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With gold (now at $1,583) looking to many like the only safe place in asset hide-and-seek, it's...

With gold (now at $1,583) looking to many like the only safe place in asset hide-and-seek, it's pushed into new nominal highs - and contrarians aren't surprised, Mark Hulbert notes, counting an average recommended market exposure of just 34% (two-thirds of gold portfolio in cash). But despite the wall of worry, could Europe woes (and a fired-up ECB printing press) make the metal go "parabolic"?
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Comments (12)
  • HiSpeed
    , contributor
    Comments (1104) | Send Message
     
    Gold is a constant and is merely maintaining a store of value - it's the fake fiat currencies that are depreciating relative to gold.
    13 Jul 2011, 07:43 PM Reply Like
  • The Sane Investor
    , contributor
    Comments (357) | Send Message
     
    Gold still have it's own form of inflation. It's called mining, and I'm not sure if most gold buyers think about this.

     

    As the price of gold increases, we will see more "inflation" as mining picks up and gold comes out of the woodwork to be sold at these higher price points. If it indeed goes parabolic, there will be a crash. It's only a matter of time.
    13 Jul 2011, 08:05 PM Reply Like
  • Vuke
    , contributor
    Comments (1648) | Send Message
     
    Right, but producing gold is not like growing corn. The easy deposits are gone and as new deposits come on-stream old are being worked out.

     

    Should the world adopt gold as a store of value it's unlikely enough will be produced to begin to retire today's debts and that's the inherent stability of gold. There's not enough to go around to satisfy political whims for "stimulus".

     

    Gold could be described as a reality check.
    13 Jul 2011, 10:50 PM Reply Like
  • WMARKW
    , contributor
    Comments (10390) | Send Message
     
    Sane,
    So what do you consider a crash and why do you think it's only a matter of time? Is there something you see out there that will change the dynamics? I only see things getting worse, not better. Would you say we are better off today than 2008 or worse off? Do you think EU will get better in the next 3 years or worse? When do you think the politicians in the US will screw their heads on?
    13 Jul 2011, 11:01 PM Reply Like
  • frdm45
    , contributor
    Comments (717) | Send Message
     
    Don't you love commenters like this "Sane Investor", bearish on gold for the last $500 up. There are dozens of reasons why gold will go up, and they think one possible negative one will outweigh all the positive ones?

     

    Why hasn't mining picked up yet? The price of gold has been on a tear for ten years and production only started to reverse the downtrend in 2008. I'll tell you why -

     

    1. Grades have been decreasing for years, and will continue to decrease. Almost all the easy, high grade, near surface deposits have been mined, as in oil, the rest are deeper, lower grade, further from infrastructure, require more environmental safeguards, require more remediation, not to mention higher energy input costs etc etc in a few years the average cost will be closer to $1000/oz and will continue to increase.

     

    2. From geophysical mapping, to early exploration, to advanced exploration, to feasability study, to development and finally production you're looking at min 7 years usually ten years.

     

    So mining may eventually ramp up, but it is questionable whether new mines will even be able to replace ones being exhausted right now, and gold mined in the future will have much higher costs.

     

    Also, gold may crash, but most think that the dollar will crash first. At least if gold crashes it will still be worth something, if the dollar crashes it won't be worth the paper it is printed on - it will be worth zero.
    14 Jul 2011, 06:20 PM Reply Like
  • Speakeasy
    , contributor
    Comments (414) | Send Message
     
    With a government like ours who needs enemies? We are imploding from within and notice that while we have to share in the "sacrifice" Congress and President are exempt! Exempt from getting their wages cut, exempt from paying social security taxes, exempt from Obama Care - they are the new King George!
    13 Jul 2011, 07:58 PM Reply Like
  • valueinvestor123
    , contributor
    Comments (327) | Send Message
     
    Gold and other commodities are going up again because they are priced in dollars and Bernanke signaled today that he is willing to destroy the value of the dollar even more!
    13 Jul 2011, 08:00 PM Reply Like
  • tigersam
    , contributor
    Comments (1711) | Send Message
     
    Gold will be $2500 by December 2012. Big demand from China and India.
    13 Jul 2011, 08:05 PM Reply Like
  • James Quinn
    , contributor
    Comments (1016) | Send Message
     
    The show must go on.

     

    www.theburningplatform...
    13 Jul 2011, 10:40 PM Reply Like
  • TradingHelpDesk
    , contributor
    Comments (538) | Send Message
     
    Gold to $10,000 in a few years. That's the message people selling gold are saying. Enough said.
    16 Jul 2011, 08:10 AM Reply Like
  • Ed's perspective
    , contributor
    Comments (262) | Send Message
     
    With all do respect . . . .

     

    25 yrs ago how much paper money supply was there in say .... china and india? today they are HUGE. gold supply has not kept pace with supply of paper, so i can see a relative balancing working its way through the systems.

     

    one should not confuse the fear trade swings with always being a winning gold bet. when markets plunge ... REALLY plunge.... and the reason for fear and ECONOMIC contractions, the price of EVERYthing goes down. gold will be no exception. check your history.
    18 Jul 2011, 09:24 AM Reply Like
  • anandsu
    , contributor
    Comments (5) | Send Message
     
    There are very few investments out there with the degree of positive expectance like gold. Essentially there are a few scenarios for gold to topple and many scenarios for gold to go ballistic. Though this trend is multi-year and the investment idea is not new, I see little point in being contrarian. Bubble spotters....look elsewhere!
    26 Jul 2011, 06:35 PM Reply Like
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