Gold and Silver Sustaining over $1000

[bayview]

   Gold and silver reaching new highs . . .

   My neighbor says gold and silver are a constant . . . The dollar is just worth less. (worthless?)


/

[Squirl]

Silver is over $1000.   

Sorry.  I disagree.  Silver is down and gold has only gone up 10% in the past two years.  I bought gold at $1000 an ounce two years ago and it fell to $800 at one point and now it is back at $1100.  I bought silver at ranges from $14 and ounce to $23 an ounce two years ago and it is still down at $17.

[Phssthpok]

Silver is over $1000.   

Sorry.  I disagree.  Silver is down and gold has only gone up 10% in the past two years.  I bought gold at $1000 an ounce two years ago and it fell to $800 at one point and now it is back at $1100.  I bought silver at ranges from $14 and ounce to $23 an ounce two years ago and it is still down at $17.

It's all about one's perspective.

For example: I bought gold at ~$800 a couple of years back, and silver  for ~$11 just a year ago. A little over a month ago I traded most of that silver at a value of $17.40-ish for my 20 acres of Montana timberland.

My gold is now up almost 40% (from when I bought it) and my remaining silver is up over 50%....IN JUST ONE YEAR.

[Squirl]

Exactly.  All about perspective.  In two years going from 10-23-14-17 is not stable to me.  Volatility like that is high risk to me.  Good to diversify.

[peternap]

I'm on the fence about this. I bought gold at 350.00 to 400.00 an ounce years ago. I also bought a lot of silver at 6.00 an ounce.

Not too long ago, I bought more silver at 11.00 an ounce I think. I have CRS these days.

Obviously, I made a profit. I can't say if it was really a good investment though because of the amount of time involved. Then there is the question of selling it. The bottom feeders never want to buy at spot.

My gut feeling is that it's gone about as far as it will for this run. But that's just a feeling.

Laugh if you want but Lead is the best investment in metal I know. At least for now. I can still buy it for .40 a pound, smelt it and cast ingots and get 5.00 a pound.

[LeoinSA]

Being a glass half empty kinda guy instead of the half full sort, I think that we haven't seen the worst of this depression yet.

Several points...

• Continued job losses in the hundreds of thousand per month.  End in sight?  Not from where I sit as my company is projecting a 30% budget cut in 2010 and that's gonna mean some job losses I'm sure.
• Banks and the govt suckin' each others fingers to the tune of hundreds of billions of our tax dollars.  Give or take a trillion and a half injected into the economy and no 'official' inflation?  I think we're being lied to again/still.
• This whole economy is consumer driven.  If we millions don't have money to buy 'stuff' then what happens to the retail stores - from Wal-Mart to Sears to Lowes and HD and the few mom-n-pop stores left.
• Imports.  Container traffic at all major west coast ports is down by 25% to 35% year on year.  China and India ain't selling us the crap they were before because we ain't buying.
• Foreclosures.  Mortgage Bankers are kicking people out of houses left and right - still.  The same banks are playing patty-finger with each other on those foreclosed properties to make it look not so bad to us rubes.
• "Stimulus" funds.  Heard a blub on NPR today that overall the billions allocated for job stimulus is about 15 to 18% spent.  The only thing at a higher percentage is road spending at near 30%.  There ain't been lots of jobs created.
• and etcetera and etcetera.

The point is that it ain't getting better no matter what corpgov and the tradmedia want us to believe. 

I think that current gold and silver prices are a reflection of the uncertainty that many people feel over the irrational exuberance that the current paper based stock market is displaying.

When?  I don't have a crystal ball but I believe in my guts that we're gonna see this financial house of cards collapse in the next few months to a year.  I pray that I am wrong, but I bet with my investments in gold and silver, stashed food and hoarded ammo that I'm gonna be more right than wrong.  --Leo

[muldoon]

Laugh if you want but Lead is the best investment in metal I know. At least for now. I can still buy it for .40 a pound, smelt it and cast ingots and get 5.00 a pound.

I would take that trade all day long every day. 

As for gold, it reminds me of when oil was running in the 140s.  topped at 147 and then saw 30.   The gold is not necessarily getting more valuable, it is trading in lockstep with the dollar as nearly all the asset classes are right now.  dollar down, market up, gold up, oil up; dollar up, gold,oil,market down.  Gold went parabolic on new highs at a time the dollar is flirting with old lows. 

Check this out -
http://www.telegraph.co.uk/finance/newsbysector/industry/mining/6546579/Barrick-shuts-hedge-book-as-world-gold-supply-runs-out.html

Barrack - the world largest producer of gold released this tonight.  peak gold?  world supply runs down? what?  this is not oil, no one consumes gold.  It is not destroyed, its still there.  all roughly 5 billion ounces ever mined since the start of time.  Supply and demand says that we will not run out, but that means prices will fluctuate. 

Gold may go up in value, or it may plummet.  I don't know anymore.   I know that people buying gold are basically giving a vote of no confidence in the governments of the world.  Thats a factor in the equation I have no idea how to chart. 

I think peternaps lead idea makes the most sense to me. 

[waggin]

Why does one buy precious metals in the first place?  Is it an investment, an insurance policy, or a vote of no confidence in any of the following: government, fiat currency, or perceived rigged investment market?  Maybe you just define precious metals as a store of value.  After all, it won't pay you dividends or interest.  Sure you can "make money" on gold or silver just as you can "lose money"...if you're trading it.  Without arguing "what ifs" about investment potential/earnings of alternatives over time, an ounce of gold would have bought a fine men's suit in the early 1900's, just as it would today.  What's the difference in US dollars to buy that same suit over that time period?  Isn't having a portion of your savings in precious metals diversification in and of itself?  What's stability?  Some may see stability as low volatility and others may see it as an ongoing trend.  What period do you choose to compare precious metals to other "investments"?  If you cherry pick your dates to compare options, you can say whatever you're predisposed to say.  What's the long-term trend of the gold price in USD?  How about looking at it in other currencies?  Do precious metals always trade inversely to the USD?  Sometimes they do, and sometimes they don't.  How about in other currencies?  Same.  As the earth's population increases at a faster rate than the increase in precious metals supply, does that make the reduced amount of gold or silver available to each person inherently more "valuable"?  What is the most politically expedient way to deal with national debt and the cost of servicing it for the US and other countries?  What is the vested interest in the outcome for those in control? 

How will the psychology of the herd affect all of the above? 

Being a glass half empty kinda guy instead of the half full sort, I think that we haven't seen the worst of this depression yet.

The point is that it ain't getting better no matter what corpgov and the tradmedia want us to believe. 

I think that current gold and silver prices are a reflection of the uncertainty that many people feel over the irrational exuberance that the current paper based stock market is displaying.

When?  I don't have a crystal ball but I believe in my guts that we're gonna see this financial house of cards collapse in the next few months to a year.  ...but I bet...that I'm gonna be more right than wrong.  --Leo

If you ask me, the glass is broken.

[glenn kangiser]

I like Whitlock's motto... "In Gold We Trust"

[waggin]

I like Whitlock's motto... "In Gold We Trust"

Dang, you beat me to it!  I was going to mention that in my next post.   

Cool link about economics, context, and perception that applies to precious metals as well:
(Is it just me, or does the author look like Telly Savalas?)

http://www.kitco.com/ind/Nathan/nov102009.html

[glenn kangiser]

We check that out every day or two.  Whitlock told me about it.  Cool.