The PRICE of Gold

Discussion in 'Men's Economics' started by BBC3, Oct 27, 2012.

  1. BBC3

    BBC3 Member

    While I hate to even go here...

    Gold, as a financial instrument has been typically cast and percieved by both active and woodbe investors as an unattractive HEDGE, or principle instrument of DIVERSIFICATION for an investment portfolio. It is one of the only market commodities out there which could actually be perceived as even more BORING than Utilities stocks - which have a historical rate of gain only doubling in value every (5) years. From a MARKET perspective, its historially about as attractive as a set-o-titties on a boar hog...:D

    I was suprised the other day when I was advised that the price of gold has risen to 17-1800$ per ounce.! Looking back, the price was around $700.00 in 2008, $450.00 in 2005, and then peaking relatively low in 2000 at about $270.00/ounce. NOTABLE, gold also pinnacled in 1987 at $600.00 and then again in in 1980 @ $615.00 quickly rising from only $150.00 in 1977. The 1977 market would have been the one best snatch and grab/profit takes of the century with regard to gold it would appear. But with regard to the recent 5 year double in price, you can relax and confidently ground yourself back to the chair realizing this as only a market correction overdue, and realistically thus realized as a 5 year double, or 12% historical average growth. Which is in fact the market historical average.

    But I do look back to 2008 and recall all the active market advertising about "Buy Gold now" (which made me ill of course), and WHY the sudden historical price spikes? Why the seeming price stabilty and reduce value growth for the majority of the last century? Looking back, the spike in 1987 would be associated with the Black Monday market crash, and the spike in 1980 would be the end result of the 1970's historically notable inflation wave. NOTABLY, Gold went from 30 bucks to over $600.00 during the 1970's.. Did you hear that? Thats a TWO THOUSAND PERCENT GAIN OVER TEN YEARS vs. the normal market growth rate of 100% every five years... Talk about a GOLD BOOM... And interestingly enough the price of gold didn't really move one ioda during the great depression in the 1920's. So I guess that could be a mark discerning TRUE POVERTY and lack of realized assets. I doubt there was an "Active World Market" at that time, but it was there. So this should also denote the world wide reprecussions with regard to war, finance, and societies. There may be a note to take there. The point is that my conversation the other day prompted this market investigation on myy part as I had misinterpreted the gains by a couple of years, and thought I had interpreted as a greater 5 year gain than actually occurring.

    But what gives a "Market Commodity" its MARKET VALUE.? This should certainly be one principle aspect of the market which should have some significant direct corrolation with that actual intrensic value of the ASSET, and as a predominant factor. Still, market value is "Market" value, and therefore the PUBLIC INTEREST as a market shall always influence and previal to a strong degree. But what REAL Value does Gold have? As a metal for metallurgic properties? Its highly malleable. Its a transition metal with interesting isotopic properties and varying oxidative states. It should not be discounted to the fact that it is a fundamental earth element know to produce a magnetic field - the only others being Nickel, iron, and cobalt. It is a strong conductor of electricity. OR perhaps its market value is derived solely from its interesting physical appearance? Is the market value of gold derived primarily due to the fact that it looks so pretty on your finger or around your neck? Gold is stated to be inert in interaction with the human body AS A METAL. But they say we are composed of all the elements that formed on this rock - which formed us. Does physical proximity have any health properties? Is this the attraction to the skin? It should be noted that the isotope Gold-198 with a half-life of 2.7 days is currently used in nuclear medicine. One important market factor is most likely the fact that gold has been used as a material for MONETARY COIN. While this is most likely due to the fact that it is BOTH Durable AND Malleable as a reason at best. Could this be the single most important factor in the current COMMON market perception of the value of gold. While the metal appears to have some unique properties and characteristics, I would speculate that the market as a whole, and as a primary form of PRICE SUPPORT, has completely based their perception on both historical use as currency, as well as the fact that it makes some pretty-ass jewelry.

    Some other notes:

    Jewelry - being that in jewelry production, the purity of the fold used is diminished as the Carat OR Karat. It should be noted that Wiki commonly used the term Carat with a "C", while Karat with a "K" may be more correct. I have heard in the past that it may be variance in terminology from different societies, however one observed refernce point indicates that "K" should be used with Gold and "C" is more appropriate for reference to Gemstones/diamonds. But the lower the Karat #, the more copper, silver, or even aluminum is mixed in; "White gold" being cut with silver and the like.

    Currency - Gold is no longer used in active traded currency. Evidence that the empirical value outran the value as a basic metal. Also would have to do with the inception of the industrial revolution and metal manufacture.

    Value relations - Copper = $3.50/lb, OR 21 cents per ounce
    Platinum = $1,600.00 per ounce (similar to gold)
    Nickel = $7.00/lb OR 42 cents per ounce

    *** 181 pennies equals 1 pound in weight. Thats a buck eighty-one, or a large candy bar in a gas station. Thats also only half the actual price as copper the commodity! Melt em down and double your money? And go to jail for Federal defacing of currency or somthing like that. But it is illegal. OR just further PROOF that a MARKET COMMODITY has nothing to do with REAL VALUE?!? Does this transaction EVER Take place. Or is it just another rhetorical example of a financially valued transaction that NEVER actually MATURES.. On a last note and a prelude to a further and much more important discussion - Is this a prelude to a NEW FORM of inflation never relized as material inflation, and only financially. ITs definitely an example of where todays mechanical and theorhetical markets have departed from the foundations of BARTER. Common laws a physics seem to be either ignored, denied, or disproven once again.

    And by the way. A pound of nickels only equals $4.50 in current monetary markets whereas its worth about 7 bucks in financial commodities markets. So why again is a one ouce gold coin worth 1700 bucks? Dimes and quarters are combinations of metal. But which one should you have stuffed under YOUR mattress if ya had to keep some change around?

    And on a final note regarding further proof that the common investor is nothing more than market support. You can denote that curbside gold peddlers are marketing currently at an all time high on street corners everywhere, dancing around with the style and grace that only a Little Caesars Pizza Boy could possibly possess and lament.! LOL Its this a tell? Can we possible discern curbside showmen as the trigger to "sell". Does this indicate the end of the latest Gold Wave? Or at least a good indiation of the latest CREST with certainty. This is undoubtedly a solid indicator that this market is fully involved, or in our terms - SATURATED...

    Is the common investor not only the support for the market profit kings, but perhaps the potential King of Profit Takers, and ironically unrealizable within itself individualy?! Duality indeed.:)
     

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    Last edited: Oct 27, 2012