Gold's future?

[Darkowl]

I apologize If this topic has been done to death, but I am a gold newbie, and don't know that much about the principles behind it. I am big into comic books, and so that is where my investment knowledge is. So my question is this, what do you guys think the future of gold will be in the next couple of years? Will It go up? Will it go down?

I purchased a 1oz gold coin when it was selling for $1500 an oz., and needless to say, it has taken a hit since then. Anyways, your thoughts are greatly appreciated!

[e1cnr]

I think it will be above your purchase price some time in the next 10 years, and you won't want to sell it because you feel it is even going to go higher....

[RWB]

Gold is a commodity with uses in industry and as jewelry. It is a speculative purchase and offers no return on your money, unless the spot markets (again, speculative) rise above your purchase price, and you decide to liquidate.

 

Like most other commodities, there are "specialists" who make their money by convincing others to buy what they sell or promote. The most common gold promotion is the Doom and Gloom or Armageddon scenario where gold is supposed to insulate you from global panic – better to buy frozen steaks…

 

If you like something made from gold, or silver, or copper, or petrified dinosaur poop, buy it, enjoy it, but forget about it being an "investment" that will be more valuable in the future -- well, I might make an exception for the coprolite.

 

[MarkFeld]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

[Darkowl]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

 

You can know a lot about gold and still ask for predictions from other people. Experts consult with each other all the time and exchange ideas. Like I said, I'm a comic book investor, and I'm always asking questions. That is how people learn. Thanks for your

 

 

 

[Conder101]

Will It go up? Will it go down?

Yes it will.

 

The problem is no one knows when it will do which. And I do mean no one.

[MarkFeld]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

 

You can know a lot about gold and still ask for predictions from other people. Experts consult with each other all the time and exchange ideas. Like I said, I'm a comic book investor, and I'm always asking questions. That is how people learn. Thanks for your

 

 

 

You absolutely can. But you already indicated (in your words) that you are a "newbie". And a newbie asking for predictions is very different from what you described above.

 

It sounds as if you didn't like my reply, so now that I have at least explained it, I will butt out. Best of luck.

[RWB]

If you buy low and sell high, you will make money. Any other scenario is a loser.

[Darkowl]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

 

You can know a lot about gold and still ask for predictions from other people. Experts consult with each other all the time and exchange ideas. Like I said, I'm a comic book investor, and I'm always asking questions. That is how people learn. Thanks for your

 

 

 

You absolutely can. But you already indicated (in your words) that you are a "newbie". And a newbie asking for predictions is very different from what you described above.

 

It sounds as if you didn't like my reply, so now that I have at least explained it, I will butt out. Best of luck.

 

I didn't like your reply, because I asked an honest question, and all I got from you was, "You should avoid gold because you don't know enough about it."

I see your point, to an extent. Nobody should get in knee deep If they don't know what they're dealing with, which is exactly why I didn't get in knee deep. I've only purchased one single oz. of gold in my entire lifetime. I don't know that much about gold, but I know enough to know that 1 oz of gold isn't going to break the bank, and that It just might help me one day in the future.

 

I don't see how a newbie asking for predictions is any different than an expert asking for predictions. People sharing their opinions regarding the future of gold shouldn't be dependent on the person acquiring those opinions. I'm sure you have your own opinions regarding gold's future, yet you chose to not to share them because I don't know enough about the subject. So yeah, I really didn't like your reply. It was kinda stuck up, and offered no real value.

[GoldFinger1969]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

You can know a lot about gold and still ask for predictions from other people. Experts consult with each other all the time and exchange ideas. Like I said, I'm a comic book investor, and I'm always asking questions. That is how people learn. Thanks for your

 

Because gold does not pay a dividend or interest, it is a SPECULATION and not an investment per se. You have to treat it as such. Of course, buying either bullion or numismatic coins has a tangible aesthetic benefit in the enjoyment of collecting them that you don't get from a savings account or a stock or bond or other intangible financial assets.

 

A good strategy for someone like yourself would be to put a small portion of your annual savings or investment portfolio into gold or gold coins each year. If the price drops alot intra-year, you could make a special purchase.

 

Let's say that the price of gold is going to $3,000 by 2025. That means you have plenty of time to accumulate gold at prices that are much less. But you don't know for sure that gold is going to that price by 2025 (I don't either). So what you want to do is let TIME and PRICE VOLATILITY work for you instead of against you.

 

That means buying gold (1) periodically, like every quarter or once a year regardless of price or (2) in addition to periodic buying, making opportunistic purchases if the price declines alot.

 

For instance, you said you bought at $1,500. I would consider a 20% drop in the price to represent enough of a 'dollar-cost average' that if I were you and had the $$$ I would have been buying a bit more (hopefully another full ounce so you don't pay an extra premium for fractional ounces).

 

Ultimately, the best strategy for YOU is what your risk-tolerance and financial levels will allow.

 

Remember....there are no guarantees. Gold and precious metals have had DECADES where they did nothing price-wise and unlike a bond or a stock they don't pay you while you wait with dividends and interest. In my example above, if gold instead was trading at $750 in 2025 then you would presumably have lots of gold that you bought on the way down -- and then, if gold is RISING in 2025 because the bottom in price was reached, then you are well-positioned (you may have bought early and at higher prices, but at least you are 'in' when the price rises).

 

Take a look at some multi-year or even multi-decade charts of the Dow Jones Industrial Average, Bond Yields, or Gold prices and you will know what I am talking about.

 

Hope this helps. (thumbs u

[RWB]

Cost averaging works well with equities where there is an underpinning of economic activity. It is not very effective for commodities like gold –

 

As for predictions – “gold bugs” will say “Up.” Economists will say “Eh…who knows?” Predictions assume there is a rational or anticipatory factor from which to learn, but gold has none of that. Gold bugs will whip out all sorts of cute little charts and diagrams, the sum of which is “Duh…we don’t know; but buy anyway.”

 

[Darkowl]

If you know little enough about gold, such that you ask for predictions from people on a message board, you should probably avoid it, until you know a lot more.

You can know a lot about gold and still ask for predictions from other people. Experts consult with each other all the time and exchange ideas. Like I said, I'm a comic book investor, and I'm always asking questions. That is how people learn. Thanks for your

 

Because gold does not pay a dividend or interest, it is a SPECULATION and not an investment per se. You have to treat it as such. Of course, buying either bullion or numismatic coins has a tangible aesthetic benefit in the enjoyment of collecting them that you don't get from a savings account or a stock or bond or other intangible financial assets.

 

A good strategy for someone like yourself would be to put a small portion of your annual savings or investment portfolio into gold or gold coins each year. If the price drops alot intra-year, you could make a special purchase.

 

Let's say that the price of gold is going to $3,000 by 2025. That means you have plenty of time to accumulate gold at prices that are much less. But you don't know for sure that gold is going to that price by 2025 (I don't either). So what you want to do is let TIME and PRICE VOLATILITY work for you instead of against you.

 

That means buying gold (1) periodically, like every quarter or once a year regardless of price or (2) in addition to periodic buying, making opportunistic purchases if the price declines alot.

 

For instance, you said you bought at $1,500. I would consider a 20% drop in the price to represent enough of a 'dollar-cost average' that if I were you and had the $$$ I would have been buying a bit more (hopefully another full ounce so you don't pay an extra premium for fractional ounces).

 

Ultimately, the best strategy for YOU is what your risk-tolerance and financial levels will allow.

 

Remember....there are no guarantees. Gold and precious metals have had DECADES where they did nothing price-wise and unlike a bond or a stock they don't pay you while you wait with dividends and interest. In my example above, if gold instead was trading at $750 in 2025 then you would presumably have lots of gold that you bought on the way down -- and then, if gold is RISING in 2025 because the bottom in price was reached, then you are well-positioned (you may have bought early and at higher prices, but at least you are 'in' when the price rises).

 

Take a look at some multi-year or even multi-decade charts of the Dow Jones Industrial Average, Bond Yields, or Gold prices and you will know what I am talking about.

 

Hope this helps. (thumbs u

 

That is some great advice! I greatly appreciate you taking the time to explain that to me. I'm definitely going take this into consideration. Thanks again! (thumbs u

[Darkowl]

Cost averaging works well with equities where there is an underpinning of economic activity. It is not very effective for commodities like gold –

 

As for predictions – “gold bugs” will say “Up.” Economists will say “Eh…who knows?” Predictions assume there is a rational or anticipatory factor from which to learn, but gold has none of that. Gold bugs will whip out all sorts of cute little charts and diagrams, the sum of which is “Duh…we don’t know; but buy anyway.”

 

Very, very interesting.

 

 

[GoldFinger1969]

Cost averaging works well with equities where there is an underpinning of economic activity. It is not very effective for commodities like gold

It's better than buying all at once. It's a conservative strategy that lets you use time and price volatility to your advantage.

 

If gold is going to $3,000 in 18 months or a financial implosion is around the corner, then my go-slow approach is probably too little, too late. But I'm not going to bet the ranch on Armageddon.

 

As for predictions – “gold bugs” will say “Up.” Economists will say “Eh…who knows?” Predictions assume there is a rational or anticipatory factor from which to learn, but gold has none of that. Gold bugs will whip out all sorts of cute little charts and diagrams, the sum of which is “Duh…we don’t know; but buy anyway.”

I agree completely, RWB. (thumbs u

[GoldFinger1969]

That is some great advice! I greatly appreciate you taking the time to explain that to me. I'm definitely going take this into consideration. Thanks again! (thumbs u

 

You're very welcome....I knew all those years studying for my CFA would come in handy !

 

 

[RWB]

Is Armageddon Ranch just south of Truth-or-Consequences, NM?

[Raisethis2]

The advice presented is based upon a solid foundation. The statement "no one knows" is certainly appropriate. As an investment putting "some" of your money into gold in my view makes sense once one accepts that there are no guarantees.

 

The only guarantee is like 1% annually socking your money in a savings account. That won't get the job done so diversity is an option.

 

 

[RWB]

Well, Treasury Notes are safer than bank deposits, but the return is still below inflation, There are several very good stocks paying 5% or above,,,but there is always the downside risk.

[GoldFinger1969]

Well, Treasury Notes are safer than bank deposits, but the return is still below inflation, There are several very good stocks paying 5% or above,,,but there is always the downside risk.

 

Hey, you guys want to start a Financial Thread for Stocks/Bonds...I'm there ! (thumbs u

 

Then I can be the expert !!

[Eric Hazen]

Gold is speculative and there has been some good advice given. I like the long-term outlook of gold and I have a feeling we will see $1400 in the near future. This is based on my evaluation of charts. Picking a bottom is difficult, I just got in on silver when we had that nice gap over resistance last week. I don't know when we will see a top but I'll keep adding to the position as it advances. Weekly charts are safer then daily chartsif you are just getting started.

 

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

[GoldFinger1969]

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

 

For the small or retail investor who is looking to the long-term and doesn't want another 'piece of paper', the reason to buy gold is an argument against GLD or SLV.

 

You want the actual gold or silver and you don't want it in a bank, either.

 

I am not a Doomsday Guy, but if you believe in that possibility or the possibility of bank's limiting ATM withdrawls (almost happened after Lehman Bros.), why own a piece of paper or have your gold stashed other than under your bed or in your vault ?

[SkyMan]

FWIW, I buy gold SOLELY as an insurance policy for the rest of my financial investments. The vast majority of my assets (aside from my house which, thank the good Lord, I own free and clear), are invested in stocks and bonds. Oftentimes stocks and bonds are negatively correlated, e.g. when one goes up the other goes down. Having a diversified portfolio means that you don't get as high a return on the market during a good year, but you also don't get as low a loss on a bad year in the market.

 

However, stocks and bonds can sometimes move together (normally downward). This oftentimes happens when the news is bleak and people think that the excrement is about to hit the fan. Generally when it gets to this stage, that's when gold pops upwards. So gold tends to be a counterbalance for the other assets trending (or cliff diving) downward. Generally I'm happy when gold is doing poorly, because that means that the rest of my portfolio is more likely to do well.

 

Another area people buy gold for is as an inflation hedge. Personally, I find that owning oil stocks such as Exxon, Chevron etc. etc., is a better inflation hedge, because not only do the stocks tend to go upwards, but they also pay a dividend while you are holding them, so you are getting a current return on your money... which you can then decide to spend or to re-invest in other financial endeavors.

[mtnstyne]

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

 

No offense to this statement but I have the opposite opinion. I very much doubt that the GLD ETF has a vault somewhere with 25 million ounces of gold sitting in it to back their fund. More likely they have a nominal amount and people who trade in GLD are only causing the price of actual gold to lag because they aren't affecting actual supply and demand. They could change the fund to SND and say they have a vault full of sandwiches and it wouldn't change anything.

 

If I buy a sandwich I want to at least eat it...who would just want the reciept?

[GoldFinger1969]

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

No offense to this statement but I have the opposite opinion. I very much doubt that the GLD ETF has a vault somewhere with 25 million ounces of gold sitting in it to back their fund. More likely they have a nominal amount and people who trade in GLD are only causing the price of actual gold to lag because they aren't affecting actual supply and demand. They could change the fund to SND and say they have a vault full of sandwiches and it wouldn't change anything. If I buy a sandwich I want to at least eat it...who would just want the reciept?

 

GLD and SLV own physical and futures contracts for gold and silver.

[mtnstyne]

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

No offense to this statement but I have the opposite opinion. I very much doubt that the GLD ETF has a vault somewhere with 25 million ounces of gold sitting in it to back their fund. More likely they have a nominal amount and people who trade in GLD are only causing the price of actual gold to lag because they aren't affecting actual supply and demand. They could change the fund to SND and say they have a vault full of sandwiches and it wouldn't change anything. If I buy a sandwich I want to at least eat it...who would just want the reciept?

 

GLD and SLV own physical and futures contracts for gold and silver.

 

I don't doubt that (maybe a little), but owning a piece of paper that says I own gold vs actually owning gold is (in my opinion) crazy.

 

Anything that is paper traded is subject to manipulation and when it comes time to cash in your paper for the actual product it may not exist.

[Raisethis2]

Goldfinger1969, If we start a successful stock pickers thread I'm a great student. Lord willing I'm going to retire some day and having more than a couple years wages saved sounds like a plan.

 

The only thing is that if wind of this gets across the street we may need a bigger server.

 

 

He He.

[Eric Hazen]

FWIW, I buy gold SOLELY as an insurance policy for the rest of my financial investments. The vast majority of my assets (aside from my house which, thank the good Lord, I own free and clear), are invested in stocks and bonds. Oftentimes stocks and bonds are negatively correlated, e.g. when one goes up the other goes down. Having a diversified portfolio means that you don't get as high a return on the market during a good year, but you also don't get as low a loss on a bad year in the market.

 

However, stocks and bonds can sometimes move together (normally downward). This oftentimes happens when the news is bleak and people think that the excrement is about to hit the fan. Generally when it gets to this stage, that's when gold pops upwards. So gold tends to be a counterbalance for the other assets trending (or cliff diving) downward. Generally I'm happy when gold is doing poorly, because that means that the rest of my portfolio is more likely to do well.

 

Another area people buy gold for is as an inflation hedge. Personally, I find that owning oil stocks such as Exxon, Chevron etc. etc., is a better inflation hedge, because not only do the stocks tend to go upwards, but they also pay a dividend while you are holding them, so you are getting a current return on your money... which you can then decide to spend or to re-invest in other financial endeavors.

 

Very sound, but I'd recommend having a trigger in place to pull my money out of the markets. I personally like weekly charts since they help me keep a cool head.

[Eric Hazen]

My two cents are these, buy gld or slv etf since they both have good liquidity. The physical stuff is overrated.

 

No offense to this statement but I have the opposite opinion. I very much doubt that the GLD ETF has a vault somewhere with 25 million ounces of gold sitting in it to back their fund. More likely they have a nominal amount and people who trade in GLD are only causing the price of actual gold to lag because they aren't affecting actual supply and demand. They could change the fund to SND and say they have a vault full of sandwiches and it wouldn't change anything.

 

If I buy a sandwich I want to at least eat it...who would just want the reciept?

 

As others have pointed out you do own a part of something, you own a part in a futures contract and some physical metal. I know there are those who think the whole system is coming down and lets assume that group is correct. Wouldn't that sandwich be a better investment then the 10oz bar of gold sitting in your bank's vault?

 

I can understand long term holdings in the physical but I swing trade this stuff and it takes a month for my order to arrive. This doesn't allow me to sell quickly enough when I see the correction coming. Its also good to limit your downside and if silver drops below my entry point by a certain percentage I cut the loser. If it's stuck in the mail I'm stuck watching my money dwindle away.

 

Anyways, just a differences in investment philosophy but investing should be something we do with a well thought out plan and part of my plan is avoiding emotional attachments with any investment vehicle.

[jom]

Another area people buy gold for is as an inflation hedge. Personally, I find that owning oil stocks such as Exxon, Chevron etc. etc., is a better inflation hedge, because not only do the stocks tend to go upwards, but they also pay a dividend while you are holding them, so you are getting a current return on your money... which you can then decide to spend or to re-invest in other financial endeavors.

 

^This right here. Something that PAYS you while you hold it is the better move.

 

Will gold go up or down? Like someone above stated "Yes". The fact of the matter is that even experts down know WHEN. It's all emotional in the short term. And long term gold hasn't done all that well...so I'd use it as a hedge at best.

 

Like Warren Buffet says: In the short term markets are voting machines, the long term they are weighting machines.

 

jom

[Hard Times]

FWIW, I buy gold SOLELY as an insurance policy for the rest of my financial investments. The vast majority of my assets (aside from my house which, thank the good Lord, I own free and clear), are invested in stocks and bonds. Oftentimes stocks and bonds are negatively correlated, e.g. when one goes up the other goes down. Having a diversified portfolio means that you don't get as high a return on the market during a good year, but you also don't get as low a loss on a bad year in the market.

 

However, stocks and bonds can sometimes move together (normally downward). This oftentimes happens when the news is bleak and people think that the excrement is about to hit the fan. Generally when it gets to this stage, that's when gold pops upwards. So gold tends to be a counterbalance for the other assets trending (or cliff diving) downward. Generally I'm happy when gold is doing poorly, because that means that the rest of my portfolio is more likely to do well.

 

Another area people buy gold for is as an inflation hedge. Personally, I find that owning oil stocks such as Exxon, Chevron etc. etc., is a better inflation hedge, because not only do the stocks tend to go upwards, but they also pay a dividend while you are holding them, so you are getting a current return on your money... which you can then decide to spend or to re-invest in other financial endeavors.

 

Very sound, but I'd recommend having a trigger in place to pull my money out of the markets. I personally like weekly charts since they help me keep a cool head.

 

Well known that people that pull their money out of the stock markets when they are going down end up losing big. The key is staying in for the long long run and ignoring the ebb and flow and having a diversified portfolio. This has been proven over and over and over again.

 

Best, HT