The Gold thread

http://business.timesonline.co.uk/article/0,,16849-2174109,00.html

"The [BOEs] comments echoed those made earlier this week when the world’s top central bankers sounded a renewed alert over inflationary dangers, expressing concern that booming global growth could spark an outbreak of cost and price pressures.
In a hawkish declaration after talks in Basel among central bank governors from the Group of 10 leading economies, Jean-Claude Trichet, their chairman, said that "very special attention" was needed over inflationary risks worldwide."

Too low rates for too long = borrow borrow borrow = too many euros and dollars flying around = inflation is back = switch to gold to protect your wealth
 
Seeing as Irish inflation is now 3.8% (and probably poised to go higher), Gold is looking pretty damn attractive right now *lol*
 
To restate my position, inflation is out of control. IMHO official price inflation calculations are absurd.

price inflation calculations have been manipulated so much as to be meaningless. Case in point: Mortgage payments rather than actual property prices are used to in the CPI calculation. This has the perverse affect of pumping "inflation" when interest rates are increased. So the higher rates go, the higher mortgages payments rise, the higher irish inflation. How surreal is that?

I would peg actual price inflation somewhere closer to M3/M4 expansion-- i.e. 10%+
 
walk2dewater said:
Case in point: Mortgage payments rather than actual property prices are used to in the CPI calculation. This has the perverse affect of pumping "inflation" when interest rates are increased.
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I heard this on the radio earlier in the week and shook my head, putting it down to poor explanation on the part of the talkshow host, but now I find that it's actually true. It's insane, it makes no economic sense whatsover and makes a joke of inflation target setting.
 
The market action in the last few days has spooked me. Ive bought some puts on the US indices. Will hold most of my positions in precious and base metals, and energy though

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You could a lot worse than follow the advice of this man.
http://corporate.bmo.com/publications/basicPoints/

Donald Coxe also puts out a weekly (friday) webcast
http://bmoharrisprivatebanking.com/webcast.asp
click thru to listen to his weekly calls.

He's a bit of a wind-bag, so best to read his monthly Basic Points publication to get up to speed with this views.

In a nutshell Coxes advice continues to be:

*Metals, including precious metals are in a long-term bull market.
*So is energy and basically any commodity 'Chindia' needs
*Canadian Oil Sand stocks are a unique asset class and should be bought and held regardless of the wider macro situ
*Recession/slowdown in the US is on the cards, probably this year.
*US dollar is in a long-term bear market
*Stocks of commodity companies have not risen along with the actual commodities-- after the recession/slowdown they will begin their own bull run
*The next 12mths is a window of opportunity to buy into these stocks, i.e. they'll fall in sympathy with the wider market
 
Buying gold is a way of storing value against a devaluing currency, correct? So what's the logic of someone in Europe buying gold in USD? If the value of the dollar falls, you aren't protecting your wealth because you're still subject to the currency risk. I do think the value of the dollar will fall, but I'm not interested in buying gold because I think the long term position of European stock markets is quite strong, and I see no reason to convert to a falling currency to purchase commodities.

Commodity companies an interesting prospect, however.
 
Foxtrot said:
Buying gold is a way of storing value against a devaluing currency, correct? So what's the logic of someone in Europe buying gold in USD? If the value of the dollar falls, you aren't protecting your wealth because you're still subject to the currency risk.
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See post No.13. Gold is a "currency", and it's appreciating against all the paper currencies. Doesnt matter what you exchange for it.

Ask yourself how much gold you'd need to buy the same house in Ireland this year versus last? Even with the continued mania in Irish property, the answer is "a lot less".

Alternatively, how much of anything does 100oz of gold get you today versus a year ago? Answer "a lot more"

The international markets are waking up to the debasement of paper currencies and are forcing a "gold standard" on the central bankers.

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How to go about getting exposure to this asset?

For Irish investors I'd suggest opening an account at Internaxx, then start buying into a precious metal mutual fund, also buying into the ETF on LSE or New York. Also pick up some bullion at www.gold.ie. "average in" on a regularly, weekly, monthly basis.
 
Howitzer are you a moderator, webmaster here?

if not, what's with the sniping? I gather you don't like what Im saying, cant form alternate opinion, cant debate, so have to sniper from the long grass? If so, sad.

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I have no connection with that site. I refer to gold.ie as they are the only source of over the counter bullion in Ireland. Neither have I any connection whatsoever with internaxx, I just recommend them as the best value internet broker available in Ireland.

If mentioning specific brokers, dealer etc is against mb rules, my apologises to the webmaster.
 
Just asking.

Due to gold being off the investment radar for so long I've no basis for where to place a true value on it. I only invest in stuff that I have a very good understanding of and don't think I'll really be able to invest in gold for another while, but it does appear to have returned as an investment class worth considering.

As such when someone is giving advise, either positive or negative, I find it instructive to know what their interests are in the matter, if indeed they have any.

I'm not sniping, I'm just looking for clarity for my own benefit. The fundamentals behind the true value appear to be quite complicated and open to various interpretations. I still couldn't tell you what a top or bottom value range could be.
 
Gold's 200 day moving average is ~US$550oz. I will be backing up the truck at that price. When? Probably August, September.
 
Does anyone know of gold ETFs available through Irish brokers and if not, how one would invest in them? Have skimmed www.gold.ie. It seems that unless you can invest in a fund you must either get a lump of gold physically delivered into your possession (I don't fancy keeping a valuable object like that knocking about the house) or else pay charges to someone to store it, eating into the value of your asset. Any alternative ideas?
 
There are gold ETFs sold on the NYSE, LSE and Euronext markets. You need to ask your broker whether they will purchase them on your behalf. Alternatively, you need to open an account with an on-line broker that will allow you to purchase on these exchanges

I don't know if it breaking the rules to nale the ETF ?

NYSE - Streettracks Gold, code GLD
Euronext - Lyxor Gold Bullion, code GBS
LSE - Lyxor Gold Bullion, code GBS
 
Note that in all cases, you will have a currency risk and inflation. All of these ETFs track the gold price in $/oz - so as $ depreciates, so those your investment unless gold price rises to compensate. The inflation risk is that gold will not rise to cover inflation.

Depending on the period you look at, gold has been a great, OK, bad or completely hopeless investment over the last 40-50 years.
 
jpd said:
Depending on the period you look at, gold has been a great, OK, bad or completely hopeless investment over the last 40-50 years.
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Exactly, gold has been hitting 25-30 year highs recently. If you bought in the last 2-3 years you would have made a lot of money but if you bought 25-30 years ago your investment has just regained its original value and in the interim you would have lost a significant amount of money in real terms due to inflation.
 
Gold is rising because of inflation. Inflation driven by excessive money creation on one hand, and cost inflation by the scramble for resources, metals, energy, etc. by 'Chindia' on the other. Just like in the late 70s the central banks won't slam the door on inflation until it's already out, and they will have to raise interest rates to 1980s levels to get inflation under control. And under control they must, or else it's bye bye the world as we know it...

The fear of inflation, i.e. fear of having your wealth robbed, has just started, hence the run on gold has just started.
 
Yea I agree with the last posting. I have been reading a lot about it over the last few years. It appears that all assets go through periods when they are in fashion and out of fashion. Gold was in fashion up to 1981 but then alot of people got burnt by it for the next 20 years. It has now been rising since 2001 but it has really only become fashionable in the last year as the mainstream media have started to focus on it. Many people are saying that it is due for a big correction and some are even comparing it to the technology bubble. However it is no where near that yet. It is interesting that gold and silver also suffered big corrections in 2004 with silver dropping from $8 to under $6. This correction attracted virtually no media attention. However when silver dropped recently from $14.40 to just over $11 some commentators were saying the bubble had burst. However it seems to confirm more that it is coming more and more into fashion as its price moves are drawing more and more media attention.
 
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