With all the chatter about gold... is it a growing bubble?

Yep. It is way outside its normal curves.

about to crash

Of course it is ... never trust any comodity that raises in value that quickly for so long. Eventually, people will realize that it's not worth that much and the prices will drop ... not back to where it started, but definatly back to where it belongs.

When anything is artificially kept high in value (like housing was), expect a correction ... the longer the bubble is kept inflated, the bigger the crash.

I like assets that pay dividends and I think alll the buyers of gold that have pushed the price to the level its at today are going to eventually decide they want some current income too and the sell off will begin. When that will happen no one knows but it looks like a bubble today and history shows they always burst.

..... gold was $32 an Oz. ... Hard to imagine, but thats about the price of silver these days!

If, & its a big if at that, the economy ever got better, owning & hoarding gold wouldnt be as desirable (??)

Me? Im putting my exess $$$ it model airplanes!

Laramie.

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Originally Posted by Big Foot 48

I like assets that pay dividends and I think alll the buyers of gold that have pushed the price to the level its at today are going to eventually decide they want some current income too and the sell off will begin. When that will happen no one knows but it looks like a bubble today and history shows they always burst.

Thats why Im investing in my hobby, the dividends are the enjoyment I get!

Laramie.

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OK, for those more knowing about these things.

What good is it to invest in gold, if after you are just parking high value dollars from the past and then exchanging them back for low value dollars in the future?

If we take the chart above in Dec 00 it was $300 and ounce, then in Dec 10 it was at $1350. So if I bought and sold at those two points I'd have $1050 in theoretical profit.

But according to this :
http://www.usinflationcalculator.com/
The same $300 in '00 now takes $380 to buy the same thing so in that case I've only made $970. Now admittedly that is a nice profit, but...I still can't sell the raw gold for food or other expenses, I still have to covert it back to the common currency, and to do that I have to sell it.

If the buble bursts and the value goes back down to the "normal" line then ALL the stuff bought between the rise and the bust is money lost to someone else.

Isn't silver doing better than gold - it was not so long back ?

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In my opinion, Gold is not a bubble the same way that housing or tech was.

With the exception of jewlery or a "contract" purchased on a commodity exchange, gold is not bought on credit.

Bubbles occur when easy money allows the price of something to become inflated due to financing options. Most gold is now being purchased with available cash. The cash holder is taking the risk.

It is unlikely that gold will drop to less than $1000 an ounce in the next 10 years or so. This is because the US will almost certainly default on it's debt within 10 - 20 years. In fact it is unlikely that the US will ever have an annual defecit below $1trillion for the remainder of it's sovereignty.

Given the above, gold probably won't catastrophically plummett and in all likelihood continue to rise.

The problem I have with gold investments is that it's all paper ... when/if I buy an ounce of gold ... I want that ounce sitting in my safe at home ... not some silly paper that promises that I have an ounce of gold somewhere.

Originally Posted by logan5

The problem I have with gold investments is that it's all paper ... when/if I buy an ounce of gold ... I want that ounce sitting in my safe at home ... not some silly paper that promises that I have an ounce of gold somewhere.

Oh yeah, you want physical gold. Don’t trust some certificate stating you own share of some stockpile somewhere.

Interesting law that was enacted January of this year, I forget what it is called. Basically, if you buy gold for investment, coins, bars, bullion, etc, The dealer is required by law to submit your information to the feds; I wonder why