GOLD...a golden promise??

lippy88

I am considering in Gold as there is a sure growth and positive outlook into the future...What is others view on this commodity??

pirelli

lippy88 wrote: »

I am considering in Gold as there is a sure growth and positive outlook into the future...What is others view on this commodity??

Inflation seems to be under strict control and is an obvious factor that makes Gold overbought and overvalued considering we had forseen there being huge inflation by now when in fact inflation has been excellent.

I am concerned Gold was very hyped but then you only have to look at silver to see how long these mammoth runs can last. Maybe the hype was based "in part" on the expectation that the money from a global stimulas would inevitably cause inflation or maybe there is other persausive reasons.

Also perhaps inflation is an eventual outcome and Gold is just too early to the party and has to go home and rest for a while.


Short term I am watching a few condolidating Gold mines for a bounce.
AEM is one.

MacStacked

lippy88 wrote: »

I am considering in Gold as there is a sure growth and positive outlook into the future...What is others view on this commodity??

What are your views on gold? And why is there sure growth and a positive outlook?

mkahnisbent

lippy88 wrote: »

I am considering in Gold as there is a sure growth and positive outlook into the future...What is others view on this commodity??

You're a bit late to the party... the time to buy gold is when the US economy gets shaky... I bought 3 years ago.

Bullish

agreed and the comming short term rally should be sold ..

WildBoots

Bullish wrote: »

agreed and the comming short term rally should be sold ..

Why would you advise shorting the next rally? Imo, gold will bottom out in August and continue on upwards. I see no reason as to why it should stop increasing in value.

Bullish

And i see no reason for it to increase in value ..... you were pumping gold up in June and i reconed it was a bad investment then .... i have not changed my mind... Gold is a good trade now ... not an investment

WildBoots

Bullish wrote: »

And i see no reason for it to increase in value ..... you were pumping gold up in June and i reconed it was a bad investment then .... i have not changed my mind... Gold is a good trade now ... not an investment

I haven't changed my mind either, still buying on the dips. Gold will be a good trade in a few weeks once it resumes it's uptrend. Lots of analysts expecting to see gold at $1400+ by Jan 2011. I expect the euro to resume it's downtrend against the dollar any day now, so eurogold should be €1150+ by Jan 2011.

Bullish

Analysts ..... really ..... you are kidding me right
Oh dear

WildBoots

Bullish wrote: »

Analysts ..... really ..... you are kidding me right
Oh dear

This attitude is probably one of the reasons why this forum is so empty (well, that and the likelihood that lots of folk have been badly burnt by playing with Irish bank shares)I've been following the gold market for a few years now and the people I listen to are the ones who have been consistently accurate.

So anyway, why is gold a bad investment at the moment?

Bullish

1) analysts are usually self serving ... making an investment decision on what an analyst says is why most people loose money in the market IMO
2) from a charting perspective Gold is topping out

Appologies if you dont like my attitude ...... I agree with your thoughts on the Euro but i think it will be short term.. so the coming rally should be sold
and if it gets anywhere back near the peak I will go short

One of us will be wrong wildboots thats what makes a market..
Best of luck with your investment

MrMatisse

I wouldnt be overly pessimistic on Gold.

Most western governments have huge debts and are printing money. The collapse of the banking system has meant that this has not caused inflation, when in normal times it would have already caused massive inflation. There was an article on this some months ago in the economist explaining why there has not been massive inflation.

Gold has been rising steadily since about 1999 at about 10-20 percent a year, it has come off a massive low and is being pruchased in large amounts by Asian central banks. The jewellery purchases by Asians are less of a driver. Its not a short term upward trend but is now being noticed more.

Hedge funds also have huge positions.

What is driving Gold is uncertainty, a fear of sovereign defaults and trouble in the Eurozone and potential deflation. This pressure has not gone away.

An ounce of Gold would be enough for a Roman senator to buy a fancy suit of clothes at about $1150 today, it would still get you a nice suit. It holds its value (roughly) over long periods of time and is something you should probably have a little of. If you ever need to sell it due to the economy being in a mess chances are you will get a good price for it.

A very long term investment.

If you have a couple of months of an investment time frame and are going to try to pick 'rallys' so on so forth I wouldnt bother with it.

hmmm

One thing that's always confused me about gold is that the main cheerleaders are they types who rubbish paper currencies and fiat money. Gold isn't much better however, it has a small element of industrial use to prop up intrinsic demand but other than that it has value only because investors say it has value. Most discussions about gold price direction are largely meaningless because the discussions have very little grounding in facts, it's a sentiment based discussion and usually involves some good old technical chart analysis. I'd be much more inclined to listen to analysts who talk up base metals or commodities as an inflation hedge.

Bullish

Do you not think that every stock that trades has the element of sentiment towards it . for example DOW chemicals ( DOW) trading at a PE of 51.45
Or why Ford (F) is trading at a PE of 8.6

hmmm

Bullish wrote: »

Do you not think that every stock that trades has the element of sentiment towards it . for example DOW chemicals ( DOW) trading at a PE of 51.45
Or why Ford (F) is trading at a PE of 8.6

An equity can be valued (in theory) by discounted future cash flow. The market expectation is that something of value will be created by the company the stock represents. Gold produces nothing in the future.

How do you value gold? It's relatively straightforward to put a value on something like silver, or copper, or orange juice etc.

MrMatisse

hmmm wrote: »

One thing that's always confused me about gold is that the main cheerleaders are they types who rubbish paper currencies and fiat money. Gold isn't much better however, it has a small element of industrial use to prop up intrinsic demand but other than that it has value only because investors say it has value. Most discussions about gold price direction are largely meaningless because the discussions have very little grounding in facts, it's a sentiment based discussion and usually involves some good old technical chart analysis. I'd be much more inclined to listen to analysts who talk up base metals or commodities as an inflation hedge.

A picasso is a 40 quid canvas with a tenners worth of paint flung all over it and sells for tens of millions.

Supply and demand.

digme

pirelli wrote: »

Inflation seems to be under strict control and is an obvious factor that makes Gold overbought and overvalued considering we had forseen there being huge inflation by now when in fact inflation has been excellent.

I am concerned Gold was very hyped but then you only have to look at silver to see how long these mammoth runs can last. Maybe the hype was based "in part" on the expectation that the money from a global stimulas would inevitably cause inflation or maybe there is other persausive reasons.

Also perhaps inflation is an eventual outcome and Gold is just too early to the party and has to go home and rest for a while.


Short term I am watching a few condolidating Gold mines for a bounce.
AEM is one.

Deflation is what's happening, not inflation.

hmmm

Really-Stressed wrote: »

A picasso is a 40 quid canvas with a tenners worth of paint flung all over it and sells for tens of millions.

Supply and demand.

Very insightful. Are you buying or selling gold these days?

pirelli

digme wrote: »

Deflation is what's happening, not inflation.

GOLD is synonomous with inflation. Maybe it is also with deflation. I am not by any means an expert economist or financial wizard. On the topic of gold there was not the volatility that was expected and it has been rather disinflated or much worse deflated.


AEM is up 10% so far, so im not complaining.

hmmm

pirelli wrote: »

GOLD is synonomous with inflation. Maybe it is also with deflation. I am not by any means an expert economist or financial wizard. On the topic of gold there was not the volatility that was expected and it has been rather disinflated or much worse deflated.

What?

pirelli

hmmm wrote: »

What?

Your just being cynical with myself and other posters here. Why should I discuss this with you.

hmmm

pirelli wrote: »

Your just being cynical with myself and other posters here. Why should I discuss this with you.

I've asked a genuine question to the gold bulls. How do you value gold? I haven't the faintest notion what you were on about in your reply, it was gibberish.