Gold Hits $600 For First Time In 25 Years

[george]

Gold hits $600 for first time in 25 years

BANGKOK: -- Gold prices climbed past $600 an ounce in New York early this morning, driven by investors betting that metals will fetch better returns than stocks and bonds.

Gold futures failed to close at $600 an ounce Thursday but after finishing just a few cents shy of it, the precious metal marked its highest closing level since December 1980, pulling other metals to multiyear pinnacles and delivering copper to a new all-time high.

The key resistance was broken. Funds poured into metals. Silver passed $12. Copper was at a record $2.621 and platinum and palladium also jumped.

Gold for June delivery rose to $600 an ounce in regular trading on the New York Mercantile Exchange, having hit a high of $601.90 in electronic trading Thursday morning -- both were the loftiest intraday levels since Jan. 1981.

The contract closed at $599.70, up $7.20 for the session.

Gold has surged more than $100, or about 20 percent, since the end of November, beating the 5 percent gain in the Standard & Poor's 500 Index. U.S. corporate bonds earned less than 1 percent. Investments in index-linked commodity funds will rise 38 percent this year to $140 billion, according to Barclays Capital.

"Commodities are the flavour of the month," said David Gornall, head of foreign exchange and bullion at Natexis Commodity Markets.

"Gold, silver, zinc or copper, it doesn't really matter, as long as it's a commodity."

Many see them as a safer investment as uncertainty over interest rates and worries of growing inflation have lowered confidence as to the sort of returns that can be made from stock, currency and bond markets.

The rush to gold in recent years is in stark contrast to the metal's dull performance for much of the previous 20 years.

Out of favour during the heady stock market rises of the 1990's, the price of gold hit a 25-year low of $255 in 2001.

Fast emerging economies like India and China are strong buyers of the metal, which, at the moment, isn't being mined quickly enough to meet demand.

Gold may attract investors as worldwide interest rates remain too low to contain inflation, analysts said. Oil prices rose to a two-month high of $67.85 overnight.

Uncertainty over rate increases in the U.S., Japan and Europe has depleted confidence in currencies and enticed investors to accumulate gold, analysts said.

The European Central Bank left its main rate at 2.5 percent today. The U.S. benchmark rate is at 4.75 percent after 15 straight increases. Japan's rate remains close to zero. Gold gained in all currencies last year, paced by a 36 percent surge in metal sold in euros and yen. Gold priced in yen has climbed 16 percent this year. The precious metal sold in euros has gained 12 percent.

Currency Link

``Gold is benefiting on the backs of the dollar, the euro and the yen,'' said William Fleckenstein, president of Fleckenstein Capital Inc. in Seattle. ``Even if you like one, it's just the lesser of evils. The move in gold has been against all currencies.''

Some central banks are buying gold to diversify reserves. Chinese Premier Wen Jiabao hinted yesterday that China might change the makeup of its foreign-exchange reserves, the South China Morning Post reported. China's currency reserves climbed to $853.7 billion in February. The country has surpassed Japan as the world's largest holder of foreign currencies.

About 75 percent of China's reserves is in U.S. dollars, while about 1.3 percent is in gold.

--Bangkok Post 2006-04-07

[LivinLOS]

Exactly my predictions for the last couple of years.. Made big bets on Gold at 380 USD per ounce.. Made big bets on Silver at 6.80 last year .. Lots of mining and exploration shares.

Basically now retired on those 2 bullion bets alone..

I love it when a plan comes together.. Just just left for the dollar to tank, its coming..

[PeaceBlondie]

Finally, gold gets back to what it was 25 years ago. Wow, what a great long term investment. It's no wonder, then, that when some reporter asked a stock analyst last year about the performance of gold investing, the analyst looked at the reporter and almost said, "No, you dumb schmuck."

However, to time it correctly, is a masterful art. If you've got the cojones to speculate in commodities when they are NOT the flavour of the month, you might be very successful. Or not.

What if you'd bought two great sounding investments at the wrong moment, such as a NIKEI index at its height, or General Motors in 1961? I bought some GM in 1961 and sold it at a loss in 1965. Apparently, if I'd held on to it, I'd have an even greater loss!

[britmaveric]

I love it when a plan comes together.. Just just left for the dollar to tank, its coming..

You'll be waiting for quite some time for that to happen!

[Pattaya_Fox]

I just wonder if the Gold Mine owners will slow down their operations somewhat and produce less gold in order to fuel the price rise and then produce more when the price is nearing it`s peak in order to maximise their profit. Maybe they are doing it now.

As the demand from the far east gets larger and the supply gets smaller the price will rise.

1000 dollars an ounce is quite feasable within the next few years.

[britmaveric]

Well lets get realistic - why does one need Gold? (elastic commodity - don't need it to live, so can do without) Eventually people won't buy it because its too much and there will be a cascade effect and lot of businesses will go under. (jewelry shops for example)

[Pattaya_Fox]

Ha! Ha!.....try telling that to the ladies

At the same time tell them that they don`t need that nice new car, that new dress, that new kitchen or even that luxurious house.

Gold is not only a money making commodity it is also good to wear, especially if adorned with precious stones.....nothing better to make one feel good than a nice piece of jewellery......at least that`s what my wife has been telling me for years

[Farma]

I’m still suffering the bruises from kicking myself. Around September last year, friends who own a gold shop suggested I buy gold as it was going to double in price by New Year. They were a little bit early with their prediction dates but the prediction was right.

I thought they were just trying to drum up business and muggins didn’t buy.

[britmaveric]

P-Fox - I hear you and I know the pain, but it will go down eventually or least stabalize. Luckily I bought all I needed years ago, and for gf course I'm sure she has other expectations.

[Pattaya_Fox]

I’m still suffering the bruises from kicking myself. Around September last year, friends who own a gold shop suggested I buy gold as it was going to double in price by New Year. They were a little bit early with their prediction dates but the prediction was right.

I thought they were just trying to drum up business and muggins didn’t buy.

If they suggest it again I would buy some if I were you...or you may be posting the same regrets in 2 years time

[trt]

Pattaya_Fox Posted Today, 2006-04-07 19:22:49

I just wonder if the Gold Mine owners will slow down their operations somewhat and produce less gold in order to fuel the price rise and then produce more when the price is nearing it`s peak in order to maximise their profit. Maybe they are doing it now.

Nope!! we are ramping up production ... make hay while the sun shines..

[Pattaya_Fox]

Pattaya_Fox Posted Today, 2006-04-07 19:22:49

I just wonder if the Gold Mine owners will slow down their operations somewhat and produce less gold in order to fuel the price rise and then produce more when the price is nearing it`s peak in order to maximise their profit. Maybe they are doing it now.

Nope!! we are ramping up production ... make hay while the sun shines..

Ramping up production...... yes

Are you not adding to your reserves to take advantage of the escalating price as there seems to be no peak in sight at the moment?

[Johpa]

1000 dollars an ounce is quite feasable within the next few years.

Alas, so is $10US a gallon for gas in the US which means nearly $20US in Europe for the same.

[trt]

Pattaya_Fox Posted Today, 2006-04-07 19:22:49

I just wonder if the Gold Mine owners will slow down their operations somewhat and produce less gold in order to fuel the price rise and then produce more when the price is nearing it`s peak in order to maximise their profit. Maybe they are doing it now.

Nope!! we are ramping up production ... make hay while the sun shines..

yes we are adding to our reserves as I speak.. we are at 12,000,000 ounces at the moment.. should be able to get another 250,000 this year from our reserve drilling..

[kdvsn]

yes we are adding to our reserves as I speak.. we are at 12,000,000 ounces at the moment.. should be able to get another 250,000 this year from our reserve drilling..

Do you work for Newmont?

[trt]

yes we are adding to our reserves as I speak.. we are at 12,000,000 ounces at the moment.. should be able to get another 250,000 this year from our reserve drilling..

Do you work for Newmont?

Nope.. Think bigger mate..

[simcity]

yes we are adding to our reserves as I speak.. we are at 12,000,000 ounces at the moment.. should be able to get another 250,000 this year from our reserve drilling..

Do you work for Newmont?

Nope.. Think bigger mate..

Riotinto / BHP billiton

well you must be a Ozzy then !

perhaps a piece rapportee if english ..

[trt]

yes we are adding to our reserves as I speak.. we are at 12,000,000 ounces at the moment.. should be able to get another 250,000 this year from our reserve drilling..

Do you work for Newmont?

Nope.. Think bigger mate..

Riotinto / BHP billiton

well you must be a Ozzy then !

perhaps a piece rapportee if english ..

Rio/BHP nope.. I am talking gold companies, not resource companies...

#1 Gold Company is now Barrick..

Aussie yes I am ..

[ilyushin]

I just love gold!

[LivinLOS]

Well lets get realistic - why does one need Gold? (elastic commodity - don't need it to live, so can do without) Eventually people won't buy it because its too much and there will be a cascade effect and lot of businesses will go under. (jewelry shops for example)

You seem to have little perception of how gold is the longest lasting real money (as in a store of wealth) in the history of the planet.. You may as well ask why does anyone want money ?? Except in the instance of hard currency no government can print it to worthlessness, pursuing guns and butter populist policies.

The world is becoming less stable.. India and China have both historically used gold as a savings vehicle.. The discussion on a global muslim gold currency.. The devaluation of the dollar by rampant fractional banking.. The coming inflation shock (some would say it has arrived but wait for hyper inflation).. Helicopter Ben printing dollars to worthlessness... The commodity battles of the 21st century.. The huge dollar reserves overseas that could tank the dollar overnight if China sold them or even stopped lending America money (isnt it laughable how the power of the American currency has been willingly given to communist country in exchange for TV sets and dodads)..

This train has only just left the station and its already put >1mil USD in the piggy bank.. Gold 1000 not unlikely at this stage.. 2k or 4k possible before 2020..

The real performance could be in silver.. I am kicking myself for only putting 250k into silver bullion last year.. With the fact that silver is used so much and the lack of above ground silver and woeful supply could we see another 40 Oz silver spike ?? I think we could but I would be pretty happy at 20.. Last year people told me that 12 Oz for slver in one year was a mad prediction, only took around 6 months.

Palladium has historically averaged 2:1 with Platinum.. My little bro took 150k Euro of it at 270 only a couple of months ago.. 350 now.. 50k Euro in 2 months not bad !!

Just cause the talking heads on CNBC are still cheerleading stocks means all the more bargains on the commodity tables for those that look..

Edited April 8, 2006 by LivinLOS

[britmaveric]

I agree with you on silver, with gold being so bloody high it seems rational silver will be heavily invested in.

[backflip]

Gold tripled in value in 25 years, and my home equity increased from $20K to $970K in the same time period.

[LivinLOS]

Golds doubled in only a couple of years and home equity is (i believe) about to come crashing down..

15% interest base rates to prop up a dollar.. How will that effect home forclosures ?? Housing crash i all part of the prediction..

Commodities will be the market segment for the next 5 - 10 years IMHO.. Uranium (china going all out for these pebble bed reactors) is a nice little play that I think will be bankable..

[LivinLOS]

Also thinking about it wasnt gold 32 USD per ounce until mid 70's until Nixon closed the gold window ??

If your picking only from the peaks thats being obstinate. Imagine the talking heads on CNBC pointing out the S&P is only now getting to where it was 5 years ago without counting inflation etc.. Not happening in the cheerleading squad.

[opothai]

Finally, gold gets back to what it was 25 years ago. Wow, what a great long term investment. It's no wonder, then, that when some reporter asked a stock analyst last year about the performance of gold investing, the analyst looked at the reporter and almost said, "No, you dumb schmuck."

However, to time it correctly, is a masterful art. If you've got the cojones to speculate in commodities when they are NOT the flavour of the month, you might be very successful. Or not.

What if you'd bought two great sounding investments at the wrong moment, such as a NIKEI index at its height, or General Motors in 1961? I bought some GM in 1961 and sold it at a loss in 1965. Apparently, if I'd held on to it, I'd have an even greater loss!

exactly peaceblondie

i'm no mathematician but gold has lost value in real terms over the last 25 years, i would reckon if gold was bought in 1980 just to keep up with inflation and with a modest growth on your investment gold should be worth about 1600 dollars an ounce today.

[PeaceBlondie]

Finally, gold gets back to what it was 25 years ago. Wow, what a great long term investment. It's no wonder, then, that when some reporter asked a stock analyst last year about the performance of gold investing, the analyst looked at the reporter and almost said, "No, you dumb schmuck."

However, to time it correctly, is a masterful art. If you've got the cojones to speculate in commodities when they are NOT the flavour of the month, you might be very successful. Or not.

What if you'd bought two great sounding investments at the wrong moment, such as a NIKEI index at its height, or General Motors in 1961? I bought some GM in 1961 and sold it at a loss in 1965. Apparently, if I'd held on to it, I'd have an even greater loss!

exactly peaceblondie

i'm no mathematician but gold has lost value in real terms over the last 25 years, i would reckon if gold was bought in 1980 just to keep up with inflation and with a modest growth on your investment gold should be worth about 1600 dollars an ounce today.

Well, let's try the Rule of 72 on that. If inflation has averaged 6% per year for 24 years, it doubled and then redoubled (every 12 years). Gold should be four times as high, or $2,400 an ounce.

However, our example is unfair, because we're picking the time spread from one high to the time it returned to that amount. Still, 25 and one half years is several times the length of some people's attention span. Unless you're Warren Buffett.

[LivinLOS]

Or you could say Gold is vastly undervalued at market prices compared to what people would pay during the oil crisis period..

[Farma]

Lets hope Bunker and Hunt are still out of the silver scene. I nearly had my fingers burnt by them years ago.

[stumonster]

.. Uranium (china going all out for these pebble bed reactors) is a nice little play that I think will be bankable..

locations of known australian deposits https://www.ga.gov.au/pdf/RR0031.pdf

[warriors]

[quote name='LivinLOS'f

Commodities will be the market segment for the next 5 - 10 years IMHO.. Uranium (china going all out for these pebble bed reactors) is a nice little play that I think will be bankable..

I Agree with you. Five years ago I bought Palidine shares In AUSY

Got them at one cent Ausy 80,000 of them Last month they hit $5.50, now back to around $4.79.

I still think they havve some way to go :whistling

Regarding homes, I bought my home 20 years ago for $290,000 put maybe another 200,000 into it over the years I lived there = secutity gates new kitchin bathrooms new roof, fence around properties. But it was a life style so I am not complaining. We all hear the good parts about property living but many do not tell you what they paid to the house while living there. they only give you the puchase and selling price