MONEY WEEK: I’ve never bought gold before – but I’m buying it now

[Half Sense]

http://moneyweek.com/why-im-buying-gold-now-v2/

"Before I go any further, I should acknowledge that many investors have made big profits from gold over the last 14 years. At the turn of the millennium, the gold price (http://moneyweek.com/prices-news-charts/index-gold/) was just $288 an ounce; in May 2011, it reached above $1,900. So my scepticism on gold caused me to miss out on big gains.

However, it’s not my past mistakes that have made me change my mind. My ‘conversion’ was triggered by an article in the FT last week, entitled Gold analysts most bearish since 2002. (http://www.ft.com/cms/s/0/9e22bbc4-82c0-11e3-8119-00144feab7de.html?siteedition=uk#axzz2rpKtcCvp)
(http://www.ft.com/cms/s/0/9e22bbc4-82c0-11e3-8119-00144feab7de.html?siteedition=uk#axzz2rpKtcCvp)
This article said that gold analysts expect the gold price to average $1,219 per ounce this year, just below the current price of $1,243. Analysts cited a potential rise in the US dollar, and a possible oversupply of gold to support their view.

You might think that this pessimism would keep me away from gold. But the article just brought out my inner contrarian.

You see, the analysts got their predictions very wrong last year (for a change, the more cynical among you might say). They predicted that the average gold price for 2013 would be over $1,700. In reality, the gold price fell 30% over the year, and the average price ended up being $1,411. So red faces all round for the ‘experts’.


And as I thought about it some more, I began to think that the gold price is too low. For starters, the gold price is now roughly at the level that covers the ‘all-in’ cost of production, so it’s hard to see the gold price going much lower than this. And if the price did fall below $1,200, you’d expect to see a fall in gold production, which would then push the price back up."


The above isn't too bad, except for the double-phony psy-op that "the experts agree gold sucks and they were wrong last year, sooo...I'M BUYING!" The normal investor would read this and run from gold, which is probably the true intent. The real kicker is at the end, after he's sure he wants to invest in physical gold:

"So at some point over the next week, I’m going to buy some physical gold via an exchange-traded fund (ETF) (http://moneyweek.com/glossary/exchange-traded-fund/)."

So, if you do read this article and are not scared away by the idea that the "experts" all hate gold, this Pied Piper is ready to lead the "contrarian" investor straight to the "physical gold" of the ETF.

[mick silver]

(etf)

[EE_]

http://moneyweek.com/why-im-buying-gold-now-v2/

"Before I go any further, I should acknowledge that many investors have made big profits from gold over the last 14 years. At the turn of the millennium, the gold price (http://moneyweek.com/prices-news-charts/index-gold/) was just $288 an ounce; in May 2011, it reached above $1,900. So my scepticism on gold caused me to miss out on big gains.

However, it’s not my past mistakes that have made me change my mind. My ‘conversion’ was triggered by an article in the FT last week, entitled Gold analysts most bearish since 2002. (http://www.ft.com/cms/s/0/9e22bbc4-82c0-11e3-8119-00144feab7de.html?siteedition=uk#axzz2rpKtcCvp)
(http://www.ft.com/cms/s/0/9e22bbc4-82c0-11e3-8119-00144feab7de.html?siteedition=uk#axzz2rpKtcCvp)
This article said that gold analysts expect the gold price to average $1,219 per ounce this year, just below the current price of $1,243. Analysts cited a potential rise in the US dollar, and a possible oversupply of gold to support their view.

You might think that this pessimism would keep me away from gold. But the article just brought out my inner contrarian.

You see, the analysts got their predictions very wrong last year (for a change, the more cynical among you might say). They predicted that the average gold price for 2013 would be over $1,700. In reality, the gold price fell 30% over the year, and the average price ended up being $1,411. So red faces all round for the ‘experts’.


And as I thought about it some more, I began to think that the gold price is too low. For starters, the gold price is now roughly at the level that covers the ‘all-in’ cost of production, so it’s hard to see the gold price going much lower than this. And if the price did fall below $1,200, you’d expect to see a fall in gold production, which would then push the price back up."


The above isn't too bad, except for the double-phony psy-op that "the experts agree gold sucks and they were wrong last year, sooo...I'M BUYING!" The normal investor would read this and run from gold, which is probably the true intent. The real kicker is at the end, after he's sure he wants to invest in physical gold:

"So at some point over the next week, I’m going to buy some physical gold via an exchange-traded fund (ETF) (http://moneyweek.com/glossary/exchange-traded-fund/)."

So, if you do read this article and are not scared away by the idea that the "experts" all hate gold, this Pied Piper is ready to lead the "contrarian" investor straight to the "physical gold" of the ETF.

Poor sap doesn't know the difference between physical gold and an ETF.
The poor sap doesn't seem to get it, the analysts and experts got it exactly right, for what concerned them, not you.

[mamboni]

There is no oversupply of gold. This is pure disinfo. There is a massive shortage of physical. It is going to China at a rate of thousands of tons per annum, in excess of world total mine supply.