It's going to consolidate soon imo. How much of a consolidation off the trend support crack not sure of though. But something maybe similar to 12-04-09 in gold imo

Ok, adding to this, I have enough spare monies to either get a 1/2 ounce of gold now, or an ounce in 2 weeks. If I wind up getting the 1/2 ounce coin now, I probably wind up buying another 1/2 ounce in 2 weeks anyways. Obviously a 1/2 ounce coin haa a higher premium compared to an ounce, but with the ridiculous price increases of the last month, if I wait 2 weeks I might wind up paying the same amount or more anyways. Of course, gold might also drop a bunch and then I would get it for cheaper. Any suggestions? I would be getting either the 1/2 ounce krug or the 1 ounce krug from apmex.

If everything else goes to hell, I hope you're right.



Let's say (hypothetically) that a couple of the major currencies- USD and EUR, through various forms of monetization, ridiculous debt loads leading to defaults (or more monetization) fail as a store of value (or as a store of real purchasing power) over any reasonable term. Some others, say CNY, JPY, CHF, whatever (since this is hypothetical) are not mismanaged. The world starts using these currencies (like Zimbabweans just started using foreign currencies for everything in place of the ZWN) instead of the imploding USD and EUR. Obviously gold is >> holding USD or EUR while this happens, since it retains real purchasing power (posting big nominal gains and probably some smaller real gains) while the currency is losing it, but the same can be said to a first approximation for physical copper, oil, or anything else whose use is functional (although barrels of oil are harder to store LDO).

Once this path is clear- the world converting to another currency (or an entirely new non-commodity-backed currency, whatever) that is actually functional (for now) as a store of value, what happens to gold?

There's no particular reason to keep it in large amounts- CNY/CHF/JPY are serving the function and they're more liquid. There's no particular reason for people to buy more in the short term. The real price should take a massive dump here relative to copper/oil/etc. I'm not saying it's a bubble (in terms of real purchasing power), or that it's wrong to buy/own NOW even if it does turn out to be a bubble, but I see real scenarios where it can take a massive dump in the future if the world converts to something other than PM-backed.

This is what gold is - a store of real world value. Gold is not really used "functionally", which good thing for it being a store of value vis-a-vie other options.

exactly.

Sure, but the nominal price of gold has quadrupled in the last 8 years. The purchasing power of cash has not gone down 75% . With $1300 today, I can buy far more commodities today than I could with $300 8 years ago. Gold has clearly appreciated massively vs. a copper/oil/lead/zinc/aluminum portfolio over that timeframe. Why? I would expect that the relative gain here is largely because of increased demand for it as a store of value in the face of fiat uncertainty. Now what happens if the current bout of fiat uncertainty dies down and gold doesn't remonetize? Gold should take a dump relative to other commodities since demand for it as a store will fall.

You're sorta comparing apples to oranges but that's another matter.

The big idea I think we can agree on is that gold has appreciated in purchasing power terms relative to a fiat currency like the dollar in recent times.

Exactly - the primary demand for gold is monetary, and this is what distinguishes gold from other "more commodity like" commodities. Which is why if the dollar was well managed (assuming it could be so), gold would not be doing what it is doing.

But I think we got into this discussion because of the assumption of the opposite occurring - that the dollar would die, but that also somehow gold wouldn't monetize? I believe you wrote:

That's what i thought we were discussing - a situation in which the dollar dies but gold doesn't monetize and we just have another new fiat reserve currency? Which is why I asked for clarification of what you meant.

And then we sorta got onto a tangent not about a new fiat currency v. gold as a store of value if the dollar fails (which is what i thought we were originally addressing), and instead seem to be on a tangent about gold v. other physical commodities if the dollar fails.

===========

The big point is that, hypothetical scenarios aside, I am not aware of a reason to expect a new fiat currency to simply appear and replace the dollar's functionality.

That we could theorize it occurring is one thing, but the discussion is well past that point, and is focused on what will or is likely to happen.

The reason why I expect a free gold market to emerge is because I don't think that the existing monetary reserve structure can be continued in a different from.

So I sorta feel like we are backtracking here - the point you are making about a "hypothetical replacement currency regime" is fundamental to why I hold the expectations I do about gold.

i bought ~40oz of silver yesterday, which was just about at a 2-year peak.

lots of people selling yesterday as i stood around and bull****ted. thought to myself, 'i'm probably doing it wrong here', but then thought i ain't selling it anyway, so who cares.

buy it now, buy another half in 2 weeks. if you can predict what's going to happen in that short of a term, you wouldn't be buying only halves right now, right?

funny how easy it is to get melt price lowered on 90% now that it's so high.

'wellll, melt's at about 15.8x face right now'

'yeah, you and i BOTH know you're not charging that..'

Agreed- that's why I own PMs and I have no current short-term plans to unload any.

Right.

Well, you have to benchmark the value of gold against something to talk about real purchasing power. Saying ZOMG my gold is worth 100000000000000000000000000000 zimbabwe dollars doesn't really mean anything without the prices of other things to compare that to. I picked the purchasing power relative to functional commodities as a proxy for general purchasing power because it's easy to find charts, although I don't think you're getting a different answer unless you compare to something very specific. Gold hasn't just appreciated in dollar terms (which may or may not be an increase in real purchasing power), but it has also appreciated significantly relative to "the average of all other stuff". 1oz of gold now gets you more usable stuff than 1oz of gold 8 years ago.

Yeah, I'm not saying that such a thing will happen, or is even likely to happen. My post is more along the lines of.. if this is looking like the probable path, it's time to unload gold, right?

Yup. I'm not sure its possible, but if it hypothetically were and this outcome was probable, than yup.

$1319 this morning. This rally is stunning.

the seer guy supposedly wrote that a long time ago

link

pretty awesome that nonfict and i have been having a convo via pm about buying gold because we didn't want to clutter up the 'still time to buy gold' thread.

I don't know where to put this, but I thought it was interesting. I admit I don't know much about gold or silver.

http://www.economist.com/node/17151109

Why did they pick some random date in 2008 to compare against gold? OH yeah, because silver had a massive pullback and gold had a minor pullback (relative to silver).

You can pick dates within a few months of the one they choose to show that gold has appreciated 30%+ over a period where silver has gone up <10%. Silver has been crazy volatile- don't listen to people who cherry pick their dates.

$1321 at the open tonight in Asia.

Hey there $1330. Silver also well over $22/oz now.

sick day today

Awesome, right after i bought my 1st golds

pshhhhhhhhhhhh


1330 is so 4 hours and 10$ ago

I knew I shoulda bought more silver yesterday on that "dip"

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I was gonna put a large amount in silver at like, 11.5 (sterling). It is now 14.3.

Anyone see a short-term drop?

For once I am actually seriously pissed off!!

are you guys buying the physical metal in silver too rather than the paper silver? buying something like 50k worth of silver would be rather hefty

I buy physical gold and unallocated silver. You save tax on silver in Britain. An unallocated er silvaccount is fine with the big gold and silver suppliers. I am not sure about gold though. There are stories of plenty of sales where the physical might/does not exist. Always take your gold in bullion.