Gold hits 25 year high as concerns about economy loom

[garybeck]

when economists worry about inflation and the economy, they buy gold. the recent skyrocketing of the price of gold should tell us something. the experts are worried.



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LONDON (Reuters) - Gold rallied to hit a new 25-year peak in Europe late on Monday as fund managers shifted more money into the metal on worries about inflation, economic growth and the dollar, analysts said.

The metal traded erratically during the day, climbing in Asian business to its highest since March 27, 1981, before slipping 1.6 percent in Europe and then rebounding to set a new high.

The market is targeting the key level of $550 an ounce.

full article:
http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2006-01-09T165943Z_01_KRA961147_RTRUKOC_0_UK-MARKETS-PRECIOUS.xml&archived=False

[Deja Q]

1. Economists can't see beyond short-term profits.

The crash will be wonderous to see.

Then it will be the last thing we will ever see.

[Crazy Dave]

3. Not only that....

have you noticed all the "invest now", "buy gold", "recession proof", commercials and info-mercials on TV late night and on the radio?
Anybody who would invest with somebody that has to troll late night for investors is looking for trouble.

[garybeck]

7. I don't konw about that....

I was hearing the same late night commercials 5-6 years ago. Instead of calling up the advertiser, I went out and bought a couple of gold 1 oz. coins at about $290, just to see what would happen. Those coins are now worth about $550 each! Actually if I check again it probably has gone up again; it's going up every minute practically. And it was those late night commercials that got me interested in the first place...

[Crazy Dave]

16. That's good to know

I've always very cautious, not much of a risk taker.

The one good thing I like about gold is that it can literally be used as currency or to barter with world wide, no matter what currency system the country you're in. Need to leave the country fast, got about $100k in gold coins or gold bullion, you got better options if you ask me.

Another thought. If the world as we know should come to an end and all markets collapse, gold would be worthless but you'd be surprised how much something like a cheap .22 cal. bullet will be worth to trade or hunt with. Something you can buy cheap, lasts a long time in storage and a lot can be stored in a small area.

[maxsolomon]

2. i hadn't realized it passed the value of BC Bud 3 years ago!

I really must spend more time analyzing these things...

[Rainscents]

4. Well, China stated last week, they might ask America to pay their

loans back in bond. If this happen, we will go into instant recession!

[garybeck]

5. ways to secure your savings?

if we are about to be hit with a dose of inflation, besides buying gold, what is a good thing to do with your money?

supposedly Bill Gates sold all his dollars and bought Euros. Can you just go to the bank and buy Euros? Or another currency? I've also heard you can purchase gold coins with cash, but I wonder how much longer the price of gold can continue to jump...?!

I've also heard of people "selling dollars short" which means when the value of the dollar goes down, you make money. but I think there's a minimum investment and it's kinda risky.

Obviously I don't know much aobut this, and I don't have a lot of cash on hand myself, but if anyone has some simple suggestions for how to secure some of your savings, or place a "hedge bet" against a devaluation of the dollar, maybe some readers will benefit.

[schmuls]

9. No one answered this poster's question about buying other currency. I

would also like to know.

[Horse with no Name]

15. I'm not a financial advisor

But I did notice once on my PayPal account that it would let me buy Euro's with my American dollars.

[leveymg]

6. How does that graph track the Euro or the Wan?

It seems the curve would be a lot flatter if we look at other currencies.

Kinda says more about the relative health of the US economy than anything else.

[garybeck]

8. yeah, well, most of us are in the US... I think what it shows is that

the US economy is in for some tough times. The dollar is doing poorly against other currences, and against gold. What does that tell you?

[leveymg]

12. Same thing. We're not being well served by our gov't and institutions,

and the rest of the world is about to discount the value of dollar-denominated holdings accordingly.

[slackmaster]

10. Somebody's getting set up for a world-class screwing here

And it's NOT the big institutional investors.

I've seen this too many times to be impressed.

[garybeck]

17. "seen this too many times"

how many times have you seen gold at $550 an ounce?

[slackmaster]

18. It happened in January 1980

A lot of small investors got screwed when the speculative wave ended and the price returned to a rational level.

Any increase in the price of gold over and above what it takes to dig it up and process it is fueled by pure speculation, which is being intentionally fueled with fear.

The world is not going to end soon. You are not going to save yourself from economic ruin by squirreling away a few gold bars or Canadian maple leaf coins.

If you think you can beat the big boys by speculating in a small amount of gold, knock yourself out. I think it's a very bad risk.

[garybeck]

19. doesn't it depend on when you get in and out?

If I purchased a few maple leafs when they were $275 each about 6 years ago, that would not have been a bad idea, eh?

Isn't it just like any other commodity, currency, stocke, etc...? Buy low, sell high, right? I would not buy gold now, because it can't go much higher. but I think the fact that it's rising so high means something.

[slackmaster]

20. Hey, if you know how to go back in time that's terrific

Predicting the future is much more difficult than predicting the past.

[garybeck]

21. it just so happens

i heard so many of those late night commercials about buying gold 6 years ago, I went to my local coin shop and bought a couple, when the price was about $275. I only wish I had bought more.

[slackmaster]

23. I have a Maple Leaf that I bought under $300 as well

If I needed cash desperately, that would be among the first things I'd sell (right now).

[ComerPerro]

11. It's funny, because you can listen to right wing radio

and they will tell you that the economy is great. But then, on the commercial break, you hear a commercial where someone is literally telling you to start hoarding gold.

LOL.

Not exactly a sign of a strong economy...

[Dr.Phool]

13. Funny.... I was reading BBC over the week-end and the headline was

"Bush shrugs off bad economic news".

The last time gold was this high (and even higher) was during Reagans recession of the early 1980's.

[ComerPerro]

14. LOL. That's about all Bush does about it

and that seems to be his approach to any and all bad news:

Shrug it off, and fire the person who gave him the bad news.

[upi402]

22. I asked about buying gold and everyone said I was nuts

Or at least not optimizing potential investments by buying gold.
I've been advocating that for months.
As a person who just cleared all credit card debt I'm finally ready to buy some gold!

[slackmaster]

24. If you're like me, the price will start dropping the minute you buy in

:argh: