There is a nice game in town called "Predict the price of gold and win a jackpot". It is well known that a lot of cheap money has gone into commodities over the last few years (perhaps 2 years or so). And that means a lot of speculation has also gone into it. One of them is Gold. There are many theories floating around why Gold is rising and the theories predicting the immediate future of this shining metal. The most traditional theory says "Gold hedges inflation". Meaning, it can store the same value and you can get the same goods worth in gold irrespective of the depreciation of a currency which happens with high inflation. The second and a consequential theory says "Gold is an alternative currency in itself when other major currencies are as volatile as Molotov cocktails". The third theory says "When the world is headed for deflation, gold is a better investment as it will atleast hold value rather than depreciate". Another theory says "Gold is usually measured in USD and as Gold and USD are usually always negatively co-related to each other, hence, Gold prices can be predicted by the prediction in the USD strengthening/weakening against other currencies". The fifth and sixth reasons are speculating based on one of these theories and buying based on hearing the blind calls of others respectively. There is no one clear and present reason for putting money in Gold.
Now, coming to the poker side of things, it gets more interesting/confusing based on how you see it. It is a fact that Gold has run up so much because many people/institutions have bought/speculated loads and loads of it. Some of them have been satisfied with the returns and thought it was in an overbought region/overpriced at around USD 1800+ per troy ounce and had started selling it and realising profits. Now at around USD 1600+, when an organisation/person says it will reach higher, one has to understand if he is saying so to protect his own interest. He can make others buy by saying so while he himself is selling it to you. Without your invaluable buying support, it is very possible that more people would be selling and his realisation of profits would be that much lower. Now, considering all the talk about Gold, are you willing to buy Gold at this highest level? Arent the retail investors falling into the same trap of investing at the very highs and again burning their fingers for the sake of a best case 5 or 10% returns and the worse case of a huge downside? Now, thats a call you have to take. The answer looks simple enough to me, I hope it is for you too.
Now, coming to the poker side of things, it gets more interesting/confusing based on how you see it. It is a fact that Gold has run up so much because many people/institutions have bought/speculated loads and loads of it. Some of them have been satisfied with the returns and thought it was in an overbought region/overpriced at around USD 1800+ per troy ounce and had started selling it and realising profits. Now at around USD 1600+, when an organisation/person says it will reach higher, one has to understand if he is saying so to protect his own interest. He can make others buy by saying so while he himself is selling it to you. Without your invaluable buying support, it is very possible that more people would be selling and his realisation of profits would be that much lower. Now, considering all the talk about Gold, are you willing to buy Gold at this highest level? Arent the retail investors falling into the same trap of investing at the very highs and again burning their fingers for the sake of a best case 5 or 10% returns and the worse case of a huge downside? Now, thats a call you have to take. The answer looks simple enough to me, I hope it is for you too.
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