# Gold In Nice Upward Trend



## ringledman (5 May 2010)

http://www.marketoracle.co.uk/Article19209.html

Huge head and shoulders pattern followed by rising channel. Very bullish???

As the West suffers under a statist collapse; time to reassess one's views on gold and precious metals?

Is there a better store of value and wealth out there?

Asian stocks and mega cap Western defensive stocks the only other two serious stores of wealth that I can see...


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## j26 (5 May 2010)

A couple of years ago, property was the gold standard (excuse the pun) for generating wealth.

Personally I don't trust the way it's being talked up.


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## ringledman (5 May 2010)

By whom???

Go down your local pub and ask how many of them own gold, and I'm not talking a bracelet they bought for their misses...


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## greentree (6 May 2010)

Gold above €950. Obviosuly the weakening euro is a major cause of this but gold at near 1K an ounce is big news.


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## ringledman (6 May 2010)

greentree said:


> Gold above €950. Obviosuly the weakening euro is a major cause of this but gold at near 1K an ounce is big news.


 
New high in sterling today also. Gold is going to rocket very soon. Only the dollar strengthening keeping it contained so far.

The only real currency out there.


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## Rory Gillen (13 May 2010)

There is no fever like gold fever is what they used to say in the Californian gold rush in the mid 1880s I believe !


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## snowdrop (14 May 2010)

*new euro record again*

gold has just broken Euro 1000 per oz.


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## ringledman (17 May 2010)

snowdrop said:


> gold has just broken Euro 1000 per oz.


 
Think it even hit a high in Swiss Francs!

I wouldn't be adding gold at present, too high a risk/reward over the short term and probably cheaper assets out there to buy.

Nonetheless there is no way I am selling.

[broken link removed]
*



Just how high could gold go?

Click to expand...

*


> May 17, 2010, 03:55
> Posted byJohn Stepek
> 
> Comments (0)
> ...


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## george.shaw (26 May 2010)

Good thread. Interesting article in the Wall Street Journal:
Is Gold the Next Bubble? 
http://online.wsj.com/article/SB10001424052748704792104575264863069565780.html

Great chart showing how gold has not gone parabolic and reached bubble levels yet:


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## j26 (27 May 2010)

george.shaw said:


> Good thread. Interesting article in the Wall Street Journal:
> Is Gold the Next Bubble?
> http://online.wsj.com/article/SB10001424052748704792104575264863069565780.html
> 
> Great chart showing how gold has not gone parabolic and reached bubble levels yet:



I'm really not convinced - one of the comments to that article was very interesting, and I think valid;
_"When a commodity is sold to the lowest common denominator of investor, it's time to start getting nervous."_


Another thing I think about is the fact that gold has no real investment value - it will never generate a return.  the other indices shown are stock markets, based around shares that can generate a return.  Gold has no more value than the psychological factor, and that can change rapidly.  Once money starts pouring back into equities, the price of gold will plummet.


Another issue is to look at the gold price from a longer term view, so here's a 36 year chart;
[broken link removed]
It's looking more like a bubble from the longer perspective.


Finally, the level of price growth over the past decade exceeded the level of growth of Irish house prices (something that was able to create some investment return).  The chart you posted above charting the rise of gold looks remarkably like the Irish property market from [broken link removed] , and you can see the precipice from which that has jumped.


I'd class gold as potentially attractive, but to me the risks outweigh the realistically prospective returns.  I would certainly never consider borrowing to get in to gold, unlike property.


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## Chris (27 May 2010)

j26 said:


> I'm really not convinced - one of the comments to that article was very interesting, and I think valid;
> _"When a commodity is sold to the lowest common denominator of investor, it's time to start getting nervous."_


Currently gold is being offered for sale to "the lowest common denominator of investor", but Joe Public hs not been buying gold. None of my colleagues of friends own gold, and I believe that the ownership of non-jewelry gold by the public in miniscule.




j26 said:


> Another issue is to look at the gold price from a longer term view, so here's a 36 year chart;
> [broken link removed]
> It's looking more like a bubble from the longer perspective.


The gold chart looks a lot different if you adjust it for inflation:
[broken link removed]
http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm


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## j26 (27 May 2010)

Chris said:


> Currently gold is being offered for sale to "the lowest common denominator of investor", but Joe Public hs not been buying gold. None of my colleagues of friends own gold, and I believe that the ownership of non-jewelry gold by the public in miniscule.
> 
> 
> 
> ...



I don't see how that makes things much different.

The first chart is 2 years old - you have to factor in a doubling of prices and a period of deflation in the intervening period.  Gold prices were high in 1983 as the second chart shows, and it's easy to show the real price of a commodity falling from a peak, so the statistical underpinning of the chart is not really sound.
The second chart clearly shows that gold is above its long term average, and the price has risen further since the chart ends in 2009.

Both charts still indicate that gold is currently overvalued.  Bar the oil crises, it doesn't look like gold is a good long term investment, and certainly not at current prices.


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## Chris (27 May 2010)

j26 said:


> The second chart clearly shows that gold is above its long term average, and the price has risen further since the chart ends in 2009.


Yes it is above it's long term average, and has been for a while, but so has the increase in money supply throughout the world, which is what inflation is. The fact that the increased money supply hasn't yet resulted in huge increases in consumer prices is the main reason I believe gold still has a huge upward potential.



j26 said:


> Both charts still indicate that gold is currently overvalued.  Bar the oil crises, it doesn't look like gold is a good long term investment, and certainly not at current prices.



I disagree, the 80s nominal peak was due to very high inflation. Opinions on the inflation adjusted price of gold differ but range from $2000 to $2500. And the amount of money printing going on now dwarfs anything of the past, making gold very undervalued
Anyway, this is exactly what makes the market, someone is willing to sell what someone else is willing to buy. Only time will tell who's right, I can wait.


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## Heymoney (27 May 2010)

*perth mint certificates, has any done it?*

Thinking of investing in this. Small bit of an inheritance from my father and want to buy a house but not just yet. So I reckon this girl has aboout 6 to 12 months to play about with the loot. I'm in two minds about gold like every body else. Scared that the gold run might be topping out but equally persuaded it may have a bit to go yet. Well that's what all of you gold bugs seem to be arguing anyway.

Eitherway, has anyone put money into the Perth Mint Certs? How quickly can you get out and what was the best intermediary in this country to do it with? Any hidden charges or drawbacks? Do they give you the spot price when you quit? x


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## george.shaw (28 May 2010)

Think GoldCore are the only dealer in the EU for the Perth Mint. Like the gold in my possession (possession is 9/10's of the law !     and have bought gold Austrian Philharmonics, 1 ounce - legal tender euro coins, from them and good service and prices.

The Irish Independent had a good article on this the other day:
For a safe haven, there's not much that's as good as *gold* these days
Irish Independent - Thomas Molloy - ‎May 27, 2010‎
*...* Muenze Oesterreich AG are among the best. The mint's *Philharmonic* is the best-selling *gold* coin in Europe and Japan and can be easily bought and traded. 
[broken link removed]


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## JEON50 (28 May 2010)

I am probally missing the whole plot here. I was a major buyer of copper, and though retired know, the first thing I do is look at the metal alerts on the   What I can tell you when the market is not steady, traders turn to metals. I have seen copper drop 60% in 3 months in 2008, at the moment it is at an all time high because of safe trading, it is over valued by 50% based on demand, and on the brink. When metal fall, its inpossible to know when to buy, as the estimate is 50% in 2010, but it could be 70% 2006 levels


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## george.shaw (28 May 2010)

Think you are missing the point - thread is about gold and not copper. 

Copper is a base metal and an industrial metal.

Gold is a precious metal, a finite currency, a safe haven asset and a store of value being bought by pension funds, central banks etc. etc.

Some good articles in the FT and Irish Indo lately:
PERSONAL FINANCE *Merryn* Somerset Webb
Financial Times - Somerset Webb - ‎May 21, 2010‎
You probably think *gold* is in a bubble. After all, it hit new highs in dollars, pounds and euros this week – and has pretty much *...* 
http://www.ft.com/cms/s/2/d6a8da26-64fd-11df-b648-00144feab49a.html


javascript:void(0)

*Gold's* no bubble - here are some real bubbles



MoneyWeek (blog) - Merryn Somerset Webb - ‎May 27, 2010‎
There is a long way to go before *gold* hits the kind of levels that should make you want to sell. By *Merryn* Somerset Webb, May 27, 2010 By Dominic Frisby, *...* 

ECB rescue package is guaranteed to dent investors' portfolios


Irish Independent - Thomas Molloy - ‎May 13, 2010‎
Without mature bond markets, most money flowing to Asia will end up in stocks and property, so Sharescope agrees with Money Week editor *Merryn* Somerset Webb *...* 

For a safe haven, there's not much that's as good as *gold* these days javascript:void(0); 

Irish Independent - Thomas Molloy - ‎May 27, 2010‎

[broken link removed]


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