Notwithstanding Friday's implosion, Barron's Randall Forsyth says gold looks undervalued, and...

Notwithstanding Friday's implosion, Barron's Randall Forsyth says gold looks undervalued, and pitches the precious metal as the anti-bitcoin: "It is incongruous that gold - money that can't be printed, just minted - would enter a bear market Friday." Calafia Beach Pundit disagrees. His next target for gold: $1,000.

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Comments (36)
  • DeepValueLover
    , contributor
    Comments (11311) | Send Message
    Why is gold (which maintains its purchasing value for decades and longer) considered the asset that is "entering a bear market" while the dollar (which loses its value with each new dollar that is added to the paper pile) is considered the asset that is "strong"?


    Seriously...can somebody explain the logic behind this?
    14 Apr 2013, 08:03 AM Reply Like
  • Joe2922
    , contributor
    Comments (486) | Send Message
    Paper currencies have no intrinsic value; they are priced relative to other currencies, and the 4 major ones are all increasing supply. The $USD is perceived as safest.
    The price of gold in various currencies is very different, so looking at it only in $USD shows just one part of the value of gold. The price of gold has swung from $250 to near $2000 and back down, in $USD.
    Gold has some intrinsic value because it is perceived by people to have some, but how much varies quite a lot.
    14 Apr 2013, 08:23 AM Reply Like
  • Tack
    , contributor
    Comments (16498) | Send Message


    I'll give it a shot.


    You're making the wrong comparison. You shouldn't be measuring the value of gold versus the dollar; you should be measuring the value of gold versus all kinds of alternative investments. Gold is not money, despite claims; it's a commodity. And, the dollar is just a medium of exchange. In effect, anybody holding dollars is uninvested, but the relative value of all kinds of other investments changes over time, without regard to what the dollar itself may be doing versus various currencies.


    Since 2008, gold's price has been mostly fear driven. Now, apparently, the market likes various business-related assets, as investments, better than an inert metal. This shouldn't be entirely surprising, as over longer periods, equities have outperformed gold significantly.
    14 Apr 2013, 08:24 AM Reply Like
  • rasanders22
    , contributor
    Comments (612) | Send Message
    "Gold is not money, despite claims"


    That line will make this thread go to over 200 replies.
    14 Apr 2013, 08:32 AM Reply Like
  • Agbug
    , contributor
    Comments (1306) | Send Message
    I gave Tack a thumbs up for his reply. You are likely right rasanders22, his comment could very well spark a laborious discussion of what money is, or isn't, but my stake in silver is speculative, I freely admit that.
    14 Apr 2013, 09:01 AM Reply Like
  • rasanders22
    , contributor
    Comments (612) | Send Message
    Well, before you can argue if gold is money, you have to define money. A quick search in the dictionary sees it is defines as
    "1. any circulating medium of exchange, including coins, paper money, and demand deposits.
    2. paper money.
    3. gold, silver, or other metal in pieces of convenient form stamped by public authority and issued as a medium of exchange and measure of value.
    4. any article or substance used as a medium of exchange, measure of wealth, or means of payment, as checks on demand deposit or cowrie.
    5. a particular form or denomination of currency. See table under currency. "
    14 Apr 2013, 10:47 AM Reply Like
  • Joe2922
    , contributor
    Comments (486) | Send Message
    Food has real value, it can't be printed, and it's useful. If things get really ugly, it can be used as money and will be stolen. I like food quite a lot, actually. The physical kind!
    14 Apr 2013, 11:14 AM Reply Like
  • rasanders22
    , contributor
    Comments (612) | Send Message
    Food has no value since they are always making more ;) When the value of food crashes, I will be glad to have gold and silver.
    14 Apr 2013, 11:23 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11311) | Send Message


    Paper is not money, despite claims; it's a commodity.


    The "fear driven" argument is bizarre. Where was the fear as home prices rocketed up along with gold prices during the last decade?
    14 Apr 2013, 12:51 PM Reply Like
  • Tack
    , contributor
    Comments (16498) | Send Message
    An excellent read on gold vs. equities:

    15 Apr 2013, 05:26 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11311) | Send Message
    A great video to watch if you don't understand the value of gold:

    15 Apr 2013, 09:00 AM Reply Like
  • whowho77
    , contributor
    Comments (146) | Send Message
    Manipulation. Pure and simple. Dollar vs Gold. Something got to give. Dollar will collapse due to unprecedented money printing while gold supply is limited and real physical demand is high.
    14 Apr 2013, 08:06 AM Reply Like
  • Hutch
    , contributor
    Comments (28) | Send Message
    I agree with Marc Faber
    "In the economy of the cuckoo people that populate central banks, everything is possible."
    14 Apr 2013, 08:46 AM Reply Like
  • pauldia
    , contributor
    Comments (7) | Send Message
    How the Gold Market was Crashed
    14 Apr 2013, 08:52 AM Reply Like
  • Agbug
    , contributor
    Comments (1306) | Send Message
    While I don't usually subscribe to conspiracy theories, I acknowledge that the world of finance is one epic poker game, and the linked article has some merit. What it neglected to add was the Goldman Sucks call on the price of gold going down the tubes just a couple of days prior. Coincidence or not? I also find it curious that bit-coin got absolutely crushed in the same week.
    14 Apr 2013, 09:36 AM Reply Like
  • filipo
    , contributor
    Comments (4662) | Send Message
    quite interesting your link.
    14 Apr 2013, 09:43 AM Reply Like
  • dancing diva
    , contributor
    Comments (2751) | Send Message
    I wonder who holds the gold for the GLD etf who I heard awhile ago held the largest position of physical gold in the US. Note the stocks and the price on the link go in the same direction. If JPM held the gld's position in their stockpile, wouldn't JPM's stocks of the physical metal naturally fall as people exitted their gld positions? Or possibly large hedge funds exitting?


    I don't know enough to opine one way or the other, but I typically look for logical explanations first before going with a conspiracy theory.
    14 Apr 2013, 10:45 AM Reply Like
  • sikkabooyah
    , contributor
    Comments (457) | Send Message
    Rather than to argue with 2,000 years of civilized human history, I prefer to be crucified on a cross of gold. At least the GLD holdings in my portfolio, when cashed in, should be sufficient to pay my burial expenses. This is more than can be said for many other such holdings upon which 2,000 years of sentiment seem to have had little impact.
    14 Apr 2013, 09:14 AM Reply Like
    , contributor
    Comments (152) | Send Message
    If anyone thinks gold is not money-it is obvious they never lived in Asia. I'm American and lived in Thailand and traveled in Asia and I assure you it is used as savings and money.
    14 Apr 2013, 10:15 AM Reply Like
  • uncensored patriot
    , contributor
    Comments (61) | Send Message
    It is also obvious that anyone who says that gold is not money, disagrees with the clear prohibition of the US Constitution which allows no "lawful" money other than gold and silver. Of course, it might be noted that Uncle Sam has unlawfully usurped the rights of the people and the states reserved in the US Constitution (as it is most clearly reserved in the 10th Amendment) and breached the covenants between the people and the states and the central government.


    Can Uncle Sam, by edict lawfully amend the Constitution, failiing to follow either of its prescribed methods for amending it.? Are we no longer a govt by consent of the people or do we subscribe to the Maoist doctrine that "All political power flows from the barrel of a gun"?.
    14 Apr 2013, 09:08 PM Reply Like
  • elmmj
    , contributor
    Comment (1) | Send Message
    Amazing how most of us forget that there is an entire world outside of the U.S. and our myopic views are too narrow.
    14 Apr 2013, 09:09 PM Reply Like
  • Anthony Fodratto
    , contributor
    Comments (5) | Send Message
    Pauldia, your link is very interesting. It shows the extent the powers that be can go to manipulate reality. In this context, how can we trust our GLD holdings will be "honored"? GLD is paper gold. If the physical market can be tossed left and right as described, it doesn´t take a genius to figure out what these guys can do to our paper holdings! On the other hand, the liquidation that´s going on in GLD must be releasing tons of gold bullion into the market. Where´s all that physical gold going to? It´s coming out of HSBC´s vaults in London and going where? Does anybody know?
    14 Apr 2013, 10:33 AM Reply Like
  • Alex Ramos
    , contributor
    Comments (295) | Send Message
    I'd like to see evidence that even a single truck has left HSBC's vaults carrying gold.
    14 Apr 2013, 11:56 AM Reply Like
  • Russ Winter
    , contributor
    Comments (691) | Send Message
    Gold Being Pulled From Depositories to Deal With Repatriations.

    14 Apr 2013, 01:17 PM Reply Like
  • jmarkar
    , contributor
    Comments (23) | Send Message
    Money is anything that participants in an economy agree upon as a symbolic
    medium of exchange. Most of the "GOLD IS NOT MONEY" folks think that
    paper with green ink IS money. Money, like beauty, is in the eyes of the
    beholder. The person above that wrote about food as a medium of substantial
    value was much closer to material truth than the rest of us arguing about
    relativity. If you have sufficient food and water and adequate shelter, you have
    the only things of value to your existence. Which is more valuable if the
    proverbial collapse of social stability occurs: 20 acres of fertile land in the hills
    with a spring, moderate climate, a warm cabin, a source of wood fuel, etc that
    was purchased for $40,000, or a $2 million dollar high rise condo in Miami filled
    with artwork, a substantial pile of jewely, completely dependent upon others for
    groceries, electricity, ... even the elevator to get you there, gasoline , etc etc.


    Value is relative. Complacency is the enemy of true value.


    Money is agreement. Period.


    My firewood may be easily worth your diamond necklace if you are cold.


    I live in a great city, but almost every day I momentarily miss my decade of
    living in the hills of Northern California surrounded by riches.
    14 Apr 2013, 02:45 PM Reply Like
  • rasanders22
    , contributor
    Comments (612) | Send Message
    N.Ca is a beautiful area. I would like to move back there some day. I have family out there and I an tired of the heat in AZ.
    14 Apr 2013, 07:03 PM Reply Like
  • 55mph
    , contributor
    Comments (82) | Send Message
    Price Target $1,000 ?? At the end of the brief article i see the number $1000 printed after 'his next target for gold'. Am i reading that correctly?
    14 Apr 2013, 03:07 PM Reply Like
  • David R. (Canada)
    , contributor
    Comments (35) | Send Message
    I think I'd better switch my holdings to Cowrie shells!
    14 Apr 2013, 03:08 PM Reply Like
  • slemarie
    , contributor
    Comment (1) | Send Message
    Its not manipulation....the Yen and Euro are worse than the dollar...and there are trillions of dollars in assets that have to flee those currencies. In general, partially due to stupidity and partially due to the media, most people do not realize what is going on. Gold has risen for 13 years and its time for a rest before it blasts off again. That won't happen til after everyone piles foolishly into dollar assets. Then they will awaken and realize the US is no different than Japan and Europe. Be patient and get ready to load up on gold at much lower prices. PS....when it all blows might be wishing for these days again after they come and take your gold.
    14 Apr 2013, 09:08 PM Reply Like
  • User 7774471
    , contributor
    Comment (1) | Send Message
    Two words Paper Gold.
    Yes paper gold is a paper currency.
    Physical gold is different and has intrinsic value. That will survive for a long time. But there is too much paper gold at present which prevents physical gold from achieving its true value.
    What you are seeing at present is the death of paper gold. Physical gold will shine when its dead.
    Look for reports of extreme scarcity of physical gold as the price of gold drops through the floor. Yes when you try to find physical gold you will not find it, when it becomes cheap enough.
    I think the final run on the bullion banks has started.
    14 Apr 2013, 09:08 PM Reply Like
  • bertrandrighi2
    , contributor
    Comments (35) | Send Message
    Good eyes User 777. A very few are parting that: PAPER vs. PHYSICAL. It's obvious that paper is paper only, just like fiat money.
    GLD never hide it is backed up for a fraction of its assets only. Would anything crash , they would be liable for this SMALL part only. Filing for bankruptcy would prove them as white as snow.
    For others, pretending they are fully backed up, it may prove eventually worse, with NO REAL back up at all. Or how to explain, that to refund the GERMAN Gold ( 3000 metric tons ) sheltered in vaults outside of Germany, it is going to need SEVEN YEARS ?
    The question is not even whether Gold ( and Silver ) , physical, are a safe and sound asset. It's more WHERE are you going to stash it, SAFELY ?
    Anything more valuable ? Food certainly. Is it safe to stash it ? I fear not: you could be robbed, and even killed, just that. Besides it may just rotten: Thailand gets 3 years rice crops in wharehouses, and a good part is mildwed already. ( they stored that for populists reasons, not for safety, a decision that would request imagination, and organization )
    In my opinion better have an outside source of food, reliable, in a small, but safe country. You may eventually TRADE the surplus, when a bushel of beans would cost an Oz of gold. ( W. Shakespeare became insane RICH from that, not from being a writer, do you know ? )
    15 Apr 2013, 12:04 AM Reply Like
  • far man
    , contributor
    Comments (76) | Send Message
    Can we estimate the ultimate time to buy. How low can gold go down without fearing it can't go down any anymore.
    14 Apr 2013, 09:08 PM Reply Like
  • JoeHenry
    , contributor
    Comments (3) | Send Message
    Equities continue to be medicated by the Fed. When Fed stimulus slows or stops, equities will come back down to earth. Equities will be like an addict who can no longer get his fix.


    The US$ is being undermined with every Fed stimulus. But, because currencies trade in a "relative" market, the $ is winning the ugly beauty contest. Watch what happens when commodity prices rise.
    14 Apr 2013, 09:08 PM Reply Like
  • PM's Rock
    , contributor
    Comments (198) | Send Message
    I like to think for PM's as an insurance policy to complete collapse of the global financial system. If that occurs I believe many will want something tangible backing fiat currency.


    What the FED and Central Banks are doing is destroying purchasing power via inflation. We know long term the USA will never be able to pay its obligations, so a collapse or a loss of reserve currency status is pretty much a given. What we are witnessing via short-sighted politicians and greedy oligarchs is a shifting of power from West to East and that is also likely where the gold is going. That is also why interest rates are artificially low and the only person buying US Treasury Bonds is the FED to the tune of 85 billion a month. Quantitative Easing is not going to end, the FED has to find other sources of revenue as it is backed into a corner on interest rates because of our absurd debt. I assure you paying debt service on approaching 20 trillion is going to take more and more of our tax revenue. The rest of the world knows the gig is up soon, but our apathetic populace is still being led like sheep to the slaughter. Precious metals are being artificially manipulated because the FED and Central Banks want to discourage individual investors from running out of bonds and into them (PM's) as they know it will bring a more rapid decline to the dollar.


    If you have a 3-5 year window, this is the chance of a life time. PM's may be beaten down further in the short term, but I can tell you Central Banks are positioning themselves out of the short positions in metals and setting a trap for those speculative shorts who are playing the momentum trade. Grab physical, where you can on the cheap, as insurance.


    Go ahead and tell me where I am wrong. In this case the trend will not be your friend in the end. Do you folks really think Goldman Sachs is going to publicly tell everyone to be short the precious metals and not have a plan to separate you from your money down the road. They don't play fair my friends. The definition of insanity is doing the same thing over and over and expecting different results.
    14 Apr 2013, 09:34 PM Reply Like
  • Sir. Monaco
    , contributor
    Comments (362) | Send Message
    violent selling in gold right now....also worse in silver.....natural gas and oil to follow....
    14 Apr 2013, 10:08 PM Reply Like
  • jobehro
    , contributor
    Comments (795) | Send Message
    Money is any form of a trading medium and only requires ones faith. Paper backed by the US Govmt seems to garner more faith at this point in time than gold. Wait awhile and see if that changes.
    Got faith?
    17 Apr 2013, 02:22 AM Reply Like
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