Werent people saying Nasdaq was a bubble back in 98...to see it triple again in 18 months time? A Jim Rogers quote I once read from that time comes to mind: 'I'm a huge bear fully invested on the long side.' Anyway, I am not here to convince people of golds further potential nor do I have the intellectual capacity to determine the state of bubbleship gold is in today. Nevertheless having tried to learn about previous bubbles in the past it is my belief peaks of bubbles come accompanied by performance crushing each and other alternative out there and I don't think we are there just yet. I mean, gold hasnt even passed a useless metal as platinum yet. Palladium outperformed gold in 2009 by a 100%! Ofcourse this is all talking my book obviously. Should gold collapse 10% tomorrow and al the miners crash 50% I am left standing with my pants down. We shall see. Exciting times.
Palladium outperforming Gold is an indication of a recovering economy, no? They use it in car parts if i`m correct. It is a noble...not precious.
Yeah? So what? Just because something is a bubble doesn't mean it can't continue being a bubble for a long, long time. Where's the Nasdaq in relevance to it's all time high right now? Don't let your seemingly blinding love for gold blind you to the potential disaster it could ALSO be. Not saying it will or won't move up down or sideways. Just that people who have a one way view of ANYthing in life often get their rears handed to them.
I'd say the answer to that would be it's very hard to determine the real value of anything with interest rates at 0%. I agree with a post (was it in this topic?) loose monetary policies will remain as long as oil keeps at bay driving up asset classes higher all across the border. So where does oil goes from here? No idea. So much mystics in the oil market. Peak oil has passed already or governments playing the people for a fool. Who knows. Anyway, oil rising above a 100$ a barrel would certainly raise my awareness on possible tightening by central banks globally possibly influencing the price of gold as well.
I understand that and I do know greed is possibly the hardest factor to surpass in trying to make a profit in the world of trading. Nevertheless, as a European resident and Euro user any substantial drop in gold would logically be accompanied by a recovering dollar and as such prove to be a nice backstop by it's own. In 2008 gold dropped 30% from 1000$ to 700$ and the Dollar rallied 20% VS the Euro. That's a 10% loss which is acceptable at least in my own situation keeping in mind the size of my gold holdings VS other assets. Ofcourse people outside the US have 'profited' less from golds recent rise but that's a knife that cuts both ways I guess.
Go out to the 30 year and you shall find what you need. 4.23% free from state taxes. If this goes over 5.67% there will be hell to pay for all things priced in dollars. Thats what i`m watching for.
until we see people fighting over the USD again overseas instead of trashing it over time ... hard assets will still have a place in society www.youtube.com/watch?v=LlCb41nelD8&feature=related
Doesn't matter much because you still should have a tidy profit even if it drops 10, 20 or even 30 %. What matters is that you know when to sell after a top and you're not caught like a deer in the headlights should things start going in the wrong direction. For many - and I am explicitly including myself here, as I am talking about human nature - psychologically it is hard to sell something that is down 20% from the top. Our brain is wired to reward the feeling of selling exactly at the top, so we can feel smart selling to fools left holding the bag. That's why we use and hear profit targets on bubble vision all the time. Nasdaq 10,000, Dow 40,000, Google $1,000, Crude $250 and Gold $5,000. This non-sense appeals to our instincts. It's like crack for our brain.