Dow who? New record high for gold

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Browser
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Dow who? New record high for gold

Post by Browser » Wed Mar 06, 2013 9:25 pm

An ounce of gold, which sold for 125,000 yen as recently as last July, now sells for 145,000. It touched 155,000, an all-time record, early in February.
Those Japanese who dumped their yen in the past couple of years and stocked up on gold are probably feeling pretty good at this point.
Gold has rocketed up 36% in yen in two years.

And this isn’t an isolated case. In recent months, gold also hit new highs in other countries, including Brazil, Iceland and India.
http://www.marketwatch.com/story/the-se ... 2013-03-06
We don't know where we are, or where we're going -- but we're making good time.

gvsucavie03
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Re: Dow who? New record high for gold

Post by gvsucavie03 » Wed Mar 06, 2013 9:29 pm

not with my money....

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HomerJ
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Re: Dow who? New record high for gold

Post by HomerJ » Wed Mar 06, 2013 10:39 pm

Does that show gold is going up or the yen is going down?

Because gold hasn't hit a new record high in dollars.

dragoncar
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Re: Dow who? New record high for gold

Post by dragoncar » Thu Mar 07, 2013 1:54 pm

HomerJ wrote:Does that show gold is going up or the yen is going down?
Yes

jdilla1107
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Re: Dow who? New record high for gold

Post by jdilla1107 » Thu Mar 07, 2013 9:37 pm

When you get into currency trades, you have to stop thinking goes up/down in some sort of absolute sense. In fact, when people say something goes up/down in the US, they really are just taking a shortcut to mean against dollars.

With currencies everything becomes a spread. This means you are long one asset and short another. For example, when you buy an ETF with dollars, you are betting that the ETF will outpeform dollars. So you are long the ETF and short dollars. Normally we leave out the dollar part in our thinking because the US world is in dollars.

So, this article only matters if you are short yen and long gold. In other words, you bought gold with yen. It says nothing about some sort of absolute performance of gold.

The dollar has rallied against yen too recently. So, if you are have a dollar denominated savings account, congrats, you are up big against yen! (Who cares.)

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nydad
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Re: Dow who? New record high for gold

Post by nydad » Thu Mar 07, 2013 10:35 pm

It says nothing about some sort of absolute performance of gold.
How would you define this, since gold is denominated/traded in different currencies around the world. If the dollar tanks against the euro, does gold go up or down, or is it not related?

jdilla1107
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Re: Dow who? New record high for gold

Post by jdilla1107 » Thu Mar 07, 2013 10:47 pm

nydad wrote:
It says nothing about some sort of absolute performance of gold.
How would you define this, since gold is denominated/traded in different currencies around the world. If the dollar tanks against the euro, does gold go up or down, or is it not related?
Almost all commodities are traded in different currencies. (eg: oil, natural gas) Many stocks are too. Toyota has shares that trade in the US, but really trades in Tokyo. (Google ADRs.)

Realize that Toyota stock can both go up 1% in dollar terms and down 1% in Yen terms at the same time. Arbitrageurs will ensure that this movement is due only to the currency movements by buying in Tokyo and selling in the US.

Same with gold, if gold goes up in yen terms, that means NOTHING to you if you have purchased it in dollars. You don't have a yen position, so it's meaningless.

This article is silly and the author seems misguided.

If AAPL were setting new highs in terms of old goats, would you care?

umfundi
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Re: Dow who? New record high for gold

Post by umfundi » Fri Mar 08, 2013 4:03 am

I checked with my gold.

It does not remember whether I bought it with Dollars or Yen.

Keith
Déjà Vu is not a prediction

DaveS
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Re: Dow who? New record high for gold

Post by DaveS » Fri Mar 08, 2013 4:14 am

I think we are getting trolled. Gold was at $1720 per ounce last October and is $1577 per today. Dave

FillorKill
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Re: Dow who? New record high for gold

Post by FillorKill » Fri Mar 08, 2013 6:46 am

DaveS wrote:I think we are getting trolled. Gold was at $1720 per ounce last October and is $1577 per today. Dave
Maybe; or maybe Browser just has a Yen for Gold. :P

jdilla1107
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Re: Dow who? New record high for gold

Post by jdilla1107 » Fri Mar 08, 2013 7:29 am

umfundi wrote:I checked with my gold.

It does not remember whether I bought it with Dollars or Yen.

Keith
You have misunderstood. (Or were just being sarcastic) Let me try another way. I think of all trades as an entry and exit plan. So, you bought gold with dollars as the entry plan. My guess is that you're implicit exit plan is that in the future you will sell gold for dollars in return. This second part (the exit plan) is that part that "remembers". Now, with this plan, it doesn't matter what yen, euro, classic cars, artwork, or anything else does in the meantime. You just care about gold vs dollars.

Here's an other way of looking at it. Say in 2013 you buy a house for $200k. At the same time, $200k could get you $175k euros. Now, in 2018, you sell your house for $175k. At this same time $175k can get you $200k euros.

So, most americans would say "I lost $25K over 5 years."

Now imagine a european who was on temporary assignment who planned to move back to europe after 5 years. This person made $25k euros. Same house. It all depends on what the exit plan/expectation is.

- What if the european decided to spend the rest of his life in the US at the end of 5 years? Did he lose or gain?
- What if the american decided to go to europe for a temporary stint after the 5 years was up? Did he lose or gain?

HenryPorter
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Re: Dow who? New record high for gold

Post by HenryPorter » Fri Mar 08, 2013 8:05 am

jdilla1107 wrote: Realize that Toyota stock can both go up 1% in dollar terms and down 1% in Yen terms at the same time. Arbitrageurs will ensure that this movement is due only to the currency movements by buying in Tokyo and selling in the US.
One the main reasons , btw, that I think we can never have a global currency enforced upon every nation-state. If everyone used and traded in Terra dollars and there were no Euros, Kronos, Lira or sheckels, the middlemen arbitrageurs would not have such a free lunch.

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Cosmo
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Re: Dow who? New record high for gold

Post by Cosmo » Fri Mar 08, 2013 8:33 am

Anyone else find it interesting that gold prices are very strong yet inflation expectations remain very low?

Cosmo

jdilla1107
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Re: Dow who? New record high for gold

Post by jdilla1107 » Fri Mar 08, 2013 9:14 am

Cosmo wrote:Anyone else find it interesting that gold prices are very strong yet inflation expectations remain very low?

Cosmo
I don't own any gold, but I think the point is that its to protect against unexpected inflation. Similar in a way to TIPs. Why do people buy tips with inflation expectations so low?

Gold also helps to protect against the coming zombie apocalypse, which hardly anyone expects.

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