If you think the government and the banks are manipulating the price of gold to keep it low, why on earth do you want to invest in it? Won’t they simply continue to suppress the price so that your investment will never achieve its true worth?
I bought most of mine around $250-300 per ounce and sold most around $1750. I kept some just because I like some of the coins; the art of them. My personal plans don’t include getting any more unless it dips/drops below $400 again. (I don’t trust my luck enough to think I can hit three big wins with metals in my lifetime)
@ftg: if they had bought, USD or Gold rather than sony TV or Tide laundry, they could have left the country and settled outside.
I guess Upto a limit, they may allow (say till 1 kg) to hold physical Gold . Beyond that limit, they may not allow. But this would be a strong negative for price of Gold.
Because This is give away their thinking and Gold price will skyrocket. My ques. is why don’t they completely sell off.
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Is silver also taxed like gold in India? Do you believe the price of silver is also manipulated?
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I don’t have any idea. I know investors (worldover) track gold to silver price ratio. it was near 80:1 I think (which is quite high) and would suggest silver is even more undervalued. But I think silver has risen more than gold recently. Personally as I said, I dont want to be holding any ‘precious’ metal but logic seems good for owning some of it.
Gold will not exceed it’s high point of +/-$1850/ounce in US dollars. Sure. Some time in the future. Just like gasoline in the US might get to $5-6/gal, in the future. But not this year or next year.
I’ve watched it since 1973.
It has two components to its price–as a commodity and as a hedge in times of trouble.
Currently, it’s about $1320/ounce US. This is about what it’s worth. In ain’t going higher this year or next. Sure, it could go to $1400/ounce US. That ain’t money.
I’d short it to $1200/US before I’d buy contracts on $1400. /US.
Only fools in the US own silver as an investment. They own “poor man’s gold.”
The world doesn’t buy silver as an investment or hedge. They buy gold.
Silver has never topped about $50. ounce US. It did that in 1980, then again 30+ years later. Great when your investment takes 30 years to mature. What have you lost in the mean time?
And this time at least you have truth on your side. U.S. government gold reserves are about $345 billion by market value. The $11 billion quotation is based on a statutory book price of $42.222/oz.
However I’m not sure what your “couldn’t this also suggest that gold may be undervalued ATM” means.
As others imply, the price of gold will most probably either go up or go down — quit your day job if you’re certain which. The price of gold will go up if/when the U.S. dollar starts depreciating rapidly, but this is unlikely unless utter lunatics take over the U.S. government (IOW about a 50-50 chance :o ).
Several countries are not maintaining constant gold reserves. They are selling them off. Most notably Germany. This is said* to be part of the decline in the price of gold a few years back due to the extra gold on the market. A couple months ago, Canada announced it was getting rid of all its gold reserve. (China, just to be contrary, is increasing its reserves.)
The cost of storing the gold makes no sense when the usefulness of the reserve is quite questionable.
As usually, take such market analysis with a huge grain of salt.
IKR. Couldn’t this be the second big reason for being positive on Gold (the first being continual QEs)? That so much gold of the west has moved to the east (India and China mainly), and the east doesn’t sell, it only buys, that now west also starts valuing its remaining gold?
No kidding. I don’t even know why (apart from tradition) it’s so highly valued. It isn’t very useful. it’s too soft to be a structural metal, and its primary industrial use (corrosion-resistant terminals/connectors) requires very little.
IMO, gold is almost useless and a fair price would be less than that of copper. Without copper, we can’t have electricity. What happens without gold? Preppers and doomsayers would just hoard something else.
Sure, but it’s not inherently special in any way. All commodities have value. Gold is just one more option that a savvy investor has- stocks, bonds, commodities, futures, etc…
The main reason gold’s popular is because historically it was THE measure of value, in lieu of more sophisticated monetary and valuation systems. But even then, it was merely pretty and scarce, while not being particularly useful.
The number did look oddly small to me, in retrospect. Thanks for the correction.
Agreed. Seems to me that Indian consumers buying up more gold than any other country in the world at the moment is more of a cultural phenomenon than an investment stroke of genius.
I see (Though this news article is nearly 2.5 yrs old). Chinese people themselves buy gold (increasingly more) as investment from what i am reading on the web.
It’s important to distinguish Chinese businesses (and people) buying gold from the PRC itself.
5 years ago or so the Chinese businesses were dumping gold. Now they’re buying it again. The reason has nothing to do with gold being the best investment ever to buy and hold onto. It’s business. Sometimes there’s a push to buy. Other times a push to sell. Are the Chinese smarter/dumber than us? Who knows.
BTW: The total market capitalization of all the companies listed on the NYSE is something like $14 trillion. That’s just one of our markets. NASDAQ companies are merely (!) $4.8 trillion. Throw in the other US exchanges, etc. (And I don’t want to even think about hedge funds and such.) Compare that to the amount of gold (public and private) help in the US and someone please explain to me why that’s such a big deal to people. Why? Good grief. Why not focus on something like land? You can build, grow crops, etc. on land.
If gold were as cheap as copper there are all sorts of things we could do with it. Gold is much more malleable and ductile than copper so you can make ultra-fine components out of it, it’s also highly resistant to corrosion. Gold is used extensively in electronics, and if it were cheaper we’d use a lot more of it.
Back in the day the Manhattan project borrowed 13,000 tonnes of silver from the US Mint for the electromagnetic separators since copper was in such short supply during the war. After the war they melted it all down and sent it back to the mint. Nice to have a secret stash of a strategic mineral like that.
If gold were a lot more abundant we’d find all sorts of ways to use it. Heck, cheap enough and it would make a better bullet than lead, it’s a lot denser. And you could use gold shot for hunting ducks without toxic lead accumulation in wetlands.
That gold itself is, in some ways, “useless” is ironically one of the reasons it was so useful historically as money, for thousands of years. And that’s the proper way to look at it (as a currency, or form of money) like the Yen or Pound, certainly not a commodity. Oil and wheat, for example are are commodities, but they are consumed, though conversely virtually all of the gold ever mined throughout human history is still available.
People call it a commodity but it trades on the currency desk, symbol XAU. I don’t pretend to understand foreign exchange or currency trading per se, but apparently it can only be traded against the American dollar. In any case it is not an investment, simply a form of easily traded wealth in an extraordinarily compact, portable form. In that sense it is a speculation, or betting on a currency. That’s not to say one can’t make a serious profit (or get blowtorched) but it is not investing in any rational use of the term.
One of the standard boilerplate arguments against owning gold (no other asset seems to invoke nearly the visceral response, but I digress) is that “it’s heavy”, as if hauling around those clanking bars is a common problem. Maybe if one is oligarch wealthy. The truth is many ordinary people could probably convert their net worth into gold coins and carry them in their front pockets with no one being the wiser. The commissions and spreads are quite low on both purchase and sale and readily saleable anywhere in the world. Personally I think everyone should own at least some gold and silver for a hedge against extraordinary times, and pray to God you never need it.
U.S. government gold reserves are about $345 billion by market value. The $11 billion quotation is based on a statutory book price of $42.222/oz.