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Precious Metals And Commodities: What’s Their Real Value Today?

May 19, 2011 by  

Precious Metals And Commodities: What’s Their Real Value Today?

A lot has been written about commodities and precious metals in the recent past. While some investors believe that we are in the middle of a super cycle for commodities and precious metals, others think that there is already too much speculation built into current prices — that we are in a speculative bubble that will have to burst eventually.

Since discussions about commodity and precious metals prices are often conducted with a great deal of emotion, I hope this article serves the purpose of rationally analyzing what is going on in these markets, what the fair value of precious metals and commodities is today and what the risks and opportunities are going forward.

The investment case for commodities and precious metals is a bit more complex than it looks at first, so let’s start with a brief review of the underlying drivers of these asset classes.

First, I would like to point out that I am not a “gold bug,” but looking to invest money in commodities and precious metals is part of our job, and we think that holding investment exposures in commodities and precious metals should be part of a well- and globally diversified investment portfolio.

In an ideal world, our allocation to precious metals would be very moderate. Unfortunately, we are living in a world that is far from ideal. With the economic and political changes we are facing today, I think we have to deal with a number of very big challenges in coming years. These challenges might be even greater than what we have seen in the last decade.

Ten years ago, precious metals were not a big investment theme. Gold prices had been falling for the most part of the 80s and 90s when central banks were selling huge quantities of gold. This pushed the price down to about U.S.$250 per ounce.

Today, this has changed completely. Central banks have become net buyers again, especially Asian central banks. This, together with investors’ growing concerns about government deficits and money printing policies, has resulted in an almost perfect investment case for precious metals.

The ongoing rally of precious metals prices in the recent past is showing us that there is growing concern among investors worldwide about the health and stability of the financial system and that there is also a lack of trust in central banks and governments. Investors worldwide are worried about future inflation and forced money devaluation. The chart below shows how much gold and silver have gone up in the past 10 years (please note that the blue line is showing the relative performance of silver) as a reaction to those concerns.

 

In order to protect and preserve capital, investors are looking for a safe and stable storage of value, which has led to the strong demand for precious metals.

The reasons behind the strong increase of commodity prices in the past two years are different, but to some extent they are related to the precious metal boom. The strong rally in commodity prices has been equally impressive, as the following chart shows.

Remember, despite the strong recovery of equity prices in the past two years, Western equity markets have been flat for the past decade, as you can see from the chart below.

 

So considering the disappointing performance of equity markets and the very low yields in fixed-income markets, investors have been looking to put money into alternative investments such as commodities. Here, rising prices are driven by rapidly expanding demand, while supply is only growing at very moderate levels.

 

The growing number of people on our planet, especially the rise of Chindia (China and India), is creating the increased demand for a broad range of commodities. Let’s not forget that despite slow economic growth in the West, world gross domestic product is still expected to grow at about 4.5 percent this year. Emerging markets, and especially the BRICs (Brazil, Russia, India and China) countries, contribute almost 80 percent of global GDP growth this year. Investors not only expect a good long-term profit on their commodity investments, they also hope to get at least some hedge against future inflation.

No question, the basic investment case for precious metals and commodities is as good as it can possibly get, BUT have prices gone up too far too quickly?

No matter how good an investment case looks long-term, investors have to realize that market prices can go down dramatically within a short period of time. When short-term capital flows go against the long-term investment case, investors can experience huge losses. Therefore, you always have to know where market prices are and what can influence them.

Let’s look for example at energy prices, in 2008 when oil was trading at U.S.$140 per barrel and people thought it would be at U.S.$200 per barrel soon. A very severe correction followed and prices fell to U.S.$40 per barrel within a few months:

 

Commodity prices (especially energy) have unique supply and demand curves which are steeper than normal. This means small shifts in supply and demand can cause very large price swings.

The increasing amount of investment and speculative money has made that problem even worse in recent years. While we think the days of “cheap” oil are probably behind us, we have no doubt that oil prices could easily drop U.S.$30-$40 per barrel again should we see increasing evidence that demand is slowing. This could be caused by lower growth in emerging markets, for example. On the other hand, should global growth be stronger than expected in coming years, prices of U.S.$200 per barrel are possible as well.

So what is the true value of commodities and precious metals today and what is the impact of increasing amounts of investment money that has been moving to these asset classes in recent years? Let’s try to answer these questions by looking at historical prices and pricing relationships with other assets.

One of my favorite charts you can see below. It shows the pricing relationship between hard assets (such as precious metals) and soft assets (for example, the stock market).

What is very obvious is that hard assets have become more expensive relative to paper assets after reaching a bottom in early 2000. This relationship had been falling for almost two decades starting in the early 80s, and it shows that these trends can continue for a long period of time.

The period between the early 80s and the year 2000 was also a time when globalization of trade and production resulted in strong deflationary forces, which brought interest rates to the low levels we are seeing today. However, there is increasing evidence that the days of record low interest rates in many parts of the world are over.

Actually, rates have started to go up in some parts of the world, including Europe, despite the sovereign debt crisis in a number of European countries. The Federal Reserve in the U.S. has not done anything yet. Actually, it is trying to keep rates at very low levels.

Rates are being kept low by ongoing monetization of debt, which means that the Federal Reserve is buying a lot of bonds that are issued by the Treasury Department. This has resulted in a mind-blowing expansion of the Fed’s balance sheet.

The investment community often refers to this mechanism as money printing. While rates could be kept low, this strategy has been the main driver behind the recent devaluation of the U.S. dollar.

The chart above makes it obvious that the pricing relationships between precious metals, commodities and “paper” money can experience large swings over time, and investors should always know about these relationships because it contains valuable information for investing. Today, gold is trading at about U.S.$1,500 per ounce and has had a very impressive rally in the past few years. It is a clear indication that investors globally are worried about the health of the international money system and currencies worldwide.

The expansionary monetary policies of most central banks are clearly lowering the faith of investors in fiat currencies. Therefore, investors have a real need for assets that are preserving the purchasing power of their assets, and gold and other precious metals are seen as the ideal solution.

The price of gold has gone up from about U.S.$300 per ounce to today’s price of about U.S.$1,500 ounce. That’s a very impressive rally. But is gold now overpriced or still too cheap considering all the money printing that is going on?

One way to answer that question is to look at the Fear Index, invented by James Turk of GoldMoney. This index compares the price of gold, multiplied by the quantity of gold a country owns, divided by the country’s money supply (M3). This index hit a 16-year high last year, but still stands way below its all-time high reached in the early 80s.

Gold also doesn’t look overpriced when compared to the stock market. The Dow/gold ratio, which compares the value of gold against the value of the Dow Jones Industrial index, currently stands at 8.3. That’s only slightly higher than the low reached in 2009, which was 7.1.

The conclusion is that precious metals and commodities have been a great investment in recent years and, considering today’s problems and challenges, the long-term outlook remains positive. But, investors have to be very careful as significant short-term price corrections are very likely in the future, no matter how good the long-term investment case for both might be.

The long-term investment case for commodities and precious metals remains positive, but investors should be careful and only make such investments as part of an overall, well-diversified investment portfolio.

Daniel Zurbrügg

is the Managing Partner of Alpine Atlantic Global Asset Management, a Swiss-based independent investment management firm. The firm provides clients with independent investment management, asset protection and family office services and is the issuer of the global investment newsletter Echo From The Alps. With a global network of partners, Alpine Atlantic's aim is to provide clients with true "turnkey" solutions for global investing. Prior to setting up Alpine Atlantic, Daniel held various positions with other banks and financial companies. Daniel is a Chartered Financial Analyst and regular guest speaker at international investment conferences.

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  • Bruce D.

    The biggest reason not to sell gold is the threat of inflation. It is difficult to sell gold with Obama’s economic strategies and be left holding dollars. Maybe the higher Obama’s ratings the more you should hold onto your gold.

  • http://cnyhams.com Randy

    Gold and silver have been international “currency” for milleniums. I do not see that changing anytime soon. The current volitility in silver prices is do to bankers manipulating paper silver. That has kept the price down to $35 from its recent high near $50 ozt. However these paper shufflers are working on borrowed time. The supply of silver is what it is and the demand will only go up.

    Buy hard silver and gold. Store it in a secure safe in your home and make sure the safe is securely fastened to the floor or wall. Get yourself a personal protection weapon and learn how to use it. Teach your spouse how to use it. If a 12 guage is too big get a .410 with 5 pellets 000 buck and that will stop an intruder just as quickly.

    • Al Sieber

      Randy, you were right on the money,If you go to the International Forecaster, or bobchapman. blog.com/2011/05 bob-chapman-explains- silver market. html Sat. May 7. they didn’t have the silver to deliver.

    • Monica

      Hi Beberonic,

      Its heartening to know that you trust in the Lord, so do I.

      I have an urgent message for you. The Lord has disclosed messages to Maria Devine Mercy since 9 Nov 2010 (go to website http://www.thewarningsecondcoming.com)that THE WARNING-ILLUMINATION OF THE CONSCIENCE(exposure of our soul to the state of sin you are in) is coming n a couple of months. The Warning will be a supernatural event to be witness by all from age of 7 yrs onwards worldwide – when two commets clash, the sky turn RED and the CROSS appears – for all eyes to perceive. Its GOD last Act of divine Mercy to the godless world we live in which is worse than SOdOm and GOmOrrOh. REPENTANCE is the key issue here for all Christians, believer of other Faiths, agnostics and atheists.
      The TRIBULATION will set in from Dec 2012, 3rd World War, The One World Government, Anti-Christ, the Mark of the Beast (666 mentioned in Chap 13 V 16 of Revelation – Apocalypse to JOHN), will unfold.

      Go to the above mentioned website for more details. The Good Lord ask us to store food, buy SILVER coins and GOLD which will be use to trade in for food/water when TRIBULATIONS sets in….

      God Bless! :)

  • bob wire

    Well Sir, I’m surely in no position to know or be an authority. But I’m left to think it depends mostly on any perception of supply and demand.

    There is many things that can affect this perception, hording, lack of faith in the dollar, manufactured or otherwise, unrest, disasters and who’s riding overlord of these markets, who or what is dominating the perception.

    Some people just love to gamble, on sports, futures, stock prices, currency markets anything and everything.

    I love the ponies as having some success there, having the passion for the horse and knowledge to make an educated wager.

    I’ve no plans to quite the day job.

    There are areas of the world where the monetary system is based on the value of a live pig. Tiny islands where pigs to human ratio is greatly at a disadvantage and highly sought after. You can buy a wife or get out of jail or win friends and political influence with just a pig. But! pigs are few, the island small and the ocean huge.

    • Bruce D.

      The saying is “you only get what you pay for”. I wonder what kind of wife you get for a pig?

      • Al Sieber

        Bruce D, not a good one I already had a few.

    • jerry mcdonald

      the good thing is tou can eat a pig!

  • Al Sieber

    You’re right Daniel, I’ve been dealing with gold and silver over 34 years on the mining and exploration end of it, now all of a sudden I’m getting all kinds of calls from mining companies wanting gold and silver properties. I never thought of gold and silver as a investment, only as a hedge against inflation. you’d be surprised or maybe not, how ignorant people are about gold and silver. I’ve also heard we may go to a gold back dollar again, and I think the Hong Kong gold exchange is gonna surpass us. I urge everyone to hold on to their precious metals and buy silver while it’s in a dip.

  • ONTIME

    Without the US being invsted in a gold standard we will see our dollar lose value and our influence on the price of gold will be only that we help cause it to become higher. There are ways to be invested in gold securely and not have the problems of physical ownership and a good securtity broker can help get you on rack. The last thought is that the governments need to keep revenue is going to influence their siezing of all kinds of assets and since they track the sale of precious metals they will know what you possess.

    • Cashpockets

      Hmm,.. you certainly may be right about Government seizure of precious metals.

      How do you feel about purchasing precious metals on eBay and taking physical ownership?
      Do you think the Government can track those sales of precious metals?

      • Al Sieber

        Cash, never trust the Govt. I would buy from private parties, starting Jan. 1, 2012 all transactions over $600 in precious metals gold etc.must be reported to the Feds. it’s in the Health Care Bill, along with a chip in your arm (RFID). welcome to “Brave New Worlds”.

        • Neal S.

          That law has been repealed as to the $600 purchase requirement.

      • DaveH

        That’s the first place I’d look for small quantities of Silver, Cashpockets. Gold might be a little scarier at such high prices, but I think if you scrutenize the seller to make sure they have lots of prior sales with a good rating it would be pretty safe.

    • http://cnyhams.com Randy

      For the time being anyway… withdraw cash from your IRA, savings or whatever and go buy silver/gold. If you are still fortunate to have a job use every extra cent you have to buy silver, 90% silver coins, .999 silver bullion coins (rounds) and other fine silver. That Sterling Silver tableware may easily be worth thousands of dollars later on. Buy gold Krugerands in a 30% gold to 70% silver ratio to balance your metals portfolio.

      With that said there will be further government intervention requiring coin show dealers etc to keep detailed documentation on what they sell and to whom; in addition to current regs.

      Several States are now considering going on the gold/silver standard. I believe South Carolina is one of them. That means something, those states are enlightened.

      In the future you will be able to buy illions of pigs and wives with those metals.

      • Al Sieber

        Sounds good, but don’t need any pigs.

        • http://cnyhams.com Randy

          Well played Al.

      • http://Illinois'17th Old Henry

        Randy:

        That is good advice, to a point. Remember, however, you cannot eat silver.

        I have purchased some silver rounds – end of last year, but have been concentrating on storing up food.

    • http://Illinois'17th Old Henry

      ONTIME:

      See the link I posted below. It is very educational.

  • http://Illinois'17th Old Henry

    Tazio directed this link to me last Monday, 5/16.

    I thank you Tazio. I did subscribe.

    It is interesting, to say the least. I urge everyone to watch it and subscribe.

    US Prepares For Gold Standard
    http://www.roadtoroota.com/public/350.cfm

  • DaveH

    For anybody who doesn’t realize just how crazy the Federal Reserve has been getting:
    http://mises.org/daily/5223/Charting-the-Course-to-7-Gas

    • http://Illinois'17th Old Henry

      Good link DaveH.Thanks.

      Piece by piece (link by link) the pieces beging to come together to lift the fog.

      However, for most I feel it is too little too late.

  • James

    I basically agree with Randy. Gold is simply a mirror that reflects the value of any given paper currency. Gold is now just under $1500/oz., if the federal government doubles the paper dollars in circulation, with unearned dollars, the price of gold will go to $3000/oz. Back in 1980, gold hit $800/oz. and silver $50.oz., that’s a 16 to 1 ratio. The ratio now is 42 to 1, which means silver is vastly underpriced. However, when too many people buy gold, possession of it will be outlawed, FDR did it and so will Obama.

    • http://cnyhams.com Randy

      The 1980 silver rise and fall was due to market manipulation by two brothers who held vast quantities of silver. They were later convicted and sent to prison. Yep the good old Hunt brothers.

      The Hunt’s managed to cause a giant spike in the price of Ag. And then the whole thing collapsed and the prices did too. I remember the whole thing well seeing folks selling off family heirlooms and making a relative fortune on flatware. Then a whole bunch of folks ended up with a bunch of silver worth 5 bucks. Good for wheel chocks.

      The current situation is vastly different and has been fully explained above by Daniel. For example, the demand for Ag for industrial and manufacturing purposes is increasing on a logrithmic scale. That laptop or tablet in front of you is living proof of Ag and Au in everyday use. If I remember correctly nearly 90% of known Ag reserves have been mined. There is a limited amount of precious metals (that’s why they call them precious) and the demand is increasing. Silver is heavily used in the construction of solar panels and other photovoltaic devices.

      The FED can do anyhing it wants except change the laws of physics.

      If you need a pig and so does everyone else the price of pigs goes up.

      God bless.

  • Bitter Libertarian

    The Biggest Commodity that is in the shortest supply is Liberty & Freedom. Both are scarce, more valuable then gold, yet disregarded in their origins, real value, and purpose.

    • DaveH

      Unfortunately for all of us, there are a large contingent of people who are quite content to be led around by the nose.

      • Bitter Libertarian

        I’ve decided after careful observation over the years, its 60% who are asleep-zombied-brain dead-apathetic-or self absorbed.

        • http://Illinois'17th Old Henry

          Bitter:

          Only 60%? I had it pegged closer to 80%. A few years ago I figured 90%, but I think the Internet is helping.

          • DaveH

            You can bet that Obama is busily implementing a solution to that using the FCC, similar to the way he used the EPA to override the wishes of the majority of the citizens about Cap and Trade.

  • Tierra Teneil/Johnnie Blando

    global diversafication is code for spread out your money so we can scrue you out of it. Your ride the winning horse to death and hope you have the good sense to sell before it drops,….there-in lies the problem of the greedy gambler who doesn’t know when to quit. None of us know when to pull out, it is like good sex with-out the pill, you know you should pull out but you can’t. Buy your gold and silver now when Obama is in office,….he is far from (offensive word removed) us good yet,….sell it before September prior to the National election for President. If this ass wins, re-invest back into gold and silver, for he has (4) years of unbridled screwing of the public to come,…

    • http://Illinois'17th Old Henry

      Tierra Teneil

      If the Communist Kenyan pulls it off next year thre will not be a 2016. Little Barry the communist has no intention of leaving OUR WH. He will, if retained, simply declare himself “leader for life”, or something like that.

      He is the most devisive, anti-American to ever occupy OUR WH. Hang on to your a$$ kiddo – it’s gonna be quite a ride. Much rougher than the 8 second ride.

      Even if he is ousted next year what the GOP is offering up as our saviors – Romney, Newtie, the other one’s name escapes me, are nothing but the opposite wing on the same bird.

      Look at the House. We gained IMMENSELY last year, they have the poer and the RINO “leadership” refuses to use it. And it appears that the TEA Party freshmen are being,ah shall we say, “brought into line”.

      The MONKEYS are surviving.

      • DaveH

        I was watching an interview with Karl Rove on Fox yesterday, I think it was on America’s Nightly Scoreboard, usually hosted by David Asman, but somebody else was sitting in. Anyway, they talked about Romney, and Newt, and Tim Pawlenty, and Rick Santorem, and maybe Herman Cain, but I didn’t hear a word about Ron Paul, or Gary Johnson.
        Yet according to this poll, Ron was the overwhelming winner of the recent Republican Presidential race on Fox. See here (pick ‘view results’ in the ‘debate poll’ box):
        http://www.foxnews.com/on-air/fox-news-debates/index.html

        Rove and his RINO buddies will do anything to keep Ron Paul out of the picture (Gary Johnson would be my next choice). Whatever the Republican leaders might try to say, they DO NOT want smaller Government.

        • newspooner

          Just a quick report on Ron Paul for his knowledgeable supporters:
          Last week Ron spent several hours in discussions with political operatives in New Hampshire. He was up-to-date on all issues and still has his amazing grasp of the importance of the key issues. His health is good and his spirit and dedication remain vigorous. He is ready to go. His biggest regret was that he was so booked and committed to banquets and other business meals that he would be unable to utilize my offer of some nice brook trout, fresh out of one of my favorite Monadnock area streams.

          • DaveH

            Now, I saw the same thing on Judge Napolitano with guest Douglas Shoen. But at least that one makes sense since Doug is a former (maybe still) Democrat strategist. And Ron Paul has polled well against Obama. So, for sure the Democrats don’t want Ron Paul to win the nomination.

        • Rob

          DaveH,
          I’ve followed Ron Paul’s career for years. He has always been an outspoken defender of the Second Amendment and an absolute advocate for exposing perhaps the most corrupt entity in the world aside from the UN, the Federal Reserve (which pays NO taxes). But some of the things he said at the recent debate made me a bit nervous. If I understood him correctly, he supports the notion of amnesty for illegals? Also, being a libertarian, he says that the central government has no business involving itself in private affairs such as the definition of marriage, which he says should be a states issue.
          On the matter of illegal immigration, there is no rational reason for granting amnesty to millions of invaders. Numbers USA agrees and gives Paul a low rating on his illegal immigration position. As for DOMA, the generous compensation packages given to Federal employees makes it virtually impossible to call this a states only issue. As a taxpayer forced to feed the monstrosity known as the Federal Government, I want a clear definition as to who gets benefits subsidized by my tax dollars. By moving the bar as to what constitutes traditional marriage and by extension eligibility for benefits, is a situation that makes me very uncomfortable.
          BTW Gary Johnson also advocates for amnesty.

    • Marty S.

      Great analogy but I suspect Barry-O is going to make sure the 2012 election is rigged and from then on welcome to the Bananna Republic States of the Former US.
      I am in process of moving investing away from dollar denominated asset base, especially 401 retirement plans as that is the next scheduled grab by Big Bro. Good luck and God-speed to all who post here.

  • http://com i41

    On federal land gold, silver and uraium are not somethingthe feds charge royalites on, no matter how high it climbs. If an y oil is sold that come off of federal lands 18.65% royality is paid to the government, so when oil is at 106 dollars a barrel the feds get a chunk of change. Coal is taxed at 12.58% to go to the Treasury. The deep water oil does not pay royalities, and why do you think the dumbocrap enviors blow smoke on offshore drilling, it just puts more burden on taxpayers. If the niggsrdly marxist muslim and his fat toad Billary would get off the green envior crap and put the pipeline on track to go from Canada to the gulf, what a boost to the Treasury, and this BS impedement is saction by all dumbocraps and the EPA! Still think the bastards are concerned about the taxpayers and tyhe high costs at the pump!

  • Hank

    What would happen if the government decides to sell the gold in Ft. Knox?

    • Bob Marshall

      I wonder how much gold is still in Fort Knox? I read where The Centeral Bank of Libya has 144 tons of gold. Wonder who will end up with it? Much like the treasures of Iraq.

      • jerry mcdonald

        amazing how you never hear what happened to the iraqi dinars.Remember how the war was going to be financed by their oil?Lies,lies,and more lies by the thieves in charge.End the fed,imf,and globalization

  • BigBlue

    On the subject of gold confiscation: 70% of the world’s dollars are held outside the USA. The moment a discussion starts about the mere possibility of confiscating gold, that sends a loud, clear, unmistakable message to the dollar holders of the world. The message is the US is in the process of destroying the dollar and the government is bothered that some Americans have the foresight to prevent a personal catastrophe by stacking PMs. So what’s the only possible reaction by the dollar-holders around the world? Dump the worthless trash while you can. Simply talking about the possibility of confiscating precious metals will bring down the dollar in a heartbeat, which is precisely what they are trying to avoid. Remember, in 1933 they didn’t actually confiscate gold, they just made it illegal in transactions. It was not a house to house search. Many did not comply but almost no one went to jail. The point is as dumb as they are, even the incompetent bureaucrats know that confiscating or outlawing gold will be an instant and utter disaster. I don’t see it happening so if you feel like stacking, keep doing it.

    • DaveH

      Good Point, BigBlue.

  • FreedomFighter

    Precious Metals And Commodities: What’s Their Real Value Today?

    Metals and Commodities like food have always had value since the birth of the human race and as Obama and the Marxist maggots continue to destroy America the value will rise-In my opinion.

    Conservatives need to take control of all local political positions, state level positions, and retake congress, then put this ugly Progressive/Liberal-Marxist/Communist Pivens spawned attempt at a coop into the grave.

    The crazy liberal judges need to go also, they are killing people by letting monsters back out into society.

    Laus Deo
    Semper Fi

    • James

      FreedomFighter, Metals and commodities stay pretty much the same, it’s the dollar that loses its value. Since the Federal Reserve Act of 1913 was passed, the dollar has lost over 95% of its value. Back when I grew up, gasoline was 9 cents per gallon and a nickle would buy a double-dip ice cream cone – with real ice cream. Since last summer, the dollar, relative to other currencies, has lost 25% of its value.

  • Dave

    I have a SERIOUS question to ask. I saw an article on The Daily Wealth that said after this QE ends; the Fed is going to finally get serious about getting its financial house in order. The article went on to state that if that happens; the gold & silver markets will absolutely crash. My question: Did i purchase 1683 oz. of silver; and 10oz. of gold for NOTHING? I mean; I’d hate like hell to be holding this much silver; and have it selling for 10 bucks an oz. Any info on this would be much appreciated. Thanks.

    • DaveH

      Read the link I posted above, Dave. The monetary base is now 3 times what it was in 2007. Three times as much money chasing the same amount of goods. We’re in for some massive inflation, even if the Federal Reserve and their enablers in Big Government reformed overnight. And that’s doubtful. Any statements about getting their house in order are likely political since there is a rising swell of citizens in favor of abolishing the Federal Reserve.

    • James

      Dave, I wouldn’t worry. Right now gold and silver are in a holding pattern, they were over bought a little. What I have wondered about though, is the $50 one ouonce gold coin being minted. It’s instrinsic value is worth 30 times that, but if the government confiscates gold they might only offer $50 per coin to buy it back. Why else was the coin labeled $50? If confiscation should happen, I would just sell those coins to a gold dealer.

  • newspooner

    Right now, dysprosium and ruthenium are the best investment values among the metals.

  • Rob

    Re the discussion of gold vs. silver or both vs. the dollar. Historically, both commodities have held their own over the past 50 years thought not necessarily on a straight-line track with the US dollar, even after adjusting for inflation. But as the commercial says….gold has never been worth zero…What concerns me now is the rapid rise in the value of gold especially over the past 3 years, which suggests a bubble in the making, and even more disconcerting is that an amoral shark like Soros increased his gold holdings over the past year and more recently, divested the majority of them. I recall what he did to the British pound late in the last decade, and I have to wonder what he plans for the gold market. Also, aside from China and India, I see Mexico has started buying gold…imagine, a country that dumps the welfare and safety of its citizens on the US has the financial resources to become a player in the gold buying marketplace.
    Do any of you folks believe it’s possible for gold to be overbought?

    • James

      Rob, Gold was over bought a little, that’s why it’s price is moving sideways now. But the bubble is in the gusher of paper dollars being poured out by the federal reserve. Since last summeer, the dollar has lost 25% of its valaue relative to other currecies. With no new production to match it, the prices of everything will skyrocket this summer, including gold.

  • http://donthaveone Beberoni

    Color me crazy, but I dont own any silver or gold, and I dont plan to own any. I do not put my trust in it any more than I put it in money. I put my trust in the Lord, and He always makes sure I have what I need, and thats good enough for me. I admit, I sometimes dont have what I want, but I have always had what I need. Always. That is a human problem of epic proportions though, many, many people want what they want, and are oblivious to what they need.

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