Gold continues to soar!

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raven15
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Re: Gold continues to soar!

Post by raven15 »

JBTX wrote: Wed Mar 03, 2021 7:28 am
Salmo Trutta wrote: Wed Mar 03, 2021 7:05 am Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc.

One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production.

And the price will drop...
https://www.usmoneyreserve.com/blog/how ... the-world/

Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined.
That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window.

It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years of production, 10 years of mine planning, and 15 years of advanced reconnaissance. Considering the volatility of gold prices it would be crazy to do any more. Also at times in the past there have been odd government policies to tax mines on proven reserves, which creates an incentive to never prove more reserves than necessary. Also paradoxically gold miners have had a tendency to produce more gold when prices are low, and less when prices are high.

When I was very young there was a certain area that was estimated to have enough gold to mine until 1994. They kept finding more. Right now that area is estimated in private to have enough gold for two more generations of miners. I don't know the status of those resources and whether they have been reported as reserves (I would guess largely no, and they are marked more as promising leads), but the general takeaway is that there is plenty of gold left. Then you could get into the gold which is known but not currently economical to extract for a hundred possible reasons.
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watchnerd
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Re: Gold continues to soar!

Post by watchnerd »

Anon9001 wrote: Sat Mar 06, 2021 10:50 am
watchnerd wrote: Sat Mar 06, 2021 10:21 am Hmmm.

Gold as substitute for muni bond MM fund?

They both pay 0%...
Gold is a long duration investment due to it's volatility. I assume muni/MM bond is short-duration investments so they should not be compared.
It was a joke. ;)
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smitcat
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Re: Gold continues to soar!

Post by smitcat »

KlangFool wrote: Sat Mar 06, 2021 10:47 am
smitcat wrote: Sat Mar 06, 2021 10:44 am
KlangFool wrote: Sat Mar 06, 2021 10:03 am
NoRegret wrote: Sat Mar 06, 2021 10:00 am
KlangFool wrote: Sat Mar 06, 2021 8:06 am Hi,

What would be the right gold price if the real interest rate drop to negative 5%?

Thanks.

KlangFool
-5% is a little extreme although I won’t argue directionally. People predicting negative US yields never bother with gold price under the same circumstance.

IMO the next leg up in nominal yields will be accompanied by widening breakevens and lower real yields as actual CPI inflation is more recognized. We’ll see.
NoRegret,

Please answer the question if you know the answer.

<<-5% is a little extreme >>

Historically, it had happened before and at a greater extreme. So, it is not impossible.

<<People predicting negative US yields never bother with gold price under the same circumstance.>>

I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left.

KlangFool
"I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left."
I agree - precious metals can be valuable in those circumstances. What % of your portfolio are in these metals now?
smitcat,

It is not part of my portfolio. It is less than 1%. I use precious metals as a form of insurance.

KlangFool
Understood - then it will not matter what the price of gold will do with a negative rate.
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Re: Gold continues to soar!

Post by KlangFool »

smitcat wrote: Sat Mar 06, 2021 12:03 pm
KlangFool wrote: Sat Mar 06, 2021 10:47 am
smitcat wrote: Sat Mar 06, 2021 10:44 am
KlangFool wrote: Sat Mar 06, 2021 10:03 am
NoRegret wrote: Sat Mar 06, 2021 10:00 am
-5% is a little extreme although I won’t argue directionally. People predicting negative US yields never bother with gold price under the same circumstance.

IMO the next leg up in nominal yields will be accompanied by widening breakevens and lower real yields as actual CPI inflation is more recognized. We’ll see.
NoRegret,

Please answer the question if you know the answer.

<<-5% is a little extreme >>

Historically, it had happened before and at a greater extreme. So, it is not impossible.

<<People predicting negative US yields never bother with gold price under the same circumstance.>>

I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left.

KlangFool
"I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left."
I agree - precious metals can be valuable in those circumstances. What % of your portfolio are in these metals now?
smitcat,

It is not part of my portfolio. It is less than 1%. I use precious metals as a form of insurance.

KlangFool
Understood - then it will not matter what the price of gold will do with a negative rate.
Trying to learn if the rate goes negative, how much the gold price goes up. As per the model, at -5%, the Gold at $10,000.

KlangFool
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jpmorganfunds
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Re: Gold continues to soar!

Post by jpmorganfunds »

There's no bigger gold bug than Peter Schiff and even he says there's no manipulation.

https://schiffgold.com/videos/peter-sch ... -theories/
NoRegret
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Re: Gold continues to soar!

Post by NoRegret »

KlangFool wrote: Sat Mar 06, 2021 10:03 am NoRegret,

Please answer the question if you know the answer.

<<-5% is a little extreme >>

Historically, it had happened before and at a greater extreme. So, it is not impossible.

<<People predicting negative US yields never bother with gold price under the same circumstance.>>

I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left.

KlangFool

P.S.: I found the formula. At -5%, the gold will be about $10,000 per ounce.

viewtopic.php?f=10&t=299656&hilit=marke ... 0#p4939835
KF,

I don't have answers but I can share some thoughts.

If we're serious about -5% real (say the 10 yr), it behooves to spell out the nominal rates and inflation that will give rise to such. It has only happened in the US at the end of '70s/early '80s. The global economy is more mature and growth rates won't be as high. There was also an oil embargo that pushed up inflation. Supply shock can certainly still happen, but let's discuss structural changes.

1) Nominal rates 7%, high inflation 12% - Fed will have already lost control and USD probably have collapsed
2) Nominal rates 4%, medium high inflation 9% - Probably under yield curve control, MMT, lots of UBI to address food price inflation, gov't mandated purchase of USTs by pensions and insurance companies
3) Nominal rates -3%, inflation 2% - Deflationary collapse?

I list these possibilities to show how implausible they are. I can't square these circles. I know I wouldn't want to live under any of these scenarios.

Gold $10k is probably more likely than -5% real. It'll likely involve a reset of the international monetary system to include a basket of currencies including (re-priced) gold as the reserve currency unit.
People predicting negative US yields never bother with gold price under the same circumstance.
This was a tongue-in-cheek statement about some BHs defending nominal treasuries. The very same BHs are usually adamantly anti-gold.

Japan and EU both have negative (very low) yielding sovereign bonds but they are mostly held within their respective regions and have the effect of sending their capital to the US. US treasuries form the bulk of international reserves and negative nominal yields will mean literally other CBs have to pay to hold our paper.

Cheers,
NR
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KlangFool
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Re: Gold continues to soar!

Post by KlangFool »

NoRegret wrote: Sat Mar 06, 2021 3:33 pm
I know I wouldn't want to live under any of these scenarios.
NoRegret,

<<I know I wouldn't want to live under any of these scenarios.>>

I know that I do not get to choose. I have to be prepared in order to survive.

<< It'll likely involve a reset of the international monetary system to include a basket of currencies including (re-priced) gold as the reserve currency unit. >.

Our current currency system is about 40 to 50 years old. It is normal for the currency system to be reset every now and then.

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Re: Gold continues to soar!

Post by willthrill81 »

NoRegret wrote: Sat Mar 06, 2021 3:33 pm
People predicting negative US yields never bother with gold price under the same circumstance.
This was a tongue-in-cheek statement about some BHs defending nominal treasuries. The very same BHs are usually adamantly anti-gold.
To be fair, many with that anti-gold sentiment don't want gold because they view the long-term real return as likely to be zero and they don't want to take on gold's volatility. While I definitely see that argument, I would have a hard time passing up gold entirely to instead take on hefty exposure to nominal bonds that are completely exposed to inflation risk.
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Re: Gold continues to soar!

Post by halfnine »

NoRegret wrote: Sat Mar 06, 2021 3:33 pm ...Gold $10k is probably more likely than -5% real. It'll likely involve a reset of the international monetary system to include a basket of currencies including (re-priced) gold as the reserve currency unit...
Gold as a reserve currency would mean that currencies would no longer float against each other. I don't see that being viable in the modern era without tremendous arbitrage possibilities even for retail investors.
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Re: Gold continues to soar!

Post by JBTX »

raven15 wrote: Sat Mar 06, 2021 11:06 am
JBTX wrote: Wed Mar 03, 2021 7:28 am
Salmo Trutta wrote: Wed Mar 03, 2021 7:05 am Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc.

One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production.

And the price will drop...
https://www.usmoneyreserve.com/blog/how ... the-world/

Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined.
That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window.

It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years of production, 10 years of mine planning, and 15 years of advanced reconnaissance. Considering the volatility of gold prices it would be crazy to do any more. Also at times in the past there have been odd government policies to tax mines on proven reserves, which creates an incentive to never prove more reserves than necessary. Also paradoxically gold miners have had a tendency to produce more gold when prices are low, and less when prices are high.

When I was very young there was a certain area that was estimated to have enough gold to mine until 1994. They kept finding more. Right now that area is estimated in private to have enough gold for two more generations of miners. I don't know the status of those resources and whether they have been reported as reserves (I would guess largely no, and they are marked more as promising leads), but the general takeaway is that there is plenty of gold left. Then you could get into the gold which is known but not currently economical to extract for a hundred possible reasons.
The 80% of gold discovered has been mined is pretty consistent among multiple sources. As to how much is undiscovered, that by definition is unknowable, but it is a logical conclusion that we have discovered most of it, at least in terms of what is theoretically extractable.

The point of it all is the supply of gold is pretty limited. It isn't likely to increase leaps and bound, at least on earth.
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raven15
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Re: Gold continues to soar!

Post by raven15 »

JBTX wrote: Sat Mar 06, 2021 6:41 pm
raven15 wrote: Sat Mar 06, 2021 11:06 am
JBTX wrote: Wed Mar 03, 2021 7:28 am
Salmo Trutta wrote: Wed Mar 03, 2021 7:05 am Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc.

One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production.

And the price will drop...
https://www.usmoneyreserve.com/blog/how ... the-world/

Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined.
That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window.

It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years of production, 10 years of mine planning, and 15 years of advanced reconnaissance. Considering the volatility of gold prices it would be crazy to do any more. Also at times in the past there have been odd government policies to tax mines on proven reserves, which creates an incentive to never prove more reserves than necessary. Also paradoxically gold miners have had a tendency to produce more gold when prices are low, and less when prices are high.

When I was very young there was a certain area that was estimated to have enough gold to mine until 1994. They kept finding more. Right now that area is estimated in private to have enough gold for two more generations of miners. I don't know the status of those resources and whether they have been reported as reserves (I would guess largely no, and they are marked more as promising leads), but the general takeaway is that there is plenty of gold left. Then you could get into the gold which is known but not currently economical to extract for a hundred possible reasons.
The 80% of gold discovered has been mined is pretty consistent among multiple sources. As to how much is undiscovered, that by definition is unknowable, but it is a logical conclusion that we have discovered most of it, at least in terms of what is theoretically extractable.

The point of it all is the supply of gold is pretty limited. It isn't likely to increase leaps and bound, at least on earth.
"80% of gold discovered has been mined" is very different from "Most gold is estimated to have been discovered." I find the first quite believable but the latter categorically false.
It's Time. Adding Interest.
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Re: Gold continues to soar!

Post by JBTX »

raven15 wrote: Sat Mar 06, 2021 7:01 pm
JBTX wrote: Sat Mar 06, 2021 6:41 pm
raven15 wrote: Sat Mar 06, 2021 11:06 am
JBTX wrote: Wed Mar 03, 2021 7:28 am
Salmo Trutta wrote: Wed Mar 03, 2021 7:05 am Living in Colorado, we bump into old or mothballed mines all the time while out hiking, fishing, biking, overlanding etc.

One thing I've learned is that there is plenty of gold still in there, but the current prices do not support extraction. If the price goes up, or the technology/productivity improves, many of those mines will restart production.

And the price will drop...
https://www.usmoneyreserve.com/blog/how ... the-world/

Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined.
That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window.

It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years of production, 10 years of mine planning, and 15 years of advanced reconnaissance. Considering the volatility of gold prices it would be crazy to do any more. Also at times in the past there have been odd government policies to tax mines on proven reserves, which creates an incentive to never prove more reserves than necessary. Also paradoxically gold miners have had a tendency to produce more gold when prices are low, and less when prices are high.

When I was very young there was a certain area that was estimated to have enough gold to mine until 1994. They kept finding more. Right now that area is estimated in private to have enough gold for two more generations of miners. I don't know the status of those resources and whether they have been reported as reserves (I would guess largely no, and they are marked more as promising leads), but the general takeaway is that there is plenty of gold left. Then you could get into the gold which is known but not currently economical to extract for a hundred possible reasons.
The 80% of gold discovered has been mined is pretty consistent among multiple sources. As to how much is undiscovered, that by definition is unknowable, but it is a logical conclusion that we have discovered most of it, at least in terms of what is theoretically extractable.

The point of it all is the supply of gold is pretty limited. It isn't likely to increase leaps and bound, at least on earth.
"80% of gold discovered has been mined" is very different from "Most gold is estimated to have been discovered." I find the first quite believable but the latter categorically false.
How can it be categorically false, when what has yet to be discovered is by definition unknowable?

Given the relatively small rate of discovery in recent decades, I don't think a conclusion that we have discovered most of the world's accessible gold is illogical.

https://www.spglobal.com/marketintellig ... iscoveries

Whatever at this point it is just a pointless argument.
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Re: Gold continues to soar!

Post by smitcat »

KlangFool wrote: Sat Mar 06, 2021 12:35 pm
smitcat wrote: Sat Mar 06, 2021 12:03 pm
KlangFool wrote: Sat Mar 06, 2021 10:47 am
smitcat wrote: Sat Mar 06, 2021 10:44 am
KlangFool wrote: Sat Mar 06, 2021 10:03 am

NoRegret,

Please answer the question if you know the answer.

<<-5% is a little extreme >>

Historically, it had happened before and at a greater extreme. So, it is not impossible.

<<People predicting negative US yields never bother with gold price under the same circumstance.>>

I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left.

KlangFool
"I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left."
I agree - precious metals can be valuable in those circumstances. What % of your portfolio are in these metals now?
smitcat,

It is not part of my portfolio. It is less than 1%. I use precious metals as a form of insurance.

KlangFool
Understood - then it will not matter what the price of gold will do with a negative rate.
Trying to learn if the rate goes negative, how much the gold price goes up. As per the model, at -5%, the Gold at $10,000.

KlangFool
Here is one chart...
https://fred.stlouisfed.org/graph/?g=dHwR
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raven15
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Re: Gold continues to soar!

Post by raven15 »

JBTX wrote: Sat Mar 06, 2021 7:24 pm
raven15 wrote: Sat Mar 06, 2021 7:01 pm
JBTX wrote: Sat Mar 06, 2021 6:41 pm
raven15 wrote: Sat Mar 06, 2021 11:06 am
JBTX wrote: Wed Mar 03, 2021 7:28 am

https://www.usmoneyreserve.com/blog/how ... the-world/

Most gold is estimated to have been discovered. Of course that is an estimate. Hard to estimate what you haven't discovered. About 80% of gold discovered gold has been mined.
That is a pretty terrible source of information on the subject. First off, it should be immediately obvious it is a terrible source because its entire purpose is to sell the most gold to the most people at the highest price. So we already know objectivity is out the window.

It would take a geologist to really go into the details. But I can give a brief overview. Gold miners have no reason at all to find more gold than they can mine in the near future. They like to find enough for about the next 5 years of production, 10 years of mine planning, and 15 years of advanced reconnaissance. Considering the volatility of gold prices it would be crazy to do any more. Also at times in the past there have been odd government policies to tax mines on proven reserves, which creates an incentive to never prove more reserves than necessary. Also paradoxically gold miners have had a tendency to produce more gold when prices are low, and less when prices are high.

When I was very young there was a certain area that was estimated to have enough gold to mine until 1994. They kept finding more. Right now that area is estimated in private to have enough gold for two more generations of miners. I don't know the status of those resources and whether they have been reported as reserves (I would guess largely no, and they are marked more as promising leads), but the general takeaway is that there is plenty of gold left. Then you could get into the gold which is known but not currently economical to extract for a hundred possible reasons.
The 80% of gold discovered has been mined is pretty consistent among multiple sources. As to how much is undiscovered, that by definition is unknowable, but it is a logical conclusion that we have discovered most of it, at least in terms of what is theoretically extractable.

The point of it all is the supply of gold is pretty limited. It isn't likely to increase leaps and bound, at least on earth.
"80% of gold discovered has been mined" is very different from "Most gold is estimated to have been discovered." I find the first quite believable but the latter categorically false.
How can it be categorically false, when what has yet to be discovered is by definition unknowable?

Given the relatively small rate of discovery in recent decades, I don't think a conclusion that we have discovered most of the world's accessible gold is illogical.

https://www.spglobal.com/marketintellig ... iscoveries

Whatever at this point it is just a pointless argument.
And yet gold production volumes have been doing just fine, it seems producers have been finding all the gold they need. In fact I would even say they could continue to pull rabbits out of hats indefinitely, it's almost as if there is plenty of gold out there so they don't even bother looking for it until they need it.
https://www.statista.com/statistics/238 ... ince-2005/
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Re: Gold continues to soar!

Post by KlangFool »

smitcat wrote: Sat Mar 06, 2021 7:26 pm
KlangFool wrote: Sat Mar 06, 2021 12:35 pm
smitcat wrote: Sat Mar 06, 2021 12:03 pm
KlangFool wrote: Sat Mar 06, 2021 10:47 am
smitcat wrote: Sat Mar 06, 2021 10:44 am

"I do not understand why this statement could be true. At that extreme, the sky is falling. The gold is the only few options left."
I agree - precious metals can be valuable in those circumstances. What % of your portfolio are in these metals now?
smitcat,

It is not part of my portfolio. It is less than 1%. I use precious metals as a form of insurance.

KlangFool
Understood - then it will not matter what the price of gold will do with a negative rate.
Trying to learn if the rate goes negative, how much the gold price goes up. As per the model, at -5%, the Gold at $10,000.

KlangFool
Here is one chart...
https://fred.stlouisfed.org/graph/?g=dHwR
Thanks.

KlangFool
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NoRegret
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Re: Gold continues to soar!

Post by NoRegret »

halfnine wrote: Sat Mar 06, 2021 5:13 pm
NoRegret wrote: Sat Mar 06, 2021 3:33 pm ...Gold $10k is probably more likely than -5% real. It'll likely involve a reset of the international monetary system to include a basket of currencies including (re-priced) gold as the reserve currency unit...
Gold as a reserve currency would mean that currencies would no longer float against each other. I don't see that being viable in the modern era without tremendous arbitrage possibilities even for retail investors.
Not as the one and only reserve currency. I don't believe we're going back to gold standard. But sometimes the pendulum has swung too far and some anchoring against competitive devaluation is necessary to restore confidence.
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Re: Gold continues to soar!

Post by jpmorganfunds »

NoRegret wrote: Sat Mar 06, 2021 8:35 pm
halfnine wrote: Sat Mar 06, 2021 5:13 pm
NoRegret wrote: Sat Mar 06, 2021 3:33 pm ...Gold $10k is probably more likely than -5% real. It'll likely involve a reset of the international monetary system to include a basket of currencies including (re-priced) gold as the reserve currency unit...
Gold as a reserve currency would mean that currencies would no longer float against each other. I don't see that being viable in the modern era without tremendous arbitrage possibilities even for retail investors.
Not as the one and only reserve currency. I don't believe we're going back to gold standard. But sometimes the pendulum has swung too far and some anchoring against competitive devaluation is necessary to restore confidence.
Gold already is a reserve currency as all central banks hold it as reserves.

Whether a nation pegs its national currency to gold is a separate question.
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watchnerd
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Re: Gold continues to soar!

Post by watchnerd »

Aren't the gold bugs worried about space gold from asteroid mining?
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Forester
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Re: Gold continues to soar!

Post by Forester »

I manually calculated the inflation-adjusted year end gold price using the official inflation data, as opposed to goldbug sites using the Shadowstats data. Gold is about as expensive as it has ever been.

Perhaps the official stats underweight inflation, and the fair price is nearer to $1,500 than $1,000 :confused

Image

A goldbug chart suggesting we can double from here and not be expensive;

Image
https://www.bullionstar.com/blogs/ronan ... er-prices/
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halfnine
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Re: Gold continues to soar!

Post by halfnine »

Forester wrote: Sun Mar 07, 2021 7:56 am I manually calculated the inflation-adjusted year end gold price using the official inflation data, as opposed to goldbug sites using the Shadowstats data. Gold is about as expensive as it has ever been.

Perhaps the official stats underweight inflation, and the fair price is nearer to $1,500 than $1,000 :confused

Image

A goldbug chart suggesting we can double from here and not be expensive;

Image
https://www.bullionstar.com/blogs/ronan ... er-prices/
Looking at inflation data and after a quick calculation it would appear to me that in 2018 gold should have been price at 650 in USD and at 416 in GBP leading to a GBP exchane rate of 1.56 (if was 1.27 at the time). So either there are arbitrage possibilities available (eventually) or the entire basis of looking at gold prices through the metric of an individual currency are flawed.
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Re: Gold continues to soar!

Post by watchnerd »

Why is the fair price only what is accounted for via inflation?

There could have been an increase in demand over time.
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Re: Gold continues to soar!

Post by watchnerd »

halfnine wrote: Sun Mar 07, 2021 9:03 am or the entire basis of looking at gold prices through the metric of an individual currency are flawed.
There have been several threads on it in the past, but there isn't any agreed upon way to figure out valuation for gold.

Some take the inverse point of view, hold gold as the constant, and then declare if currencies are over/under relative to it.
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Re: Gold continues to soar!

Post by CoolHobieCat »

watchnerd said : "Aren't the gold bugs worried about space gold from asteroid mining?"

Gold bugs should not be too worried about gold from asteroid mining because of the "astronomical" cost, regardless of the quantity available.

And any real gold mining of this nature is at least decades into the future.

( I own a good bit of gold, and asteroids are my stock in trade. )

https://en.wikipedia.org/wiki/Loren_C._Ball
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Re: Gold continues to soar!

Post by Forester »

Gold is selling off alongside expensive tech stocks :oops: Would like to think there's more upside than downside in the $1400s and buyers will come in.
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Re: Gold continues to soar!

Post by watchnerd »

Forester wrote: Tue Mar 09, 2021 3:05 am Gold is selling off alongside expensive tech stocks :oops: Would like to think there's more upside than downside in the $1400s and buyers will come in.
Is it?

It seems up 1%, at least in USD:

https://www.kitco.com/charts/livegold.html
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Re: Gold continues to soar!

Post by jpmorganfunds »

Forester wrote: Tue Mar 09, 2021 3:05 am Gold is selling off alongside expensive tech stocks :oops: Would like to think there's more upside than downside in the $1400s and buyers will come in.
Gold headed to $1,000.
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Re: Gold continues to soar!

Post by Robot Monster »

Bloomberg article, "BlackRock Says Gold ‘Failing’ as Equity Hedge, Faces Risks". According to the BlackRock dude, gold’s ability to guard against inflation is ‘exaggerated’. (So, even though he says it's not being a good hedge against stock moves or inflation risks, he says it is a good hedge against a falling dollar.) “And for those investors still looking for a hedge, one word: cash.”
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Re: Gold continues to soar!

Post by secondopinion »

willthrill81 wrote: Sat Mar 06, 2021 4:32 pm
NoRegret wrote: Sat Mar 06, 2021 3:33 pm
People predicting negative US yields never bother with gold price under the same circumstance.
This was a tongue-in-cheek statement about some BHs defending nominal treasuries. The very same BHs are usually adamantly anti-gold.
To be fair, many with that anti-gold sentiment don't want gold because they view the long-term real return as likely to be zero and they don't want to take on gold's volatility. While I definitely see that argument, I would have a hard time passing up gold entirely to instead take on hefty exposure to nominal bonds that are completely exposed to inflation risk.
Truly, volatility is either one's foe or merely a distraction; if you are in it for the long-term, I do not think it will really matter. As I have posted elsewhere before, I think gold, silver, and maybe platinum are the only long-term commodities I would even hold; partly because they are actually able to be held physically rather than by futures, and they have some history of being valuable in more than a commodity sense. Palladium and the rest of the platinum group elements are unproven; copper and some of the other metals are far too difficult to hold directly.

A tangent: In a subscription-centered world, I think ownership is downplayed; and it will continue to be downplayed, until it is not (and it will be a sad day for non-owners). I can use a product until it is good and gone to reduce the cost of ownership, depreciation could be claimed, donations can be written off, reselling is possible, no strings attached to use, no never-ending payments, build skills repairing your stuff, and the list goes on (there are downsides, but long-term frugal users will benefit much more than lose). Subscriptions are over when you stop paying; you have nothing...
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Re: Gold continues to soar!

Post by Anon9001 »

willthrill81 wrote: Sat Mar 06, 2021 4:32 pm To be fair, many with that anti-gold sentiment don't want gold because they view the long-term real return as likely to be zero and they don't want to take on gold's volatility. While I definitely see that argument, I would have a hard time passing up gold entirely to instead take on hefty exposure to nominal bonds that are completely exposed to inflation risk.
Gold's only advantage for a stocks and bonds portfolio is black-swan hedge. I don't know if this country which is third world could survive climate change so I have some physical Gold in-case. Most of my assets are linked to this country not collapsing into anarchy like Somalia so I don't mind the 0% real return to hedge that out.
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Re: Gold continues to soar!

Post by willthrill81 »

Anon9001 wrote: Fri Mar 12, 2021 9:10 am
willthrill81 wrote: Sat Mar 06, 2021 4:32 pm To be fair, many with that anti-gold sentiment don't want gold because they view the long-term real return as likely to be zero and they don't want to take on gold's volatility. While I definitely see that argument, I would have a hard time passing up gold entirely to instead take on hefty exposure to nominal bonds that are completely exposed to inflation risk.
Gold's only advantage for a stocks and bonds portfolio is black-swan hedge.
That hasn't been the case for the last ~50 years. A small (i.e., 5-20%) allocation to gold has reduced maximum drawdowns and stabilized portfolios to a greater degree than it has reduced returns. Importantly, when stocks have had long stretches of poor performance (i.e., 1970s, 2000s), gold has performed very well. That might not happen going forward, but it has happened and may happen again. YMMV.
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Re: Gold continues to soar!

Post by Anon9001 »

willthrill81 wrote: Fri Mar 12, 2021 10:08 am That hasn't been the case for the last ~50 years. A small (i.e., 5-20%) allocation to gold has reduced maximum drawdowns and stabilized portfolios to a greater degree than it has reduced returns. Importantly, when stocks have had long stretches of poor performance (i.e., 1970s, 2000s), gold has performed very well. That might not happen going forward, but it has happened and may happen again. YMMV.
The asset has a very poor sharpe ratio ie low return high risk so it should not be held in large quantities. A 5-20% exposure to paper Gold might help if the future behaves exactly the past but I think it's not as useful as holding physical Gold which is a better black swan hedge. Gold should be thought of as insurance (due to the low sharpe ratio) not as investment and when viewed that way paper Gold is pointless.
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Re: Gold continues to soar!

Post by willthrill81 »

Anon9001 wrote: Fri Mar 12, 2021 10:43 am
willthrill81 wrote: Fri Mar 12, 2021 10:08 am That hasn't been the case for the last ~50 years. A small (i.e., 5-20%) allocation to gold has reduced maximum drawdowns and stabilized portfolios to a greater degree than it has reduced returns. Importantly, when stocks have had long stretches of poor performance (i.e., 1970s, 2000s), gold has performed very well. That might not happen going forward, but it has happened and may happen again. YMMV.
The asset has a very poor sharpe ratio ie low return high risk so it should not be held in large quantities. A 5-20% exposure to paper Gold might help if the future behaves exactly the past but I think it's not as useful as holding physical Gold which is a better black swan hedge. Gold should be thought of as insurance (due to the low sharpe ratio) not as investment and when viewed that way paper Gold is pointless.
The Sharpe ratio doesn't tell the whole story of any asset. It's potentially more important to examine what role a particular asset plays in one's portfolio than only viewing it in isolation. As I noted, gold has done well when stocks have faltered over the mid-term.

I gravitate toward physical gold over paper as well.
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Re: Gold continues to soar!

Post by jason2459 »

willthrill81 wrote: Fri Mar 12, 2021 10:58 am ...

I gravitate toward physical gold over paper as well.
As you should. https://www.google.com/amp/s/www.scienc ... d-ball/amp
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Re: Gold continues to soar!

Post by surfstar »

Physical crypto and digital gold FTW!
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Re: Gold continues to soar!

Post by JBTX »

Anon9001 wrote: Fri Mar 12, 2021 10:43 am
willthrill81 wrote: Fri Mar 12, 2021 10:08 am That hasn't been the case for the last ~50 years. A small (i.e., 5-20%) allocation to gold has reduced maximum drawdowns and stabilized portfolios to a greater degree than it has reduced returns. Importantly, when stocks have had long stretches of poor performance (i.e., 1970s, 2000s), gold has performed very well. That might not happen going forward, but it has happened and may happen again. YMMV.
The asset has a very poor sharpe ratio ie low return high risk so it should not be held in large quantities. A 5-20% exposure to paper Gold might help if the future behaves exactly the past but I think it's not as useful as holding physical Gold which is a better black swan hedge. Gold should be thought of as insurance (due to the low sharpe ratio) not as investment and when viewed that way paper Gold is pointless.
While some draw comfort in being able to touch their gold in case of zombie apocalypse or in case we go full Venezuela, I prefer not having the burden of having to physically store and secure a very valuable physical asset, not to mention deal with potential tax issues. Thus I’m all etf for good and silver. Only about 5% allocation so probably doesn’t make much difference either way.
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Re: Gold continues to soar!

Post by Robot Monster »

Bloomberg video: "What’s The Outlook for Inflation and Gold?" link

Everything said in the video is gospel truth, so please invest accordingly.

In other news, "Gold prices rise, head for best weekly gain of the year" link
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Re: Gold continues to soar!

Post by 000 »

Robot Monster wrote: Fri Apr 16, 2021 12:37 pm Bloomberg video: "What’s The Outlook for Inflation and Gold?" link

Everything said in the video is gospel truth, so please invest accordingly.

In other news, "Gold prices rise, head for best weekly gain of the year" link
So, are you buying?
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Re: Gold continues to soar!

Post by Forester »

The opportunity cost of a gold-bonds barbell, versus just bonds, is currently low. There will be a time when gold could be dismissed, but I don't see it yet.
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Re: Gold continues to soar!

Post by 000 »

Forester wrote: Fri Apr 16, 2021 6:30 pm The opportunity cost of a gold-bonds barbell, versus just bonds, is currently low. There will be a time when gold could be dismissed, but I don't see it yet.
What about the opportunity cost compared to a crypto-bonds barbell? :twisted:
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Re: Gold continues to soar!

Post by watchnerd »

Forester wrote: Fri Apr 16, 2021 6:30 pm The opportunity cost of a gold-bonds barbell, versus just bonds, is currently low. There will be a time when gold could be dismissed, but I don't see it yet.

Funny.

Playing along, is the gold at the long or the short end?
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Re: Gold continues to soar!

Post by watchnerd »

000 wrote: Fri Apr 16, 2021 7:54 pm
Forester wrote: Fri Apr 16, 2021 6:30 pm The opportunity cost of a gold-bonds barbell, versus just bonds, is currently low. There will be a time when gold could be dismissed, but I don't see it yet.
What about the opportunity cost compared to a crypto-bonds barbell? :twisted:
I thought it was vs a crypto-gold barbell?
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Re: Gold continues to soar!

Post by 000 »

watchnerd wrote: Fri Apr 16, 2021 8:07 pm I thought it was vs a crypto-gold barbell?
Which weighs more, the bits on the Treasury's mainframe or the bits on the blockchain?
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Re: Gold continues to soar!

Post by luckyducky99 »

000 wrote: Fri Apr 16, 2021 8:10 pm
watchnerd wrote: Fri Apr 16, 2021 8:07 pm I thought it was vs a crypto-gold barbell?
Which weighs more, the bits on the Treasury's mainframe or the bits on the blockchain?
I read this, then made a joke to myself "gold-backed crypto LOLOL." But then I googled that, and sure enough... https://pmgt.perthmint.com/
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Re: Gold continues to soar!

Post by watchnerd »

luckyducky99 wrote: Fri Apr 16, 2021 8:20 pm
000 wrote: Fri Apr 16, 2021 8:10 pm
watchnerd wrote: Fri Apr 16, 2021 8:07 pm I thought it was vs a crypto-gold barbell?
Which weighs more, the bits on the Treasury's mainframe or the bits on the blockchain?
I read this, then made a joke to myself "gold-backed crypto LOLOL." But then I googled that, and sure enough... https://pmgt.perthmint.com/
Well, at least it's backed by something real.

The irony of Bitcoin is that it's just another kind of faith-based currency.
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Re: Gold continues to soar!

Post by 000 »

luckyducky99 wrote: Fri Apr 16, 2021 8:20 pm I read this, then made a joke to myself "gold-backed crypto LOLOL." But then I googled that, and sure enough... https://pmgt.perthmint.com/
To every thing there is a season. :P

To every asset there is a crypto? :greedy
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Re: Gold continues to soar!

Post by NoRegret »

luckyducky99 wrote: Fri Apr 16, 2021 8:20 pm
000 wrote: Fri Apr 16, 2021 8:10 pm
watchnerd wrote: Fri Apr 16, 2021 8:07 pm I thought it was vs a crypto-gold barbell?
Which weighs more, the bits on the Treasury's mainframe or the bits on the blockchain?
I read this, then made a joke to myself "gold-backed crypto LOLOL." But then I googled that, and sure enough... https://pmgt.perthmint.com/
PAXG would be my choice if I want a gold backed crypto. Earns 5% at Blockfi.
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Re: Gold continues to soar!

Post by Robot Monster »

"Gold Hits Three-Month High as Speculators Increase Bullish Bets" link

"...weaker bond yields added to the metal’s allure...Prices have rebounded from lows set in March as the dollar retreated and the Federal Reserve signaled it will keep interest rates low..."
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Re: Gold continues to soar!

Post by 000 »

Robot Monster wrote: Mon May 17, 2021 9:25 am "Gold Hits Three-Month High as Speculators Increase Bullish Bets" link

"...weaker bond yields added to the metal’s allure...Prices have rebounded from lows set in March as the dollar retreated and the Federal Reserve signaled it will keep interest rates low..."
Indeed.
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Re: Gold continues to soar!

Post by anoop »

My brokerage now has added a new extra warning when trading gold ETFs. Wonder what changed.
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Re: Gold continues to soar!

Post by 000 »

anoop wrote: Mon May 17, 2021 2:06 pm My brokerage now has added a new extra warning when trading gold ETFs. Wonder what changed.
What's the warning?
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