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Petróleo Brasileiro S.A. - Petrobra Message Board

  • musketeernumberone musketeernumberone Dec 15, 2012 8:11 AM Flag

    Gold

    Interesting piece on the Forbes site: Why Gold's Long Bull Market May Be History

    "Given that it’s been 12 years and the expected inflation has not shown up–along with indications that the dollar’s multi-year plunge may have bottomed in 2008–gold may well be in that final stage where its fundamental supports are no longer there and its price is being maintained by speculative investors.

    Another warning may be coming from the gold-mining stocks. Gold bullion is only down $200 an ounce, 10%, since its peak at $1,900 an ounce last year. However, gold-mining stocks, which often lead the bullion in both directions, began their long bull market in 2001, a year before the bull market in bullion began, and potentially topped out in March of last year, plunging 29% since."

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    • Gold chart getting interesting ... stay tuned. It looks like the beginning of a technical breakdown is not far off.

    • I sold GLD primarily because I don't know how to value it. I can put a value on AAPL or MSFT but not gold. I understand all the reasons to own it etc, I've preached it myself, I just don't feel comfortable trying to #$%$ a value.

    • Nice link, Musk. The technical stuff is good as is the historical comparisons, but the notion that gold is an inflation hedge is the stuff of myth. Inflation went up in the 80s and 90s as gold fell in price.

      Once more, the lunatics have gotten their hyping points in lockstep and have convinced everyone that all the matters with pricing is supply of money. Buy gold as a hedge against Uncle Ben. Sigh.

      As I have pointed out many times, only charlatans hype gold when it costs more than platinum and only fools buy it. As of now, platinum is $80 an ounce cheaper than gold. I think gold may be priced higher than platinum because it is a prettier metal.

      To me though the more interesting notion is what happens if gold goes from its current price to $2000. I will usually have people tell me, "Gold went up. Admit you were wrong doc.", and they get mad when I don't. You can make money as easily as a bubble blows up as rolling a seven in Vegas. It is just that that is not investing; it is gambling. When someone wants credit for being right over a short period of time, to me, that is like being right about a dice roll.

      Amazingly, "investing for the long term" has been a slogan that has petered out as the market has been sideways for 12 years. What investing for the long term really means though is that you find a market ineffeciency and wait for the market to catch up to you.

      I have been saying that oil has been overpriced for at least two years. However I have not mentioned the when because I really don't know when people will wake up to the supply and demand numbers. But lately the numbers have been getting noticed. First, Porter Stansberry started hyping it, and then my broker went to a big presentation on surging U.S. oil demand, and the huge surge in U.S. oil production also made front page news on USA Today.

      The supply and demand numbers don't justify the current high price of oil. Period. At current production rate increases the U.S. will be self sufficient in oil, and what
      What is interesting about gold is what will happen to it when oil comes down in price. Historically one ounce of gold buys 15 barrels of oil. Gold bugs have been reduced to using Brent crude as opposed to WTI to justify the price of oil, and the one thing that you can always count on with gold bugs and oil nuts is the gold-oil ratio will never be used to say that either gold or oil is overpriced.

      So the real issue with gold then is what happens to it when the price of oil gets cut in half.

    • Tough to say musk.
      There can be a good case made for either direction. The technicals are at a juncture where the break will be made one way or the other. Either direction gold heads, silver will follow. And momentum will escalate the move in either direction.
      The US dollar still should play a big role in the rise or fall, but not always the case.... as we've witnessed with oil. I'm just watching the charts looking for a break either way.... all the while watching the currency trades also.
      Bull markets in commodities are historically about 18 year cycles. That said, I try to stay away from hard fast rules. I'll look to make a trade of the precious metals rather than a long term trade.... what's new ?

 
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