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Gold prices - continue to slip tomorrow?

Posted on 12/14/16 at 4:54 pm
Posted by GREENHEAD22
Member since Nov 2009
19610 posts
Posted on 12/14/16 at 4:54 pm
I am figuring that the feds raise was probably already factored in for the most part.
Posted by cave canem
pullarius dominus
Member since Oct 2012
12186 posts
Posted on 12/14/16 at 6:27 pm to
In my opinion gold prices are going to continue to slide as CD rates increase.

There really has not been much of a reason to move out of PM's and into bank deposits since '08, if rates continue to rise that all changes.

Same reason Wall Street is terrified of rising rates right now
Posted by windshieldman
Member since Nov 2012
12818 posts
Posted on 12/14/16 at 6:46 pm to
Hope not for long, got a gold mining company stock I'm impatiently waiting to sell for the last 6 months.
Posted by Iowa Golfer
Heaven
Member since Dec 2013
10230 posts
Posted on 12/14/16 at 6:56 pm to
What miner out of curiosity, a junior or a major?
Posted by windshieldman
Member since Nov 2012
12818 posts
Posted on 12/14/16 at 7:10 pm to
Eldorado Gold
EGO
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 12/14/16 at 7:33 pm to
I don't really have a strong opinion on what gold will do in 2017, but overall, gold prices actually seem surprisingly normal right now. I've taken the position for about 8 years that gold prices were way too high based on post-1971 CPI ratios, and were bound to fall below $1,000/oz. However, maybe with consumer price inflation picking up, it doesn't necessarily have to break below $1,000. If gold prices tumble in 2017, then it might become a decent hedge investment in 2018.
Posted by GREENHEAD22
Member since Nov 2009
19610 posts
Posted on 12/14/16 at 7:33 pm to
I'm up slightly on a bear etf that I want out of bad.
Posted by mallardhank
Atlanta
Member since Feb 2006
1276 posts
Posted on 12/14/16 at 7:39 pm to
How can gold prices fall past $1000 when it costs about that to mine the stuff
Posted by GREENHEAD22
Member since Nov 2009
19610 posts
Posted on 12/14/16 at 7:41 pm to
Which is why I plan on getting out.
Posted by Iowa Golfer
Heaven
Member since Dec 2013
10230 posts
Posted on 12/14/16 at 7:47 pm to
All in costs are lower than that in some cases.
Posted by soccerfüt
Location: A Series of Tubes
Member since May 2013
65747 posts
Posted on 12/15/16 at 12:56 am to
quote:

How can gold prices fall past $1000 when it costs about that to mine the stuff
Gold is different than other commodities (cement, zinc or steel, for examples) because Gold is not just used to make products (electronics, dental, industrial uses, etc.), it is held long term as an investment. The production cost is less influential on the market price of gold because there's a huge worldwide historical investment pool of gold that was produced over the past centuries (and even millennia) with this pool's total production costs averaged down.

The historical pool is "competing" to investors with today's current gold production which prevents higher production costs from influencing gold prices to any great extent.

Another way to understand this is to compare two one ounce gold bars.

One was mined and produced in (say) 1950-
Labor was much cheaper
Little to no environmental costs
Overhead was cheaper
The other bar was mined and produced in 2016 with your correctly noted higher associated production costs.

Which one ounce gold bar is worth more?
The answer is obviously they are worth exactly the same amount.

This immunity to production costs is part of what makes Gold (and Platinum, Silver, etc.) different than any other commodity. It's also a reason why it was tempting to base currencies on an exchange rate with gold or silver.
This post was edited on 12/15/16 at 1:07 am
Posted by windshieldman
Member since Nov 2012
12818 posts
Posted on 12/15/16 at 9:10 am to
And it appears I'll be waiting awhile to sell. Damn it, oh well.
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
72734 posts
Posted on 12/15/16 at 9:34 am to
quote:

How can gold prices fall past $1000


How was gold 300 an ounce in 1998?

figure it out.

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