Gold at $1900???

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Submitted by kev374 on September 5, 2011 - 7:32pm

WTF? this has got to be some kind of maniacal bubble? Why are investors fleeing to gold? Are fiat currencies so doomed in the next few years? Do people suspect hyperinflation is near? Is there something we should be reading here..time to move away from cash reserves?

$1900 gold is madness...

Submitted by scaredyclassic on September 5, 2011 - 7:38pm.

It's difficult to tell which way is up.

Submitted by scaredyclassic on September 5, 2011 - 8:01pm.

How many usdollars is fair per oz of gold?

Submitted by SD Realtor on September 5, 2011 - 8:31pm.

Why is this madness?

Submitted by Arraya on September 5, 2011 - 8:38pm.

The dollar will probably benefit from the problems in europe as well short term. But, gold is kind of a panic meter. To me, it looks like another round of debilitating deflation is on the way. Though, Gold will probably hold up.

Submitted by enron_by_the_sea on September 5, 2011 - 9:07pm.

Price of gold is inversely proportional to people's faith in the "system".

Submitted by CA renter on September 5, 2011 - 9:25pm.

Arraya wrote:
The dollar will probably benefit from the problems in europe as well short term. But, gold is kind of a panic meter. To me, it looks like another round of debilitating deflation is on the way. Though, Gold will probably hold up.

That's how I see it as well.

Submitted by Aecetia on September 5, 2011 - 10:44pm.

I think it is because dollars are not as good as gold any longer and the PM market is reflecting it.

Submitted by The-Shoveler on September 6, 2011 - 5:41am.

I tell you this could be our solution Gold to 3K oz please,

As the price of gold rests near record highs, people from Spokane to Bangkok are selling jewelry or buying bullion, some are giving up steady jobs to take to panning while theft of gold chains and watches is on the rise worldwide.

Gold surge draws prospectors, thieves worldwide

People pan for gold in Panompa near Phichin in this February 17, 2011 file photo. REUTERS/Damir Sagolj
On Wednesday August 31, 2011, 2:16 am EDT
By Natalia Konstantinovskaya and Tan Ee Lyn
TOKYO/BANGKOK (Reuters) - It has been called the saint-seducing metal, with good reason.
As the price of gold rests near record highs, people from Spokane to Bangkok are selling jewelry or buying bullion, some are giving up steady jobs to take to panning while theft of gold chains and watches is on the rise worldwide.
"Panning for gold is becoming a real family affair, more popular now because of the gold price," says Cordell Kent, who sells do-it-yourself mining equipment in the 19th century Australian gold rush town of Ballarat.
"Some people I know are making hundreds, even thousands of dollars on the weekends."
Locals say rising prices and heavy rain earlier this year are leading to a surge in amateur prospectors, looking for flakes of gold washing up on river-beds.
"We're seeing a whole new gold rush now around Ballarat," Kent says.
Spot gold sells now for $1,830 an ounce, up nearly a third this year. With currencies and stocks faltering and prices of other commodities held back by slowing economic growth, the frenzy for gold has gone global.
Many are cashing in on the gold they have at home -- or on gold teeth -- although the trend is slowing in the belief prices will rise further.
"The most disgusting thing I had to deal with was a rotten tooth with a gold crown from a customer's grandmother who died," said Munehiro Otsuki, the manager of a gold store in the Shinjuku district of western Tokyo.
He also had a customer seeking to sell half a dozen Buddha statues which he had thought were gold, but were in fact brass.
"When I called him this week after the evaluation, I could tell by the way his voice changed that he was extremely disappointed. He never came back."
At another store in the Kanda district of Tokyo, manager Kenta Okiyama spoke of a middle-aged woman dressed in brand-name clothes, the smell of her expensive perfume wafting across the store, who poured 30 rings of varying designs out on the table in front of her.
She told Okiyama these were rings she had received from ex-husbands and boyfriends back in the heyday of the 1980s, Japan's free-spending "bubble economy" era.
"When I showed her the 200,000 yen ($2,630) on the calculator screen, the expression on her face changed in a way I will never forget," Okiyama said. "She became so happy and smiled, saying 'I'll take it right now.'"
Ritsuko Aoki, a 40-year-old Tokyo housewife, said she was selling old jewelry to buy domestic appliances.
"We did not even think that my old gold accessories were worth anything before we saw news about people selling their gold on TV," she said. "If gold prices rise more, I'll look for more accessories in the depths of my closet."
VOLATILITY, HEDGING
But experts say sales of recycled gold will rise only about 5 percent this year, against 30 percent in 2009. "Either people are waiting till the price hits $2,000 or they are running out," says Mariabi Peenya, a street side dealer in New York's Diamond District.
Nevertheless, canny investors see opportunities in gold's price volatility. Although prices have been rising steadily since the start of the year, gold has veered between as low as $1,600 per ounce to as high as $1,900 in August.
And if dealing in physical gold, it's much easier since there are no brokerage fees or delays in payment.
"We bought and sold twice and made a nice tidy sum," says Ivy Mok, a mother of two who lives in Bangkok. "Not very huge because we sold, and then the price went even higher."
She and her husband dealt in small gold bars bought and sold in the well-guarded upstairs rooms of stores in the city's Chinatown district.
"People buy and sell their gold bars right there," Mok said. "But it was very stressful for me because once you are on the streets, you are on your own with all your gold bars and you feel very vulnerable."
Her fears are not unfounded. One of the unsavory sides of gold's price surge has been a matching surge in crimes associated with the metal.
Dubai, Casablanca, Pathanamthitta in southern India, all have been hit by major robberies linked to gold in recent weeks. In Ghana, a gold dealer is being accused of fraud after he alleged he was held up and robbed of gold he had promised to customers.
Snatchings of gold chains are on the increase in London, China, across the United States and many other parts of the globe, but especially in India, which is the world's biggest buyer of gold.
In northern Vietnam, a gold shop owner, his wife and 19-month-old daughter were killed and the shop robbed 10 days ago in one of the most violent crimes in the country in years. Another daughter was discovered cowering under a bed with her hand severed.
In France, there were 183 armed robberies of jewelers in the first half of 2011, up from 138 in the year-earlier period, according to OCLCO, a police agency that tackles organized crime.
"If gold is a safe haven for people with savings, it is also becoming it would seem a safe haven for armed robbers," said Frederic Doidy, an officer with OCLCO.

Submitted by harvey on September 6, 2011 - 7:24am.

Similar thing that happened during the dot com boom.

You have a bubble, combined with new means of trading that make it easier for the average consumer to buy.

The dot com boom coincided with the availability of online trading. It was so easy for anyone to buy those shares of pets.com. Just a couple of clicks - much simpler than calling your broker, and putting in an order. Didn't have to talk to anyone.

Gold is similar today. It's easier to buy than ever. ETFs, "GoldLine," etc. Plus you have the parade of "experts" on CNBC talking about it. Since there's nothing left to talk about (tech?, real estate? - old news.) They are on for ten hours a day - they have to talk about something.

And then there are the commercials...

Bubble? Possibly. If so, when will it pop?

Markets can remain irrational longer than you can remain solvent.

Submitted by scaredyclassic on September 6, 2011 - 11:55am.

The real bubble is treasury debt. Gold is a little tiny minibubble attached thereto.

Submitted by kev374 on September 6, 2011 - 6:02pm.

it's madness because at $1000 per ounce just a little while ago people were saying that gold is soaring, now it is closer to TWICE that $2000/oz. What is the reason it has DOUBLED in such a short period? Is the faith in fiat currencies so dismal?

Submitted by scaredyclassic on September 6, 2011 - 6:46pm.

i think 1000 an ounce was a while ago.

Submitted by SD Realtor on September 6, 2011 - 6:57pm.

I think it does reflect an aggregated lack of faith in many things. Really do you believe the government can figure out a solution? Do you think the private market can figure it out? It also does indicate that many people know the next bubble to burst will be the bond market. Honestly you can only build up so much debt until liquidation is the only real option. I think many people understand that. QE1 - N will do nothing but to continue to prolong the game but in the end reconciliation will be necessary.

Submitted by UCGal on September 7, 2011 - 12:45pm.

walterwhite wrote:
i think 1000 an ounce was a while ago.

A while ago = 2 years ago.
What else doubled in the last 2 years?

Submitted by enron_by_the_sea on September 7, 2011 - 12:50pm.

UCGal wrote:
walterwhite wrote:
i think 1000 an ounce was a while ago.

A while ago = 2 years ago.
What else doubled in the last 2 years?

Nothing doubled, but credibility of lawmakers and fed is one half of what it was 2 years ago.

Submitted by lifeizfunhuh on September 9, 2011 - 3:04pm.

I think the question is not, "how high can gold go?" but "how low can the dollar go?" The answer is theoretically to zero, so the nominal $ value attached to gold is meaningless.

Bernanke announced in early August that he was going to keep interest rates at a very low rate for two years. You can't just say the words. The only way the central bank can do that is to intervene in the market and force interest rates down. Just look at the Fed’s unadjusted numbers since the beginning of August and you will see they shot up at the same time.

Its all about relative supply curves - the supply curve for bullion is far more inelastic than is the case for paper currency. Its really that simple.

Submitted by SD Realtor on September 9, 2011 - 9:06pm.

I would agree with that logic lifeizfun. Hey the senate just authorized raising the debt ceiling by another 500B.

Like you said, how low can we go...

Submitted by scaredyclassic on September 9, 2011 - 9:24pm.

the endgame is de facto default, right, on all this debt, by inflation? can it be otherwise? it's just, well, what route do we take to get there...

Submitted by Zeitgeist on November 14, 2011 - 7:03pm.
Submitted by scaredyclassic on November 14, 2011 - 10:09pm.

Ha!

Submitted by blahblahblah on November 15, 2011 - 6:22am.

All I know is that I see signs everywhere saying "We Buy Gold" or "Se Compra Oro". I do not see signs everywhere advertising gold for sale, nor do I see online advertisements on any mainstream websites advertising gold for sale.

I thought gold was in a bubble and sold mine at a loss back around $600/oz or so. I sold again to break even at $1000/oz. Don't own any today because of my poor track record in the past and it's too rich for my blood now...

Submitted by markmax33 on November 15, 2011 - 8:13am.

CONCHO wrote:
All I know is that I see signs everywhere saying "We Buy Gold" or "Se Compra Oro". I do not see signs everywhere advertising gold for sale, nor do I see online advertisements on any mainstream websites advertising gold for sale.

I thought gold was in a bubble and sold mine at a loss back around $600/oz or so. I sold again to break even at $1000/oz. Don't own any today because of my poor track record in the past and it's too rich for my blood now...

It's actually cheap! The fed is printing waaaay too much!

Submitted by GH on November 24, 2011 - 9:22am.

Italy is the third largest gold holder in the world with some $150 billion held. Given they will need to sell this soon to keep the lights on I suspect gold will temporarily crash in a manner similar to the 90's when Russia was dumping its stock to keep the lights on. Demand for consumer electronics is tied to the economy as well.

Me thinks in the near term (2 - 3 years) gold back down to around $800.

Of course I may be totally wrong about Italy as it is possible their gold will be used or has already been used to secure their debt and will never enter the market. In this case we could see gold up over $2000 within the year.

WAY to volatile for my appetite!

Submitted by sd_matt on November 24, 2011 - 11:25am.

enron_by_the_sea wrote:
UCGal wrote:
walterwhite wrote:
i think 1000 an ounce was a while ago.

A while ago = 2 years ago.
What else doubled in the last 2 years?

Nothing doubled, but credibility of lawmakers and fed is one half of what it was 2 years ago.


Nicely put

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