What is the best market to trade in right now?

[jd1888]

This is interesting. Just like the dot.com bubble I believe that the early signs of a gold & silver bubble will be when more and more people (newbies?) show an interest in trading them. T2W would be my canary in the coal mine and so far, so good.

This is great point. I've been thinking about this for a while now. How far can gold truly go before (POP) it all comes crashing back down to earth or can it achieve and maintain a relatively high but steady price. Because unlike the tulip story (not sure if this story is true or not) in Wall Street: Money Never Sleeps surely gold actually has some real value (but obviously you can't go out and buy bread, a car or whatever with it) even if that value is put on it by us humans it must hold some value.

 

[new_trader]

This is great point. I've been thinking about this for a while now. How far can gold truly go before (POP) it all comes crashing back down to earth or can it achieve and maintain a relatively high but steady price. Because unlike the tulip story (not sure if this story is true or not) in Wall Street: Money Never Sleeps surely gold actually has some real value (but obviously you can't go out and buy bread, a car or whatever with it) even if that value is put on it by us humans it must hold some value.

If I was selling something I would gladly accept gold as payment, there is nothing in the law that says you can’t. What you can’t do is force anyone to accept gold as a payment or settlement of a debt unless you are paying with legal tender such as the gold coins from the Royal Mint. In this case they only have to accept the face value of the coins and not the melt value. Even the tax office would have to accept them but again, only the face value.

If you are trading gold it doesn’t really matter when it ‘pops’ as long as you are on the right side. However, if you are buying and holding gold to preserve wealth/purchasing power then you need to do a lot of research. My opinion (backed by my own research and the opinions of analysts and investors whom I hold in high regard) is that gold isn’t yet near the bubble stage. The price of gold is currently $1422Oz and it would have to double and then double again to a price of $5688Oz before I would be concerned and even then I wouldn’t sell, even though I would have stopped being a buyer long before then.

Do some research on bubbles and see how far and fast prices have risen before crashing and pay particular attention to the level it ends up at after the crash! A good place to start is the NASDAQ because its level in the run up to the dot.com crash is roughly equal to the price of gold over the last 10 years. If you look at a chart of the NASDAQ from April 1983 to March 1997 you will see it almost replicates the price of gold from 2001 to today. If you were looking at the NASDAQ in March 1997 you would think it was in a bubble and you would dismiss as insane anyone who told you that it would triple in value within 3 years.

Here are some good resources to begin with. The first is a 4 part video that takes about an hour to watch. The other video is a racy but informative ‘pop music’ video. Both are worth watching.

http://www.bullionvault.com/GoldWhereToNow/Part1.html


http://www.youtube.com/embed/-HaqwFJj4ZY

 

[Ari.Gorian]

God knows!