Current Gold Price

[Lord Beria3]

On a personal level, I know knowbody who independently has brought silver and gold.

I have managed to persuade my parents to buy gold/silver and I suspect that on this forum, the recent moves by others into PM's is partly been my bloody mindness - without my continual posts, I doubt many others would have brought gold or silver.

In terms of pension managers, very few have ANY gold or silver in their portfolio's - outside hedge funds, I see no investment driven demand for gold and silver.

So, whilst there may be a bubble later on, we are still in the early days of a long-term bullish rally in gold and silver.

[UndercoverElephant]

On a personal level, I know knowbody who independently has brought silver and gold.

I have managed to persuade my parents to buy gold/silver and I suspect that on this forum, the recent moves by others into PM's is partly been my bloody mindness

I am not a recent convert to gold, although recent events have made me believe a bigger spike is coming...

[UndercoverElephant]

Gist of Bernanke speech...

Commodity price increases in the last two years (in dollars) are only 20% due to dollar-printing and 80% due to increased demand and stagnant supply. Oil production is below 2008 peak. However, he still hopes/believes that increases in production and improvements in efficiency will stabilise the supply/demand equation and bring inflation back under control.

He has attempted to keep everybody guessing. No firm prediction on inflation (it's out of his hands, right...) and no firm commitment not to print more money if the economic data from the US deteriorates.

No mention of gold. All other commodities mentioned.

The speech appeared to me to be self-contradictory with respect to limits to growth. On the one hand he was clearly articulating global supply/demand problems for oil, food and non-precious metals like copper, and pointing out that consumption levels per head in the "emerging markets" was still below that of the west (i.e. it's not their "fault", but their right to consume more). He even specifically alluded to peak oil in 2008, at least to my ears. He noted that OPEC does not appear to be very interested in increasing production. Yet on the other hand he seems to be convinced that this supply/demand problem is not going to have long-term effects on inflation or growth and that eventually "things will settle down."

As snow hope said in another thread today...we'll see about that.

[JavaScriptDonkey]

On a personal level, I know knowbody who independently has brought silver and gold.

I have managed to persuade my parents to buy gold/silver and I suspect that on this forum, the recent moves by others into PM's is partly been my bloody mindness - without my continual posts, I doubt many others would have brought gold or silver.

In terms of pension managers, very few have ANY gold or silver in their portfolio's - outside hedge funds, I see no investment driven demand for gold and silver.

So, whilst there may be a bubble later on, we are still in the early days of a long-term bullish rally in gold and silver.

That's possibly because gold and silver don't generate any income at all. You have to liquidate your position in order to realise any profit and that is more the preserve of short term traders rather than long term growth pension funds.

It's not a perfect comparison but gold bulls should take a look at the current housing market. Ignoring the obvious benefit of owning the roof over your head or the potential for rental income, if you want to cash out then you have to sell which means finding someone with sufficient capital to buy and who believes that houses might actually go up in value. Many people who think that their house is worth a lot are finding it very hard to realise that in the open market. ie prices have risen beyond demand and that is for houses, things that people actually need. Gold? Pah. Bubble.

(Not that you can't make vast profits out of bubbles though....)

[UndercoverElephant]

On a personal level, I know knowbody who independently has brought silver and gold.

I have managed to persuade my parents to buy gold/silver and I suspect that on this forum, the recent moves by others into PM's is partly been my bloody mindness - without my continual posts, I doubt many others would have brought gold or silver.

In terms of pension managers, very few have ANY gold or silver in their portfolio's - outside hedge funds, I see no investment driven demand for gold and silver.

So, whilst there may be a bubble later on, we are still in the early days of a long-term bullish rally in gold and silver.

That's possibly because gold and silver don't generate any income at all. You have to liquidate your position in order to realise any profit and that is more the preserve of short term traders rather than long term growth pension funds.

It's not a perfect comparison but gold bulls should take a look at the current housing market. Ignoring the obvious benefit of owning the roof over your head or the potential for rental income, if you want to cash out then you have to sell which means finding someone with sufficient capital to buy and who believes that houses might actually go up in value. Many people who think that their house is worth a lot are finding it very hard to realise that in the open market. ie prices have risen beyond demand and that is for houses, things that people actually need. Gold? Pah. Bubble.

(Not that you can't make vast profits out of bubbles though....)

Whether or not you believe gold is in a bubble depends on what you believe about (a) the fate of the $US as the world's reserve currency, (b) the sustainability of the existing fiat money system in general and (c) whether you believe global supply/demand for commodities is going to eventually return to pre-noughties "BAU" or not. If you are pessimistic about all three, as Beria and myself are, then gold has still got a long way to go up and it may never come down again, ever.

Gold is the very last thing that any person tasked with managing large amounts of other people's money wants to "invest" in. Doing so is basically admitting that everything else is screwed, and these people know all too well that a stampede into gold as a safe haven in the coming months/years signals the ending of the world as they know it. This doesn't mean the stampede won't eventually happen. It depends on the level of fear, which is what this thread is about.

One thing I am fairly certain of is this: most of the people making these decision do not fully grasp the reality and implications of peak oil/resources because they are too deeply immersed in the daily shiftings of other aspects of global economics to have any real awareness of those things. So if Bernanke says that the global supply/demand equation will "return to normal" then many of them are likely to believe him. Most people here will not.

[Lord Beria3]

On a personal level, I know knowbody who independently has brought silver and gold.
I have managed to persuade my parents to buy gold/silver and I suspect that on this forum, the recent moves by others into PM's is partly been my bloody mindness - without my continual posts, I doubt many others would have brought gold or silver.

Sorry, but no. ... (Edited at the request of the poster, kenneal)... I am not a recent convert to gold, although recent events have made me believe a bigger spike is coming and it has not been all that long that I've had spare cash to invest anyway. I owned a house before that, and had a mortgage to pay off.

Fair enough, its just that for a long time it felt that I was the only person here promoting the benefits of gold ownership.

http://www.powerswitch.org.uk/forum/vie ... ld+ruppert

As an example... That was brillant advice buying in 2005 -
(Edited at the request of the poster kenneal)

On the subject of Ben, sounds like he is keeping all his options open. To create the conditions for the politically acceptable QE3, there needs to be a period of decline in stocks before politicians - looking at the 2012 election - start pressurising the Fed to release QE3.

[UndercoverElephant]

On the subject of Ben, sounds like he is keeping all his options open. To create the conditions for the politically acceptable QE3, there needs to be a period of decline in stocks before politicians - looking at the 2012 election - start pressurising the Fed to release QE3.

Yes...

[Lord Beria3]

http://www.commodityonline.com/news/Mar ... 8-3-1.html

In his latest June outlook on the global economy, Faber asked investors to stay away from industrial commodities. "Global growth is slowing, which means weaker demand and lower prices for industrial commodities," he said.

Faber who publishes the widely circulated Gloom, Boom, and Doom Report said that he still likes gold and recommends a gradual accumulation despite market fluctuations.

He said that longer-term gold can only go higher because of negative real interest rates. Even a deflationary collapse is unlikely to hurt gold because the Fed will simply debase the dollar to get nominal prices higher.

"If the Fed gets it right and successfully re-inflates asset prices, then inflation will be in the double-digits, which would be bullish for gold," Faber pointed out.

Faber predicted the top in the equity markets in Nov 2007 and caught the bottom in March 2009, making his subscribers a lot of money.

On the global stock market, Faber is still cautious on equities, believing that a more significant market correction is around the corner.

On the issue of silver, this is a important fact...

http://www.commodityonline.com/news/Inv ... 2-3-1.html

The gold-silver ratio is currently around 42:1, which is to say that investors can buy 42 ounces of silver for the price of one ounce of gold, thus providing an accessible entry point into bullion investing.

In the long-run, silver will probably enjoy a even greater bull market than gold because a one ounce bar silver is cheap compared to gold. Indeed, if a fast crash ever happened, I suspect that silver would be used a a day-to-day currency.

[UndercoverElephant]

So you'd recomend silver bars over silver brittania coins? Why?

[Lord Beria3]

The coins have a premium paid on them.

Secondly, there is something stunningly beautiful about a pure silver bar.

[UndercoverElephant]

I think I'll give the silver a miss. Harder to sell, I think, and I'm not so sure whether the returns on it are going to make up for all that VAT. And surely you would also have to pay CGT on silver bars, because they aren't legal tender.

[UndercoverElephant]

The gold market is currently a mess of confusion. These are three news stories from the last 24 hours.

Gold market steady, awaits clues on future US policy:

http://af.reuters.com/article/metalsNew ... 6A20110608

Gold heading up to $1800 by the end of the summer:

http://www.dubaichronicle.com/2011/06/0 ... ld-prices/

Gold price is about to crash, bankrupting some major players:

http://moneylife.in/article/is-it-safe- ... 17119.html

I personally find all this fascinating. Much better than Eastenders.

[biffvernon]

Journalists get paid for writing.

What they write is doesn't seem to have much bearing on the pay rate.

[UndercoverElephant]

Journalists get paid for writing.

What they write is doesn't seem to have much bearing on the pay rate.

Yes, but what they write about things like this makes a big difference to their credibility. Some of these people are making bold, public predictions, and there is a big difference between getting those right and getting them totally wrong. Economic journalists can't afford to make too many predictions of a 20% rise in the price of gold just before the price crashes - not if they want to keep their jobs. It's not like writing politics for the Torygraph, where it doesn't matter whether what you are saying turns out to be right or wrong just so long as it is what the readership of the Torygraph wants to hear. Specifically, whether or not a pundit calls this one correctly should give people a big clue about how firm a grasp of the global macro-economic situation we are in. It's the same for Beria and myself...if we consistently make the right predictions then people will be more likely to take us seriously in the future, and vice versa. I'm siding with the first of the three; I think that Ben Bernanke is currently sitting on a fence and keeping his options open, but that the current state of the US and global economy will prevent him from sitting there for very long. He will be forced to play another card, but nobody knows which card he's going to play.

[Lord Beria3]

http://www.wsws.org/articles/2011/jun20 ... -j09.shtml

This is the substance of the administration’s negotiations with the Republicans to slash trillions of dollars in social spending as part of a deal to raise the federal debt limit. On Wednesday, Fitch Ratings weighed in on behalf of the big banks to warn that it would put US debt on watch for downgrade in early August if no such deal was reached by then.

It joined its bigger ratings counterparts in threatening to downgrade US government bonds, Standard & Poor’s having made a similar warning in April and Moody’s having issued it own last week.

This appears to back up the calls of a major US bond crisis by this Fall - the rating agencies seem to be gearing up for a downgrade of the US credit rating.

This may be the point in which gold - which will probably have some kind of correction during the no-mans period post-June once QE2 has ended and QE3 started - to see a strong rise to target $2,000 by year end.