I have been playing the Precious Metals game now for over 2 years. I got hooked when I was watching Gold (XAU) hit its all time high of over USD1000. What I found very interesting was that precious metals are very predictable.
Unlike stocks and term deposits, you control what & when you do your thing with precious metals.
As I mentioned above, Gold hit an alltime USD high this year, it was phenomenal. What no-one knew, no squeak of news, no ounce of reporting, was that Gold also hit an alltime high against the Swiss Franc this October. Over CHF1000/oz. I sold. I made a big profit. What happened next was astounding.
Precious metals plummeted like a bungee jumper without a rope.
In fact, Gold dipped back down again to where it was 2 years ago when I bought it in the first place! I bought again, and I bought big. Overnight, it went up CHF60/oz and stablized. This time I am sitting, waiting for the Bull market to return and drive prices back up again to a new predicted "normal" rate of USD850/oz.
At the same time, I bought Platinum (XPT) The interesting thing about XPT is it also hit an alltime high of USD2250 this year and then plummeted almost to the same levels (USD800) as Gold! Verrrrryy interesting. I bought big again! The thing with XPT is that its very rare. The other big thing is that its used in anti-pollution control, this becomes even more interesting when you think about how many cars get produced per year and how much demand there ISNT for cars at the moment. Is your grey matter ticking over yet? It should be. XPT is predicted to stablize (eventually) at around USD1500, thats 200% up from where it is now…. tick tick tick tick..
In a time when currency markets are not very stable, just ask anyone being paid in Euros or USD over the last 2-4 years, and you will see that precious metals are a bit of a bargain at the moment. If you are prepares to sit on it for 6mths to 18mths you might find that you are getting a better rate than any bank can hope to give you as an interest rate. Over a period of 2 years I made an equivalent of 30% return per year on my Gold investment. Not bad when you look at what banks are giving these days.
Now more than ever, considering the financial "crisis", the instabilty in oil, world market economies, US Governement etc, precious metals are on the brink of another comeback.
My advice is to get into XAU & XPT whilst the getting is good and be patient whilst the rise keeps coming and coming.
Cheers from Fribourg,
ValAdministratorKeymaster@piadminJoin Date: 2013Post Count: 3,225
Very interesting Val.
I've become very interested in platinum. Just back in March it was at a phenomenal all-time high, but it has quickly plummeted back to a 5 year low. It seems to be gaining again steadily, but really has a long way to climb before I'd consider it stabilised.
My question is, what caused this major plummet? Obviously platinum is becoming a more useful metal for pollution reduction purposes. With China getting more involved, the world going more "green" and the extremely scarce nature of platinum, I can see what would cause it to rise in value so much. Is the value really there, but the price was just rising too fast?
The plummet is quite easy to explain.
There are 2 major factors to consider when speaking about Platinum.
Firstly, that it is very much tied to the fluctuations of the Gold price.
Secondly, because it is so costly to get out of the ground & process, there needs to be great demand for it before it is excavated.
The peak in XPT this year can be explained in simple facts: the immense demand for vehicle production and hence the demand for catalytic converters for each vehicles polution standards and the output of XPT mining/process. Demand exceeded supply (greatly= XPT became a "rare" commodity and hence prices soared.
Dont forget that XPT is also used in the manufacture of Hydrogen Fuel Cells, something that should be worth watching in the years to come when our oil suuplies are even further stretched and the USs need for an "alternative" fuel source kicks in. (not to mention the future demands of places like China & India.)
The immense drop came about because of the stabilisation of oil prices (after record highs), the slowdown in the US economy, financial crisis in all markets and the immediate recession of spending. You have to remember that when demand is high (during a Bull market) mining companies meter out their quotas in prediction of future demands, not current demands. Consequently, mining companies like to keep the balance in the "demand" area not in "over-supply". Considering this, because the recession hit very quickly, mining companies were caught with their pants down and there was an "over-supply" of both Gold & Platinum on the market. Add to this the number of speculatiors as well as banks that started selling Gold & Platinum in huge bulk quantities and your question is easily answered.
Remember one point, XPT unlike Gold can be destroyed and "lost". Nearly all of the worlds Gold stocks (jewellery, currency, bars etc) are always circulating and re-circulating. It always re-enters the market in some form. XPT though rare, is expended and therefore "lost" in lots of market vehicle production.
Just a thought.
Thanks for your comment and post David.
ValhbbehrendorffMember@hbbehrendorffJoin Date: 2006Post Count: 293
See, The bankers worst enemy is Gold, Precious metals are a banks nemesis, Its only WITHOUT Gold that the bank can continue to run there fiat paper money scam. Banks do not want gold to increase in price and will do everything within there power to keep precious metals suppressed, Because if they surge then people loose faith in the paper.
Banks are having a hard time keeping the lid on and when it comes off people will see gold double almost instantly, Then it will double again and again and again over the coming decades
The really funny thing now is that the basic rules of supply and demand are not being applied to Gold, The metal is becoming more scarce, dealers are running out of the stuff and having a hard time getting more while at the same time the prices are plummeting.
At the end of the day its the people with the gold who control the wealth of the world.
That about sums it up in a nutshell!
Very true comment about Banks keeping a lid on proces of Precious Metals. If I can add to that, they also make it quite compicated to purchase physical gold bars across th counter, and even add a surcharge of CHF30 per bar!! for "handling & shipping" ??
Funny story.. 2 years ago I am standing at the counter at Credit Suisse in Bahnhofstrasse Zürich dressed in my boardshorts, t-shirt, 5-day growth and unkept hair asking the Teller for the current price of Gold.. without blinking an eye he askes me "can I afford to buy Gold??!" (as it is wasting his time serving people "like me"..) ..after telling me that the price is CHF785/oz he neglects to tell me that there is additional fee of CHF30/bar (as described above).
I can see that there are a number of Gold Bars in his drawer and then begin asking him why do I have to pay this additional fee if the Gold bars are already there IN THE BANK! IN HIS DRAWER!? RIGHT IN FRONT OF ME! He tells me that the Bank has already paid for the shipping & handling to the bank (frmop Credit Suisses bank depository 3kms away!) and that the Buyer must "cover" the Banks expense!
I then asked him, why then doesnt the Bank charge me for the mining costs, salaries of the miners, refining the Gold, melting into bars, shipping from Africa to Europe and all other subsequent fees as well!! .. he wasnt impressed…
I managed to talk him out of the additional fee (as I was already a "good" customer of Credit Suisse) and took my 13 Gold 1oz bars home with me….
Today, instead of this headache, I use a Precious Metals Account (yes, still with Credit Suisse…) and buy and sell Gold & Platinum "without fuss" over the phone (in German or French, Swiss arent too happy about trying to speak to you in English). No charges, no fees! (but then again, no physical Gold in my hands)
The Bank still controls my Gold, Platinum & Silver..
ValhbbehrendorffMember@hbbehrendorffJoin Date: 2006Post Count: 293
Lets just hope the Banker Elites don't make the government steal everyones gold like they did in the 20's in America to "save" the economy, We couldn't allow the plebs to get there hands on real money now could we ?