Saturday, August 21, 2010

Why has gold price gone up when oil price and realestate are down?

Because gold is attractive to investors in times of uncertainty. It's highly liquid (much quicker to buy or sell than a house and without price negotiation) and can be bought and sold in smaller amounts (dollar per dollar) than real estate. Also because it is used to preserve wealth, even in a recession there will always be someone else who will buy it.





Also most of the world's gold is the same gold we had decades ago - only small amounts of it are consumed every year (in electronics) and only small amounts are mined. Most of it is just the same gold being bought, sold, stored, and recycled over and over again. This makes the price more stable as opposed to oil which fluctuates more rapidly in response to global supply and demand.Why has gold price gone up when oil price and realestate are down?
Well oil and property have been loosing value, and so you do not want your portfolio value to go down with those assets. Gold has always had a safe haven status during times like these, mainly because it doesn't loose value so easy, it should be in demand now and it is highly liquid. However gold has not performed at all during this crisis! Back in 2007 already we were predicting that gold will reach the $1000 mark and now we are in 2009 and it is still not there, instead it's been falling to around 800, hovering around early 900. In my view gold may perform well as inflation picks, but it shouldn't be by much as other commodities and equity markets will be a much better investment option sooner. The markets have changed from ten years ago, there are many other assets out there with good returns that are highly liquid. Always remember strong gold means falling confidence and possibly big problems in the financial markets. Now we know this is not so yet the case. A Final consideration is that gold is a currency indicator, specifically dollar. When dollar goes down gold goes up. Now we know that china and india are increasing their gold stocks, at the same time china has been manipulating the dollar. Now the big question here should be what are the chines up to? I smell dollar manipulation. The chines are sitting on the largest pile of dollar bonds. A decline in dollar is a gain on the gold side. You can use one to influence the other. At this stage I am keen in observing what the chines are up to.Why has gold price gone up when oil price and realestate are down?
Lots a reasons. Oil has less demand, it goes down, real estate is overvalued with huge supply overhand and low demand. Gold has HUGE demand coming in from all sources, China for example has increased reserves by 75% in last few years. Gold also goes up when dollar goes down, and people run to gold as inflation hedge...etc.
Because some time in the near future there won't be a canadian currency peso or a dollar there will be 1 currency between the three countries called the AMERO.





If the american dollar is worth nothing imagine how many american no matter how rich would be broke... not if they invest in gold... gold will always have worth and value... BUY GOLD





Research north american union


Research amero


Research 911
the real estate bubble has burst, oil demand has eased at the same time as production has come down. when people are worried, they invest in gold, gold traditionally has been a great place to store wealth, especially during times of uncertainty
They usually have no relationship to each other regarding unit prices.





Doug T.....The mutual fund guy

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