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Re: Investing in gold - physical storage vs vault advice

Clayton — Tue, 09 Aug 2011 19:46:55 GMT

@ricarpe: True, but I think of platinum as a blend between gold/silver and other commodities, such as oil. It's pretty inconvenient to buy/sell barrels of oil and the storage costs are very high. Platinum is more like gold/silver in this regard... it can be coined and could potentially be used as a commodity money, just like gold or silver. But you are right that it is not gold/silver because it hasn't actually ever been used as a money and stood the test of time, as those metals have. However, I would rather own oil right now than gold/silver because I think the latter are in a bubble among bubbles. As Marc Faber says "everything is in a bubble" but even amongst the bubbly commodities, gold/silver are in their own bubble. That leads me to the position that platinum is a uniquely attractive commodity. You shouldn't be holding platinum as "doomsday money", of course. Better to have some silver (or even cigarettes) for that. I'd rather have platinum than gold right now. I'll change back to gold after the bubble bursts.

Clayton -

Re: Investing in gold - physical storage vs vault advice

ricarpe — Tue, 09 Aug 2011 16:25:27 GMT

It's government data, but USGS puts out monthly reports on silver and other metals.

Re: Investing in gold - physical storage vs vault advice

Esuric — Tue, 09 Aug 2011 15:10:41 GMT

Jim Rogers claims that silver has heavy industrial use and that the supply of gold is 5x that of silver. Can anyone substantiate this claim?

Re: Investing in gold - physical storage vs vault advice

ricarpe — Tue, 09 Aug 2011 13:17:55 GMT

Clayton:

...exchanging gold coins almost at par for platinum coins seems like a no-brainer.

Clayton -

I would not do that, even as a speculation move. Platinum, palladium, and rhodium are used primarily as industrial commodity metals unlike gold and silver, which have industrial applications but are used more in jewelry, used in coins for collecting, etc. As industrial use slows down, demand will most likely fall and prices will probably come down as well. I would invest separately in platinum, palladium, and rhodium instead of exchanging gold and/or silver for these metals.

Also, the quantity of platinum, palladium, and rhodium that is extracted is much lower than gold and silver -- tons (gold and silver) versus kilograms (platinum, palladium, and rhodium).

Re: Investing in gold - physical storage vs vault advice

z1235 — Tue, 09 Aug 2011 13:04:01 GMT

Esuric:

...but I believe that it's way too early to reach a definitive conclusion.

When a definitive conclusion can be made, then it's way too late to act in the market. Speculation is all about probabilities. Opportunity appears when the market miscalculates the probability of a certain outcome -- in this case, the probability of gold replacing USD as the reserve currency, and the inability of the fiat currency cabal to prevent that from happening.

One more, speculation in unprecedented waters is not done by comparison to precedent (historical) price levels.

Re: Investing in gold - physical storage vs vault advice

Kakugo — Tue, 09 Aug 2011 10:14:12 GMT

One of the reasons bond yields are falling while the price of gold is hitting new times high is the newly announced ECB policy. On Saturday the ECB announced it will start purchasing Italian bonds while, at the same time "will provide liquidity to the markets".

I believe the ECB, like it did before, will closely coordinate its inflationary policy with the Fed. QE3 is on the way, investors have taken the hint and are buying gold.

By contrast crude oil futures fell last week by about 20% (NYMEX). This latter part may be physiologic: oil demand isn't increasing as sharply as expected worldwide, consumption in Europe is still contracting and, most importantly, oil futures cannot be hoarded like gold. They have an expiry date on them. As for silver I reiterate my opinion: supply is more than able to meet demand, demand which is not increasing as expected by some people. Asia isn't interested in silver: they want gold. And as far as Europeans and Americans are concerned... we all know the answer.

The purchase announcement was a political move which had the expected result: allow bond yields to drop low-term to give some respite to exhausted treasuries. Details of the deal are extremely sketchy (no mention of how much is worth, rumors Spanish bonds may be next etc) but it seems like, after pressuring Italy into increasing taxes earlier this year, our wise European overlords realized higher taxes will negatively affect an already critical growth situation...

Re: Investing in gold - physical storage vs vault advice

Esuric — Tue, 09 Aug 2011 09:09:24 GMT

Sunday: gold at $1,694. up $44 in one day. All time high.

I may be wrong, and it may very well be a good time to get into gold, but I believe that it's way too early to reach a definitive conclusion. There are certain anomalies present within the market at the moment; traditional relationships have broken down, and there are contradictory signals.

For example, the stock market is crashing and bond yields are falling, representing deflationary expectations, and yet the price of gold is sky-rocketting, which traditionally represents inflationary expectations. This means that a part of the market seems to believe that there will be a traditional deflationary recession (double-dip), while another portion of the market expects future rates of inflation. This could be in anticipation of QE3, which will most likely be extremely aggressive (Bernanke is a hardcore inflationist).

Additionally, gold seems to be decoupled from other commodities which, historically speaking, have been inflation hedges as well. I'm referring to silver and petroleum. So I still think it's too early to call. I personally would not buy gold at the moment; a deflationary double-dip seems likely. But you definitely want to get into gold before Bernanke begins QE3.

Re: Investing in gold - physical storage vs vault advice

Aristophanes — Mon, 08 Aug 2011 19:30:43 GMT

gold is at 1719.6 at 2:30.

Huge leaps while the stock market gets beaten like its staying in abu ghraib

Re: Investing in gold - physical storage vs vault advice

z1235 — Mon, 08 Aug 2011 12:26:58 GMT

Clayton:

Gold is cash.

No, it's not.

Markets are forward-looking.

Re: Investing in gold - physical storage vs vault advice

Clayton — Mon, 08 Aug 2011 05:05:12 GMT

If someone offered to give me a $100 bill for $5, I too would be skeptical. However, I would definitely be interested. Unless I was in a terrible rush, I would at least see if I could figure out if it is a fake and point out what I thought was fake about it. If they offered it for free, I would definitely take it, what's there to lose? I think most people would behave similarly. The difference in behavior between offering a massive discount on a $100 bill versus a gold coin means that people don't see gold as money and gold is not cash. By virtue of disuse, people are not generally able to tell genuine gold from a fake.

Clayton -

Re: Investing in gold - physical storage vs vault advice

DanielMuff — Mon, 08 Aug 2011 04:47:03 GMT

It broke $1700!!! Donde esta el PPT?

Re: Investing in gold - physical storage vs vault advice

Smiling Dave — Mon, 08 Aug 2011 04:43:50 GMT

About the video.

They might think it fake. I would, too, when approached by some guy in the street practically giving it away.

Think Nigerian prince.

Re: Investing in gold - physical storage vs vault advice

Clayton — Mon, 08 Aug 2011 04:32:18 GMT

people see gold as money

(Please visit the site to view this media)

Clayton -

Re: Investing in gold - physical storage vs vault advice

Clayton — Mon, 08 Aug 2011 04:29:55 GMT

Gold is cash.

No, it's not.

Buying paper currency with gold (i.e. selling gold to hold currency) is the risky speculation -- the proverbial catching of a falling knife.

Who said to buy paper?

Why should USD stop falling at 1/1650 oz and not go all the way down to 1/100,000 oz instead?

Given the broad swath of things against which USD is not devaluing at a rate even close to its devaluation against gold and silver, I'm inclined to believe that gold and silver are in a bubble rather than that everything else is depressed.

Clayton -

Re: Investing in gold - physical storage vs vault advice

z1235 — Mon, 08 Aug 2011 04:14:34 GMT

Clayton:

Don't you think such price movements indicate abnormality?

Gold is not going up. It's the paper currencies by which its value is measured that are melting down. Gold is cash. Buying paper currency with gold (i.e. selling gold to hold currency) is the risky speculation -- the proverbial catching of a falling knife. Why should USD stop falling at 1/1650 oz and not go all the way down to 1/100,000 oz instead?