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WHAT HAPPENED ?


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Any metal bulls left ? 1000 gold? 20 silver?

 

Gold - Down from 720 to 580,,, off ~20%

Silver - Down from 14 to 10,,,, off ~28%

Copper - Down from 3.8 to 3.2,,,, off ~16%

 

Anyone buy that $700 oz. gold or $12-14 silver?

 

........ and a hush fell over the herd ........

 

 

 

Looks like little ol' copper was the best buy...... I'm gonna go search another $25 box and sock away a few more in the bucket. :ninja:

 

Cheers, and have a great weekend all... Bulls and Bears alike.

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Common date wheaties in g/vg condition have been selling for 4 cents each in bulk for a while now. Since HSN started to do this wheatie bag thing the price has steadily climbed to where they're now running about 7 cents each in 500 coin bags. I don't think the fall in copper is going to stop this climb.

 

I'd predict that the copper memorials will follow the same path but be about 1 year behind the bulk price curve.

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I'd guess most around here have thick enough skin to take the barb.

 

Can I say Bubble now? :ninja:

 

Cheers.

 

You can say bubble if we are back to $250 by the end of the year, if not I would tread carefully. In my view the market got way ahead of itself in the spring, and we had a normal correction. Gold even at $540 is above the long-term trend line, so this could be expected. If the bull market is truly over, then it would be the shorted metals bull market in recorded history, so I'm thinking we still have a lot of time to roam. Of course, people like you were spouting "I told you so" back when gold peaked just over $400 and fell all the way back to $320 (another 20% correction) and were screaming like chicken little all the way to $500. I'm sure when we reach $1,000 and pull back to $800 you'll be there to warn us, and then after the pullback from $1,500 to $1,200 you'll be there. I view this as a great buying opportunity, and put my money where my mouth is adding two Saints to my collection in the last three weeks. With a man like "helicopter" Ben in charge of the Fed and at the controls of the printing presses, I'll take real money every time.

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Of course, people like you were spouting "I told you so" back when gold peaked just over $400 and fell all the way back to $320 (another 20% correction) and were screaming like chicken little all the way to $500.

 

Nope,, you may be confusing me with someone else. I actually socked away a couple of St's when gold was ~$400, as was scratching my head when it fell back. I didn't say a word until gold hit $700, at which time I think both Vfox and I expressed caution in another thread.... and I sold one of the St's :ninja: cha-ching.

 

I agree with you, as I said in the earlier thread and which you are now saying (after the fact), that gold has experienced a regression toward the mean. Also, agree that it could be a buying opportunity. I'm gonna wait a bit though and make sure it's found the bottom... I'll probably buy back my St. and maybe another around $525-550.

 

Finally, your probably right. When gold gets to $10,500 an oz (and it will given an infinite time line),, and if I'm still kickin',,, and if it get's there by doubling within a relatively short time,, then I'd express caution again,,,, especially if the cost is not warranted by an equavilent increase in the costs associated with digging more up.

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Any metal bulls left ?  1000 gold?  20 silver? 

 

Gold - Down from 720 to 580,,, off ~20%

Silver - Down from 14 to 10,,,, off ~28%

Copper - Down from 3.8 to 3.2,,,, off ~16%

 

Anyone buy that $700 oz. gold or $12-14 silver?

 

........ and a hush fell over the herd ........

Looks like little ol' copper was the best buy...... I'm gonna go search another $25 box and sock away a few more in the bucket.  :ninja:

 

Cheers, and have a great weekend all... Bulls and Bears alike.

Well, I was buying gold at $320 and was still buying at over $600. If I'd had some walk in front of me on May 12th, I probably would have bought at $725. The price of gold doesn't matter when I get a chance to buy. It's just something I do when the funds are free to use.

 

When you're not buying to resell, the spot price isn't really significant. It's just a kick to get see that people will still take green paper in return for real money. ahaha

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When you're not buying to resell, the spot price isn't really significant. It's just a kick to get see that people will still take green paper in return for real money. ahaha

 

I think a lot of money management advisors recommend that you keep 6-8 months of your annual sallary in cash within a bank account for emergent events. What'cha think of that? IMO, I just can't see keeping that much tied down. Like you, when I have the green paper sitting around I prefer to put it somewhere,,, just not something that's raced up beyond my ability to explain it in a business case....

Had you sold at 700, you could now have jumped back in and got a free 6th coin for every 5 that you had sold a few months ago (Monday morning Q'backing,,, sorry, I know).

 

.... and what about mining company stocks? Would you trade the green for a few shares of them as readily as you would pay for thier marked up product.?

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I have been following the gold and silver markets for a few months now, so I'm basically clueless. :ninja: So I did some research on how gold is consumed world wide and found some interesting tidbits. What it looks like to me (and remember, I'm clueless so let me know if I'm being stupid here) is I don't think that gold can go much higher then about $800 per ounce. My theory is that most of the gold consumed in the world goes to jewelery. 70% to 80% of it goes to this market alone and some studies say it might be as high as 85%. When gold hit $700 back in March the largest jewelery market in the world, India's, dropped by 30%. This is a massive amount of gold by any standards, maybe even more then all the gold being invested in the US market at this same time period. Another large jewelery market Turkey also dropped by 15%. It appears to me that drops in these markets would put large amounts of gold on the market unsold and the price must drop. Is there something wrong in my logic here? Maybe if the price went up very slowly so that these markets could adjust it could get above $700?

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Grimm,

 

I think your analysis is one-dimensional and ignores a number of important points.

 

1) You are analyzing gold purely as a commodity, like plastic resin used to make toys and coffee cups. While it's true that gold is a commodity input for jewelry, unlike any other commodity, people will run out and buy it as a store of value, while seldom to people stockpile oil, steel or soybeans for a rainy day.

 

2) You have an underlying assumption that the breakdown of jewelry demand vs. other demand remains constant (i.e. that if jewelry demand goes down, prices must go down since there is no other source of demand). In fact, gold behaves in an unusual way where higher prices may dampen "commodity" demand (for jewelry, electronics and such) but will stimulate investment demand. My guess is that the declines in jewelry demand in places like India and Turkey did not happen overnight when the price hit $700. I would bet demand was softening over $600, but that new investment and particularly speculative investment demand pushed the price from $600 to $730.

 

3) I think you are making a bad assumption on the jewelry market in places like India. While it's true that there is a certain level of traditional jewelry demand similar to that in the US, it's not as though Indians were flocking to Zales to pick up charm bracelets for high school proms. In many parts of India, the banking system is underdeveloped, and the local farmers use gold (primarily in the form of jewelry such as chains) as a method of savings. So it's quite difficult to separate out jewelry demand from investment demand in places like this since some of the investment is done in terms of jewelry (Major Indian banks in large cities just started selling gold coins as investment in the last 2 years).

 

4) Given the large retail markups in jewelry, large price swings such as from $500 to $700 might not be as noticable to consumers given that they are probably paying more like $1,500 per ounce for gold jewelry at retail. So in more developed countries, you likely saw a much smaller movement in retail demand as prices rose above $700. (I guarantee you will not find any retail stores selling 18k gold chains anywhere close to $586 per ounce today). This also goes to support the idea that investment demand in some developing countries takes the form of jewelry that is priced much closer to spot.

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