Will the gold price ever increase?????

BarbellionBarbellion Posts: 27 Tin ✭
I've had gold in goldmoney for a year now and i'm about 25% down. A couple of times its got close to my initial investment but most off the time its 10-25% down.
I wonder if gold has had its day, crypto currencies seem to be here too stay and i can't see people investing in gold when there is so much profit in bitcoin etc
Sorry to be on a downer but i'm fed up.
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Comments

  • PrairieSailor_2016PrairieSailor_2016 Posts: 85 Copper ✭✭
    Look long on gold. I agree that it can be disappointing with the weakness that we have seen in the last couple of months but some are calling for a positive 2018:
    http://gulfnews.com/business/money/when-gold-prices-will-hit-1-450-an-ounce-1.2114795
  • GMONEY1GMONEY1 Posts: 415 Silver ✭✭✭✭
    "He who has the bitcoin makes the rules" ... I think that's how the saying goes :wink:

    "Remember the bitcoin rule: do unto others as you would have them do unto you" ... that sounds right too :wink:
    Just kidding.

    But in all seriousness, the short-term risk-adjusted performances of certain cryptos --such as bitcoin, ethereum, litecoin, etc-- have been much better/higher than the short-term risk-adjusted performance of gold and silver bullion if you view those nominally like a security (e.g. GLD, SLV); you are correct there @Barbellion . The tricky part is gold and silver actually have a long-term risk-adjusted performance; cryptos do not. With all that said, your question implies that a fiat currency is your numeraire (i.e. will the price of a unit of gold go up/down in dollar terms?).

    My mindset is... "I know how many grams of gold I have"...and if the dollar weakens I will be able to acquire less gold for say a 100 dollar bill...and if the dollar strengthens, then I'll get more for that same $100 bill.

    I think there are two underlying points to your post though... 1) there are tradeoffs and opportunity costs with investing/wealth preservation. If you take that $100 bill and buy gold with it, then you cannot also buy Bitcoin with that same $100. 2) speculators have been successfully seeking out and realizing (cap gain) yield in crypto markets (i.e. digital asset trading), but a key point for physical gold bullion is that it-- much like a dollar bill-- doesn't have yield. Gold is supposed to offer you the same optionality as cash (globally)... while maintaining your purchasing power over a long period of time. Fiat currencies have great short term optionality, but they fall short on maintaining purchasing power in the long-term.

    The crisis today is that the world is lacking a "de jure" anchor for the financial system-- i.e. a benchmark, a standard, a universally accepted numeraire. The dollar was that for a long time, but after 1971 and later rapid and excessive expansion of the monetary base due to the GFC, the name of the monetary policy "game" has been an environment for irrational credit expansion, quantitative easing, and essentially acting like highly corrosive agent to the global anchor.

    If only the anchor were made of an anti-corrosive, non-reactive metal... enter the "de facto" anchor.... gold.
  • BarbellionBarbellion Posts: 27 Tin ✭
    Thanks, great answers.
  • IrishGuyIrishGuy Posts: 135 Bronze ✭✭✭
    Hi all
    Came across this - a paper written in 1997 by Mundell a noble prize winner for economics.

    Title: The International Monetary System in the 21st Century:
    Could Gold Make a Comeback?

    http://www.columbia.edu/~ram15/LBE.htm

    Spoiler alert: he thinks it will and his predictions post 1997 are pretty accurate so far.

    If it happens expect gold to rise. Interesting when he wrote it Gold was $350 I believe.
    So I think just patience is needed.
    Fingers crossed anyway.
  • plashadpobedyplashadpobedy Posts: 16 Tin ✭
    I had (20) BTCs (from CoinBase) with a cost-basis of $771. At one point, I was up over $10K on them, and held for the long-term. Per the Mt. Gox fiasco, it sank to as low as $189. I sold at $200/BTC. Took a big loss. Mt. Gox was hacked. The run-up was just a manipulation of buying 20 BTCs every hour.

    I believe, BTC is being played right now (again), with a low-float of 21 million BTCs. The downside will be precipitous, compared to last time. The big banks don't want the competition of a competing crypto-currency, and will do everything in their power to have govts. neutralize it. China is an example. Not very practical right now for everyday use.

    Given the proliferation of fake coins & bullion, I wouldn't be buying them either. I read 75% of the gold/silver offered on EBAY is fake. I bought (15) 1oz. PAMP gold bars in April 2012 @ $1632.50/oz. from a reputable retail dealer in Oregon. Now, sitting down 22%, a good $5K.

    Goldmoney or equivalent, seems to be the only feasible avenue right now to owning gold.

    My guess is that gold will rise when one of the big banks fail.

  • GLDGLD Posts: 46 Copper ✭✭
    I honestly don't know how much I've made or lost ..... i have been buying $150-$200 a month for a year or two now. I''ve spent very little of it. In this phase, i am dollar-cost-averaging ..... so if price goes down, on my next purchase it gets me more grams. Its a hedge against a financial catastrophic failure for me, not a short term investment. However, i know how you feel as i moved $45K cdn RSP investment into an alternate silver bullion and storage program last summer ..... lol .... i'm down $8K there (since it was a lump sum, it easy to see the gain/loss). Plus it costs me a monthly storage fee. The great thing about GoldMoney is the no storage fee .

    I don't worry about it ..... if gold and silver flatline or drop, it means my stocks, GIC's and cash are OK ...... if they tank then my gold/silver will rise. If neither of these work we are all in some serious s__t. Then, shotgun shells are a good investment (got some).

    I recommend the auto deposit goldmoney purchase ..... every month or bi-weekly .... whatever you can easily afford. If you get nervous just redeem a few gold cubes once in a while so you can hold it yourself.

    KC
  • BarbellionBarbellion Posts: 27 Tin ✭
  • Marco_1983Marco_1983 Posts: 152 Bronze ✭✭✭
    @Barbellion "Will the gold price ever increase?????"

    Not until either the Stock/Bond/Real Estate bubble pops and/or the banksters lose control of their manipulation process and/or they are forced to let it go.

    I'm personally long Silver because I believe in precious metals in the long run. However, what is making me money in the short/medium term is Cryptos (Bitcoin and Litecoin). And some of the profits go towards precious metals. I still dollar cost average Silver every month by the way.

    My advice is, even if precious metals are a long term investment, do NOT sit on your hands and wait for them to rise. While you wait, try studying and investing in Cryptos a little bit. Even Mike Maloney made lots of profits with Cryptos and re-invested them in Silver.
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