Gold Predictions?

[Tilted]

Gold has broken through the $1000 barrier again. It's up $24.50 to $1001.00.

Where will it be one year from now?

For those who don't know, gold is regarded by many as a bellwether hedge by people who are concerned about economic weakness.

 

[Tilted]

Back down into the $980s this morning.

 

[CrashTest]

Since you can't go into McDonalds and buy a Big Mac with a bar of gold, your gold had better increase in value at a rate greater than that of tanking currency.

 

[BoyGenius]

Gold has broken through the $1000 barrier again. It's up $24.50 to $1001.00.

Where will it be one year from now?

For those who don't know, gold is regarded by many as a bellwether hedge by people who are concerned about economic weakness.

$780, one month from now.

 

[Christy]

But I once worked with a guy who insisted on being paid in gold vs the US dollar.

 

[BoyGenius]

But I once worked with a guy who insisted on being paid in gold vs the US dollar.

I had no idea you were that old.

 

[Christy]

I had no idea you were that old.

I'm not, but he is.

 

[BoyGenius]

Okay, BoyGenious, I'll tell you what. Let us write a contract agreeing for me to buy 5 ounces of gold from you one month from now for $875 per ounce. What ya say?

So you're saying my $780 prediction is less absurd than your $875 prediction?

 

[BoyGenius]

If the stock market is down, the price of gold will be up. If the stock market is up, the price of gold will be down. The key is to offset the volatility of both by having some of your portfolio (some say 10% to 15%) in gold, and the rest in some combination of stocks, cash equivalents, etc. I know your were asking for a more specific prediction, so here it goes: I predict there will be a short-term boost in the economy during 2009, which will send stock prices climbing slightly, resulting in gold prices tumbling slightly. So, I predict gold prices to be about where they are now.

Diclaimer: I am not a financial expert; each individual's situation is different and necessitates an individual plan.

What happened to this?

BoyGenious, the more you speak on this subject, the clearer it becomes how little you know about it. Essentially all advisors agree that dollar-cost averaging is the best strategy for the long term investor because it has the effect of reducing the average purchase price to levels even lower than the average market price during the same period. As for your other question, someone who had "a bunch of tech stocks back in 2000" had no business having a portfolio that unbalanced.

By the way, I was aware of these concepts even before I obtained my Master of Science in Financial Management.

 

[BoyGenius]

Actually, I was making an offer for you and I to enter into a "futures" contract. My willingness to enter into the futures contract at the described terms reveals only one thing about my prediction: that I expect gold to trade for more than $875 per ounce a month from now. That way, I could buy the gold from you and turn around and sell it for an immediate profit. I am sorry if I am talking above you.

I will never, ever buy gold. It's a scam. And that advice that you need it in a portfolio is a joke.

Check out November and December 2008 gold prices. Really blows your earlier comment away about gold in relation to whether the market is up or down.

Historical Gold Charts and Data - London Fix

 

[BoyGenius]

First, you are making a mistake by assuming a two-month period is indicative of an overall long-term trend. Secondly, it is actually the value of the dollar (and not exactly the stock market, although it usually works out that way)that has an inverse relationship to the value of gold. Finally, if you don't wish to buy gold or you otherwise think my advice is "a joke," by all means refuse to heed it or ignore it altogether. It's that simple.

So you're backing off this statement you made: "If the stock market is down, the price of gold will be up."

 

[David]

Gold is technically oversold right now. Could probably go as low as $850. What will it be a year from now? Can't say, but I'll bet it will be a lot higher. Once the dollar starts to crumble, it will probably crumble fast and Gold will take off from there. Add some inflation followed by hyperinflation, and the sky is the limit.

When a government goes as far in the hole as ours has and continues to do, it has 3 solutions to get out: 1) raise taxes a whole lot, 2) default on the debt, 3) print money so they can pay it back in cheaper dollars (the hidden tax on the people). What do you think they'll do?

When you crank up the printing presses and start whipping out trillions of dollars w/o a corresponding increase in GDP to support it, you have a flood of money, and basic supply and demand says the more of something there is, the less it is worth. See Argentina, Zimbabway, Weimar Republic, etc...

Gold has been real money since the beginning times of civilized man. Don't see any reason that will change this time.

In past cycles, Gold saw its peak when the ratio of the DOW/GOLD was 2. That could be DOW $5000, Gold $2500, or DOW $2000, Gold $1000 or whatever. But, this time I think things are extraordinary, meaning the ratio could be 1 or lower.

If you're gonna buy now, wait for some pull backs. But, once it goes this time probably gonna be hard to catch it. For the past few months there has been an incredible premium on gold and silver bullion coins and a very lengthy delivery time -- meaning high demand. A friend bought some silver bullion a few weeks ago and they are quoting a June delivery.

The central bankers and their larger banks have been suppressing/manipulating gold prices by massive short selling and other means using so-called dark derivatives. High gold prices do not bode well for their paper fiat currency -- bad for business so to speak.

Corrections in a bull market are not unusual. Last time gold shot up in the 80's or whenever it was, I believe it took a year long break and dropped 40% or so before it took off for the moon again.

 

[Tilted]

Gold traders are definitely weighing in on the Fed's latest announcement.

After a significant sell off yesterday, gold is trading up about $60 this morning, to around $950.

 

[Larry Gude]

Gold traders are definitely weighing in on the Fed's latest announcement.

After a significant sell off yesterday, gold is trading up about $60 this morning, to around $950.

Store of value for dollars; oil and gold.

The market still has no direction as Timmy gropes about in his dark, empty offices, Barney and Dodd aren't helping anything and Barrack is preoccupied with the tournament and a little super star R and R.

House, Fanny and Freddy, have not been fixed.

Gold and oil. If things stay the way they are, no direction for the market, no fix on housing, no change in speculator regulations, gold will be $1,200 by fall and oil will be $100.

 

[xusnret]

You got that right. Don't forget about silver either, since it typically lags behind gold although now it is rapidly catching up. I looked into silver coins yesterday, but the cheapest asking retail price I could find (I did not look extensively) was $395 for 20 U.S. silver dollars, with each dollar containing one troy ounce of silver. Doing the math, this equates to about $20 per troy ounce for the silver, when the current market price was under $14. That was too much of a markup; going by the value of the silver alone, the investment would have had to gain some 40% just to break even. As for silver investment, for now I will have to settle for a sizeable collection of sterling silver spoons that I acquired a year ago from an estate liquidation at a discounted price.

If you are serious about accumulating some silver keep an eye out on ebay. Qty's flux but if you go for the ones and twos at a time you can build up a fair amount, hold out for the free shipping auctions. I started building in 1986 100 a year. First year got them for 3.95 an oz, stopped in 1995 at 7.50. For new stuff go right to the mint. They are out of gold/silver blanks right now but through The United States Mint Home you cut out the middle man.

 

[Tilted]

Okay, BoyGenious, I'll tell you what. Let us write a contract agreeing for me to buy 5 ounces of gold from you one month from now for $875 per ounce. What ya say?

You two never booked this deal, did you? It would have been close, as to who came out ahead/behind. With a significant downward move today, gold is currently trading around $871. But, as of yesterday, it would have been closer to $900.

 

[BoyGenius]

You two never booked this deal, did you? It would have been close, as to who came out ahead/behind. With a significant downward move today, gold is currently trading around $871. But, as of yesterday, it would have been closer to $900.

Libertarian made a good call on that one. And hell no, I never booked that deal. I wouldn't bet anything concerning anything with gold in a market where the government rewrites the rules each day as they see fit.

 

[Tilted]

I'm surprised it was close. The sudden upward jolt in the stock market must have sent the gold price downward. I don't blame BoyGenious for being reluctant to invest in gold, although I still think a small amount as an inflationary hedge is advisable. I am not buying any right now though, because the market is pushing it way too much and is putting way too much of a premium on it. Plus, what the stock market hates right now is that one party has control of the White House and Congress. The closer we get to the mid-terms, the more investor confidence I expect to see in the stock market (assuming things aren't f##k#d up beyond repair), because it is almost certain we will see a change in Congressional power. When that happens, the stock market should climb and the gold price should fall, especially if the Iraqi war is ending.

I have to disagree with that assertion. Is it possible? Sure, but I think it is unlikely - and more importantly, it certainly isn't almost certain. Economically, things are likely to 'feel' better by then, and, in a lot of circles, Obama (and Democratic rule in general) will get credit for that.

In the House, if things fall favorably for the Republicans, they may gain some seats - but even that is far from certain. Furthermore, gaining enough to take control of the House would be a bit of a stretch. Obviously, anything can happen between now and then to increase the likelihood of it happening, but, at this point, I'd lay pretty significant odds against it.

As for the Senate, it is hard to imagine how the GOP could take control of that chamber. Looking at the specific seats that will be contested in 2010, I just don't see how the Republicans could achieve a net gain of 9 or 10 seats. Gaining a couple net seats will be a reasonable achievement for them.

 

[Tilted]

Gold is now back up over $1000, trading around $1017 this morning.

And by the way, what ever happened to BoyGenius? BG, do you have a different name now?