[youtube]http://www.youtube.com/watch?v=GB10xud4tII[/youtube] Notice how when gold hit it's peak price of $850 and the bubble popped. The price decline was VERY RAPID! Gold loses hundreds of dollars with a matter of days. The downward spiral was much faster than the upward takeoff! It makes sense because Gold rise to a bubble territory was driven by GREED while gold decline was driven by FEAR and FEAR is a much more powerful emotion than GREED. And gold dealers actually deliberately close their door to stop people from selling back their gold. They don't want to buy gold when the price is going down, because they loses money when they re-sell what they just bought. The moral of the story is Don't overstay bullmarket. Exit BEFORE the bullmarket hit its peak.
Thanks for posting. Now THAT is Phase 3. The public queueing up for hours to buy gold. Not seeing it yet.
A good sign that gold bullmarket is nearing its end is when interest rate is rising exponentially to control inflation. Personally I don't see Ben Bernanke rising interest rate for a long while, unless if they bring Paul Volcker back as Fed Chairman. I personally believe The Fed has ZERO interest in controlling inflation for that reason US dollar will go into hyper-inflation as the do QEs after QEs in the near future. If I'm right and US dollar is going into hyper-inflation, a good sign to watch for end of Gold bullmarket is when a new currency come into existence to replace US dollar as happened in the past hyper-inflationary situation. Where the old currency (US dollar) is exchangeable into the new currency with ratio something like $1 billion to $1 or whatever... When this happen that is a good sign of inflation is turning into deflation and gold bullmarket is over. But that is a loooong time into the future.
Timing is the key to everything, I know a lot of us will be wondering as it starts to peak when and how much to sell. Silver is a whole other ball game but still with similar timings involved. I know it will be getting close when the news starts reporting daily on Silver prices ?
This is a good and important point. I think we have many more years to go, unless the FED do increase the rates ALOT in which case would destroy their system anywho. There are only 2 option atm that i can see for the US, Hyper inflation or default & both are good for metals. i find it interesting that people still refuse to accept that the world might once again return to a part Gold standard. if this is the case then there is no bubble.
The gold bubble did not pop in January 1980. What we had that time is a 2 days spark on short covering. Gold only spent 2 trading days over $760. The January average was $675 about the same price as September 1980. Everyone had plenty of time to get out if they wanted to. Dot let selectively chosen misleading data to manipulate you. See the day to day data first. http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
If you bought equal amount gold every month from January 1979 until February 1980 because the price was going up, you had an average price of $335 only not $850. This is the best you can do.
Doesn't gel with me. There's a lot of stuff written of it but it seems simple to me -- bubbles form on easy money and break when its taken away and interest rates start to get bid up. Most recent history is the tech and housing bubble both of which turned on rising rates.
My gold investments scare me more than my silver. The value of gold is driven purely by the public perception of its value, whereas silver has such a highly level of annual industrial use that regardless of its public perception, its future value will be derived from its increasing industrial demand and diminishing above ground supply
depends how you look at it. another way would be: what if the global monetary system collapses and the world goes into a depression, then Silver will be worth nothing. But Gold on the other hand will be the only global currency that the world trusts and accept and will have massive value. there are many ways to look at it...
Really? I'm the opposite. Gold is a permanent money while silver is slowing losing it's monetary status and slowly move more into industrial category. In the SHTF situation industries will shut down... industrial demand for silver will drastically reduced... whereas investment demands will pick up the slack is remain to be seen.
Sure. Real rates are what will matter to people. My signals to look for what it matters are Dow Gold ratio and GSR heading back to something like the last bull market and rising rates. Dropping significantly below a GSR of 40 would indicate we are starting to see a bit of heat building up.
Yep, Gold is definitely the safer of the two. The whole thing about there being an industrial shortage is, I think, a myth. If that was true the price would be high already, the price of silver is being driven by the monetary demand for it, which is temporary. People will divest themselves of it at some point. Gold on the other hand, will have strong demand from Central Banks and they won't divest it for a long time. In saying that, I have plenty of silver because I thing it is a great speculative opportunity.
Also we may not see lines of people outside the shops because so many sales will be done online. is this the internet version of lines in the streets? Record-Setting American Eagle Silver-Coin Sales Could Be Greater If Not For Rationing Temporary Suspension of 2011 10oz and 5oz Silver Bullion Coins - Perth Mint I think it is.
