Gold: An Excellent Primer On The Yellow Metal
From MarketWatch this afternoon:
Crisis sparks new gold rush
Gold futures closed up $70 an ounce on Wednesday, the biggest daily gain in dollar terms since at least 1980, as news of the U.S. government’s takeover of the biggest U.S. insurance company fueled massive safe-haven buying.
Gold for December delivery jumped $70, or 9% to end at 850.50 an ounce on the Comex division of the New York Mercantile Exchange. This would represent gold’s biggest one-day jump in dollar terms since at least 1980, the earliest year historical data were available on the Comex. Gold started futures trading in the U.S. in 1974.
After market closed, gold continued to rise more than $20 to $870.90 an ounce in electronic trading.
Wow. When gold shines, it REALLY shines.
I’ve written a few posts about the “barbarous relic” in the past, including:
“Gold: Barbarous Relic Or Investment Superstar?” Parts One, Two, and Three
“Gold, Unloved”
“Gold: Not So Precious?” Parts One, Two, and Three
However, just last week I came across an informative piece on the yellow metal by MSN Money’s Darrell Delamaide. Delamaide begins “Why does gold matter?” with:
The precious metal’s price has been lackluster in the long term, but when people get nervous about the world’s economies and weak currencies, gold becomes a hot haven. Also: 2 ways to get in on the action.
I found the article to be a pretty good primer on gold, and up-to-date as well (published September 11).
Notwithstanding today’s explosive price action, that is.
You can access the article here.
(Note: The author disclaims any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Sources:
“Gold ends up $70 as investors flee financial turmoil”
Nick Godt, Moming Zhou
MarketWatch, September 17, 2008
“Why does gold matter?”
Darrell Delamaide
MSN Money, September 11, 2008
September 17th, 2008 at 2:55 pm
I know that this will sound like major b.s. - I told my wife that we should buy and hold some 1/10oz gold eagles and 1 oz silver eagles on Monday afternoon. A local dealer just received a shipment of silver eagles that morning and did not expect them to last one week. I am pissed because the gain would have already covered a bid/ask spread that bullion dealers use to buy and sell metal. Damn.
Not expecting a big short-term score, I just would have liked to get some for the “just incase.” BTW, great blog, I try to stop by daily.
September 18th, 2008 at 7:53 am
Thanks for the comment and compliment Stefan. Sorry about missing out on the buying opportunity…
September 19th, 2008 at 9:18 am
Stefan,
Feel free to buy in at the next downward spike. We’ve been buying on the dips and selling on the peaks for the past year. It’s gut-wrenching to watch the daily price fluctuations but we have made a tidy sum.
There is a 6-8 week wait for the physical stuff from the place that I buy (1-oz Maple leafs) from. Took a gamble back in July and bought 15 oz using a “no-interest” credit card check. What a gamble - if Gold doesn’t rise above the purchase price by next February, then I will need to cough up $$$ to pay off the balance then.
Not for the faint-hearted!
How about you, Editor - are you playing the Gold-game?
-Mammoth
September 20th, 2008 at 10:01 am
Thanks for the input Mammoth.
“How about you, Editor - are you playing the Gold-game?”
Was. Started buying a few years ago around $400 an ounce, and stopped around the end of 2006.