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Jeremy Soana said: "Hi all should I be buying gold futures given the strength in the market and possible inflation or do you think the market will reverse?"
ratAphooey said: "thats the million dollar question"
Harry said: "Gold and HOLD!
My fellings on GOLD...own some stock.
The commodity price is tickiling a high. Back up the truck as the stock prices fall. But long term seems like the magic stretegy for this commodity."
LongArm said: "[QUOTE=Harry]But long term seems like the magic stretegy for this commodity.[/QUOTE]
Tell that to the folks who bought gold in 1980...and still don't have a gain. It hasn't been the best long-term investment. It IS a good diversifier, though."
AlfredSokol said: "Gold is great when the nuclear winter hits."
Harry said: "I got out of GOLD.
It tends to do better with higher inflation and a weaker US dollar, both of which we don't have. Inlfation appears in check and foreign markets are raising interest rates giving our dollar nudges upward.
I sold at a loss and will find another investment that I can have more confidence in...?"
lil dickie said: "I would rather buy a goldmine. But even those can lose money."
newinvestor123 said: "We don't have higher inflation according to the government, but ~15% M3 growth per year in nearly every advanced economy in the world will catch up to us eventually... I'll spare you the 'fiat money is doomed to failure' bit, and remind you all that most gold miners can extract gold from the ground at a cost of ~$300/oz. Even if gold does not go up (like I think it will), it's probably not going to go DOWN any time soon, which means hefty profits for any gold company with sufficient resources and limited hedging. It's risky, but the potential payoff is attractive imo. I'm long AUY and UXG, and will pick up some more NXG below $3 and CDE below $4."
ratAphooey said: "Why arent these mining operations getting more efficient?"
newinvestor123 said: "With the same technology, there is only so much efficiency you can wring out of a mining operation (or any other operation, regardless of the industry). Mining is very labor and energy intensive, and without significant improvements in technology, inflation and increasing energy costs negate increasing mine efficiency, and if costs increase fast enough, overhead can even drive the nominal cost of mining up even as the mine's efficiency is increasing. It's a race against time, basically, and as we have all seen, in the past 5-10 years, commodities prices across the board have exploded, meaning higher overhead costs for miners. In real terms, most miners have improved efficiency, but in nominal terms, costs have remained relatively static or increased."
AlfredSokol said: "Mines are always going to be capital intensive too."
ratAphooey said: "But when they hit big....hoo boy!
:grin:"
Harry said: "[QUOTE=newinvestor123]We don't have higher inflation according to the government, but ~15% M3 growth per year in nearly every advanced economy in the world will catch up to us eventually... I'll spare you the 'fiat money is doomed to failure' bit, and remind you all that most gold miners can extract gold from the ground at a cost of ~$300/oz. Even if gold does not go up (like I think it will), it's probably not going to go DOWN any time soon, which means hefty profits for any gold company with sufficient resources and limited hedging. It's risky, but the potential payoff is attractive imo. I'm long AUY and UXG, and will pick up some more NXG below $3 and CDE below $4.[/QUOTE]
It could go down...after some dumping on the down trend I'm fishing for bottoms and new bottoms. We're in a deflationary period. Long will pay off :)...deflation will present bargains."
newinvestor123 said: "[QUOTE=Harry]It could go down...after some dumping on the down trend I'm fishing for bottoms and new bottoms. We're in a deflationary period. Long will pay off :)...deflation will present bargains.[/QUOTE]
I meant it won't go down far... :whacky044:"
darsh999 said: "Well can`t say anything right know coz it depends upon the price of dollar and there will be flactuations used to occur in the price of dollar ."
lb19984 said: "its good a good play as long as the fed keeps cutting (which i think they will)
I am a bit unsure what happens when the rest of the world starts to cut rates... but in any case i think you are pretty safew going long gold and shorting the USD untill it reaches 900 an oz.. i think they fed might cut on oct 28th or 29th whenever the next time they meet is... if so get ready to see a serious spike up $50+
if they wont cut it might go sidways a bit untill they do.
IMO that is"
newinvestor123 said: "[QUOTE=lb19984]its good a good play as long as the fed keeps cutting (which i think they will)
I am a bit unsure what happens when the rest of the world starts to cut rates... but in any case i think you are pretty safew going long gold and shorting the USD untill it reaches 900 an oz.. i think they fed might cut on oct 28th or 29th whenever the next time they meet is... if so get ready to see a serious spike up $50+
if they wont cut it might go sidways a bit untill they do.
IMO that is[/QUOTE]
What makes you think the rest of the world is about to begin cutting rates? From everything I've read, the rest of the world is worried about inflation, and is raising rates.
But I agree with the rest of your statement."
lb19984 said: "i am not completely sure but one scenario could be that since the US dollar falls and everyone starts to purchse things from the US they will produce less causeing them to have a trade defecit or problems inthe long run. If they cut their inflation starts to go up and everyting is balanced again.
im not 100% sure yet i am tring to figure out why exactly this would happen but thats what i think will happen.
I know that if the US was lifting rates other countries would start to lift rates aswell because otherwise that countries investors would trasfer money into our banks for the higher rates on wquity. And by buying up the currency they would devalue their own currency and push up ours."
newinvestor123 said: "You're looking too far ahead into the future. Nearly every other country already is raising rates to soak up the sloshing pool of liquidity, created by most of those same governments when they create money at better than 10% a year, and their GDP grows nowhere near that fast. Money growth - GDP growth = Inflation. The FED, however, has engineered a nice little situation with which to cut rates at the same time everyone else is raising, to the detriment of the dollar.
I don't think they'll cut rates again this month, but I do think they will cut rates again by the end of the year.
Like I've said numerous times here, a weak dollar is good for the economy, and it enables our ridiculous government to pay off their equally ridiculous debt at a much lower rate. The FED wants a lower dollar, but the question is: How low? They don't want to trigger a fire sale (which I still think is highly unlikely), but they DO want a weak dollar, for whatever reason."