Precious Metals Who is buying gold at the moment?

Perception i.e. trust is a critical ingredient of ALL monetary assets. Fiat, decentralised or naturally occurring.

Which monetary asset has a better track record over the long term?

Zombie apocalypse is not as concerning to me as the next financial / monetary / debt crisis which could be a big one. Will we be reduced to trading lead and cans of beans, probably not, but that doesn't mean we won't see a reallocation of trust away from those systems and currencies being impacted into other assets (including gold).

 

FIAT currencies are legal tender, Gold is only legal tender in the form of coins from the mint.
Gold has no value other than a commodity.
And just like diamonds, the perception that it looks shiny and pretty.
For which the majority of the male population of first world countries works long hours to buy to impress others, buy wives and there own vanity. Mostly from those who can afford it least.
That's how strong perception can be.

Gold is not money and has not been for a while. So it is not any more "monetary" than nickel, copper or other used for coins.
RE is better.


And the Dow index.

The ZA must be mentioned as all over the net forums people constantly post that in event of crisis gold is the best asset.
Long lasting food, batteries, fuel and probably guns/ammo is a much better plan.

From what I can see the financial system has been moving away from gold.
Of course for those that need to park a few hundred billion, the theory of diversification (which all major institutions follow) will put a few bills as gold.
But I can't see value other than bullion based on perception (which I repeat, is strong) rather than usefulness.

Putting that aside, there is a market for it and a large industrial complex built around it.
And where there's a market there are opportunities.
Just not for me.

 

How did legal tender status help in holding up the value of the Zimbabwean Dollar or Venezuelan Bolivar? These are extreme examples, but we don't live in a world where we can rely on 'legal tender' status to uphold currency value in isolation. Often the value of a national currency can be impacted by external perception (given most countries need to engage in global trade). What do you think would happen to the value of the US Dollar if the world decided the US may default and were no longer prepared to fund their massive trade deficit or even one step further, started panicking out of USD & USTs?

Having commodity value is a backstop to any decline in gold to 0, fiat currencies don't even have that.

Gold is whatever its users think it is. I could dig up some quotes from central banks who still consider it a monetary asset, but feel you are about as hardened in your view as the worst of some gold bugs so won't bother.

FOFOA: What is Gold?

I am not asking you to buy gold, only to consider representing it accurately in your posts.

 

How much is gold worth in Venezuela at the moment (in a hard currency)?

 

Well there was also the confiscation of gold, and not in a third world shlthole.

I would agree that gold has more worth as wealth storage in third world and mainly poor countries (including India, China, Paki) as most of the population lives in more of a barter world with not much of monetary or banking system.

 

Difficult to answer. In investment form I would expect there to be a premium on gold over quoted exchange rates vs the Bolivar because the official rate is not necessarily accurate, but then I understand there is a lot of illegal gold mining occurring and that gold in unrefined form could be trading hands below the expected price (just so those mining it can get access to the basics like food). In hard currency, I have no idea and in a country this deep in crisis it could be different from one transaction to the next depending on the desperation of the owner/seller to dispose/acquire it. All I know is that if I lived there and saved in gold it would have held it's value much better than legal tender.

 

Interesting interview on Gold v Bitcoin, also details on how to hold and exchange gold via mastercard.

 

Much better than the bolivar*

I would argue it's likely to have held less value than USD

 

It probably depends on the time frame measured over and as mentioned the specifics of a transaction, but you are just further proving my point. Perception matters far more than legal tender status, USD isn't legal tender in Venezuela either.

 

Sure, my argument is solely that there are very, very few convincing scenarios in which gold is actually the best hedge. Nearly always, one out of currencies of other countries, bonds or food and ammunition seem likely to outperform gold

 

I don't own gold because I think Australia will become the next Venezuela and I will need to trade it for food.

 

Post made 22/9

Exact low came in at 20.87 but the lowest daily close was 20.95 and it was pretty obvious pivot reversal right at the second of the purple dashed lines (expected reversal time zone markers). Classic 5 wave impulsive trend with ABC retracement. This is an Elliott wave & market geometry structure based trade supported by sector bias formed from significant relative strength against ASX200 benchmark. Complex to learn, YES! Worth the effort?... for me YES!

If you are following this consider taking profit or part profit now (+12% in 2 months).

NCM has crossed median lines (blue set) and most likely completed wave 3 of the new 5 wave set meaning the meat of the ST move is over and as the best trader who ever lived Bernard Baruch would say...."focus on capturing the middle third of the trend". As always DYOR