May 30, 2013 at 3:55 pm

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I never understand the inverse relationship between the market and gold. It seems to me that when the market is going up, gold should go down as investors gain more confidence. Does that make sense to anyone else?

“Everyone must choose two pains: The pain of discipline, or the pain of regret.” Jim Rohn

June 3, 2013 at 2:54 pm

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Have a look at this. I’m no expert, but supposedly gold really hasn’t acted as the hedge it’s touted to be, especially this spring.

http://investorplace.com/2013/05/gold-just-isnt-worth-the-risk/

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June 3, 2013 at 4:20 pm

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“Have a look at this. I’m no expert, but supposedly gold really hasn’t acted as the hedge it’s touted to be, especially this spring.

http://investorplace.com/2013/05/gold-just-isnt-worth-the-risk/

Thanks – guess I’m not the only one thrown by gold’s antics this year.

“Everyone must choose two pains: The pain of discipline, or the pain of regret.” Jim Rohn

June 22, 2013 at 5:22 pm

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This is an extension to a post that I responded to about the US dollar predicting the market.

The value of gold is currency related. The value of the US dollar increased about 17% this year (prior to recent correction). Thus the relative price of gold has gone down because of the increased buying power of the dollar. Of course there are other factors that have pushed the price of gold down more than 17% this year, but the currency appreciation is a fairly large portion of it at this point.

Buzz339

July 4, 2013 at 5:16 am

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With massive hyperinflation on the horizon, alternatives to the U.S. dollar are a must to all investors. And there s no better time than now to load up to this precious metal. Gold performs well during periods of geopolitical upheaval, inflation, and U.S. dollar depreciation. If the world’s currency reserves were backed 1-for-1 by gold (as they used to be), gold would sell today for $11,000 an once !! The best way to buy gold is from the pure appreciation of owning from the physical metal. As the hyperinflationary tsunami hits, the value of gold will skyrocket.

July 5, 2013 at 11:08 am

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“With massive hyperinflation on the horizon, alternatives to the U.S. dollar are a must to all investors. And there s no better time than now to load up to this precious metal. Gold performs well during periods of geopolitical upheaval, inflation, and U.S. dollar depreciation. If the world’s currency reserves were backed 1-for-1 by gold (as they used to be), gold would sell today for $11,000 an once !! The best way to buy gold is from the pure appreciation of owning from the physical metal. As the hyperinflationary tsunami hits, the value of gold will skyrocket.”

Thanks, Seco – that’s an easy-to-understand explanation!

“Everyone must choose two pains: The pain of discipline, or the pain of regret.” Jim Rohn

July 6, 2013 at 11:47 pm

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“With massive hyperinflation on the horizon, alternatives to the U.S. dollar are a must to all investors. And there s no better time than now to load up to this precious metal. Gold performs well during periods of geopolitical upheaval, inflation, and U.S. dollar depreciation. If the world’s currency reserves were backed 1-for-1 by gold (as they used to be), gold would sell today for $11,000 an once !! The best way to buy gold is from the pure appreciation of owning from the physical metal. As the hyperinflationary tsunami hits, the value of gold will skyrocket.”

There is no one investment that you can hold forever and expect it to appreciate forever. Everything is cyclical, including gold. Just look at its history relative to other investments. Below I show a chart of gold relative to the SP500.

One major problem I see with gold is that it really has no value in a time of true crisis. The most valuable asset is a farm that can produce food. Gold cannot be eaten, it cannot be used as shelter or for heat. At least with paper money you can burn it to stay warm.
Companies that produce goods and services that are necessary for human survival will always outperform gold over the long haul, and I believe is a much safer investment.

Gold was recently in a cyclical bubble that has burst. This is even more prominent with silver. The trends in precious metals are historically long, so I believe the trend change has a long way to go (down). The second chart below illustrates this well even though it is a few years old. The third chart implies this as well, and it appears the DOW will greatly outperform gold in the intermediate term.
(if you can’t see the images right-click on them and view in a new tab)
chart1

chart2

chart3

Edited by buzz339:
Edited by buzz339:

Buzz339

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