long term gold chart - b2

  1. pj
    2,090 Posts.
    B2, I have copied your reply into a separate thread as I do not think we should contaminate Jocam's thread, which many people file, with a discussion on gold.

    In answer to my query as to the prognosis for gold you stated:

    "I remember $35 an oz , then $80 then $200 then The Aden Sisters and their hopes for $1,000's an ounce.We are talking real $ remember .
    I feel it may bounce a bit more to the upside however I feel that the risk level has changed and is not at this time acceptable to me.
    However on the other hand I also feel that the US Government has changed it's high US $ policy which basically Volker brought in and Reagan went along with. Volker was the best the Fed has had in my lifetime.
    Greenspan is a waste of space IMHO as he caused the 87 crash by overtightening . He caused the Bubble in US Shares and the Nasdaq Casino Chips recently because he did not tighten enough . The money supply is the key .
    USA Stocks are STILL vastly overpriced IMHO.
    Therefore there is a chance that Gold may break out to the upside from the Collar of the US $.
    However the risk is too high for me so I will not play with the large Gold Producing shares.
    I will only play with the small gold shares , which have and do find Gold so that the shares are not much affected with the price of gold, provided they are not a low grade / high cost operation. In passing I would mention that JAK worries me in that regard, however I may be incorrect and you would probably know.So I stand to be corrected.
    I am also concerned about the Nickel price and their shares . For example so many seem keen on IGO yet it's share price does not take off.
    I trust that my comments answer your question."

    Well that $35 was in 1970. I think they did something like "releasing gold from the gold standard" around that time, not that I really understand the implications of that, but anyway so gold was left to arrive, which I guess it must have done in the early eighties, levelling off at around $US350 after peaking at US$800. I remember the Aden Sisters but I think they were talking US$3000 at the time.

    Sounds a bit simplistic but I was just wondering what price we would come up with for gold if we applied the $US inflation rate from a) $35 in 1970 and b) US$350 in 1980. What would we come up with now? Obviously more for b) than a) but I have a feeling that even a) would somewhere near the current price.

    This would imply there is considerable room on the upside, the only caution being 1979 was a mania which has taken 30+yrs to resolve and we won't necessarily have another one now. Still if we did???

    I think Nickoo was calling DOW 4000 and gold $US800 and it certainly doesn't look absurd on the charts.

    Whether the $A price would change is another matter.

    And I don't know about JAK - seems to be low grade stuff. Anyway in a gloomy mood I stuck mine on at 18c the other day sold a few and in a fit of impatience dumped the larger portion at 17c for a only small profit.

    Someone then came on and bought a stack through to 19c. This is the second time this has happened.

    Still, thing is I am reasoning that a couple of years ago. Gold was $280 US / 0.50 = A$560 and now we have US$350 / 0.615 = A$570 and in that time:

    Bought Hill 50 opt 25c sold 45c and 75c
    Then bought BDG 15.5c sold av 27c
    Bought ADU 14c still hold (Damn)
    GTM 0.029 - 0.55c etc

    So I am thinking I've had a good run on gold and maybe
    I'll call it a day... ??

    Personally I can't see why anyone would want to pay over A$500 for a tiny piece of yellow metal, but there you go.

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