Time to Buy Gold?

PsychoBob

When is it a good time to buy gold?

When no one is talking about it. So now is not the time. As peopke still talk about it (even if not quite so much as before). When everyone and his brother is talking about it- avoid it like the plague.

Last time I bought it, no one else was, and I made a bomb when the credit crunch came.

Everyone was talking about Royal Mail Shares & they still made a profit.

People are talking about Gold because they are scared they are going to lose money. Warren Buffet said be greedy when others are fearful so I'm buying a bit from my matched betting profits & holding for 5-10 years maybe longer. See what happens. I like Gold anyway.

atush

Everyone was talking about Royal Mail Shares & they still made a profit.

Everyone was talking abt Royal mail when the price was set, and it was decided the price was too low. Not everyone was talking about it before, and not as many are now.

This was NOT normal market forces, but a possible incorrect valuation of the company (as the reverse happened not so long ago when Facebook was Overvalued???).

We can argue til the cows come home why the valuation was incorrect (my personal view is possible labor disputes).

Go ahead and buy now if you like, but I am not- even though as a contrarian I bought sub $700 last time. Still not low enough for me.

Satoshi

Thing is there are millions of tons of gold been mined through history, not the 180K we are told, it could be sold into the market at any time. I do not think gold is a good investment.

sabretoothtigger

Those who hold the most gold have already leveraged out this security. That really is the reason to buy, that everyone is standing on one side of the boat. For decades we've been shuffling further into this extended situation.

Its the same kind of hubris that backed titanic and so on. Their fate was largely bad luck, but its consequences were amplified by their over extending themselves. That is also UK now, maybe luck is good but if not I see a parallel in the extremes we are at

If anyone were vulnerable to change, not feeling like taking a splash then at least some counterweight is feasible

I'm not dismissing our present exceptional circumstances, in fact I am relishing it

Leaning on something means you miss it more when absent but I guess you are paying a mortgage down faster?, which is alot safer. Also it helps banks recapitalise so its intentional easy money

if its price totally crashed in a boom

When QE was being done faster then ever, gold started falling from 1900.
This is the crash you are looking for, visuals can deceptive

chucknorris

sabretoothtigger wrote: »

Leaning on something means you miss it more when absent but I guess you are paying a mortgage down faster?, which is alot safer. Also it helps banks recapitalise so its intentional easy money

We are not leaning on it, we were making very good profits before interest rates fell, and will continue to do so when they rise again. No, we are not paying down my mortgages (although 4 of our 9 properties are not actually mortgaged) because our average mortgage rate is just over 1%, which is still less than the return that we are receiving elsewhere.

sabretoothtigger

4 of our 9 properties are not actually mortgaged

That does sound more balanced then many people. Also sounds way out of my league and Im not seeking to criticise as I certainly dont manage properties.

My main argument is UK is out of balance and over extended. We did used to operate on at least some gold, held by gov, or in the money or by trade links to usa who held it.
None of that is there now and people hold none personally and see no need to hold security beyond gov bonds; unleveraged property would count as real security even if not liquid.

We all hold gov bonds, directly, indirectly, via the banks who hold it as tier1 capital and so on.
I see this situation as everyone in one end of the boat and I think a red flag is justified. Mainstream is the extreme now, a guy calling for 1% gold or whatever is the boring sensible one I reckon.

I wont change my mind even if gold goes to 900 or lower, the dynamics remain the same. Maybe we keep getting lucky and maybe something trips up. caveat emptor

Why Bill Gross Likes Short End? Look at Returns -- Market Talk
12:31 EST - A notable trend in 2013 has been migration from longer-dated bonds and into shorter-dated maturities. Pimco's Bill Gross has favored Treasurys due in three years or less in recent weeks. One reason? Short-maturity bonds managed to eke out some positive return this year in contrast to the bruising year for long maturities. Treasurys due in one-three years posted a 0.3% total return through Friday, compared to 8% loss in maturities 10-20 years and 14% loss in bonds due in over 25 years, according to Barclays. The short end could tumble if investors question that the Fed will wait until at least 2015 to raise rates.

bond returns this year vs gold's always nil yield capital loss returns

talexuser

Gold is too risky for me but I saw an interview with William Littlewood of Artemis Strategic Assets who favoured some gold because he reckoned all this QE would turn out to be a disaster in future inflation and gold was a hedge. I'm pretty sure he's right but it will be a question of timing of when to get in and/or out as not to miss the boat on any stocks bull run I suppose. At the moment he is lagging because of his safety first/capital protection approach (I have a punt in his fund because of the oodles he made for me in Jupiter Income from the beginning till he left those years ago).

DiggerUK

Miners have never impressed me as a buy. Even when gold was at it's recent highs, the miners did not seem to perform. It's one for the speculators.

The dire price for gold of recent has been a boon for buyers, and a down for sellers. It is obvious, to me, that the selloffs by the big institutions is so they can ride the sugar rushing equity express.
I don't think many will see this rekindled boom as anything other than a one way ticket to Palookaville, red flags may only be at half mast, but the green shoots of recovery don't pass muster.

Gold never puts on weight in a boom, the 80's and 90's prove that, so it won't have any chance to plump out until this boom turns sour. If any are looking for the right time to buy gold then it will be when the markets start to go south, for now I think it is the time for potential buyers to sit tight, and those needing cash to be upset.
I view gold as a five year plus long term buy, not a get rich quick strategy

Best of fortune for 2014, Digger Mansions.
..._

sabretoothtigger

The miners are in many cases cheaper then five years ago but the gold isnt.
I guess this'd be from higher oil and general costs. Despite gold poor performance, inflation has not taken a rest outside of gov stats

As for this is a boom, not in my book it isnt. Bubbles in part, stock prices are recovered but value isnt. Value should rise dramatically in a boom and I dont think we are seeing that.

Have a look at this video which features a graph from the Fed. Even with lower unemployment, average household income does not rise
http://www.youtube.com/watch?v=rcH6kGd3XQs
I wont waffle on about it but you know why that is, theres no booming economy.

Gold never puts on weight in a boom, the 80's and 90's prove that, so it won't have any chance to plump out until this boom turns sour.

It rose from 35 dollars an ounce and its never come close to returning. If that were a person of 35kg, you'd not say that person shrunk even as low as 200kg

blinko

Gold is looking weaker and weaker where on earth is all the uncertainty going to come from and USD weakness that gold needs to rally....?