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69

For gold mining companies, the amount of gold that the company has access to but has not yet been mined is accounted for in "reserves". The company can claim a percentage of those reserves as assets, but must spend money to mine them. That is why the market value of those reserves is not entirely reflected in the value of the company. The actual value must ...


36

As I argued in the comment to your question, your assumption is flawed. Here are some facts that counter your assumption (link to resource): Fact #1: Gold went from $105 in 1976 to $850 in January, 1980. Consumer prices increased by about 28%. Verify this here. Fact #2: Gold went from $850 in 1980 to $256 in 2001. Consumer prices more than doubled. ...


35

A lot of people probably don't agree with him, but Warren Buffett has some great quotes on why he doesn't invest in gold: I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s ...


25

You could buy shares of an Exchange-Traded Fund (ETF) based on the price of gold, like GLD, IAU, or SGOL. You can invest in this fund through almost any brokerage firm, e.g. Fidelity, Etrade, Scotttrade, TD Ameritrade, Charles Schwab, ShareBuilder, etc. Keep in mind that you'll still have to pay a commission and fees when purchasing an ETF, but it will ...


23

does it mean uncontrolled severe deflation/inflation is more likely to occur compared to "normal" currencies such as USD, EUR etc? Look at the chart referenced in the link in your question. It took approximately 50 years for annual production of gold to double from 500 tons to 1000 tons. It took approximately 40 years for annual production to double ...


23

I suspect he claims "the rich" put their money in gold so that you'll sign up for whatever gold service he's pitching on his podcast using his coupon code.


22

How would gold have protected you during the 2007/8 crisis? In no way, shape or form. The ways to protect yourself at any time are: A reasonable debt/salary ratio: In other words, don't over-extend yourself on the mortgage, how much the mortgage broker says you can buy with 0% down. Ditto on the cars you buy. A healthy emergency fund. Diversified ...


20

Gold has specific properties that make it more useful than most metals for monetary and decorative purposes: It's extremely unreactive, so it doesn't corrode, rust, or otherwise tarnish. So gold, once pure, stays that way, unless alloyed. It's very difficult to dissolve gold with acids - aqua regia, formed by mixing nitric acid and hydrochloric acid, must ...


17

The problem I have with gold is that it's only worth what someone will pay you for it. To a degree that's true with any equity, but with a company there are other capital resources etc that provide a base value for the company, and generally a business model that generates income. Gold just sits there. it doesn't make products, it doesn't perform services, ...


15

A good time to invest in gold WAS about ten years ago, when it had reached a 20-year bottom around $300 an ounce. That's when I was buying (gold stocks, not physical gold). Since then, it's gone up 5-6 times in ten years. It might continue to go up of course, but it also has long way down to go, because it has come up "too far, too fast." I have since sold ...


15

Just because the coins are legal tender does not mean that they are "in circulation" and people are spending them at stores. Yes, the Canadian Gold Maple Leaf is legal tender, as is the American Gold Eagle. All this means is that if you owe a debt of $50 to someone, you can give them one of these coins, and they are required to accept it as payment in full....


14

GLD, IAU, and SGOL are three different ETF's that you can invest in if you want to invest in gold without physically owning gold. Purchasing an ETF is just like purchasing a stock, so you're fine on that front. Another alternative is to buy shares of companies that mine gold. An example of a single company is Randgold Resources (GOLD), and an ETF of mining ...


14

The link you originally included had an affiliate code included (now removed). It is likely that your "friend" suggested the site to you because there is something in it for your "friend" if you sign up with their link. Seek independent financial advice, not from somebody trying to earn a commission off you. Don't trust everything you read online – ...


13

The US does have a gold reserve. The main reserves are held at Fort Knox but there is even more gold, mostly owned by other countries, stored in the basement of the New York Federal Reserve Bank (Think Die Hard 3). The United States Bullion Depository, often known as Fort Knox, is a fortified vault building located adjacent to Fort Knox, Kentucky, used to ...


13

According to the US Mint, the Government does still have a gold reserve stored mostly in Fort Knox in Kentucky, but there is some in New York and Colorado too. Some facts from their site: Amount of present gold holdings: 147.3 million ounces. The only gold removed has been very small quantities used to test the purity of gold during regularly scheduled ...


13

Ok, I think what you're really asking is "how can I benefit from a collapse in the price of gold?" :-) And that's easy. (The hard part's making that kind of call with money on the line...) The ETF GLD is entirely physical gold sitting in a bank vault. In New York, I believe. You could simply sell it short. Alternatively, you could buy a put option on it....


13

if you bought gold in late '79, it would have taken 30 years to break even. Of all this time it was two brief periods the returns were great, but long term, not so much. Look at the ETF GLD if you wish to buy gold, and avoid most of the buy/sell spread issues. Edit - I suggest looking at Compound Annual Growth Rate and decide whether long term gold ...


12

Since GLD is priced as 1/10 oz of gold, I'd call it the preferred way to buy if that's your desire. I believe gold is entering classic bubble territory. Caveat emptor. A comment brought me back to this question. My answer still applies, the ETF the best way to buy gold at the lowest transaction cost. The day I posted and expressed my 'bubble' concern, gold ...


12

It's not clear that anything needs to go up if gold goes down. In a bubble, asset prices can just collapse, without some other asset increasing to compensate. Economies are not a zero-sum game. On the other hand, gold may fall when people decide they don't need to hoard some store of value that, to their minds, never changes. It could very well indicate that ...


12

Ye, you're wrong. A blanked statement that "gold is inflation proof" doesn't stack up historically - one can pick various pairs of points in time to show gold rising as prices rise; or gold falling as prices rise. And periods of deflation are, happily, sufficiently rare to be able to draw any meaningful conclusions either way. As Willem Buiter explained in ...


11

"Bullish in gold, but only in Yen terms" means that he thinks gold will go up against the Yen, but not against other currencies. The translation of this is that he thinks the Yen will go down. I'm not sure why he chose to phrase it like that, unless he is in the business of selling gold. If you sell USD to buy Yen, and then use that to buy gold, that ends ...


11

How could it be that this gold coin was created as legal tender when its gold content is much higher than its face value? There are many coins that have market value far above their face value, typically collectibles of limited production. They are often issued to create revenue for the treasury. You can't buy one of these for 50 dollars. Is it ...


10

Platinum use is pretty heavily overweight in industrial areas; according to the linked Wikipedia article, 239 tonnes of platinum was sold in 2006, of which 130 tonnes went to vehicles emissions control devices and another 13.3 tonnes to electronics. Gold sees substantial use as an investment as well as to hedge against economical decline and inflation, with ...


9

When you buy a futures contract you are entering into an agreement to buy gold, in the future (usually a 3 month settlement date). this is not an OPTION, but a contract, so each party is taking risk, the seller that the price will rise, the buyer that the price will fall. Unlike an option which you can simply choose not to exercise if the price goes down, ...


9

Borrowing Wikipedia for a bit, it seems like the intrinsic uses are these. I've ordered these approximately in technology-level order: Decorative uses as jewelry, gold foil on metal objects, solid gold objects, gold thread, and the like Gold crowns Heat dissipation material As a toner in photography De-icing conductor for aircraft Corrosion-resistant or ...


9

Gold has a few key attributes historically: It's scarce. Gold is mined in very localized places. So it's easy for the local king to monopolize production and supply. Easy to identify. Hard to destroy. (It is non-reactive) Coins have also been made of bronze, copper, iron, and lead, but the properties of those metals make long-term less desirable.


9

Gold ETFs are treated different than stock ETFs, as a collectable. This makes long-term investing in gold ETFs (for one year or longer) subject to a relatively large capital gains tax (maximum rate of 28%, rather than the 20% maximum rate that is applicable to most other long-term capital gains). Read the Investopedia article The Gold Showdown: ETFs Vs. ...


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