Big dip for gold?

DiggerUK

lvader wrote: »

By that logic the value of paper currencies have gone up by 6% in the last week............Gold is simply another thing to bet on like anything else, it can go up or down, but unlike stocks or other commodities it has no real purpose.

Gold as a traded metal commodity for industrial, electronic, scientific use etc., only accounts for about 12% of annual gold production. That markets demand goes up and down.

The majority of gold produced goes in to bank vaults and is used in the currency markets as security for paper. Not exactly the same as a gold standard, but it does get used a lot by banks as money. Which is a surprise to those who think gold as an international currency ended a 100 years ago.

Most of the world gold market in jewelry is 22ct investment jewelry, which is golds other main use, and is a bigger percentage of the private investment gold market than the likes of me with bullion and coins.
http://www.invest.gold.org/sites/en/why_gold/demand_and_supply/

The 6% increase in the value of paper is true for 1 week.
The 40% decrease in the value of paper since this day last year is real as well.
http://www.lbma.org.uk/?area=stats&page=gold/2009dailygold
http://www.lbma.org.uk/?area=stats&page=gold/2010dailygold

DiggerUK

jem16 wrote: »

And here was me being led to believe that gold is a no-risk investment.

A statements as true as ever it was.
Over the long term it always goes up, always has done, and will continue to do so.

Past performance is no guide to future performance of course, but after only a few hundred years track record as a no risk investment I am the first to admit I may be calling the market a bit early.

DiggerUK

wombat42 wrote: »

Were in the summer doldrums for gold, will probably shoot up again in August.

Not a big fan of seasonal arguments for gold, but price has to go further due to currency debasement. Just a question of when, not if it goes higher.
I just posted to encourage those who are considering buying, to follow what happens in this period.

For me it is a judgement call that I think it has a bit more dip in it. We'll see.

DiggerUK

VT82 wrote: »

One assumes therefore that you sold your investment before the doldrums and have bought it back now to make a quick turn?

Some people are making good returns calling the gold market.
575GBP an ounce 1 year back, 800GBP today. 40% up.

I don't practice or recommend such an approach with physical gold, the 6-12% spread between buying and selling is a short term risk factor. Long term buying and selling, what's the point? keep the gold say I. Sell when you need the cash, not before.

Most who speculate in gold do so in paper gold market, something I know nothing about.

DiggerUK

The pound has been kissing $1.53 all day, and keeps price of gold at 790GBP per ounce. Not the spectacular dip I am looking for, but fingers crossed.
If the $ price dips more, then look out for bargains.

RDB

DiggerUK wrote: »

After dropping from 860GBP to 790GBP an ounce in under a month, I think it quite possible that bargains in the yellow metal are still to come.

It seems that the pound has had a big boost from the Euro problems...... (a strengthening pound helps buyers of gold in UK.)

There have been some slides in $US price of gold back towards $1200, and if that continues down with a stronger pound, then UK buyers will benefit.
http://money.cnn.com/2010/07/08/markets/gold/index.htm

Other gold fans I have run this past seem to suspect the same, so if you were considering buying gold then keep an eye on prices. Buying opportunities that look this good for gold don't come by that often.

How this affects miners and ETF's I'll leave for others to pass comment on.

Best of fortune.

Today is a good day to BUY!

DiggerUK

Well, a week after my prediction of a further substantial dip, what have we got.
A miserable ten quid down, at 780GBP.

$US price of gold is under 1200 an ounce, but the pound, after kissing $1.55, refuses to budge from $1.53.

http://finance.yahoo.com/q/bc?s=GBPUSD=X&t=5d&l=on&z=m&q=l&c=

http://www.lbma.org.uk/?area=stats&page=gold/2010dailygold

Ah well, tomorrow is another day.

DiggerUK

Starting this thread to encourage people to follow the price of gold, especially with the current dip, has been given a new catalyst with the withdrawal of Index Linked savings.

Now only gold is a safe place for funds. So don't miss the buying opportunities as they presently exist.

https://forums.moneysavingexpert.com/discussion/2603969

Seems almost beyond doubt, that the governments favoured option to deal with this crisis, is to let monetary and price inflation rip.

Lokolo

I am sorry Digger, but as you keep recommending Premium Bonds, there's no way I would ever listen to you.

Housebear51

Anyone else getting gunpowder ready? When to pull the trigger?

I'm thinking of ordering another 20 silver maple leafs and 20 Silver Eagles.

If the price does go even lower I will order the same again.