Gold

StevieJ

Why is the Gold price so low? with all the volatility in the markets I thought it was nailed on for Gold to rocket through $1000.
Anyone explain the dynamics?

amcluesent

Too many forced sellers covering margin calls. And concerted efforts by the banks and Treasury to maintain the façade of fiat currencies (for a while) by manipulating the bullion price.

[Deleted User]

When man on the street is safe in the knowledge that something is the best investment in the world. It is the time to sell. (after the pump comes dump)

When man on the street says something is the worst investment ever, dont touch with a barge pole, its just crashing and will soon be zero. Good time to buy.

StevieJ

Yant1 wrote: »

When man on the street is safe in the knowledge that something is the best investment in the world. It is the time to sell. (after the pump comes dump)

When man on the street says something is the worst investment ever, dont touch with a barge pole, its just crashing and will soon be zero. Good time to buy.

Shouldn't that be the famous shoe shine boy? or his modern equivalent the taxi driver.

amcluesent

>When man on the street is safe...<

Err, maybe. Actually, you need to work out what the man-on-the-street thinks the other men-on-the-street expects to happen. Thenyou do the opposite to that.

StevieJ

jackdoor wrote: »

Because of the strength of the USD. Gold GBP has been holding up pretty well.

I expected it to more than hold up, it used to be the place to go when all hell is breaking loose, obviously not any more.

Reaper

I wondered if it was because governments are selling off their gold reserves to generate the cash they need to lend to banks. It would make sense though I have no evidence to back up the idea.

rl290

amcluesent wrote: »

Too many forced sellers covering margin calls. And concerted efforts by the banks and Treasury to maintain the façade of fiat currencies (for a while) by manipulating the bullion price.

I've heard plenty of people mentioning this conspiracy about BIG BAD CENTRAL BANKS trying to keep the price down... though nothing reasonably well backed-up. Certainly there was some credible speculation that some governments were selling when gold went back down to $750, but I have heard nothing since...

I'm sticking with gold for now. Although I understand the shoe-shine analogy, I point out three things:

1. The "common man" has only just started to see gold as a potential investment - only in the past two weeks have I seen it mentioned on the news etc. However, a VAST percentage of people have no gold exposure. I'm waiting until a reasonable number have 5% of their money in gold

2. I'm still of the opinion that there is a good chance that a state like China, with a huge surplus and bad investment record, may start to buy a bit of gold...

3. Prices often go a lot higher or lower than people think.... sentiment on the FTSE, for example, is probably at an all time low, with people like Anthony Bolton and Robin Geffin having said for some weeks that it's the worst they've seen it (thereby calling the bottom)... but it keeps going lower!

R

tradetime

Gold tends to be a dollar hedge and an inflation hedge, recent strength in the USD and the growing pronouncement by central banks that the risks presented by inflation are diminishing will put pressure on gold.

rl290

tradetime wrote: »

Gold tends to be a dollar hedge and an inflation hedge, recent strength in the USD and the growing pronouncement by central banks that the risks presented by inflation are diminishing will put pressure on gold.

In the short term... in the longer term, I doubt that the US government's bail-out plan won't lead to increasing inflation and dollar devaluation.

StevieJ

Reaper wrote: »

I wondered if it was because governments are selling off their gold reserves to generate the cash they need to lend to banks. It would make sense though I have no evidence to back up the idea.

Certainly not the UK, we don't have any left.