No bull market goes on forever, this Gold bull will be no different.Is that really a sustainable bull market?
This was an interesting article I read recently on scrap and general demand:
http://www.commodityonline.com/news/ETFs-physical-investments-drive-gold-market-24195-3-1.html
It does support that scrap selling can have an effect on the market.
At the same time as we have an increase in scrap gold selling though we have a decrease in selling by central banks and infact they have moved to net buyers...
It's a store of wealth in uncertain times and with sovereign debt problems, increase in deficit spending and general carelessness of many countries with their recent money/credit supply, a safe haven like Gold seems like a reasonable place to be.I have no idea how much gold should be, because I can't quantify the demand and supply. No one NEEDS gold, it earns no income, there is tons of supply out there (because it doesn't disappear), and it's actually pretty useless. Longer term, supply doesn't even need to come from mines: 5000 years of gold is lying in vaults and sock drawers.
It's difficult to put a "target" price on Gold, one can use many measuring sticks, some popular ones include a target ratio against silver, a target ratio against the dow, a target ratio of a country's supply vs their money supply, a target of the inflation adjusted high from 1980 using official stats or shadow stats and I'm sure there are others. I think a well timed exit from the Gold bull will be something that many miss, perhaps I will too.
By the way Hooray, are you going to clarify that Hunt Brothers comment?
Thanks for catching GP, I missed the word 'potentially' in that line.A double bottom is not "formed" until prices have risen back above the central high point.
Really Graemsay? Government stats? Try with ShadowStatsHobo-Jo, looking at gold in inflation adjusted terms, it's nowhere near its 1980 high, but it is inline with other spikes in its value.
http://www.ritholtz.com/blog/wp-content/uploads/2009/10/gold-REAL-dollars.gif
I'd be inclined to sell up because it's still a strongly rising market, and could well turn. I think that there might be better long term buys elsewhere.
http://www.sharelynx.com/chartstemp/FreeGoldSilverSSCPI.php
What are you looking at for a better long term buy? I believe some agriculture based stocks/futures could do well over the next few years, but find it easier to concentrate on one sector to find the outstanding performers and most undervalued stocks.