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Is Gold Increase Actually A Currency Issue

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I have interests in both UK and Australia, and have been looking at gold as a 10% wealth haven. Missed the chance to buy using GBP back in December when I thought yes, worth a little diversification. Was thinking maybe to get some using AUD this month.

However.....looked today at the price vs AUD and found THIS:

gold_1_year_o_aud.png

couldn't this mean that the increase in gold is purely due to the fall in the US dollar against other 'things' that have held value, including the aussie dollar? I know very little about the gold market, but know that HPCers will have something to say.....

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I have interests in both UK and Australia, and have been looking at gold as a 10% wealth haven. Missed the chance to buy using GBP back in December when I thought yes, worth a little diversification. Was thinking maybe to get some using AUD this month.

However.....looked today at the price vs AUD and found THIS:

gold_1_year_o_aud.png

couldn't this mean that the increase in gold is purely due to the fall in the US dollar against other 'things' that have held value, including the aussie dollar? I know very little about the gold market, but know that HPCers will have something to say.....

Aussie dollar is still a carry trade currency I suspect. AUD/XXX exchange rates can change very quickly. e.g. dropped from 1 to the USD to 0.6 to the USD during late 2008. It is overly strong, so buying gold in the AUD might be a reasonable currency hedge, especially if China wobbles.

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couldn't this mean that the increase in gold is purely due to the fall in the US dollar against other 'things' that have held value,

Quite possibly. The dollar is in a positive feedback loop with oil, and many other assets are based/related to oil. The Aussie has assets behind its value so it should basically keep stable against assets. Gold, however is largely a speculative investment, it has no value or real worth except for gambling in a Ponzi scheme.

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Gold, however is largely a speculative investment, it has no value or real worth except for gambling in a Ponzi scheme.

unlike fiat

:lol:

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Quite possibly. The dollar is in a positive feedback loop with oil, and many other assets are based/related to oil. The Aussie has assets behind its value so it should basically keep stable against assets. Gold, however is largely a speculative investment, it has no value or real worth except for gambling in a Ponzi scheme.

Gold/oil ratio has remained fairly constant, as shown on the chart below, over last 60 years, that can not be send for fiat and look at the the value of the euro fall since 2000, prior to that it's the German mark.

crude%20oil%20price%2011%20August%2009.jpg

Regarding gambling ponzi schemes, Winston Churchill said

All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster.
Edited by Take Me Back To London!

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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