Will Gold prices hit a bottom in 2018?
Price have been steady around 1200-1300 for quite some time now and may not be as a bad of an idea to have as a longer term (1-3+) investment after things settle down post-tax bill? I'd be very curious to learn more about NUGT & JNUG since they are 3x leveraged and potentially good (albeit massively risky) trades when gold finally recovers?
Cryptocurrency > gold
Seriously why would you want to own gold?
Why do people buy gold? Is this even a serious question? I don't think the time is ripe (yet) to buy but was wondering what everyone else thought.
I am being serious. What are your reasons for wanting to own gold? Do you purchase anything with gold? Does gold have many real world uses that make it especially valuable? It always seemed strange to me that people bought gold aside from pure speculation that someone else will eventually pay more for that gold.
A gold bug dies everyday. No one under 40 or probably even older remembers gold being a monetary instrument.
So now its all about jewelry.
I think we're seeing, now with the introduction of cypto's, the demonetization of gold. Gold hasn't been used as base money for quite some time, but it maintained its exchange value via central bank holding and the potential for it to reemerge with the anticipated collapse of fiat money. Now that we have crypto's, I no longer see gold operating in that capacity.
I wouldn't hold it under any circumstance.
Is Gold Overpriced Relative to Other Commodities? (Originally Posted: 03/31/2012)
Gold stocks are quite popular among hedge funds these days, and with good reason. John Paulson, who is very bullish about gold, made $5 billion by betting on gold in 2010. As of December 31, 2011, the largest position in the 13F portfolio of his Paulson & Co was the gold exchange-traded fund (ETF) SPDR Gold Trust (GLD), in which Paulson had over $2.6 billion invested. Besides Paulson, there were 55 other money managers bullish about SPDR Gold Trust. In total, they had $8.2 billion invested in the position.
Another gold ETF, Market Vectors Gold Miners ETF (GDX), was also popular with hedge funds last year. It was held by 41 hedge funds at the end of last year. In addition to ETFs, hedge funds were also bullish about companies engaged in producing gold, such as Barrick Gold Corporation (ABX) and Newmont Mining Corp (NEM). There were over 40 hedge funds with these two positions in their 13F portfolios at the end of 2011. For instance, David Einhorn’s Greenlight Capital had $60+ million invested in Barrick while Jim Simons’ Renaissance Technologies had nearly $90 million invested in Newmont. Other gold stocks with significant hedge fund interest are Goldcorp (GG), Kinross Gold (KGC), Allied Nevada Gold (ANV), and AngloGold Ashanti (AU).
But, is gold truly worth investing in? Or, is it overpriced relative to other commodities? Let’s check it out by comparing the historical prices of the gold and commodity indexes.
We are going to use spot gold prices and two commodity indexes: S&P GSCI (Goldman Sachs Commodity Index) and CCI (Thomson Reuters Equal Weight Continuous Commodity Index). S&P GSCI is a broad-based index mainly weighted in energy (80%), agriculture (10%), industrial metals (6%), and precious metals (2%). CCI is comprised of 17 commodity futures that are continuously rebalanced to maintain equal weighting. Unlike GSCI, which can overweight the energy sector, CCI provides relatively even exposure to all commodity subgroups (energy 18%, metals 24%, soft commodities 29%, and agriculture 29%).
Gold vs. GSCI
We collected daily data points of spot gold prices and GSCI from January 8, 1991 to March 23, 2012 and plotted the values we obtained (see the graph of gold price vs. GSCI). Gold price and GSCI tracked each other closely before late 2008. After that, the price of gold went up rapidly while GSCI grew at a relatively slow pace. As a result, the gold-price-to-GSCI ratio has gone up to a higher level in recent years. As of March 23, 2012, the gold-price-to-GSCI ratio is 2.37, 25% lower than its peak of 3.18 on February 23, 2009 but still 35% higher than its historical average of 1.75.
Gold vs. CCI
Gold looks a bit overpriced compared with other commodities when using GSCI, an index has higher weight on energy. Now, let’s compare the gold price with an equally weighted commodity index, CCI. Similarly, we collected daily data points of gold prices and CCI from December 29, 1978 to March 23, 2012.Gold prices grew abnormally high in January 1980 to about $850 per ounce due to high inflation, high oil prices, and the termination of the direct convertibility of the dollar to gold. The price of gold has also gone up much faster than CCI since late 2008. Therefore, the gold-price-to-CCI ratio has a peak of 3.02 on December 7, 2011 and it also reached 2.93 earlier on January 21, 1980. As of March 23, 2012, the ratio is 2.89 which is 74% higher than its historical average of 1.66 (see the gold/CCI graph).
Overall, the price of gold has been on an uphill trend over the past decade, but it grew much more rapidly than other commodities only in recent years. Gold market is very liquid and it also doesn’t cost a lot to store it. Gold supply is also pretty inelastic which makes it a good long-term play on inflation. These may be the reasons why investors preferred gold over other commodities. Our calculations showed that gold is overpriced relative to other commodities. This doesn’t mean that gold prices are going to go down though. Considering that there were no supply side shocks after September 2008 that would explain the 100% increase in gold prices relative to commodities we think investors would be better off by betting on commodities and shorting gold.
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tungsten yes, gold no.
All the big dogs like Paulson are only riding the bubble until it bursts. I would stay away from gold.
Do you believe that central banks will continue monetizing sovereign debt. If yes buy gold if no don't.
Gold isn't trading like a commodity. It is trading like "safer money"
Price of Gold - What does it communicate? (Originally Posted: 12/21/2012)
Hello there fellow monkeys,
I have a noob question prepared, for which I apologize in advance :) :
Why is gold such an important financial indicator? What does it signal when it is up/down and what conclusions would one draw from the price of gold right now? Also, does silver play the same role?
Thanks!
I'm a newb as well, so pro's please feel free to correct/add to my comment as necessary. From what I understand, the price of gold to some extent indicates people's comfort level with equity investments and the economy as a whole.
When people feel uncomfortable with stocks (especially during turbulent economic times), they tend to gravitate towards gold, a hard asset, which has traditionally been viewed as a bit more stable. With more people moving towards gold during tough economic times, you can, in general, expect to see the price of gold go up when the economy is not doing so well, and go back down when the economy is booming.
yes you are a newb...this kid is trying to get you to do his homework.
A fall in gold price? (Originally Posted: 04/22/2013)
Just a few days ago, gold price plummeted to around 1300 from 1700( don't have the exact figure). A lot of news talk about fall in gold price but haven't really been able to explain what is/are the main reason(s)?
a lot of panicky people bought gold over the last few years, driving he price up. Those same people started panicking when the value started to wane. Gold is more or less a measure of fear in the financial markets - the higher the fear, the higher the price. Not saying it's a bad investment hedge, but keep it to about 10% of your portfolio.
I never understand how people are surprised by gold price volatility. Gold pays no dividends and has limited industrial uses. Basically it is inherently worthless and derives the vast majority of its worth from demand by investors who view it as an inflation hedge. It's a very weird asset that is very susceptible to the emotions of the market, because you can't model what it should be worth in any theoretically sound way. That is why it's such a volatile investment.
Heard from a few sources that in order for Cyrpus to get its bailout, they'll need to sell all of their gold holdings... Thus the downward pressure on price. Just speculation though
street was short gamma
Gold prices flirt around eight month lows and rebound! A look back and way ahead for the bullion…. (Originally Posted: 09/17/2014)
Prices will likely begin to stabilize around the all-in producer break-even cost of production. All the rest is just noise or posturing for attention IMNSHO.
That is an interesting view point...I had come across this article stating that one third of gold production is probably losing money while pointing to the fact that the industry is need of restructuring and 'survival of the fittest'. Here is the link to the article: http://www.bloomberg.com/news/2014-09-14/gold-industry-needs-cleansing-…
I am wondering what will happen to gold prices as India's guaranteed demand (Google how that country think about gold and the social value of it) moderates. I think as the country westernizes/modernizes that demand will enter a secular decline.
Whether that's enough to meaningfully affect gold prices (and what the timeline might be) is a different question.
That will likely not happen anytime soon.
Why is Gold's price still going up? (Originally Posted: 03/04/2016)
Considering we're coming out of a period of very bearish negative market sentiment, which we witnessed from January to the end of February, and stocks and crude are up, shouldn't investors be selling their gold as it primarily acts as a safe haven which isn't necessary any more?
Is there something I'm missing? Can some explain the continued surge in gold prices.
It's because you touch yourself at night ;)
Well if that's true it sounds like I have a very pleasurable road to riches.
Easy on the monkey shits. I think people are still on the sidelines a bit. The seemingly one good thing is that our job numbers and payroll data are improving, which has a very positive impact on all things consumer related. The dollar is still strong relative to other currencies, and global economic fears continue. The rise of the dollar has hurt our exports, manufacturing is still contracting (but improved last month), and oil prices are still low - even if they bumped up a few dollars/bbl. There will still be some bankruptcies this year to come in the o&g market, and I think banks will take a hit. We are seeing banks increase their loan loss reserves by the billions (even though it's not much when you consider the overall balance sheet of some of these banks). All in all, there are still some concerns and headwinds. Just because oil rose to $35 a barrel from $29 doesn't mean we are out in the clear.
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