OPINION: there is no foundation for the drop in Gold prices. - Page 2

Originally Posted by unknownk

The $800 last peak was in 1980, $800 of 1980 dollars would be worth: $2,228.41 in 2012 so they are still under water whgich was my point.

I gotcha. You're using the value of the gold versus inflation approach.

Originally Posted by unknownk

The $800 last peak was in 1980, $800 of 1980 dollars would be worth: $2,228.41 in 2012 so they are still under water whgich was my point.

People who bought at $800 per ounce are not under water, gold is worth almost $1600 per ounce today, almost double the profit. If you held onto your $800 dollars from 1980 you would have, lets see... Let me break out my calculator and figure this out, uhmmm.. Oh yeah, you would have $800 dollars. If you bought an ounce of gold in 1980 then sold it today, you would have almost $1600.

How would someone be able to turn their $800 1980 dollars into $2,228.41 in today's dollars? You have to invest in something, you could try playing the bank interest, but even that is cutting it close. This is exactly what this thread is all about, the devaluation of gold. There is no reason for gold to be devalued, yet it is. There is no basis, no foundation, no logical reason, yet it is being devalued and you just proved the point.

If we are talking about safe, smart investments, gold has always been a safe investment. At no time has buying gold ever been a wrong decision. And sooner or later, the entities who are manipulating gold prices are going to have to allow it to run for awhile just to relieve the pressure. The precious metals market is totally artificial. All you have to do is read a little bit, do some investigation, look at which central banks and entities are selling gold and ask yourself WHY, and you can figure it out all on your own. I am not asking anyone to just take my word for it, don't, look up the information yourself, please, and correct me if you find I am wrong, I would like to be wrong about this, I really would.

I'll tell you one more thing, this is what I tell the customers I purchase material to process from and trade gold and silver in payment. They are buying gold at a fraction of the real value because it's in a form that is considered waste or recyclable goods. This means they are paying far less than market value for their precious metals. Think about this for just a minute. A smart scrapper can secure their future with confidence if they put their hard work, to work for them, here is an example.

Lets take someone I buy silver scrap from as an example. He pays about 25% of the real value of the silver scrap he obtains, he sells it to me for 50% of it's real value. I pay him in gold or silver. Not only did he just double his money, but over time, so long as he holds onto that metal, that same metal becomes worth more and more. The longer they sit on it, the more money they make.

Here is a 36 year historical chart on gold prices:

http://goldprice.org/gold-price-hist...ear_gold_price

It shows your spike in 1980, but do you see the current trend. And that trend exists even in the presence of market manipulation. The reason for this trend is that there is far more demand than there is gold. Eventually gold will even outstrip your 1980 benchmark on inflation, it has to, it's been catching up all these years and really pouring on the heat recently regardless of market manipulation.

I wouldn't buy gold or silver because I can recover and refine it. If I couldn't, then I might be a lot more careful in considering when to buy, but I don't need to be. If I were a scrapper I wouldn't buy gold or silver either, I would buy, with cash, gold or silver scrap and then sell it for gold or silver shot, in this way I can choose how much profit I want to make by selling it when it hits that amount, or I could hold onto it for longer and only sell as needed. This is how you beat the precious metals game, this is the way to secure your future. It's not difficult to do and if you are obtaining your material for 25%-50% of it's real value in precious metals, you can still make a decent profit, and pass on the opportunity to a refiner to make some profit as well.

Scott

Originally Posted by NobleMetalWorks

People who bought at $800 per ounce are not under water, gold is worth almost $1600 per ounce today, almost double the profit. If you held onto your $800 dollars from 1980 you would have, lets see... Let me break out my calculator and figure this out, uhmmm.. Oh yeah, you would have $800 dollars. If you bought an ounce of gold in 1980 then sold it today, you would have almost $1600.

Perhaps what unknownk was referring to was the PURCHASING POWER of those 800 dollars. In 1980, $800 would buy FAR more than $1600 would buy today.

Plus, assuming you could manage a measly 2.2% APR, which I think any reasonable savings account would've averaged, you would, in fact, have $1600 now from your original $800 saved in 1980.

In fact, a 6-month CD would've trounced gold's return since that peak day on 21JAN80. Here's a month by month chart of 6 month CD rates since January of 1980:

Data from CD Interest Rate Chart



So... an unfortunate soul who bought gold at $850/oz on Monday, 21JAN80, versus a conservative saver who bought 6-month CDs with those same 850 bucks and reinvested their interest..... which would you rather be?

Better yet, the S&P500 closed at 112.10 on 21JAN80. It closed at 1502.42 yesterday. I don't think there was such a thing as SPDRs in 1980, but a broad investment in S&P500 companies would have turned $800 into $10,722.

As always, past performance is not indicative of future returns, yadda-yadda-yadda... and these figures are for an extreme circumstance, but the numbers say gold has not historically been a wise investment long term.

Originally Posted by auminer

So... an unfortunate soul who bought gold at $850/oz on Monday, 21JAN80, versus a conservative saver who bought 6-month CDs with those same 850 bucks and reinvested their interest..... which would you rather be?

Better yet, the S&P500 closed at 112.10 on 21JAN80. It closed at 1502.42 yesterday. I don't think there was such a thing as SPDRs in 1980, but a broad investment in S&P500 companies would have turned $800 into $10,722.

As always, past performance is not indicative of future returns, yadda-yadda-yadda... and these figures are for an extreme circumstance, but the numbers say gold has not historically been a wise investment long term.

No matter what investment I put up as being a good solid investment, someone else could come along and present something better. We could even talk about real estate in other countries that has made leaps and bounds against the performance of real estate in western countries.

I purchased AOL stock way back in 91 I think it was, when it went public. I sold right away, if I held onto it I could have made $100k off every $1k I invested. But what is it worth today?

Sure I could have invested in something that would have performed well, or I could have invested in something that performed poorly, or still something else that had it's up and downs and be down right now. My point in saying gold is never a bad investment is that it has always increased in value. It cannot be a bad investment, and besides being a good investment, you can actually exchange it for goods and services, I do all the time, whenever possible myself.

I still stand by what I said, precious metals are still the best investment, maybe not so far as maximum profit is concerned, by more so in terms about what might be in the best interest if everything goes to crap. Not only are precious metals a good solid long term investment, but it's protection against the total devaluation of paper money.

Then add to these facts how I obtain the precious metals I hoard, through recycling e-waste/i-waste at or around 25%-50% of it's real value, and the fact I purchase much of this by trading precious metals for recyclable goods, I pass on this opportunity to others who then can protect their own futures if they so choose. Or wait until the precious metals become worth more than their exchanged value, and make more profit in doing so.


Scott

The government does not like precious metals because the cant manipulate the value, and now they are losing the ability to manipulate dollars due to the global economy, hence the incoming nosedive of the us economy triggering massive inflation which will make metals prices skyrocket, if the value of the dollar gets cut in half it will take twice as much to buy one ounce of gold. Right now is a good time to buy in my opinion, i think holding is good right now if youve already positioned. I would buy palladium and platinum over gold though due to industrial demand.

I am still seeing huge government and retail cutbacks this year leading to massive unemployment. Which will lead to inflation and metals prices rising in the long run.

the only illusion in play is how the government is running the country on fluff, the fundamentals for a good economy do not exist, its simply a matter of time at this point untill the game ends.....

the money is not controlled by the government it is controlled by the FED. Every president that tried or even thought of printing money or taking control of it has been assassinated.

The government wants money. QE 1,2,3,4, the Treasury sec calls the FED and orders 40 billion the FED says ok. and the treasury prints it. trading it for U.S. security's plus 6% interest. There is no backing of this loan except for you and me and what we produce. The government produces nothing. So it is entirely Debt to you and me 40 billion plus 6% intrust. That debt has now been streached way past you and me to our children and grand children. the government is now spending their money and futures.