Buying Gold

earlgrey_3

purch wrote: »

The more and more posts that appear on here about Gold, makes me worry that this guy might be right; :eek:

http://www.safehaven.com/article-10037.htm

It's something I've always subscribed too which was why I thought the "death of property" had arrived when all those perishing property programmes appeared on telly. Unfortunately not everyone agreed so I was well out on the timing.

Anyway, I broke a crown last month and got the dentist to give me back the old one, so I've now got gold well covered.

Darth_Trader

linden wrote: »

Thank you all for the posts .

Where would you turn to make at least some profit and not take an enormous risk ?

I think the recent big thing has been palm oil (eg NBPO and its ilk) but way too volatile for me, and the ship may already have sailed.

I also saw an interview with Jim Rogers, the commodities futures trader, a few months ago, saying water would be the next big thing. In his book Hot Commodities, he also said that commodity bull runs were longer lived than equities, which left me thinking commodities were good til 2010, but the global slowdown may mean it's already 'game over'.

So, very hard to call where profits and 'low risk' might coincide! Ignoring stockmarket volatility over the last six months, I'm still pondering the old maxim: 'Sell in May and go away!' Perhaps still a correction to come soon, who knows.

cloud_dog

I dont think things (commodities) are over, not for a while yet.

Nothing ever goes straight up and there will always be volatility, especially in the commodities sector as it forms such a tiny fraction of the finacial markets. This is part of the reason why when the big boys jump in or out the prices change significantly.

Wrt Gold it can still drop by another 12%ish and still remain in an uptrend.

The things that let me be more comfortable with my chosen investment strategy (even though I dont always remain fully invested) is:

• Gold producers unwinding any old hedged positions
• Recent increases in commodity prices (iron ore for one)
• Its really difficult for miners/producers to react, i.e .increase production
• Industrialisation of the East will dwarf that of the West
• A lot of major producers haven't sctually been uncovering new deposits, they have just merged / bought others; ergo lack of significant increase in reserves
• Weakness of USD

Obviously there will be fluctuations that will to a larger or lesser degree affect things:

• US Recession
• Ebe and tide of the strength of the USD
• Energy costs will affect profitability and possibly production
• lots of others......

But overall, I think the long term future is positive.

cloud_dog

purch

Nothing ever goes straight up and there will always be volatility, especially in the commodities sector as it forms such a tiny fraction of the finacial markets

The Commodity markets are very very different to the Equity or Fixed Income markets. The 15-20% correction in the Gold price which is underway currently should not be seen as unusual, nor particularly damaging to the longer term trend.

A similar move in Equities would be hugely more significant.

Darth_Trader

I agree with the last two posters, that a long term view should be positive. In the name of capital preservation, I normally still ditch things that look to be losing money. And in line with Cloud Dog's comment on gold, my stops are generally linked to things such a trends and price moving averages, rather than just picking a number. This does seem much harder with commodities than equities, I must confess.

cloud_dog

Interesting article offering an 'opinion' on short term / long term gold outlook:

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=51785&sn=Detail

cloud_dog