DaveinElma Posted August 8, 2011 Share Posted August 8, 2011 I was thinking about it today-why does gold have the value it does? If you woke up this morning and every ounce of gold had evaporated overnight would your life really change? Now imagine if the same thing happened to oil, or steel, or whatever. Why is gold worth anything? Link to comment Share on other sites More sharing options...
Magox Posted August 8, 2011 Share Posted August 8, 2011 I believe that's Warren Buffet's rationale. I wonder how he feels about the Billion dollars of silver he sold back in 2005 when it was at $7 an oz? You just have to look at it as a an age old currency that is accepted globally. It's pretty much as simple as that. Link to comment Share on other sites More sharing options...
DC Tom Posted August 8, 2011 Share Posted August 8, 2011 I was thinking about it today-why does gold have the value it does? If you woke up this morning and every ounce of gold had evaporated overnight would your life really change? Now imagine if the same thing happened to oil, or steel, or whatever. Why is gold worth anything? Why are baseball cards worth anything? Because people will pay for them. Link to comment Share on other sites More sharing options...
TheMadCap Posted August 8, 2011 Share Posted August 8, 2011 cause we say it is. Just like diamonds or any other rock, mineral or metal... Link to comment Share on other sites More sharing options...
DC Tom Posted August 8, 2011 Share Posted August 8, 2011 cause we say it is. Just like diamonds or any other rock, mineral or metal... For example: diamonds are worth significantly more when fighting your avatar... Link to comment Share on other sites More sharing options...
Peace Posted August 8, 2011 Share Posted August 8, 2011 I believe that's Warren Buffet's rationale. I wonder how he feels about the Billion dollars of silver he sold back in 2005 when it was at $7 an oz? You just have to look at it as a an age old currency that is accepted globally. It's pretty much as simple as that. You and I talked about this before. You enjoyed busting my balls about saying GLD is worth nothing per se. As I said then, I've been in and out of GLD at times. Last sold out in the 138 range earlier this year (yes, my ass hurts from kicking myself but whatever). I use it to make money, but it continues to baffle me how this purely psychological device inspires so much confidence. I still trade in the metals and miners a lot. Just bought some HL today. Link to comment Share on other sites More sharing options...
....lybob Posted August 8, 2011 Share Posted August 8, 2011 Gold is a store of value - it cannot be created with a printing press or computer entry diluting it's value suddenly- it's universal it doesn't need to be exchanged country to country- and historically it represents the sun and sun god deities it also represents eternity as it does not tarnish or rust or corrode. Link to comment Share on other sites More sharing options...
Magox Posted August 8, 2011 Share Posted August 8, 2011 You and I talked about this before. You enjoyed busting my balls about saying GLD is worth nothing per se. As I said then, I've been in and out of GLD at times. Last sold out in the 138 range earlier this year (yes, my ass hurts from kicking myself but whatever). I use it to make money, but it continues to baffle me how this purely psychological device inspires so much confidence. I still trade in the metals and miners a lot. Just bought some HL today. I don't remember busting your balls about GLD, that isn't to say that I didn't, because god knows that I've killed trillions of brain cells (thank god I have quintillions hehe). I happen to believe that GLD is an excellent trading vehicle for investors who want to have exposure to the metal without taking delivery. The only problem I have with it is the tax structure for investors, considering that it is listed as a "collectible" on it's capital gains, which means instead of the normal 15%, you pay 28% on gains. In regards to why, well, we've discussed this a few times, until the fundamentals change, prices will most likely go higher. And you don't get much better than this, US bonds has been downgraded, economy is very weak which means we may see another round of QE or at the very least monetary policy will remain extraordinarily loose and to top everything off, the ECB is now just not buying crappy PIGS debt, but now Italian and Spanish bonds which means that the printing presses across the pond are now on overdrive. My argument to my clients is that as the value of paper money erodes, people will continue to keep buying hard assets such as gold. This is precisely what we are seeing, and the fundamentals definitely support it. Link to comment Share on other sites More sharing options...
TheMadCap Posted August 8, 2011 Share Posted August 8, 2011 For example: diamonds are worth significantly more when fighting your avatar... God, that thing actually creeped me the f out when I was a kid... Link to comment Share on other sites More sharing options...
/dev/null Posted August 8, 2011 Share Posted August 8, 2011 God, that thing actually creeped me the f out when I was a kid... If you're over your fear, you can play a Gorn on Star Trek Online Link to comment Share on other sites More sharing options...
DC Tom Posted August 8, 2011 Share Posted August 8, 2011 If you're over your fear, you can play a Gorn on Star Trek Online Always fun to play a Gorn and kick Picard's ass... Link to comment Share on other sites More sharing options...
UConn James Posted August 8, 2011 Share Posted August 8, 2011 Gold is a store of value - it cannot be created with a printing press or computer entry diluting it's value suddenly- it's universal it doesn't need to be exchanged country to country- and historically it represents the sun and sun god deities it also represents eternity as it does not tarnish or rust or corrode. It has a lot of industrial uses... not just decorative. Link to comment Share on other sites More sharing options...
....lybob Posted August 16, 2011 Share Posted August 16, 2011 It has a lot of industrial uses... not just decorative. It has some industrial uses but nowhere nears as much gold is used in industry as silver or platinum. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted August 17, 2011 Share Posted August 17, 2011 (edited) I don't remember busting your balls about GLD, that isn't to say that I didn't, because god knows that I've killed trillions of brain cells (thank god I have quintillions hehe). I happen to believe that GLD is an excellent trading vehicle for investors who want to have exposure to the metal without taking delivery. The only problem I have with it is the tax structure for investors, considering that it is listed as a "collectible" on it's capital gains, which means instead of the normal 15%, you pay 28% on gains. In regards to why, well, we've discussed this a few times, until the fundamentals change, prices will most likely go higher. And you don't get much better than this, US bonds has been downgraded, economy is very weak which means we may see another round of QE or at the very least monetary policy will remain extraordinarily loose and to top everything off, the ECB is now just not buying crappy PIGS debt, but now Italian and Spanish bonds which means that the printing presses across the pond are now on overdrive. My argument to my clients is that as the value of paper money erodes, people will continue to keep buying hard assets such as gold. This is precisely what we are seeing, and the fundamentals definitely support it. Forget all that. I am from India and I hoard gold because I need to give it as dowry when my two daughters get married. Else nobody will accept them as brides. Linky Edited August 17, 2011 by Fan in Chicago Link to comment Share on other sites More sharing options...
Magox Posted August 17, 2011 Share Posted August 17, 2011 Forget all that. I am from India and I hoard gold because I need to give it as dowry when my two daughters get married. Else nobody will accept them as brides. Linky Without looking at the link, I use to place much more emphasis on seasonal patterns than I do now. Considering India was the #1 buyer of gold in the world, and the Indian wedding season begins roughly around in September and ends pretty much sometime around March, that use to be the time when we would start placing heavy positions, sometime around the end of August, depending on overbought oversold levels. Link to comment Share on other sites More sharing options...
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