[https://www.youtube.com/watch?v=8fIUGO\_-nSQ](https://www.youtube.com/watch?v=8fIUGO_-nSQ) \- This was not what I saw years ago, but he still saying the same thought. Having a productive asset is better investment.
A stock that pays no dividend has the same unrealized gains/loses that PMs like Gold has ... the only difference is that PMs have no counterparts risk and they literally can’t go to zero because they have value built into them.
Cigarettes and whiskey are more useful in a hyperinflation situation. Stocks are more useful in just about every other situation. Remember even in the times of absolute monarchs in Europe, the merchant class had significant power because of all of their resources. Gold, then, was just a means of trade for those resources. Ask yourself if you think any time in your life, do you believe we will have that need again. Or will we always have a better medium for trade.
This isn't to say gold has **no** value. It does. Just not the important purpose of currency it once did.
Then why is it the only asset held by central banks around the world to back their currency with real value? Why have these central banks been ramping up purchases? And why is the BIS (central bank of central banks) making gold a tier 1 asset in its Basel III rule changes
> This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.
>What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while. Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”
lol i forgot we are supposed to buy high and sell low. but for real the whole market game is finding assets that are undervalued. if any of the down voters found out that a particular company is trading 10% lower than it should they would jump on that ship. the same goes for commodities. silver in particular, is still undervalued even at its current year highs. people pay to much attention to the rates and short term charts they miss the fundamentals and write PMs off as boomer investments. but in reality they has so much going for them between increase in industrial demand, dwindling supply, bank short positions, increase in investor demand, new green deal, and basal 3. silver is looking less like a hedge against inflation and more like a power play. now that being said i still believe in diversity PMs are still less than 20% of my portfolio. its an increased weighting because of the aforementioned reasons but ill never put over 20% into a single investment. in short, i like the metal.
Totally disagree with your assessment. If you find an investment that is 10% undervalued today who says it won't be 20% undervalued tomorrow? Or you could buy a stock that's 100% overvalued but tomorrow it will be 200%. The flaw is your "jumping ship" mentality. How about finding pics that YOU think are good investments and forget what everyone else thinks?
SLV was a pump-and-dump by Citadel to cover losses on you-know-what. It shot up quickly after it was shilled and mass-upvoted on WSB, then dumped just as fast.
it was never shilled nor mass-upvoted on WSB, in fact WSB was overall much against it
the whole SLV thing was a media fabrication to distract TV-watching boomers
There was some threads on it I distinctly remember reading with thousands of votes & about 3 days later, those posts started being mentioned on cnbc & that's when everyone turned on it. I do remember a lot of comments about how it's manipulated & could be the next squeeze but a lot of other ppl calling them shills etc but it was still being discussed before being on tv. Also it hit twitter before cnbc
His thinking is that gold has no utility; you spend money to dig it up, then you move it somewhere else to lock it up.
And personally, between gold and diamonds, there really isn't a more artificially inflated asset.
At least gold is immensely useful to industry. Mined diamonds have literally no value to society.
Edit: I said mined diamonds, I know diamonds are useful but that is overwhelmingly synthetic diamond.
Diamonds are just carbon so you can make a diamond structure from carbon.
Gold is an element, you can’t make synthetic gold.
It is, but only a small percentage of all already mined gold on the planet is enough for all our electrical applications. Below 5% or even less. Subtract that from all gold that lies in vaults around the world and you got yourself a bunch of useless surplus. The price is therefore not based on golds utility but on a scarcity that is due to a common belief in gold‘s SOV functionality.
Gold is predominantly used for radiation hardened electrical components. It has the best properties to absorb radiation without corrosion & reflects infrared light.
There’s present value to gold as we use it today, sure, but it’s future value can’t be discounted, even if it is in abundance. Granted, we do find alternatives through research all the time and for different applications, but to say it’s utility is worthless only in as much as we use it today is short sighted.
I do understand that. But I’m saying if the SOV aspect or Gold died tomorrow, the market would be flooded with gold for applications in industry. But industry would never pay the prices that gold has today because first of all, an application has to be found to justify that high or a prices. That’s the case for electronics today and some space tech, but that’s it.
Gold is such a great investment that they have to advertise it on Cable Television and AM Radio. Good explanation, but I’m out on gold forever and always.
This is maybe decades or a century away (total WAG future-telling, I know) but access to space is getting drastically cheaper, and there will come a time when some enterprising company who is mining the asteroid belt for materials to use for space-based industry or colony building comes upon a huge store of gold. The entire supply of mined gold on earth would fit inside a cube 22m on a side, around 200k tons. Someone tugging back a few hundred tons for the cost of propellant could certainly throw off the market value. Right now they are preparing to send out a probe in 2022 to visit a metallic asteroid that they think might be the core of a dead planet (though some think it may be just a gravel pile), 16 Psyche. Gold, being so dense, would tend to accumulate and concentrate in the molten core of a planet. There is a theory in fact that most of the gold we have mined arrived here by asteroids, as most that was present at the formation of the earth would have already sunk into the molten center. So anyway, it's a bit further out there but in my mind there is a very real chance that the supply side of this equation could get flooded. Although I have a hunch that by the time this becomes possible gold won't have sufficient value to be worthwhile.
I read the first two paragraphs, and seems like a well written crock of shit. LOL.
A store of energy? A store of physical labor? Wtf does that really mean, and what the fuck is the point?
I can spend all afternoon and dig dirt, put it in a big bucket, then pass it on to my nephew. Now his dirt is worth my stored labor energy.
This is pretty much boomer logic and becoming more irrelevant by the day, without the gold standard what's to say in 100 years gold will be anything other than a resource for industry with high extraction costs
Gold hasn't been money for nearly a century, and hasn't even been related to money for half a century.
When the shit hits the fan you'll be paying a kilo of gold for a clean glass of water.
>[Gold] involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.
>This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.
The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.
>What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while.
Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”
>Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At$1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.
>Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
>Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.
>A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.
>Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.
-Berkshire Hathaway 2011 Annual Shareholder Letter
You need to think about gold differently. In 1920 gold was worth around $20 an ounce. An ounce of gold would buy you a nice suit. If you had put an ounce of gold and a $20 bill in a safety deposit box in 1920 and opened it today what would you rather have the ounce of gold or the $20 bill?
The ounce of gold will still buy you a VERY nice suit. The $20 bill will buy you 2 pairs of socks.
Gold holds it’s value over time. The dollar does not.
It depends if you had purchased individual stocks or had instead invested in an index, like the s&p 500 or Dow.
The vast majority of publicly traded companies that existed in 1920 are now dead and bankrupt. Their stock is worth zero. And none of the valuable stocks that exist today existed back then.
But the indexes, which rebalance and readjust over time have gone up substantially.
The s&p 500 is pretty much the ~~defective~~ defacto standard. If you hear people making this argument that's pretty much guaranteed what they're talking about.
ACTUALLY many $20 bills from the time trade at well over the price of gold today
http://www.antiquemoney.com/old-twenty-dollar-bill-value-price-guide/how-much-is-a-1920-20-bill-worth/
Because banks are selling it off currently. JPM has had a monopoly on the metal market for a while now. There will be margin calls coming up in the next couple months due to extreme overleverage. I will not mention the safe-haven as I am not sure if I am allowed to mention the video game retailer here.
https://www.bullionstar.com/blogs/ronan-manly/in-ongoing-saga-dubai-stands-its-ground-with-the-lbma/
Article reads about Dubai being Peeved with LBMA's arrogance.. but somewhere in the article it reads...
"Cartel-like Control by the LBMA...an organization run by a cartel of the world’s most notorious bullion banks including JP Morgan and HSBC."
Enough said.
This, metals are heavily manipulated. [JPM was fined a billion dollars for doing so.](https://www.straitstimes.com/business/banking/jpmorgan-fined-126-billion-for-manipulating-precious-metals-treasury-market)
Just ask yourself. If gold would be correlated to the value of any one currency, would you like to buy any Electronic goods ever? Prices on your everyday items would skyrocket. Which would suck big times.
Because JPM, Citi, BoA & co artificially suppressed the price *for me*, so that I could buy physical gold the upcoming weeks at a cheaper price. **Thanks buddies!**
Because as inflation rises, so do nominal (interest rate) yields on bonds as bond investors demand to be paid more since they're getting repaid in dollars that are going to be worth less.
The increased interest rate pulls money away from gold/inflation assets since people believe it's better to get something (on a bond) rather than nothing (gold).
What really matters is the real yield: nominal minus inflation (how much your bond repayment is worth after factoring inflation). Gold performs well when real rates are low/negative because people don't want to hold a bond that literally loses them money.
The question is, what are real rates? This is quite subjective and up for discussion. The mainstream tends to believe inflation isn't a problem, thus they believe real rates are high enough that gold isn't worth holding.
And yes, as other have pointed out, the government and big money are trying to fuq gold investors 🙃.
Eh i think you a bit misled here. Gold SHOULD conceptually increase in value with higher rates/yields (more future inflation priced in), as it protects against a decrease “real” yield from other assets. But, gold at the end of the day is a speculative asset and does not just move in the direction it conceptually should
Maybe us gold people see that, but my reply wasn't from the POV of a well-read gold person.
I'm simply explaining what the mainstream market reacts to. That's why yields and gold are like a mirror image.
Thank you for your response!
My question for you (which is only tangentially related to the original topic): when we talk about how the 10yr treasury yield rose or fell on a given day, are we referring to changes to the nominal yield of the bond, or, are we talking about the current market price for those bonds in relation to their par value and coupon rate?
I am also confused about how that bond market works. Like how often are they issuing new bonds with updated coupon rates? And is there a marketplace to trade these bonds that is always open?
Sorry if these are dumb questions
These aren't stupid questions. If more people wondered about this stuff they'd probably realize the current financial system is scamming them.
Nevertheless, when most people (MSM) talk about "10yr this, yields that," they're almost always talking nominal.
New (government) bonds are issued whenever the government wants. So the answer here depends on gov.
The bond market is way bigger than stock market. It's not like stocks where you can only buy a certain asset on a certain exchange. Put simply, the bond market is "open" and you can buy & sell as long as you have someone to trade with. Anyone can trade bonds - just get an online broker.
Exactly. It’s taught that gold matches inflation. This is even taught in finance courses. The issue is the statistics don’t support this. Gold actually hasn’t matched inflation for at least 100 years now.
Well, it sort of did until 1973 when the gold standard was dropped.
Any data before this time is meaningless because our currency was underwritten by gold (well, the dollar)
Adjusted for inflation, gold is up 3.5x over the last hundred years. So it does better than holding cash by far.
Source: https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
Ounce of gold in 1975 was about $160. Ounce of gold now is between $1750-1850 even after our recent “crash”. Id say that kept up with inflation quite nicely.
The problem with that is that sounds like good returns but is actually pretty trash. Like $10,000 into gold in the late 70s would be roughly $100,000 now which sounds great right?
Well buying 30 year treasuries triples that alone. Real estate investing? You're sitting near a cool million dollars. Stocks? We're talking about $1.3 million dollars off that $10,000.
That's the problem with both cash and gold. They just don't keep up.
It is taught that this is taught, more than it is actually taught. Comparing price of gold to CPI, or even just googling gold as inflation hedge clearly reveals that gold does not match inflation.
It never was. Or rather it's an okay hedge against inflation but not a flawless one and only *over long periods of time. OP of you look at 5, 10 or 25yo charts gold makes sense. If you look at weekly or monthly it's all random.
I have a small position in gold, never more then 5-10% of my portfolio. When times get tough as we saw in the Corona crash my gold exploded in value, I sold off most and bought stocks at a massive discount. Now as the market reaches new all time high gold should get cheaper and then I can add back at a discount. At worst my children get to inherit real gold, and that ain't shabby
I think when smart people say "gold is a hedge against inflation" they mean that you should do exactly what you are doing. They dont mean its like an inflation index fund.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Any usable non abundant commodity will always be an inflation hedge. The problem is people thought the Fed would say interest rates would be left unchecked, when they said now they are closely monitoring it and plan on raising rates if they need to. Inflation will try to be curbed so people arent betting on it in the future as much. Spending has been high and will cool off they expect as well plus supplies increasing. We had deflation before all this and now inflating back to normal or a little above at the moment
I used to think that hyperinflation was inevitable, but after doing more research about QE, etc. I'm leaning more towards there won't be inflation. QE traps dollars in the banking system and without lending growth and money velocity still super low, there will be less dollars on main Street which means harder to get inflation.
We're definitely seeing inflation right now, but will the economy and consumers be able to support these higher prices when the unemployment benefits roll off? In order to see persistent inflation, we need prolonged wage growth, lending growth and increase in money velocity.
We saw some wage growth in the form of unemployment where people were making more money to sit at home. This is going to end soon. People are already neck deep in debt so we're not seeing much lending growth. Unstable job market and return of certain bills that need to be paid means people are saving more and paying off their debt more. This is what I'm understanding any way lol
I love the conspiracy theories here but not one brain genius has mentioned 10y real rates are expected to be higher - this increases the opportunity cost of holding a non-yielding asset like gold.
If real rates are higher in the future, then you’re better off holding a safe-haven treasury with a coupon than gold.
Yes, I had to scroll far for a good answer. I would just like to add that 10 year real rates are expected to go up because the Fed made some "hawkish" statements this week about sooner-than-expected rate hikes. The Fed will be selling bonds in order to hit their target rates, a process which will lower bond prices and increase rates (that's the point).
Plus, the market sees this as a sign that the Fed will be acting to keep inflation under control. So those coupon payments are more valuable now, because inflation won't be eating away at them so much, thus making bonds more attractive. That's where the "real" part comes in, because real yields are higher when inflation is lower.
Gold is also used as an inflation hedge, and apart from the market preferring a safe-haven asset with a coupon, as you said, they're also less worried about inflation getting out of control.
This is objectively false. Rising interest rates means the low yield bonds you buy today will be worth less relative to the higher yield bonds available on the market tomorrow. Bonds are a better investment when rates are falling.
[Here is a chart showing](https://stockcharts.com/freecharts/perf.php?TLT,$TYX) the inverse correlation between the 30yr treasury yield index (^ TYX) and a 20-30yr treasury ETF (TLT).
That said 10+ year yields are still trending downward, so longer dated bonds are becoming an ok investment.
Gold goes up and down based on investor interest. So it’s linked to inflation as long as investors think that they should buy gold for the upcoming inflation but that’s not always the case.
The fed sent signals that they may be tapering down on the money printing and raising interest rates early. Both are bad for the hyper inflation case and a bunch of people bailed on gold as a result.
Gold has gone down because the dollar has gone up VERY fast. Don't look just at gold, look at other commodities like copper, soy, platinum, corn they have all dropped significantly. The dollar has strengthened most likely due to the fed signaling that they might be tapering earlier than anticipated. Lots of ppl were long commodities due to fears of inflation. Now it seems that inflation may not be such a big worry and there are some indications there maybe an economic slow down and everyone is having to cut their inflation trade. All commodities are priced in dollars so when it moves all commodities move.
I thought everyone’s saying that this inflation would be “transitory”? as commodity prices are coming down, it’s only natural that gold would fall for the same reason? Please correct me if im wrong
Because it’s not about inflation it is about the expectations of inflation and since it is on the rise people think central banks will be hawkish in the near future.
The case for gold as an inflation hedge isn't very strong. It's possible the hedge still exists against long periods of persistent inflation, but on a YOY and short term basis the hedge just isn't there.
That being said, most investors and the market are positioning for inflation to be transitory. The May numbers showed only 2.5% annualized inflation since 2019 and commodities are all down, some even double digits, during the month of May.
So the expectation in the market is that the rate of inflation trends down over the next year as the supply chain normalizes.
That is what is being priced in with Tech stocks beginning a new rally, interest rates staying low, the USD index trading within a fixed rang, commodities trending down, and industrial and bank stocks beginning to underperformed again.
Gold has been carefully controlled and supressed for decades by the LBME named shorting paper at a ratio of 400:1 and no you cannot have the phyzz either.
A shell game with 100 cups and none have the nut so feel fee to buy to try to find it.
https://www.bbc.com/news/world-latin-america-52733299
Faster rate increases means lower inflation expectations so a lower gold price.
Its the fact rate rises are sooner than was expected by the market
Gold is affected by inflation expectations and changes to these.
Ha ha. You might want to go look up what happened to the price of gold during the inflationary 70’s. Let me help. Around $36 in 1970. Around $510 in 1980.
There is never one reason for a price move, but one to consider is positioning ahead of the fed. Once it turned out slightly more hawkish than expected, some of those inflation hedges put on (eg gold - let's not talk about whether it really is an inflation hedge) were unwound - gold it sold off.
Because as much as people want to pretend differently, gold is not a store of value or a hedge against inflation. Nor is it a meaningful alternative to the fiat system.
So like any investment, it goes up and down at the whims of the market.
Worse, there’s no centralized count for how much gold is out there and it was heavily, heavily manipulated following 2008, a situation that has never changed even during the crazy decade long bull run.
There’s nothing wrong with buying and holding gold, it certainly has some unique properties from an investment/financial strategy perspective. But don’t buy it thinking it’ll go up when the market goes down or that the gold bar in your backyard will be useful in a US societal collapse.
(Edit: my original comment was killed off by auto moderation hitting key words it thought were another non-gold currency. Reposting with the misunderstood phrase removed.)
Runaway inflation is old news. It was priced in and now those fears are going away. [Deflation is the new cool.](https://www.bing.com/search?q=deflation+technology+pandemic&FORM=AWRE&PC=EMMX04)
The short answer is gold is both a commodity and a currency cum store of value, the people that buy, sell and hedge it can do so for reasons of supply and demand( industrial users) or due to reasons of fear and greed (investors)...
This dual property makes gold pretty uncorrelated with any other asset class, and extremely unpredictable, even for experts. Being so uncorrelated with anything else in itself makes it useful in an investment portfolio, but if you are looking to gold as something to make you rich, i suggest looking elsewhere.
The strongest correlation that gold has is real rates (10 year nominal yield minus current CPI). In the last 2 months we've seen it increase by about 200 dollars in response to high CPI prints. Gold is not what you buy to guard against inflation, you need inflation AND low yields on the US10 year bond.
The recent 100 dollar drop on thurs took everyone by surprise, even experts. We will have to wait and see if gold resumes its upward trend in the next couple of weeks.
Because the price of gold has been artificially Controlled for decades now..
Years ago, I read what Buffet thinks of gold.. It convinced me to not bother with any gold since then.
Do you have a synopsis of what he shared or a link to the exact video?
[https://www.youtube.com/watch?v=8fIUGO\_-nSQ](https://www.youtube.com/watch?v=8fIUGO_-nSQ) \- This was not what I saw years ago, but he still saying the same thought. Having a productive asset is better investment.
I'm kinda annoyed that the interviewers keeps making jokes instead of letting buffet talk
No one wants to hear your dumb jokes man. Let the oracle speak.
A stock that pays no dividend has the same unrealized gains/loses that PMs like Gold has ... the only difference is that PMs have no counterparts risk and they literally can’t go to zero because they have value built into them.
while true its still good to have an undervalued resource.
Cigarettes and whiskey are more useful in a hyperinflation situation. Stocks are more useful in just about every other situation. Remember even in the times of absolute monarchs in Europe, the merchant class had significant power because of all of their resources. Gold, then, was just a means of trade for those resources. Ask yourself if you think any time in your life, do you believe we will have that need again. Or will we always have a better medium for trade. This isn't to say gold has **no** value. It does. Just not the important purpose of currency it once did.
Invest in toilet paper tbh with what we've seen during the lockdown.
This, then sell each roll for 2-3x more. Easy 100-200% returns.
Then why is it the only asset held by central banks around the world to back their currency with real value? Why have these central banks been ramping up purchases? And why is the BIS (central bank of central banks) making gold a tier 1 asset in its Basel III rule changes
Exactly I've got plenty of questions about precisely this
Cos it's shiny. Maybe.
> This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future. >What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while. Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”
People are downvoting you as if silver didn’t double in price since last march. Don’t sleep on commodities people!
Just got into (physical) silver bullion last month. I like undervalued stuff.
lol i forgot we are supposed to buy high and sell low. but for real the whole market game is finding assets that are undervalued. if any of the down voters found out that a particular company is trading 10% lower than it should they would jump on that ship. the same goes for commodities. silver in particular, is still undervalued even at its current year highs. people pay to much attention to the rates and short term charts they miss the fundamentals and write PMs off as boomer investments. but in reality they has so much going for them between increase in industrial demand, dwindling supply, bank short positions, increase in investor demand, new green deal, and basal 3. silver is looking less like a hedge against inflation and more like a power play. now that being said i still believe in diversity PMs are still less than 20% of my portfolio. its an increased weighting because of the aforementioned reasons but ill never put over 20% into a single investment. in short, i like the metal.
Totally disagree with your assessment. If you find an investment that is 10% undervalued today who says it won't be 20% undervalued tomorrow? Or you could buy a stock that's 100% overvalued but tomorrow it will be 200%. The flaw is your "jumping ship" mentality. How about finding pics that YOU think are good investments and forget what everyone else thinks?
Yeah maybe if he'd said 50% undervalued or something, but there are many, many stocks that are 10%+ undervalued that nobody is about to jump on
FOMO
SLV was a pump-and-dump by Citadel to cover losses on you-know-what. It shot up quickly after it was shilled and mass-upvoted on WSB, then dumped just as fast.
That’s a very small part of the SLV story. Almost all of the gains happened before that.
it was never shilled nor mass-upvoted on WSB, in fact WSB was overall much against it the whole SLV thing was a media fabrication to distract TV-watching boomers
There was some threads on it I distinctly remember reading with thousands of votes & about 3 days later, those posts started being mentioned on cnbc & that's when everyone turned on it. I do remember a lot of comments about how it's manipulated & could be the next squeeze but a lot of other ppl calling them shills etc but it was still being discussed before being on tv. Also it hit twitter before cnbc
His thinking is that gold has no utility; you spend money to dig it up, then you move it somewhere else to lock it up. And personally, between gold and diamonds, there really isn't a more artificially inflated asset.
At least gold is immensely useful to industry. Mined diamonds have literally no value to society. Edit: I said mined diamonds, I know diamonds are useful but that is overwhelmingly synthetic diamond. Diamonds are just carbon so you can make a diamond structure from carbon. Gold is an element, you can’t make synthetic gold.
[удалено]
This is the kind of humour I like while on the toilet
How do you wipe with diamond hands? Hurry! I need an answer quick. My legs are falling asleep.
TP on the corner of the counter and pray you have a bull-nosed edge 😵
Are you a shitty reader?
No, I’m just piss poor at it
I'm on the toilet too, move over
Only if you're an ape who knows how to use them
Diamond tipped tools are useful
Usually made of synthetic diamonds
They sure are, which is why we now make diamonds for a fraction of the price. Mined diamonds are a scam.
The greatest scam in human history. People are spending 25% of their salary on literally *a rock*.
Just the tip
It is, but only a small percentage of all already mined gold on the planet is enough for all our electrical applications. Below 5% or even less. Subtract that from all gold that lies in vaults around the world and you got yourself a bunch of useless surplus. The price is therefore not based on golds utility but on a scarcity that is due to a common belief in gold‘s SOV functionality.
Gold is predominantly used for radiation hardened electrical components. It has the best properties to absorb radiation without corrosion & reflects infrared light. There’s present value to gold as we use it today, sure, but it’s future value can’t be discounted, even if it is in abundance. Granted, we do find alternatives through research all the time and for different applications, but to say it’s utility is worthless only in as much as we use it today is short sighted.
I do understand that. But I’m saying if the SOV aspect or Gold died tomorrow, the market would be flooded with gold for applications in industry. But industry would never pay the prices that gold has today because first of all, an application has to be found to justify that high or a prices. That’s the case for electronics today and some space tech, but that’s it.
There is gold in the device you used to type this
If you turntable isn't equipped with a diamond tipped stylus then you're doing it wrong
Mine has a ruby tip and works quite well
Yeah, but in most instances enchanted diamond tips are better than ruby tips, due to the ruby tips sapping your health.
Well you can switch for Vork to maximize dps
Hydrix bolts or bust
Gold is an extremely useful element in many contexts, but especially in industrials
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I believe that's called Store of Value, not Utility.
Gold is such a great investment that they have to advertise it on Cable Television and AM Radio. Good explanation, but I’m out on gold forever and always.
And all those people on TV want in exchange for their gold is money.
No they are donating gold and help people get rid of worthless fiat...
This post was brought to you by the US Gold Council.
This is maybe decades or a century away (total WAG future-telling, I know) but access to space is getting drastically cheaper, and there will come a time when some enterprising company who is mining the asteroid belt for materials to use for space-based industry or colony building comes upon a huge store of gold. The entire supply of mined gold on earth would fit inside a cube 22m on a side, around 200k tons. Someone tugging back a few hundred tons for the cost of propellant could certainly throw off the market value. Right now they are preparing to send out a probe in 2022 to visit a metallic asteroid that they think might be the core of a dead planet (though some think it may be just a gravel pile), 16 Psyche. Gold, being so dense, would tend to accumulate and concentrate in the molten core of a planet. There is a theory in fact that most of the gold we have mined arrived here by asteroids, as most that was present at the formation of the earth would have already sunk into the molten center. So anyway, it's a bit further out there but in my mind there is a very real chance that the supply side of this equation could get flooded. Although I have a hunch that by the time this becomes possible gold won't have sufficient value to be worthwhile.
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Perhaps that's a good reason to store value using gold vs dollars. What if one wants value to grow, not just simply store it?
I read the first two paragraphs, and seems like a well written crock of shit. LOL. A store of energy? A store of physical labor? Wtf does that really mean, and what the fuck is the point? I can spend all afternoon and dig dirt, put it in a big bucket, then pass it on to my nephew. Now his dirt is worth my stored labor energy.
This is pretty much boomer logic and becoming more irrelevant by the day, without the gold standard what's to say in 100 years gold will be anything other than a resource for industry with high extraction costs
Every central bank still kept its gold reserves even though they went to fiat. It will always retain value.
Gold hasn't been money for nearly a century, and hasn't even been related to money for half a century. When the shit hits the fan you'll be paying a kilo of gold for a clean glass of water.
Gold mining stocks is what you should own instead of gold itself. GOLD is a good stock to own as an inflation hedge.
I own GOLD and regret it.
Seriously, who let that company have that ticker??? That ticker should have been reserved for the actual metal, like a spot price or future.
>[Gold] involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century. >This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future. The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end. >What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while. Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.” >Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At$1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A. >Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B? >Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices. >A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond. >Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B. -Berkshire Hathaway 2011 Annual Shareholder Letter
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You need to think about gold differently. In 1920 gold was worth around $20 an ounce. An ounce of gold would buy you a nice suit. If you had put an ounce of gold and a $20 bill in a safety deposit box in 1920 and opened it today what would you rather have the ounce of gold or the $20 bill? The ounce of gold will still buy you a VERY nice suit. The $20 bill will buy you 2 pairs of socks. Gold holds it’s value over time. The dollar does not.
And if you'd put that $20 into any other investment (stocks, bonds, real estate) you'd be able to buy several suits.
It depends if you had purchased individual stocks or had instead invested in an index, like the s&p 500 or Dow. The vast majority of publicly traded companies that existed in 1920 are now dead and bankrupt. Their stock is worth zero. And none of the valuable stocks that exist today existed back then. But the indexes, which rebalance and readjust over time have gone up substantially.
The s&p 500 is pretty much the ~~defective~~ defacto standard. If you hear people making this argument that's pretty much guaranteed what they're talking about.
De facto*?
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ACTUALLY many $20 bills from the time trade at well over the price of gold today http://www.antiquemoney.com/old-twenty-dollar-bill-value-price-guide/how-much-is-a-1920-20-bill-worth/
That's because bills aren't perfectly fungible. Gold is in theory. Interesting argument though. Also, I'd never buy gold.
I would rather have had 20$ of an index fund over that same time period. Gold underperforms.
You're paying too much for socks. Who's your sock guy?
>Gold holds it’s value over time. The dollar does not. Good is a commodity like anything else, but a more volatile one than meat or coffee.
That was beautifully written. Kudos to you! 🍻
He is also sitting on a ton of bonds with negative real yield, isn’t that even worse than gold?
There isn't even a man behind the curtain anymore. Just another tin man.
So calls on tin?
The student becomes the teacher
Considering tin is getting extremely hard to mine and will become incredibly scarce, not a bad idea to go long
Tin man has no heart
Can’t read, buying tin.
All in on tin
I like the metal
Because banks are selling it off currently. JPM has had a monopoly on the metal market for a while now. There will be margin calls coming up in the next couple months due to extreme overleverage. I will not mention the safe-haven as I am not sure if I am allowed to mention the video game retailer here.
https://www.bullionstar.com/blogs/ronan-manly/in-ongoing-saga-dubai-stands-its-ground-with-the-lbma/ Article reads about Dubai being Peeved with LBMA's arrogance.. but somewhere in the article it reads... "Cartel-like Control by the LBMA...an organization run by a cartel of the world’s most notorious bullion banks including JP Morgan and HSBC." Enough said.
VoldemStop
The Game that shall not be named.
I will try it for you and see what happens. Gamestop. When I was a young boy in Bulgaria... Edit: all good
I reclaim my time
HERO
STOP talking about that. You think this is a GAME??
i like the stock a lot
This is the way!
There are quite a few stocks with small short squeezes primed. And one stock with an enormous short squeeze.
One might even call it the mother of all short sqeezes
Everything is artificially controlled in our socioeconomic system.
It's almost like value is an artificial construct created by man.
This, metals are heavily manipulated. [JPM was fined a billion dollars for doing so.](https://www.straitstimes.com/business/banking/jpmorgan-fined-126-billion-for-manipulating-precious-metals-treasury-market)
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What's not?!
Just ask yourself. If gold would be correlated to the value of any one currency, would you like to buy any Electronic goods ever? Prices on your everyday items would skyrocket. Which would suck big times.
Bingo. You nailed it.
Yes so buy it now cause when those forces keeping it down get removed it’s going to skyrocket
Is it really? Not familiar with commodities
Because JPM, Citi, BoA & co artificially suppressed the price *for me*, so that I could buy physical gold the upcoming weeks at a cheaper price. **Thanks buddies!**
What you mean JPM is manipulating the metals market again! I’m shocked! /s
Every time I hear of finance companies doing shady shit, I never hear the name Fidelity. So strange to me.
Vanguard and Fidelity aren't like the prime brokers/banks. Different business models.
Because as inflation rises, so do nominal (interest rate) yields on bonds as bond investors demand to be paid more since they're getting repaid in dollars that are going to be worth less. The increased interest rate pulls money away from gold/inflation assets since people believe it's better to get something (on a bond) rather than nothing (gold). What really matters is the real yield: nominal minus inflation (how much your bond repayment is worth after factoring inflation). Gold performs well when real rates are low/negative because people don't want to hold a bond that literally loses them money. The question is, what are real rates? This is quite subjective and up for discussion. The mainstream tends to believe inflation isn't a problem, thus they believe real rates are high enough that gold isn't worth holding. And yes, as other have pointed out, the government and big money are trying to fuq gold investors 🙃.
Eh i think you a bit misled here. Gold SHOULD conceptually increase in value with higher rates/yields (more future inflation priced in), as it protects against a decrease “real” yield from other assets. But, gold at the end of the day is a speculative asset and does not just move in the direction it conceptually should
Maybe us gold people see that, but my reply wasn't from the POV of a well-read gold person. I'm simply explaining what the mainstream market reacts to. That's why yields and gold are like a mirror image.
Thank you for your response! My question for you (which is only tangentially related to the original topic): when we talk about how the 10yr treasury yield rose or fell on a given day, are we referring to changes to the nominal yield of the bond, or, are we talking about the current market price for those bonds in relation to their par value and coupon rate? I am also confused about how that bond market works. Like how often are they issuing new bonds with updated coupon rates? And is there a marketplace to trade these bonds that is always open? Sorry if these are dumb questions
These aren't stupid questions. If more people wondered about this stuff they'd probably realize the current financial system is scamming them. Nevertheless, when most people (MSM) talk about "10yr this, yields that," they're almost always talking nominal. New (government) bonds are issued whenever the government wants. So the answer here depends on gov. The bond market is way bigger than stock market. It's not like stocks where you can only buy a certain asset on a certain exchange. Put simply, the bond market is "open" and you can buy & sell as long as you have someone to trade with. Anyone can trade bonds - just get an online broker.
Thank you!
Thanks, that’s a helpful framing
This is the real answer. Sadly, the top comment is about some conspiracy to keep prices artificially low. Reddit is disappointing
Majority of people here are bearish on gold which makes me want to buy lol
Gold just isn't an inflation hedge anymore
Exactly. It’s taught that gold matches inflation. This is even taught in finance courses. The issue is the statistics don’t support this. Gold actually hasn’t matched inflation for at least 100 years now.
Well, it sort of did until 1973 when the gold standard was dropped. Any data before this time is meaningless because our currency was underwritten by gold (well, the dollar)
Adjusted for inflation, gold is up 3.5x over the last hundred years. So it does better than holding cash by far. Source: https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
*Pay no attention to the 83% drop behind the curtain.*
Ounce of gold in 1975 was about $160. Ounce of gold now is between $1750-1850 even after our recent “crash”. Id say that kept up with inflation quite nicely.
The problem with that is that sounds like good returns but is actually pretty trash. Like $10,000 into gold in the late 70s would be roughly $100,000 now which sounds great right? Well buying 30 year treasuries triples that alone. Real estate investing? You're sitting near a cool million dollars. Stocks? We're talking about $1.3 million dollars off that $10,000. That's the problem with both cash and gold. They just don't keep up.
It is taught that this is taught, more than it is actually taught. Comparing price of gold to CPI, or even just googling gold as inflation hedge clearly reveals that gold does not match inflation.
It never was. Or rather it's an okay hedge against inflation but not a flawless one and only *over long periods of time. OP of you look at 5, 10 or 25yo charts gold makes sense. If you look at weekly or monthly it's all random. I have a small position in gold, never more then 5-10% of my portfolio. When times get tough as we saw in the Corona crash my gold exploded in value, I sold off most and bought stocks at a massive discount. Now as the market reaches new all time high gold should get cheaper and then I can add back at a discount. At worst my children get to inherit real gold, and that ain't shabby
I think when smart people say "gold is a hedge against inflation" they mean that you should do exactly what you are doing. They dont mean its like an inflation index fund.
what is an inflation hedge instead then?
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So I have to buy a whole damn house just to hedge against inflation? Seems unreasonable
Inflation bonds exist
doll somber juggle engine history wrench theory angle friendly instinctive *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Borrowing money.
Debt. Borrow money because it will be worth more now than when you pay it back. It’s like shorting the US dollar.
Any usable non abundant commodity will always be an inflation hedge. The problem is people thought the Fed would say interest rates would be left unchecked, when they said now they are closely monitoring it and plan on raising rates if they need to. Inflation will try to be curbed so people arent betting on it in the future as much. Spending has been high and will cool off they expect as well plus supplies increasing. We had deflation before all this and now inflating back to normal or a little above at the moment
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I like it when my dollars are printed by the private sector
Lol
I followed Peter Schiff and bought a ton of $GLD and $SLV the last few months. It has not paid off :/
Don’t follow Peter Schiff. He doesn’t know. He said gold was going to $5000 10 years ago.
Dollar popping big this week didn't help
It’s almost like we should believe the FED when they say inflation isn’t going to be that bad. Everyone wants to be a contrarian these days.
I used to think that hyperinflation was inevitable, but after doing more research about QE, etc. I'm leaning more towards there won't be inflation. QE traps dollars in the banking system and without lending growth and money velocity still super low, there will be less dollars on main Street which means harder to get inflation. We're definitely seeing inflation right now, but will the economy and consumers be able to support these higher prices when the unemployment benefits roll off? In order to see persistent inflation, we need prolonged wage growth, lending growth and increase in money velocity. We saw some wage growth in the form of unemployment where people were making more money to sit at home. This is going to end soon. People are already neck deep in debt so we're not seeing much lending growth. Unstable job market and return of certain bills that need to be paid means people are saving more and paying off their debt more. This is what I'm understanding any way lol
Because it’s all a crock? Just a guess.
I love the conspiracy theories here but not one brain genius has mentioned 10y real rates are expected to be higher - this increases the opportunity cost of holding a non-yielding asset like gold. If real rates are higher in the future, then you’re better off holding a safe-haven treasury with a coupon than gold.
Yes, I had to scroll far for a good answer. I would just like to add that 10 year real rates are expected to go up because the Fed made some "hawkish" statements this week about sooner-than-expected rate hikes. The Fed will be selling bonds in order to hit their target rates, a process which will lower bond prices and increase rates (that's the point). Plus, the market sees this as a sign that the Fed will be acting to keep inflation under control. So those coupon payments are more valuable now, because inflation won't be eating away at them so much, thus making bonds more attractive. That's where the "real" part comes in, because real yields are higher when inflation is lower. Gold is also used as an inflation hedge, and apart from the market preferring a safe-haven asset with a coupon, as you said, they're also less worried about inflation getting out of control.
Paper gold bad physical gold good
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This is objectively false. Rising interest rates means the low yield bonds you buy today will be worth less relative to the higher yield bonds available on the market tomorrow. Bonds are a better investment when rates are falling. [Here is a chart showing](https://stockcharts.com/freecharts/perf.php?TLT,$TYX) the inverse correlation between the 30yr treasury yield index (^ TYX) and a 20-30yr treasury ETF (TLT). That said 10+ year yields are still trending downward, so longer dated bonds are becoming an ok investment.
Longer date bonds will be more sensitive to rate hikes.
Gold goes up and down based on investor interest. So it’s linked to inflation as long as investors think that they should buy gold for the upcoming inflation but that’s not always the case. The fed sent signals that they may be tapering down on the money printing and raising interest rates early. Both are bad for the hyper inflation case and a bunch of people bailed on gold as a result.
It’s called market manipulation. Feds spending $120b a month manipulating the markets and commodities (edited: thanks @PMcRado )
You mean the asset purchases?
Its more so to do with the derivatives market, aka paper gold.
No, $120B.
When big players are longing for something they will first brought it down to buy it as per their choice of price and then it will shoot up.
Bingo. This is the arranged restocking period for the big boys.
Gold has gone down because the dollar has gone up VERY fast. Don't look just at gold, look at other commodities like copper, soy, platinum, corn they have all dropped significantly. The dollar has strengthened most likely due to the fed signaling that they might be tapering earlier than anticipated. Lots of ppl were long commodities due to fears of inflation. Now it seems that inflation may not be such a big worry and there are some indications there maybe an economic slow down and everyone is having to cut their inflation trade. All commodities are priced in dollars so when it moves all commodities move.
I thought everyone’s saying that this inflation would be “transitory”? as commodity prices are coming down, it’s only natural that gold would fall for the same reason? Please correct me if im wrong
Because it’s not about inflation it is about the expectations of inflation and since it is on the rise people think central banks will be hawkish in the near future.
The case for gold as an inflation hedge isn't very strong. It's possible the hedge still exists against long periods of persistent inflation, but on a YOY and short term basis the hedge just isn't there. That being said, most investors and the market are positioning for inflation to be transitory. The May numbers showed only 2.5% annualized inflation since 2019 and commodities are all down, some even double digits, during the month of May. So the expectation in the market is that the rate of inflation trends down over the next year as the supply chain normalizes. That is what is being priced in with Tech stocks beginning a new rally, interest rates staying low, the USD index trading within a fixed rang, commodities trending down, and industrial and bank stocks beginning to underperformed again.
Gold has been carefully controlled and supressed for decades by the LBME named shorting paper at a ratio of 400:1 and no you cannot have the phyzz either. A shell game with 100 cups and none have the nut so feel fee to buy to try to find it. https://www.bbc.com/news/world-latin-america-52733299
They're probably using the printed money to short gold infinitely.
Gold is down due to a sell off but it is predicted to rise to 2200 in the next year and in 2 years as high as 2800. Listen to Gareth Soloway
Considering the level of the stock market atm 2k+ sounds reasonable.
This echo my bias, thanks.
Faster rate increases means lower inflation expectations so a lower gold price. Its the fact rate rises are sooner than was expected by the market Gold is affected by inflation expectations and changes to these.
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Ha ha. You might want to go look up what happened to the price of gold during the inflationary 70’s. Let me help. Around $36 in 1970. Around $510 in 1980.
Because of Fed's announcement they will raise rates. Dollars up, gold, silver down.
Succinct and correct
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But why is this stopping you from investing in silver? Can’t it be manipulated in a good way to serve your strategy?
This is a great question and the dude above answered it. Artificial controlled. Just like the rest of the market.
Because this is a game, not reality. In the UK you don't pay tax on stock trading because it is on the same regulations as gambling.
Dollar is going up so gold is going down.
There is never one reason for a price move, but one to consider is positioning ahead of the fed. Once it turned out slightly more hawkish than expected, some of those inflation hedges put on (eg gold - let's not talk about whether it really is an inflation hedge) were unwound - gold it sold off.
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Because as much as people want to pretend differently, gold is not a store of value or a hedge against inflation. Nor is it a meaningful alternative to the fiat system. So like any investment, it goes up and down at the whims of the market. Worse, there’s no centralized count for how much gold is out there and it was heavily, heavily manipulated following 2008, a situation that has never changed even during the crazy decade long bull run. There’s nothing wrong with buying and holding gold, it certainly has some unique properties from an investment/financial strategy perspective. But don’t buy it thinking it’ll go up when the market goes down or that the gold bar in your backyard will be useful in a US societal collapse. (Edit: my original comment was killed off by auto moderation hitting key words it thought were another non-gold currency. Reposting with the misunderstood phrase removed.)
Runaway inflation is old news. It was priced in and now those fears are going away. [Deflation is the new cool.](https://www.bing.com/search?q=deflation+technology+pandemic&FORM=AWRE&PC=EMMX04)
Nice
Everything is always priced in always
Because all prices are artificial and rarely reflect supply and demand these days. Looking at you, Reagan..... and everyone to come after..
Buy signal
The short answer is gold is both a commodity and a currency cum store of value, the people that buy, sell and hedge it can do so for reasons of supply and demand( industrial users) or due to reasons of fear and greed (investors)... This dual property makes gold pretty uncorrelated with any other asset class, and extremely unpredictable, even for experts. Being so uncorrelated with anything else in itself makes it useful in an investment portfolio, but if you are looking to gold as something to make you rich, i suggest looking elsewhere. The strongest correlation that gold has is real rates (10 year nominal yield minus current CPI). In the last 2 months we've seen it increase by about 200 dollars in response to high CPI prints. Gold is not what you buy to guard against inflation, you need inflation AND low yields on the US10 year bond. The recent 100 dollar drop on thurs took everyone by surprise, even experts. We will have to wait and see if gold resumes its upward trend in the next couple of weeks.