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Could Gold Be In A New Bear Market?

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BTW, when I say "end of the world" I don't mean human extinction. More along the lines of bank defaults, nuclear war or some severe black swan etc.

Some people worry about this stuff (I don't). If owning gold makes them feel better then this is a perfectly valid reason to buy peace of mind.

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BTW, when I say "end of the world" I don't mean human extinction. More along the lines of bank defaults, nuclear war or some severe black swan etc.

Some people worry about this stuff (I don't). If owning gold makes them feel better then this is a perfectly valid reason to buy peace of mind.

Ahhh The Mad Max scenario?

Yes I know there are folks that think that...I too am not one of them.

As such it is not my reason for owning PM's

It is just by choice & given the alternatives along with my distaste for what I have seen & learned in recent years.....

Well as I said just a personal choice not at all based in fear :)

Edited by flying

  • Author

Whatever an individual's reason for owning gold, IMO psychology and peace of mind are very valid factors. An asset class that is right for one person is not necessarily right for everyone.

If someone truly believes that in the next 5 to 10 years the USD is going the way of the Argentinian peso and that gold will retain its value, and earning the maximum return on his investment is not his top priority, then this person probably should own some gold, even if he is wrong. As long as he is smart enough to not bet his life savings on a hypothetical scenario playing out. His gold holdings will make him feel secure. Even if he makes a small monetary loss on his investment, his investment in his mental wellbeing could still be considered successful from this point of view.

A nimble trader will think it is ridiculous to own physical metals, why would he tie up his capital if he can buy and sell futures contracts on margin several times a day? He is more comfortable being as liquid as possible so that he can take the most advantage of whatever opportunity presents itself. He's not worried about currency devaluation, because he'll be short leveraged 40:1 and profit from it. Volatility in currency markets are his bread and butter. Not many people can cope with this kind of risk taking though.

Two completely opposing views which are both perfectly valid, and there are many other valid viewpoints. Different strokes for different folks.

I didn't start this thread to beat on "gold bugs" or to convince people owning gold is stupid, rather to discuss my viewpoint that there are plenty of reasons for why gold could depreciate and I don't understand why people seem to think that it can only go up. I do believe that there is a high probability gold will make it past $1500 in the years to come, but I would not at all be surprised if it would spend some time in the $700 to $800 range first.

So far I have not seen anyone make a reasonable argument for why gold can not go down to $800.

So far I have not seen anyone make a reasonable argument for why gold can not go down to $800.

I never thought there needed to be a argument for why gold could go back to $800...or less.

It always seemed as reasonable as it going to 1500-2000.

But if I had to hypothesize....I would look at the current state of affairs that caused gold to rise in the last 2 years.

Then I would realistically decide if those conditions have abated, stayed the same or gotten worse. That should give me a pretty good view of things to come.

Edited by flying

i was of course shooting from the hip as there are different ways to calculate the "necessary ratio quantity of gold vs. statistical remaining life time." the calculation is even more distorted when assuming different rates of inflation and especially "how many bakeries will one Krüger Rand buy?"
If you change one kruger rand in baht you can buy a motorbike in Thailand.

I guess a motorbike is way more useful than a gold coin that you can just flip between your fingers.

Edited by Penefattore

answering the OP, the way gold price behaved during this crisis, that is highly correlated to stock markets, suggests that it is a financial bubble as well. Now that stock markets are retracing from their tops, so does gold.

I guess it's better to stay away from it .

  • Author
I never thought there needed to be a argument for why gold could go back to $800...or less.

Lots of people will have you believe that this is impossible, but for some reason their participation in this particular gold thread is minimal.

Maybe they'll come out of their shells when gold starts rallying again :)

I never thought there needed to be a argument for why gold could go back to $800...or less.

Lots of people will have you believe that this is impossible, but for some reason their participation in this particular gold thread is minimal.

Maybe they'll come out of their shells when gold starts rallying again :D

Well while I did say that anything is possible & hence there need be no arguments I also said....

.I would look at the current state of affairs that caused gold to rise in the last 2 years.

Then I would realistically decide if those conditions have abated, stayed the same or gotten worse. That should give me a pretty good view of things to come.

My eyes & ears tell me things have not gotten better at all. Regardless of the aberration the casino's present. As such I see PM's as being very strong. :)

i was of course shooting from the hip as there are different ways to calculate the "necessary ratio quantity of gold vs. statistical remaining life time." the calculation is even more distorted when assuming different rates of inflation and especially "how many bakeries will one Krüger Rand buy?"
If you change one kruger rand in baht you can buy a motorbike in Thailand. I guess a motorbike is way more useful than a gold coin that you can just flip between your fingers.

the last time i rode a motorbike was half a century ago (i didn't have a license). but i still remember the couple of hours in a hospital when they picked embedded sharp gravel, sand and threads from my left arm and leg. personally i find a motorbike in Thailand as useful as tits on my back :)

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