Au/Gold keeps dropping
 

Au/Gold keeps dropping, When is it time to sell?

Before it starts dropping?

Everyone here has already sold. You still hanging on?

It's down 25% in the last quarter while the major indexes are up 10-20%. The economy is looking up, India is buying less because their economy is in the tank, the dollar is strengthening, shale oil is reducing oil imports, only speculators ran up the price this high and they're getting nervous.

The sound I hear is a bubble bursting. It will go lower before it goes higher. Take your profits and be happy.

Gold's price rises and falls like any commodity traded on the international market. Have you set your sale price limit ?

Well if you haven't already.....
Gold is still 50:1 over silver. But I'd rather get the 50 ounces of silver than the 1 ounce of gold.

I haven't sold any gold or silver all year. Not much fractional metal has been coming in, just the usual karat gold, sterling, and 90% coins.
I'm waiting for $1700/oz to come back, perhaps a mistake on my part. I don't have a pressing need for the money, metals are about 10% of my investments (not by design, just sort of happened).
Jim

Getting to be time to buy...

Gold will hit $1,000 before it hits $1,700 again. There are too many factors against gold value now. Demand is low, the Fed isn't planning more quantitative easing, the trouble in Europe is driving the Dollar up, and the speculators who ran prices up are taking profits and getting out. Im not saying it will never be higher than it is now, but it is down and will go down farther. It's not where you want to park your money.

Speaking as one not invested in gold, and not following the price trends all that closely:

What makes you think $1700 is coming back?

Based on historical trends, the price since '06 is a historical anomaly. Perhaps a repeat of the 1980 peak & fall on a larger scale. http://www.nma.org/pdf/gold/his_gold_prices.pdf

Imho, a lot of the price rise may have been driven to a large extent by all of the "goldbug" advertising & hype, and being of a suspicious nature, I strongly suspect the advertising was sponsored by those who were about to sell, and are now laughing at the suckers who fell for their "pump & dump" scam.

Having said that, if demand stays high, it may be worth holding onto for awhile (gold has been moving on a roughly 8-10 year cycle since '80 or so), but if you've made some money on your purchase - sell!!

The worst thing to do is hold on based on optimism (e.g. my Lucent stock ;-) ) . Sure, you may give up some potential short-term gain, but avoiding an outright loss is more important. Unless you really want/need the capital loss for your taxes.

From the goldbug's point of view . . .

“Emerging market central banks continued their gold buying spree in March. UBS Investment Research says that Mexico bought 16.8 tons, Russia bought 15.6 tons and Turkey added 11.5 tons. Additional small purchases were made by Tajikistan, Kazakhstan and Belarus. We wrote a few months ago that central banks have begun accumulating gold reserves since the Federal Reserve cut interest rates in 2007, and HSBC Global Research expects this buying trend to continue for another five years.”

“In March, China’s gold shipments grew to 62.9 tons, which is the third largest volume of gold in a decade from Hong Kong to the mainland, according to UBS. With ongoing rising demand, China may overtake India this year as the world’s largest gold buyer.

India’s government abolished the excise duty on gold jewelry. This was one of the reasons for the jewelers’ strike, which drove gold imports to decrease 55 percent in India a few months back. Getting rid of the tax should encourage the restocking of gold and bring Indian gold buyers back to the market.”

And . . .

“The bottom line is gold’s latest secular bull almost certainly didn’t climax last summer. Such major bulls need an extreme psychological event to end them. And it comes in the form of a popular speculative mania and vertical parabolic ascent. While gold was indeed overbought last August, the resulting topping looked absolutely nothing like the previous gold-bull climax of several decades ago.

And if gold’s bull isn’t over, then gold is destined to power to new all-time highs sooner or later. And once that inevitable recovery gets rolling, capital will flood back into this metal and the stocks of the companies that bring it to market. So if you can stand strong as a contrarian and fight the popular fear gold’s latest correction spawned, there is a vast smorgasbord of incredible bargains in the precious-metals realm.”

All from Kitco links . . .

Ian

Kitco wants you to buy gold.

True. But I said it was from a goldbug's point of view.

Ian

And a vid from MSNBC.

Ian

Gold is done. just let it go. retail investors just dont get it. counter cyclical to dividend stock index. look it up plot both since '29 and check out the past 10 years. I cant tell you how I know. Just check it out.

I don’t know. From our current vantage point, can we really trust historical perspective in global finance right now? This includes the bull analysis in my quote above as well, of course.

Ian

If this results in all those We-Buy-Gold storefronts going away, I won't complain. They just all too much remind me of the payday loan place. I hate leeches.

If you go to Barchart.com, Futures, Commitment to Traders, you'll see the large specs are still long gold. They're supposed to be the "smart money". When they start letting go, then I'd drop it as well.

There's also seasonality to consider. Gold typically rallies at the end of August.

So...if the large guys are long and gold 'should' rally in a few months, I'd hold on a little longer.

Just my .02

What to do, what to do...hmm? I established a position in both gold and silver over the past couple of years expecting to hold it indefinitely as a hedge (and still have some very nice gains). Now, an unexpected land purchase has crossed my path in recent weeks. I'd been planning on liquidating 2/3rds of each along with some equties but the recent correction just sucks :(. Go ahead and liquidate or hold for a bounce within the next few months? Decisions, decisions...

ps: Anyone interested in Eagles, Mapleleafs, Krugerrands, or 100 oz bars :)

How many are you talking about (other than the big silver bars)?
Jim