wanting to invest a bit in precious metals

[FriedChicken]

well guys, thank you very much.
I'll do that. [join the forum]

Yeah, I may use the term "investment" or "profit" but I completely agree with all of you - I think the price changes are mostly a reflection of the dollar's value.

I'm going to be saving for a house for at least another couple years - I'll be buying a home during Ron Pauls first term for sure (positive waves dude).
I have a banking account that will draw 3% interest for amounts under $25k ... if things keep going "smoothly" I guess that rate keeps up with inflation plus some if we keep the account full.
But I still have more confidence in PM's than fed notes obviously.

Does anyone agree with the person that told me that central banks will probably dump a huge amount of gold on the market to drive gold prices down in order to prop up currency?

 

[Seraphim]

well guys, thank you very much.
I'll do that. [join the forum]

Yeah, I may use the term "investment" or "profit" but I completely agree with all of you - I think the price changes are mostly a reflection of the dollar's value.

I'm going to be saving for a house for at least another couple years - I'll be buying a home during Ron Pauls first term for sure (positive waves dude).
I have a banking account that will draw 3% interest for amounts under $25k ... if things keep going "smoothly" I guess that rate keeps up with inflation plus some if we keep the account full.
But I still have more confidence in PM's than fed notes obviously.

Does anyone agree with the person that told me that central banks will probably dump a huge amount of gold on the market to drive gold prices down in order to prop up currency?

No. Central banks around the world became net buyers of gold about 2 years ago. Why? Because they KNOW their fiat game is DEAD (under it's current form). It really is. Credit markets will DICTATE that loans be made to creditworthy people and institutions. Sooner then later, the days of NO MONEY DOWN, 1% loans will be GONE.

Holders of gold/silver will already have a foot in the door in relation to credit markets.

Central banks CANNOT afford to dump their physical gold holdings - doing so would bankrupt them and destroy the international creditworthiness of their own country. This will become indisputable quite soon.

 

[AceNZ]

I agree with what others have said: it's a mistake to look at gold as an investment, unless you're into short-term trading. For the average person on the street, that's a risky game. Buying with a need to sell at a specific fixed time in the future is a recipe for potential disaster.

I view gold as insurance. It's worth holding for the same reasons central banks hold it: in case of a currency "dislocation."

As far as central banks dumping gold: they've already tried that. See GATA for details.

 

[pmbug]

If you don't plant to sell for 3 years minimum, gold & silver should do very nicely. If you are looking to understand the PM market for short term trading, I would recommend reading Harvey Organ's blog and Turd's site for some perspective on the pulse of the market.