NY gold loses most in 15 years (what was that again about the dollar being worthless?)

Gold futures plummeted 7.3 percent on Tuesday, the biggest fall in more than 15 years, closing below $600 an ounce on heavy selling due to a stronger dollar, soft oil price and concerns over interest rate hikes.

Silver dropped 13 percent and fell below $10 an ounce as speculative liquidation pummeled the precious and base metals, and platinum and palladium futures also tumbled.

news.moneycentral.msn.com...

Of couse this an another way to say: "Fiat money rises most in 15 years".

The pros are dumping oil and gold to buy dollars despite that big, scary, end-of-America oil bourse.

For those that don't understand currency markets, allow me to explain. As interest rates fall, the currency earns less so money goes to things like stocks,which is why up until may stocks had done so well. Lower interest rates tend to stimulate economic activity which is part of the reason why America's Q1 GDP came in at 5.3 percent.

However high growth can be inflationary, which is part of the reason why money was going into commodities, hence the run up in gold. BUT Bernanke is making lots of noise like he's not done raising rates and that helps the dollar.

Note to self: Don't take financial advices from eruos who don't know a thing about markets.

Oh well eruos, wrong again...

[edit on 13-6-2006 by Number23]

[edit on 13-6-2006 by Number23]

[edit on 13-6-2006 by Number23]

Wasn't Bill Gates saying the Dollar was going to go down too? Is he a "eruo?"

Gold is ALWAYS a good investiment.

You, like many other people, are thinking short term. This little tidbit is a short term gain in strength by the dollar.

However, in the long term, oil is gonna run out. Gold is one of the worlds most sought after and oldest commodities. If the financial markets of the world collapse, paper money, whether dollars, euros, yen, pesos, ect will become worthless.

Gold is accepted everywhere.

A drop in gold prices now means diddly squat. You obviously seem to forget how fast markets change.

Let's wait and see, shall we?

It wasn't that long ago that silver was at 4 and change, while gold was just over 400.

As far as anyone dumping gold to buy dollars, they ought to have their head examined. I doubt that institutional investors are insane, so there must be a play in the works.

The dollar's worth is ephemeral, whereas gold has real value, actual value. You can't do anything with money besides burn it and spend it. How much is a slip of green paper with goofy cross-hatching really worth?

Originally posted by Skadi_the_Evil_Elf
Gold is ALWAYS a good investiment.

You, like many other people, are thinking short term. This little tidbit is a short term gain in strength by the dollar.

However, in the long term, oil is gonna run out. Gold is one of the worlds most sought after and oldest commodities. If the financial markets of the world collapse, paper money, whether dollars, euros, yen, pesos, ect will become worthless.

Gold is accepted everywhere.

A drop in gold prices now means diddly squat. You obviously seem to forget how fast markets change.

So go buy gold and you'll lose your shirt. If you had bought gold back in the 80's, you ONLY NOW be back above water. Is that long term enough for you?

Meanwhile your money would have more than tripled in the S&P

Here's a hint: When you see ads on TV & Radio telling to buy gold, all the smart money has left and they're out trolling for suckers.

Originally posted by Skadi_the_Evil_Elf
If the financial markets of the world collapse, paper money, whether dollars, euros, yen, pesos, ect will become worthless.

I suppose in that case gold won't be good either. We'll be using one pound sacks of rice as currency.

Gold is accepted everywhere.

Just yesterday I was trying to by a flame broiled burger meal at the local fast food place, and they didn't accept my golden ducat I was saving for the last 10 years! It is apparently worthless.

A drop in gold prices now means diddly squat. You obviously seem to forget how fast markets change.

Hmm... 7.3% drop in price is nothing trivial compared to the usual volatility. You obviously seem to forget about that.

Most of gold’s value is historical. In general it costs around $300 to $350 to produce. Anything over $400 an ounce is speculative at best. Its not strategic and will always be a risk to invest in. I have a friend in Salt Lake City that told me recently his bank insisted he liquidate his precious metals holdings or they would not approve a new business loan. To much risk involved.

[edit on 13-6-2006 by Blaine91555]

Inflation fighting by the Fed in the modern sense has been done with short-term interest rates since 1979. It is very effective. Investing in capital assets will slow when the return on financial assets is high enough. With long term rates around 6%, the ability of a business to earn higher returns on capital is much better than it was in 1987 when long term rates were in the 9-10% range. The Fed only controls very short-term rates. The long-term rates on government bonds are a function of the market's expectation of inflation.

A certain amount of monetary growth is necessary to support higher levels of GDP. The monetary growth, nominally, will match the addition of real value in the economy (e.g., processed raw materials).

It is to be expected that monetary growth would continue while the Fed uses interest rates to shift funds between capital assets and financial assets.

You're overlooking the industrial value.

It's not just a pretty metal, it's practically incorruptible. It also conducts electricity with a higher degree of efficiency than more common metals.

The value of gold is partially ephemeral, but it's not as though that's all there is to it.

Also, the cost to produce an ounce of gold could drop dramatically if technology is fully realized. The vast majority of gold exists in the earth in minute portions, and it's never been economical to extract that sort of gold. It probably never will be, using traditional methods.

But there are other options on the horizon, like resource extraction through burning (some plants pull gold from the soil, like goldenrod for example) and refining.

So, the high gold prices are probably not going to be eternal, but the gold itself very nearly is, and that's pretty cool in my book. Much better than dirty stinking dollars.

Ah... the logic of the yo-yo news reader... a day makes a trend.

For those paying attention, something is going on in the silver market at the moment with a rumoured default along with rumours of a major derivatives player in trouble.

Bernanke does not command the respect that Greenspan still does and the White House just appointed a member of the Plunge Protection Team as head of the Treasury.

Speaking of the White House, why do you suppose they just gave Intelligence Czar Negroponte the authority to waive Securities and Exchange Commission rules?

The stock market crash of '29 was the final and very public confirmation that the system was broken. It did not break the system.

The system is broken again. It's obvious to those that follow it and by that I don't mean day traders sitting at their computer, traders in the pit, paid market analysts etc. They cannot see the forest for the trees.

Those whose job it is to take a bird's eye view can see it and they are warning all over the world that all is not well.

So... enjoy the schadenfreude while you can. In fact I'm willing to bet that the DOW will attain new record nominal highs this year as money supply is inflated into the system all over the world. Won't that be great?

We've been partying for so long we've forgotten about the hangovers. I'm thinking aspirin might be on this year's holiday shopping lists.
.

If currencies around the world fail the only valuable metal will be steel fashioned into firearms and brass jacketed lead.

Our founder thought of everything!

[edit on 13-6-2006 by Number23]

$2 trillion ....poof!!!

news.yahoo.com...

seems as though even the thought of raising interests rates crashes the system...lol!!

can't raise the interest rates, people will panic that the economy will slow down and crash all the markets!!!

can't keep lending out a ton of money.....inflation will raise it's ugly head and that money will be worthless, or next to it...

ummm..what to do, what to do???

melt the gold and silver, make pretty jewelry and trade it for bread instead of the wheelbarral full of money??

2 trillion lost, at just the suggestion that they were gonna tighten up the economy...do you really think that they will actually carry through with it?? I don't, they're gonna back out of this one and find another path, this one is too painful to their wallets in the imediate future....and who cares what happens ten or twenty years down the road.....we'll worry about that then, right?? that's if they can keep juggling that long...

If currencies around the world fail the only valuable metal will be steel fashioned into firearms and brass jacketed lead.

Silver is a fine material for fashioning bullets. It has a low melting point, and it expands viciously. Lead has its uses as well, but nothing spectacular about it - it's nowhere near as classy. Other metals work adequately if it's shielding or slugs you're after - and every other metal that I can think of has a better weight/value ratio.

Originally posted by WyrdeOne
You're overlooking the industrial value.

It's not just a pretty metal, it's practically incorruptible. It also conducts electricity with a higher degree of efficiency than more common metals.

Use of gold for industrial purposes is almost nonexistent now. Aluminum, the most common metal, is actually a better conductor. Aluminum has the drawback of delayed compression requiring connections to be retightened or remade to avoid arcing. It also oxidizes to easy making it unsuitable for small conductors or it would have been used more. It’s been outlawed for use as small conductors and is only used for large conductors like purchase power coming over transmission lines to the point of connection at your meter. Circular mils or surface area is far more important to conductivity. Gold has not been used in electronics for some time. Some companies will sell you things like RCA cables with a gold coating but I doubt it has any real value. There might be a dimes worth of gold used and they charge you a great deal for the pretty coating.

If gold were below $400.00 I’d say buy it like a drunken sailor you’ll make a killing? At $600 its way over valued.

Originally posted by Number23
[

Oh well eruos, wrong again...

[edit on 13-6-2006 by Number23]

[edit on 13-6-2006 by Number23]

[edit on 13-6-2006 by Number23]

I never took financial advice from euros anyway, I dont know why anyonme would....

mainly its difficult to sift through their dislike oif america from their "facts"....

just my opinion

The dollar's worth is ephemeral, whereas gold has real value, actual value.

This is a bit off topic, but it has to be said. Paper and Gold are worth the same in the grand scheme of things. They are both worthless in the long run, it's only the information with which we attach to these inanimate objects that gives them value. Information is the only "worth" in the world. Always has been, always will be.

What are the three aspects that make gold worth what it is today? 1. Relatively Rare on Earth. 2. It looks pretty and shiny when purified and pressed into jewelery or coins. 3. Malleability.

So anyway, back to the topic at hand, I do agree that in the medium term, gold is where it's at. Turbulent eras are usually good times to investing in precious metals and staples like Grain and Soy. In the long run, I see our economy transitioning to a monetary system pegged on the value of knowledge and information. Those that cultivate and effectively exploit those "commodities" will take a flying leap off the Peak Oil cliff and spontanously learn how to fly. I sense quite a few dead rotting corpses of Nations will plauge our Earth for the rest of this Century though...

One Day's drop means nothing. One Quarter drops mean nothing. The only time they actually mean something is when they connect to additional down quaters for a sustained period of time(4-6 quarters)

Originally posted by Skadi_the_Evil_Elf
Gold is ALWAYS a good investiment.

You, like many other people, are thinking short term. This little tidbit is a short term gain in strength by the dollar.

However, in the long term, oil is gonna run out. Gold is one of the worlds most sought after and oldest commodities. If the financial markets of the world collapse, paper money, whether dollars, euros, yen, pesos, ect will become worthless.

Gold is accepted everywhere.

A drop in gold prices now means diddly squat. You obviously seem to forget how fast markets change.

Gold may be a good investment, but when the markets of the world collapse, i severly doubt any banks will exchange your gold papers for your actual gold, any more than they would accept US dollars, euros, yen or any of the other paper moneys.

If youre gonna invest in gold, i hope you've got a big safe to store it all in. There is more gold on the market, than actually exists.

Now, considering how long gold has been rising for, i'm honestly not suprised its seen a 15% decline, it was bound to happen eventually, and as a few people have said, its just one day in the market.

That said, im pretty convinced were pretty close to a world wide economic collapse. I'm certainly not an expert, but if i had anything invested in the US Share Market i would be a bit worried -- the DOW JONES doesn't look too stable atm.

Originally posted by Skadi_the_Evil_Elf


A drop in gold prices now means diddly squat. You obviously seem to forget how fast markets change.

i see the last 5 weeks of falling gold prices
as a planned attack by a group of central bankers...

they had to save all those overextended 'short' positions held by
the hedge funds and others, the investment bankers and options
traders & hedgefunds made a killing on the controlled decline of gold prices
(as the central banks flooded the gold markets with bullion)

it is also interesting that this thursday, the US mint will be rolling out
the $50. 'Buffalo' 24kt gold coin, the 'proofs' (only 300K) will sell at $875. (+)?

i see the gold manipulation of the last 6 weeks, had also had this new
gold coin issuance as a factor in their plans...
after all, with the price of bullion retreating to ~570-600 USD
that should make the common, middle class american, more likely to buy
into the new gold coin (with its 3%-12% markup) over the daily spot-price
of gold...and hold as investment/speculation

but massive sales of the new $50. gold coin might could help to stabalize
this lower price of gold in the current $575-600 range, and to regulate
mining production & the creation of gold coins, at least in the Western World.
The only random element would be the Islamic Nation
tugging the world economies to a gold standard instead of the fiat US petro-dollar

i think someone could put these 'dots' together and pull back the curtain a bit,

EDIT to add article of Buffalo Gold Coin;
www.usatoday.com...

good-day

[edit on 21-6-2006 by St Udio]

[edit on 21-6-2006 by St Udio]

[edit on 21-6-2006 by St Udio]

Gold is dead. The US takes out loans from other nations and if they do not want to loan us the money then we stop buying their products and their economy falls to pieces. Love how that works, infinitely greater than any gold backing or gold relying scheme. I doubt whether China's economy would be worth as much as it is if the US did not outsource jobs to the country and buy its cheap knowck-off products. Gold is dead. The day of controlling markets through outsourcing and protectionism is upon us.

Investing in phyisical gold commodities is fine through an online site like bullion vault.com. But do not buy metal to keep under your stair case. This is a bad investment because it needs to be validated at cost if it is to renter the market as gold bullion. Instead buy, sell and own it inside a trusted online gold vault because this way there's no validation cost and only a small commision of about 1 percent for an instant buy or an instant sell. Gold is a good investment providing you believe oil is about to go up or the dollar is about to go down. At the current rate (in the long term) both these things will happen so in the long term gold is a good investment but in the short term gold is extremely volatile so the question is how longer term do you need to own gold to have a good investment? Is it too long for now? Or do you fancy riding the short term market? Its just been on a bull run and it looks like its not sure whether to go up or down. But (as said) in the long term up is a certain bet.

[edit on 090705 by Liberal1984]