When will gold hit $1,000 per oz ?
- Thread starter kph
- Start date
Its also the primary refuge when markets are scared witless about inflation fears. So if gold goes to $1000, AND the speculators are right (lets let that assumption hold for awhileAceyducey said:
) then $1000 gold could indirectly affect us just as much as the $100 barrel of oil. I dont understand the meteoric rise in gold, but im certainly paying attention to what it could mean for the big picture over the next 5 years or so. The market might be trying to tell us something.
stretchy said:Its also the primary refuge when markets are scared witless about inflation fears. So if gold goes to $1000, AND the speculators are right (lets let that assumption hold for awhile
That is a very long bow.
Acey is correct when he describes gold as a 'store of value' but it is also a commodity. Much of the current demand for gold is from China & India as a component of manufacture ie jewellery, electronics and so on. Supply & demand will prevail and gold could become too expensive and loose some of the momentum in now enjoys.
I guess what I meant was that oil at $100 per barrel is a given as it will eventually get there.
What I was wondering was that gold is now heading towards $1000 per oz ( and thats USD per oz ) so it has to be symptomatic of some underlying factor.
I don't believe it is to do with consumption in China or India, and not for jewellery production.
If it is a store of value then maybe thats a clue.
Flight to a safe haven maybe ?
Much the same way as profits from share market success stories flow into property as a perceived safe haven.
Somethings up with gold .......
kp
What I was wondering was that gold is now heading towards $1000 per oz ( and thats USD per oz ) so it has to be symptomatic of some underlying factor.
I don't believe it is to do with consumption in China or India, and not for jewellery production.
If it is a store of value then maybe thats a clue.
Flight to a safe haven maybe ?
Much the same way as profits from share market success stories flow into property as a perceived safe haven.
Somethings up with gold .......
kp
Oddly enough KPH it does look as if gold is going into jewellery in very large quantities. This fact alone does not shoot down your Goldfinger theory because gold in jewellery is also considered as a "safe haven", a dual purpose hedge. I do not think that hoarding is the problem as you suggest but rather a long subjugated urge to own and flaunt possessions!
I don't understand gold. Never have.
Here is a chart of 30 year gold prices,..
http://goldprice.org/30-year-gold-price-history.html
I can't see how gold can be a safe haven/store of value when historically it doesn't show that. Why didn't gold rise with the big sharemarket plunge in Oct 1987? Or the following recession in 1990? What about the first gulf war? No spike there. Nor the second Iraq war.
I also can't see how gold is a hedge against inflation, as it didn't do much in the high inflation years. That's all except the big spike in 1980 or so. Was that the big oil embargo time when the middle east was going to cut oil to the west? I think gold follows oil prices, but I'm not sure why.
I reckon gold is rising simply due to increased demand from now wealthy asians, especially Indians for use in jewellery. It's simply rising demand and falling production as gold gets harder and more expensive to find.
It certainly would not have been a good investment if bought physical gold 30 years ago and just held. No dividend, no yield. I even know someone who bought gold right at the top of the big spike in 80 or so and just held. What a disaster!
But as I said, I don't understand gold.
See ya's.
Here is a chart of 30 year gold prices,..
http://goldprice.org/30-year-gold-price-history.html
I can't see how gold can be a safe haven/store of value when historically it doesn't show that. Why didn't gold rise with the big sharemarket plunge in Oct 1987? Or the following recession in 1990? What about the first gulf war? No spike there. Nor the second Iraq war.
I also can't see how gold is a hedge against inflation, as it didn't do much in the high inflation years. That's all except the big spike in 1980 or so. Was that the big oil embargo time when the middle east was going to cut oil to the west? I think gold follows oil prices, but I'm not sure why.
I reckon gold is rising simply due to increased demand from now wealthy asians, especially Indians for use in jewellery. It's simply rising demand and falling production as gold gets harder and more expensive to find.
It certainly would not have been a good investment if bought physical gold 30 years ago and just held. No dividend, no yield. I even know someone who bought gold right at the top of the big spike in 80 or so and just held. What a disaster!
But as I said, I don't understand gold.
See ya's.
Been googleing
Here's and article that explains why gold is linked to oil,..
http://www.incrediblecharts.com/economy/gold_oil_ratio.htm
It appears that the arab oil embargo happened in 1973, not 1980.
http://en.wikipedia.org/wiki/1973_oil_crisis
After reading the above article, I can understand how gold is linked to inflation as well as oil, although oil is really the main cause of inflation it appears.
See ya's.
Here's and article that explains why gold is linked to oil,..
http://www.incrediblecharts.com/economy/gold_oil_ratio.htm
It appears that the arab oil embargo happened in 1973, not 1980.
http://en.wikipedia.org/wiki/1973_oil_crisis
After reading the above article, I can understand how gold is linked to inflation as well as oil, although oil is really the main cause of inflation it appears.
See ya's.
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Is gold a commodity or is it money?
If it were simply a commodity it's long term chart would be increasing roughly in line with inflation/population/wealth as RE and shares do. It may well be out of sync with other investments but long term MA charts would be similar.
But the POG charts have borne no similarity with any other investment class. So I contend that it isn't a commodity.
That it is treated so can be explained by the fact that 95%+ of all gold ever mined still exists in public or private hands so the "bears" have a field day reminding us that Keynes called it "The Barbaric Relic". Us bulls present the case that if all this gold were collected it would only fill a volume about as big as a football field three stories high. Not a lot, you'll agree, for all those who would like to own a little. Another thing often overlooked is that it is bloody hard to find. And expensive to extract. (the cheap alluvial gold has long gone). To put this in perspective, the average gold miner has to shovel a tonne of ore into a dump truck, haul it up that long road to the top of the pit, crush it and extract the metal worth about a hundred bucks. Rising costs of oil, tyres, steel and cyanide eat the heart out of that $100.
So is it money? Let's describe money. It is a mutually agreed upon standard of exchange. ie It is something I can get in exchange for goods I sell you which I can take across the street/nation/world and exchange it for goods I wish to buy. A couple of thousand years ago gold and silver were perfect. A trader could carry a few ounces of gold from Europe to Asia, buy his silks (knowing his gold was desirable when he got there) and take them back and exchange them, again, for (hopefully, a larger amt of) gold.
So what has changed? Gold is still as beautiful and as desirable, so that hasn't. It is still as rare, that hasn't. It changed in '71 when Nixon closed the gold window. Until then the Bretton Woods agreement established the US$ as the reserve currency of the world. It, and only it, would be backed by gold. All other currencies would be rated against the USD. The French, however, noticed the Yanks were cheating and were printing far more dollars than they had backing it in gold and de Gaulle (was he Pres then?) started demanding gold instead of USD in payment. The Yanks were exposed and Nixon was forced to close the gold window. Thereafter US$1 (it was in fact a "gold certificate") could no longer be exchanged for 1/32 oz of gold.
This is what John Maynard Keynes wanted. He wanted central banks to have unfetted ability to "print money". His justification was that there would have been no Great Depression had the central banks done so. He overlooked the fact that the banks actually did the reverse and exacerbated the problem so, ergo, the right of the Fed to print money would have been ignored.
So where are we now? Nations worldwide are now deeply involved in competitive devaluation. The leaders of all nations are desperately trying to debase their own currency to maintain international competiveness, to mask domestic ineffeciencies. They do this by flooding the market with fiat currency. To me, as a working class Labor voter, this smacks of enslavement. I don't expect silvertails to agree on this tho (that's only the "enslavement" bit).
Today, the USD is rapidly losing value, but not really much against the Euro, Loony, $A, and all other stable currencies. So what could it be losing value against? Remember Gold?
When the traders were plying the silk route 1oz of gold was said to buy a good gentleman's suit. A couple of thousand of years later this is still about right. How about any fiat currency? Again I must believe what I'm told but since the US Fed was formed (in the '30's?) the once US$1 is now worth US0.05c. Clearly fails the Gent's suit test.
So it is still gold the punters are measuring their fiat (means "law") currencies against. This is why Ben Bernanke, and before him Greenspan, are fighting desperately to curtail the price of gold. Put simply, if POG reaches US$1,000 it will prove absolutely that the USD is a fraud. Should this happen we are all embroiled in an economic conflagration so China, Japan and the Arabs (the big holders of USD and vendors to them) are joining the good fight to save it.
WARNING: at this point I'm entering the realm of conspiracy.
All Weatern central banks sold tons of gold to supress the POG. In a stroke of genius the Poms dumped many tons @ abt US$275/oz. We did little better. (Does anyone know if our Res holds ANY gold?) Others, notably Germany and the US "loaned" their bullion the bullion banks @ less than 1% int (more likely 0.25%) who took delivery of metal and on-sold it on the open market. The procedes were then available to be reinvested anywhere in the world at much higher rates. (Remember the "easy" money available here to anyone looking at property?) Talk about free money! Billions of it! It's only rumour but they say Ft Knox gold is all stored in the filing cabinet. It is certain that no audit of actual holdings has been done for decades.
So now we have the reserve banks desperate to shore up their fiat currencies, and the bullion banks desperately trying to cap the POG so that they can buy and repay the Bank of England or the Bundesbank the millions of tons of borrowed gold. This is the biggest short squeeze in histoy. JP Morgan may not survive.
So $1,000 gold is probably more important than $100 oil.
If it were simply a commodity it's long term chart would be increasing roughly in line with inflation/population/wealth as RE and shares do. It may well be out of sync with other investments but long term MA charts would be similar.
But the POG charts have borne no similarity with any other investment class. So I contend that it isn't a commodity.
That it is treated so can be explained by the fact that 95%+ of all gold ever mined still exists in public or private hands so the "bears" have a field day reminding us that Keynes called it "The Barbaric Relic". Us bulls present the case that if all this gold were collected it would only fill a volume about as big as a football field three stories high. Not a lot, you'll agree, for all those who would like to own a little. Another thing often overlooked is that it is bloody hard to find. And expensive to extract. (the cheap alluvial gold has long gone). To put this in perspective, the average gold miner has to shovel a tonne of ore into a dump truck, haul it up that long road to the top of the pit, crush it and extract the metal worth about a hundred bucks. Rising costs of oil, tyres, steel and cyanide eat the heart out of that $100.
So is it money? Let's describe money. It is a mutually agreed upon standard of exchange. ie It is something I can get in exchange for goods I sell you which I can take across the street/nation/world and exchange it for goods I wish to buy. A couple of thousand years ago gold and silver were perfect. A trader could carry a few ounces of gold from Europe to Asia, buy his silks (knowing his gold was desirable when he got there) and take them back and exchange them, again, for (hopefully, a larger amt of) gold.
So what has changed? Gold is still as beautiful and as desirable, so that hasn't. It is still as rare, that hasn't. It changed in '71 when Nixon closed the gold window. Until then the Bretton Woods agreement established the US$ as the reserve currency of the world. It, and only it, would be backed by gold. All other currencies would be rated against the USD. The French, however, noticed the Yanks were cheating and were printing far more dollars than they had backing it in gold and de Gaulle (was he Pres then?) started demanding gold instead of USD in payment. The Yanks were exposed and Nixon was forced to close the gold window. Thereafter US$1 (it was in fact a "gold certificate") could no longer be exchanged for 1/32 oz of gold.
This is what John Maynard Keynes wanted. He wanted central banks to have unfetted ability to "print money". His justification was that there would have been no Great Depression had the central banks done so. He overlooked the fact that the banks actually did the reverse and exacerbated the problem so, ergo, the right of the Fed to print money would have been ignored.
So where are we now? Nations worldwide are now deeply involved in competitive devaluation. The leaders of all nations are desperately trying to debase their own currency to maintain international competiveness, to mask domestic ineffeciencies. They do this by flooding the market with fiat currency. To me, as a working class Labor voter, this smacks of enslavement. I don't expect silvertails to agree on this tho (that's only the "enslavement" bit).
Today, the USD is rapidly losing value, but not really much against the Euro, Loony, $A, and all other stable currencies. So what could it be losing value against? Remember Gold?
When the traders were plying the silk route 1oz of gold was said to buy a good gentleman's suit. A couple of thousand of years later this is still about right. How about any fiat currency? Again I must believe what I'm told but since the US Fed was formed (in the '30's?) the once US$1 is now worth US0.05c. Clearly fails the Gent's suit test.
So it is still gold the punters are measuring their fiat (means "law") currencies against. This is why Ben Bernanke, and before him Greenspan, are fighting desperately to curtail the price of gold. Put simply, if POG reaches US$1,000 it will prove absolutely that the USD is a fraud. Should this happen we are all embroiled in an economic conflagration so China, Japan and the Arabs (the big holders of USD and vendors to them) are joining the good fight to save it.
WARNING: at this point I'm entering the realm of conspiracy.
All Weatern central banks sold tons of gold to supress the POG. In a stroke of genius the Poms dumped many tons @ abt US$275/oz. We did little better. (Does anyone know if our Res holds ANY gold?) Others, notably Germany and the US "loaned" their bullion the bullion banks @ less than 1% int (more likely 0.25%) who took delivery of metal and on-sold it on the open market. The procedes were then available to be reinvested anywhere in the world at much higher rates. (Remember the "easy" money available here to anyone looking at property?) Talk about free money! Billions of it! It's only rumour but they say Ft Knox gold is all stored in the filing cabinet. It is certain that no audit of actual holdings has been done for decades.
So now we have the reserve banks desperate to shore up their fiat currencies, and the bullion banks desperately trying to cap the POG so that they can buy and repay the Bank of England or the Bundesbank the millions of tons of borrowed gold. This is the biggest short squeeze in histoy. JP Morgan may not survive.
So $1,000 gold is probably more important than $100 oil.
mmm - Oil is a pretty decent store of value as well
Another argument goes that the USD has long been used as the measuring stick for the price of oil.
When Iraq moved away to use the Euro instead, the US promptly invaded and reset the Iraqi oil standard back to USD.
Iran is also moving away from the USD towards the Euro for oil measurement at present....which country is the US most likely to invade next?
If the world's oil prices were no longer measured in USD this would severely reduce the amount of trade required in the USD and remove the need for many countries to hold a store.
The impact on the dollar would be immense.
Cheers,
Aceyducey
Another argument goes that the USD has long been used as the measuring stick for the price of oil.
When Iraq moved away to use the Euro instead, the US promptly invaded and reset the Iraqi oil standard back to USD.
Iran is also moving away from the USD towards the Euro for oil measurement at present....which country is the US most likely to invade next?
If the world's oil prices were no longer measured in USD this would severely reduce the amount of trade required in the USD and remove the need for many countries to hold a store.
The impact on the dollar would be immense.
Cheers,
Aceyducey
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I live in a dead ordinary weatherboard suburban house. I could easily have more equity stored as precious metals in my hidden safe (costing $200, but this is theoritical, isn't it?) with zero holding costs than the local servo has in it's expensive storage.Aceyducey said:mmm - Oil is a pretty decent store of value as well
I hope none of your neighbours are storing drums of petrol as an inflation hedge. On second thoughts, it must be YOU doing the hoping.
Gold reached the magic $1000.00AUD in sep 1980
Gold peaked at $1000.00AUD in september 1980, i have since met gold prospectors who in 1980 were consistantly obtaining 1-2 ounces of gold a day using suction dredgers in the gold bearing rivers of Victoria. They should have purchased the median priced houses in Melbourne for the then median price of $35,000.00, which would now be worth $300,000.00.
It was rather unfortunate that the Suction dredge operators got nailed by the green movement and had to halt there mining operations in November 1990. Despite the proven fact that they were not destroying the enviroment.
As it know looks almost certain gold will reach this level again soon, it got to $940.00AUD on Saturday, there has been a slight correction overnight on Monday and it has dropped a little.But the fundamentals remain the same there is a huge demand coming from India and China and production is dropping rapidly so supplies of gold are drying up fast.
Gold peaked at $1000.00AUD in september 1980, i have since met gold prospectors who in 1980 were consistantly obtaining 1-2 ounces of gold a day using suction dredgers in the gold bearing rivers of Victoria. They should have purchased the median priced houses in Melbourne for the then median price of $35,000.00, which would now be worth $300,000.00.
It was rather unfortunate that the Suction dredge operators got nailed by the green movement and had to halt there mining operations in November 1990. Despite the proven fact that they were not destroying the enviroment.
As it know looks almost certain gold will reach this level again soon, it got to $940.00AUD on Saturday, there has been a slight correction overnight on Monday and it has dropped a little.But the fundamentals remain the same there is a huge demand coming from India and China and production is dropping rapidly so supplies of gold are drying up fast.
Well here comes the correction, just in time for the posts on when gold will hit $1000 Its back under $700 US - from about $730-ish I think.
For those that are interested, there is a blog that goes into some detail regarding metals (and the associated companies that mine them) Its actually a general investment blog, but the focus has been on metals for a year or so now.
www.billcara.com
Its back under $700 US - from about $730-ish I think.For those that are interested, there is a blog that goes into some detail regarding metals (and the associated companies that mine them) Its actually a general investment blog, but the focus has been on metals for a year or so now.
www.billcara.com
Christopher Laird has something to say about the importance of the price of gold. In part:
The world is about to change radically... in every way, and you and your life are going to be directly affected, and soon too.
and:
Another factor driving gold in 2006 is the imminent change from the US dollar system as a world reserve currency. The fact that the US has twin trade and fiscal deficits are really only part of the reason that gold is rising VSVS the USD. The real reason gold is rising so rapidly this year is because the world is looking at the probable demise of the whole USD SYSTEM. The fiscal deficits are a side show to this potential sea change for world economics.
The article is at:
http://www.financialsense.com/fsu/editorials/laird/2006/0516.html
ps. Sorry it's such black reading.
The world is about to change radically... in every way, and you and your life are going to be directly affected, and soon too.
and:
Another factor driving gold in 2006 is the imminent change from the US dollar system as a world reserve currency. The fact that the US has twin trade and fiscal deficits are really only part of the reason that gold is rising VSVS the USD. The real reason gold is rising so rapidly this year is because the world is looking at the probable demise of the whole USD SYSTEM. The fiscal deficits are a side show to this potential sea change for world economics.
The article is at:
http://www.financialsense.com/fsu/editorials/laird/2006/0516.html
ps. Sorry it's such black reading.
