Jim Rogers says that although he doesn't think he's a gold bug, gold has been in a bull market since it hit its low in 2001. He says that he is currently holding gold and has been holding it for a long time. When told by the reporter that when adjusted for inflation silver peaked at over $800 per ounce before Columbus discovered the New World and around $100 per ounce in the early 1980s Rogers comments that not just silver but all commodities will be in a bubble before long:
"Silver is more attractive than many commodities. Silver is 70% below its all time high. There are not many things in the world you can say that about and if I had to buy any precious metal at the moment, I'd probably buy silver rather than gold. Gold's been making all time highs, silver's far, far below its all time high. Likewise palladium. Palladium is another that's far below its high. But I think think silver is more attractive than gold."
View Our Inflation-Adjusted Charts Article Here
Rogers then goes on to explain that silver has been used as money much more throughout history than gold has. He also notes that commodities will be hot for the next 10 or more years, and then stocks will be back.
The above is a complete summary. To hear the full conversation see the Youtube video below
Part 2 has Rogers commenting on governments printing too much money, gold being nowhere near its inflation-adjusted high, eventual currency collapses, US defaulting on its debts, and other economic issues. Interestingly, Rogers says his daughters will be given gold and silver for Christmas in 2009!
Watch Part 2 below
View Our Inflation-Adjusted Charts Article Here
Showing posts with label gold price. Show all posts
Showing posts with label gold price. Show all posts
Friday, November 20, 2009
Tuesday, November 17, 2009
Article Summary: 'New Normal" for the Gold Price?
Over the past week or two I've been helping an exchange grad student at the local university summarize articles for his Literature Review class. Doing so, I realized that it's entirely possible to get a seven page article down to a few paragraphs. Therefore, for several reasons--to save you time of finding articles, to save you time reading articles, and to save you from reading my opinions only--I've decided to start summarizing a few others' articles to give you a different angle on things.
Peter Cooper, writing for Arabian Money, posted an article on November 4 commenting on the surging gold price. The article give his predictions, views, and even a bit of investment advice.
Cooper (2009) states that with gold standing at $1080 at the time of writing, another jump in the gold price seems almost certain. However, saying now that gold will jump to $2000 might be similar to the Kremlin declaring in July 2008, when oil was $147 per barrel, that oil would jump to the $200-250 range. Gold, though, is not just on a temporary spike as oil was. For this to be a spike we'd need to see $1500 gold, or higher.
Cooper (2009) notes how that at the time of writing the dollar was somewhat of a safe haven, along with gold. Also, "increasingly it looks as though silver is also being treated as precious metal again rather than an industrial commodity, offering an interesting leverage play on the rising gold price" (Cooper, 2009).
It still seems that gold won't be going much higher as long as we have a strong dollar, Cooper says. Cooper also mentions the possibility of a global currency and the uncertainty of the dollar's future. However, in times of uncertainty, gold and silver will retain their value.
Finally, Cooper notes that holding gold is more a wise investment than holding dollars. He also notes the fact that the India is purchasing a lot of gold from the IMF.
Cooper, Peter (2009). What is the 'New Normal' for the Gold Price? Arabian Money. http://news.goldseek.com/PeterCooper/1257344245.php.
Peter Cooper, writing for Arabian Money, posted an article on November 4 commenting on the surging gold price. The article give his predictions, views, and even a bit of investment advice.
Cooper (2009) states that with gold standing at $1080 at the time of writing, another jump in the gold price seems almost certain. However, saying now that gold will jump to $2000 might be similar to the Kremlin declaring in July 2008, when oil was $147 per barrel, that oil would jump to the $200-250 range. Gold, though, is not just on a temporary spike as oil was. For this to be a spike we'd need to see $1500 gold, or higher.
Cooper (2009) notes how that at the time of writing the dollar was somewhat of a safe haven, along with gold. Also, "increasingly it looks as though silver is also being treated as precious metal again rather than an industrial commodity, offering an interesting leverage play on the rising gold price" (Cooper, 2009).
It still seems that gold won't be going much higher as long as we have a strong dollar, Cooper says. Cooper also mentions the possibility of a global currency and the uncertainty of the dollar's future. However, in times of uncertainty, gold and silver will retain their value.
Finally, Cooper notes that holding gold is more a wise investment than holding dollars. He also notes the fact that the India is purchasing a lot of gold from the IMF.
Cooper, Peter (2009). What is the 'New Normal' for the Gold Price? Arabian Money. http://news.goldseek.com/PeterCooper/1257344245.php.
Thursday, November 12, 2009
Why the Gold Price Increase to $1,120 an Ounce?
Gold has been surging like we haven't seen it surge for years. This increase is significant because it continually reaches all-time highs, which today, has gold at $1120 per ounce.
The white metals are all well below their all-time highs, but are still following gold up the ladder: platinum is at $1370 per ounce, 60% of its all-time high. Palladium is at $350 per oz, 32% of its all-time high. And silver is trading at $17.50 per ounce, 35% of its all-time high.
Unlike gold, the white metals are used in manufacturing and used up. With the recessed economy they aren't in high demand, so their price jumps are not industrial, but rather, they're following gold as hedges.
Now let's look at some of the reasons gold has risen to $1120 an ounce.
India
Central banks are buying gold. Most notably India. Last week the central bank of India bought 200 tons of gold from the International Monetary Fund (IMF). India is reported to want to diversify it's financial hedges. The sale was an alleged US $6.7 billion.
Central Banks
Several other central banks are reported to be buying gold to hedge against the risks of a falling dollar. Sri Lanka and China are on the list, amongst others. These purchases not only increase the gold price, but influence individual investors as well.
Since buying has begun, it may continue, thus making investors rush to buy before the price increases more. This interest may shoot gold well past anticipated levels due to overbuying.
Matt Zeman of LaSalle Futures Group Inc. is quoted as saying, "The interest that central banks have shown for gold has really lit a fire under the market...People are questioning the value of not only the U.S. currency, but all paper currencis. Investors are moe comfortable holding gold" (cited by Ngyuen and Larkin).
China
A simple report by the Chinese government saying it will start buying gold is enough to shoot the price up another $100 or more. A swift upturn in the Chinese economy would have a similar, yet softer effect.
Falling Dollar
If the dollar falls, the price of gold will go up in dollar terms. However, if the dollar falls, since many other countries hold US debt, gold will rise in terms of other currencies as well.
The dollar has reached a 15-month low on the dollar index. This index compares the performance of the dollar against other main currencies. This shows some of the reason for gold's surge, however, gold is also at an all-time high measured in euros. It's currently trading at around 750 euros per ounce.
Inflation
The world is worried about the dollar. With the trillions of dollars spent this year in bailouts and stimulus packages, the dollar is being printed like never before. The Fed is hoping this will stimulate the economy, and it may, but it will also likely cause inflation.
John Hathaway of Tocqueville Gold Fund is quoted as saying, "Would they be able to retract the liquidity they put into place?...If they havce a hard time doing it, I htink we'll see inflation, and gold will go much higher (cited by Ngyuen and Larkin).
And again, it's not only the inflation that's causing the gold to go higher, it's also the anticipation of future inflation causing investors to hedge now before prices go higher.
Interest Rates
The Fed has kept interest rates low in hope of sparking the economy. Low interest rates means cheap loans for housing and month thrown back into the economy.
Zeman says, "The dollar is not going to get any firm footing with rates at zero...People are selling dollars and putting it in higher-yielding assest. All commodities are going higher" cited by Ngyuen and Larkin).
Goldman Sachs thinks that gold will reach $1200 with rates as they are. Also, since people are thinking rates will stay low longer, they're anticipating gold to go higher and buying more, thus increasing the gold price even more.
"Analysts said the dollar was smarting after Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy, which may keep the Fed funds rate low" (Tang and Harvey).
Other Factors
There are too many factors to list, but above are the main ones. Some others include the opening of the gold market back into Vietnam, spurred by investor demand. It was previously illegal to import gold into Vietnam.
The Chinese government has reportly encouraged citizen's to buy gold to hedge for inflation.
Gold Fields gold producer in South Africa is going on a labor strike. This just means less new gold coming out of the ground to sell.
Godt, Nick and Lesova, Polya. "Gold Hit Record Near $1,120 an Ounce." MarketWatch. November 11, 2009. http://www.marketwatch.com/story/gold-futures-climb-to-record-above-1117-2009-11-11
Tang, Frank and Harvey, Jan. "Gold Rises Towards $1,120 on Strong Sentiment." Reuters. November 11, 2009. http://www.reuters.com/article/ousivMolt/idUSTRE5A80MQ20091111?pageNumber=2&virtualBrandChannel=11604&sp=true
Nguyen, Pham-Duy and Larkin, Nicholas. "Gold Futures Rise to Record on Speculation Dollar Will Decline." Bloomberg.com. November 11, 2009. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJwZs1AweH_s
The white metals are all well below their all-time highs, but are still following gold up the ladder: platinum is at $1370 per ounce, 60% of its all-time high. Palladium is at $350 per oz, 32% of its all-time high. And silver is trading at $17.50 per ounce, 35% of its all-time high.Unlike gold, the white metals are used in manufacturing and used up. With the recessed economy they aren't in high demand, so their price jumps are not industrial, but rather, they're following gold as hedges.
Now let's look at some of the reasons gold has risen to $1120 an ounce.
India
Central banks are buying gold. Most notably India. Last week the central bank of India bought 200 tons of gold from the International Monetary Fund (IMF). India is reported to want to diversify it's financial hedges. The sale was an alleged US $6.7 billion.
Central Banks
Several other central banks are reported to be buying gold to hedge against the risks of a falling dollar. Sri Lanka and China are on the list, amongst others. These purchases not only increase the gold price, but influence individual investors as well.Since buying has begun, it may continue, thus making investors rush to buy before the price increases more. This interest may shoot gold well past anticipated levels due to overbuying.
Matt Zeman of LaSalle Futures Group Inc. is quoted as saying, "The interest that central banks have shown for gold has really lit a fire under the market...People are questioning the value of not only the U.S. currency, but all paper currencis. Investors are moe comfortable holding gold" (cited by Ngyuen and Larkin).
China
A simple report by the Chinese government saying it will start buying gold is enough to shoot the price up another $100 or more. A swift upturn in the Chinese economy would have a similar, yet softer effect.
Falling Dollar
If the dollar falls, the price of gold will go up in dollar terms. However, if the dollar falls, since many other countries hold US debt, gold will rise in terms of other currencies as well.
The dollar has reached a 15-month low on the dollar index. This index compares the performance of the dollar against other main currencies. This shows some of the reason for gold's surge, however, gold is also at an all-time high measured in euros. It's currently trading at around 750 euros per ounce.
Inflation
The world is worried about the dollar. With the trillions of dollars spent this year in bailouts and stimulus packages, the dollar is being printed like never before. The Fed is hoping this will stimulate the economy, and it may, but it will also likely cause inflation.
John Hathaway of Tocqueville Gold Fund is quoted as saying, "Would they be able to retract the liquidity they put into place?...If they havce a hard time doing it, I htink we'll see inflation, and gold will go much higher (cited by Ngyuen and Larkin).
And again, it's not only the inflation that's causing the gold to go higher, it's also the anticipation of future inflation causing investors to hedge now before prices go higher.
Interest Rates
The Fed has kept interest rates low in hope of sparking the economy. Low interest rates means cheap loans for housing and month thrown back into the economy.
Zeman says, "The dollar is not going to get any firm footing with rates at zero...People are selling dollars and putting it in higher-yielding assest. All commodities are going higher" cited by Ngyuen and Larkin).
Goldman Sachs thinks that gold will reach $1200 with rates as they are. Also, since people are thinking rates will stay low longer, they're anticipating gold to go higher and buying more, thus increasing the gold price even more.
"Analysts said the dollar was smarting after Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy, which may keep the Fed funds rate low" (Tang and Harvey).
Other Factors
There are too many factors to list, but above are the main ones. Some others include the opening of the gold market back into Vietnam, spurred by investor demand. It was previously illegal to import gold into Vietnam.
The Chinese government has reportly encouraged citizen's to buy gold to hedge for inflation.
Gold Fields gold producer in South Africa is going on a labor strike. This just means less new gold coming out of the ground to sell.
* * *
Sources
Godt, Nick and Lesova, Polya. "Gold Hit Record Near $1,120 an Ounce." MarketWatch. November 11, 2009. http://www.marketwatch.com/story/gold-futures-climb-to-record-above-1117-2009-11-11
Tang, Frank and Harvey, Jan. "Gold Rises Towards $1,120 on Strong Sentiment." Reuters. November 11, 2009. http://www.reuters.com/article/ousivMolt/idUSTRE5A80MQ20091111?pageNumber=2&virtualBrandChannel=11604&sp=true
Nguyen, Pham-Duy and Larkin, Nicholas. "Gold Futures Rise to Record on Speculation Dollar Will Decline." Bloomberg.com. November 11, 2009. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJwZs1AweH_s
Friday, November 6, 2009
$1100 Gold Coming Soon!
I was wrong. I said a couple weeks ago that gold will peak at around $1050 (but I searched to find where I said that, so I guess I'm not wrong, right?!). Today the gold price is $1095.
This is a historical high for gold in dollar terms, surpassing it's many previous highs that it hit in October, 2009. We've seen quite a few instances of a gold all time high over the past few months. Let's look at a chart which shows it a bit more clearly.
As you can see from the chart above gold nipped $1000 in February, nearly did it in May (both were near historical highs at the time) and in September in remained comfortably over $1000 for over a month long period. In October its holding level was around the $1050 mark. Now we're tinkering with $1100. Will it hold here for a month again? I'm not going to take a guess this time!
And, for your reference, the chart below shows gold's previous run up to $1000 when it did it in the spring of 2008. Then it pretty much remained below $1000 for a year before continuing on its current spike.
This is a historical high for gold in dollar terms, surpassing it's many previous highs that it hit in October, 2009. We've seen quite a few instances of a gold all time high over the past few months. Let's look at a chart which shows it a bit more clearly.
Rise to $1100 Gold Chart
As you can see from the chart above gold nipped $1000 in February, nearly did it in May (both were near historical highs at the time) and in September in remained comfortably over $1000 for over a month long period. In October its holding level was around the $1050 mark. Now we're tinkering with $1100. Will it hold here for a month again? I'm not going to take a guess this time!
And, for your reference, the chart below shows gold's previous run up to $1000 when it did it in the spring of 2008. Then it pretty much remained below $1000 for a year before continuing on its current spike.
Should You Sell or Buy Gold Bullion and Gold Coins?
Right now, if you paid under $700 for your gold bullion coin and would like to realize a $500 profit, I wouldn't say that you'd be making a mistake by selling it. I do think it will go higher, but that will be slowly and not a sudden increase unless if something drastic happens in the economy. So, also, if you decide to buy gold right now, your investment decision will also be wise! I do think gold will dip again, though.Should I Sell Gold and Buy Silver?
I wouldn't say this is a bad strategy, since silver has a much higher chance to double or quadruple as gold does. If you've been reading the site you'd know that I have all my money tied up as it is and I'm not saving too much so I haven't been buying as I'd like to. I did manage to buy a few small silver bars the other day; and I didn't have to sell my gold to do it!Tuesday, August 4, 2009
Palladium & Rhodium Price Increase (08/09)
Palladium Price Steady, Rhodium Rises
I've been on vacation for the the past few weeks but I'm glad to see that the Eitan Cohen interview has gotten so much attention. Glad I was finally able to get that up before I left. I'll be on vacation again for most of August. But I'll have the computer with me and hoping to keep an eye on the palladium price and the rhodium price increase.The Palladium Price
For a couple weeks now palladium has been on the rise and seems to be steady at around $275 an ounce. That's good news! With all the money Obama is pumping into the economy the values of gold, silver, and platinum should rise, likely with palladium and rhodium following. The palladium price
From the chart we see that palladium has been on the rise for the past 30 days. I know a lot of people read this site so see my predictions. Well, my prediction on this is that Pd won't reach $300 on this rise. I wish it would though. I think it's near its peak and will drop back down to around $250 for the time being. No reason to run out and buy now.
The Rhodium Price
The rhodium price has increased like palladium. We see a quick jump from around $1300/oz rhodium to $1600. And for now it's around $1500. We'll see where this moves to in the near future. I'm thinking it will stay over $1500 an ounce Rh for a while.
The Gold Price, Platinum Price, Silver Price
The gold price has risen about $50 in the past month. That's good news. Platinum price and silver price have risen at a similar percentage. (nearly 10%) over the same time period.Is this big news? No, not really. But if you're buying and selling the metals for small time profit taking, now might be the time to sell before the prices drops and you can buy back.
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