Loading ...Gold is a store of Value but….
…over time Gold can be overvalued or undervalued for long periods of time in the lives of the average person. When it is overvalued, it is the flight to safety over other assets. When undervalued, there is a mania occurring in another asset. Many assets that had more value than Gold at one time no longer retain that value ie The Tulip Mania, Beanie Babies, Hunter Biden Artwork, etc.
Instead of arguing over the nominal price, we should look at what an ounce of Gold purchases. As more currency is printed, the price of Gold in that currency rises but does it buy more in that event? No, it eventually finds it’s value and swings from undervalued to overvalued and back.
Holding Gold preserves your purchasing power over longer periods of time (that can be debated of course) but it is the leverage of a well positioned producer that will multiply your wealth. Many mines are just a money pit as most of us have unfortunately discovered at great expense.
To put a target on Price we need to know what is happening to the currency it is measured in. This is beyond my pay grade and I will continue to make some bad decisions but hope that the winners more than make up for the losers.
I will say that a saying that has stood the test of time is (paraphrasing) “An ounce of gold buys a man’s fine suit.” I took a look at the Armani website, and although a few suits sold for over $3,000, most sold for $1,700 to $1,900.
Agree Columbia. Preservation of wealth and buying power is golds real strength. When we buy on that basis we never regret ownership nor need to be concerned with the speculative side.
Well thats a different tune Sir Farmer
Thats why most of us don’t sell
There is no conflict Fully. Gold has its place. My charts however are the technical picture and come with a warning for speculators in the room. Not everyone will admit it of course. But most gold investing is indeed speculative driven and that is often the wrong way to invest in this special category of assets.
Sir Farmer,
What if this time is different?
What if, now, gold and silver and senior miners and juniors investing, is the only RIGHT thing to do, whether speculative or not?
The game is to get returns, high in speculative vehicles, and low in “insurances” like physical.
If someone bought AAPL 20 years ago, were they speculating? Or investing?
I’m proud to be a discerning speculator.
Had I not done that, I’d never have tasted what a 42x feels, in just 17 months, circa Dec 2019 to May 2021.
Or, if you consider the above example as a Las Vegas crap shoot, I got 7x, in a new junior, from May 2023 to Dec 2023?
GL