Spot gold surges over 2 pct, above $1,020/ounce

[Banana]

Buy gold because you think it will hold value for you- not because the price is shooting up now. http://www.nma.org/enumerate/gold/gold.htm

Now, "holding value" is what I expect to do with gold- the right question would be- when the gold prices comes crashing, will my buying power stay the same because I am holding the gold? Is it possible for gold to crash while other things stays at same price level?

 

[RadiantBlueLight]

You don't lose value when you're in gold. Period. "Price of gold" is somewhat of a misnomer in that it's been the same "price" for thousands of years. When gold goes up all it means is the dollar has gone down. There are minute fluctuations day to day but that's just the short term traders profit taking. Metals dropped today because of increased confidence in the market: JPMorgan's grabbing up Bear and billions in Fed floated debt. $200 billion for Freddie and Fannie and fast and furious rate cuts. The Fed's help has given the market a breather for the short term.

If gold plunged back to $300 six months from now, you could buy the same amount of goods as the money had when you first bought the gold at $1000. No loss at all. The dollar is doomed and starting to show it, therefore gold will rise.

 

[Archie]

You don't lose value when you're in gold. Period. "Price of gold" is somewhat of a misnomer in that it's been the same "price" for thousands of years. When gold goes up all it means is the dollar has gone down. There are minute fluctuations day to day but that's just the short term traders profit taking. Metals dropped today because of increased confidence in the market: JPMorgan's grabbing up Bear and billions in Fed floated debt. $200 billion for Freddie and Fannie and fast and furious rate cuts. The Fed's help has given the market a breather for the short term.

If gold plunged back to $300 six months from now, you could buy the same amount of goods as the money had when you first bought the gold at $1000. No loss at all. The dollar is doomed and starting to show it, therefore gold will rise.

But what about something like new car's? [since the mid-80's up untill today] for instance sure todays worth of 25 oz's of gold could by you a brand new 25 thousand dollar car but so can 25k cash in hand right now ,But Im pretty sure that if Gold went down tommorow to 500 an ounce you would need 50 oz's of gold instead of 25 oz's of gold to buy the exact same brand new car. But on the other hand you will still be able to buy any brand new 25k car for 25k USD Cash in Hand .. I do Agree with you that "gold's value" in other things "never loses" its real value but As this Brand new Car example I put forth ITs sometimes very funny how USD Cashola in hands has consistently been able to buy that brand new luxery 25k cars since the mid 80's up untill 2008 when 25 oz's of gold has not been able to buy that brand new luxery 25k car since the mid 80's and up

Good points though Just thought I would add some food for thought

PS- Dont all yous guys get jelous of the days of Brand new Fast luxery cars in the 60's and 70's that went for 5-10k and more importantly when you still had lots of "driving freedoms" that you dont have today

[5 year old kid gets into his Pinko Car seat which is so uncomfortable]

 

[RadiantBlueLight]

But what about something like new car's? [since the mid-80's up untill today] for instance sure todays worth of 25 oz's of gold could by you a brand new 25 thousand dollar car but so can 25k cash in hand right now ,But Im pretty sure that if Gold went down tommorow to 500 an ounce you would need 50 oz's of gold instead of 25 oz's of gold to buy the exact same brand new car.

It would take a while for goods prices to match such a radical one day turnaround if gold went to $500. When my dad bought his first house, a modest two story in the city, it cost him $25k in 1973. Today that same house would go for $250k. Gold in 1973 was $100/oz and today it's $1000. Gold, grain and oil are the three pillars holding up civilization as a whole and apart from supply problems will retain value forever.

 

[Shed]

The gold price is still subject to supply and demand, even if it's inflation proof. So I think it would be more accurate to say the value of gold changes within quite a tight margin, rather than remaining absolutely constant.

 

[Banana]

So basically, when gold prices drops, the buying power is temporarily contracted while market corrects itself then it's basically same (e.g. prices for other goods drops as well)?

This was what I wanted to know and now feel a bit better about.

 

[Shed]

I should say the purchasing power of gold only remains more-or-less-fixed in the long term, not on a daily basis.

 

[RadiantBlueLight]

It's fiat currency's fault for any lag in gold's purchasing power. If the dollar was backed by gold, there wouldn't be a discrepancy.

The spike is Nixon taking us off the gold standard August 15, 1971. Before then, the price stays the same as far back as you want to go.

 

[kirkblitz]

darn i wish i had bought some at 50. to bad i wasnt alive lol