Does gold need a breather?

Quote from makloda:

People quickly forget how many got burned and buried trying to pick a top in oil 2007/2008. Don't short stuff that's going up. If anything, buy put options, then all you can lose is the premium you're long.

When (if ever) gold unravels, there will be plenty of time to establish outright short positions with much better risk/reward ratios than today. No need trying to pick the top tick.
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Quote from AyeYo:

Good point.

So let's say we do get a single, world currency. What happens to gold then? Is it the same situation? Your ounce is worth $1,000,000, 500,000 Euros, $100,000,000 Yen.... and 500 new world dollars... what did you just accomplish?
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Seriously? You think that the time in between a dollar collapse and "new world dollars" will be 5 minutes? Such a scenario would entail panic across every financial market in the world. Gold will be the only thing with a clear value.

And if you end up with 500 new world dollars in the end, that will likely be 500 more new world dollars than you would have had you held dollars.
 
Quote from AyeYo:

But the point remains that the gold "trade" is nothing more than break-even. However, you're risking some solid downside.

Let's see... proof that gold is overcrowded...

It makes news headlines almost every night. I'm getting family and co-works telling me to buy gold (people that know nothing about investing). I see 3-4 "Cash 4 Gold!!11!!!!1!!" billboards on my ride to work, and that number is increasing. Every third commercial is a "gold is at an all time high!!" from a pawn shop/metal broker/etc. Zerohedge runs at least 3 articles on gold every day, and another 3-4 after market close - read through the comments on them and you'll find about 700 bulls for every bear, if you can find a bear.


IMO - will it continue up from here? I wouldn't be surprised to see a massive blow-off top like oil did last year as the last couple bears buy in desparately. However, longer run, I say it falls just as hard as oil. Just wait until the stop losses start getting triggered. It'll get ugly.

Don't get me wrong. I wouldn't even short it with your money, but I wouldn't long it even with my enemy's moeny.
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Gold is not a break even trade when winning. What on earth? Seriously? Gold is a store of wealth, it is accepted in exchange for any currency (practically).

It appreciates and depreciates at different speeds against the major currencies.

Please, do some research on this before going off like this about break even trades.
 
Both points very good stated, PlusMinus. But if we get a world currency after a "panic across every financial market in the world", what says that gold would withstand this panic? Wouldn't it be possible that gold, after such a panic, just lost all it's worth.
 
Quote from ElTrader:

Both points very good stated, PlusMinus. But if we get a world currency after a "panic across every financial market in the world", what says that gold would withstand this panic? Wouldn't it be possible that gold, after such a panic, just lost all it's worth.
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forgive me for butting in.

gold value is in the difficulty in forging it. it is a finite resource and thus ideal for currency. people understand its rare so they know it is scarce and due to the weight it cannot be replicated. when all other currencies lose value the properties of gold withstand their demise as a result of this.

the fact that something can be used for exchange is a value in itself.
 
Quote from ElTrader:

Both points very good stated, PlusMinus. But if we get a world currency after a "panic across every financial market in the world", what says that gold would withstand this panic? Wouldn't it be possible that gold, after such a panic, just lost all it's worth.
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I brought this up in the last gold thread. Gold has absolutely zilch for intrinsic value. It's soft, yellow metal - nothing more. If there's going to be such worldwide chaos and panic, people will want food and shelter, your useless gold won't be worth shit.

This seems to be too much for the gold bulls to wrap their minds around.
 
Quote from AyeYo:

I brought this up in the last gold thread. Gold has absolutely zilch for intrinsic value. It's soft, yellow metal - nothing more. If there's going to be such worldwide chaos and panic, people will want food and shelter, your useless gold won't be worth shit.

This seems to be too much for the gold bulls to wrap their minds around.
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Again, gold went parabolic several years during the seventies yet no nuclear holocaust happened.

The suggestion all gold bugs accumulate gold to prepare for the end of times is just as ridiculous as the idea of gold really being of any help in case of a true apocalyptic outcome of the crisis of today.

The keyword here is capital preservation.
 
Quote from AyeYo:

I brought this up in the last gold thread. Gold has absolutely zilch for intrinsic value. It's soft, yellow metal - nothing more. If there's going to be such worldwide chaos and panic, people will want food and shelter, your useless gold won't be worth shit.

This seems to be too much for the gold bulls to wrap their minds around.
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http://www.elitetrader.com/vb/showthread.php?s=&postid=2257237&highlight=worthless#post2257237 said the same thing in jan 09, gold was at 830
 
Quote from makloda:

The keyword here is speculation, nothing else. People always have to find out the hard way.
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Say you have a billion USD and you buy 100 million$ worth of gold.

I wouldnt say such a move has all of it's roots in greed really.

Also, in a world where it's hard to find anything that hasnt doubled this last year versus the USD gold's performance is still laging so the accusation of greed being behind the rise and atractivness in gold can be debated as well.

Fanny and Freddie, AIG, C and other worthless crap quadrupling in a few months time despite still being bankrupt... Now that's speculation! :D
 
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