Gold in Them There Hills

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I had the chance to buy some ingots today for $1185.00 each. The guy needs cash and was looking to make a deal. With gold trading at lows last seen about 9 months ago, I felt somewhat drawn to this. But, alas, I did not go for it. I see the chart and the prices seem to be wanting to break support and go lower, so I am a little worried about the bottom falling out. I told my broker a while ago to be looking for some ingots when the price hits $800.00. He said I was crazy when I told him that when  the price was around $1500.00 in March of last year. He told me I was passing up a good thing, but I came back and said just keep an eye opened. Well, he called me today and was very excited about the $1185.00 which is below spot by 3%. I, on the other hand, plan on buying in the $800.00 range. I like to have some assets that are tangible, so a little gold at a good price is on my list. If it drops to the $800.00 level, that would be a price not seen since around September of 2008. Although the current price is not where I would like it, it is lower than it has been in a while and getting closer to my magic number. I think I will hold my ground like I have been doing with the real estate. I prefer not to chase the deal.

Does anyone have any thoughts on where gold might be headed? Do you invest in gold as an asset class? Any thoughts?

Keep cranking,

Robert the DividendDreamer

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About dividenddreamer

Doing what I can to make the best of today and the most of tomorrow.
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10 Responses to Gold in Them There Hills

  1. I have a bias against gold personally. However, my parents value gold very much. They own some because they want tangible assets like you said. I’m not sure there is much intrinsic value in gold. You can use it as currency, but anything can be perceive as valuable by any society; e.g., seashells, salt, etc.

    If I had to guess, I don’t think gold will fall below $1,200 an ounce. It might dip below that, but economically it can’t stay below $1,200 for long. The reason being is because the average production cost of an ounce of gold is above $1,200! So producers will lose money, they already are. This happened to oil back in 2008 when it fell below $40 a barrel, while production was $60. If production cost for gold decreases, then the price will too I suppose. I think that might come with new technology and methods for extraction. Plus, most of the easy to find gold have been extracted. So that’s why one of the reasons gold production is up, because producers are venturing into riskier areas to find the yellow stuff.

    • Thanks for the insight. I feel that the value of gold lies in the fact that it is tangible. Money is just paper and like in the Weimar Republic, hyperinflation could make the paper vitually worthless. There were stories of people leaving baskets of money on the road and people throwing the paper out of it to steal the basket because the basket was worth more than the paper money. That is why I would consider any gold because of its value as a commodity.
      I am only considering a few ounces in ingot form and at a good price, it might be a good hold.

      Keep cranking,

      Robert the DividendDreamer

  2. Yeah, I’m not a big fan of gold either. Maybe it’s just because I’ve never actually sat down to understand gold and its market. However, I do invest in physical assets in the form of investment grade gemstones. That’s a market I get a lot better, but of course, it’s not very liquid, as opposed to the common precious metals. Different strokes and all that.

    • Funny you should say that about the gemstones. My brother is a jeweler, and I have been trying to collect different little morsels as people come in and want to sell them. He usually does not like dealing with scrap or people who are looking for pawning and selling so he can refer them to me, and I can make sure I’m getting a good deal because my brother knows what he’s looking at. I have gotten a few good deals over the years. I bought a 12 carat beautiful tanzenite in an 18kt setting with a few nice diamonds, and I paid about 1/10 of what tanzenite was going for at the time. Best part is that it is actually a very nice ring. Also, picked up a 154 gram 18kt chain for scrap metal prices. I wanted a new chain and only paid scrap to get it. It is good to have a brother in that business because the sellers come to him and I can offer a little better than the pawn shops and the seller might jump at it. Sad thing is no matter how nice the piece is, it is bought as scrap. They must really need the money.

      Keep cranking,

      Robert the DividendDreamer

      • That is really awesome! You must have a great leg up with such a great resource in your family! I personally am very specialized in untreated Columbian emeralds. Just picked up a great .98 carat square cut from Gachala last month! I’ve taken a look at investing in certain diamonds as well. It’s a shame that they feel the need to sell, but that’s the way it goes, I suppose.

      • That .98 must be something to see. I like to go to flea markets and garage sales too. I picked up an Elgin white gold pocket watch for $50. I guess they thought it was silver. I do not go out of my way to go to the sales, but if I am passing I might stop in. As far as the diamonds go, it is getting harder to come by the really good stuff because it is not being mined in the old ways. No pickaxes or handtools. They are pulverizing it out of the ground for the sake of volume. Good luck with the diamonds. I will post a picture or 2 of the watch. It is really cool and over 100 years old.

        Keep cranking,

        Robert the DividendDreamer

  3. I believe everyone should at least some gold as it is the only real money in circulation today.

    However I’m holding off for the moment as it does not provide me any passive income so it won’t accelerate my path to financial independence.

    Regards,
    FRD

    • That sounds like how I see it. I am just looking for a good deal and I happen to be ae to get better than spot on most purchases, so when it looks good I might get some. You have to buy at least an ounce most of the time unless it is scrap.

      Keep cranking,

      Robert the DividendDreamer

  4. DivHut says:

    While I primarily invest in dividend paying stocks I do also own some tangible assets such as gold and silver. Nothing too huge as it is probably no more than 6% or 7% of my current portfolio. There is something about holding gold and silver in hand that almost seems magical. I’m not a gold bug or believe the world is coming to an end etc. but having some diversification doesn’t hurt either. I realize that gold and silver do not pay dividends and basically just sit there looking shiny. Still, it is an asset class that is recognized the world over and can be traded for any good or service on the planet. Thanks for sharing this different perspective from the regular dividend posts.

    • I am on the same page as you. Although most of my purchases in the past were only actual scrap from friends, I always got really good deals on my jewelry from my brother. Most of my purchases were at about 300 an ounce and lower. Just the material for my jewelry and the design and labor was on him. I could not pass the deal up. He really is a good brother and has been generous to me throughout my life. His website is designsinjewelry.com. I came across some Krugerands at about 500 a while back and a few liberty 1 ounce coins for the same. This was a while ago now. I wish I could get a whole pile for that price now, but not possible. It sure is really cool to hold the coins. They feel very heavy and you know they are worth something no matter what happens. Take it easy and keep in touch.

      By the way, silver is a sore subject in my family. I might post a little about that in a few days. The story goes back to about 1980 or so. I will find out and let you know.

      Keep cranking,

      Robert the DividendDreamer

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