Thread: I'm coming very close to taking the metals plunge. All advice welcome.

I read an article the other day....about China and India beginning to stockpile gold. Also China has told their people to save at least 5% and buy gold...as it will become more valuable in time. Gold has been really taking off...the problem is that unless you've got a bunch of money...you probably have to pay storage fees etc which is on the downside. I know there's a big company one in the NY area. Can't remember it's name. You can buy 1 oz, etc of gold. I'm not as interested in silver. If I was in the US it might be fun....a challenge to try paning for gold in CA or somewhere. Here in Asia...it's too dangerous...kidnappings etc.

Gold: where it's at.

http://en.wikipedia.org/wiki/List_of...old_production

As in everything, there's an economic chart. China is the 2nd largest gold producer in the world, after S. Africa. At some point, there are diminishing returns.

lacaprup,

What do you see in JTH's 20-year chart?

What I see is that Silver and Gold floundered in the Dot.Com boom and then banged up during the real estate/credit bubble. Both silver and gold then collapsed during the recent market crash - a cruch from elevated growth ratios.

There doesn't really seem to be a negative correlation between silver/gold and other investments. Maybe I'm reading the chart leaves incorrectly. What I see is a bubble.

Regardless, do you think the FED will allow the dollar to collapse forever? That the EURO and Yen have no problems? That the oil ticks are the masters of the universe? That China will not have another of their statist grabs and clamp downs?

Can you answer those questions?

Personally, I would pay down debt with the cheapest dollars you will likely see for a very long time. With all of the money growth the FED and Spendulus pumped in we are still living in mild deflation. When all those efforts crap out - because some of the efforts (not the FED) were unbelievably stupid - the trend will be stronger deflation. Maybe a brief period of inflation will pop up first - which will kill folks on revolving credit. What happens to Silver/Gold during deflation? Nothing good...

Gold prices are inflated - how can you tell? It's all the speculation going on. Jewelery companies are buying gold from customers because they think it's overvalued, otherwise they would not be doing this. Gold unfortunately is not just a "currency", it also has some real industrial uses. If it gets too overvalued, it will effect those products using it (electronics and others) and those industries will try their best to bring down the price to reasonable.

Silver is more reasonable because it doesn't have gold's cache'. There was a time when it got unreasonable, but that was due to a major player in that commodity jinning the price up - notice that didn't last long and it dived afterward. If I was to invest in a metal, I'd like silver better than gold, but personally I think that investing in metals should be seen from an industrial value standpoint rather than as a replacement for money. The speculation in copper has already led to people stealing copper pipe and telephone wire and I don't like the trend - so take what I say with a grain of salt as I am admittedly biased.

The time to invest in metals has past...

Its best to buy low and sell high...

Its a gamble to buy high and hope for higher

I wouldn't buy gold unless it went to $990-$999 level, which is where I would set any limit orders for purchase. I would only buy the ETF's, that way there's no physical attachment to it. I can't hold an ETF, I can't show off an ETF. (I know, I know.... I couldn't muster the courage to sell my baseball cards 10-15 years ago. Sigh) With gold and silver, there are no tax incentives for holding on to LT cap gains since both are taxed the same.

Therefore, just trade it like a mercenary in an IRA account.

Gold is going higher forever, just like Oil a little over a year ago and t-bills 10 months ago.