Gold flirts with $400

[The_RANDy_Corporation]

Gold Hits 7-Year High, Looks to $400

Reuters
Thursday, September 25, 2003; 11:42 AM

By Veronica Brown

LONDON (Reuters) - Gold rose to its highest level in more than seven years on Thursday as fund buyers piled into the metal, inspired by a surprise decision from OPEC on Wednesday to cut oil output and a weaker dollar, which raised bullion's safe-haven appeal. . . . .

Washington Post (http://www.washingtonpost.com/ac2/wp-dyn/A63823-2003Sep25?language=printer)

[2nd_Amendment]

I keep buying it a little at a time. It was somewhere around rock bottom and a safe bet. There's ALWAYS some sucker that wants gold and land. Nothing else comes with that guarantee. I'm genuinely curious, too, where it'll go if the dollar continues to weaken along with our industrial base. Worst case is I break even so what the hell...

[The_RANDy_Corporation]

http://freeconservatives.com/ubbthreads/images/graemlins/yeahthat.gif TRVTH!

[Estragon]

Gold is an absolute hedge against loss, although it presents little opportunity for gain. When gold goes up, it means the dollar is weaker and buys less, so any "profit" is an illusion.

The only exception is if a trader can take advantage of speculatory bubbles in the price, and sell at an appropriate time {I believe our friend Etaoin does this}. For example, gold spiked to $414.80 in February 1996, just before the huge surge in the economy of the late '90s.

The reason for this is the unique stability of supply of gold. Over 98% of all the gold ever mined is still in use today {most of that which disappeared was lost in shipwrecks}, and new production annually only amounts to slightly more than 1% of total supply. This relative stability also guarantees a constant demand, which has persisted for thousands of years. So, in essence, the "price" of gold NEVER changes; it is rather the value of currencies used to purchase gold which varies.

A free site to instantly check the current price of gold is http://www.kitco.com/charts/livegoldnewyork.html .

[Jason]

[ QUOTE ]
Estragon said:


The reason for this is the unique stability of supply of gold. Over 98% of all the gold ever mined is still in use today {most of that which disappeared was lost in shipwrecks}, and new production annually only amounts to slightly more than 1% of total supply.


[/ QUOTE ] These are some good reasons to buy silver, which is consumed at a rate faster than production. It has remained relatively flat for the last 20 years but supply/demand factors suggest that this can't go on any longer. It is due for a spike.

Ted Butler is the premier silver analyst:


http://www.butlerresearch.com/archive_free.html

[Etaoin]

EXACTLY, ESTRAGON! That is why it is called THE STORE OF VALUE.

Harry Browne suggests an investment program of placing one third of your money in each of 3 areas. Gold, Stocks, and Bonds. Then every year readjust your portfolio to the same balance. He maintains that this will give you an annual 5% return. In fact, with the recent bubble, it should have returned much better.