Gold Investment Thread

NoMoreTO

Ostrich
The price of Gold reached all time highs in 2020, many predict it will break these highs in 2021-22.

It is considered a safe haven in times of economic turbulence, high inflation, or when the bubble "pops".
It is what governments and central banks stack in their vaults.
Gold can be held on your person, and was considered a centrepiece of a portfolio of 10% up until recent years.

It's price in comparison to equity, bond markets is quite low. An event with a sharp market correction

gold_30_year_o_usd_x.png

This chart is telling, in the 1980s when inflation ran wild, gold was clearly a superior investment. In the 5 years following the Financial crisis it also performed incredibly well.
Gold-vs.-Stocks-Long-term-Price-Chart.jpg


An interesting video I am watching tonight regarding the current situation. Frank Giustra has founded 4 companies, including Goldcorp and most recently Aris.

 
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AntoniusofEfa

Kingfisher
I believe that the big banks (especially JPM), and central banks have bought enough of the stuff, therefore they allow it to reach all times high.

I would like to bring up a point: there was never in the world a situation in which all governments have printed an obscene amount of money simultaneously. Gold and silver coins, as well as gold and silver based digital tokens (see kinesis) might just become a viable exchange commodity in a world where all the worlds currencies are massively inflated.
 

NoMoreTO

Ostrich
I heed the words of George Gammon:

Whenever you stumble upon a large stack of currency units, your yearly payroll, etc., take 10% of that and turn it into gold - as insurance.

I would not call gold in itself an investment.
Fair Point. It is first and foremost a store of value

I believe that the big banks (especially JPM), and central banks have bought enough of the stuff, therefore they allow it to reach all times high.

I would like to bring up a point: there was never in the world a situation in which all governments have printed an obscene amount of money simultaneously. Gold and silver coins, as well as gold and silver based digital tokens (see kinesis) might just become a viable exchange commodity in a world where all the worlds currencies are massively inflated.

Banks and Governments are still buying it.

I heard that Chyna likely has more Gold now than the Federal Reserve. If they were to seek currency stability or to win the currency war they could simply have an auditor come in and look at their Gold, then peg their yuan to the gold. But I don't see them doing that anytime soon.
 

Mr.S

Pigeon
I don’t believe in buying gold. If you buy gold on the stock exchange you’re basically just paying a guy who has a vault full of gold to say you’re entitled to a portion of it. How do you know he even has it? People on Wall Street have been lying about these sorts of things all the time. Someone once told me that some of the US gold reserves are held in a building right next to a big bank and there’s tunnels beneath to shuffle the gold around for ‘fractional reserve gold’, but who knows if that’s true. Anyhow there’s a lot that can go wrong. Who even cares about gold anyways? It’s just yellow metal that materialistic people enjoy. It’s value is directly linked to materialism, so in theory as people become more Christian the desire for gold should go down. What happens when there’s a cyberattack and we lose the data telling us who has claim to what? Probably people in the inner circle will just take it

Now suppose we find ourselves in a dire financial crisis with devastating effects. I think that if the economy ever collapses to that extent, you’d be much better off storing purchasing power as ammunition. Who cares about gold when society is chaos.

As for the need of a transacting tool, I think Bitcoin is a better alternative, with with a few silver coins for in person transactions.

Wealth is a fleeting thing. Store what you need to live, invest what you can to grow, and be prepared to lose that which you don’t need.
 

typtre

Robin
I don’t believe in buying gold. If you buy gold on the stock exchange you’re basically just paying a guy who has a vault full of gold to say you’re entitled to a portion of it. How do you know he even has it? People on Wall Street have been lying about these sorts of things all the time. Someone once told me that some of the US gold reserves are held in a building right next to a big bank and there’s tunnels beneath to shuffle the gold around for ‘fractional reserve gold’, but who knows if that’s true. Anyhow there’s a lot that can go wrong. Who even cares about gold anyways? It’s just yellow metal that materialistic people enjoy. It’s value is directly linked to materialism, so in theory as people become more Christian the desire for gold should go down. What happens when there’s a cyberattack and we lose the data telling us who has claim to what? Probably people in the inner circle will just take it

Now suppose we find ourselves in a dire financial crisis with devastating effects. I think that if the economy ever collapses to that extent, you’d be much better off storing purchasing power as ammunition. Who cares about gold when society is chaos.

As for the need of a transacting tool, I think Bitcoin is a better alternative, with with a few silver coins for in person transactions.

Wealth is a fleeting thing. Store what you need to live, invest what you can to grow, and be prepared to lose that which you don’t need.
It is true there may be worse concerns than gold in a society of chaos, and if you think this is where we are headed there are better things to hold than gold. Like ammunition, non-electric powered tools, fine knives, alcohol, etc - items that hold almost no value today might thrive in a society of lawlessness.

You claim gold is materialistic yet you suggest Bitcoin and silver coins? Is there a difference?

Gold is a concentrated form of wealth, it is money, and accepted all over the world. So should the confidence in the currency you use collapse, and if we do not enter the cashless society Illuminati dreams of, there will need to be a time when we go back to a monetary system backed by a finite resource. Historically that has been gold. Physical gold. Unless your new society has become Amish over night.

Buying gold (or silver) on the stock exchange is to participate in the bankster ponzi scheme and you are bound to lose because when the time comes should the metals find their real value and you need or want to take delivery, you will be cash settled by useless currency units because there will be nothing available behind the papers you own. The exception is the Sprott Silver Trust, PSLV, where every paper claim is backed by the equivalent physical metal.
 

C-Note

Ostrich
Gold Member
A number of mining companies, if I understand correctly, give you the option of receiving their dividends in gold (or silver) bullion rather than dollars. They'll mail the bullion right to you. I suspect that they're aware that many of the people who invest in mining companies are using precious metals as a hedge and use the bullion as an investment incentive.
 

AntoniusofEfa

Kingfisher
A number of mining companies, if I understand correctly, give you the option of receiving their dividends in gold (or silver) bullion rather than dollars. They'll mail the bullion right to you. I suspect that they're aware that many of the people who invest in mining companies are using precious metals as a hedge and use the bullion as an investment incentive.
Could you name such a company? This sounds like a very honest business.
 

FrancisK

Kingfisher
Gold Member
I know gold and oil are not the same but when oil went nuts companies invested into new methods of extracting it and the price eventually tanked because of supply. I don’t see the price of gold “tanking” because of its hedge value against the undeniable inflation occurring but still it has made certain mining ventures much more viable now and the supply is increasing, while also it’s not something which can be consumed such as oil.

Food for thought
 

C-Note

Ostrich
Gold Member
Could you name such a company? This sounds like a very honest business.
Looks like it's only two right now that I can find:

1. Gold Resource Corp (GORO)

2. Resolute Mining (RSG)

I can vouch for GORO as I've purchased some shares with them and have done a deep dive into their financial reports to try to make sure that they're legit. I have not given Resolute a hard look. I haven't opted-in to GORO's bullion dividend option as I don't have enough shares with them to qualify, but if I did it would be tempting to elect for it, just for the experience of having a company mail silver or gold to my house.
 

NoMoreTO

Ostrich
I know gold and oil are not the same but when oil went nuts companies invested into new methods of extracting it and the price eventually tanked because of supply. I don’t see the price of gold “tanking” because of its hedge value against the undeniable inflation occurring but still it has made certain mining ventures much more viable now and the supply is increasing, while also it’s not something which can be consumed such as oil.

Food for thought
Agree 100%.

But the mines take time to come online. Just like 2x4 slabs of wood, if the supply is restricted and demand increases, you can see a massive increase. To me the largest driver of gold price is a "psychological shift to safety", when this happens gold will run wild. Right now we are in some sort of mania with money creation and some sort of exuberance, but inflation is likely on the way.

An interesting learning on "gold as a hedge", there is lots of evidence gold isn't any better than stocks as a hedge on inflation through your typical inflationary cycle, but when you get into the once or twice in a lifetime events, gold is head and shoulders the hedge.

There is also a theory of "peak gold", similar to "peak oil", I'm not relying on it in my investment decision, as people always seem to find a way to increase the supply.
 

Stats

Woodpecker
Gold and silver are are great to protect against inflation but beyond the temporary fluctuations they always go exactly with inflation not much more room for gainz. personally im investing in gold and some silver/copper miner etfs as a hedge for my bitcoin holdings. Should something major cause a dump of bitcoin I think a lot of that value will go into gold.
 

NoMoreTO

Ostrich
This is a dive into the historical value of Gold vs DOW Jones.

We are currently at 15:1, but there are points in history of 1:1

Comparisions vs. 1970s commodities cycle with inflation and low growth.


Note @MichaelWitcoff previously gold was 90% jewelry, currently it is only 40-50%. The jewelery provides the price floor on Gold, primarily in India and Middle East. 20:53
 
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I was a gold bug over 10 years ago. After a full decade to reflect I now know that gold is a bad investment. At best it could beat out inflation slightly or be used as currency in a scorched earth scenario. The worst case is it doesn't do its one job and doesn't keep up with inflation and you've payed the opportunity cost (You could have made profit or gotten rich doing something else with your money).

Why I now think gold is a hopeless case. It's a commodity. With every commodity that shoots up people mine or produce more it. Price goes down. Whenever gold goes up people just mine more of it, creating an oversupply. Another example is Peak Oil. Everyone thought we were 10years away from running out. It never happened because as oil became scarce and expensive people were motivated to produce more it. That's why we have too much oil now.

I won't even get into the fact that there's more paper gold than physical and institutions have endless tools at their disposal to bring down the price. Just look at the last 10 years and ask yourself whether you would have invested in gold all over again and the rational answer is its was a huge opportunity cost. Land was better, property did better, s&p 500 did better. Gold couldn't even keep pace with inflation better than the ones I just described.

You are better off investing your money in the NASDAQ or Bitcoin since mining it harder doesn't produce more. Based on the evidence it looks like Bitcoin has eaten gold's lunch. I liked both but now I think gold's time is behind it. Sure, it might go to $3k in the near future but I think everything else will go up higher.
 

C-Note

Ostrich
Gold Member
I think one of the issues with silver is that demand for it will likely remain strong, because silver oxide batteries have a longer life span than lithium ion batteries, so they're used in toys (that are especially popular in Asia) and defense applications, as well as certain medical devices. There are rechargeable silver oxide batteries. Because of the push for "renewable energy" that is dependent on batteries to hold excess electricity when the solar panels or wind mills or whatever are dormant, there will be increasing demand for rechargeable batteries.

Gold is used in electronics, but will the demand for electronic devices that use gold increase in the future or remain the same as it is currently? I think the answer to that question is a factor in determining whether the price of gold will stay high in spite of increased production of gold ore, which is happening.

If I understand correctly, the major use of gold isn't industry, but jewelry. Certain countries, like India, have a culture in which the purchase of gold jewelry is an important facet in familial identity and inheritance. Will this continue? Will millennials in the West consider gold jewelry to be an attractive investment? Will demand for gold jewelry increase, decrease, or remain the same worldwide?
 
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NoMoreTO

Ostrich
Macron today announces that he Western Nations should "sell" their reserves to bail out africa. While China buys africa and builds infrastructure, this is his solution to keep the banking system going.

Perhaps Macron is doing this to help the bullion banks short cover on unallocated gold, and they don't have the physical.

In September 2008, Macron left his job as an Inspector of Finances and took a position at Rothschild & Cie Banque. Macron was inspired to leave the government due to the election of Nicolas Sarkozy to the presidency.

I'm skeptical of purchasing any additional gold. It's already near all-time highs. Granted it's a hedge against inflation, but how much higher can it go?

How high can Gold go? How low can the dollar go? How many will they print. So gold really isn't going up, it has scarcity and there is effort to take it out of the ground (aka intrinisc value). It's the same oz of Gold, price the dollars in Gold, not the gold in dollars. Saavy?

On price... What isn't past it's all time high these days? Stocks? Real estate? Land? Commodities. There are an additional 50% plus dollars, so if it's not at an all time high and it's of solid value, it's a buy. I'm skeptical of just about everything else.

Gold is a hedge, it doesn't work that well in the regular business cycle, it is good during an inflationary cycle, but during a currency reset it dominates like you wouldn't believe. As you can tell I'm bullish.
 
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