Comments on: GOLD LOSING ITS LUSTER?

By: Nick P.

Nick P. — Fri, 15 May 2009 11:10:21 +0000

A picture may be a thousand words, but it is still just a snapshot of a brief point in time. For example, the above chart is basically showing a run up from a price collapse in each of the metals above except Gold.

Palladium has suffered a 73% drop in price from peak to trough, PL a 67% drop, SI a 62% drop. GC had a 33% drop.

From the first trade day of 2005 GC is up 116%, SI 67%, PL 17% and PA is down -6%.

By: Erik78

Erik78 — Thu, 14 May 2009 03:13:20 +0000

Great post TPC….

The miners to me look ripe for a swing short here into next week (jmo)…

By: TPC

TPC — Thu, 14 May 2009 00:00:08 +0000

I'm not sure where you're going with this conversation. No one ever knocked gold. If you are trying to start an argument you've picked the wrong person….I could care less about golds performance.

By: timiacono

timiacono — Wed, 13 May 2009 23:18:33 +0000

Funny, I don't remember seeing “Of course, when compared to most other assets, gold has been an outperformer over a 1, 3, 5 or 10 year period.” when I left my comment. Either I'm getting old or you just did a big Blogger no-no.

By: TPC

TPC — Wed, 13 May 2009 23:03:33 +0000

I never said gold had performed poorly as an investment. I said it had performed poorly relative to other metals since the year began. Gold has been a fantastic investment over the last 10 years.

By: timiacono

timiacono — Wed, 13 May 2009 22:53:35 +0000

Gold was also a bad investment since 1980, however, since 2000, it has outperformed just about every other asset class with the notable exception of gold stocks. Pick your timeframe and you can make any argument you want, but, in the scheme of things, the four and a half months are meaningless. It's nice to see that there are still plenty of people with a profound disdain for the stuff, a clear indication of a huge upside yet to come.

By: TPC

TPC — Wed, 13 May 2009 21:00:10 +0000

China suffers more than anyone if we go down. Our economies are interlocked. We have actually played a brilliant game of global chess here by forcing them to be dependent on our debt. They have no choice but to buy US denominated assets. They would go down with us if we fell off the cliff. Won't happen. I'd put the probability at less than 1/10th of 1%.

By: ejack

ejack — Wed, 13 May 2009 20:13:25 +0000

BTW, I'm not saying you're wrong. I think the high probability situation is as you describe. But given the fact we're living in very strange times, these “6th standard deviation events” seemed to have occurred a bit too often, so who knows what could happen. I'm not a gold bug, but I do have a lot of investments in GLD, protected with puts just in case.

By: ejack

ejack — Wed, 13 May 2009 20:10:54 +0000

I don't agree. People are remarkably resilient especially when money is concerned. It may cause short-term turmoil, but people adapt pretty easily. I'm not sure what the world's opinion was when the US moved off the gold standard, but I imagine there must have had doomsday predictors as well. I think the world would survive well enough without having the US dollar as the reserve currency. If anything, some countries such as China and Russia would relish the opportunity and would probably broker a deal to provide the financial stability in order for countries to transition quickly to that new reserve currency.

By: TPC

TPC — Wed, 13 May 2009 19:18:49 +0000

America burns, the whole world burns. Our reserve status is probably the only thing that kept us from falling off the edge of the cliff in Q4. The rest of the world can't afford for USA Inc. to go down in flames. That's why it won't happen.