The case for gold

[scaredyclassic]

Flirting with all time highs, gold seems high priced but not a dumb asset to own over the next few years if you think lots of stimulus money is coming still.

The case for gold always seems strong to me, but it always seems to peter out.

Could this be its time?

[The-Shoveler]

IMO Gold has just about 0 in real value, it’s value is just whatever number people want to put on it.

So it goes up and down for whatever reason people want to use.

OK maybe there is some value for jewelry, rings etc…

[scaredyclassic]

[quote=The-Shoveler]IMO Gold has just about 0 in real value, it’s value is just whatever number people want to put on it.

So it goes up and down for whatever reason people want to use.

OK maybe there is some value for jewelry, rings etc…[/quote]

i think the value of everything is whatever number people want to put on it.

except for a 9.8 copy of amazing fantasy 15. that has value independently of anything going on in human affairs, or even if human society continues to exist.

[Coronita]

Do you guys stockpile the ETF representing gold are raw bullion?

[scaredyclassic]

[quote=Coronita]Do you guys stockpile the ETF representing gold are raw bullion?[/quote]

CEF

[gzz]

I have more silver than gold. So far the wrong allocation, as gold has outperformed going from 1200 to 1750 while silver only 15 to 18. Though you can easily sell silver for 20-21/oz because there is a shortage of physical silver for sale. I don’t expect that premium to last however, probably in a few months the “physical premium” will go back to its normal $0.75 – $1 an ounce.

Silver shows a higher propensity to spike however. It hit 50 about 15 years ago, and in 1980 it also hit 50, which is an inflation adjusted 150/oz.

Governments hold gigantic gold reserves, but few have any silver reserves. Either a decision to stockpile silver, or a decision to sell gold, could let silver greatly outperform. China in particular has been a big buyer of gold, even though they had a silver rather than gold standard for most of their history.

The recent low of $250 for gold was partly attributed to the UK government selling off its gold stockpile:

“The UK eventually sold about 395 tons of gold over 17 auctions from July 1999 to March 2002, at an average price of about US$275 per ounce”

My two favorite gold coins are 20 francs that are .1873 oz (both French and Swiss are the same size) and $5 us coins that are .2324 oz. A few years ago using ebay and credit card promos, I was able to get them at 2 or even 3.5% below spot price when spot was $1200. Wish I had got a lot more.

1oz bars and coins are heavily targeted by counterfeiters, and also harder to sell.

[gzz]

ETF management fees add up over time. For long term holdings and SHTF scenarios, go physical.

Right now GLD is 0.4% a year. I think it used to be higher.

When it first came out, it was 1/10 of an oz per share. Now at 165 with gold at 1775, it is obviously less than this because of management fees over many years.

[pinkflamingo]

With the way the fed/gov is printing, it seems like a good bet. We recently acquired some.

With that said, I wonder if precious metals will dip during the upcoming crash as it did back in march. I don’t fully understand why gold and silver dips in a market crash. My guess is people have to sell to cover liquidity issues, in which case why not buy during the next crash? Rich would say that is trying to time the market, which is why we bought some now.

The question shouldn’t be, should you own gold, but how much. What do folks here think is the right allocation of precious metals as a percentage of their portfolio?

[scaredyclassic]

Not sure.

But how to balance a portfolio today?

bonds seem like a sucker bet.

Could gold replace the bond or cash portion of a portfolio.

I have more faith in gold than bonds or cash i think.

Still, somewhat volatile. But maybe more stable than bonds or us dollar in future?

Lets say 8 to 12 perc?

[pinkflamingo]

We are starting with 10 as insurance.

[scaredyclassic]

Wpm and rgld. Precious metal mine play. Worth reading about if interested in metals hedges.

[svelte]

It looks like some folks favor gold because it is untraceable – hides illicit activities.

https://www.sandiegouniontribune.com/news/courts/story/2020-07-14/rabbi-injured-in-poway-synagogue-shooting-pleads-guilty-to-tax-charge

[gzz]

Problems with gold stocks:

Labor troubles, nationalization risk, they are really bad for the environment and risk divestment and drastically increased costs because of stronger regs.

Canadian miners are often stock scams more than actual companies.

Alternatively, you can own one of these:

https://www.jmbullion.com/2020-1-oz-british-gold-queens-beast-white-horse-coin/

https://www.jmbullion.com/20-saint-gauden-gold-double-eagle-almost-uncirculated/

[scaredyclassic]

The environmemtal problems are real bad. Shit. Maybe i hate gold too.

All those risks mentioned could potentially benefit gold price tho. Inc production costs

CEF stock appreciates as long term capital gains, not ordinary inc. No idea how they do that its just bullion. gld Taxed as ord incone

Ive made a little paper gain on some multi year purchases. Its hard for me to buy and harder to sell.

When its down im like fuck that im not taking a loss. When its up im like fuck all the johnny comelatelys ima ride this one up.

I am an untrader. I prefer money in a bank.

Still id like to get out with a decent profit and pay off the mortgage. I feel, with no basis (other than the insane rants of biased fund managers and other internet lunatics) in fact that gold should be 3000 an ounce and silver 75.

Therefore i was going to start selling at 2100 and continue selling on its way up, unless this is the near peak, in which case ill prob. Be stuck with this position for 5 or 10 years. Or life. Maybe not such a dumb hedge.

But how much is too much. 5 % 10%
And 10% of what? Total net worth? Total non retirement monies?

I am a very bad money mgr. I much prefer throwing money in a 401k and forgetting about it.

All i know is today 10,000 in the local bank will get you 10.00 in interest and the fed govt thinks nothing of dumping a trillion into the economy at the drop of a hat. The cost of buying gold shared is transction free nowadays and if it does start to attract some real money, 3k isnt a fantasy. And the downside rosk. Id say 1250 was a pretty firm base

[The-Shoveler]

Never been a big fan of Gold, But if I get the chance to buy SLV at 13 and around 10 again I will take advantage of it, That was a nice ride to 17 when I got out.

About as good as catching the S&P at the lows of March.

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