Gold is Falling! Next Subject…

p>goldTwo years ago during the gold-buying frenzy, I cialis pill analyzed the rate of return to gold.  Bottom line:  The price does not rise indefinitely, in many cases the rate of return to gold does not come close to stock market returns, and as we have seen today, the gold market is subject to fluctuations like any other investment market.  Yet there will be many investors who once bought at $1,800 an ounce now selling today for a loss.  What happened to the promises made by the financial “experts” that gold would rise to $3,000 an ounce before the end of 2012?  What cialas happened today in the gold market is typical of any other market.  Stuff happens and markets respond.  Gold is not immune.  Now can we talk about something else?

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Comments (10)

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  1. Joe Barnett says:

    Gold is money, not an investment. As an asset, it isn’t earning any return, unless it is lent out. It could be a protection against inflation, but it appears many people are buying gold medallions and coins at retail prices — rather than commodity prices — and thus they are paying a 100 percent or more mark-up & will never get their money back — even after adjusting for hyperinflation.

  2. B. Popplewell says:

    So the value is dropping on the special minting of the Sept. 11th coin by US Premium Minters LLC that I bought off that infomercial at 2 a.m. in the morning?

  3. Mo says:

    A diverse portfolio always out out earns a metal heavy one. Getting caught up in fashion fads are just as stupid as pouring significant money into investment fads. Stick with your staples, they wont lead you astray.

  4. Jordan says:

    I think part of the appeal isn’t so much the rate of return, but the security that if the dollar fails Gold will still retain value. I’ve got about a million dinar in old Iraqi currency that literally isn’t worth the paper it’s printed on.

  5. Jacob Ruisdael says:

    Joe is right, buying at commodity prices and maintaining a diverse portfolio is the best practice. Gold sales always go up with market uncertainty. It was just scare-mongering. All those poor fools should’ve started stockpiling RMB instead, China can’t keep devaluing their currency forever.

  6. Patel says:

    Interesting post, until now I was under the impression that gold was a the safest stock to have in the market. Indeed, you are right, not is immune of market forces.

  7. Pam Villarreal says:

    I like Warren Buffet’s take on 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 – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (NYSE:XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

  8. Andrew says:

    The financial market is a complex system we created over some time and I think this post hits it on the head by stating that gold is nothing unique or different in regards to investment.

  9. Desai says:

    In India, Gold is still king, and I think there is cultural fascination over this stuff, even though, if I had a choice, I would go with the farmland and Exxon Mobils.

  10. Jacob Ruisdael says:

    Yeah but Warren Buffet paid less in taxes last year than his cube of gold, and that’s just not fair.

    …..