Friday, February 27, 2009

Gold: still the only serious safe haven

Gold: still the only serious safe haven

With demand for investments in gold still surging, its eight-year bull run looks far from over. Fears of currency debasement are growing, making gold look ever more appealing.

Posted by damien @ 10:04 AM (1592 views)
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34 thoughts on “Gold: still the only serious safe haven

  • What is the intrinsic value/use of Gold? It seems like the ultimate asset bubble in the modern world.

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  • Anyone else expecting gold to correct down to $900-850 in the next few weeks, before the next surge to $1300 later in the year?

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  • I brought some gold coins today from ATS bullion, my misses reckons its a waste of money but i feel better knowing iv got some just in case.

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  • I sold mine last Friday expecting a 5-10% correction and trying to decide when to buy back in, £20,600 – £20,800 per Kilo was my target price, not sure how that compares to your $/oz figures MG.

    Having read that Gold usually falls in March I may not buy all back at that level – if indeed it gets to that level and I’ve got it right.

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  • penbat1 – fantastic video

    Right now for the serious analysis.

    There have been 2 articles this week linking gold with Martin Armstrong’s 8.6 year cycle and his recently announced 8.6 monthly cycle

    http://www.kitco.com/ind/Aden/aden_feb232009.html
    The 3rd graph says it all, even if the author isn’t aware of the 8.6 year PI cycle.
    It shows a potential big bottom in gold in August 2009

    The 2nd article is on safehaven which is down at the mo but the link is
    http://www.safehaven.com/article-12699.htm

    I read this article last night and it shows how gold is following an 8.6 monthly cycle.
    We can expect a small correction going into March and then a 4 month bull ending in August 2009.

    There are buying ops in late March / early April, again in September 2009 and lastly in December 2009

    Gold stocks’ resonance with Calleman’s model is also stunning. Barron’s gold mining index (BGMI) (adjusted for the commodity (CRB) index) topped in early 1939 (maps to top in March 2008). The BGMI (CRB adjusted) bottomed in June 1951 (maps to late October 2008 which was also a major bottom (70pc correction from peak in both cases)

    Gold stocks look set to start Elliott wave 1 in April 2009 that will complete wave 5 next April 2010. The intermediate peaks should be mid-late August and late December 2009.

    For me the Calleman and Armstrong models are now aligned.

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  • Here is the BGMI (NOTE: not adjusted for CRB index here) but still a good rough guide.
    In Calleman’s model resonance we are in the year 1958

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  • Not sure why the graph didn’t come out but here is a link to the 70 year BGMI chart

    http://www.bgmi.us/

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  • S2R1 – thanks for links and views. I know you like miners but I have my doubts i.e. miners might keep lagging bullion all the way through this crisis.

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  • S2R1
    Thanks for the detailed info.

    Was expecting things to fall back a bit further than they have currently, but we’ll see.

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  • Anyone believe any of the conspiracy theories about gold and silver prices?

    In full flow here ( under ‘And then there’s this…’ ) covering the move down from around $1000/tr oz this week:

    http://www.caseyresearch.com/displayDrp.php?id=471

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  • MG,

    I like miners because they will come through in the end. Although like in the dot-com bubble, most exploration stocks will never mine a single ounce EVER, but it doesn’t stop the madness of the latecomers to the party buying into anything with gold in the stock title

    Secondly, miners give very important diversity, as some attempt to confiscate gold WILL happen by the G7 (or G20). Robbing the people of a final safehaven will give us the revolution that is required.

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  • For those interested in extra diversification and profit, get silver and silver stocks (after this correction)
    There is no history of confiscation of silver. Silver usually goes mental in the final stages of the bull (Hunt brothers attempted to corner the market in silver in 1980).

    What will be the trigger this time for the silver mania?
    Could it be an attempt to confiscate gold?

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  • I see the persistant gold ramping keeps going and going and going.

    Yawn…….

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  • S2R1 yes i also like silver. Silver is also in shorter supply. Check the video here. The one to watch is the 5th one down with David Morgan. Watch to the end when he shows some charts…

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  • Shining Wit – don’t fall asleep at the wheel now…;-)

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  • @13.shining wit

    I guess you never held on to quality

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  • rocket robbie – looking at the gold price it seems you weren’t the only one buying today…

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  • are silver etf’s a good way to invest in silver and how would you go about doing this??

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  • sold 2 rent 1 says:

    amjidk,

    goldmoney.com allows you to buy vaulted silver in UK or switzerland.

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  • mountain goat says:

    amjidk – personally I do have investments in silver ETFS Physical Silver (PHSP). This ETF holds matching stocks of silver, unlike some that just track the spot price. I trade these in an online share trading ISA account with thesharecentre. I like ETFs because they can be traded instantly like shares whereas physical bullion is slower and has storage issues. Silver bullion trading is subject to sales tax unlike gold. The disadvantage is counterparty risk of not holding the silver in your possession if things go t!ts up.

    I read advice that if investing in precious metals you should start with holding some physical metal. Then after that think about other ways of investing such as ETFs or allocated bullion accounts. Sounds sensible like sensible advice.

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  • MG

    The problem with holding actual metal as I see it is
    1/ not getting sold ‘tampered with’ coins bars in the first place.
    2/ convincing whoever you’re selling onto that they’re not tampered with.
    3/ the spread between the two is pretty big compared to trading at bullion vault (0.8%)

    I very much like the idea of having a little stash somewhere
    Currently I can’t help feeling the price for coins etc is (and I’m not sure I can justify this) but more bubble than buying stored bullion.
    Oh I know what it is – it’s paying far more than ‘face value’ of a coin – I don’t know why it just grates on me.
    I suppose not knowing what I’m doing, ie not knowing if I’m getting turned over by the ‘reputable’ dealer or not concerns me.

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  • mountain goat says:

    Str 2007 – yes I agree with what you say. I do hold some coins, but I regard them as my Armageddon insurance rather than standard investment. I use and recommend coininvestdirect. I got criticised for recommending them a few weeks ago because they have huge spreads on some coins. But I find their prices competitive for buying silver coins, which is a combination of the spot price and their supplies. If you buy 20 you get a container from the mint. Don’t think I would sell to them though.

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  • S2R1
    Thanks for the link to Gold Money, reading briefly it looks as though they’re half way there to being able to use their/your Gold as currency.

    The buying commission at 2.49% though looks very high compared to Bullion Vaults 0.8%. Maybe I’m missing something ?

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  • sold 2 rent 1 says:

    str 2007,

    The spreads are higher, especially on silver, so my advice is to only trade when prices are severely overbought and severely oversold.

    MG,
    Nice video. Any idea which silver stock the guy was recommending to buy?

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  • mountain goat says:

    S2R1 – Yes that guy has his head screwed on right. I liked the bit about this being a currency crisis not an ordinary depression. Don’t know the mine he was recommending, I am not subscriber. It was a zinc deposit he was talking about not silver I think.

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  • sold 2 rent 1 says:

    The 2 gold graphs of 8.6 year and 8.6 month cycles



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  • mountain goat says:

    S2R1 – Secondly, miners give very important diversity, as some attempt to confiscate gold WILL happen by the G7 (or G20). Robbing the people of a final safehaven will give us the revolution that is required.

    Anger is rising at bankers the perceived “wrong-doers”. When the tax bill arrives, currencies collapse and interest rates explode there will be more anger still, this time at governments whose lame excuses for having to bailout everyone will be rejected.

    At the moment it is still only the very rich investing in gold (and a few ridiculed survivalists). There is no point in confiscating gold because it is not linked to the currencies as it was before. But I suppose it might be done in an attempt to get people spending. So it might be done at the top of the bubble when average people start buying gold.

    Recently I have been reading that Central Bankers actually like strong gold, since they are all in a beggar-thy-neighbour rush to devalue their own currency. Or do you think they are still out to undermine gold?

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  • sold 2 rent 1 says:

    MG,

    “So it might be done at the top of the bubble when average people start buying gold” – oh yes.

    The governments/corporates want to suppress gold for as long as posible allowing the Power Elite to buy more of it and blow up the coming bubble in commodities using printed money

    Then when currencies collapse gold will rocket and an attempt to confiscate it will surely happen.
    Then the revolution.

    Until then lets just discuss things like Land Value Tax, and pretend we have the solutions to the problems.
    My God. People are in for such a shock when they realise the old world has gone

    It can be a lonely place sat here with all my effing graphs and charts. Can’t wait for some of you guys to catch up and smell the monatomic coffee!!!!!!

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  • thanks mountain goat, what is the advantage of the type of etf you described as compared to say PHAG..

    thanks

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  • mountain goat says:

    amjidk – as far as I can tell they are much the same, PH standing for physical backing. So I guess it comes down to costs (if one is cheaper) and what your stock broker offers.

    Re-reading what I wrote above I realised it was ambiguous. Coins and bars invite sales tax, whereas ETFs invite the taxes related to ETF/share trading which are less than sales tax. Holding them in an ISA allows you to escape capital gains tax.

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  • mountain goat says:

    S2R1 – “It can be a lonely place sat here with all my effing graphs and charts”

    🙂

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  • To debtfree said…@ 17

    “I guess you never held on to quality”

    I’ve lost in some investments but as of late I am up an most of the others. I wouldn’t touch gold regardless of what others say as it appears to either be near the top or is volatile as anything else.

    I have also held onto the best woman in the world mate, and she definitely is pure gold…

    Cheeky bugger….

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  • shining wit

    I’ll have to tell you your wrong on the woman front, mine’s downstairs washing up (without a dishwasher) as I type.

    Looks like I’ve got the best !

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