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    (Original post by Dumpynose)
    You can do a fundamental analysis on what the price should be if the world ever decides to return to the gold standard. If you take the M2 money supply of around £1.3 trillion and divide it by the number of uk gold reserves in ounces (about 10,945,500 oz) you get £122,500/oz. So if the UK ever switched back to a currency 100% backed by gold that is the sort of price you'd be looking at provided of course that gold reserves aren't increased or more money isn't printed. If you do the same for the US you get around $7000/oz which is where a lot of these predictions come from.
    And you can do the same for the oil standard where the UK or US oil price would hit the roof.

    Thats not a fundamental price anymore than the fundamental price of Vodafone shares is based on if Vodafone where made the monopoly in a territory, so in the UK were worth approx three times as much as present.
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    (Original post by Quady)
    And you can do the same for the oil standard where the UK or US oil price would hit the roof.

    Thats not a fundamental price anymore than the fundamental price of Vodafone shares is based on if Vodafone where made the monopoly in a territory, so in the UK were worth approx three times as much as present.
    Depends what you define by fundamental but if we went to a 100% gold standard that's what it would be. I'm not saying that will ever happen but if they keep printing money they might have to to prevent it turning into toilet paper.
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    (Original post by Dumpynose)
    Depends what you define by fundamental but if we went to a 100% gold standard that's what it would be. I'm not saying that will ever happen but if they keep printing money they might have to to prevent it turning into toilet paper.
    Because you don't get inflation/deflation when on the gold standard?
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    (Original post by cl_steele)
    So looking at the charts gold is taking one hell of a nose dive recently, my question to anyone who is remotely aware of the subject is how long do you think the bear market on this will last before it returns to a bull one? Id rather not be one of the unfortunate people who buys thinking that the market has hit its plateau before its meant to rise when infact it takes a nose dive off of a cliff...
    Depends why you are buying for? If you are buying for short term profit then wait awhile. If it is for long term profit. Then buy. Or buy in increments keeping an eye on its price.

    However me personally, I am only interested in the long term gains of bullion. Not short term.

    If you understand the current monetary paradigm of currency you would know that it has no stored value. Manipulations happen to gold and silver all the time, but in the long run they would always beat currency, because they have an intrinsic value.
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    (Original post by Quady)
    Because you don't get inflation/deflation when on the gold standard?
    Of course you do, it would be a function of the amount of goods and services available to the market and the supply of gold. But the amounts of pounds convertible into gold ounces would be fixed unless the underlying gold reserves changed. The price changes (inflation/deflation) would appear in the prices of goods and services. With a growing economy under the gold standard you generally see secular price deflation as there is an increasing amount of goods and services available for the same amount of gold.

    When the Conquistadors discovered gold in South America back the 15th and 16th centuries the Portuguese thought were rich but in the end all that it led to was rampant inflation because all that happened was that you had more gold chasing the same amount of goods.

    I'd rather have risk of huge gold discovery sparking that type of inflation than a politically motivated bank printing money out thin to massage a yield curve at the expense of everyone else.
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    (Original post by cl_steele)
    So looking at the charts gold is taking one hell of a nose dive recently, my question to anyone who is remotely aware of the subject is how long do you think the bear market on this will last before it returns to a bull one? Id rather not be one of the unfortunate people who buys thinking that the market has hit its plateau before its meant to rise when infact it takes a nose dive off of a cliff...
    Gold has no bottom whilst the ice is melting away on Greenland. There could be millions of tons of virgin deposits to be revealed.
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    (Original post by Fullofsurprises)
    I'm going for a few years, until the next stoking of the derivative-driven madness starts to bite. Give it 4 years. :rolleyes:
    In fairness derivitives arent to blame really, after all a derivitive is simply a financial instrument thatderives its value from something else be it gold, oil, loans, forex etc. etc.

    More on subject though it appears the delightful folk on ebay dont look at the prices of the metal and continue to buy for twice the market value :rolleyes: Just sold a small ingot of Palladium to a chap on there who appeares to have tryed to resell it at a profit and lost £100 in the process :L
 
 
 
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