Apr 19, 2006

Gold Now at $632 per Ounce

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(San Francisco, CA) Gold futures surged $9 an ounce in mid-day trading, reaching their highest levels since 1980. Analysts pointed to high crude prices and a jump in consumer prices as triggers for the continued rise in the price of gold.

"The volatile mixture of oil, gold, and world economics and politics continues to show signs of disquieting instability," said Jon Nadler of Kitco.com. "The three components of this maelstrom appear to feed off of each other, as news propels oil, and then oil propels gold."

Gold is a traditional hedge against inflation, and is also the preferred investment strategy of those who fear political instability. I invested rather heavily in gold in the late 1990s, especially as I thought Y2K might cause some serious disruptions to the economy.

Had I held on to my Eagles, I might have been able to cash in on this run. Alas, I dumped them at a very small profit in 2000-2001.

This has been the story of my investment life; if I ever sound as though I am knowledgeable and push an investment strategy, do the exact opposite of me and you should turn a handsome profit.

These days I diversify in managed funds, close my eyes, and congratulate myself for avoiding the temptation of day-trading and speculation in volatile markets like precious metals and currencies.

Addendum, 3:20 pm
: Undoubtedly influenced by the fact that historymike is not buying gold, wise investors have jumped in and driven the prie of gold above $640 per ounce later this afternoon.

6 comments:

Anonymous said...

Yes, I bit on Y2K too, Mike, except I took my loss on canned foods.

Anonymous said...

Keep in mind that this is $632 in 2006 dollars.

You need to adjust those dollar figures from 1979 and 1980 up by a factor of 2.5 or more to compare to today's prices.

So, $700 an ounce in 1980 would be more like $1600-1800 an ounce today.

So, sure, price of gold is high, but in inflation adjusted dollars, no story. Move on.

historymike said...

True, anonymous.

It should be noted that gold has risen about 50% since 2004, though.

Dariush said...

Some interesting speculation by Stephen Lendman on what the price of gold means for us in the immediate and long-term future.

David Schantz said...

At 8:35 PM on April 19, 2006 Gold was $633.90 per ounce and Silver was $13.95 per ounce. Puts me out of the buying market for a while. I'm not sorry about buying any of the stuff I got for Y2K. In fact I still store food and emergency supplies. I've used my altenative heat and light sources during power outages caused by mid-west storms.

God Bless America, God Save The Republic.

Hooda Thunkit said...

Mike,

Gold is traditionally attractive in economic times like this, however NOW is the worst time to buy, as any future sale will likely be at a lower price.

Those traditionally touting gold as a hedge on inflation are usually sellers of gold bought at much lower prices, and profit is their reason for advocating gold ownership.

To me, gasoline or oil, bought a few months ago is a better "investment."