Gold edges closer to key $400 mark as dollar continues to slip

[UpInArms]

http://www.bangkokpost.com/Business/17Nov2003_biz73.html

Gold was the talking point of the trading week, almost breaching the psychologically important $400 per ounce mark for the first time in more than seven years.

The gains came about because of the fall of the US dollar, which also proved the major factor in other markets ranging from platinum to wool.

<snip>

Gold: The price closed at $396.70 an ounce, against $378.95 a week earlier. Silver rose to $5.300 from $4.695.

The main driver of gold was the relative decline in the dollar, the currency in which the metal is denominated, said Matthew Schwab of Barclays Capital.

...more...

the current reading on the dollar is 90.99, you can see the charts at http://quotes.ino.com/chart/?s=NYBOT_DXY0

the current reading on gold is 398.50 on the overseas market, you can see the charts at http://www.kitco.com/market/

also see http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={40C7A269-30C7-413E-A758-EBB97C6361E2}&siteid=mktw&dist=bnb

Tokyo's Nikkei plunges below 10,000 By Allen Wan

TOKYO (CBS.MW) -- Tokyo's Nikkei Average plunged over 250 points to below 10,000 in early Monday trade on worries that upward pressure on the yen could haunt Japanese exporters going forward after Wall Street ended down Friday. The Nikkei Average tumbled 253 points, or 2.5 percent, to 9,913.68 -- the first time it fell below the key 10,000 mark since Aug. 18. The broader Topix slipped 2.4 percent to 982. Technology exporters were getting hit hard by the appreciating yen, which was trading at 108.26 yen in early Tokyo, compared with 108.35 yen in late Friday trade in New York. <snip>

looks like a rocky week for economies

[54anickel]

1. What is psychological importanance of $400?

I read about it alot but honestly don't understand it.

I was going to put a small % of gold into my portfolio when my 401k $ was released to roll-over. Now that it has gone up so much I'm torn as to whether it's still a good idea.

[UpInArms]

2. basically the "psychological" importance

of $400 is the same as with any 100 denomination in any of the markets - a point of resistance or a platform from which to continue -

personally, I wouldn't think too much of any paper investment - they are all gambles and every market has quite a bit of manipulation going on (jmho)

If you feel lucky with the pm's (precious metals) do quite a bit of research and only invest in companies that are not "hedged" - you can private message me to get more info

[leftyandproud]

3. gold & silver...

always a good idea to have a fraction in your portfolio...In the worst case scenario, if the USA gets nuked or something, pretty much every other asset will go to zero, and precious metals will skyrocket. I personally think silver is the bargain of a lifetime.

[54anickel]

4. The real thing i.e. eagle coins or paper?

I saw some PM Mutual funds. Also saw where Golden Eagle coins could be purchased as part of an IRA. I wouldn't think the paper would be of much value if everyone would be trying to cash out at the same time. Then again, how would you get change for a Golden Eagle coin?

I basically have no idea what I'm talking about here.

[Art_from_Ark]

5. The idea is, you sell the coins to dealers

Here's a theory of how it has worked in countries experiencing severe inflation:

Pablo is worried because his pesos aren't worth what they used to be-- last week. There is inflation predicted as far as the eye can see, so he decides to buy some gold, which is maintaining its purchasing power in his country. He buys little coins for daily needs (say, Mexican two pesos and Peruvian 1/5 libras, each containing about 1/20 ounce of gold) and bigger coins (such as the Mexican 20 and 50 pesos) for larger needs. He sells the coins as he sees fit to keep abreast with inflation (since, theoretically, an ounce of gold will keep its purchasing power regardless of whether a pair of shoes costs 200 pesos or 2,000 pesos). Since the value of his pesos declines wih each week, he will sell coins only when necessary.

Of course, Pablo could also try dabbling in foreign currencies, as many of his compadres have done.

At any rate, one other thing to keep in mind about American Eagle gold coins is that they are given ridiculously low denominations. The smallest member of the family, the 1/10 ounce Eagle, is worth nearly $40 in today's market for just the gold alone (it's usually traded at a premium), but the face value is a measly 5 dollars. If you took that to a 7-11, $5 is all you could get for it, assuming that you could even convince the clerk that it was, indeed, a legal tender coin. And a quarter-ounce coin is only given a face value of $10-- a "value" which is even less of a proportion of its gold value than the 1/10 ounce!

[54anickel]

6. Thanks, I am pretty uninformed in this area. Greatly appreciate

the information. I worked for a bank years ago that had gold coin in the vault that we had to count as face value. Just before a merger, they let one of the officers (had been with that bank forever and family had started the bank) buy them at face value.

[Art_from_Ark]

7. What a deal

Assuming the coins in the vault were so-called "old gold" (that is, US gold coins issued before 1934), and that even the grungiest "old gold" coin is worth 17-18 times face value, that bank officer really made out like a bandit.

[seemslikeadream]

8. I guess that deal George Bush Sr. gave Barrick Gold

is working out for him. That deal he gave Barrrick Gold Mining just before he left office which gave $10 billion in mining rights on U.S. public land, citing a 1870's mining law. The company was started by Khashoggi, the company that now George Bush Sr. is an international consultant for, the company that gave Jr. money to win the election. And on his last day in office George Sr. pardons Khashoggi. That's what I read from Greg Palast