I feel bad for all those low information investors who listened to the Gold commercials.

[Statistical]

You know the ones on talk radio and late night TV talking about how gold is so much safer than the market. The ones convincing people to liquidate their IRA/401K and put it in gold.... :(

Euro down, riots in Greece, unemployment numbers bad, market tanking, LIBOR spreads blowing out, dollar strengthening and gold still can't rally. Not good. That is all the conditions for gold to be hitting higher highs each day. Instead it is $60 off the peak.

Wonder how many people believed the hype of gold going to $2500 an ounce just in time to buy it at the peak.

[AngryAmish]

1. I have always had a prejudice against gold bugs

Because they are gold bugs. I lack enough information to make an intelligent purchase of gold (One needs to know about just about everything to make an intelligent decision on gold).

So spread your risk as far as possible, don't pay fees or loads and hope for the best.

[MadHound]

3. Actually gold isn't that hard to invest in,

All you have to do is be able to predict a major catastrophe, war, etc.

This last run up to gold's current peak was easy to predict, Bush was selected in '00. I knew right then that gold would be a good investment because the Bushes bring war and economic ruin. The rate of return on gold bought in '00 was tremendous, but now is the time to sell.

If you still want to get in on gold fever without buying the actual metal, there are mutual funds for gold dealers that are doing quite well. These dealers make money when the price goes up and when it goes down, just so long as gold dealing is active

[Art_from_Ark]

16. There is a major catastrophe in the making

It's called, euphemistically, the Gulf Oil Spill

[nadinbrzezinski]

26. Bingo, still remember telling hubby in '04

some goes to gold.

:-)

Happy as a clam about that.

[charlesg]

2. They're probably the same folks who signed up for LifeLock

and gave them their Social Security numbers and all that...

[hobbit709]

4. The famous statement about candy, birth and time.

[mrcheerful]

5. The current gold crap reminds me of the silver crap of the late 80's when it was predicted silver

would keep going up after it hit the $35 an ounce mark, I knew one survivalist nit wit who bought $25,000 of silver ounce bars right before the rich asshole dumped all of his silver onto the market and silver ended up being worth a $1.40 an ounce. How much you wanna bet that the same thing will happen with gold?

[Statistical]

8. It certainly could happen.

European central banks have a LOT of gold. Liquidity crisis in Euro could result in some forced cental bank selling.

Central bank unloading some gold (measured in tons) will quickly swamp Joe Six Pack buying a couple ounces from Goldline.

[Art_from_Ark]

12. Joe Sixpack isn't a big player in the gold market

Really, at $1200/ounce, how much can the average Joe afford?
The big players are countries-- particularly India and China, but other countries have been buying as well. The only effect Joe Sixpack has on the gold market is on the premiums that dealers are charging for the bullion gold coins, especially those made by the US Mint.

[Art_from_Ark]

9. In the late '80s, silver was in the doldrums

It was around $4.00-$5.00 an ounce for most of that time (1986-89), and I was buying 90% US silver coins for 3.2 to 3.6 times face value. If your friend had bought $25,000 in silver bars at that time, and sold them now, he would be making a very nice profit.

And silver has not been at the $1.40 level since 1970.

I get the feeling you just made up that story.

[Statistical]

10. While silver never went that low depending on when he bought he could still be underwater.

It is possible he made a mistake on the time and was thinking early 80s. The spike in silver was in early 80s.

Better chart:
http://www.futuresbuzz.com/si.bmp

[Art_from_Ark]

11. The spike in silver was in January 1980

It briefly hit $50/ounce, but no one was buying at that price, and dealers were offering $25/ounce *at most* from walk-in sellers. The word came out that the Hunt Brothers were trying to corner the silver market, and the Feds were investigating. That is what caused the silver price to crash. It was never really $35/ounce, although it is conceivable a dealer offered bars at that price when the official price was $50. But since this spike in price was so short-lived, I have my doubts. Also, the silver price was still in the teens in 1981, when I cashed out the last of my 90% silver coins at 9X face.

Your graph is a bit disingenuous, because it compresses 20 years of activity into a short blip.

Also, the other person's story is so full of errors that I'm still calling it made up.

[mrcheerful]

17. yeah early 80's I wasn't sure when I just remembered he thought he was going to be filthy rich off

silver, though I knew it was in the 80's.

Edited to add, yeah was supposed to be $2.40 when he sold out not $1.40, so long ago and so many stupid get rich schemes from this person it was hard remembering what when and what he tried. In the late 90's he was buying Chinese SKS's and converting them over to AK-47's so he was ready for the race war of 2000 when the computers crashed. He was big for the fear stuff.

[Art_from_Ark]

27. Silver hasn't been $2.40 since the '70s

that is, before the Hunt Brothers fiasco.

The lowest it has fallen in the 30 years since the 1980 crash has been in the $3.50 range, which it reached in the early '90s. The lowest price during the '80s was $4.85 in May 1986.

Maybe your friend was just bullshitting you.

[Art_from_Ark]

6. Gold is up $252 (21%) over its price of a year ago today

It is up $50 in just the past month.

The hype about $2500 gold is bad, but gold isn't exactly tanking.

If the euro is in bad shape, it could have a temporary negative effect on the gold price if European central banks unload some of their gold holdings in response.

The stock market tanking could have a similar effect, with investors unloading gold, at a profit, to cover losses in other parts of the market.

Riots in Greece wouldn't have a major impact on the gold price. Greece is a small country, with limited world influence.

A strengthening dollar usually has a negative effect on the price of gold.

[Statistical]

7. Being up 21% from a year ago is good (of course S&P 500 is up 20% from year ago too).

My concern is more that the commercials are so one sided. I own some gold (about 10% of portfolio) and use it more like insurance than an investment.

The problem is the commercials are the equivalent of getting rich flipping houses scams but with Gold.

When Glen Beck is promoting Gold and Sears/Kmart get into the gold biz I think that is sign of a top.

[Art_from_Ark]

13. I will agree that the hype is bad

Any time there is a bull market, it attracts the scammers, whether it's metals, stocks, houses, whatever.

People shouldn't dabble in gold if they don't know what they're doing.

[DFW]

14. It makes a HUGE difference who you buy from

It's fine and dandy that Gold is up 20+ percent, but in what form did you buy gold, and from whom?

Glenn Beck's darling, Goldline, sells common foreign gold coins, minted in the tens or hundreds of millions
(i.e. NOT rare) at a premium of something like 40%. As these coins are worth less than 10% over their gold
value, if you invested with Beck's pals, you paid something like an extra 30% for the privilege, some of which
went directly into Beck's pocket.

If you buy a big enough package of these things, you can go directly to a wholesaler and get them at the price
Goldline pays for them, i.e. 10% or less. Old (i.e. before 1933) US gold coins retain a market premium for their
collector value, as well as their state of preservation, and are a different story altogether. Back home in Dallas
is one of the biggest wholesalers of these things, and I know the guys there. They don't play much with the kind
of common foreign gold that Goldline sells, unless someone insists on placing an order with them, but I know that
they make something like 2% or 3% max when they take these orders. It's legit for Goldline or another retailer to
charge more to an individual who wants to order a small quantity, as the costs are greater, but to charge 40% is
like charging $40 to cash a $110 check. If you can get away with it, nice for you and too bad for your victim,
but it's still not ethical.

There are ALWAYS "experts" out there, who seize on a particular trend and say they know which way the wind blows.
If gold goes from $1000 to $1200, then they know for sure it is going to $1500. If gold goes from $1200 to $900,
then they know for sure it going to $500. Both "expert opinions" are likely to be full of shit.

[Art_from_Ark]

15. Yes, it does make a difference who you buy from

I usually buy from Japanese dealers, since I am in Japan. I usually don't mess with strictly bullion coins, since they have almost no numismatic potential (there are some exceptions with American Eagles), and the dealer spreads are too high. But old (pre-1933) US gold is being sold by some Japanese dealers for around the bullion price, and the US price is usually higher due to higher demand from US collectors.

There was a large coin dealer from Dallas at an international show recently in Tokyo. Their name begins with H. Is that who you were referring to?

[DFW]

18. That's the one

They must have sent their new Brazilian guy. He has nothing to do with bullion gold, but he is a good guy,
and his English is so good, he sounds like he's from Dallas. You'd never guess he was from Brazil.

[Art_from_Ark]

25. When I went by their table, it was staffed by a lady

The Brazilian guy might have been away from the booth when I was there.

At any rate, they had some of their pricey stuff on display-- nothing in the way of bullion, as far as I could see. From what I could tell, and what I heard though, there wasn't a whole lot of interest in the really expensive foreign (non-Japanese) stuff.

[DFW]

30. They wouldn't have been there to sell anyway, more to display

They were probably concentrating on getting auction consignments, as their auction business has been attracting
consignments from around the world, including the Pacific Rim. It seems people are tired of being either ripped
off or treated like trash by the older firms. Was the woman blond, short, very sharp and friendly, about 50? She
is very sharp, occasionally goes to events with them. Their gold division wouldn't have been there at all, as
all their sales are run through Dallas. They don't retail common gold anyway, they just supply other dealers and
marketers, although a private person with a large order is welcome to approach them. One of the reasons that outfit
got so big so fast is because they treat little guys as if they were big guys, and if they are not swamped, they'll
take the time to explain stuff to you, even if you're an unknown nobody. I've always liked the people who work there.

[Art_from_Ark]

32. Ok, that explains a lot

There was at least one lady at the show who matched your description, but I seem to remember her being at the PCGS table. At any rate, H had a few slabs on their table containing some pricey coins, I just assumed they were for sale. Unfortunately, I was a little hesitant to talk with the dealers with the high-priced stuff, so I guess I missed out on an opportunity to make their acquaintance. I assume they'll be in town for next year's show, though, so I'll be sure to call on them then.

[DFW]

35. They are in general really good people

Not at all what you'd expect from such a high brow firm. I'm not at all thrilled with PCGS, especially their overseas people.
Just bad chemistry, I guess, although I hear the same thing from a LOT of Europeans about their French staff (I think NGC
secretly loves it). I called down to Dallas today, and they confirmed that Debbie from their marketing division was there along
with their new Brazilian guy. They were indeed looking for consignments and contacts, not for sales. ALL their staff is very
approachable in my experience, both European and Stateside. Don't be hesitant to talk to them just because they're big. This
is not Christie's or Sotheby's with their noses stuck a mile in the air. They are down to earth. This is the company that kept
a guy on for six months on their books, even though he freaked out and became a religious nut and his wife left him. They kept
him "employed" so that he wouldn't lose his health insurance while he was looking for another job. They probably can't afford
to do that with everyone now, since they are so big, but this guy had been with them for ten years, and the head guys felt sorry
for him. How many companies do you know whose CEOs do THAT kind of thing?

[Art_from_Ark]

40. Thanks for the information

It looks like I missed a good opportunity to make contact with what sounds like a pretty good company. Do you know if they will be at any of the other Japanese shows before next year's TICC?

[DFW]

43. No idea, sorry.

But you could ask them by contacting their department that does the Asian shows.

[avaistheone1]

34. Gold has done very well over the last 8 years, as well

as over the long term.


scroll down to the second chart.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2465019

[DFW]

36. Gold has done well, yes, BUT

If the guy selling it to you takes a 50% service charge for his trouble, how well do you do? If gold is $800 an ounce,
and goes up to $1200, that's a 50% gain. BUT, if you pay $1200 an ounce when the coins you are buying are only worth
$820, then your investment sucks. You have to buy it from an honest broker, or you're sunk. It's like some sleazy bank
investment adviser putting you into some cool fund that pays a guaranteed 15% interest a year, and charges "only" a 15%
service charge annually. Then it isn't so great any more, is it?

I know well what gold has done, and since I know the big wholesaler in Dallas, I can get amounts that mere mortals like
myself can afford at wholesale prices. The same coins that Goldline sells their "investors" at 50% premium over melt, I
can get at 5% over melt, the same price they would charge Goldline. But if you want to place an order for some real money,
they'll probably accept it even if you're not a Goldline. They're pretty loose about that as long as it doesn't cost them
more than they can make on the deal.

[AllentownJake]

19. I'm long bullets, canned goods, and liquor nt.

[hugo_from_TN]

20. Buy some can openers also.

They'll soon be worth their weight in gold (or bourbon).

[AllentownJake]

21. I just need one

Opening cans for dumbasses that don't have an opener is now a trade-able commodity. ;-)

[cliffordu]

23. I'm long on toilet paper and Depends

[JI7]

22. they are the ones complaining about high taxes and other regulations

because they think they are going to become rich.

[Odin2005]

24. Gold Bugs = idiot Libertarians and Survivalists that want the Gold Standard back.

[Art_from_Ark]

29. That's quite a blanket statement

Perhaps some of those "idiots" just don't like seeing the value of their paper money being constantly eroded, and want to have something tangible that has been considered money around the world since money was invented.

[havocmom]

28. even the ones that got hosed from believing Beck?

Wonder if even 1% of the Beckheads will connect any three dots.

[Radical Activist]

31. I wonder if Rush, Glenn Beck and all the others will apologize to their listeners

who made bad investments after being encouraged by ads the conservative talk radio hosts recorded. It's really bizarre how much they keep pushing gold investments. Maybe they can't get many other advertisers.

[krabigirl]

33. Well, I personally wish I had bought some about 4 years ago..husband wouldn't listen.

lol he said he'd listen to me from now on :)

[DFW]

37. But if you do, DON'T buy from some big marketer with huge advertising costs

You'll be paying for their advertising costs when you buy their gold. If you can find a wholesaler who takes retail orders,
that's the best way to buy gold. What matters is the premium you pay over the gold price. This does NOT apply to old US coins,
which have a market of their own, and are sometimes still good deals with big premiums, as these premiums have always been
a part of their market price.

[bobbolink]

38. I've always thought it was sleazy of Thom Hartmann to make those commercials.

It just doesn't enhance his image at all.

[iceman1]

39. lol as this page loaded there was an advertisement for gold on this page

[Swamp Rat]

41. Not me

They voted for Bushler and nutjobs like Rand Paul, so I have a bone to pick.

[Blue_Tires]

42. i've always been suspicious of them...

because on a local radio station one commercial is all about "buy, buy, buy GOLD!!" or "we just found a huge 100-year-old stash of U.S. gold coins in some old vault, so buy them while you still can!"

and in the SAME commercial segment they have the "are you short on cash? take all the useless or broken old gold jewelry in your house and SEND IT TO US for a fast check (of about 5% its real value)!!"