Gold just hit AU$1600

I think there's not much of a chance of a sudden big drop even if there is a downturn and those of us in australia will be insulated grin that because it will probably coincide with stronger us dollar/weaker aud. That gives us time to see if there is going to be more stormy weather in world markets that will send more and more people to metals as a hedge against being squeezed by the market.

Marc faber, who admittedly is pro gold but honest enough last year to say he wouldn't and isn't buying at the time (i.e no permabull) and wasn't making "any day to the moon" claims, is now saying that worldwide loss of confidence by retail and institutional investors will lead gold 30% higher this year.

Gold is increasingly decoupled from the USD index and other commodities excepting sliver and I've heard it said over and over now outside of the usual PM presses that It's being used as a de facto currency independent from central banks now. That doesn't mean gold is money like it used to be in the sense that countries are adopting it and backing their currency with it but that it's acting like a currency of its own golden country.

I'm starting to wish I hadn't gone so heavily into sliver thinking it was cheap compared to gold. I think over a long enough time line sliver will beat gold in a big way return wise but it will be in short bursts and won't be clear when the top of the market is and when it's time to sell. Gold will probably do almost as well but will stay high for longer and you'll have more time to look at the market situation and decide when a good time to sell is.

Also need to start thinking about what to move the money into. No point trying to get out of gold if your currency is falling apart and you have nothing else to put it in to.

 

I wouldnt be too worried ...silver is going ok atm aswell might hit AUD $23 by the end of the week at this rate ...did i just make my half yearly post about metals ?

 

Indeed this is a big one.
Stocks? Aus RE? Cash? Bonds?
None seem like a good option right now. RE in Australia - especially for capital cities is one of the most expensive in the world. Stocks even though they aren't at all time high, are still high.
Cash is loosing against inflation, are bonds are a debt.
Perhaps, when the time to sell PM comes, the stock market will have crashed - but it will look like the last place you want to put your $ into!
Or perhaps, Aus housing will have crashed? For capital cities, I am not convinced we will see it happen (lots of people waiting on the sidelines) but each has an opinion on that so let's not speculate.

Really a tough questions, there aren't that many investment classes out there for whom wants to stay relatively mainstream and liquid (excludes art, digital currencies, collector items etc)

Suggestions?

 

There's things like inverse ETFs and the VIX. The USD looks like it's going to leg up now on the weak Euro but that could change too if the Fed backs away from raising rates

 

Gold or oil.

 

Oil still has some (smallish) downside risk, but medium to long term, practically guaranteed to rise. Our entire way of life relies upon it so heavily, and it ain't getting any easier to find or extract. Which is why they are so desperate they are going for fracking, which is pretty horrible environmentally, and thus politically.
You can buy oil on the ASX using OOO

 

Me too, I keep thinking is it worth making $300 now or holding and waiting until the next big crash and making thousands? I also can't decide If I should buy now, since the AUD is falling.

 

The falling AUD is what is making gold and silver go UP further relative to what it's doing in USD.
If you think the AUD will drop further then you should buy now. Assuming you are buying and selling metal in AUD.

 

I can't see anything but downward pressure on the AUD so if you're buying in AUD you're at least hedging against our falling currency even if gold stays flat or declines mildly in USD terms

 

Thanks for the help, Yes I'm buying in AUD, and yes I think the AUD is going to go lower, but US rate rises just worry me, if this happens how much will it knock off the gold price, but will the AUD be so low that over here it won't matter that much?

 

good point.

 

Over here in Aus there is already talk of another rate cut. Down goes our dollar some more. Up goes the housing market some more.

 

My situation is a bit more difficult with a 5 figure profit tempting me everyday, it isn't easy. I don't know how much longer I can hold out. Especially given it was all made in about 11 weeks. If I cash out and spot rises a lot more.. well you all would understand how I would feel..and if spot drops... right now I'm thinking that would be the lesser of the two evils as at least I would have the option of waiting for the next rally. Be it in three six or twelve months.

Could do with some advice what would you all do? Do you all have a number where you would cash out? Or would it be based more on future plans whether you would hold out or take the deal? Not many people understand gold so it's not like there is a wealth of knowledge out there on this.

 

and we need that like a hole in the head.

 

Sell high, buy low. never regret locking in profits.

In terms of metals, given the ridiculous volatility of them, I'd lock in profits at say 20% and wait for the next dip.
Contrary to what many think, it's almost certain that that neither gold nor silver will "go to the moon". i.e. it's not going to go up 10 times like a speculative stock would. It's most likely not going to even double. So locking in say a solid 20-50% profit on metals is very wise move based on the history. Unless you really only care about the really long term, like a decade.

Just look at the history of it over say 30 years. How many times has it doubled in a reasonable time like a year or two? Maybe once?, in 30 years!
How many times has it "gone to the moon"? Zero. $550 to $1750 is the biggest rally ever, and that took about 6 years. So it's only tripled once in 30 years and took half a decade. Whoopdy-do. That new medical marijuana company just tripled in price in 1 day.
People need to put metals into perspective, there is zero evidence of them ever "going to the moon", it's just a wet dream.

 

Even if it does that (possible), that's still only double in 4 years, or tripling in 8 years, or 6 times in 10 years (ok, now we are getting somewhere, but still has yet to happen, and if it does, first time ever in 30 years). That's assuming you bought in at the ideal time. This is why buying metals for "going to the moon" is demonstrably nothing but wishful thinking.

 

Thanks for the input, yes historically I'd lean towards locking them in and wait for the next dip, but that's taking into account history will repeat it's self, what if it doesn't what if everything was set on a collision course since 1971 unpegging currency from gold. GFC 2006 was a tremor with a quake coming soon. What if gold hits $2000 this year or next. To me that is more likely then it hitting $1000. But how greedy is too greedy you know what I mean? It's a pickle... maybe some beer will help..

 

why not sell half, take a nice profit now and keep the other half to see if it "goes to the moon"

or sell an amount equal to your initial investment leaving you with "free gold" for the to moon gamble