Precious Metals

[Radagast]

You're counting the 8 months before 9/11 happened, but ignoring 2002?

According to Portfolio Visualizer, U.S. stocks lost -20% in 2002 while gold rose +25%.  In 2008 U.S. stocks plunged -37% while gold rose +4%.

Mid-2001 did mark the point when gold began to lift out of the doldrums. There was a 9/11 lift. Mid-2001 was also the lowest real price ever set by the free market. It easily may have just been the random low of a boom-bust cycle, with a tiny spark.

From January 1, 2000 to March 13, 2020 PV reports a correlation of gold and SPY of -.04 for daily, 0.01 for monthly, and .08 for annual returns, which covers both periods in question. Very close to no correlation.
https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=%5EGOLD%2C+SPY&startDate=01%2F01%2F2000&endDate=3%2F16%2F2020&timePeriod=1&tradingDays=60&months=12

Gold versus long term bonds shows similarly little correlation.

[MustacheAndaHalf]

You're counting the 8 months before 9/11 happened, but ignoring 2002?

From January 1, 2000 to March 13, 2020 PV reports a correlation of gold and SPY of -.04 for daily

That has nothing to do with my claim.  I said during a crisis, not every day for the past 20 years.

[Joe Schmo]

present arguments aside, looks like another gold sale today because the market is up, gold is down...so you could buy it so that when the market is down gold goes...down?

[mrmoonymartian]

present arguments aside, looks like another gold sale today because the market is up, gold is down...so you could buy it so that when the market is down gold goes...down?

We already established there is no correlation. What do you want - a negative correlation?

[appleshampooid]

present arguments aside, looks like another gold sale today because the market is up, gold is down...so you could buy it so that when the market is down gold goes...down?

Yeah, I'm hoping that it stays low for a couple weeks, I need to buy more and A) I don't have any cash on hand B) most providers are out of what I want to buy right now :(

[Radagast]

You're counting the 8 months before 9/11 happened, but ignoring 2002?

From January 1, 2000 to March 13, 2020 PV reports a correlation of gold and SPY of -.04 for daily

That has nothing to do with my claim.  I said during a crisis, not every day for the past 20 years.

And I showed that during a crisis, there is no evidence of negative correlation. September 2001 was up*, October 2008 was down, right now in the CoronaCrisis it is down. The years of 2001 and 2008 finished slightly up. The entire period, no correlation. There looks to be a greater tendency towards negative correlation over longer periods, for example 2-5 year periods, but I don't have tools to test that. But specifically during a crisis, no, no obvious historical correlation. It might help or it might not. William Bernstein also investigated this in his books with similar conclusions. I have shown a lot of evidence for no correlation and would be happy to see someone show consistent evidence of strong (-) correlation though.

*I recall one of the WTC towers had a large quantity of gold bullion in the basement, whose recovery was in doubt for a few weeks. That specific factoid could explain the month's price movement as well as a flight to safety would.

[MustacheAndaHalf]

For two of my data points, once we agree on the dates, you agree with my data but then put an asterisk next to it.  Maybe I'm wrong about the global financial crisis, but let's at least agree on the dates.  The peak panic was when Lehman Brothers collapsed in Sept 2008,
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308

It looks like gold rose from under $800/oz (start of Sep) to over $900/oz (end of Sept).

[ice_beard]

Not that I actually want to buy any, but i have been looking at a few of the websites that sell PMs. 

You can't buy silver in any quantity right now.  Spot is now at $12.40, which is quite cheap and the only bars I've seen are 10 oz and were listed for $174 last night.  Not sure who will be buying that or who will even be selling at that price.

I don't follow these markets closely but I'm under the impression people, brokerages, etc are selling PMs to generate cash, hence the price fall instead of the increase as a perceived "safe haven".  I wonder if/when it will return to "safe haven" status and then where the price will go. 

[appleshampooid]

Not that I actually want to buy any, but i have been looking at a few of the websites that sell PMs. 

You can't buy silver in any quantity right now.  Spot is now at $12.40, which is quite cheap and the only bars I've seen are 10 oz and were listed for $174 last night.  Not sure who will be buying that or who will even be selling at that price.

I don't follow these markets closely but I'm under the impression people, brokerages, etc are selling PMs to generate cash, hence the price fall instead of the increase as a perceived "safe haven".  I wonder if/when it will return to "safe haven" status and then where the price will go.

Yeah basically everything I would want to buy right now is out of stock. However, I also don't have any free cash right now, so not a problem. I'm hoping stuff gets back in stock in a couple weeks.

Anyone want to sell me some British sovereigns? Or 100oz silver bars? We can both save over using APMex or whoever :P

[ice_beard]

I was actually interested in seeing if I could find a 100 oz bar at < $1300.  Negative. 

[appleshampooid]

APmex finally has British Sovereigns back in stock, of course they are about $15 more expensive than the prices listed at other dealers, where you can't actually buy them right now :D

[appleshampooid]

Are bullion premiums way up right now due to high demand? It sure seems that way, but I'm not really in this game very often, so I may be out of whack.

Gold doesn't seem too far off, but some sliver examples. The 100oz silver bars that are actually in stock at SD Bullion are priced around $1704 with a current spot price of $12.05...roughly 41% premium.

On 90% junk silver bags it's even worse. I know these carry a higher markup generally, but I'm seeing like 66% markup on a $500 face value bag! $7167 when the spot price is $4311.

I have a spreadsheet tracking my past purchases, cost basis, and current value, but now I wish I had also tracked the current spot price when I bought those items to track premiums over time.

I wonder if big institutions are selling driving the prices down, but individuals are buying due to the APOCALYPSE and thus these retail outlets are pricing in crazy markups.

[Radagast]

For two of my data points, once we agree on the dates, you agree with my data but then put an asterisk next to it.  Maybe I'm wrong about the global financial crisis, but let's at least agree on the dates.  The peak panic was when Lehman Brothers collapsed in Sept 2008,
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308

It looks like gold rose from under $800/oz (start of Sep) to over $900/oz (end of Sept).

For two of my data points, once we agree on the dates, you agree with my data but then put an asterisk next to it.  Maybe I'm wrong about the global financial crisis, but let's at least agree on the dates.  The peak panic was when Lehman Brothers collapsed in Sept 2008,
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308

It looks like gold rose from under $800/oz (start of Sep) to over $900/oz (end of Sept).

I will agree that was when peak panic started, but the biggest losses and most volatile days in the stock market were in October. October was also when Total Bond lost money for the month because people thought the system might fail. If there was ever a crisis when gold should shine that was it, but it was down that month as well, setting its low for the year. Foretelling price movement in 2020, possibly. So no, it is not reliable in a crisis.

In the past it seems as if it has often done well post-crisis, maybe it has a bright future later this year?

[Joe Schmo]

Waiting for IAU to revisit the 13.80ish point...

[MustacheAndaHalf]

For two of my data points, once we agree on the dates, you agree with my data but then put an asterisk next to it.  Maybe I'm wrong about the global financial crisis, but let's at least agree on the dates.  The peak panic was when Lehman Brothers collapsed in Sept 2008,
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308

It looks like gold rose from under $800/oz (start of Sep) to over $900/oz (end of Sept).

I will agree that was when peak panic started, but the biggest losses and most volatile days in the stock market were in October. October was also when Total Bond lost money for the month because people thought the system might fail. If there was ever a crisis when gold should shine that was it, but it was down that month as well, setting its low for the year. Foretelling price movement in 2020, possibly. So no, it is not reliable in a crisis.

In the past it seems as if it has often done well post-crisis, maybe it has a bright future later this year?

Total Bond Market loses money any time all bond yields go up - it's not something that panics markets.

Here's the timeline on Wikipedia:

Sept 2008: Lehman brothers went bankrupt, then Washington Mutual. Fannie Mae, Freddie Mac and even A.I.G. (a public company) were taken over by the government.  A money market fund, widely considered the same as cash, "broke the buck" and lost money, an extremely rare and scary event.  Even cash wasn't safe.  The month ended with Congress failing to pass legislation to help, and markets dropped.
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308#Timeline

On that timeline on wikipedia, October 2008 has one sole entry:
"October 3, 2008: Congress passed the Emergency Economic Stabilization Act of 2008."

Agreeing on a relief package doesn't strike me as the moment of maximum panic, compared to bankruptcies, U.S. government seizing control of a public company, and a money market fund breaking the buck.

[appleshampooid]

Are bullion premiums way up right now due to high demand? It sure seems that way, but I'm not really in this game very often, so I may be out of whack.

Gold doesn't seem too far off, but some sliver examples. The 100oz silver bars that are actually in stock at SD Bullion are priced around $1704 with a current spot price of $12.05...roughly 41% premium.

On 90% junk silver bags it's even worse. I know these carry a higher markup generally, but I'm seeing like 66% markup on a $500 face value bag! $7167 when the spot price is $4311.

I have a spreadsheet tracking my past purchases, cost basis, and current value, but now I wish I had also tracked the current spot price when I bought those items to track premiums over time.

I wonder if big institutions are selling driving the prices down, but individuals are buying due to the APOCALYPSE and thus these retail outlets are pricing in crazy markups.

I looked up historical prices, and in 2014 I bought a bag of $100 face value 90% junk silver for roughly $1.50/oz over spot. Prices right now for junk silver are like $8-$10/oz over spot. Definitely not pulling the trigger on one of those...

[JAYSLOL]

I was actually interested in seeing if I could find a 100 oz bar at < $1300.  Negative.

Hahaha, no, not a chance.  Spot price in Canada is like $17.50CDN/ounce, looked at online bullion dealers, they all want $2450+

[pecunia]

Would smart people be dumping their precious metals now to buy stock at very low value?

[Radagast]

Would smart people be dumping their precious metals now to buy stock at very low value?

I think yes. Gold is approximately flat for the year. Stocks are down 30%. Anybody smart would have an asset allocation and rebalancing policy, which would almost certainly have them rebalancing now. Unless they are on a calendar year schedule.

[waltworks]

If you were using gold as a hedge/uncorrelated asset, yes, you'd be rebalancing at least some now.

In my experience the majority of the pro-gold folks (not necessarily on this forum but IRL) are constantly pessimistic and are waiting for the apocalypse. So they just own gold because it makes them feel good, not because they're investing for the future.

If I had any gold I'd be selling it to buy stock, that's for sure.

-W

[vand]

Would smart people be dumping their precious metals now to buy stock at very low value?

Nowhere near tempted.

I expect the Dow/Gold ratio to fall at least to a sub-5 level by middle of this decade.

Remember it peaked at 22.5 and is currently sitting at 13.

The huge stimulus in response to the crisis was entirely predictable and is why it makes sense to hold onto your gold.

[Radagast]

And for those interested I attached a plot of the S&P500 price divided by the gold price since 1954. I am having a hard time wrapping my head around that ratio. However, the average since 1954 is 1.55, and right now it is 1.54 sooo ... that means something. Very very meaning.

Actually I am surprised. I think I would have expected that ratio to change more than it has. The exercise was more interesting than I expected. But I think it indicates it is a better than average time to be buying stocks.

[MaaS]

Would smart people be dumping their precious metals now to buy stock at very low value?

Nowhere near tempted.

I expect the Dow/Gold ratio to fall at least to a sub-5 level by middle of this decade.

Remember it peaked at 22.5 and is currently sitting at 13.

The huge stimulus in response to the crisis was entirely predictable and is why it makes sense to hold onto your gold.

Who would have thought that gold would drop during this unprecedented money printing? What is happening to the dollar is truly remarkable (Not necessarily in a positive way).

[vand]

Would smart people be dumping their precious metals now to buy stock at very low value?

Nowhere near tempted.

I expect the Dow/Gold ratio to fall at least to a sub-5 level by middle of this decade.

Remember it peaked at 22.5 and is currently sitting at 13.

The huge stimulus in response to the crisis was entirely predictable and is why it makes sense to hold onto your gold.

Who would have thought that gold would drop during this unprecedented money printing? What is happening to the dollar is truly remarkable (Not necessarily in a positive way).

Personally I am not surprised.

Short term liquidity issues are at play and a lot of stuff is getting sold regardless. The exact same thing happened in 2008; Gold got hit along with everything else, but then it rallied well before the equities bear market had bottomed then went on to do about 270% into the 2011 peak. I expect the same thing to play out this time as the corona panic eventually subsides and we are left with the fallout, where the investing world will take on a different shape and gold will be more desireable by mainstream investors.

[vand]

And for those interested I attached a plot of the S&P500 price divided by the gold price since 1954. I am having a hard time wrapping my head around that ratio. However, the average since 1954 is 1.55, and right now it is 1.54 sooo ... that means something. Very very meaning.

Actually I am surprised. I think I would have expected that ratio to change more than it has. The exercise was more interesting than I expected. But I think it indicates it is a better than average time to be buying stocks.

I'm fairly bullish on stocks, but even more bullish on gold. I see economic policy designed to support paper assets as providing strong tailwind to precious metals.

Can I remind you that you have been questioning and doubting my forecasting and reasoning on this bullish gold play since I jumped into this thread 14 months ago, and so far I would say that that the price changes have done all the justification for me.

Trust me, we have a LONG way to go. How do I know? Look at the level of the gold mining index relative to the price of gold - it has almost NEVER been lower! What sort of a bubble or even a bull market is that? When companies pulling the metal out of the ground can't even make profit and keep having to raise capital it suggests that the price has still a long, long way to run up.

In one mf my earliest posts I wrote:

As I said, I don't really expect to change anyone's mind. But all markets are cyclical. The only thing that is really going to change sentiment is when there is proof in the pudding of what PM investors are saying and PMs actually start to move higher against other asset classes, and then you will find that the casual investor will be tripping over themselves with reasons to be in that sector instead of others.

and that is probably the truest thing that we all will probably agree on.

[Radagast]

I'm fairly bullish on stocks, but even more bullish on gold. I see economic policy designed to support paper assets as providing strong tailwind to precious metals.

Can I remind you that you have been questioning and doubting my forecasting and reasoning on this bullish gold play since I jumped into this thread 14 months ago, and so far I would say that that the price changes have done all the justification for me.

Trust me, we have a LONG way to go. How do I know? Look at the level of the gold mining index relative to the price of gold - it has almost NEVER been lower! What sort of a bubble or even a bull market is that? When companies pulling the metal out of the ground can't even make profit and keep having to raise capital it suggests that the price has still a long, long way to run up.

I am actually somewhat surprised at how well the S&P500/gold ratio has done at forecasting relative price movements between the two in the past, so I will concede that to you. When the ratio gets to an extreme in the future I might consider giving one more weight than the other. However right now it is at the very center of its range, so I prefer dividends instead of expenses, thanks.

Questioning and doubting your "bullish gold play": yes, and I continue to do that, even more strongly now, relative to stocks. First, I expect the stock market to continue to exceed gold by an annual rate of about 4%, of which around half will be in dividends and half price increases. With a lot of variability. There is no doubt which I would rather be in long term: stocks. Which is not to say a small amount of gold might not be useful, but not as a major part of a person's finances. The graph I posted reinforces my doubting you: The price of the S&P500 is at its average relative to gold, and yet I would expect it to increase over time. Throw in dividends, and I would say gold is not looking good relative to stocks.

Gold mining companies are doing fine. They are out exploring and expanding, and they have good P/B ratios and are paying decent dividends for the first time in a long time. They are not euphoric and over leveraged like in 2010-2013, but still feeling pretty good and are on much better footing than back then. It is true that their stock prices versus gold are low relative to what they used to be, but they are well above the 2015 bottom, by several multiples. I agree the companies are probably better to own than the metal at this point. Public opinion is bad about the companies relative to the metal, but that doesn't mean the price of the metal will outpace the broader stock market.

[vand]

@Radagast

You plot the S&P/Gold ratio but then you draw a completely useless conclusion.

What you should look at is the range it has traded between:

(I will use the Dow/Gold ratio as I'm more familiar with it)

I'm 42 year sold, and the ratio has swung between 1:1 and 40:1 in my lifetime. That is an absolutely huge range. How meaningful is simply looking at the long term average given this range?

Rather than wait for one to be 5 or 10% overvalued compared to the long term average, the huge range tells me that the cycles at play in these markets gives the investor fantastic opportunity to outperform the long term average in both of them if you can position yourself to be more heavily tilted towards the asset that is in the ascendency. 1970-1982 you would have done well being more heavily in gold. 1982-2000 you would have done well to be more heavily in equities. 2000-2011, back to Gold, 2011-2018 Equities

2018-?? It's looking like gold's time so far.. and given the duration of the average swing it is likely there are a few more year left where gold will be in the ascendency.

[Classical_Liberal]

@vand

I don't think his conclusions are useless.  Instead we are looking at two completely different investment mindsets.  You are thinking near to midterm 0.5-4 years maybe.  While @Radagast  is looking at longer term, 10 years out. At this point, being we are near the median, looking at long term investments is quite different than the nearer term.  IOW, you are looking at momentum and value, whereas Radagast is mostly looking at value.

I tend to be on @Radagast's side in that I'm looking for the investment that will outperform over the next decade, not the next year or two. I'm basically looking for places to park some of my 35% cash allocation for the long term.

[Radagast]

@vand
IOW, you are looking at momentum and value, whereas Radagast is mostly looking at value.

That seems like a fair assessment.

I've had it pretty well drummed into me that I can't predict future price movements. As a result, in general my only strategy is to build up my investments (mostly stocks) over many years by dollar cost averaging. Then, in 5 or 15 years when they inevitably but unpredictably go through the roof, I can sell a lot of them. Not too sure how that will work out compared to buying only one stock fund or any of the the gazillion market timing strategies. But, I do have 5% in gold miners, which should act like 15% in gold if @vand ends up being right. And if Vand is not right and they tank, I'll just buy more to maintain my 5% and they will jump eventually.

[vand]

I don't consider this a momentum play. If anything I consider myself a value investor, which is the opposite of a momentum investor. I like gold because it is still cheap and still very unloved by both Wall streer and Main street, both still brainwashed that the only the asset classes worth investing in are equities and real estate.

 I consider this a global macro play. I have been very enthusiastic on PMs for 4 years (actually about 15 years, but only an investor since 2016) even while they were still losing ground to stocks, because I could see the implications of the breathtaking course of action that the Trump administration was following meant that we were doubling down on the same orthodoxy that caused the last two meltdowns and has driven the long term bull market since 2000.

[vand]

Gold and gold miners behave VERY differently. You should not consider them anywhere close to being the same asset class; they're not. I consider my miners as part of my equity allocation, not my PM allocation.

[markbike528CBX]

......... I like gold because it is still cheap and still very unloved by both Wall streer and Main street, both still brainwashed that the only the asset classes worth investing in are equities and real estate.

BS. Gold is way above the The 10 year moving average. 

[vand]

......... I like gold because it is still cheap and still very unloved by both Wall streer and Main street, both still brainwashed that the only the asset classes worth investing in are equities and real estate.

BS. Gold is way above the The 10 year moving average.

https://www.youtube.com/watch?v=7FBo467hLzQ

[Radagast]

Gold and gold miners behave VERY differently. You should not consider them anywhere close to being the same asset class; they're not. I consider my miners as part of my equity allocation, not my PM allocation.

Annual returns of gold miners since 1977 are about about 80% like gold and 20% like the broader economy, with double the price movements. Less correlated for returns over shorter periods (1 month, 1 day), but probably more correlated for returns over longer periods.

[markbike528CBX]

......... I like gold because it is still cheap and still very unloved by both Wall streer and Main street, both still brainwashed that the only the asset classes worth investing in are equities and real estate.

BS. Gold is way above the The 10 year moving average.

https://www.youtube.com/watch?v=7FBo467hLzQ

You are in invoking DAVE RAMSEY as your authority? Or is he your strawman? 
Not sure, he makes a good case for long term mutual fund holding

https://onlygold.com/gold-prices/historical-gold-prices/
Recent spot from https://www.xe.com/currencyconverter/convert/?Amount=1&From=XAU&To=USD

Date          Value              10 year moving average
2020.23   $1,523.76    $1,350.19
2019   $1,523.00    $1,310.53
2018   $1,286.81    $1,251.15
2017   $1,302.81    $1,210.21
2016   $1,133.69    $1,149.56
2015   $1,060.00    $1,093.14
2014   $1,202.32    $1,036.37
2013   $1,204.50    $965.00
2012   $1,664.00    $886.66
2011   $1,531.00    $760.53
2010   $1,420.25    $646.13
2009   $1,087.50    $543.40
2008   $869.75    $470.79
2007   $836.50    $417.81
2006   $635.70    $375.31
2005   $513.00    $352.70
2004   $435.60    $340.91
2003   $417.25    $336.92
2002   $342.75    $329.26
2001   $276.50    $330.21
2000   $272.65    $340.18
1999   $290.25    $351.85
1998   $288.70    $362.75
1997   $287.05    $380.73
1996   $369.00    $390.17
1995   $387.00    $386.35
1994   $383.25    $379.17
1993   $391.75    $378.88
1992   $333.00    $383.90
1991   $353.15    $389.99
1990   $386.20    $411.97
1989   $401.00    $418.59
1988   $410.15    $401.05
1987   $486.50    $378.41
1986   $390.90    $346.34
1985   $327.00    $323.47
1984   $308.00    $310.45
1983   $380.00    $292.13
1982   $447.00    $263.39
1981   $400.00    $226.80
1980   $594.90    $193.98
1979   $459.00    $143.62
1978   $208.10    $105.85
1977   $161.10    $90.16
1976   $133.77    $78.73
1975   $139.29    $69.80
1974   $183.77    $60.35
1973   $106.48    $46.85
1972   $63.84    $40.38
1971   $44.60    $37.80
1970   $38.90    $37.07
1969   $41.00    $36.74
1968   $43.50    $36.21
1967   $35.50    $35.46
1966   $35.40    $35.44
1965   $35.50    $35.41
1964   $35.35    $35.41
1963   $35.25    $35.41
1962   $35.35    $35.43
1961   $35.50    $35.44
1960   $36.50    $35.43
1959   $35.25    $35.22
1958   $35.25    $35.21
1957   $35.25    $35.20
1956   $35.20    $35.18


Disclosure:  I bought gold ~20K USD in 2010 as "near SHTF" emergency fund money that I didn't want to totally rot in cash.
Note that it was at, near, or slightly below the 10  year moving average at the time.

If you want to beat your head against a gold brick, I would suggest a Pan-Galactic Gargle Blaster, https://hitchhikers.fandom.com/wiki/Pan_Galactic_Gargle_Blaster.
For those of your not HHGTG fans, Its effects are similar to "having your brains smashed out by a slice of lemon wrapped round a large gold brick."


Doesn't gold get taxed at 28% no matter what your income is otherwise?

[vand]

......... I like gold because it is still cheap and still very unloved by both Wall streer and Main street, both still brainwashed that the only the asset classes worth investing in are equities and real estate.

BS. Gold is way above the The 10 year moving average.

https://www.youtube.com/watch?v=7FBo467hLzQ

You are in invoking DAVE RAMSEY as your authority? Or is he your strawman? 
Not sure, he makes a good case for long term mutual fund holding

https://onlygold.com/gold-prices/historical-gold-prices/
Recent spot from https://www.xe.com/currencyconverter/convert/?Amount=1&From=XAU&To=USD

Date          Value              10 year moving average
2020.23   $1,523.76    $1,350.19
2019   $1,523.00    $1,310.53
2018   $1,286.81    $1,251.15
2017   $1,302.81    $1,210.21
2016   $1,133.69    $1,149.56
2015   $1,060.00    $1,093.14
2014   $1,202.32    $1,036.37
2013   $1,204.50    $965.00
2012   $1,664.00    $886.66
2011   $1,531.00    $760.53
2010   $1,420.25    $646.13
2009   $1,087.50    $543.40
2008   $869.75    $470.79
2007   $836.50    $417.81
2006   $635.70    $375.31
2005   $513.00    $352.70
2004   $435.60    $340.91
2003   $417.25    $336.92
2002   $342.75    $329.26
2001   $276.50    $330.21
2000   $272.65    $340.18
1999   $290.25    $351.85
1998   $288.70    $362.75
1997   $287.05    $380.73
1996   $369.00    $390.17
1995   $387.00    $386.35
1994   $383.25    $379.17
1993   $391.75    $378.88
1992   $333.00    $383.90
1991   $353.15    $389.99
1990   $386.20    $411.97
1989   $401.00    $418.59
1988   $410.15    $401.05
1987   $486.50    $378.41
1986   $390.90    $346.34
1985   $327.00    $323.47
1984   $308.00    $310.45
1983   $380.00    $292.13
1982   $447.00    $263.39
1981   $400.00    $226.80
1980   $594.90    $193.98
1979   $459.00    $143.62
1978   $208.10    $105.85
1977   $161.10    $90.16
1976   $133.77    $78.73
1975   $139.29    $69.80
1974   $183.77    $60.35
1973   $106.48    $46.85
1972   $63.84    $40.38
1971   $44.60    $37.80
1970   $38.90    $37.07
1969   $41.00    $36.74
1968   $43.50    $36.21
1967   $35.50    $35.46
1966   $35.40    $35.44
1965   $35.50    $35.41
1964   $35.35    $35.41
1963   $35.25    $35.41
1962   $35.35    $35.43
1961   $35.50    $35.44
1960   $36.50    $35.43
1959   $35.25    $35.22
1958   $35.25    $35.21
1957   $35.25    $35.20
1956   $35.20    $35.18


Disclosure:  I bought gold ~20K USD in 2010 as "near SHTF" emergency fund money that I didn't want to totally rot in cash.
Note that it was at, near, or slightly below the 10  year moving average at the time.

If you want to beat your head against a gold brick, I would suggest a Pan-Galactic Gargle Blaster, https://hitchhikers.fandom.com/wiki/Pan_Galactic_Gargle_Blaster.
For those of your not HHGTG fans, Its effects are similar to "having your brains smashed out by a slice of lemon wrapped round a large gold brick."


Doesn't gold get taxed at 28% no matter what your income is otherwise?

You really don't do subtle, do you?

DR is mainstream. DR hates gold. The mainstream hates gold.

Now run along back to your index trackers, and come back with the rest of the mainstream are clambering for gold.

[markbike528CBX]

The question of 28% taxes is out of vand's preview as a UK person.   Could any US person chime in?

@vand nope, no subtlety to be found here, fresh out (actually never here).
You did not answer my question on whether Dave Ramsey was a strawman.   
There are numerous threads here on the MMM boards that note that DR is a lousy investment advisor and near-quack/charlatan for investments in which he has a financial interest.

@vand You also didn't deign to comment on the data and graph provided as proof of my "greater than 10 year moving average" statement.

you run along back to your index trackers, and come back with the rest of the mainstream are clambering for gold.

  - please leave off the smarmy, it is unbecoming to one of Her Majesty's subjects ;-)

and I will be back to sell you and the mainstream my gold at great selling prices.   The time to buy [gold] is past, the time to sell [gold] is nigh!

Edit to add correct quote stamp, and fix a punctuation

[vand]

Dow/Gold is now 12.

Main street should start taking it more seriously as a viable investment when it reaches sub-10.

[markbike528CBX]

Dow/Gold is now 12.

Main street should start taking it more seriously as a viable investment when it reaches sub-10.

Not a big Dow fan. or is this a special Dow of the Dogs thingy?

[ChpBstrd]

The mainstream hates gold.

Now run along back to your index trackers, and come back with the rest of the mainstream are clambering for gold.

Is it "mainstream" now? I thought "normies" was the term for people outside one's own cult? Admittedly, I'm not keeping up with "alternative" economic theories on Reddit / YouTube, so that probably makes me something like that.

[vand]

Gold made a new high in my local currency today.

But the public don't notice:

https://trends.google.com/trends/explore?date=today%205-y&q=gold

all they care about is their stocks:

https://trends.google.com/trends/explore?date=today%205-y&geo=US&q=vtsax

My portfolio is treading water much better consequently - down from peak by 20% time weighted (17% money weighted), and it's my PMs that have kept it from the anniilation that the overloaded equity investors will be suffering. And yes, there will be all the geniuses popping their head above the parapet to let us know how they suddenly became expert market timers and sold everything days before the crash, but you know what, I don't really believe half their stories, and even if they did, I don't really care, I'm not that into day trading, just smart asset allocation and readjustment.

[Classical_Liberal]

The question of 28% taxes is out of vand's preview as a UK person.   Could any US person chime in?

It's an important question.  Personally, I keep enough of a percentage of my gold allocation in a Roth IRA (currently about 40%, was <30 before).  This way it can be sold to rebalance without tax consequences.  I'm one of those folks who will always keep some of my assets in gold.  5-10 percent on the low end.  So even in a market where rebalancing is needed I have enough flexibility in my roth to sell gold and purchase equities when I get too far out of wack in allocation.
_____

I am sitting in the @vand camp of being down about 18% of my portfolio.  The combination of cash, gold, and treasuries, which made up about 40% of my portfolio pre-COVID crash, is holding pretty steady at about 1/2 S&P losses.  This is what my projections, based on historical data, had shown would happen in an event like this.  So, I'm as happy as I can be with losing 3-4 years of living expenses. Since the crash, I sold about 50% of my I-term Treasuries when yield was at about 0.75 and converted to cash.  I have since been using some of that cash to DCA into US and international equities once US CAPE got below 25 (S&P 2600ish).  As well as some earnings from my post retirement part time job.  I have not sold any gold yet, I think there is still some good upside.

[celerystalks]

Good luck to anyone who is trying to get their hands on physical gold right now. 1 oz of gold is going for about 1800. Premiums are huge. Most online bullion dealers are reporting extreme order volumes, and are running out of stocks of certain coins like krugerrands.

[effigy98]

Can't wait for a 1oz coin to buy a house. Thank you Fed!

[celerystalks]

Can't wait for a 1oz coin to buy a house. Thank you Fed!

That likely won’t happen. The price of anything of tangible value will probably go up as well.

[vand]

I guess as the self-proclaimed goldbug around this place, it would be remiss not to point out that we have a new 7 year USD high for gold @ $1722..

30daychg   +192.10   +12.56%
1yearchg   +432.20   +33.51%

For investors who think still that it's dangerous to put a part of your wealth in precious metals..  as usual..  you have it backwards.

With the astonishing action by central banks and governments around the world in an effort to reflate their economies, I see the next few years as a extremely dangerous time to NOT have a significant part of your wealth in precious metals.

Remember Dalio's prognosis (https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio). What worked well in the last paradigm tends to work much less well when the world transition to a new paradigm. Are we entering that new paradigm? Central bank action and asset prices seem to suggest that we might be. Adjust your thinking and your portfolio accordingly.

[waltworks]

It will be interesting to see if the hyperinflation folks are right this time, I'll certainly say that.

Not wishing I had gold, though. I'm happy with a big low-rate mortgage (planning to make it bigger and lower rate soon!) and stocks.

-W

[vand]

It will be interesting to see if the hyperinflation folks are right this time, I'll certainly say that.

Not wishing I had gold, though. I'm happy with a big low-rate mortgage (planning to make it bigger and lower rate soon!) and stocks.

-W

I don't predict hyperinflation, but I think people underestimate the possibility of an inflationary recession (ie stagflation) similar to the 1970s. In this scenario the stock/bond portfolio gets crushed as central banks lose their main tool in fighting economic contraction.  The purchasing power of the currency could halve or quarter over a decade. That's nowhere near hyperinflationary, but it is more inflationary that most people have ever known.

[maizefolk]

I don't predict hyperinflation, but I think people underestimate the possibility of an inflationary recession (ie stagflation) similar to the 1970s. In this scenario the stock/bond portfolio gets crushed  as central banks lose their main tool in fighting economic contraction. The purchasing power of the currency could halve or quarter over a decade. That's nowhere near hyperinflationary, but it is more inflationary that most people have ever known.

Inflation is bad for bonds in the short term and disastrous in the long term.

Inflation is bad for stocks in the short term and neutral in the long term. In Venezuela, which is experiencing actual hyperinflation, buying stocks as soon as you got paid and then selling them as needed to make purchases is one of the ways the middle class (such as it is) over there adapted to a currency that was constantly losing its value.

I hold almost no bonds not because I'm greedy and want higher returns but because I know a stock based portfolio can ultimately recover from a significant rise in inflation while a bond based one will not.

[appleshampooid]

Back in the day I used to set a 5% target of NW in physical bullion. My wife talked me out of it some time ago and it retracted to about 1.5% depending on asset prices. I managed to negotiate with her back to a 3% position. Since we met on that number, I have been setting aside some cash but it has been slow going accumulating the necessary cash. I'm hoping to buy about 8k worth of gold for this round in any coin or bar close to 0.25 troy ounces (sovereigns would be great for this). Current target if the market stays relatively stable in terms of what's in stock and premiums:
https://sdbullion.com/5-us-commemorative-gold-coins-bu-proof

I'm probably shooting myself in the foot waiting to accumulate enough cash to get a volume discount, rather than just DCA'ing a few coins at a time as the price goes up.

I'm upset in myself that I let my position deteriorate to the point where I'm now buying on the upswing instead of over the previous years while prices were relatively low. On the other hand, it's such a small part of my portfolio that it won't matter much.