An interesting thing I got in the mail about the gold market..

[CoinPulsive PCM]

On Friday I got a brochure type letter from my uncle regarding the gold stock market. I don't know exactly what he does on for his firm but he works with numbers to say the least.

 

He included an article that said that if I have invested in gold bullion I need to sell and invest in natural colored and raw diamonds. I never really thought about "the diamond trade" nor have I compared investing in diamonds against investing in gold and I do not have enough to go on to make an informed decision if I were to ever invest in something other than gold or silver.

 

A chart was included that compared the gold index to the BMO rough diamond index. The chart shows diamonds having a steadier incline vs. gold and the forcast is gold will drop while diamonds will soar. The "flyer" goes on with quotes from Money.com, The Sovereign Society and BMO Nesbitt Burns. They say stuff like "The rough diamond index has outperformed the gold index over the past 63 years." and "Fancy colored diamonds are the world's most concentrated form of wealth!"

 

I did some research through Google but the problem that kept occuring was the information was "one sided" The diamond "supporter sites" talked about diamonds having a huge advantage over gold and silver and the gold "supporter sites" listed the pros of gold and I didn't read anything on gold vs. diamonds.

 

I decided to bring this up to see what others have to say and I am doing this just for an interesting discussion. I really don't do much with gold and most of my personal invested funds are in ASEs and other silver bullion; I only own around 4 ounces of gold.

 

My questions:

1- Has anyone here ever questioned the future of the gold market? Both as bullion and numismatic gold.

2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?

3- If Natural colored and raw diamonds have more potential value compared to gold, why don't I ever see any TV info-mericals on diamond investing?

4- If both the gold and silver market had a "melt down" and went down more than 55%, what do you think would be the smartest option:

-sell all your silver/gold incase they hit rock bottom

-hold everything and wait for the rebound.

- hold everything AND buy all the silver and gold you can get your paws on.

 

Please try to keep politics to the minimum. I have read about how much it bothers other members.

 

-Dave

[HiHoAudio]

Diamonds, fancy colored or otherwise, are not as rare as they would like you to believe. A shakey investment at best IMHO.

 

Gold is an extremely versatile and useful metal and unlikely to ever really tank, and I will hold onto mine for the long term.

 

Interesting that gold is still $1600+ an oz, while platinum has dropped to $1400. If I were a gambling man, which I am not, I would put some money into platinum.

[EVillageProwler]

Diamonds, fancy colored or otherwise, are not as rare as they would like you to believe. A shakey investment at best IMHO.

 

Gold is an extremely versatile and useful metal and unlikely to ever really tank, and I will hold onto mine for the long term.

 

Interesting that gold is still $1600+ an oz, while platinum has dropped to $1400. If I were a gambling man, which I am not, I would put some money into platinum.

 

Please do not take my comments for sound investment advice from a professional...

 

My understanding is that one common way to make money is to buy low, sell high. Same for the commodities market. If diamond has a steady curve, then it's hard to speculate.

 

The global supply of diamonds is largely controlled by deBeers, which in turn controls the pricing. Also, commercial-grade diamonds can be manufactured, so there is no industrial pressure on quality natural diamonds. And, I agree that diamonds are not scarce at all.

 

Gold will have price peaks and valleys. While easier said than done, buy during valley and sell at a peak.

 

Not sure about platinum, but I've always expected platinum to cost more than gold, since it's rarer.

 

EVP

[Onadlos-migration]

I've been led to believe that diamonds aren't at all precious. Gold has been used as a currency for centuries. Simple logic dictates I follow along with the two previous posts.

[PerryHall]

2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?

 

No!!! I would consider this a major buying opportunity and load-up on as much gold as I could afford.

[BillJones]

2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?

 

No!!! I would consider this a major buying opportunity and load-up on as much gold as I could afford.

 

If history repeats itself, I'd have the opposite take on this. The last time gold had a HUGE drop in price was in the early 1980s. I can't remember exact numbers but gold went from an all-time high of $850 down to a little below $300. The reason was that people perceived that the economy and the dollar had gotten "well," and gold speculation was no longer "needed" to preserve wealth.

 

I suspect that if gold goes below $1,200 now, it will do so like an elevator from the top of the Empire State Building. It will happen so fast that you won't be able to get the $1,200 and will end up with a few hundred less, if you decide on a panic sale. In other words if gold gets to $1,200, no one will want to buy it at that level. They will be thinking that it will go lower.

 

As for diamonds my perception of that market is that it is highly manipulated. A few firms control the supply of them and the average speculator, who is not a professional in the diamond business, is in line to get taken. It has been known for years that DeBeers has been the big player in this market.

 

Diamonds also are even more exacting than coins when it comes to grading them. Unless you know what you are doing it's easy to get taken. You know there are "market games" when companies can advertise on TV that what they sell "is guaranteed to appraise for at least double." Diamonds are not like the coin business. The mark-ups are a lot higher.

 

[mtnstyne]

2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?

 

No!!! I would consider this a major buying opportunity and load-up on as much gold as I could afford.

 

(thumbs u

 

I was reading the other day about a guy who offers trading on the gold:silver ratio. It sounded interesting but seems that would take many years to be effective.

 

Basically the way it works is when the ratio is smaller you buy gold and hold until the ratio spreads and then you sell the gold and buy silver again. Wait for the ratio to close some again and then vice versa. The dollar amount is irrelevant, the purpose is to just increase the amount of the precious metals you hold. Anyway I thought it was interesting but dont' have time to mess with it or do the research right now to see how it would have actually worked out in the past.

 

As far as diamonds, it's been said above...deBeers price sets so it's up to them.

[Crazy Mtn Coins]

The problem with platinum and the PGMs (platinum group metals) is that something like 40% of the demand is for catalytic converters in autos. So as the auto sales go so does platinum. The scary thing is if someone invents a new emission control that does not depend on platinum (and therefore less cost), the platinum price will tank and never return. PGMs are too much tied to one industry.

[CyberspaceVoid]

Much like photography and silver? If there is a need, there is value ... the real problem is timing it right.

[wheat'swheats]

In the 1980's I was in the gold and diamond business. If you want to lose your butt quick just start buying diamonds. Especially when a person knows very little about them. The market is now controlled by De Beers and the Russians. That means the price is controlled.In 1980 a 1 carat flawess white diamond was selling for about $45,000 it dropped to $18,000 in about 3 days. DeBeers was being suied by the U.S. for anti trust violations.The price has never come back up. If DeBeers wanted to they could drive the price of diamonds to almost nothing by selling off all their stash,but they don't to keep the price artifically high.

wheat

[RWB]

Both materials are subject to persistent manipulation and market saturation. Neither gold nor diamonds are "rare," neither have a base of public disclosure by marketers, and neither have unique commercial uses.

 

The folks at casinos will also be helpful in taking your money.

 

[ComicConnoisseur]

On Friday I got a brochure type letter from my uncle regarding the gold stock market. I don't know exactly what he does on for his firm but he works with numbers to say the least.

 

He included an article that said that if I have invested in gold bullion I need to sell and invest in natural colored and raw diamonds. I never really thought about "the diamond trade" nor have I compared investing in diamonds against investing in gold and I do not have enough to go on to make an informed decision if I were to ever invest in something other than gold or silver.

 

A chart was included that compared the gold index to the BMO rough diamond index. The chart shows diamonds having a steadier incline vs. gold and the forcast is gold will drop while diamonds will soar. The "flyer" goes on with quotes from Money.com, The Sovereign Society and BMO Nesbitt Burns. They say stuff like "The rough diamond index has outperformed the gold index over the past 63 years." and "Fancy colored diamonds are the world's most concentrated form of wealth!"

 

I did some research through Google but the problem that kept occuring was the information was "one sided" The diamond "supporter sites" talked about diamonds having a huge advantage over gold and silver and the gold "supporter sites" listed the pros of gold and I didn't read anything on gold vs. diamonds.

 

I decided to bring this up to see what others have to say and I am doing this just for an interesting discussion. I really don't do much with gold and most of my personal invested funds are in ASEs and other silver bullion; I only own around 4 ounces of gold.

 

My questions:

1- Has anyone here ever questioned the future of the gold market? Both as bullion and numismatic gold.

2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?

3- If Natural colored and raw diamonds have more potential value compared to gold, why don't I ever see any TV info-mericals on diamond investing?

4- If both the gold and silver market had a "melt down" and went down more than 55%, what do you think would be the smartest option:

-sell all your silver/gold incase they hit rock bottom

-hold everything and wait for the rebound.

- hold everything AND buy all the silver and gold you can get your paws on.

 

Please try to keep politics to the minimum. I have read about how much it bothers other members.

 

-Dave

Some people have gone from diamond cutters to billionaires in the diamond trade.

I never heard of anyone recently starting at the bottom with gold and going on to being a billionaire like Laurence Graff.

[mumu]

I am not sure how your uncle reccomends sourcing the investment because its not like PMs where you can just go to a website and buy and sell diamonds. The diamond market is not an open market. A lot of deals for uncut diamonds are done in back rooms and to get the best prices these back rooms are overseas in places you probably dont want to be. The Jewish diamond market in NY is very difficult to penetrate beyond retail. Your only real access would be at retail prices on cut diamonds. And as mentioned, a cut diamond is hard enough to grade as it is. Try grading an uncut stone. Thats like trying to grade a coin buy the planchet on which it will be struck.

[DirtyGoldMan]

My only comment would be that it is dangerous to put all of your eggs in one basket and equally dangerous to assume what has happened in the past will continue or occur again.

[e1cnr]

with any investment, you need to discover the spread between buying and selling.

 

Maybe you should buy $5K in diamonds and then sell it/them in a couple days and report back.

 

If you need to be a dealer to be liquid, it is not a very good investment for common folk.

[jom]

I know nothing about diamonds but I would guess it's just another commodity like gold.

 

The basic problem I have with investing in gold is that the price is dictated by what others think and feel (just like all commodities). If the market (ie people) believe it's not worth some amount it will do down. The opposite is true of course.

 

This is why I like stocks and real estate. Sure...the market is dictated by how people feel and think but the fact of the matter is that these bring in CASH...something commodities do NOT do (unless you sell of course). Stocks bring dividends, real estate bring in cash flow positive while you HOLD the asset.

 

If you bought all the gold in the world at $1500 per oz. it would be about $10 Trillion dollars and it would just SIT there doing nothing. For that same about I could buy all of the farm land in the US and Exxon Mobile 16 times over and bring in enough cash in 10 years to cover the cost of purchase.

 

Gold is good for a hedge (short term) and it's wonderful collectable! However I'm not real interested in it as an investment. JMO.

 

jom

[RockMyAmadeus]

Diamonds are among some of the most common stones on earth.

 

The only reasons they sell for so much are 1. they are so popular as wedding/engagement rings, and 2. they are controlled.

[derryb]

there is an inverse relationship between the success of the gold market and the success of economic policy. If you think economic/financial problems have been properly addressed and resolved, sell all gold tomorrow.

 

The future of the gold market is being determined by central bank policy (zero interest rates, money creation, etc.) and fiscal spending/borrowing policy. Moments of dollar strength (currenty due to euro weakness which is 54% of the dollar index measurement) will cause dips, but the long term picture remains very bright. 2008 saw a PM decline because of a temporary rush to cash and we are seeing some of that again as the realization of our economic condition once again moves to the front page. When the fear and rush to cash settled down in 2009, gold proceeded to reach it's highest prices.

 

As a proven store of value in times of dollar destruction, gold keeps getting brighter. Gold is a centuries old, proven insurance policy against failure in financial/economic leadership.

 

My concerns with diamonds as an investment are:

- price control via supply control

- liquidity

- need for an expert to determine true value of a stone

 

A diamond's value is based on one's opinion while gold's value is based on everyone's opinion. The gold market is a much more commonly understood and accessible market, resulting in more participants.

[Mary B]

Gold is set for a steep climb this fall, at least until the elections. When (not if) the dollar tanks gold and silver will rise fast.

[dimefreak]

Colored Diamonds as an investment??? NO!!!

Colored Diamonds in my Jewelry??? YES!!!

[CoinPulsive PCM]

Colored Diamonds as an investment??? NO!!!

Colored Diamonds in my Jewelry??? YES!!!

 

.

 

The only diamond jewelery I have is in my two watches and they replace the digits.

 

I honestly wouldn't touch diamonds as a form of investing because my life is already compicated enough. the last thing I need is to get side tracked into grading diamonds.

 

I always will stick to silver both as a numismatic collectible and a hedge regardless of how wel gold does. IMO, if gold were to jump up $1,000 in 6 months, silver would follow the same trend but on a smaller scale.

 

I also invest in ammunition. I am sure that IF we do run into an apocolypse, people will need ammo to kill zombies or whatever. I can buy boxes of 20 rnds of 5.56 Remington for $9.99 and when the time comes, I could sell them for $20.00 a box!

 

-Dave

 

[michael]

My questions:

1- Has anyone here ever questioned the future of the gold market? Both as bullion and numismatic gold.

answer-----NEVER gold is money for the last 5000+ years of recorded history and always will be in my lifetime9for the foreseeable future) after that i dont care

 

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2- If gold melt dropped below $1,200 over night, would you start to cosider alteratives to invest your money in?--

 

ANSWER------- it all depends on the reasons for the drop and then my financial position and my recent future expenses

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3- If Natural colored and raw diamonds have more potential value compared to gold, why don't I ever see any TV info-mericals on diamond investing?--

 

 

ANSWER---

 

A COMPLICATED MARKET THAT SOMETIMES HAS LIQUIDITY PROBLEMS

UNLESS ------- YOU ARE ONE OF THE ACKNOWLEDGED EXPERTS IN THIS FIELD AND KNOW WHERE TO GO TO SELL THE STONES THAT ARE FINEST IN CLARITY AND COLORATION AND WHOM THE BUYERS ARE WITH READY CASH AND WILL DEAL WITH YOU---99.9999% people watching tv cant do this even if they had years of training which they dont

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4- If both the gold and silver market had a "melt down" and went down more than 55%, what do you think would be the smartest option:

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-sell all your silver/gold incase they hit rock bottom

 

----ANSWER--- NO DONT SELL

UNLESS YOU NEEDED MONEY to survivie TO BUY FOOD AND SHELTER AND MEDICAL CARE MEDICINES THEN YOU WOULD HAVE NO CHOICE

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-hold everything and wait for the rebound

 

.----answer--- YES HOLD and again only sell as per the above

 

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- hold everything AND buy all the silver and gold you can get your paws on.------

 

answer --- almost impossible to answer as it depends on many factors like your current cash position and future outlays/bills and then what caused all this??

then with these 2 answers you could make a decision for yourself

 

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good luck with your gold investments and/or flawless and perfect pidgons blood red colour one carat and higher lazare brilliant cut loose diamonds

 

 

[Dcoin]

The premium you'd pay as a small time investor would take you years, if not decades to recoup.