Gold - whats it going to do?

[XJSJohn]

Interested in an opinion from the experts (and the aledged experts ;-)

I know the theory that when economy is up, gold is down, when interest rates are high gold is low etc, and that currently although not at the all time high levels is prety strong at the moment. But, we keep getting told that things are on the up, unemployment in USA at record lows just reciently, everyone is doing well, etc etc - but the reality is that its certainly not glory days yet.

so - is Gold worth holding for the next 1 year / 2 years / 5 years currently?

[XJSJohn]

Some interesting (and some complex) comments there that i did have to google a bit (i am good at counting, mostly wiv me fingers). Also been wondering that modern day communications, media and teh speed that data and knowledge travels are erasing traditional long term trends like teh much talked about 7 and 12 years cycles etc etc

Part of where i was coming from here is that i live in Thailand where for many, gold is seen as the defaut savings plan, buy a 2 baht (weight) cold necklass to "save you" from spending your money, 8 months later you are a bit short on cash to pay teh rent, can put it back into the shop and get the current value / a %age on loan at 0.5% for 3 months - default and the shop keeps. But many people have a lot of cash tied up in gold, either jewlery or gold bars, wondering what might happen to the domestic economy here if there was say a 20% drop in value. I don't know the stats but Thailand must have one of the largest privately held gold reserves as a combined nation!

Ginge R said:

PS: We joined the board at the same time, but you've been a hell of a lot more busy than me!

it just means that you have been working harder than me - my post count got seriously increased during the guess the car thread from 3 or 4 years ago!!! i got a bit obsessed.... much like blib and his shadows these days !!!!

[XJSJohn]

Snoggledog said:

XJSJohn said:

Part of where i was coming from here is that i live in Thailand where for many, gold is seen as the defaut savings plan, buy a 2 baht (weight) cold necklass to "save you" from spending your money, 8 months later you are a bit short on cash to pay teh rent, can put it back into the shop and get the current value / a %age on loan at 0.5% for 3 months - default and the shop keeps. But many people have a lot of cash tied up in gold, either jewlery or gold bars, wondering what might happen to the domestic economy here if there was say a 20% drop in value. I don't know the stats but Thailand must have one of the largest privately held gold reserves as a combined nation!

India is probably higher. By default most Indians consider Gold as being the 'saving of choice' as there isn't the same level of confidence with banks as we have... (although they could be onto something there..) You also need to consider the cultural value of gold. Most western nations and the associated populace are comfortable with the idea of a piece of paper having 'value'. Most Eastern nations like to be able to hold something of substance. (But hey.. you probably know that anyway).

.

A valid point both India and China also hold a lot of value in gold (as do middle easterns) as a "personal savings plan worn around the neck"

Interesting (and logical given where most of you are) how most of the responses have been about buying into a gold fund, or "gold coins v gold bars and VAT" ... i was thinking in asia where there is no (advertised) vat on gold in any form, be it jewlery, bars or coins, only a surcharge (usually around GBP15 - 30) for the "craftsman" to make into jewlery to be worn and when people buy gold they go into a licensed gold trading shop that sells based on weight and the market value of that day, walking out with the actual gold.

So what happens when you have most of the working classes in these powerful Asian economies all keeping their savings around their necks rather than in the bank as cash? I suppose one of the plus points is that if a bank starts to fail (northern rock style) you dont get such a big run of people taking cash out causing the implosion to be even greater, as people have spread the risk out.