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Gold prices are hitting records

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Re: Gold prices are hitting records

#21

Post by panarky »

ortusdux wrote: post #16
Dig1t wrote: post #3

Earlier quoted context omitted.

Looks like Great Depression, 1979/1980, and right after the Great Recession. What is the significance of 79/80?

Gold is generally considered a hedge against inflation. https://www.forbes.com/advisor/investing/gold-inflation-hedg...

Yes, but that doesn't explain why didn't gold soar when inflation was far higher in the first half of 2022%

And it doesn't explain why gold is suddenly hitting all-time-highs right now, precisely when inflation is nearly back to pre-pandemic levels.

Re: Gold prices are hitting records

#22

Post by ortusdux »

ajross wrote: post #20
ortusdux wrote: post #16

Earlier quoted context omitted.

Gold is generally considered a hedge against inflation. https://www.forbes.com/advisor/investing/gold-inflation-hedg...

And by bidding it up at the end of a period of inflation, those trying to hedge burned themselves. Same thing is happening now: inflation is back down to baseline, but people think it's high because prices are higher than they were (brains have trouble with reasoning based on derivatives of functions). Basically gold is, as it always has been, a sucker's bet. All the people buying it now are probably going to lose mo…

Yep. The key is to buy it 6 months ago, and then do everything you can to get others to continue buying in.

Re: Gold prices are hitting records

#25

Post by randomdata »

echelon wrote: post #5

Does this as an index track global anxiety?

It seems to track economic recovery, seeing the historical growth largely coming after major recessions/depressions. Such growth may be the intersection of people starting to be able to invest again, but still having anxiety related to the decline of the business environment they just went through, thus not wanting to invest in businesses.

Re: Gold prices are hitting records

#26

Post by AnimalMuppet »

ajross wrote: post #20
ortusdux wrote: post #16

Earlier quoted context omitted.

Gold is generally considered a hedge against inflation. https://www.forbes.com/advisor/investing/gold-inflation-hedg...

And by bidding it up at the end of a period of inflation, those trying to hedge burned themselves. Same thing is happening now: inflation is back down to baseline, but people think it's high because prices are higher than they were (brains have trouble with reasoning based on derivatives of functions). Basically gold is, as it always has been, a sucker's bet. All the people buying it now are probably going to lose mo…

1979/80 wasn't the end of the inflation. Especially 1979.

But even later... there's a lag time in peoples' minds and, especially, emotions. When inflation has gone up to 10%, it's a huge surprise, but your mind is still back on 6% or 8%. When it comes back down to 10%, your mind is still on the 14% it was, not on the 6% or 8% it's (maybe) headed back to.

Re: Gold prices are hitting records

#27

Post by fatherzine »

ortusdux wrote: post #2

If you adjust for inflation, there have been 3 periods in the last 50 years with higher gold values. https://www.macrotrends.net/1333/historical-gold-prices-100-...

the gold price serves as an independent yardstick for the level of real inflation. it defeats the purpose to 'adjust for inflation'.

'adjusting for inflation, prices have been remarkably stable for the past century'

Re: Gold prices are hitting records

#28

Post by everforward »

foobarbaz33 wrote: post #14
nostromo wrote: post #8

The US real estate to gold ration has always facinated me: https://www.longtermtrends.net/real-estate-gold-ratio/ If you bought a house with gold in 1890 or 2023, the price would be... about the same.

I forget where I heard it. Supposedly the amount of silver needed to buy a goat during Roman times is similar to today. Cold metal seems to act as cold storage of value across history.

That would be fascinating, if true. It requires balancing so many things. We keep mining, so supply is increasing, but so is population and thus demand. We keep making more efficient ways to mine silver which should make it cost more silver, but we are also getting more efficient at herding goats making it cheaper.

It's crazy that many factors could be/stay in balance. It makes me wonder whether those factors are actually separate or whether these factors scale based on some common element like population.

Re: Gold prices are hitting records

#29

Post by Buttons840 »

strangesmells06 wrote: post #6
Dig1t wrote: post #3

Earlier quoted context omitted.

Looks like Great Depression, 1979/1980, and right after the Great Recession. What is the significance of 79/80?

It was the most severe recession since the Great depression lol good times /s https://en.m.wikipedia.org/wiki/Early_1980s_recession Good time to buy defense contractor stock because one way to get out of serious depressions/recession is a war. And the presidential election is next year...

Those previous recessions were marked by high unemployment, right? But currently we have record low unemployment. Is the high unemployment on its way, or is this something new?

Re: Gold prices are hitting records

#30

Post by blacksqr »

Dig1t wrote: post #3
ortusdux wrote: post #2

If you adjust for inflation, there have been 3 periods in the last 50 years with higher gold values. https://www.macrotrends.net/1333/historical-gold-prices-100-...

Looks like Great Depression, 1979/1980, and right after the Great Recession. What is the significance of 79/80?

It was a period of what was called "stagflation", economic stagnation combined with inflation. It was supposed to be impossible to have the two happen at once, and no one knew what the hell was going on. Gold seems attractive in periods of uncertainty.
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