NationStates Jolt Archive

Sooooooo...

Platinum and Gold both hit their highs last summer, with platinum at 2300 dollars and gold at 1000 dollars. Right now, gold is getting near it's all time high again while platinum is around 1050 dollars. I've heard this is in part because platinum is used in catalytic converts and since the world's auto industry is in the can, so is the demand for platinum. I've also heard Palladium might be used as a platinum substitute.

Do any of you buy or sell precious metals? Any experience whatsoever? Should I sell my K-rand and buy a 1oz platinum coin? Should I buy palladium instead?

Anyone have ANY ideas??!?!!

Sooooooo...

Platinum and Gold both hit their highs last summer, with platinum at 2300 dollars and gold at 1000 dollars. Right now, gold is getting near it's all time high again while platinum is around 1050 dollars. I've heard this is in part because platinum is used in catalytic converts and since the world's auto industry is in the can, so is the demand for platinum. I've also heard Palladium might be used as a platinum substitute.

Do any of you buy or sell precious metals? Any experience whatsoever? Should I sell my K-rand and buy a 1oz platinum coin? Should I buy palladium instead?

Anyone have ANY ideas??!?!!

Buy zinc.

*nods*

Buy zinc.

*nods*

Raw zinc ore, not processed. It contains a bit of germanium, which can be extracted.
Germanium might be the future of microelectronics, so its price might climb significantly in the next few years.

I myself recently purchased platinum. i did it in coin form simply because i like the tactileness of actually holding the metal plus how cool is it to have a $100 (face value)US currency coin ? I got it when plat was around $850 and i have increased my investment by almost 25% in 3 months. Find any stock that has done that.

http://www.usmint.gov/mint_programs/american_eagles/index.cfm?flash=no&action=american_eagle_platinum


Plus its also used in jewelry not just autos and is 35x more rare then gold.

Platinum is also used in the creation of hydrogen fuel cells. I think that might have been what caused the spike last year in the price of catalytic converters. I made A LOT of good money selling cat. converters.

The foreign ones also contain rhodium I'm told. That peaked at 10k last year. Now it's worth like 1-2 k an ounce. I don't know what else rhodium is used for.

See, I was all ready to sell my K-rand for a Platinum Eagle but then I read something about how palladium might be used as a platinum substitute. The stuff was worth 1k an ounce back in 2000/2001 but now it's only worth $210 or so.

And gold keeps rising, so maybe I should just stick with that.

Don't invest in precious metals. Invest in housing. People will always need houses, and with the population increasing, demand will always go up, so prices can never fall, and the market can never fail. Oh, wait. Damn.

Don't invest in precious metals. Invest in housing. People will always need houses, and with the population increasing, demand will always go up, so prices can never fall, and the market can never fail. Oh, wait. Damn.

Precious metals are fine; but theatres - hell no.

Platinum and Gold both hit their highs last summer, with platinum at 2300 dollars and gold at 1000 dollars. Right now, gold is getting near it's all time high again while platinum is around 1050 dollars.
Gold will go down soon. I can't tell the day (anyone who can will become a millionaire), but I'd say it's 80% that it will go down, seeing as it's heavily overbought and tends to follow the rules. Not the next week probably though. Maybe a week after.

I don't suggest to buy it now, since it will drop. Don't forget that gold has also experienced its all-time deepest drop recently, from 980 to 750, and right then from 920 to under 700. Both absolute and relative record. I was there, it didn't look good. That was scary, and it has scared a lot of people, so the faith in gold is undermined now.
1000 is a very strong psychological resistance level, it won't break easily. It might not even break at all anytime soon, although I won't be surprised in the slightest if it does.

If you're serious about buying gold, I'd wait until it drops to 800-850. It has a weak, but persistent support level at around 800. If you're really confident in gold, at least wait till 900, its non-spike value is around there at the moment. You'll surely miss the bottom, but will almost surely be there.
The strong support level is 720, it worked as resistance in 2006, the current bounce up is from that level as well. I'm sure it won't crash through it in either case.



Do any of you buy or sell precious metals? Any experience whatsoever? Should I sell my K-rand and buy a 1oz platinum coin? Should I buy palladium instead?
Yes, usually in futures form. I don't like storing the physical stuff, too much buy/sell losses, and if the financial system crashes, it will all go down anyway. It's been too long since gold was the currency for it to return.

I don't trade in metals at all, but I have to say, the idea of purchasing even a small amount of gold bullion fills me with glee. Partly because it feels so anachronistic. Platinum and other metals, less so.

rappers count as investment bankers now?

I love gold. (http://www.entertonement.com/clips/27577/Austin-Powers-in-Goldmember/Mike-Myers/Goldmember/I-love-gold)

Stay away from PGE metals. Their main demand is in the car industry, and the car industry is in the poo and will stay there for an extended period of time.

Gold is better, essentially all its competition (US Dollar, Euro, Yen?) is looking dodgy. If it breaches the $1000 mark, I myself might have a look in.

My beliefs on gold are like Warren Buffet's in that gold is a useless joke that for some reason people value despite the fact that it is less useful than paper: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

Really, gold and other precious metals are absolutely useless except for the minute quantities used in industrial applications and as a result their prices really aren't anything worth betting on. It's actually pretty unlikely that it will ever have the kind of long-term uptrend that makes it a safe investment...there really is no safety in gold because it is almost useless. Unless you're really dedicated and want to trade frequently, you have no real chance of making good money from gold because it is so volatile; you could easily see its value drop by 50% in a month and then shoot up 50% the next.

I'd say ditch your gold while prices are high and lock yourself in to a good money market or annuity investment, one with a guarantee return. To put it in perspective, gold's real value has declined steadily since 1979. That's an effectively negative return for 30 straight years...it's really not worth it except as a short-term gamble.

My beliefs on gold are like Warren Buffet's in that gold is a useless joke that for some reason people value despite the fact that it is less useful than paper: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

Really, gold and other precious metals are absolutely useless except for the minute quantities used in industrial applications and as a result their prices really aren't anything worth betting on. It's actually pretty unlikely that it will ever have the kind of long-term uptrend that makes it a safe investment...there really is no safety in gold because it is almost useless. Unless you're really dedicated and want to trade frequently, you have no real chance of making good money from gold because it is so volatile; you could easily see its value drop by 50% in a month and then shoot up 50% the next.

I'd say ditch your gold while prices are high and lock yourself in to a good money market or annuity investment, one with a guarantee return. To put it in perspective, gold's real value has declined steadily since 1979. That's an effectively negative return for 30 straight years...it's really not worth it except as a short-term gamble.

Gold's not useless... it's money...

Gold's not useless... it's money...

What gives it intrinsic value compared to oil, iron, nickel or other industrial metals? Outside of the 10% or so that's used for industrial purposes (and is mostly recycle) nothing, really...it's a shiny rock that's only valued today because people think it looks nice.

Hell, fiat currency has more intrinsic worth than gold because its backing is effectively the GDP of the country issuing it.

What gives it intrinsic value compared to oil, iron, nickel or other industrial metals?

Mainly, relative stability of supply.

Mainly, relative stability and predictability of supply.

Air has a relative stability and predictability of supply. Its not valuable though.

Platinum, Palladium, Rhodium all actually useful in large applications as catalysts. Gold however... not really.

Mainly, relative stability and predictability of supply.

On average, gold is one of the most volatile commodities with the exception of some agricultural futures. It's pretty likely most of the gold that has ever been mined is still in circulation in one form or another, so it's likely gold will continue to decline in real terms because it's not really ever consumed and the supply on the market remains high.

Now, if you're a day trader, gold can be a genius move due to its short term volatility...however, it's not something to invest in for retirement purposes.

Air has a relative stability and predictability of supply. Its not valuable though.

Platinum, Palladium, Rhodium all actually useful in large applications as catalysts. Gold however... not really.

Gold is also scarce. Air is not.

Scarcity and stability/predictability look good on the resume of a prospective currency.

Industrial applications aren't, and will never be, a major factor determining what gets to be considered a useful and widely recognized currency.

(Platinum has recognition as money too, though not to the extent of gold)

On average, gold is one of the most volatile commodities with the exception of some agricultural futures.

Stability of supply ultimately is more relevant to a currency's viability, and not day-to-day volatility. Which is why gold will never cease being considered money.

It's pretty likely most of the gold that has ever been mined is still in circulation in one form or another, so it's likely gold will continue to decline in real terms because it's not really ever consumed and the supply on the market remains high.

The exact same thing can be said of fiat currencies.

Industrial applications aren't, and will never be, a major factor determining what gets to be considered a useful and widely recognized currency.

(Platinum has recognition as money too, though not to the extent of gold)

They have to be...what gives currency credence is how we value it. There's nothing inherent about gold that makes it valuable other than the weight of human culture saying gold is valuable, and that reasoning basically breaks down to the fact that it's shiny and hard to find. Beyond that, there really isn't much else going for it.

Stability of supply ultimately is more relevant to a currency's viability, and not day-to-day volatility. Which is why gold will never cease being considered money.

I doubt that. There are plenty of other items that served as currency prior to gold and are now completely forgotten, and their supply was hardly any less stable or rare than gold.

The exact same thing can be said of fiat currencies.

Exactly. That's why anyone arguing that a gold standard is somehow superior to fiat currency is completely wrong. Unlike gold, of course, you can reduce the fiat money supply; getting rid of gold would require physically tracking down and removing from circulation the amounts desired.

They have to be...what gives currency credence is how we value it. There's nothing inherent about gold that makes it valuable other than the weight of human culture saying gold is valuable, and that reasoning basically breaks down to the fact that it's shiny and hard to find. Beyond that, there really isn't much else going for it.

Empirically speaking, economies naturally and specifically exclude those commodities used for industrial purposes from ever becoming an accepted medium of exchange. Readily "consumeable" commodities are unfavorable for use as medium of exchange; it's exactly because gold has no other function that makes it suitable as a money. I don't really need to extensively polemicize about the merits of gold. Market processes ensures its status as currency.

I doubt that. There are plenty of other items that served as currency prior to gold and are now completely forgotten, and their supply was hardly any less stable or rare than gold.
With a few exceptions that can't be applied to our current situation, gold has been considered currency throughout almost all human societies and cultures. The fact that gold has managed to preserved its status up to this day only reaffirms that it has "beat out" if you will its competition (seashells, beads, what have you) in the market selection process for medium of exchange.



Exactly. That's why anyone arguing that a gold standard is somehow superior to fiat currency is completely wrong. Unlike gold, of course, you can reduce the fiat money supply; getting rid of gold would require physically tracking down and removing from circulation the amounts desired.
Well a gold standard is of course wrong because, coupled with taxation, that is basically another fiat standard, except a gold fiat and not paper fiat one. A non-fiat paper currency is also useful and viable, which is why gold probably won't displace paper and paper probably won't displace gold. (By paper I mean today's paper/electronic money and hypothetical future electronic currencies)

Hell, fiat currency has more intrinsic worth than gold because its backing is effectively the GDP of the country issuing it.

Well, let us not forget this

http://upload.wikimedia.org/wikipedia/en/thumb/3/3c/Zimbabwe_Hyperinflation_2008_notes.jpg/735px-Zimbabwe_Hyperinflation_2008_notes.jpg

At least with gold, it is very difficult to mass manufacture; fiat currency can be mass manufactured very easily; just look at Germany in the 1920s, Hungary in the 1940s, Yugoslavia in the 1990s and Zimbabwe today. Even in Western countries, too much has been printed and we have seen a ten fold increase in prices since the 1970s - compare with the long term price stability we had between 1815 and 1939.

Gold is also scarce. Air is not.

Scarcity and stability/predictability look good on the resume of a prospective currency.

Polonium is pretty scarce. Nobody uses it as currency, though.
/devil's advocate

Polonium is pretty scarce. Nobody uses it as currency, though.
/devil's advocate

No-one likes currency with built in inflation.;)

Well, let us not forget this

http://upload.wikimedia.org/wikipedia/en/thumb/3/3c/Zimbabwe_Hyperinflation_2008_notes.jpg/735px-Zimbabwe_Hyperinflation_2008_notes.jpg

At least with gold, it is very difficult to mass manufacture; fiat currency can be mass manufactured very easily; just look at Germany in the 1920s, Hungary in the 1940s, Yugoslavia in the 1990s and Zimbabwe today. Even in Western countries, too much has been printed and we have seen a ten fold increase in prices since the 1970s - compare with the long term price stability we had between 1815 and 1939.

That's a problem with the issuing authority and not with the concept of paper currency. Paper can be a fully viable currency.

Goldbugs and Fiatbugs are actually sort of similar; both insisting that it's an "either-or" situation where gold and paper are mutually exclusive. That's hogwash. Anything that is able to achieve widespread recognition as a medium of exchange is a viable currency, be it gold, silver, paper, or sand dollars. Empirical evidence shows us that gold has had quite a successful run as a widely recognized form of currency, and suggests that it will continue to enjoy status as currency into the future, despite fiatbugs' protestations to the contrary.

here is my advice. get out of gold(other precious metals).
its in the news papers, and talk about constantly.
When your shoe shine boy starts giving stock tips its time to get out of the market.
Current gold prices are a bubble.
historic relationship between Oil and gold is one ounce of gold equals 10-12 barrels of oil.
with oil getting stable I suspect a price drop in gold to 350-450 dollars an ounce.

My beliefs on gold are like Warren Buffet's in that gold is a useless joke that for some reason people value despite the fact that it is less useful than paper: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Gold isn't useless. If you melt it down and inject it into your eye sockets, you gain the ability to see the future! Who doesn't want to see the future?

here is my advice. get out of gold(other precious metals).
its in the news papers, and talk about constantly.
When your shoe shine boy starts giving stock tips its time to get out of the market.
Current gold prices are a bubble.
historic relationship between Oil and gold is one ounce of gold equals 10-12 barrels of oil.
with oil getting stable I suspect a price drop in gold to 350-450 dollars an ounce.

When you make a direct comparison of gold and oil you're making the mistake of only considering gold's commodity demand. Gold's not like other commodities. Unlike other commodities, gold has a monetary demand built into it. During a debt-deflationary scenario like the one we're experiencing right now, all commodities drop against all currencies. Oil drops against USD, Yen, and Euro. Likewise, oil also drops against gold, since gold is a currency. Unless oil prices rise against USD, don't expect oil prices to rise against gold.

That's a problem with the issuing authority and not with the concept of paper currency. Paper can be a fully viable currency.

Goldbugs and Fiatbugs are actually sort of similar; both insisting that it's an "either-or" situation where gold and paper are mutually exclusive. That's hogwash. Anything that is able to achieve widespread recognition as a medium of exchange is a viable currency, be it gold, silver, paper, or sand dollars. Empirical evidence shows us that gold has had quite a successful run as a widely recognized form of currency, and suggests that it will continue to enjoy status as currency into the future, despite fiatbugs' protestations to the contrary.

the thing with gold is you can not do so much with it.
start a business with gold ? pay your employees with gold?
the amounts of gold needed for even a small business would weigh a ton.
in current form gold is mostly a hedge against poor currency management and poor economic polices.

the thing with gold is you can not do so much with it.
start a business with gold ? pay your employees with gold?
the amounts of gold needed for even a small business would weigh a ton.
in current form gold is mostly a hedge against poor currency management and poor economic polices.

Well it's obvious that gold's physical bulkiness is a strike against it as a currency. No job applicant is flawless after all. But gold's other characteristics which we've discussed in this thread make it attractive as a currency. Adding up all the pros and cons, it becomes apparent gold's status as a currency will continue for some time to come.

When you make a direct comparison of gold and oil you're making the mistake of only considering gold's commodity demand. Gold's not like other commodities. Unlike other commodities, gold has a monetary demand built into it. During a debt-deflationary scenario like the one we're experiencing right now, all commodities drop against all currencies. Oil drops against USD, Yen, and Euro. Likewise, oil also drops against gold, since gold is a currency. Unless oil prices rise against USD, don't expect oil prices to rise against gold.

In the 20th century has been a currency shelter as well. Follow the 80's. oil drops in value in 82' by 83' so had gold. Oil is also the more responsive currency shelter and in most cases oil leads gold. As soon as business is comfortable with the stimulus package gold will drop. and that's because you cant use gold. You cant pay your taxes with gold, you cant pay your workers with gold. Banks don't give you loans of gold to start a business.

The only reason gold has lagged behind oil so much is because business is uncertain hat the effects of government interference in the economy will be. The second business is comfortable making money in the economy gold invariable drops.

In the 20th century has been a currency shelter as well.
Hmm I don't see how that's relevant to the discussion at hand...
Follow the 80's. oil drops in value in 82' by 83' so had gold. Oil is also the more responsive currency shelter and in most cases oil leads gold. As soon as business is comfortable with the stimulus package gold will drop. and that's because you cant use gold. You cant pay your taxes with gold, you cant pay your workers with gold. Banks don't give you loans of gold to start a business.

The only reason gold has lagged behind oil so much is because business is uncertain hat the effects of government interference in the economy will be. The second business is comfortable making money in the economy gold invariable drops.

Well I would never suggest gold speculation or any type of speculation unless you have a lot of money that you can afford possible losses and just play with. And if you really, really know what you're doing.

But from the way the current debt-deflation is playing out, I wouldn't be surprised if gold:USD stays high for many years, just like in our previous secular debt-deflation scenario in the 1930s when gold:USD shot up and reached a true plateau from which it has never gone down since.

Your comparisons with the 1970s and 80s are not as good as a comparison with the 1930s because debt deflation did not proceed during the oil crisis. You say gold will go down once businesses become "comfortable" with the stimulus package but you have to remember gold:USD did not go down during the New Deal, when essentially all of American industry was retooled to become "comfortable" with FDR's stimulus package.

Not entirely sure about the supposed connection to Platinum value and car sales. As i mentioned earlier in this thread, platinum prices have risen 30% in the last 4 months while car sales have dropped 35%

Not entirely sure about the supposed connection to Platinum value and car sales. As i mentioned earlier in this thread, platinum prices have risen 30% in the last 4 months while car sales have dropped 35%

Interesting finding. This is indicative of platinum's monetary demand which is separate from, and unrelated to, its commodity demand. This is also instructive of the status of gold.

Hmm I don't see how that's relevant to the discussion at hand...


Well I would never suggest gold speculation or any type of speculation unless you have a lot of money that you can afford possible losses and just play with. And if you really, really know what you're doing.

But from the way the current debt-deflation is playing out, I wouldn't be surprised if gold:USD stays high for many years, just like in our previous secular debt-deflation scenario in the 1930s when gold:USD shot up and reached a true plateau from which it has never gone down since.

Your comparisons with the 1970s and 80s are not as good as a comparison with the 1930s because debt deflation did not proceed during the oil crisis. You say gold will go down once businesses become "comfortable" with the stimulus package but you have to remember gold:USD did not go down during the New Deal, when essentially all of American industry was retooled to become "comfortable" with FDR's stimulus package.

that's an invalid comparison. That was the time of the gold standard. the government changed what it would pay for gold from $20.67 to $35. not once until we got off the gold standard did gold ever go 5 dollars over what the government was willing to pay. And even that required either a post war inflation period or and in the late 60's it reached 4 dollars over when the government went to a two tiered price structure.
Now governments don't really buy gold. you cant take your gold and have the government change it to cash for you. they will tell you to call the cash for gold number.

that's an invalid comparison. That was the time of the gold standard. the government changed what it would pay for gold from $20.67 to $35. not once until we got off the gold standard did gold ever go 5 dollars over what the government was willing to pay. And even that required either a post war inflation period or and in the late 60's it reached 4 dollars over when the government went to a two tiered price structure.


That's not an invalid comparison. USD devaluation on the gold standard to allow the government to finance the New Deal is inherently the same as inflationary devaluation of USD today to allow today's government to finance the current stimulus packages. Since history shows us that these stimulus packages never seem to lapse, gold has opportune moments to reach new plateaus in moments of credit crisis (i.e.: debt deflation and New Deal, Great Society/Vietnam war excesses and the nixon Shock, and our current debt deflation). Knowing this context, the ridiculous commodity bubbles of the late 70s are correctly recognized to be little related to gold's monetary demand or currency function, and monetary demand for gold is seen to reach new plateaus during every credit crisis (each of which predictably brings accelerated USD inflation). Again, the commodity and monetary aspects of gold need to be distinguished for an accurate analysis.

Also, in your examples, gold:USD was either kept down by consistently higher interest rates, or taken down when it was high by currency defense schemes like when the Fed jacked up the interest rates to some ungodly level. This likelihood of this happening in the near future under Helicopter Ben and the quantitative easing regime is virtually zero.

Now governments don't really buy gold. you cant take your gold and have the government change it to cash for you. they will tell you to call the cash for gold number.
I don't see how that's relevant. Governments can influence, but don't determine, what is or isn't currency. Sure, ending gold standards reduced fiat demand for gold but not by much because gold/paper convertibility is so liquid.

Unless you're really dedicated and want to trade frequently, you have no real chance of making good money from gold because it is so volatile; you could easily see its value drop by 50% in a month and then shoot up 50% the next.
That never happened, the supposed 50% drop. The biggest drop gold had was recently from 970 to 720 (25%), but it took close to a year and followed a steep rush up. And then it climbed back.

Here's its graph for the last 17 years:

http://vault10.webs.com/gold.png

All other times, there were small drops followed by major rises. Actually, gold is interesting in that it's very nearly the only commodity that drops slowly and rises sharply, most do the opposite. It's to currencies what currencies are to commodities.



On average, gold is one of the most volatile commodities with the exception of some agricultural futures.
And currencies. And stocks. And oil. Basically, with the exception of all other most commonly traded commodities.

Unlike gold, of course, you can reduce the fiat money supply;
You can also piss against the wind. No one is going to reduce the fiat money supply, on the contrary, every government is only increasing it.

There's nothing inherent about gold that makes it valuable other than the weight of human culture saying gold is valuable, and that reasoning basically breaks down to the fact that it's shiny and hard to find. Beyond that, there really isn't much else going for it.
It's shiny, which gives it decorative uses, and it has industrial applications as a highly chemically resistant material, the best heat reflector, electrode plating. While gold is not as essential as platinum or palladium, and has lower-performing cheap substitutes, it's rare enough, and it's less industrially used only because it's too established as the currency.
It's also universally recognized as a thing of value, unlike paper money. That alone makes much more going for it than even for USD.

I'm not telling you to invest in gold (not now anyway), but don't dismiss it as something illogical. Gold is quite secure. To make it fall, the economy must grow, and that doesn't happen overnight.

That's not an invalid comparison. USD devaluation on the gold standard to allow the government to afford the New Deal is inherently the same as inflationary devaluation of USD today to allow today's government to afford the current stimulus packages. Since history shows us that these stimulus packages never seem to lapse, gold has opportune moments to reach new plateaus in moments of credit crisis (i.e.: debt deflation and New Deal, Great Society/Vietnam war excesses and the nixon Shock, and our current debt deflation). Knowing this context, the ridiculous commodity bubbles of the late 70s are correctly recognized to be little related to gold's monetary demand or currency function, and monetary demand for gold is seen to reach new plateaus during every credit crisis (each of which predictably brings accelerated USD inflation). Again, the commodity and monetary aspects of gold need to be distinguished for an accurate analysis.

except versus inflation.21 1920's dollars equals 35 1930's dollars equals 500 today's dollars. any time gold peaks above these it always crashes. this is true in the 30's the 40's and 70's or the 80's.


Also, in your examples, gold:USD was either kept down by consistently higher interest rates, or taken down when it was high by currency defense schemes like when the Fed jacked up the interest rates to some ungodly level. This likelihood of this happening in the near future under Helicopter Ben and the quantitative easing regime is virtually zero.


I don't see how that's relevant. Governments can influence, but don't determine, what is or isn't currency. Sure, ending gold standards reduced fiat demand for gold but not by much because gold/paper convertibility is so liquid.

anytime before we got off the gold standard the government set the price of gold. That was you know the entire principle of the gold standard.
Gold stays standard in relation to inflation, right now gold is well above the inflation value. history has shown when gold is above its inflation value it crashes. Even more concerning is the advertising. when its in news papers, super bowl commercials its too wide spread. Any investment that advertised is heading for bust.

Actually, gold is interesting in that it's very nearly the only commodity that drops slowly and rises sharply, most do the opposite.

That's not necessarily helpful. There's no one size fits all investment strategy...for example if you had been a 62 yr old nearing retirement back in the 1983, buying gold would've been the worst thing you did. Because when gold dropped slowly, it dropped and it dropped slowly. Someone urgently needing to liquidate for retirement would've lost the shirt of his back in gold during the 80s and 90s.

except versus inflation.21 1920's dollars equals 35 1930's dollars equals 500 today's dollars. any time gold peaks above these it always crashes. this is true in the 30's the 40's and 70's or the 80's.
That's not relevant either.
We're comparing gold to USD, not gold to a hypothetical inflationary magic 21 dollars that somehow expands over time.



anytime before we got off the gold standard the government set the price of gold. That was you know the entire principle of the gold standard.
Gold stays standard in relation to inflation, right now gold is well above the inflation value. history has shown when gold is above its inflation value it crashes. Even more concerning is the advertising. when its in news papers, super bowl commercials its too wide spread. Any investment that advertised is heading for bust.

You've just rehashed what you already stated previously which I've already addressed in my posts. Every major credit crisis (1929, Nixon shock, and 2008) causes massive volatility with the USD supply and it's impossible to know the "inflation value" to compare gold against. This is precisely why gold performs well in credit crisis situations - in crisis of confidence in USD and sharp inflation, gold obviously performs well, and in debt-deflation, gold performs well as discussed earlier. That combined with never-lapsing stimulus programs and liquidity easing measures and gold reaches a new plateau, which it might overshoot in the future and not during the initial credit crisis episode.


You make a good point though about the Super Bowl ads. A Super Bowl ad would be the ultimate contrary indicator...

We shall return in the coming months and years and see what the trajectory of gold is. I don't have the spending money or the testicular fortitude to attempt to time the market so I'm definitely not putting my money where my mouth is and I discourage other people's speculative energies too.

one more in then late 90's early 2000. low interest rate but gold dipped to 250. hows that fit your data?

That's not necessarily helpful. There's no one size fits all investment strategy...
Who says there is? I'm not a gold bug; I buy gold when it's profitable, sell when it's not. And, really, I only keep 5% to 10% of the investment in gold, sometimes negative (hedging with futures). But with an overall long position. Just in case.


for example if you had been a 62 yr old nearing retirement back in the 1983, buying gold would've been the worst thing you did. Because when gold dropped slowly, it dropped and it dropped slowly. Someone urgently needing to liquidate for retirement would've lost the shirt of his back in gold during the 80s and 90s.
No, just a tie for his shirt. Gold only fell from $400 to a low of $300, and even in that time there were moments for selling. And it was falling slowly enough that you'd have to be blind not to notice. So why would you buy gold when it was going down is the big question.

No investment is bulletproof, but gold is one of the safest, and when it drops, it's not a crash.

one more in then late 90's early 2000. low interest rate but gold dipped to 250. hows that fit your data?


Actually Fed increased interest rates in late 90s and early 2000 to "tame" the overheated Greenspan-Clinton economy. Since the Fed's m.o. is to expand and contract credit like a drunk accordionist, anticipation of deleveraging the NASDAQ bubble was priced into the declining gold price. Another thing was the relatively undistorted (compared to today) capital structure in developing countries so gold couldn't enjoy the type of unprecedentedly massive global debt-deflation we're witnessing recently. Finally, the trend toward balanced federal budgets in the late 90s helped the USD's cause too.

Who says there is? I'm not a gold bug; I buy gold when it's profitable, sell when it's not.
Ok, got it. I just tend to be suspicious of using the "slow drop fast rise" types of technical analysis in support of an investment.

So why would you buy gold when it was going down is the big question.

If people could answer that question then everyone would be millionaires...

except versus inflation.21 1920's dollars equals 35 1930's dollars equals 500 today's dollars. any time gold peaks above these it always crashes. this is true in the 30's the 40's and 70's or the 80's.
That's based on a "value" of dollar which is in itself heavily tied to gold. Also, the error of this valuation is so high that it could be 500 or 1000 - very different results - depending on how the price indices are calculated.

Right now, there's no way gold is going even to 500, much less lower. If you take the 2006-2007 trend, before this rapid rise, it gives support at 750. Even if you take the beginning of old gold's upward trend all the way from 9/11 (or even all the way 1992-2009), the base would still be at over 600 now.
So, gold might break the 800 level, but it still won't near 500.

Ok, got it. I just tend to be suspicious of using the "slow drop fast rise" types of technical analysis in support of an investment.
Well, since FA doesn't really work with gold (as correctly mentioned earlier, there's not enough real value behind it), we're stuck to using TA for it. "Slow drop, fast rise" is just an important thing to remember, not just to predict the price, but also to keep that in mind when choosing an investment. On the downside, it's next to impossible to predict when the gold will rise, on the upside, you can quit anytime you wants with little loss, unlike with most investments like stocks.

That makes it safer, not as in "safe bet", but as in low-risk. Plus, gold is good for hedging a portfolio of more volatile investments, since it goes up when the commodities go down. Combined with its overall upward trend, very good for long terms.

Also keep in mind, that despite deflationary tendencys now, you cant dump Trillions into the economy without it eventually causing inflation. Its simple logic. And when you have inflation, you will have flight into gold and a corresponding price increase. Gold and platinum seem like a good mid term investment to me.

So should I sell it for the Platinum coin?

So should I sell it for the Platinum coin?
I don't think so. What in this thread suggests so? Gold, silver and platinum tend to go up or down together, and the platinum-to-gold ratio has been falling throughout 2008, still slowly going down. I'd rather just stick with the gold coin.

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But it's an area where no one can tell you what to do. While some people are buying gold, others are, obviously, selling it - no seller, no buyer. And both have their reasons to believe they're going to profit from it.

Nonetheless, as it is now, you'll probably just lose about 5% in selling and buying prices difference (although you can reduce it a lot if using exchange), and maybe more on platinum to gold weakening. Coins of precious metals today aren't at all a convenient medium to trade.

If you're serious about active investing in gold, platinum and other commodities, rather consider futures markets. There you only lose about 0.1% per transaction, don't need to hide the coins from theft, and don't need to leave your home to buy and sell.

Sooooooo...

Platinum and Gold both hit their highs last summer, with platinum at 2300 dollars and gold at 1000 dollars. Right now, gold is getting near it's all time high again while platinum is around 1050 dollars. I've heard this is in part because platinum is used in catalytic converts and since the world's auto industry is in the can, so is the demand for platinum. I've also heard Palladium might be used as a platinum substitute.

Do any of you buy or sell precious metals? Any experience whatsoever? Should I sell my K-rand and buy a 1oz platinum coin? Should I buy palladium instead?

Anyone have ANY ideas??!?!!

I'm after the street-cleaning machines. Platinum in catalytic converters -> platinum dust on the streets -> street-cleaning machines pick it up.

I can't even afford to buy steel let alone gold or platinum.

I can't even afford to buy steel let alone gold or platinum.

Now isn't the time to buy gold. The time to buy gold was months/years ago.

, and the platinum-to-gold ratio has been falling throughout 2008, still slowly going down. I'd rather just stick with the gold coin.


This strikes me as the exact reason to buy platinum over gold. It wont stay at this ratio indefinitely.

Buy an additional platinum coin then. It won't climb up anytime soon.

Right now isn't a good time to quit gold, not with a 5%+ transaction loss with coins. It will probably drop shortly, but may also go up (unlikely), and is, I'd say, equally likely to drop to the 800-950 corridor or stick around the sub-1000 zone. With a potential small chance of breaking through, but if it goes up, it goes way up.

Not entirely sure about the supposed connection to Platinum value and car sales. As i mentioned earlier in this thread, platinum prices have risen 30% in the last 4 months while car sales have dropped 35%

Where did you see that?? Platinum has been hovering between $900-$1000 the past 4 months. That's down from $2000 last year.

I'm a scrapper remember;)

Now isn't the time to buy gold. The time to buy gold was months/years ago.

That's exactly what I'm thinking. Does nobody remember the 90s when gold was 2-300 dollars an oz.?

Where did you see that?? Platinum has been hovering between $900-$1000 the past 4 months. That's down from $2000 last year.

I'm a scrapper remember;)

And i have the actual data. From the Wall Street Journal:

"The front-month April platinum futures hit $1,095.80 an ounce Thursday on the New York Mercantile Exchange, their strongest level since Sept. 29. At that level, the contract was up 44% from the $761.50 low hit on Oct. 27, a day when commodities broadly tumbled.

http://online.wsj.com/article/SB123481129113593867.html

And i have the actual data. From the Wall Street Journal:

"The front-month April platinum futures hit $1,095.80 an ounce Thursday on the New York Mercantile Exchange, their strongest level since Sept. 29. At that level, the contract was up 44% from the $761.50 low hit on Oct. 27, a day when commodities broadly tumbled.

http://online.wsj.com/article/SB123481129113593867.html

Percentages confuse me. I guess it's been the past month or 2 that its been hovering between 9-1000. I've just recently gotten an increase on my GM and small foreign cat. conv. prices. Yay!

Percentages confuse me. I guess it's been the past month or 2 that its been hovering between 9-1000. I've just recently gotten an increase on my GM and small foreign cat. conv. prices. Yay!

I still dont understand how if platinum is primarily considered an industrial metal for auto production how its price is dramatically rising despite the fact that dramatically less cars are being made during the same time period? Are people making a decision that its more a precious metal along lines of gold then an industrial metal? Anyone have any idea what % of worlds platinum is in say jewelry as compared to catalytic converters?

I still dont understand how if platinum is primarily considered an industrial metal for auto production how its price is dramatically rising despite the fact that dramatically less cars are being made during the same time period? Are people making a decision that its more a precious metal along lines of gold then an industrial metal?

Nah I don't think so. Some might, it'd be a bit foolish on their part. I think it's mainly going up because it's used in the development of fuel cells in vehicles as well. That's still going on, and I would think more people are joining that movement every day.

Also it's in jewelry and the like, but that would be going down as well though. Maybe people are treating it as an investment commodity. I wouldn't though.

Maybe people are treating it as an investment commodity. I wouldn't though.

Yea im feeling really bad about the ounce i bought back in November ;)

Yea im feeling really bad about the ounce i bought back in November ;)

Well I'm saying that people could be forcing the price up just by the fact that they're buying it because they think it's worth something. It could be a short lived bubble. I think that's the case with gold. Everyone's forcing the price up because they're being told "Gold is the way to go in financial crises!!!" and buying the hell out of it. That bubble is going to burst and it's going to drop to the $400 mark, which is a bit higher than the 90s but I'm taking into acocunt inflation. I'm no economist but that's just my take.

After typing that though, there are industrial uses for platinum after all, as compared to gold, which might make platinum a safer bet. Gold's main use is in wiring for spacecraft IIRC as well as jewelry and just all around separating people from their money:p.

I still dont understand how if platinum is primarily considered an industrial metal for auto production how its price is dramatically rising despite the fact that dramatically less cars are being made during the same time period?
Because it got severely underpriced in October'08, due to non-market reasons, and here comes the correction.

Price changes without fundamental reasons, or based on overtrading beyond the supply-demand line change, are always followed by a correction, which goes in reverse and sets the price to match the actual value.

It's pretty simple, people see platinum go down, they mass-sell platinum, that creates a temporary oversaturation. The price can change 50%, even if the real, end-consumer demand change requires only a 20% drop. Of course, such a low price is not sustainable, so it goes back. Same with sharp growth.


Are people making a decision that its more a precious metal along lines of gold then an industrial metal? Anyone have any idea what % of worlds platinum is in say jewelry as compared to catalytic converters?
Platinum has a lot of uses other than automotive. It's just that it's so expensive that it's only used when quantities are very low (in a lab) or when absolutely necessary.

But what is uneconomical with $2,300 platinum, is quite efficient with $700 platinum. The consumer market expands to those who have a less critical need for the metal.

I'd expect it to settle at $1,150-$1,200 or so, but it might just as well stay around $1,000 or even go back down, so doesn't make a particularly good mid-term investment. Long-term, it will go way up in a few years, but hard to say how few.

Well, since FA doesn't really work with gold (as correctly mentioned earlier, there's not enough real value behind it), we're stuck to using TA for it. "Slow drop, fast rise" is just an important thing to remember, not just to predict the price, but also to keep that in mind when choosing an investment. On the downside, it's next to impossible to predict when the gold will rise, on the upside, you can quit anytime you wants with little loss, unlike with most investments like stocks.

Good points. Though historically, FA has probably worked very well for gold especially over long term.

My question is will people consider platinum the same way they consider gold when inflation hits and people turn to gold as a hedge. Im convinced that pumping several trillion stimulus into the economy will eventually cause inflation despite our deflationary condition now. During times of inflation people traditionally turn to gold. Will people turn to platinum in the same way or is it more of a good economy high price bad economy bad price kind of industrial metal?

Well I'm saying that people could be forcing the price up just by the fact that they're buying it because they think it's worth something. It could be a short lived bubble. I think that's the case with gold. Everyone's forcing the price up because they're being told "Gold is the way to go in financial crises!!!" and buying the hell out of it. That bubble is going to burst and it's going to drop to the $400 mark, which is a bit higher than the 90s but I'm taking into acocunt inflation. I'm no economist but that's just my take.

After typing that though, there are industrial uses for platinum after all, as compared to gold, which might make platinum a safer bet. Gold's main use is in wiring for spacecraft IIRC as well as jewelry and just all around separating people from their money:p.

All your assertions have already been refuted multiple times in the previous pages in this thread.

All your assertions have already been refuted multiple times in the previous pages in this thread.

Not necessarily.

I don't think so. What in this thread suggests so? Gold, silver and platinum tend to go up or down together, and the platinum-to-gold ratio has been falling throughout 2008, still slowly going down. I'd rather just stick with the gold coin.

This is what I'm saying. Platinum dropped over $1000 dollars in less than a year. Gold continued to climb. To me that suggests that people continued to buy the hell out of gold and are just pushing the price of it higher and higher. What would stop one major player from pulling out their investment and sending the price of gold plummeting overnight? Not even plummeting, maybe the price dropped $50-$100. Wouldn't that scare people off?

My question is will people consider platinum the same way they consider gold when inflation hits and people turn to gold as a hedge.

If a hypothetical "big inflation" scenario occurs, people will turn to anything, not just gold and platinum. Real estate and equities will become very attractive. Gold might not outperform a real estate investment WTSHTF.

Im convinced that pumping several trillion stimulus into the economy will eventually cause inflation despite our deflationary condition now. During times of inflation people traditionally turn to gold.

It would be very dangerous to attempt to time an inflation event. Unless the Fed starts printing Zimbabwe-style, this deflation could go on for years and years.

That said, gold DOES perform well in a protracted debt-deflation scenario (for reasons explained earlier), and this is the situation we're seeing now. Gold might not rise explosively, but it could hold steady at present prices for a long while.

Will people turn to platinum in the same way or is it more of a good economy high price bad economy bad price kind of industrial metal?

Gold will likely always be more attractive than platinum as a store of value and medium of exchange, because gold is more widely and easily recognized than platinum is.

Not necessarily.



This is what I'm saying. Platinum dropped over $1000 dollars in less than a year. Gold continued to climb. To me that suggests that people continued to buy the hell out of gold and are just pushing the price of it higher and higher. What would stop one major player from pulling out their investment and sending the price of gold plummeting overnight? Not even plummeting, maybe the price dropped $50-$100. Wouldn't that scare people off?

Earlier in the thread the proper analysis of gold was discussed.

Gold is not like most other commodities (oil, agriculture, etc). Gold has a commodity demand and a separate monetary demand. Since gold isn't relatively widely used as an industrial metal, most of its value comes from its demand as a money. Remember, gold is money just like USD, Euro, Yen, etc.

For our purposes, let's say 90% of gold's value comes from its demand as money, and 10% of gold's value comes from its demand as industrial application.

Platinum is more widely used than gold in industry, so let's say 50% of platinum's value comes from its demand as money, and 50% of platinum's value comes from its demand as industrial application.

When the commodities bubble burst last year, the industrial values of gold and platinum were wiped out. That means when the bubble burst, gold declined 10%, and platinum declined 50% (since in our example we estimated gold's and platinum's industrial values to be 10% and 50%, respectively). But the monetary demand for both metals still exist, and actually is increasing due to debt-deflation (in deflation, it goes without saying demand for money increases).

This last point is actually why, after the commodities bubble burst, platinum's value has recently been increasing even though industrial uses of platinum is falling of a cliff; demand for platinum as money is increasing faster than demand for platinum as an industrial application is decreasing.

Good points. Though historically, FA has probably worked very well for gold especially over long term.
Not so much of modern FA for gold is really FA, rather than just TA in disguise. With stocks, it's easy, company profits->up, loses->down. Currencies similarly depend on economy strength. There aren't comparable fundamental factors for gold, however; some mine closure or find is a drop in the ocean, and "global economy is falling" is too vague. Essentially it boils down down to "price up", "high trade volume", studying and following the market. And that's the definition of TA. It may be called FA only in comparison to the purist indicator style TA.


My question is will people consider platinum the same way they consider gold when inflation hits and people turn to gold as a hedge.
Gold and platinum, or generally the precious metals, tend to go in the same direction, with a set of relative values of their own. When one goes up, so do others.


Will people turn to platinum in the same way or is it more of a good economy high price bad economy bad price kind of industrial metal?
Platinum isn't steel, it doesn't take nonexistantly massive warehouses to store, so it doesn't have to be used quickly. It's also a high-margin, high-liquidity product, which means you don't stop producing it just because the demand is low. Unlike steel, which you won't sell at all if there's no demand, and will have to close down, platinum will sell, just for less.

That's generally the difference between common and precious metals. So work silver, palladium, iridium.

Not so much of modern FA for gold is really FA, rather than just TA in disguise. With stocks, it's easy, company profits->up, loses->down. Currencies similarly depend on economy strength. There aren't comparable fundamental factors for gold, however; some mine closure or find is a drop in the ocean, and "global economy is falling" is too vague. Essentially it boils down down to "price up", "high trade volume", studying and following the market. And that's the definition of TA. It may be called FA only in comparison to the purist indicator style TA.

Yes that's quite possible.

If a hypothetical "big inflation" scenario occurs, people will turn to anything, not just gold and platinum. Real estate and equities will become very attractive. Gold might not outperform a real estate investment WTSHTF.
The issue with real estate is a near-zero base demand. Urban property can be somewhat scarce during urbanization, but suburban estate is just a luxury item. One can live in the same home all their life, enough space, and houses last long - new ones aren't essentials. That means that in a heavy depression, there's no heavy demand for real estate. On the contrary, it grows with the economy.


Since gold isn't relatively widely used as an industrial metal, most of its value comes from its demand as a money. Remember, gold is money just like USD, Euro, Yen, etc.
Even more so. You can't print gold like Euros. In some ways, say if you take world as a country and currencies as stocks, gold behaves as a "super-currency".


This last point is actually why, after the commodities bubble burst, platinum's value has recently been increasing even though industrial uses of platinum is falling of a cliff; demand for platinum as money is increasing faster than demand for platinum as an industrial application is decreasing.
Don't forget that it fell down a lot first. That means it was underpriced for a while.

This is what I'm saying. Platinum dropped over $1000 dollars in less than a year. Gold continued to climb. To me that suggests that people continued to buy the hell out of gold and are just pushing the price of it higher and higher. What would stop one major player from pulling out their investment and sending the price of gold plummeting overnight?
Lack of such a major player. It's too big a market. And the pressure will correct for these dumps. For every manipulator, there's a million gold bulls.

And remember, trends more often continue than reverse.


Not even plummeting, maybe the price dropped $50-$100. Wouldn't that scare people off?
It drops and rises that much every week. Today it's not impossible even for a day's spike.

The issue with real estate is a near-zero base demand. Urban property can be somewhat scarce during urbanization, but suburban estate is just a luxury item. One can live in the same home all their life, enough space, and houses last long - new ones aren't essentials. That means that in a heavy depression, there's no heavy demand for real estate. On the contrary, it grows with the economy.

Yeah I was being tongue-in-cheek (should've conveyed it much better). In a deflationary depression real estate would be a black hole. However in a hyperinflation scenario (which was the point I was addressing), real estate would be attractive because you can leverage up the wazoo on real estate (10% down payment), and you can't get the same kind of crazy leverage on stocks and gold for example. But I wouldn't recommend this investment m.o. to anyone, since the timing is essentially impossible to get right.

Yeah I was being tongue-in-cheek (should've conveyed it much better). In a deflationary depression real estate would be a black hole. However in a hyperinflation scenario (which was the point I was addressing), real estate would be attractive because you can leverage up the wazoo on real estate (10% down payment),
Ah, the fixed-rate mortgage thing. That's, however, more of a scheme than an investment. Indeed, a hyperinflation will greatly rise the prices, and as no one can afford a mortgage anymore, the supply locks, no new builds.
That works both ways, though: houses cost a huge lot, but no one can actually pay for one - a zero liquidity situation. Until it all settles down and the rates drop.

Another risk is that, as the banks are collapsing, the government intervenes, taking over your liens, and it has the power to change the rules. Doing it directly would be violating the sanctity of the contract, although from a government that tortures people (i.e. disregards civil rights), that's not unlikely. But it can be done without that violation, say, by taxation changes which make sure you can't afford the tax on your house. For instance, an alteration of CGT to be taken on assessed value without the sale, like property tax - unless you opt for a refinance with the gov't as an inflation-corrected ARM. It's harsh, but from a government infamous for double-taxing its citizens, not unexpectable.

This scheme would work with a sudden high change in inflation rate, that however doesn't lead to a catastrophic hyperinflation, but rather to a 15%-30% inflation rate as occurs in developing countries.


and you can't get the same kind of crazy leverage on stocks and gold for example.
Actually, the typical leverage there, if you go marginal, is 1:100. The minimum is 1:20.
But you don't get a fixed rate. More specifically, sometimes you do, but the broker may change it in extreme circumstances.