Any good thoughts on gold?

Discussion in 'Commodity Futures' started by TheStudent, Oct 26, 2003.

  1. I was just doing some research on gold and it is very hard to separate fact from fiction, so I wanted to hear other people's thoughts on gold. Maybe we can share observations and learn something from each other.

    I'll just kick off with some observations culled from the web :

    1) Demand seems to exceed production

    2) Central bank dishoarding of gold in the 1990s and gold loans seem to have played a significant role in keeping prices down

    3) India and China are among the 3 biggest consumers of gold. Presumably if and when the wealth of these nations increases, gold consumption will also increase

    4) The ratio of dollars to gold (James Turk fear index) is unusually low

    5) Central Banks seem to have come together to support the gold price under the Washington Agreement

    Perhaps anyone with a good insights into the gold market might want to comment?
  2. James Turk fear index
  3. Gold market has neggative corelation to USD and possitive corelation to Austraia where is major gold production country.
    So, Gold corelates AUD/USD, someone says 80%.
  4. Banque de France comments on gold circa 2000
  5. Dont know anything about the macro-economic picture but gold has another use. Whenever I get to feeling down I pull out my Doomsday stash and put my Kruggerands and Eagles and Maple Leaf's in nice neat stacks. Never fails to lift my spirits.
  6. Well the day may come when paper tender is worthless, and gold may be the only medium of exchange. But when that day comes, do you think that you will really want to be part of what is left of society?

    Only the most catastrophic events could or would bring about that day. And there you sit in your bunker, armed to the teeth against your neighbor, counting your gold coin.

    Ahhh, the life!
  7. Student, all your points are correct.The trend is firmly in place and gaining momentum on a daily basis.This trend should continue as long as the fed devalues the dollar.Those of us already involved in the sector have chalked up some outstanding gains.We're still in the earlier stages of the trend.Stocks,funds and index's are still low and cheap on a historical basis.Most, if not all the fundamentals for a higher gold price are in place and gaining strength.Not to get involved in this sector is missing an opportunity to make easy money
  8. That's the kind of thinking I like - and I liked it when the Hunt brothers said basically the same thing...
  9. Thanks. I started following gold in May and am happy to see the technicals hold up.

    Since gold is a market that is highly subject to manipulation, I'm wondering if anyone can shed any insight on the reasons why Central Banks will want to keep gold down.

    I don't quite buy the argument that govts that want to print money are worried that a rising price of gold will expose them. As we have seen in printing press economies like Weimar Germany and Argentina, even the price of your morning coffee will start sky rocketing! No body needs the price of gold to tell them what the govt is doing.

    Seems to me that the main reason why govts do not like the price of gold to go up is because if it does, it will attract the attention of the masses. Once the masses move their wealth into gold, it becomes hard to tax, hard to keep within the borders and hard to circulate in the economy. All three of which are anathema to a sitting govt.
  10. Sitting in a bunker?
    Ya mean those Mad Max movies aren't even close as to what happens "the day after?"

    I doubt people in a post apocalyptic world will care about silly shiny coins or metals when they're looking for food and water that isn't radioactive.

    On another note...
    Gold as wealth...hardly. Gold on an inflated adjusted basis is worth today roughly what it was worth back in 1800. Central banks conspiring to keep the price of gold down? What's a CB going to do with gold when they're freely floating their currency?
    As for the US and the dollar, cheap dollar helps exports, helps US industries... or are all you rooting against the US so your silly shiny coins can actually generate wealth?
    #10     Oct 27, 2003