Gold prices dropping like a rock

[SUBMAN1]

In its continuing roller coaster ride, gold is going downhill in handbasket. This makes gold not even keeping up with inflation. Its like having your money worth half as much every few years as it would in a simple bank account. A losing proposition, and always has been.

-S

RAW MATERIALS: Gold futures take dive

Gold futures fell, capping the biggest weekly loss since 1990, as the dollar rallied and traders pared bets on future cuts in U.S. interest rates by the Federal Reserve.
Interest-rate futures show a 58% chance the Fed will cut borrowing costs by 50 basis points to 1.75% next month, compared with an 82% chance Wednesday.
The Fed has cut the overnight lending rate six times since September, when it was 5.25%. Gold reached a record $1,033.90 on March 17, before losing as much as $100 this week.
"Gold can thank the Fed and the dollar for this monstrous sell-off," said Matt Zeman, a metals trader at LaSalle Futures Group Inc. in Chicago. "Right now, we are in no-man's-land."

[Antiacus]

It'll correct.

This is the time to buy.

[stabiz]

Its my fault, I found a lump the size of Bismarck in my back yard.

[Letum]

Its my fault, I found a lump the size of Bismarck in my back yard.

I once found a tiny lump the shape of the Bismark on my front lawn.

[DeepIron]

The world currency foundation based on the price of gold has been a fallacy for decades. The printing of paper money far outstripped the ability of governments to redeem "value for value" paper currency for gold metal...

To quote the Wikipedia: "The gold standard is not currently used by any government or central bank (http://en.wikipedia.org/wiki/Central_bank), having been replaced completely by fiat currency (http://en.wikipedia.org/wiki/Fiat_currency). However, private currency (http://en.wikipedia.org/wiki/Private_currency), backed by gold, is in use."
Maybe we should be using Uranium or Plutonium instead... :huh:

[Jimbuna]

What next.....free samples to all visitors at Fort Knox so there'll be more room for bank notes http://img98.imageshack.us/img98/1817/thinkbigsw1yo4.gif

[Skybird]

Currently, prices for many ressources suddenly went into a significant fall - which is no sign of relief for the current crisis, but an extremely dangerous signal for an economy in or near to a recession. economists will tell you that it means that the economic trend ("Konjunktur") is about to switch into the red, or may even collapse with a loud bang. German press even had editorials about it in the past two days, with red flashing lights framing the articles.

You do not buy gold for speculation and investement anyway, but to have an emergency reserve for very, very bad times when no printed paper, money and treaty is worth anything anymore. for that, the value of gold expressed in current currency, is pointless. because in that scenario, gold itself becomes the currency.

[peterloo]

I am not an alarmist or a survivalist, so I don't think I need to buy gold myself in case of dollar depreciation

However, the recent trend of oil and gold did remind me that, the huge bunch of speculators do have profound impact on the price of these goods

economists will tell you that it means that the economic trend ("Konjunktur") is about to switch into the red, or may even collapse with a loud bang.
The ecomony has already in recession. The Fed just don't want to admit that.

[Platapus]

You do not buy gold for speculation and investement anyway, but to have an emergency reserve for very, very bad times when no printed paper, money and treaty is worth anything anymore. for that, the value of gold expressed in current currency, is pointless. because in that scenario, gold itself becomes the currency.


But in that terrible situation, what will be the value of gold?

If you are hungry but have a bar of gold and I have a loaf of bread. How much will that bar of gold be worth? Exactly one loaf of bread if you are hungry enough.

You can try to tell me "no no, my gold is worth much more." My answer will be "but I have the bread and you are hungry". :up:

Other than for a few industries, gold only has value because people agree on a value. In the doomsday scenario you mentioned why would gold be of any standard value?

If the world's economy collapses and governments fail and all currency is failed, why would you think that gold will have any value except for what someone will trade you for it?

It may take many bars of inedible gold to buy one loaf of bread if you are hungry enough :smug: