 percent annual rate, two months after gold capped a four-year rally. Adjusted for the decline in the dollar’s purchasing power since then, gold’s Oct. 14 record of $1,072 represents the equivalent of $409 in 1980 dollars, the Labor Department calculator shows.
Since January 1980, the average price of a pound of white bread has risen almost threefold, from about 50 cents to $1.38 in August, and medical care has surged more than fivefold, Labor Department figures show. Gasoline and electricity prices have more than doubled.
Today, the gap between gold’s spot price and its CPI- adjusted equivalent is the widest ever.
Gold hasn’t been as effective a hedge against inflation as oil since the 1980s, said Matt Zeman, of LaSalle Futures Group LLC in Chicago.
Oil Beats Gold
Crude passed its 1981 inflation-adjusted record two years ago. The cost of imported oil averaged $39 a barrel in February 1981, after Iran cut exports, according to the Energy Department. That’s $89 in 2007 dollars, the Labor Department calculator shows. Oil reached a record $147.27 on July 11, 2008, and closed at $78.53 on Oct. 16 in New York trading.
“If you bought gold in the 1980s, you’re still losing money today,” said Zeman, a metals trader. Gold prices in New York languished for two decades after declining from the 1980 record, dropping to a 20-year low of $253.20 on July 20, 1999.
While bulls say gold is cheap, the inflation-adjusted price is 15 percent above its 30-year average, Bloomberg data show.
The Federal Reserve may limit gains by raising interest rates before inflation balloons, analysts said. Fed Chairman Ben S. Bernanke said on Oct. 8 that policy makers will need to raise interest rates “at some point” to control inflation.
‘Prepared to Tighten’
“When the economic outlook has improved sufficiently, we will be prepared to tighten,” Bernanke said in remarks prepared for an Oct. 8 conference in Washington.
Fed moves to cool inflation and the government’s revenue needs will stop gold, according to Jon Nadler, a senior analyst for Montreal metals dealer and refiner Kitco Inc.
“These wild calls for several-thousand-dollar gold are typical of times when gold goes into uncharted territory,” Nadler said. “The Fed will pull the interest-rate trigger and the Obama administration will, in addition, pull the tax-hike trigger before we get into any serious inflation. Once the man on the street gets in, the gold rally is likely over.”
Gold held in exchange-traded funds climbed to records this month at Zuercher Kantonalbank and ETF Securities Ltd. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, are up 42 percent this year. Hedge funds and other large speculators hold their most-bullish position ever in gold futures. So-called net-long positions, or bets prices will rise, increased by 6 percent to 253,955 contracts in the week ended Oct. 13, according to the Commodity Futures Trading Commission.
Gold Producers
The Philadelphia Stock Exchange Gold & Silver Index jumped 43 percent this year, as Phoenix-based Freeport-McMoRan Copper & Gold Inc. tripled. Toronto-based Barrick Gold Corp., the world’s largest producer, fell 10 percent. Barrick said Sept. 8 it will record $5.6 billion in third-quarter costs to eliminate fixed- price contracts as the company bets gold’s value will climb.
At Jersey, Channel Islands-based GoldMoney.com, which held $759 million of gold and silver for investors as of Sept. 30, founder James Turk said bullion can climb eightfold based on the historical relationship between the metal and the Dow Jones Industrial Average. The Dow is up 10-fold since January 1980.
Gold and the Dow, which has gained 14 percent this year to 9,995.91, were at about the same level during the Great Depression and the early 1980s, he said. On Jan. 21, 1980, as gold futures surged to $873, the Dow slipped to 946.25.
“The dollar is constantly being debased and inflated,” Turk said. “By 2013, gold is going to be at $8,000 and the Dow will be at 8,000.”
Gold-Dollar Link
Deutsche Bank said early this month that the dollar will fall to $1.60 per euro next year, a drop of 7.3 percent from last week, because of “rising fiscal deficits and loose monetary policy.”
Gold has moved in the opposite direction of the dollar over most of the past decade. The metal’s correlation coefficient to the U.S. Dollar Index is minus 0.8539, Bloomberg data show. A correlation of minus 1 indicates two assets move inversely to each other, while a 1 would show they move in tandem. A reading of zero shows no correlation.
Philip Gotthelf, the president of Equidex Brokerage Group Inc. in Closter, New Jersey, says he expects gold to trade at $1,250 by year-end.
“Gold has been pushing higher because it’s no longer just a hedge against commodity inflation, it’s also a hedge against a change in world-monetary standards.”
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
Last Updated: October 18, 2009 19:31 EDT
By Pham-Duy Nguyen
Oct. 19 (Bloomberg) -- Gold’s rally to a record means prices are still 53 percent below the 1980 inflation-adjusted peak.
While gold rose 19 percent this year to $1,072 an ounce on Oct. 14, consumer prices almost tripled in the past three decades, eroding the metal’s value. Bullion hasn’t kept pace with the cost of bread, fuel or medical care. In 1980, gold hit a then-record $873 an ounce. In today’s dollars, that would be $2,287, according to the U.S. Labor Department’s inflation calculator.
Record government debt and interest rates close to zero percent are pushing gold higher for a ninth straight year, and options show investors expect the rally to continue. When prices reached all-time highs, the contract with the most open interest was the December call to buy the metal at $1,200. The contract to purchase at $1,500 an ounce was the third biggest.
“Gold is not at any peak,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages $58.5 billion in mutual funds and brokerage accounts. “The world’s money supply has increased and gold hasn’t kept pace,” he said. “We’re now in a period where gold is catching up.”
The U.S. Dollar Index, which measures the currency against those of six major trading partners, fell on Oct. 15 to the lowest level in 14 months, and has dropped about 7 percent this year. President Barack Obama has increased the nation’s marketable debt 22 percent to $7.01 trillion to revive growth.
Preserving Value
Gold bulls say today’s record borrowing and low interest rates mean the government will have to accept faster inflation as the economy recovers. Investors buy bullion to preserve value during times of turmoil and economic stress.
Financial institutions worldwide have reported credit losses and writedowns of about $1.62 trillion since the start of 2007, when the credit crisis began. Group of 20 governments have pledged about $11.9 trillion to ease credit and revive economic growth, according to the International Monetary Fund.
“Gold is the hedge against currency devaluation,” John Brynjolfsson, of hedge fund Armored Wolf LLC, said in a Bloomberg Television interview from Aliso Viejo, California, on Oct. 7. He predicted bullion will top $2,000.
Banks have raised their gold estimates. On Oct. 9, JPMorgan Chase & Co. said the metal will average $1,006 an ounce next year, compared with an earlier projection of $950. Deutsche Bank AG forecast an average of $1,150, up 32 percent from its estimate in July. Barclays Capital said Oct. 12 that “prospects for a run at $1,500 should not be underestimated” next year.
Understated CPI
Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based Shadowstats.com. He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.
Gold futures for December delivery closed Oct. 16 at $1,051.50 an ounce on the New York Mercantile Exchange’s Comex division, gaining for a third straight week.
“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.
The cost of living in the U.S. rose 0.2 percent last month, the Labor Department said on Oct. 16. Compared with a year earlier, consumer prices fell 1.3 percent. The CPI will drop 0.5 percent this year, before rising 1.9 percent in 2010, reflected by the median estimates of 61 economists in a Bloomberg survey. Annual increases averaged 2.8 percent a year in the past decade.
Purchasing-Power Adjustment
In March 1980, inflation surged to a 14.8 percent annual rate, two months after gold capped a four-year rally. Adjusted for the decline in the dollar’s purchasing power since then, gold’s Oct. 14 record of $1,072 represents the equivalent of $409 in 1980 dollars, the Labor Department calculator shows.
Since January 1980, the average price of a pound of white bread has risen almost threefold, from about 50 cents to $1.38 in August, and medical care has surged more than fivefold, Labor Department figures show. Gasoline and electricity prices have more than doubled.
Today, the gap between gold’s spot price and its CPI- adjusted equivalent is the widest ever.
Gold hasn’t been as effective a hedge against inflation as oil since the 1980s, said Matt Zeman, of LaSalle Futures Group LLC in Chicago.
Oil Beats Gold
Crude passed its 1981 inflation-adjusted record two years ago. The cost of imported oil averaged $39 a barrel in February 1981, after Iran cut exports, according to the Energy Department. That’s $89 in 2007 dollars, the Labor Department calculator shows. Oil reached a record $147.27 on July 11, 2008, and closed at $78.53 on Oct. 16 in New York trading.
“If you bought gold in the 1980s, you’re still losing money today,” said Zeman, a metals trader. Gold prices in New York languished for two decades after declining from the 1980 record, dropping to a 20-year low of $253.20 on July 20, 1999.
While bulls say gold is cheap, the inflation-adjusted price is 15 percent above its 30-year average, Bloomberg data show.
The Federal Reserve may limit gains by raising interest rates before inflation balloons, analysts said. Fed Chairman Ben S. Bernanke said on Oct. 8 that policy makers will need to raise interest rates “at some point” to control inflation.
‘Prepared to Tighten’
“When the economic outlook has improved sufficiently, we will be prepared to tighten,” Bernanke said in remarks prepared for an Oct. 8 conference in Washington.
Fed moves to cool inflation and the government’s revenue needs will stop gold, according to Jon Nadler, a senior analyst for Montreal metals dealer and refiner Kitco Inc.
“These wild calls for several-thousand-dollar gold are typical of times when gold goes into uncharted territory,” Nadler said. “The Fed will pull the interest-rate trigger and the Obama administration will, in addition, pull the tax-hike trigger before we get into any serious inflation. Once the man on the street gets in, the gold rally is likely over.”
Gold held in exchange-traded funds climbed to records this month at Zuercher Kantonalbank and ETF Securities Ltd. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, are up 42 percent this year. Hedge funds and other large speculators hold their most-bullish position ever in gold futures. So-called net-long positions, or bets prices will rise, increased by 6 percent to 253,955 contracts in the week ended Oct. 13, according to the Commodity Futures Trading Commission.
Gold Producers
The Philadelphia Stock Exchange Gold & Silver Index jumped 43 percent this year, as Phoenix-based Freeport-McMoRan Copper & Gold Inc. tripled. Toronto-based Barrick Gold Corp., the world’s largest producer, fell 10 percent. Barrick said Sept. 8 it will record $5.6 billion in third-quarter costs to eliminate fixed- price contracts as the company bets gold’s value will climb.
At Jersey, Channel Islands-based GoldMoney.com, which held $759 million of gold and silver for investors as of Sept. 30, founder James Turk said bullion can climb eightfold based on the historical relationship between the metal and the Dow Jones Industrial Average. The Dow is up 10-fold since January 1980.
Gold and the Dow, which has gained 14 percent this year to 9,995.91, were at about the same level during the Great Depression and the early 1980s, he said. On Jan. 21, 1980, as gold futures surged to $873, the Dow slipped to 946.25.
“The dollar is constantly being debased and inflated,” Turk said. “By 2013, gold is going to be at $8,000 and the Dow will be at 8,000.”
Gold-Dollar Link
Deutsche Bank said early this month that the dollar will fall to $1.60 per euro next year, a drop of 7.3 percent from last week, because of “rising fiscal deficits and loose monetary policy.”
Gold has moved in the opposite direction of the dollar over most of the past decade. The metal’s correlation coefficient to the U.S. Dollar Index is minus 0.8539, Bloomberg data show. A correlation of minus 1 indicates two assets move inversely to each other, while a 1 would show they move in tandem. A reading of zero shows no correlation.
Philip Gotthelf, the president of Equidex Brokerage Group Inc. in Closter, New Jersey, says he expects gold to trade at $1,250 by year-end.
“Gold has been pushing higher because it’s no longer just a hedge against commodity inflation, it’s also a hedge against a change in world-monetary standards.”
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
Last Updated: October 18, 2009 19:31 EDT
11-04-2009, 03:01 PM
#67
The sizzle in the Steak
Gold extends record high on India purchase
Gold prices continued to rise on Wednesday extending the all-time highs which followed India’s central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country’s finance minister warned the economies of the US and Europe had “collapsed”.
India’s decision to exchange $6.7bn for gold equivalent to 8 per cent of world annual mine production sent the strongest signal yet that Asian countries were moving away from the US currency.
The purchase by New Delhi’s Reserve Bank from the International Monetary Fund pushed gold prices to a record $1,090.90 per troy ounce, up 2.6 per cent on the day, as traders bet that other central banks would also become buyers.
India’s decision to exchange $6.7bn for gold equivalent to 8 per cent of world annual mine production sent the strongest signal yet that Asian countries were moving away from the US currency.
The purchase by New Delhi’s Reserve Bank from the International Monetary Fund pushed gold prices to a record $1,090.90 per troy ounce, up 2.6 per cent on the day, as traders bet that other central banks would also become buyers.
11-04-2009, 05:03 PM
#68
goldeneye style
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thoughts on gold from a prominent global macro hedge fund: Tudor Investment Corp. Basically says gold is 'undervalued'
http://www.marketfolly.com/2009/10/p...old-curve.html
So many big hedgies are in this trade it's almost scary.
http://www.marketfolly.com/2009/10/p...old-curve.html
So many big hedgies are in this trade it's almost scary.
11-04-2009, 06:15 PM
#69
I feel the need...
When a trade gets this crowded, its a signal to take some profits. 
Roubini (bearish) and Jim Rodgers (bullish) are in a bit of a pissing match on Gold right now. I would tip my hat to JR since he has been a very successful investor with a long track record but Roubini comes from academia and has played one successful call into growing his operation from a three man bucketshop into full-blown punditry.
Roubini (bearish) and Jim Rodgers (bullish) are in a bit of a pissing match on Gold right now. I would tip my hat to JR since he has been a very successful investor with a long track record but Roubini comes from academia and has played one successful call into growing his operation from a three man bucketshop into full-blown punditry.
11-04-2009, 06:32 PM
#70
I feel the need...
Here's the play by play:
Roubini Says Rogers’s $2,000 Gold ‘Utter Nonsense’
http://www.bloomberg.com/apps/news?p...d=aOfwpkHV2clM
Rogers Says Roubini Is Wrong on Bubbles as Gold, Stocks Rally
http://www.bloomberg.com/apps/news?p....G.WUIP8&pos=5
Roubini Says Rogers’s $2,000 Gold ‘Utter Nonsense’
http://www.bloomberg.com/apps/news?p...d=aOfwpkHV2clM
Rogers Says Roubini Is Wrong on Bubbles as Gold, Stocks Rally
http://www.bloomberg.com/apps/news?p....G.WUIP8&pos=5
12-01-2009, 11:57 AM
#74
The sizzle in the Steak
The only way to deal with the mountain of debt for the next +10 years is inflation.
Thus commodities will be king. Farmers will be driving Ferraris.
Thus commodities will be king. Farmers will be driving Ferraris.
12-06-2009, 11:20 PM
#77
Drifting
The media is talking about a Gold 'bubble', but there is really a dollar bubble instead. You can hear all about this at the following site- the latest 30 minute video is extremely good:
http://inflation.us/videos.html
You'll see that Silver is still relatively low compared to the price of Gold and should snap back to historic valuation ratios to gold. In 1981, silver peaked around $50 and that was when gold was (only) $800- now it's $1100 and change having been $1200 just a few days ago. You'll also see why gold is still cheap in relation to the Dow (now 10,388) and there are historic ratios of Dow/Gold as well that makes gold relatively cheap even at these levels. That's the Cliff notes version of this video.
Besides SLV i-shares that I mentioned in this thread in January, hard bullion is a great way to go. I have been loading up on Silver dollars since April. The best place I have found is www.bulliondirect.com where you can buy bullion via the nucleo exchange which works similar to Ebay in concept. You can store you holdings in their vault and sell them through the nucleo exchange- haven't sold anything yet though. I bought a bunch this weekend on Friday's weakness since the prices are down. The general price trend is up so buying on dips has served me well the last few months.
Looks like Canadian Silver dollars are the best value at the moment- about $20.40 per coin. These coins are a great way to get invested because the initial cost is not that high unlike a gold Krugerrand that sets you back $1170 at the moment.
This is just friendly advice- take it or leave it. I don't have any business relationships with bulliondirect I'm just a happy customer of theirs now. I just found this inflation.us web site and it is very helpful in guiding me in a potentially difficult future.
http://inflation.us/videos.html
You'll see that Silver is still relatively low compared to the price of Gold and should snap back to historic valuation ratios to gold. In 1981, silver peaked around $50 and that was when gold was (only) $800- now it's $1100 and change having been $1200 just a few days ago. You'll also see why gold is still cheap in relation to the Dow (now 10,388) and there are historic ratios of Dow/Gold as well that makes gold relatively cheap even at these levels. That's the Cliff notes version of this video.
Besides SLV i-shares that I mentioned in this thread in January, hard bullion is a great way to go. I have been loading up on Silver dollars since April. The best place I have found is www.bulliondirect.com where you can buy bullion via the nucleo exchange which works similar to Ebay in concept. You can store you holdings in their vault and sell them through the nucleo exchange- haven't sold anything yet though. I bought a bunch this weekend on Friday's weakness since the prices are down. The general price trend is up so buying on dips has served me well the last few months.
Looks like Canadian Silver dollars are the best value at the moment- about $20.40 per coin. These coins are a great way to get invested because the initial cost is not that high unlike a gold Krugerrand that sets you back $1170 at the moment.
This is just friendly advice- take it or leave it. I don't have any business relationships with bulliondirect I'm just a happy customer of theirs now. I just found this inflation.us web site and it is very helpful in guiding me in a potentially difficult future.
12-06-2009, 11:20 PM
#78
Drifting
The media is talking about a Gold 'bubble', but there is really a dollar bubble instead. You can hear all about this at the following site- the latest 30 minute video is extremely good:
http://inflation.us/videos.html
You'll see that Silver is still relatively low compared to the price of Gold and should snap back to historic valuation ratios to gold. In 1981, silver peaked around $50 and that was when gold was (only) $800- now it's $1100 and change having been $1200 just a few days ago. You'll also see why gold is still cheap in relation to the Dow (now 10,388) and there are historic ratios of Dow/Gold as well that makes gold relatively cheap even at these levels. That's the Cliff notes version of this video.
Besides SLV i-shares that I mentioned in this thread in January, hard bullion is a great way to go. I have been loading up on Silver dollars since April. The best place I have found is www.bulliondirect.com where you can buy bullion via the nucleo exchange which works similar to Ebay in concept. You can store you holdings in their vault and sell them through the nucleo exchange- haven't sold anything yet though. I bought a bunch this weekend on Friday's weakness since the prices are down. The general price trend is up so buying on dips has served me well the last few months.
Looks like Canadian Silver dollars are the best value at the moment- about $20.40 per coin. These coins are a great way to get invested because the initial cost is not that high unlike a gold Krugerrand that sets you back $1170 at the moment.
This is just friendly advice- take it or leave it. I don't have any business relationships with bulliondirect I'm just a happy customer of theirs now. I just found this inflation.us web site and it is very helpful in guiding me in a potentially difficult future.
http://inflation.us/videos.html
You'll see that Silver is still relatively low compared to the price of Gold and should snap back to historic valuation ratios to gold. In 1981, silver peaked around $50 and that was when gold was (only) $800- now it's $1100 and change having been $1200 just a few days ago. You'll also see why gold is still cheap in relation to the Dow (now 10,388) and there are historic ratios of Dow/Gold as well that makes gold relatively cheap even at these levels. That's the Cliff notes version of this video.
Besides SLV i-shares that I mentioned in this thread in January, hard bullion is a great way to go. I have been loading up on Silver dollars since April. The best place I have found is www.bulliondirect.com where you can buy bullion via the nucleo exchange which works similar to Ebay in concept. You can store you holdings in their vault and sell them through the nucleo exchange- haven't sold anything yet though. I bought a bunch this weekend on Friday's weakness since the prices are down. The general price trend is up so buying on dips has served me well the last few months.
Looks like Canadian Silver dollars are the best value at the moment- about $20.40 per coin. These coins are a great way to get invested because the initial cost is not that high unlike a gold Krugerrand that sets you back $1170 at the moment.
This is just friendly advice- take it or leave it. I don't have any business relationships with bulliondirect I'm just a happy customer of theirs now. I just found this inflation.us web site and it is very helpful in guiding me in a potentially difficult future.
12-07-2009, 04:31 PM
#79
I feel the need...
Gold Can’t Beat Checking Accounts 30 Years After Peak
Gold’s best year in three decades has yet to match the returns of an interest-bearing checking account for anyone who bought the most malleable of metals coveted for at least 5,000 years during the last peak in January, 1980.
Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.
“You give up a lot of return for the privilege of sleeping well at night,” said James Paulsen, who oversees about $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “If the world falls into an abyss, gold could be a store of value. There is some merit in that, but you can end up holding too much gold waiting for the world to end. From my experience, the world has not ended yet.....”
Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.
“You give up a lot of return for the privilege of sleeping well at night,” said James Paulsen, who oversees about $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “If the world falls into an abyss, gold could be a store of value. There is some merit in that, but you can end up holding too much gold waiting for the world to end. From my experience, the world has not ended yet.....”
12-07-2009, 06:11 PM
#80
The sizzle in the Steak
Who would have held gold bought at $850 an ounce back in 1980 for all these years? They would have sold it LONG ago. Who writes this stuff?