The case for gold

User Forum Topic
Submitted by scaredyclassic on June 23, 2020 - 6:27pm

Flirting with all time highs, gold seems high priced but not a dumb asset to own over the next few years if you think lots of stimulus money is coming still.

The case for gold always seems strong to me, but it always seems to peter out.

Could this be its time?

Submitted by The-Shoveler on June 24, 2020 - 9:15am.

IMO Gold has just about 0 in real value, it's value is just whatever number people want to put on it.

So it goes up and down for whatever reason people want to use.

OK maybe there is some value for jewelry, rings etc...

Submitted by scaredyclassic on June 24, 2020 - 9:48am.

The-Shoveler wrote:
IMO Gold has just about 0 in real value, it's value is just whatever number people want to put on it.

So it goes up and down for whatever reason people want to use.

OK maybe there is some value for jewelry, rings etc...

i think the value of everything is whatever number people want to put on it.

except for a 9.8 copy of amazing fantasy 15. that has value independently of anything going on in human affairs, or even if human society continues to exist.

Submitted by Coronita on June 24, 2020 - 9:53am.

Do you guys stockpile the ETF representing gold are raw bullion?

Submitted by scaredyclassic on June 24, 2020 - 11:46am.

Coronita wrote:
Do you guys stockpile the ETF representing gold are raw bullion?

CEF

Submitted by gzz on June 24, 2020 - 3:06pm.

I have more silver than gold. So far the wrong allocation, as gold has outperformed going from 1200 to 1750 while silver only 15 to 18. Though you can easily sell silver for 20-21/oz because there is a shortage of physical silver for sale. I don't expect that premium to last however, probably in a few months the "physical premium" will go back to its normal $0.75 - $1 an ounce.

Silver shows a higher propensity to spike however. It hit 50 about 15 years ago, and in 1980 it also hit 50, which is an inflation adjusted 150/oz.

Governments hold gigantic gold reserves, but few have any silver reserves. Either a decision to stockpile silver, or a decision to sell gold, could let silver greatly outperform. China in particular has been a big buyer of gold, even though they had a silver rather than gold standard for most of their history.

The recent low of $250 for gold was partly attributed to the UK government selling off its gold stockpile:

"The UK eventually sold about 395 tons of gold over 17 auctions from July 1999 to March 2002, at an average price of about US$275 per ounce"

My two favorite gold coins are 20 francs that are .1873 oz (both French and Swiss are the same size) and $5 us coins that are .2324 oz. A few years ago using ebay and credit card promos, I was able to get them at 2 or even 3.5% below spot price when spot was $1200. Wish I had got a lot more.

1oz bars and coins are heavily targeted by counterfeiters, and also harder to sell.

Submitted by gzz on June 24, 2020 - 3:10pm.

ETF management fees add up over time. For long term holdings and SHTF scenarios, go physical.

Right now GLD is 0.4% a year. I think it used to be higher.

When it first came out, it was 1/10 of an oz per share. Now at 165 with gold at 1775, it is obviously less than this because of management fees over many years.

Submitted by pinkflamingo on June 28, 2020 - 11:01am.

With the way the fed/gov is printing, it seems like a good bet. We recently acquired some.

With that said, I wonder if precious metals will dip during the upcoming crash as it did back in march. I don't fully understand why gold and silver dips in a market crash. My guess is people have to sell to cover liquidity issues, in which case why not buy during the next crash? Rich would say that is trying to time the market, which is why we bought some now.

The question shouldn't be, should you own gold, but how much. What do folks here think is the right allocation of precious metals as a percentage of their portfolio?

Submitted by scaredyclassic on June 28, 2020 - 11:47am.

Not sure.

But how to balance a portfolio today?

bonds seem like a sucker bet.

Could gold replace the bond or cash portion of a portfolio.

I have more faith in gold than bonds or cash i think.

Still, somewhat volatile. But maybe more stable than bonds or us dollar in future?

Lets say 8 to 12 perc?

Submitted by pinkflamingo on June 30, 2020 - 7:45pm.

We are starting with 10 as insurance.

Submitted by scaredyclassic on June 30, 2020 - 8:24pm.

Wpm and rgld. Precious metal mine play. Worth reading about if interested in metals hedges.

Submitted by svelte on July 16, 2020 - 7:06am.

It looks like some folks favor gold because it is untraceable - hides illicit activities.

https://www.sandiegouniontribune.com/new...

Submitted by gzz on July 16, 2020 - 1:47pm.

Problems with gold stocks:

Labor troubles, nationalization risk, they are really bad for the environment and risk divestment and drastically increased costs because of stronger regs.

Canadian miners are often stock scams more than actual companies.

Alternatively, you can own one of these:

https://www.jmbullion.com/2020-1-oz-brit...

https://www.jmbullion.com/20-saint-gaude...

Submitted by scaredyclassic on July 16, 2020 - 3:38pm.

The environmemtal problems are real bad. Shit. Maybe i hate gold too.

All those risks mentioned could potentially benefit gold price tho. Inc production costs

CEF stock appreciates as long term capital gains, not ordinary inc. No idea how they do that its just bullion. gld Taxed as ord incone

Ive made a little paper gain on some multi year purchases. Its hard for me to buy and harder to sell.

When its down im like fuck that im not taking a loss. When its up im like fuck all the johnny comelatelys ima ride this one up.

I am an untrader. I prefer money in a bank.

Still id like to get out with a decent profit and pay off the mortgage. I feel, with no basis (other than the insane rants of biased fund managers and other internet lunatics) in fact that gold should be 3000 an ounce and silver 75.

Therefore i was going to start selling at 2100 and continue selling on its way up, unless this is the near peak, in which case ill prob. Be stuck with this position for 5 or 10 years. Or life. Maybe not such a dumb hedge.

But how much is too much. 5 % 10%
And 10% of what? Total net worth? Total non retirement monies?

I am a very bad money mgr. I much prefer throwing money in a 401k and forgetting about it.

All i know is today 10,000 in the local bank will get you 10.00 in interest and the fed govt thinks nothing of dumping a trillion into the economy at the drop of a hat. The cost of buying gold shared is transction free nowadays and if it does start to attract some real money, 3k isnt a fantasy. And the downside rosk. Id say 1250 was a pretty firm base

Submitted by The-Shoveler on July 16, 2020 - 4:14pm.

Never been a big fan of Gold, But if I get the chance to buy SLV at 13 and around 10 again I will take advantage of it, That was a nice ride to 17 when I got out.

About as good as catching the S&P at the lows of March.

Submitted by scaredyclassic on July 16, 2020 - 4:43pm.

cef is 70 perc gold 30 perc silver i think

Submitted by The-Shoveler on July 16, 2020 - 4:56pm.

Hmmm CEF is one I will keep an eye on as well.

I kind of like Silver a bit more than Gold to tell the truth IMO more upside potential and relatively stable/safe below 15 IMO.

Submitted by pinkflamingo on July 16, 2020 - 9:30pm.

Silver is definitely cheaper. In fact, silver/gold ratio is at all time highs. And if you look back at the 08 recession w/e to QE, silver did just as well in terms of percent gains if not better. We own about 50/50 split between CEF/PSLV

We would like to positioned our portfolio at 20% metals by end of next year. Waiting for the market to dip to get the other 10% in hopes that metals will also dip due to margin calls again as in Mar. When will this mania end? Then again, if every thing dips, buy gold or just buy snp?

Why 20%? Because Golden butterfly, Dragon portfolio and the likes of them recommend 20% Gold. Are these portfolios hyped? Probably. But this year so far we are at 9 trillion, between fed and gov. Some predict we will need another 10 before this is over. I can't imagine gold/silver going down with the current fed/gov policy.

I would like to look into mining. Gold and silver maybe even uranium. But so far I have not determined what I should be looking for. And I am hesitant to buy into something that I do not understand.

Submitted by scaredyclassic on July 16, 2020 - 9:50pm.

pinkflamingo wrote:
Silver is definitely cheaper. In fact, silver/gold ratio is at all time highs. And if you look back at the 08 recession w/e to QE, silver did just as well in terms of percent gains if not better. We own about 50/50 split between CEF/PSLV

We would like to positioned our portfolio at 20% metals by end of next year. Waiting for the market to dip to get the other 10% in hopes that metals will also dip due to margin calls again as in Mar. When will this mania end? Then again, if every thing dips, buy gold or just buy snp?

Why 20%? Because Golden butterfly, Dragon portfolio and the likes of them recommend 20% Gold. Are these portfolios hyped? Probably. But this year so far we are at 9 trillion, between fed and gov. Some predict we will need another 10 before this is over. I can't imagine gold/silver going down with the current fed/gov policy.

I would like to look into mining. Gold and silver maybe even uranium. But so far I have not determined what I should be looking for. And I am hesitant to buy into something that I do not understand.

GDX is a diversified miner etf. Risky. Also gdxj for junior miners. Pretty ez way to lose money. Or maybe make some?

Submitted by scaredyclassic on July 17, 2020 - 8:12am.

gzz wrote:
Problems with gold stocks:

Labor troubles, nationalization risk, they are really bad for the environment and risk divestment and drastically increased costs because of stronger regs.

Canadian miners are often stock scams more than actual companies.

Alternatively, you can own one of these:

https://www.jmbullion.com/2020-1-oz-brit...

https://www.jmbullion.com/20-saint-gauden-gold-double-eagle-almost-uncirculated/

Many believe any form of paper gold, including gld, cef and so on, ultimately is a leveraged scam and believe if you dont own a real su b stance u have nothing. Which seems possible to me. But jeez...its a little extreme

Submitted by gzz on July 17, 2020 - 8:46am.

We call these people goldbugs. They've been saying 5000, 10,000, 50,000 gold for decades. They missed out on a generational bull market, gaining 50% from the bottom while stocks and real estate greatly outperformed that.

My view is there chance that GLD etc don't have the real gold they claim is low, but not zero. After Enron, Worldcom, AIG, Wirecard, and many other financial scams, why trust Wall Street more than you have to?

You have to weigh this against the risk of physical ownership: lost, stolen, forgotten, etc.

There's also management fees, though they are not as bad as they used to be. Still, when the market interest rate is under 1%, a 0.4% management fee is pretty bad. CEF I believe is even higher, which is why it has a consistent discount.

Submitted by zk on July 17, 2020 - 10:52am.

gzz wrote:

You have to weigh this against the risk of physical ownership: lost, stolen, forgotten, etc.

I used to work with a gold bug. He told me he had a decent percentage of his assets in physical gold, and that it was in a safe in his basement.

If I owned that much physical gold, I wouldn't tell anyone that I had it, let alone where it was stored. I wouldn't tell my mother where it was stored, let alone some guy from work.

When I asked if he was afraid of it being stolen, he said, "aren't you afraid to have your wealth in ones and zeroes on somebody's computer?"

Which is an interesting point. Unless I'm mistaken, all (at least most) bank accounts, stocks, brokerage accounts, etc (and some bonds, too?) are ones and zeroes on somebody's computer. Sure, you get monthly statements and all. But it's still vulnerable to e-theft just like physical gold is subject to theft.

Other than stupid mistakes on the part of the holder of the electronically-kept asset (e.g. falling for phishing), though, I don't think I've ever heard of such theft.

I imagine they're backed up in lots of different computers in different locations. So even if your the city where your bank is headquartered is nuked, your account should survive.

I would be more worried about a major hacking event than anything else, I guess.

Not making a point, I guess. Random thoughts on theft or other loss of assets. I'm kind of making guesses, and I'd be interested to hear from people with more knowledge about it.

Submitted by scaredyclassic on July 17, 2020 - 11:13am.

The bible seems to indicate that all stored wealth will pass away.

Your gold and your silver are rusted; and their rust shall be for a testimony against you, and shall eat your flesh as fire. Ye have laid up your treasure in the last days.

So in addition to theft, theres also spiritual risk. Im willing to accept that tho. So the risk of holding paper assets seems lower than the risk to my soul.

Submitted by svelte on July 17, 2020 - 2:10pm.
Submitted by pinkflamingo on July 17, 2020 - 4:22pm.

I do remember reading somewhere that the amount gld is leveraged. To what degree? idk. I've read that CEF hold at least 97% of total net assets in physical gold and silver at the Canadian Mint. Tax savings is also great.

CEF also allows shareholders to redeem actual bullion on a monthly basis, though the fees to conduct such redemptions are quite steep and an investor must own 100,000 units to qualify.

If you are worried about redemption there is also the equivalent of CEF for Australia. AAAU. Like cef, it's backed by the aus mint. It doesn't have the tax savings, but you can redeem it for lesser quantity, gold coins.

Submitted by scaredyclassic on July 19, 2020 - 10:39pm.

Gold does seem silly if u think about it too much, but then again so do mortgage backed securities

Submitted by Coronita on July 21, 2020 - 10:01am.

Gold at 1840/ounce. Silver at $21.

My bullion is 30% above what I bought them at starting in 2016. Not great return, but I'll take it.

Submitted by The-Shoveler on July 21, 2020 - 10:10am.

I find Silver is actually quite volatile, I have traded it probably 7 or 8 time since 2016 or so for good gains.

IMO contrary to most who hold these commodities they are better traded than held long term.

Just my opinion

Submitted by scaredyclassic on July 21, 2020 - 1:19pm.

Yep. The up and down is very steep.

Im very bad at buying, and selling.

Im good at paralyzed holding. Thats my specialty in fact.

I'd probably be holding at $55 silver

Submitted by The-Shoveler on July 21, 2020 - 1:23pm.

LOL then you will win !!

I still have a few shares of SLV, I am going to put a trailing stop $1 tomorrow.

We will see.

Submitted by scaredyclassic on July 21, 2020 - 11:15pm.

interested in dollar cost averaging into slightly beaten down VNQ real estate etf with an eye toward the future.

Ultimately, I think the best bet long term is everything; VT. It's the only thing , other than gold and silver and maybe (no not really) platinum (SPPP) I feel really comfortable buying and holding longterm. That doesnt mean I think Im going to make money. Just that i don't feel utterly defrauded.

I despise looking at all the fees on old retirement accounts from other employments we've had. .85% a year. the dumbest thing is to leave money in these overexpensive accounts. guaranteed loss long term. need to consolidate

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