4 ms·

Yeah I do not see why this is worthy of interest. Gold is pretty much always appreciating.

by devmor 1y ago

vdupras 1y ago
What is unusual is for gold to perform better than stock indexes, which it has been doing by a significant margin in the past year.
kragen 1y ago
Gold has a pretty stable value over long periods of time; the famous quote is: > an ounce of gold in Roman times bought a nice suit, and today, an ounce of gold buys a nice suit. Consequently it's the standard safe store of value investors flee to when the world is in upheaval, a role it has played since well before Roman times. Its price being high is a standard indicator of investors fearing miserable times ahead. See, for example, https://www.investopedia.com/terms/s/safe-haven.asp https://www.investopedia.com/terms/s/safe-haven.asp or https://www.investopedia.com/terms/f/flighttoquality.asp https://www.investopedia.com/terms/f/flighttoquality.asp. If it appears to you that "gold is pretty much always appreciating", that's a function of your perspective, similar to the phenomenon where, sometimes, when you're standing on railroad tracks, a faraway train looks bigger and bigger and bigger if you just stand there and watch. In this case what is happening is that the value of whatever you're using to measure the gold's value, probably dollars, is depreciating. Gold's value is pretty volatile in the short term, though, so in fact most of the time gold is not at an all-time high, even measured in dollars. If you look at https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/File:Price_of_gold.webp https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/F..., for example, you'll see that gold didn't reach its high of 02011 again for about 9 years, and didn't reach its high of 01980 again for 27 years, until the subprime mortgage crisis in 02007. To me it looks like the recent periods that gold has reached a nominal all-time price are roughly 01968–01975, 01979–01980, 02008–02011, the first half of 02020 when nobody knew what was going to happen with covid, and since Trump got elected. 13 out of the last 60 or so years. The following plot on that page shows what I mean about inflation; adjusted for the BLS CPI, gold hadn't exceeded its 01980 peak until the last few months, not even in the subprime mortgage crisis. kmeisthax's shadowbanned graph of oil barrels per gold ounce is also pretty thought-provoking: stable within the 10–35 range from 01946 until 02023, with the stunning exception of 02020 ("The peak in 2020 was driven by COVID-19, which boosted gold prices as a safe haven while oil demand and prices plummeted due to global lockdowns.") https://elements.visualcapitalist.com/visualizing-the-gold-to-oil-ratio-since-1946-copy/ https://elements.visualcapitalist.com/visualizing-the-gold-t...
- Muromec 1y ago
  An ounce is what -- 3800 USD now? That is indeed a nice suit.
  - breadwinner 1y ago
    Not very far off: https://www.brioni.com/en/us/ca/suits https://www.brioni.com/en/us/ca/suits
    - rockercoaster 1y ago
      [dead]
  - kragen 1y ago
    And if you look at the inflation-adjusted graph, you'll see that it was up to 2600 dollars if you adjust for inflation ("2024 dollars"), which was already a pretty fancy suit, and within three years it had dropped by 40% before gradually settling to a low of 400–600 "2024 dollars" from 01998 to 02004. As I said, there's a lot of short-term volatility, though not as much as Bitcoin: https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/File:Gold_price_in_USD.png https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/F...
  - lomase 1y ago
    A hand made suit would fit better in this case.
    - kragen 1y ago
      One of the eminently attackable facets of that claim is the varying availability of goods over the millennia, making it impossible to have a really stable and precise measure of value against which to measure gold's purchasing power. You can't buy silphium or Roman concrete today for any price, for example, nor a ticket to a gladiatorial match, and, from a certain point of view, most of the functions fulfilled by handmade Roman togas are today fulfilled by mass-produced machine-stitched US$200 wool suits, or even a cheap sports coat, jeans, and T-shirt. And no amount of gold would have bought you penicillin 100 years ago, much less in Roman times.
wetpaws 1y ago
[dead]

Yeah I do not see why this is worthy of interest. Gold is pretty much always appreciating.

by devmor 1y ago

Yeah I do not see why this is worthy of interest. Gold is pretty much always appreciating.

What is unusual is for gold to perform better than stock indexes, which it has been doing by a significant margin in the past year.

kragen 1y ago

Gold has a pretty stable value over long periods of time; the famous quote is: > an ounce of gold in Roman times bought a nice suit, and today, an ounce of gold buys a nice suit. Consequently it's the standard safe store of value investors flee to when the world is in upheaval, a role it has played since well before Roman times. Its price being high is a standard indicator of investors fearing miserable times ahead. See, for example, https://www.investopedia.com/terms/s/safe-haven.asp https://www.investopedia.com/terms/s/safe-haven.asp or https://www.investopedia.com/terms/f/flighttoquality.asp https://www.investopedia.com/terms/f/flighttoquality.asp. If it appears to you that "gold is pretty much always appreciating", that's a function of your perspective, similar to the phenomenon where, sometimes, when you're standing on railroad tracks, a faraway train looks bigger and bigger and bigger if you just stand there and watch. In this case what is happening is that the value of whatever you're using to measure the gold's value, probably dollars, is depreciating. Gold's value is pretty volatile in the short term, though, so in fact most of the time gold is not at an all-time high, even measured in dollars. If you look at https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/File:Price_of_gold.webp https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/F..., for example, you'll see that gold didn't reach its high of 02011 again for about 9 years, and didn't reach its high of 01980 again for 27 years, until the subprime mortgage crisis in 02007. To me it looks like the recent periods that gold has reached a nominal all-time price are roughly 01968–01975, 01979–01980, 02008–02011, the first half of 02020 when nobody knew what was going to happen with covid, and since Trump got elected. 13 out of the last 60 or so years. The following plot on that page shows what I mean about inflation; adjusted for the BLS CPI, gold hadn't exceeded its 01980 peak until the last few months, not even in the subprime mortgage crisis. kmeisthax's shadowbanned graph of oil barrels per gold ounce is also pretty thought-provoking: stable within the 10–35 range from 01946 until 02023, with the stunning exception of 02020 ("The peak in 2020 was driven by COVID-19, which boosted gold prices as a safe haven while oil demand and prices plummeted due to global lockdowns.") https://elements.visualcapitalist.com/visualizing-the-gold-to-oil-ratio-since-1946-copy/ https://elements.visualcapitalist.com/visualizing-the-gold-t...

Muromec 1y ago
An ounce is what -- 3800 USD now? That is indeed a nice suit.
- breadwinner 1y ago
  Not very far off: https://www.brioni.com/en/us/ca/suits https://www.brioni.com/en/us/ca/suits
  - rockercoaster 1y ago
    [dead]
- kragen 1y ago
  And if you look at the inflation-adjusted graph, you'll see that it was up to 2600 dollars if you adjust for inflation ("2024 dollars"), which was already a pretty fancy suit, and within three years it had dropped by 40% before gradually settling to a low of 400–600 "2024 dollars" from 01998 to 02004. As I said, there's a lot of short-term volatility, though not as much as Bitcoin: https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/File:Gold_price_in_USD.png https://en.wikipedia.org/wiki/Gold_as_an_investment#/media/F...
- lomase 1y ago
  A hand made suit would fit better in this case.
  - kragen 1y ago
    One of the eminently attackable facets of that claim is the varying availability of goods over the millennia, making it impossible to have a really stable and precise measure of value against which to measure gold's purchasing power. You can't buy silphium or Roman concrete today for any price, for example, nor a ticket to a gladiatorial match, and, from a certain point of view, most of the functions fulfilled by handmade Roman togas are today fulfilled by mass-produced machine-stitched US$200 wool suits, or even a cheap sports coat, jeans, and T-shirt. And no amount of gold would have bought you penicillin 100 years ago, much less in Roman times.

wetpaws 1y ago

[dead]