The Gold thread

I agree there is no currency risk in gold. The risk to gold is that central bankers might act as adults and impose some financial discipline on what are clearly bubbling asset markets. Crunch time is approaching. Growth seems to be slowing while inflation seems to be rising. If the CBs duck this and "Go for Growth" gold could expode upwards.
On the other hand if the ECB went 0.5% in June and the fed went 0.25% at their next meeting and came out with a hawkish statement and the Japanese went 0.25% sometime over the Summer, gold would take a hammering.
The point is it is not inflation itself that is the problem it's the perception that CBs are ducking their responsibility. They are under enormous political Pressure. Has anybody ever heard of a (successful) politican anywhere in the world calling for higher interest rates?
Regards
 
And yes generalised inflation is good for all hard assets-- this would include property.

Normally.

That is, if those holding large mortgages can manage with double digit interest rates, can win wage increases in line with broader inflation, nor lose their jobs in any macro turbulence. Rem: it was WAGE inflation that eroded the real cost of mortgages taken out in the 70s.

Investing profitably in gold may mean you can subsidise/offset the mortgage.
 
walk2dewater said:
See my gold thread. IMHO inflation is out of control, rates will have to go much much higher
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Just had a look at your Gold thread. I can see you backing gold on the argument of inflation heading north, but I don't really see you justifying the inflation claims.

Not knocking you, just interested in hearing a bit more about why you think inflation is way ahead of the official figures.
 
conor_mc said:
Just had a look at your Gold thread. I can see you backing gold on the argument of inflation heading north, but I don't really see you justifying the inflation claims.

Not knocking you, just interested in hearing a bit more about why you think inflation is way ahead of the official figures.
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My post No.59 sums it up.
 
Would anyone like to try to interpret the drop gold suffered in the last two weeks..? Some profit taking perhaps..?

WTTW - I believe you mentioned something in & around the $550/oz mark for gold & that you would 'back the truck up' at that price. Are you saying you think Gold will fall and then 'bounce' off $550 or what did you mean..?
 
Does anyone know what are the tax implications in Ireland when converting Gold holdings back to euros?
 
gold and especially silver have come down significantly in price over the last 3 weeks. Do people think they have much more to fall. There has been an awful lot of speculation in the silver market especially
 
I reckon $550 is a good entry point ~ I see that rabodirect are offering unit trusts at cheap prices ~ they have two of particular interest, "world gold" and "world mining" ~ they also allow small periodic purchases
 
I'd be surprised if gold falls that low to be honest, I think it'll dip to just under €600 before pulling up. Given that inflationary fears haven't gone away, prices of $700 or more an ounce wouldn't be surprising for next year. If you're keen on gold, I reckon the "averaging" strategy mentioned by walk2dewater earlier in this thread is a good way to get in.
 
walk2dewater said:
Gold's 200 day moving average is ~US$550oz. I will be backing up the truck at that price. When? Probably August, September.
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Well WTTW we're almost down to $550 - have you got the truck ready..? ;)
 
Having managed to get my previous comment spectacularly wrong, I'm now thinking it will fall even further. Probably to around $520 but maybe even as low $500.

I'm bullish about the long term prospects of gold and I think a fantastic investment opportunity is starting to present itself.
 
ivuernis said:
Is that really possible though? Especially in Ireland?
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It must have been at some time, if inflation was 15% for three years and interest rates rose to the same you would have to be getting similar increases or else...
 
My own humble opinion on gold is:

As long as there is widespread belief that interest rates are going higher, perhaps even sharply higher, then gold is less important as a hedge.
 
owenm said:
It must have been at some time, if inflation was 15% for three years and interest rates rose to the same you would have to be getting similar increases or else...
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I don't think it's possible for wages in Ireland to rise significantly higher to offset higher inflation. From a cost competitiveness point of view we are already slipping way down that league.

Stagflation? Anyone?
 
Remix said:
My own humble opinion on gold is:

As long as there is widespread belief that interest rates are going higher, perhaps even sharply higher, then gold is less important as a hedge.
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Yes, in times higher interest rates gold is less important as cash would become king but interest rates aside for the moment as they are still low by historical standards wouldn't one think with the markets taking a beating at the moment that gold would actually be increasing in price as people look for a safe haven and also because gold generally moves in the opposite direction of the stock markets. It's obvious that gold is tied up with the general bull market in metals and perhaps things are not yet bad enough for people to see that gold is the ultimate store of value in times of uncertainty. However, if the stock markets are in the beginnings of a bear cycle wouldn't gold at some point detach from the general market trend and head upwards?
 
ivuernis said:
Yes, in times higher interest rates gold is less important as cash would become king but interest rates aside for the moment as they are still low by historical standards wouldn't one think with the markets taking a beating at the moment that gold would actually be increasing in price as people look for a safe haven and also because gold generally moves in the opposite direction of the stock markets. It's obvious that gold is tied up with the general bull market in metals and perhaps things are not yet bad enough for people to see that gold is the ultimate store of value in times of uncertainty. However, if the stock markets are in the beginnings of a bear cycle wouldn't gold at some point detach from the general market trend and head upwards?
Click to expand...

I still think US$550oz is a good point ~ I have been averaging into 3 precious metal mutual funds (aka unit trusts) at $100 each per week. I'm going to bump that up to $200 as gold drops lower, and perhaps make a few big lump-sum purchases of actual bullion in late summer.

The markets are exceptionally volatile and chaotic (gold down, while inflation fears up? huh?), stay in CASH until this phase passes. Nothing real has changed since early May. What we're seeing is a purely financial correction. Some say the hedge funds are moving in and out in response to higher interest rates. Whatever. Economy-wise it's still the same macro story as before. If you believe that we're in a bout of very strong price inflation, and central banks can't/won't raise rates high enough, then gold and gold shares are even better value than before this correction.
 
Oh, and I think gold shares, say as per the HUI index, are due a big bounce, maybe this week (or today even). Actual gold price will probably bounce around US$550 like a yo-yo. Dems mye perdictions!
 
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