The Rapid Rise Of Gold

[Midasfrog]

The four main world events in the last four years leading to the rapid rise in gold value.

1.  January 2020 Coronavirus 

2.  February 2022 Russia Invades Ukraine 

3.  March 2023 US Banking Crises 

4.  October 2023 Israel - Hamas War 

 

Are we going to see a cooling off period during 2024 or maybe later with a possible pull back in gold value and see spot prices of £1300 again ? 

Nothing to worry though it will rise again 

 

[Darr3nG]

11 minutes ago, Midasfrog said:

spot prices of £400 again ? 

Wonger, is that you?

[Midasfrog]

1 minute ago, Darr3nG said:

Sorry wrong thread 

No problem 🤣

[James32]

Anything is possible I guess, but the world is in a sad state currently, ask yourself this...whats the plan to fix the worlds problems in 2024?

[Midasfrog]

2024 continued housing market crash ?

[Guest]

Hope so. Still haven't managed to make a bed of it

Edited November 14, 2023 by Guest

[Gruff]

I think you need to zoom out on that timeline, then those 4 become more markers of the overall rise in the gold price, or to put it another way, the overall decline in the value of FIAT. We know that they're going to have to turn the printer spigots back on at some point and then try and deal with the inflation that comes with that, but that is just the next step in destruction of the value of FIAT.

With the BRICS and other nations all making concerted efforts to reduce exposure to USD, that will further exacerbate the wars as the US fights for supremacy and also tries to crush decent and any move away from the USD. In doing so they will continue in the short to medium term to further push the divide between them and other currencies. I can see the GBP/USD heading towards parity in the next decade.

[Midasfrog]

Yes @Gruff that is very true 👍 zoomed out further , from the year 2000 gold just keeps going up 

[Sovhead]

1 hour ago, Midasfrog said:

The four main world events in the last four years leading to the rapid rise in gold value.

1.  January 2020 Coronavirus 

2.  February 2022 Russia Invades Ukraine 

3.  March 2023 US Banking Crises 

4.  October 2023 Israel - Hamas War 

 

Are we going to see a cooling off period during 2024 or maybe later with a possible pull back in gold value and see spot prices of £1300 again ? 

Nothing to worry though it will rise again 

 

I don’t think we’ll ever see that price again tbh, the first 3 events are in the past now and we’ve seen an ATH recently granted it’s dropped a bit again but when events 5, 6 and 7 happen I think it’ll rise again so gather up as much as we can.

[HonestMoneyGoldSilver]

1.  January 2020 Coronavirus - Money Creation - DEBT

2.  February 2022 Russia Invades Ukraine - WAR - DEBT

3.  March 2023 US Banking Crises - Money Creation - DEBT
 
4.  October 2023 Israel - Hamas War - WAR - DEBT

 

The price of gold is effectively the inverse of the USD. The value of the $ is decreasing at an accelerating rate due to debt (money creation and interest)

Expecting gold to go down is equivalent to expecting the US national debt to decrease rather than accelerate to $40 trillion. Or for the UK, EU and Japan to suddenly balance their books

If fiat currencies have major struggles then the $ will be the last currency to fail. We've seen recent gold ATHs in every major currency (£, €, ¥) except for $. In theory gold should continue to go up faster in £, €, ¥ than $ but all 4 are losing out heavily to gold and will continue to do so proportional to their accelerating debts

Gold has done alright lately but there's many years of underperformance relative to real inflation that markets haven't yet priced in. We can add to that price whatever dramas the world has in store for us like wars, pestilence, famine, BRICS, CBDCs and cryptocurrencies

 

You are right that gold can go down as well as up. I'm not sure as low as £1300 is possible unless GBP goes up a lot vs USD but the charts suggest $1615 is a theoretical low or around £1370. Others have said the AISC (All-in Sustainability Cost) is in the $1300-1700 range, then the floor for gold would be higher than $1615

My read for the next few months is up. There's Diwali and CNY which mean nothing to us but a lot to a few billion people. We have Christmas. I don't think there will be a major dip but if there is, it's more likely to happen after CNY (10th Feb) than before it

[Paul]

My views are a tad one sided on gold, so I'd hate to be one to repeat oneself

[Paul]

12 hours ago, James32 said:

whats the plan to fix the worlds problems in 2024?

 

 

[Paul]

11 hours ago, Midasfrog said:

Yes @Gruff that is very true 👍 zoomed out further , from the year 2000 gold just keeps going up 

It's when you see a graph like this on the macro decades scale instead of the micro month/year scale you can see where the net average destination is headed.

As my plan is still holding firm for another 20-25 years until retirement. Let the uptrend continue, there'll be knocks and bumps along the way, but if we've gone from $200 to $2000oz, why can't we go from $2000 to $20,000in the next 25 years ?? 

Us debt is now adding a trillion to it more and more regularly. This isn't going to stop any time soon 

Edited November 15, 2023 by Paul

[sixgun]

There are two questions on gold:

1 Does holding value in gold protect you against inflation?

How much GBP or USD it takes to buy the gold is a side issue - does the yellow metal protect against inflation? https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

The price of gold in 1974 was £68.50 - It's £1582 now.

£69 in 1974 according to the BoE is £625.11 today. Clearly gold has outperformed the inflation index according to the BoE.
I would probably argue this is in part due to the heavy suppression of gold in the years prior to 1974 and that the true inflation rate was really a lot higher than the BoE admits. 

2 Does gold outperform inflation?

Well we have the 'official' answer to this question, which is yes. Personally i think that like almost everything coming out of government, the inflation rate is a lie. These numbers of manipulated to keep the rate of inflation low.

If we compared gold to UK average house prices we get a different picture. https://www.nationwide.co.uk/house-price-index/

Property difference valuation, based on the UK average prices.

From Q2, 1974

£69

To Q3, 2023

£1,790

Percentage change in price:

2494.71 %

So according to average UK house prices, bricks and motar outpeformed but not hugely. Now you could have lived in that property, you could have rented that property - and so got added value. BUT there are costs, council tax, the rates, insurance, maintanence and so on. 

Invested in the general stock market

I cannot find the data for the UK stock market so I used the Dow. The index was at 773 mid 1974 - it is now at 34827. This is a 4505 % increase. It does not take into account dividends you might have received and it does not take into account the 'management fees' for holding a general Dow fund and it assumes the managers were able to match the Dow. Those are some big factors to not take account of but investment is a general US fund certainly looks like it was the better bet.

I think we are entering a golden phase for gold as the fiat / paper system continues to collapse. Stock indices may continue to climb as the destruction of fiat takes hold. We must remember stock indices are always adjusting - stocks fall out as a company fails and new ones appear - so they adjust for the changes in the economy. 

[Nick1368]

Yeah it doesn’t really matter if it drops to £1300 or go to £1700 , the important thing is the purchase power of gold and it’s protection against inflation which is why it’s a long term investment and in long term it usually protects you against inflation .

i buy whenever I can regardless of the price and only sell if i need the cash .

[KleinerVogel]

18 hours ago, Midasfrog said:

Yes @Gruff that is very true 👍 zoomed out further , from the year 2000 gold just keeps going up 

Are you sure that isn't the graph for bullion by post's premiums? 🤑

[Bigmarc]

9 hours ago, Paul said:

 

 

That was written in graffiti for may years around the m25. 

 

[Gruff]

2 minutes ago, Bigmarc said:

That was written in graffiti for may years around the m25. 

 

I've seen that several times in the past

[Abyss]

But lets not forgot that it is always fun to try and buy gold while it is on a downward price spiral and time the markets (not advisable it is always better to average into long term position) but you certainly get a ego boost if you can get right. Right now spreads from Chards has the lowest premium on a newly released 1 oz Gold Britannia 2.5% above spot (not for 100 oz, but a single oz) I have ever seen in my lifetime. This should tell you that dealers having to reduce premiums to either compete or because demand is drying up due to higher prices. I am predicting Gold price heading towards $1600 oz once Hamas defeated, F16's delivered and more Ukraine territory liberated and inflation brought closer 2% most likely due to sustained higher interest rate plus a recession. Yes Gold long term hedge against inflation but why would I want to buy the metal after it has spiked $200 due to geopolitical reason I personally would rather wait and see what happens to price after returning to more normal market conditions.

All because I believe short term Gold headed lower does not imply I would be willing to sell any of my physical Gold, just to much risk at the present moment in time in the world, US elections 2024, possible further bank failures....

Edited November 15, 2023 by Abyss
typo