the big Gold BUST! Fortune CNN - opinions?

[svm]

http://money.cnn.com/2010/05/19/news/economy/gold.price.collapse.fortune/index.htm

(Fortune) -- When gold prices turn skyward, like they did for the past two weeks before some recent flattening, some mix of greed, fear and uncertainty are likely ruling the market. What better time to remember what really drives prices over the long-term: market fundamentals. Through that lens, gold might not be such a hot investment.

The gold market works much like any other, with supply and demand eventually equalizing, and runaway prices returning to long-term averages. Since 1980, the price of gold has averaged about $440 an ounce in U.S. dollars. But much like U.S. home prices over this decade, it can take some time for prices to return to normal.

FacebookDiggTwitterBuzz Up!EmailPrintComment on this story


Barclays Wealth in London predicts gold will fall to a fair value of $800 an ounce by 2012, as investors eventually dump it for riskier trades; Societe Generale, the French bank, in April 2009 predicted $800 gold by the end of 2010, though it has reversed its stance since then. Analyst John Nadler of gold deal Kitco predicts gold will fall to $900 in 2011. (See editor's note below.)

Their reasoning is simple: investors are keeping prices high even as demand from non-investors is cratering.

Take gold jewelry, which accounts for more than half of the world's gold market. Demand there fell 8% in the fourth quarter of 2009 and is likely to continue to fall amid high prices that turn off shoppers. For example, in India, the largest gold buying country, high gold prices this week kept Indians from purchasing metal for the gold-buying festival of Akshaya Tritiya, which in turn drove down prices.

Then there's price pressure from the supply side. Higher gold prices mean miners work overtime. The supply of mine gold around the world jumped 7% last year to 2,572 tons-the second largest increase in history.

Gold bullion dealer Kitco says places like China and Russia will help boost the amount of gold from mining by 4% to 6% a year through 2014. Because it costs miners about $480 on average to extract an ounce of gold, they plow ahead when prices are high, eventually leading to an oversupply situation..................

[AgAuGal]

Wha the blazes does this mean????

Their reasoning is simple: investors are keeping prices high even as demand from non-investors is cratering.

why would 'non-investor cratering' mean to the price of gold? Who the heck is a non-investor???? By definition a non-investor would not invest in gold so how could non-investors create demand. We must be at a bottom, TPTB are rolling out the drivel.

[Aussie]

Same story - duplicate thread . . .

http://goldismoney2.com/showthread.php?4680-Will-gold-be-800-in-one-year-or-two&p=36476#post36476

[ppius13]

In 2002, when gold rose to about $340/oz, I distinctly remember several well respected money managers pounding the table that gold would drop below $300. Gold has gone up 400% since then and silver 500%. I would never listen to those Mongolian idiots.

If they are correct that gold will settle in the $800 range -- I say perfect. Keep accumulating at that price point.

[clarkth]

If they are correct that gold will settle in the $800 range -- I say perfect. Keep accumulating at that price point.

Exactly, I thought the same thing when I saw that story on CNN.com. I'll buy all the way down.

[Anakin]

As I said in the first thread, investment demand will continue to be more important than fabrication demand - and this is good for gold.

[Irons]

Oh No!!! People stop buying bling and grills and gold is gonna tank!!




I think not..these talking heads are full of it.

[pay dirt]

Another gold bashing article: this guy says its better to put money in Intel stocks as gold is a horrible. Weakest arguments have read in awhile its laughable. Says it didnt protect the Aztecs or Mayans, or people from pirates. This is the guy that will be screaming "This cant be Happening"! when the time comes.

Is Gold a Safe Haven or Illusion?

http://newsblaze.com/story/20100519171430levy.nb/topstory.html

0
diggs
diggBy Michael Levy



If you have $10,000 to invest right now what do you feel will be your safest investment, Intel (INTC) Closing price on 05/18/10 $21.46 or the ETF (GLD) closing price 05/18/10 119.58.

In three years time, which will bring you the best and safest return on your capital? Firstly, understand I am not recommending anyone to buy or sell either, although I do own Intc. I am not qualified to give tips on stocks, nor do I feel is anyone else. Investments are a personal quest and anyone who feels like dipping their feet in the water needs to do their own research and not listen to the tips of stock market gurus, who may have a good run for a short time.

That said, lets look at which investment makes the most sense from a simple mans point of view. The best criteria is, which one of the two can you sleep easy at night owning. Which one may make your stomach churn and which one allows peace of mind. Let's look at the facts when considering a safe haven in either stocks.

First the gold stock GLD ... The investment seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.

One of the main reasons gold is sought in times of turmoil is it has the myth attached to it that it is a safe haven in place of money ...Wrong! Gold has never saved anyone in times of turmoil. In the last world war, the few rich Jews of Europe that held gold and diamonds as a safe haven went into the gas chambers along with all the many poor Jews... Gold gave no protection. Likewise the Mayans and Incas were wiped out by the Spanish and having gold was one of the reasons they were slaughtered. In turn, the Spanish galleons carrying gold were attacked by British pirates. If they never carried Gold and silver treasures the pirates would have no reason to attack. So, far for being a safe haven, gold attracts robbers and murderers.

Gold coins will always have some value, however, in times of turmoil, if people think they can escape a tyrant or riots by having gold coins, well, ask yourself what an angry mob would do with someone who has a pocket full of gold. So, when people realize gold is not a safe haven, the ETF; GLD many not do so well.

Another myth about gold is it is a second currency...Wrong. Gold is not a currency. It came off the gold standard in 1971 and it does not back any currency. If one countries currency weakens then other counties currencies gain. In the weaker currency, exports get cheaper and that is good for the companies in that country. Also imports get more expensive so less is imported. Eventually the weak country recovers and the roles are reversed. That is what is happening now with the Euro and it is a healthy market that allows that to happen. It certainly is no reason to own gold. For people who want to speculate, then trading currencies of Forex markets makes more sense than gold. I do not trade currencies now as I feel it is too risky at my time of life and I never could get that one right anyway.

With the price of gold around $1230 an ounce, it may slow the sale of jewelry, as less people will be able to afford to buy. With less physical demand and more and more supply each year, the only way gold will keep going up is if the intellectual propaganda story tellers, spin doctors, vested interested experts and fear mongers, get the coverage in the media. to brainwash people, who cannot work out the complexity of gold.

Now, how about Intel (INTC) ... This one is easy.


•It has a yield of 3 %.

•It has super management, one of the best run companies in the world.

•It has terrific pipeline of products for the foreseeable future.

•Its research is second to none.

•It has a reasonable PE that gives the stock room to grow.

•Its products are in most computers and will be in cell phones more and more.

•Its last conference call gave great guidance for the rest of the year as did other large high- tech companies.

I could go on and on about the innovations at Intel, but do not take my word for it. Do your own research and invest in what you feel comfortable owning. In three years time you can look back and see if you made the right choices.
So, the best safe haven for me between gold and hi quality stocks is no contest.
Michael Levy is a professional optimist. He is an international radio host and the author of nine inspirational books including "Invest With A Genius".

[Sturdly]

Wow, what great choices this guy offers. Guidance from those always forthright and honest Corp. Board members of yield at 3% ? Wow that'll sure keep up with inflation. Or a paper promise as a substitute for physical PM's? Offer two bad choices and pick the least worst. This guy probably loves two party politics too. I hope no one is paying for this advice and DYODD's


Like the Zepplin song, but I paraphrase. If it keeps on raining the "Levy's" gonna break.

[Irons]

Another gold bashing article: this guy says its better to put money in Intel stocks as gold is a horrible. Weakest arguments have read in awhile its laughable. Says it didnt protect the Aztecs or Mayans, or people from pirates. This is the guy that will be screaming "This cant be Happening"! when the time comes.

Is Gold a Safe Haven or Illusion?

http://newsblaze.com/story/20100519171430levy.nb/topstory.html


0
diggs
diggBy Michael Levy



If you have $10,000 to invest right now what do you feel will be your safest investment, Intel (INTC) Closing price on 05/18/10 $21.46 or the ETF (GLD) closing price 05/18/10 119.58.

In three years time, which will bring you the best and safest return on your capital? Firstly, understand I am not recommending anyone to buy or sell either, although I do own Intc. I am not qualified to give tips on stocks, nor do I feel is anyone else. Investments are a personal quest and anyone who feels like dipping their feet in the water needs to do their own research and not listen to the tips of stock market gurus, who may have a good run for a short time.

That said, lets look at which investment makes the most sense from a simple mans point of view. The best criteria is, which one of the two can you sleep easy at night owning. Which one may make your stomach churn and which one allows peace of mind. Let's look at the facts when considering a safe haven in either stocks.

First the gold stock GLD ... The investment seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.

One of the main reasons gold is sought in times of turmoil is it has the myth attached to it that it is a safe haven in place of money ...Wrong! Gold has never saved anyone in times of turmoil. In the last world war, the few rich Jews of Europe that held gold and diamonds as a safe haven went into the gas chambers along with all the many poor Jews... Gold gave no protection. Likewise the Mayans and Incas were wiped out by the Spanish and having gold was one of the reasons they were slaughtered. In turn, the Spanish galleons carrying gold were attacked by British pirates. If they never carried Gold and silver treasures the pirates would have no reason to attack. So, far for being a safe haven, gold attracts robbers and murderers.

Gold coins will always have some value, however, in times of turmoil, if people think they can escape a tyrant or riots by having gold coins, well, ask yourself what an angry mob would do with someone who has a pocket full of gold. So, when people realize gold is not a safe haven, the ETF; GLD many not do so well.

Another myth about gold is it is a second currency...Wrong. Gold is not a currency. It came off the gold standard in 1971 and it does not back any currency. If one countries currency weakens then other counties currencies gain. In the weaker currency, exports get cheaper and that is good for the companies in that country. Also imports get more expensive so less is imported. Eventually the weak country recovers and the roles are reversed. That is what is happening now with the Euro and it is a healthy market that allows that to happen. It certainly is no reason to own gold. For people who want to speculate, then trading currencies of Forex markets makes more sense than gold. I do not trade currencies now as I feel it is too risky at my time of life and I never could get that one right anyway.

With the price of gold around $1230 an ounce, it may slow the sale of jewelry, as less people will be able to afford to buy. With less physical demand and more and more supply each year, the only way gold will keep going up is if the intellectual propaganda story tellers, spin doctors, vested interested experts and fear mongers, get the coverage in the media. to brainwash people, who cannot work out the complexity of gold.

Now, how about Intel (INTC) ... This one is easy.


•It has a yield of 3 %.

•It has super management, one of the best run companies in the world.

•It has terrific pipeline of products for the foreseeable future.

•Its research is second to none.

•It has a reasonable PE that gives the stock room to grow.

•Its products are in most computers and will be in cell phones more and more.

•Its last conference call gave great guidance for the rest of the year as did other large high- tech companies.

I could go on and on about the innovations at Intel, but do not take my word for it. Do your own research and invest in what you feel comfortable owning. In three years time you can look back and see if you made the right choices.
So, the best safe haven for me between gold and hi quality stocks is no contest.
Michael Levy is a professional optimist. He is an international radio host and the author of nine inspirational books including "Invest With A Genius".


That article should be in the joke of the day thread!

[Anakin]

what an angry mob would do with someone who has a pocket full of gold. So, when people realize gold is not a safe haven, the ETF; GLD many not do so well.For 4000 years gold has been the premier currency, angry mobs notwithstanding.

[Bobthetomato]

They want to call a bubble since they all missed the tech one. Plain and simple: GOLD IS MONEY! not some piece of junk stock that has no earnings and no future.

[latemetal]

These guys did not see gold going up-so I'm going to believe them when they say it is going down? Well, they will be right someday.:reddy:

[Silver-Gold-Palladium]

It really doesn't matter what CNN has to say about gold, because JP Morgan Chase has a multi-million dollar ownership stake in them. They're a propaganda outlet that doesn't matter if you're a truth-seeker.