Timeline for When is a good time to invest in gold? In what situations is the price of gold likely to drop?
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| Apr 13, 2017 at 12:25 | history | edited | CommunityBot |
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| Aug 16, 2011 at 9:33 | comment | added | Chuck van der Linden | I'm fine with having some assets outside the banking system, but you can't exactly go buy groceries with a krugerand. And given the limited number of places that will trade in gold (and the fee's they charge) if there is some kind of calamity, don't you expect that those who do trade in gold will rapidly run out of anything to pay you with in return for your gold? and in such an event, if a bunch of people holding gold are trying to sell, and nobody is in a position to buy, what is likely to happen to the price? | |
| Aug 16, 2011 at 9:23 | comment | added | Chuck van der Linden | at the point the runup in recent years is far above the trend of a far longer prior period, you are often looking at a bubble. In the case of the stock market there has been an overall upward trend, same for housing. The housing bubble is pretty easy to see if you look at a chart like this one. Everyone is going to have their own interpretation of the numbers, but to me if I look at a 35 or 40 year chart of gold prices, the last 6 years is way out of line with the prior 30, and to my eyes, that looks a lot like a bubble. | |
| Aug 16, 2011 at 1:04 | comment | added | Muro | In regards to "buying at the high". I know gold has had a run. But I don't base my investment decisions on something simply going up or something going down. The S&P went up 253% from 1950 - 1960, another 53% from 1960 - 1970, another 17% from 1970 - 1980, another 220% from 1980 - 1990, another 334% from 1990 - 2000. At what point was the runup too big? That's 50 years. | |
| Aug 16, 2011 at 1:01 | comment | added | Muro | I agree that storing physical gold is a pain. Not my desire but I've read enough monetary history to know about bank holidays, frozen bank accounts, and massive inflation to know I should have some assets outside of the banking system. | |
| Aug 15, 2011 at 20:30 | comment | added | Chuck van der Linden | never mind of course that storing and dealing with physical gold is a PITA.. Especially since you generally have to pay a several percent comission both to buy and to sell, where as with a stock like GLD you would pay a small fixed fee at a discount broker. OH and regulations that require reporting of large cash transactions that make it very hard to buy or sell any substantial quantity of gold without the government knowing about it anyway. And lastly, since gold is trading at record highs after a big runup, if you buy now, you could very well end up 'buying at the high' | |
| Aug 15, 2011 at 16:54 | history | answered | Muro | CC BY-SA 3.0 |
