Gold: A Good Time to Sell?

[imcarthur]

A bubble? Sure. But it just might bubble a lot higher before year end. It was due for a mild sell-off & topping $1900 did the trick. The markets are gyrating = higher gold. Europe's a basket case = higher gold. No currency seems stable = higher gold.

Or am I wrong & it just might be a really good time to cash out on some inventory? I almost did today but . . .

Ian

[red-beard]

Has gold gone up much in Canadian dollars?

[Zeke]

I'm thinking it will be long slow steady climb after 2000. So, you'll just have to weigh against other investments.

Jeez, I remember when it was 300. People thought then how could it go higher?

[imcarthur]

Gold is bought & sold in USD. So then their is the currency conversion & the bank fee. And the income tax hit. But I assumed it at around $1200 so our thought was to cash out on some & hold the rest for the ride.

Ian

[imcarthur]

And other investments? The majority is pitiful income but safe . . . gold is our Biggest Hit for sure. And I already blew it by selling a bunch of silver 2 years ago . . .

Ian

[Hugh R]

You pay income tax when you buy gold? Hadn't really thought about that. You don't pay income tax when you buy/exchange currencies.

[imcarthur]

No, it is tax on the capital gain.

Ian

[Hugh R]

oh, INCOME tax, sorry, didn't process that completely.

[red-beard]

And Capital gains tax on gold is 28%

[imcarthur]

In Canada, a capital gain can be reported as income (so standard income taxation rate) or as a capital gain of which only 50% is taxable iirc.

But you all reminded me to do some research & do the math. This is prime time retirement savings dollars so it matters.

Here's the little baby that I keep on my desk:



Ian

[gatotom]

First off, how is au or ag taxed when its was bought with no sales tax, since the seller has no reporting requirements why would the new seller????

My understanding has always been under 10K no worries, over that the uncle gets a slice.

As far as selling goes imcarthur, you answered your own question by saying you sold that ag too soon 2 yrs ago.

Think of this one when the time to sell might be right. In the newspapers and radio and even tv there is tons of ads to buy your au and ag. IMHO the time to sell your stuff is when they are advertising to sell you the au and ag.

The sheeples are always on the wrong side of the curve.

100 buck swings in price are now normal in au, when in swings to 1760 buy your brains out. Problem is you will be hard pressed to find it at that price same with ag in the 30's.

The market now is such that to board the train you must pay a price to join the party, weak at heart go to the cd or mm line.

[red-beard]

11:19 am - $1780

[McLovin]

Originally Posted by milt

Jeez, I remember when it was 300. People thought then how could it go higher?

You must also remember, then, when gold was $800, and people thought "how could it go lower."

That was in 1980. (That $800 in 1980 is around $2090 in today's dollars, btw).

Well, it did go lower - a lot lower (more than cut in half) and stayed lower for over a quarter of a century.

Anyways, you can make money on gold, but you need to know when to buy, and when to sell. It's not the buy and hold type of investment that gradually increases over time.

Clearly (there is no doubt about it), gold is in a massive bubble right now. The only question is, where in the bubble are we? Nobody knows, it is pretty much the same as guessing on black or red. Sell too early and you leave gains on the table. Sell to late and you lose gains that may take another 25 years to come back.

Here's the chart. Spikes like this with this kind of product are always a bubble. Whether in gold, or housing, etc. Always.

[island911]

Now is a nice time to sell. . . lot's of others are advertising hard to get others to buy. YMMV.

[Rich76_911s]

I find gold impossible to value. All you are doing is guessing how people are going to feel about a yellow shiny near useless metal tomorrow.

If you have a sizable position in gold, and are considering that this may be the top, you might want to concider using options to protect your investment. I doubt options will be cheap on gold because of it's volatility, but it could be a very worthwhile investment decision. Correctly done an option position would allow you to still take advantage of upward price movement, but limit your downside risk.

Rich

[McLovin]

It is impossible to value, b/c it trades at prices that have nothing to do with its real value as a commodity.

But if someone is holding gold that they bought at under $1000, and they sold it now, even if the bubble goes higher, they can take comfort that they are one of the few in the last 35 years who have traded gold and actually made a significant profit (see the chart, big profit opportunities in gold don't happen often, and those opportunities don't last long).

[legion]

I think that depends. If you don't physically hold the gold, I'd say yes, definitely. Sell now. No sense in trying to time the top of the market.

Now if you hold it physically, I think it is a different decision. Do you think the economy will totally collapse? If so, it's probably good to hold on to that gold. If not, go ahead and sell.

[McLovin]

What use is gold in a totally collapsed economy?

[imcarthur]

Well I didn't sell - yet. The correction is in swing with gold down $100 to $1763 as I type this. I discovered that selling gold as an asset is not as simple as it seems.

Kitco will buy @ $1759 (right now) but you must ship & insure & you have to give them a 15% deposit (wire transfer) for any quantity over $7500.

Scotia Bank (the seller in this instance) will buy back at around spot but only with original invoices + $14/oz bar charge & commission of 0.5% up to $2K, 0.25% 2K-5K, 0.125% for above. And you sell in person at their counter.

Other buyers hit you with charges more than those above.

Ian

[legion]

Originally Posted by McLovin

What use is gold in a totally collapsed economy?

It always has some value in trade. The value of paper currency would go to zero in such a scenario, as would bank account balances.