Safer Trading Gold!!!

Since Gold and Silver is one of the unique and precious metals are used in a variety of human basic needs, such as foreign exchange reserves of a country, support a currency, jewelry, money substitutes, for industrial purposes, and others. Besides, it is also influenced by the availability of gold and silver that is limited, and the level of political stability often also affect the movement of the metal. So that gold and silver is very suitable as an investment option that is worth mentioning for the long term and secure.😎

Yes, until they start selling everybody fake gold. oh wait they already did... Many times.

But seriously there has to be more to it than this. I am skeptical about gold's price rising just because so many think it should. Predictions of it going higher are generally true because of the different fiat paper currencies racing against devaluation, but what event could cause gold to seriously devalue? Can someone out there tell me?

I do agree with most of what you say GrenMan (that I can decipher)

I think metals such as gold and silver are a safe haven as those become harder and harder to find, therefore, its price can only go up long term. I'm not sure of which timeframe are you referring to GrenMan, but I don't think it's a viable investment for forex traders as forex for most traders is intraday trading.

😎 Good Luck

sandelchayes, your post brings out an interesting point. There are lots of information/resources of prices of metals moving higher blah blah.. but seldom find any information that speaks about what can devalue the price of metals. Would be nice to see if someone with experience and the knowledge could shed some light on that.

jw1981 posted:
sandelchayes, your post brings out an interesting point. There are lots of information/resources of prices of metals moving higher blah blah.. but seldom find any information that speaks about what can devalue the price of metals. Would be nice to see if someone with experience and the knowledge could shed some light on that.

Exactly. Many traders see only an upside with metals, however they forget it can go down as easily. I would be interested in seeing the reason for devaluation of metals - one reason comes to mind is a strong economy, therefore less are looking for alternative investments (?).

One of the factors to the devaluation of metals like gold is currency strength. For example, a strong dollar can devalue gold as you only need to pay less amount of dollars for an ounce of gold. If the dollar is weak, you'll need more dollars to pay for an ounce.

I hope I contributed to the discussion 😄

brokersstaragent posted:
One of the factors to the devaluation of metals like gold is currency strength. For example, a strong dollar can devalue gold as you only need to pay less amount of dollars for an ounce of gold. If the dollar is weak, you'll need more dollars to pay for an ounce.

I hope I contributed to the discussion 😄

Yes, that make sense! Another case I can think of is if gold becomes more of a precious metal, so its value can go higher even if currencies are strong.

Exactly. Many traders see only an upside with metals, however they forget it can go down as easily. I would be interested in seeing the reason for devaluation of metals - one reason comes to mind is a strong economy, therefore less are looking for alternative investments (?).

This is a great point being made here. However, keep in mind that the Smart Money is always hoarding physical Gold & Silver. Ordinary people should also accumulate as much physical Gold & Silver as possible - from a reputable dealer of course. Paper currency is what is fluctuating in value, NOT Gold & Silver. Metals are actually the best indicator of how well or poor the USD is performing. With that being said, considering how the FED is now on QE3 to infinity, the value of the US Dollar will continue to decline over time. Don't be surprised if there is a currency crisis within the next few months or years. I suggest everyone accumulate Silver as it's more affordable than Gold & has greater potential to take off when the USD has its crisis. Don't worry about the price, just accumulate it while the opportunity is still here and it's so cheap. Remember, Silver was priced at $13.00 in October of 2007. Today it's around $33.00. What is that telling you about how the US Dollar has been doing over the last 5 years? Think about it.

blazan posted:

Exactly. Many traders see only an upside with metals, however they forget it can go down as easily. I would be interested in seeing the reason for devaluation of metals - one reason comes to mind is a strong economy, therefore less are looking for alternative investments (?).

This is a great point being made here. However, keep in mind that the Smart Money is always hoarding physical Gold & Silver. Ordinary people should also accumulate as much physical Gold & Silver as possible - from a reputable dealer of course. Paper currency is what is fluctuating in value, NOT Gold & Silver. Metals are actually the best indicator of how well or poor the USD is performing. With that being said, considering how the FED is now on QE3 to infinity, the value of the US Dollar will continue to decline over time. Don't be surprised if there is a currency crisis within the next few months or years. I suggest everyone accumulate Silver as it's more affordable than Gold & has greater potential to take off when the USD has its crisis. Don't worry about the price, just accumulate it while the opportunity is still here and it's so cheap. Remember, Silver was priced at $13.00 in October of 2007. Today it's around $33.00. What is that telling you about how the US Dollar has been doing over the last 5 years? Think about it.

Very interesting info - much appreciated for the detailed explanation.
Doesn't it also matter who controls the largest share of the market in question? For example (this is just hypothetical, I really have no idea), if most of the gold is exported from the US and its economy deteriorates, wouldn't gold lose value also? (although probably in a lesser rate).

Very interesting info - much appreciated for the detailed explanation.
Doesn't it also matter who controls the largest share of the market in question? For example (this is just hypothetical, I really have no idea), if most of the gold is exported from the US and its economy deteriorates, wouldn't gold lose value also? (although probably in a lesser rate).

Well, in the U.S., precious metals in general are not mined in abundance relative to other countries with more precious metals resources available. In particular, Silver is actually in more demand than Gold because it's consumed. It has hundreds of uses in most of the technology we now use that is in high demand, such as cell phones, computers, etc. If you consider that, Silver is the better of the two as a long term investment - for that reason. To answer your question in more detail, Gold NEVER loses value. It has and will continue to always have intrinsic value. The price of Gold or Silver is a reflection of the value of the currency you are pegging it to. The U.S. does still have roughly 287 million ounces of Gold still in reserve. The problem with that is it's not backing up the US Dollar, thanks to President Nixon in 1971. The Dollar, along with every other paper currency is not backed up by anything. It is just printed by Central Banks and dependent on the creation of new debt to fund current interest payments on existing debt. The way this is set up provides an incredible opportunity for those of us who understand our monetary system. At some point, the currency will not be able to hold its value at all because there is way too much of it in circulation. The more of something that there is, the less valuable it becomes, and vice versa. So, eventually paper currency will lose the bulk of its value relative to Gold and other commodities. It's not that the price of things are actually going up. On the contrary, the value of the currency is going down. Buy Silver while you can still afford to! Gold is out of reach now for most of us. Hope this helps.

Yes, that actually helps a lot. Looks like you're very knowledgeable of fundamental analysis - I've never tried to understand it as it just looks so complicated - your posts proves my point 😄

Kidding aside, what other metals do you think are valuable? And when you're saying it will always go up in price - what timeframe are you talking about here? As it can definitely go down in a 6 months timeframe for example.

Kidding aside, what other metals do you think are valuable? And when you're saying it will always go up in price - what timeframe are you talking about here? As it can definitely go down in a 6 months timeframe for example.

How does the U.S. government pay for the existing debt it has? Most would say through taxes. This is far from the truth. Even if we paid 100% tax, it would not be enough to meet the interest payments on the existing debt we have in the U.S. So, where does the money come from? They PRINT it. Through the FED, the U.S. prints the money it needs to pay for the interest on existing debt, in addition to many of the entitlement programs we have - Medicare, Welfare, Military, etc. So, what happens when there's more currency in circulation? The value of the currency goes DOWN. This causes the PRICE of everything to go UP.

Most people have no idea what government is doing to cause price fluctuations in the market. They only see the consequence of it. Food costs more, gas costs more, etc. But they don't understand why. Currency devaluation is the cause. It's not a question of IF we will see a currency crisis. Rather a question of WHEN. Look at what's happening in Europe. This is a clue as to what will happen in the U.S. - only worse. It's a mathematical certainty. How long can you pay for your existing debts with new debt? Each time they buy Treasuries or bailout a Bank or Automaker, they are adding another interest payment to the existing interest that they can't afford to pay. So not only is debt increasing, so is the interest on the debt. This can't go on forever. And, the U.S. has infected other governments with the same Central Banking money printing. So, you will continue to see countries and currencies going broke one after the other. For example, first Greece, now Spain in Europe. You'll hear about another soon enough. It won't get better, it will get worse. They are all doing the same thing. Everyone is paying for debt with new debt.

Precious Metals in particular benefit the most from currency losing value because as people realize their cash is losing its purchasing power, they rush to put their money where it can maintian its value at the time. They are also physical assets. Gold & Silver have always been valuable, and they always will be. Silver is the better opportunity of the two because it is in high consumer demand. It is used all over the world in the technology we are starting to use more and more. Solar Panels, LCD screens, computers, cell phones, etc. My suggestion is to buy a little at a time, even if only 1 ounce each month. Over time you will accumulate a large amount of it and you'll benefit in the end as currencies go through crisis all over the globe.

Blazan, I agree with you 100%. People don't realize that central governments (especially the USA) have created the biggest ponzi scheme of all! Madoff who? Think about it. The government guarantees its debt by paying interest on T-Bills and T-Bonds. When it is time to pay the interest, they reissue debt to cover the old debt. Hmmm!!! OK. This sounds like Madoff! The government is the biggest hypocrite of them all.

But we have a huge problem. There has been so much damage, the only thing we can do is delay the inevitable. If we change now, the whole system will collapse overnight. Also, by using a gold standard, it will be hard for an economy to grow because we won't be able to produce enough gold to keep up. So you can't issue debt and expect someone to pay you interest, because where is the extra money going to come from? Also, the inevitable crash is exacerbated by the fact, that the US Federal Reserve has lied about the amount of gold it has stored. It is rumored that they have about 25% of the reported value. When this comes crashing, 2008 will be laughable compared to epic collapse of the fiat currency system.

Using commodities to stabilize the economy has its pros and cons. It will be harder for the little guy to become prosperous. Wealth will be harder to create out of thin air, because we wouldn't be able to use fancy accounting to justify it. But, maybe that is exactly what we need.