450SEL6.9

Gold hits $600 U.S. per ounce this morning and silver is at $12. Gold was about $500 in January and I thought that was speculatively overvalued. Silver was about $9 four months ago, but they keep going up.

Analysts are expected gold to go up in straight lines basically. From 600, it goes to 650 then 700 and 800 and 875... Silver is the same again, 10 to 12 then 15 and 25 within two years. I guess there is a fundamental change for silver with a new exchange-traded fund, which increases physical demand for the metal. Still, either these commodity prices are irrationally priced or they are foretelling a massive worldwide economic problem.

So is anyone buying? Someone in my family bought silver in the 1970s and we've finally broken even. The crazy speculation in metals today is similar to the late-1970s frenzy. All metal prices tumbled after everyone bought into the craze.

Curb Zone

 

Hypersonic

I have been aware of the rising market for gold, silver, and palladium over the last year - I think many large investors are concerned about the current instability of the world's markets in general - gold in particular is seen as a relatively secure investment in the long term.

Bozzor

I have been in gold since early 2002 when it was still below USD 300/ounce. I really have little faith now in the USD.

Everyone, be careful of platinum: much of its value is driven by demand for catalysts in cars, various industrial uses and electricity. In a general downturn, it will take a bit of a hit...

notic

most resources are doing quite well including palladium and rhodium. and uranium prices are still increasing. i havn't bought any of the commodities, but i do buy shares in the mining companies (and etf's as well). their fluctuations tend to be in sync with the commodity prices but more volatile (no risk, no reward )

...one more thing. i remember seeing a clip on tv about two years ago interviewing one of the vp's from gold corp. asking him what his predictions for gold price were. his instant response was "about $800" (and this was when gold was between 3-400). the correspondent thought he was joking, but now it looks like it could be a reality.

450SEL6.9

Hey Roberto, haven't spoken to you in a while.. How's it been?

There were many smart people, Bozzor is likely one of them, who were long gold when it was in the 300s. I caught on late. I bought some, but relatively little, in the 420s. I bought a lot more early in the year for a trade when gold "corrected" to the 500 support level. I am bullish on uranium because there is a good, long-term fundamental reason for its surge back above $40/lb: nuclear power. Notic, there are some great small Canadian junior uranium companies. You should take a look.

Traditionally, platinum is very speculative. Gold and silver at these prices look speculative as well. Most analysts thought $12 silver was a peak and now it's $25 though inflation appears under control. I keep coming back to the problems with the American dollar, economy and its implications for the world economy. I think gold is predicting a major worldwide recession.

So Bozzor, what's your target for gold? Personally, I think it'll underperform silver. I'll buy loads of silver if it corrects to 11 and hopefully 10.50s before running up again.

Bozzor

Australia has this past week signed a deal to supply uranium to China...and Taiwan. We have plenty of juniors here too, but they are best avoided: there is plenty of unexploited capacity in the existing majors and I still think they are underpriced. China is looking at a new type of reactor technology called pebble bed: whilst no nuclear plant can ever be called safe, this type of reactor is much safer than existing technology and can be developed on a smaller scale.

As for gold, yes I do think USD 800 is realistic and we may even see 4 digits. For that to happen, we would need a middle east war, with Iran blocking the Straits of Hormuz and choking tanker traffic. If that occurs, gold could easily shoot up USD 200 in less than 2 weeks.

notic

Silver ETF (SLV) was finally released last week on the amex. is $25/ounce by years end out of the questoin?

The Artist

well i guess the gold train has gone.. its very high now.. and the only way is down imo..

mark my words may and especially june will be very bullish months for the stockmarket..
so i say sell and go on vacation..

Bozzor

"Sell in May and go away"

Well, I think the stock market has bene doing well so far, but with Iran and the oil price the way it is, the stock market does not look like a good near term bet. I do think gold may go up and down yet, but remember that in 1980 gold hit USD 850/ounce, which in inflation adjusted terms would be USD 2200 today/ounce. If you bought gold then and held it, you would have lost out big time

The Artist

for sure... so for now i would say stay away from the gold and the stock until july.. if you arent one of those really short time investor that buys alot of stocks for alot cash and hold em for like no more than 1h and sell them and take the profit..
but if you do it the ordinary way.. you either need to place your cash in bear dow jones funds.. or buy stocks in norweigan or russian oil...

or the best go on vacation.. lol

Curb Zone