Gold nearing $3,000/oz!

Fast Eddie B

Philosopher
Fast Eddie B
Joined
Sep 27, 2010
Messages
8,318
Location
Lenoir City, TN/Mineral Bluff, GA
Has anyone else been following the price of gold recently?

54384589596_e69f764747_z.jpg


Gold has traditionally been seen as a hedge against inflation, and not so much an investment per sé. Over the years I've squirreled away a handful of 1 oz. gold coins, mainly Krugerrands, Maple Leafs, Pandas and U.S. Double Eagles. The lowest I've paid was $278 in 2001, the most $1,470 in 2011, my last purchase.

At no time did the price seem "cheap", considering that in 1900 the price was fixed at $20.67/oz, and as recently as 1934 it was pegged at $35/oz.

Still, it seems hard to justify today's price, though with economic uncertainty its always been a relatively safe haven.

Anyway, anyone considering buying - or selling - a today's prices?
 
Ah ha! I just checked and the gold sovereign I got when I was baptized is worth a thousand bucks Canadian. I'll be able to buy <something.>
 
My financial advisors always warn me against investing in gold or silver, but they're a Cyberman and a werewolf so they may be biased. The vampire keeps telling me to save it all in the blood bank.
 
TragicMonkey said:
My financial advisors always warn me against investing in gold or silver, but they're a Cyberman and a werewolf so they may be biased. The vampire keeps telling me to save it all in the blood bank.
Click to expand...

There seems to be a general rule of thumb that it’s wise to have about 10% of one’s portfolio invested in precious metals. I have no idea where it came from, but doesn’t seem like a bad idea as a hedge against hyperinflation.

The classic cautionary tale is Germany in the 1920’s. From Wikipedia: “A loaf of bread in Berlin that cost around 160 marks at the end of 1922 cost 200,000,000,000 or 200 billion (2×1011) marks by late 1923.” But that same loaf of bread could still be purchased with silver coins worth about 160 marks. I am NOT predicting hyperinflation in the U.S., but at the same time I think it’s foolish to think it’s impossible.

Oh, and gold did close above $3,000/oz yesterday.
 
Last edited:
michaelsuede once argued that soon silver would be valuable enough so that the silver content of a pre-1964 dime would be enough to feed you for several days.

That didn't come to pass.

If course that doesn't mean that there won't be hyperinflation in the US this time around - after all pessimists have predicted fifty of the last four recessions.
 
The Don said:
michaelsuede once argued that soon silver would be valuable enough so that the silver content of a pre-1964 dime would be enough to feed you for several days.

That didn't come to pass.
Click to expand...

Of course not.

The idea is that if a silver dime bought you a candy bar in 1964 (it did), it could still buy you a candy bar today when it would otherwise cost close to $1. Or, God forbid, if one was $1,000,000 post hyperinflation. Precious metals don't increase your buying power over time, but help you to maintain it.
 
At this point in time a lot of not quite kosher gold bars are out in the market, weight is off not pure or any other scam. Investing in precious metals where you physically hold them is risky too if you aren't dealing with reputable sellers.

Online sales and some won in casinos have been found to be less than face value.

Be careful if this is your plan.
And remember, the ones selling the gold gladly accept the dollar they warn 'could ' lose all value. Hmmmm.
 
Gold coins from a reputable dealer are probably the safest way to invest in gold. “Junk” silver coins are similarly relatively safe.

I suppose counterfeiting is possible, but that’s where a reliable dealer comes in.
 
I miss the old days in Vegas when slot machines actually took coins because, well, they had slots. I still have a handful of silver dollars left over from one trip.
 
Well, the mining claims office at where I work in California will be busy this mining season.
 
8enotto said:
And remember, the ones selling the gold gladly accept the dollar they warn 'could ' lose all value. Hmmmm.
Click to expand...
This is what cracks me up esp about the never-ending commercials trying to get you to buy gold. If it's such an amazing deal, why are they trying to sell it?

Basically gold is too volatile for me to trust it, esp as I near retirement. Sure it's easy to look back and go oh if only I'd bought in back when....but that's (pardon the expression) fool's gold. I'll stick to boring regular investments, thanks.
 
bigred said:
This is what cracks me up esp about the never-ending commercials trying to get you to buy gold. If it's such an amazing deal, why are they trying to sell it?
Click to expand...

I don’t think that’s fair. They make their money on the “spread” between what they can obtain the gold for and what they can sell it for. Their commission is often 2% or less, but can earn a dealer a fair living.
 
bigred said:
This is what cracks me up esp about the never-ending commercials trying to get you to buy gold. If it's such an amazing deal, why are they trying to sell it?

Basically gold is too volatile for me to trust it, esp as I near retirement. Sure it's easy to look back and go oh if only I'd bought in back when....but that's (pardon the expression) fool's gold. I'll stick to boring regular investments, thanks.
Click to expand...

You've reminded me of an age-old scam, that used to appear in newspapers and magazines (and may still do so for all I know) but now appears on social media:

"Send me $20 and I'll give you the secret for making easy money."

And the secret?

"Put an advert on social media that says: 'Send me $20 and I'll give you the secret for making easy money.' "

Surprisingly it is no where near as common as "Vote for us and you'll magically get rich".
 
Yup gold is doing pretty well at the moment due to global uncertainty - which IMO overall is not a good thing. For the record, apart from the usual amount of jewellery and a few gold coins I don't have a gold hedge and therefore am apt to get a bit miffed when stocks are taking a beating and gold is doing well.

Then again. In 1994 I gave up £2,000 of salary to get some share options in the company I worked for. In 1999 these options were vested when the company was taken over and I received half the proceeds in cash, the other half in shares in the purchasing company.

The cash, after some significant capital gains tax, paid off the mortgage on the flat Mrs Don and I were living in at the time (IIRC £57k)

The shares have varied significantly in price. At their worst they were worth less than half of the price I "bought" them for. At their best they were around 6 times the original price. At the moment they're around three times the original price. Although there hasn't been phenomenal capital gains since 1999, I've been getting around £1,000 a year in dividends for the last 25 years.

We still own the flat (though we are in the process of selling it) and it delivers around £10,000 a year income net of expenses and has done for the last 13 years. It has also delivered around £300,000 in capital gains.

So a very lucky initial investment of £2,000 has delivered (directly and indirectly):

- £150k of shares
- £25k in dividends
- £130k in rental income
- £300k in property capital gains

A pretty good return IMO.
 
The Don said:
Yup gold is doing pretty well at the moment due to global uncertainty - which IMO overall is not a good thing. For the record, apart from the usual amount of jewellery and a few gold coins I don't have a gold hedge and therefore am apt to get a bit miffed when stocks are taking a beating and gold is doing well.

Then again. In 1994 I gave up £2,000 of salary to get some share options in the company I worked for. In 1999 these options were vested when the company was taken over and I received half the proceeds in cash, the other half in shares in the purchasing company.

The cash, after some significant capital gains tax, paid off the mortgage on the flat Mrs Don and I were living in at the time (IIRC £57k)

The shares have varied significantly in price. At their worst they were worth less than half of the price I "bought" them for. At their best they were around 6 times the original price. At the moment they're around three times the original price. Although there hasn't been phenomenal capital gains since 1999, I've been getting around £1,000 a year in dividends for the last 25 years.

We still own the flat (though we are in the process of selling it) and it delivers around £10,000 a year income net of expenses and has done for the last 13 years. It has also delivered around £300,000 in capital gains.

So a very lucky initial investment of £2,000 has delivered (directly and indirectly):

- £150k of shares
- £25k in dividends
- £130k in rental income
- £300k in property capital gains

A pretty good return IMO.
Click to expand...

Yes indeed.

And a fairly grim indicator why it is better to find a way to invest, even small amounts of savings, rather than just blow every cent on avocado toast, $10 coffees, and $30 alcoholic drinks and $50 cover charges. (I was stunned by the numbers of younger people, around me at work, who were always 'crying poor' but always bought their breakfast, lunch and coffees rather than making their own. If I took them at their word, they were always buying their evening meals and 'going out' every night too, but I doubt their veracity.)

Because of my unusual working life, I had, at one stage, six small super funds, so small that they risked being eaten by fees and charges...

At the end of a three year contract, I amalgamated them all into a single fund, ($30k) and since that was now my smallest fund, switched it over to 'high risk high return'.

When I retired, that smallest fund paid off my mortgage and handed over $50k in cash.

As you can imagine, I was pleased with that choice.

:)
 
If someone wants to invest in the gold price, an alternative to buying gold is to buy a company that mines the gold. Not only will the share price go up and down with the gold price, it should pay a dividend.
 
rjh01 said:
If someone wants to invest in the gold price, an alternative to buying gold is to buy a company that mines the gold. Not only will the share price go up and down with the gold price, it should pay a dividend.
Click to expand...

Another option is buying a mutual fund tied to gold and gold-related companies. One such…

54573931632_a9b8b429ac_z.jpg


Advantages: Ease of investing, no need to store physical gold, at least small dividends paid which can automatically be reinvested. Makes it easy to make regular investments, taking advantage of dollar cost averaging.

Disadvantages: In the event of a cyberattack, getting funds out could be problematic. And no doubt there are some fees involved.

As an update, gold has held steady above $3,000/oz, currently at $3,331.
 
Tempted to pull the trigger several times but never did. argh. At this point what I'd invest would be such a small % of my portfolio not sure there's much point.
 
Ads just started showing up on my yt feed telling me smart investors hold gold. But they seem to want my cash so I can get some.

Market must be seen as ready to top out soon by the ones selling it.

The local gold buyers in my area pay nothing near three grand an ounce for it, in fact most stopped buying as prices rose. Says a lot without words.
 
Mike! said:
I'm likely wrong, but isn't the price of gold directly linked to the value of the U.S. Dollar, and if that is the case, wouldn't the price of gold go up as the value of the dollar drops?
Click to expand...

Not directly linked I think.
(Not since 1971)

However, if the currency value drops, that looks like the price of other things going up, if the price is expressed in that currency.

Gold is sometimes called: 'the currency of destabilisation' because people buy gold when currency values fall, typically during war, unrest, etc.

It has bothered me that governments can declare gold (bullion, coins, shares) ownership to be illegal (I think this was true in the USA between 1930 and 1970).

So if things get really bad, there's a possibility that the government will just force you to sell your gold.
 
8enotto said:
The local gold buyers in my area pay nothing near three grand an ounce for it, in fact most stopped buying as prices rose. Says a lot without words.
Click to expand...

Interesting.

In my experience, dealers make money on the “spread” between the “buy” price and the “sell” price. They don’t typically sit on a horde and hope it appreciates - they’re not typical investors themselves.

This from Copilot:

The dealer spread—the difference between the buy (bid) and sell (ask) prices for gold—varies depending on market conditions, dealer policies, and the type of gold being traded. Here are some general insights:

• Typical Spread Percentage: For physical gold, such as bullion coins and bars, the spread often ranges from 1% to 5%, though it can be lower in highly liquid markets.
• Example Calculation: If a dealer quotes a bid price of $3,350 per ounce and an ask price of $3,400 per ounce, the spread is $50, or approximately 1.5%.
• Retail vs. Wholesale: Online platforms with high trading volumes may offer spreads as low as 0.10% to 0.20%, while traditional retail dealers may have spreads closer to 5% or more.
• Premiums on Specific Products: Some gold products, like collectible coins, may have higher spreads due to rarity and demand.
 
Fast Eddie B said:
Interesting.

In my experience, dealers make money on the “spread” between the “buy” price and the “sell” price. They don’t typically sit on a horde and hope it appreciates - they’re not typical investors themselves.
Click to expand...
It's always possible that locally, a dealer might have more sellers than buyers at the current market price (ie they would not be able to sell all of the gold they buy).
 
psionl0 said:
It's always possible that locally, a dealer might have more sellers than buyers at the current market price (ie they would not be able to sell all of the gold they buy).
Click to expand...

That’s certainly possible. I’ve only dealt with dealers in Hollywood, FL and suburban Knoxville, TN, the former larger than the latter. But they both seemed to be in positions to either buy or sell on either side of the transaction, with just a few percentage points spread.
 
psionl0 said:
It's always possible that locally, a dealer might have more sellers than buyers at the current market price (ie they would not be able to sell all of the gold they buy).
Click to expand...
My uncle was a gold and silver dealer for close to 60 years and while he made money whether the price was going up or down due to the buy/sell spread, higher prices typically meant greater volume which meant more money for him - typically because most of his customers were hoarders who only ever added to their holdings.
 
In Mexico near nothing gets hoarded after the price becomes profitable. Scrap iron to precious metals it all gets rolled over in the market when sensible.
Only in case of a death does stuff set long term, until a new owner clears it all out and then resells the land under it if he bought that too.
 
You must log in or register to reply here.

Back
Top Bottom