Topic: Will people come back to gold - page 7. (Read 24528 times)

Gold is perfectly relevant even now.   It does not have be to held or exchanged as a piece of metal, it can be exchanged by agreement without physical transfer.    Economies circulate value and often multiple times between the same people, final settlement between countries is where actual transfer of the metal can occur hence the wording 'trading deficit' comes into play.

If theres any doubt why central banks have been net buyers of gold over 10 years its down to this difference.   We the people are still throwing bits of paper at each other while the long game is the final settlement of debts over decades and the price will be in gold not debt and bonds



Not a bad point but dont take these current prices as the set field for what is possible.   People said the same thing about bitcoin when it was 1 dollar, with only 21 million it could never be used for anything big because there isnt enough to go around.

Even now people want to argue about owning 1 bitcoin or not.  Obviously the idea is that most people only ever use bits not the entire coin, hence the name !

Same with any currency standard, forget the rich people.   I know everyone thinks its a top down system but thats a falsehood.   Same as democracy its down to the little votes that all add up, the smallest parts of an economy are what matters and is what drives growth.   The largest richest amounts often just want to preserve their purchasing power over time, hence land investment etc

Currently Gold is the best Store of Value (SoV).
This has to do with scarcity. All the gold ever mined in mankind history is basically a 70 meter cube. Gold is scarce means that the rate of gold mining is constant in history, above all constant regarding the price: spikes in prices basically cannot cause more gold digging (this is not true for other store of value, like silver).

Gold has proved in past century as a good SoV because goods priced in gold had constant prices, whilst in fiat money had increasing prices.

Now we live in a digital world: every aspect of our life has been digitised: communications, pictures, audio, money, wealth and so, sooner or later, a digitised world will need a digitised Store of Value. This is Bitcoin, as the only scarce digital asset available today.

Central banks are hoarding gold reserves because gold is a PROVEN store of value, Bitcoin is a tentative store of value, actually so far has been a subpar store of value because of volatility, that it is not a feature of a store of value (the opposite being true: SoV has a low volatility, above all in real terms).

Diamonds are historically a good store of value because of wealth concentration, in war times you could eat your diamond and safely carry your wealth in your stomach. But nowaday scarcity is totally artificial: not only we know diamonds are well abundant in Earth’s crust, but their scarcity is maintained by the monopolist supplier (De Beers) rigging the supply chain. In addition technology is now able to craft synthetic diamonds virtually indistinguishable from real ones. Diamonds are over imho.

And why Gold isn't good in this current era? When we were in the 1500 BC we were in a new era and gold was still used.
It's not because the technology improved that it makes gold outdated. Actually, I would say gold is stronger than bitcoin (i take BTC as an example since we talk about technology)
Why central banks are massively buying gold so? I strongly believe central banks are smarter than me.

@fillippone
Have you invested in the diamond field?

No doubt gold has long history since years people are investing into it and growing their money but it’s not an old age now. It’s modern age where people are in need of modernized technologies and I think crypto investment is the best investment ever. Gold is now an old investment which is not fully acceptable in this era.

That’s exactly why copper is not used as a store of value: storing big wealth with copper would be impracticable from a physical point of view. And if you think storing is a problem, try moving that wealth.
So wealth density is a very important quality for store of value. Gold is good, diamonds are better, but bitcoin is simply unbeatable from this point of view.

Reassure me, you don't know anyone with 6.7 tons of copper in his house, do you? Even the Gypsys don't have.

Seems legit. Another one is corrosion.
Do you really want to store your value in something that basically is goingto turn into rust just because exposed to air?

Sorry, I am new on this thread: are we brushing up WHY store of value is GOLD and not Copper or Silver? /sarcasm

The problem is wealth density.

$40k gold is the size of a smart phone.
$40k copper is 6.7 tonnes

after all, Emasn is one of the influential assets, and has a price wherever you are. when money is no longer guaranteed, most people will return to investing in gold, real estate, and others. I am sure, many of us target to have a lot of gold in the future. it is an investment that is easy to control.

I think gold will not become obsolete, it will not be excluded by technology and time. we know that gold has been around for thousands of years, and the price continues to stabilize and even increase. we don't go back to gold. we always invest in gold

gold will always be an interesting item to have and store. since ancient times gold has become a valuable item today. and investing in gold is always profitable even though it is quite low every year. but the price of gold rarely goes down. so it's not surprising if now people are still interested in investing in gold.

I think there are a number of other base metals/products that one can invest in to store wealth

Gold doesn't need a new use case, it doesn't need to prove anything more. It showed us its strength long before we were born. Its price won't decrease no matter if we have not a new industry consuming it. Check back the gold history.
You contradict yourself, your first say jewelry is important and then useless. Which one should we take?

Countries such as China and Russia are accumulating gold as quickly as possible.
Countries are fighting to repatriate their gold from the US and UK.
Gold jewellery has been sought after since around 3100 B.C. that is not about to change any time soon.
Gold does have a minimum floor price due to energy, equipment and people costs to pull it out of the ground all of which continue to increase in price with reducing yields.
Gold hits an all time high in 72 currencies:
https://www.zerohedge.com/news/2019-01-15/gold-hits-all-time-high-72-currencies



Bitcoin has no new use cases, no mass adoption, no killer app.  
It has existed such a small amount of time it could disappear tomorrow and the majority of the world wouldnt even notice.
There is no minimum floor price for bitcoin thanks to the automatic difficulty adjustment, 1 nerd mining on pentium III with bitcoin at $1 could happen.

it could all happen that no one can know for sure if seen from the beginning until now gold still exists and is still used by people as an investment does not cover the possibility that in the future gold can be a promising investment

Unless a new significant use case for gold arises within the next decades (which is not impossible, could be something space related), the price will go down to its intrinsic value (on computer chips and the likes). Jewelry, which is one important use case for gold right now, is quite useless apart from being a part of our culture. Once people start to realize this, gold will go down in price. At the very latest, the price will go down once supply increases.

On Bitcoin existing in 2100: It's absolutely impossible to predict that far into the future. The scenario was hypothetical, and deliberately exaggerated in order to make the point, that while the supply of gold might spike at some point in the future, Bitcoins cannot.

Yes, maybe some people will return to gold, or those who buy gold in large quantities, they really do not pay too much attention to the presence of Cryptocurrency. but I am sure, gold and bitcoin are both going to generate big profits. so now it's up to ourselves, want to stay here or be back in gold.

You have to factor in risk too as recent events have shown.

Perhaps banks are now actively buying gold, but at the same time there is a very large number of OTC transactions during which various funds and individuals actively buy bitcoins from miners, and if they do this, this means that they have some kind of investment plan. I think that ultimately buying bitcoins is much more profitable than buying gold.

The only important fact is fiat is the worst thing to hold.

Inflation always exceeds any interest paid on cash savings so constantly erodes purchasing power year on year.