Thursday, January 10, 2008

When to sell gold

Central Banks Facing Stagflation - Bullish Gold, Currencies and Crude Oil

"If we stay with decent world growth and inflation, gold and oil continue rising. If we get stagflation, that could be worse, and gold and oil rise more, .... But, even if central banks cut interest rates, we may get a big economic contraction anyway because, so far, Central Bank rate cuts have had virtually zero effect on the spreading credit contraction. If that is the case, we get a severe world economic recession. In such case, gold, commodities and oil likely turn in the other direction. The present price levels will not stay with us. It is going to be important for gold and commodity bulls to discern if a serious recession is about to emerge which stems both inflation and or stagflation causing a big world stock sell off."

Posted by happyrenterz @ 10:46 PM (637 views)
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6 thoughts on “When to sell gold

  • And here we have a different take altogether Buy Gold on Emotion, Not Fundamentals! when gold hits $1000 EVERYONE will know about it and go beserk.

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  • sold 2 rent 1 says:

    There will always be different viewpoints.

    The Market Oracle article always sees gold and oil going in the same direction.
    Why? One is the most important industrial commodity on the planet; the other is a future reserve currency with little industrial use.

    Money supply is exploding around the world and consequently currencies are devaluing. If the world economy does hit the buffers then will people dump everything for cash. I don’t think so. The debt problem is so big now that we need hyperinflation or debt destruction on a massive scale. Gold will be the safe haven.

    The main risks to gold investors are:
    – Moves by governments to confiscate gold and buy it cheap
    – Complete breakdown of society

    Neither of these I see happening before 2010-12 so gold should be safe enough for a year or two.

    It might be best to diversify out of gold from 2010. To what? Only time will tell us the answer.

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  • Whilst it’s been a no-brainer to buy gold recently, when to get out of it is the interesting question. At some point, I can see a lot of people, myself probably included, being like rabbits in the headlights watching the price go back down again and telling myself it will pick up once more!

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  • sold 2 rent 1 says:

    cornishman,

    Sure it will correct and flush out the weak hands who don’t understand what is really happening.

    At various points in the next 7 months I will convert a third of my gold/gold stocks into USD. Probably when gold is over $1000 and/or when the USD index goes below 72. We are in Elliott 2 since August so we can expect another pullback within the next month or 2 then gold to take off again and maybe hit $1200.

    After the summer we will probably have another period of consolidation that can be used as a buying opportunity.

    It is only when proper gold speculative mania arrives you really have to be concerned about getting out.
    Gold is the bubble to top all other bubbles, and we have had a few of those over the last 30 years.

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  • Yogi's Friend says:

    To my mind the time to consider exiting a gold position is when we overhear ‘coffee shop’ conversations about what a great investment it is – when I first bought gold in October 2006 this was seen as ridiculous when I could have bought property – sentiment is undoubtedly changing, but I don’t feel we have seen the irrational exuberance phase yet.

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  • also sold to rent says:

    Personally I can’t be bothered trying to time anything. I just settle on a long term bull (like the tech boom, housing or commodities) and try to be in it for 5 or 10 years. Works for me.

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