notic

maybe, here's another way to look at the gold - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER

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450SEL6.9

I think gold is not going down anytime soon. The price level doesn't seem to fall below technical trading support levels. Chinese, Hong Kong-traded mining and gold companies are very sensitive to the swings in gold prices. Gold will be $700 in a couple of weeks in my opinion.

notic

in the short term gold seems to be heading for an adjusment in price. it has gained so much in so little time. but i think over the long run750-800 isn't completely out of the question.

notic

here's a possible reason for why gold went over 700 today: - ONLY REGISTERED AND ACTIVATED USERS CAN SEE ALL LINKS - CLICK HERE TO REGISTER

Michael

Wow this is a very interesting thread. For the most part I am not to familier with what you guys are talking about. For example, when someone uses the term "correct itself" what does that mean? I was rather confused when it was used.

Here is a rather ignorant question: How do you guys buy gold? Do you buy it as a commodity trade (not sure if this is what it is called) in which you never see the gold, or you actually possesses the gold in your hands?

450SEL6.9

BMWFREAK, you can buy gold several ways. They all involve a broker of some sort. I don't think you're asking an ignorant question since you already partly answered it yourself. Rarely, would you buy an actual gold bar and possess the actual bullion. If you want something tangible, you could buy gold coins. I had some silver coins for 25 years and finally I'm not losing money on them. You can also buy a gold futures contract which are usually settled prior to their expiry. If the futures contract is settled or the position is closed out, you don't take the delivery of the actually gold. Another way to buy it is through an ETF or exchange-traded fund. Ticker symbol GLD on the New York Stock Exchange is one such gold tracker fund. Correct itself means gold prices have to fall somewhat.

Notic, do you think gold will hit $800 anytime soon? Last time it did, price quickly collapsed. I think $725/oz. gold is a bubble price. It prices in all sorts of risks about Iran, US interest rates, US dollar and the global economy. I think we may be headed for an American and Chinese-led economic meltdown in a few years, but paying $725 today? That seems very expensive. Gold started the year below $500. Warren Buffett talked about the terrific moves in metal prices and suggested the obvious, they can't continue forever. There are so many people, most of whom were not buying metals like he was years ago, who think gold will just surge to $2,000 with little resistance. I read the comments on one particular metals traders who thinks gold prices will move as much as they did between 1978 and 1980. I'm not sure if this is correct, but I think gold was about $100/oz. in '77, '78 and soared to $850 in 1980. Several metals traders and analysts are acting like speculative amateurs when it comes to these commodity prices..

notic

I have doubts about gold hitting $800 in the near future, but i think if the fed keeps monetizing debt and the chinese do buy more to beef up their reserves, something close to 800 might actually be possible. There are a ton of reports on the internet claiming gold can surpass the 1000 mark before the end of the year, but I think those ppl are a little optimistic. Gold prices have been soaring, but quite a few of the major gold mining stocks havn't followed that rise. Even gold indexs like xau havn't been following the rise in gold prices like they used to. If this continues, I think gold might be overbought and will head for a correction in the near future.

I am however a little more bullish on silver and copper. SLV has had a great run since its inception and copper mining stocks have had a good run already as well. Also, (I might be wrong on this, but) I think silver is a more consumable good (industrially) than gold.

...one more thing. alternative energy stocks have recently caught my eye. companies processing biofuel and ethanol seem to be heading higher and higher everyday.

450SEL6.9

I think gold is dangerously overbought. You are correct about silver. It does have more industrial applications than gold does. In 1972, the head of the Bank for International Settlements, an organization of world central banks, was bearish on the future of gold as an investment asset. Back then, world currencies, US dollar in particular, were being de-linked from gold. The gentleman from the BIS predicted that with no more central bank demand and as an industrial metal, gold was worth about $7.50/oz.

Spot prices fell from about 50% from 1974 to mid-1976 while gold was still in a secular bull market. No one seems to think gold prices today will correct much from $720. Most corrections are for about $50 downside. I've seen a $6,000/oz. estimate within ten-years!

I think today's trading is similar to the mid-1970s when the market speculated on a legalisation of private gold ownership by Americans. When it was legalised, gold prices dropped like a rock to $103 from $190s on the last trading day of 1974. The American law allowing private ownership of gold came into effect in January, 1975. Today, the market is speculating on increased physical demand coming from central banks, and Chinese reserves. Thirty-years ago, the demand increase was predicted to come from American households. Gold prices fell then and I think they'll fall now. If gold is to hit $1,000, 2,000 or 6,000, I still feel there needs to be a worldwide economic meltdown and surging inflation.

Bozzor

I am just sitting back and watching the equities markets tumble: the only stocks I have now of any significance are defense related, oil and silver/gold/uranium focused. I am still taking a bit of a risk with gold, but I do think it still has a fair bit of medium term northward momentum.

Osnabrueck

An anxiety-laden portfolio Boz.

Won't second-guess you though. You told me almost 4 years ago to be prepared for a dollar to trade long-term at .75 Euro and that's exactly what happend, more or less.

I can only assume that your outlook on the middle-east is less than optimistic.

BTW - There's been a raging debate going on in California about who and what's behind our astronomical pump prices. What's your take?

My assumptions have been:
1) There's gobs and gobs of oil left in the Earth.
2) Supply is being deliberately withheld.
3) Stateside, refineries are purposely working under-capacity
4) Megamergers under the Bush administration have enabled refiners to lock-down an effective and legally transparent oligopoly
5) Bush has done everything in his power to stack the deck for the refiners
6) Global anxiety and forecasted demand have led the market to bid up oil

So, in short - The US Petrol market is broken, devoid of true competition and bilking us big time.

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