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drbubb

The "Real" Gold price - for the past 600 years

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Yeah. I couldn't believe it either, but here it is: "REAL" GOLD PRICE

realgold.gif

...or click here for a larger version:

http://www.sharelynx.net/Charts/600yeargold.gif

 

aug132007_2.gif

 

update: 25 Year chart : 10 Years Chart

aa4yg5.gif

Seasonal Pattern

seasonal_gold.gif

 

MORE Long term comparisons:

0822_2.gif

 

= = = = =

LINKS:

COT timing Blog : http://www.COTsTimer.Blogspot.com/

Gold COT charts :

Gold lease rates : http://www.kitco.com/charts/g_leaserates.html

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Here's a question:

What was the best time to BUY GOLD ?

aaxt7.gif

 

If you saw this coming, would you have considering selling a London property then,

- if you thought 2001 was likely to be an imortant cyclical low for Gold -

to buy Gold shares- knowing they had a gearing of 3-4 times on Gold price rises ?

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How much is a 1998 $ compared to a 2007 $.

Unless I'm misreading it, that first chart does not make a bullish case.

 

To match those old highs in 1980, gold would have to rise to $5,000

 

In 1998 dollars, that peak was $1,560 - the chart suggest

 

Something is wrong with these figures, since I dont think prices have doubled in 9 years

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2001-2007 Bull market versus the Seventies

 

That previous bull move was from $35 to $850 - over 20 times.

This one was: $250 to near $750 - under 3 times.

 

aal1cd8.gif

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HAS GOLD been restrained by central banks capping it?

 

Jim Turk thinks so.

 

0813.h18.gif

 

This chart shows the price of the Dow Jones Industrials Average each day from gold’s bear market low on July 19, 1999 to this past Friday’s close, cross-plotted against the price of gold on the same day. For example, on August 10th the DJIA closed at 13,239.54 and gold closed at $670.30. So if you look at the intersection of these two prices, there is a purple dot marking this data point.

. . .

The four different colours denote the four deliberate efforts to cap the gold price, with each capping effort marked by a horizontal red line.

 

-see: http://www.financialsense.com/editorials/turk/2007/0813.html

 

= = =

 

WHEN THE LAST CAP ($450) gave way

 

0813.h7.gif

 

-see: http://www.financialsense.com/fsu/editoria.../2007/0813.html

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GOLD PRICES versus Lease Rates

 

Chart ... Lease Rate Chart

ac2xu4.gif

 

The recent jump is bullish IMHO.

 

+ Gold tends to fall when lease rates jump. That is because:

+ Lease rates are pushed up, because banks and traders are borrowing gold TO SHORT IT.

+ But when the rates stabilise, or start falling, Gold tends to rise,

+ The Rise comes because banks and traders are buying back those shorts

 

The shorting of gold makes sense, if someone was trying to hold gold below $700,

during a time of finanacial disruptions, and Central bank pumping.

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It shows how things have changed - 1400s, 1500s, etc it was real because they had no interlinked global economies. Now we do.

 

Note with interest how, in the past 6 months gold is mirroring the dow rather nicely: http://finance.yahoo.com/charts#chart32:sy...ource=undefined

(hope the link works, haven't figured out how to embed piccies)

 

the yellow metal, in today's web2 world is actually rather meaningless. we can never ever ever return to a physical commodity based economic system. I'll keep the 5 coins I have as they're nice to look at but will be selling my BV stock at the soonest possible non-loss

 

http://finance.yahoo.com/charts#chart32:sy...ource=undefined

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To match those old highs in 1980, gold would have to rise to $5,000

 

In 1998 dollars, that peak was $1,560 - the chart suggest

 

Something is wrong with these figures, since I dont think prices have doubled in 9 years

 

Hi Dr Bubb,

 

Interesting charts. The second one showing the 1980 peak as $5000 adjusted bothers me though. I looked up historical inflation rates here:

 

http://www.inflationdata.com/inflation/Inf...tor.asp#results

 

1980-2007 inflation 160.17%

1980-1998 inflation 107.71%

 

This makes the first graph look about right with the 1998 price of $1560.

 

But it makes the second chart look way out. According to these figures the 1980 peak should be about $2000 in 2007 dollars, not $5000.

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This makes the first graph look about right with the 1998 price of $1560.

 

But it makes the second chart look way out. According to these figures the 1980 peak should be about $2000 in 2007 dollars, not $5000.

 

To clarify, I meant the first graph looks right in identifying the 1980 price as $1560 in 1998 dollars.

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looks like my reply got lost somehow.

 

You could be right, M.

There are different measures of inflation (like increases in money supply) and so that is why there

may be different ways of calculating a "real" gold price.

 

In any case, they are both well above current gold prices

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It shows how things have changed - 1400s, 1500s, etc it was real because they had no interlinked global economies. Now we do.

d[/url]

 

No interlinked economies in the 1500s? Which history books have you been reading? Try:

 

Braudel, Fernand (2002) The Wheels of Commerce: Civilization and Capitalism 15th-18th Century, London: Phoenix

 

Outhwaite, R.B. (1969) Inflation in Tudor and Early Stuart England London: Macmillan (very interesting on how the flood of South American gold (stolen by the colonizing Spanish) impacted on inflation in Europe - at a time when gold really was money).

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...Macmillan (very interesting on how the flood of South American gold (stolen by the colonizing Spanish) impacted on inflation in Europe - at a time when gold really was money).

 

hmm...

maybe the finding of gold in america, and subsequent inflation, helped to spur on social changes,

including the enlightenment

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UK HOUSE prices must be falling fast now, when priced in Gold ounces

 

= =

 

The long term chart looks very bullish to me

 

aa4yg5.gif

 

Drawn this way, the major breakout in Gold has already happened!

 

(as Mish Shedlock puts it):

 

Bernanke's Bullet Misses The Mark - Mike 'Mish' Shedlock

"Not much has changed since Bernanke cut rates. Mortgage rates actually rose, Auto and Home Equity rates did not budge. Massive numbers of foreclosures are still going to occur and the jobs picture is still bleak. Bernanke has pulled out his pistol and is firing bullets praying that one will hit a target. If Bernanke's liquidity goes anywhere gold will likely benefit."

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IS A GOLD IN A BIG BUBBLE?

 

These charts suggest it is not

 

1/ Smallish gains, compared with genuine bubbles, and big bull markets

 

Midas0928A.gif

 

2/ Little traffic into a major gold-oriented website

 

Midas0928B.jpg

 

"How excited is the public getting about gold as it scales new heights? Not very, if the web traffic at Kitco.com is an indication. Visits to the site are barely 36% of what they were in May 2006 when gold peaked at $726. In fact, investor interest is less than half of what it was when gold sold for just $400 per ounce in 2004"

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Agreed, very interesting.

 

Re the Kitco traffic, it occurs to me that maybe the major interest is in ETFs, so it may not be a good indicator of interest ?

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Just found this. May be interesting:

 

http://goldnews.bullionvault.com/gold_lows...using_100320073

 

The Fortis report also notes that total holdings in exchange-traded gold funds – the "ETF" innovations that allow investors to "track" the Gold Price but charge fees of 0.4% per year without giving you actual gold ownership – now exceed the position held in Comex and Tocom gold futures by 59 tonnes.

 

That means private individuals and investment funds increasingly favor tracking the Gold Price on cash alone, rather than speculating with the leverage – and the risks of highly-geared losses – that gold futures allow.

 

In the 12 months ending last Friday, the major exchange-traded gold funds grew their gold bullion holdings by 47%. Physical gold owned outright by customers of BullionVault, in contrast, grew by 83% over the same period.

 

Between July and October alone, the gold stored by BullionVault increased by 21% in volume terms. The service now looks after more than $102 million worth of gold and cash on behalf of private individuals in 78 countries worldwide. Its store of privately-owned gold bullion exceeds most of the world's central banks, including the Bank of Canada.

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