Why is gold considered a safe haven investment?

Gold is considered a hedge against inflation, not a safe haven investment.

genius wrote:

If the economy tanks even further and we go into another depression, won't gold be the LAST thing anybody will give a sh*t about?

I think that the only real safe haven investments are food, water and shelter stocks. Is there a Survival Index??

[quote]Rudi Voeller wrote:

Gold is considered a hedge against inflation, not a safe haven investment.

Oh?

http://www.businessweek.com/news/2010-07-02/gold-climbs-on-haven-demand-amid-u-s-europe-economic-woes.html

This is a Business Week article from a little over an hour ago: Friday, July 2nd at 3:27 PM.

Third paragraph, first sentence:

'“People are still considering gold as a safe haven,” said Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva.'

Pwned.

Just because you read it in Business Week doesn't mean its correct.

genius wrote:

[quote]Rudi Voeller wrote:

Gold is considered a hedge against inflation, not a safe haven investment.

Oh?

http://www.businessweek.com/news/2010-07-02/gold-climbs-on-haven-demand-amid-u-s-europe-economic-woes.html

This is a Business Week article from a little over an hour ago: Friday, July 2nd at 3:27 PM.

Third paragraph, first sentence:

'“People are still considering gold as a safe haven,” said Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva.'

Pwned.

And just because people have been convinced it's a safe haven investment doesn't mean it is. As a rule, as soon as you see someone post a thread about an investment on letsrun, the bubble's about to burst.

If you dollar cost average invested in the stock market over the last ten years, then you lost a lot of money. And you should never lose capital over a ten year period, unless you invested unwisely.

You would be very foolish if you did not regularly reallocate your assets depending on the conditions of the stock market and the domestic and global economy. Do not depend on a retail broker or financial planner to do this for you. You do need to take control of your own investments and there is plenty of information on the internet and many new investment options to help you accomplish this.

Did you really think that Goldman Sachs made so much money by dollar cost average investing? You may not make as much as them, but you should not be made a fool.

Gold is like any other commodity. If you need an ounce of oil to heat your house in the winter, you will pay a lot. If you need water to keep from dying of thirst, you will pay a lot. If you don't need gold right now, it is not worth a lot, except if people think it might be needed down the road.

lot of good information on lewrockwell.com, anglofareast.com, and also garynorth.com.

Speculating on Gold is really a bet that the economy won't return to sure footing and that inflation will take off. In such a situation one would assume that the demand for gold as a store of value would rise precipitously. Someone else suggested that stuff like food is what will really be of value. That's true but food is perishable, ie you buy it and it loses value over time. Gold retains its useful qualities extremely well- hence its monetization. If this is the apex of uncertainty about the dollar and the economy, people who invest in gold will get hosed. If, as Ayn Rand Disciple seems to think, this merely the beginning, gold is a good bet.

Money is worthless, as is Gold. The only material possessions that will be of use when the world goes to shit: canned food, clothes, camping equipment and wilderness survival things.

Gold is only valuable if there is a buyer for it. There is nothing hard-wired in people to make them believe gold is valuable.

In the panic of 1837, one operator not only was able to bilk people out of a load of cash in a property ponzi scheme, he ALSO benefited by selling them gold he did not own, and then the price collapsed when the value of their property collapsed. They believed themselves "safe" by booking profits from their property bets in over-priced gold.

Gold is a classic "Giffen Good". As its price rises, people consider it more valuable. It has many industrial applications. There is ~1 ounce of gold in 1 ton of ore, vs 3 ounces in 1 ton of discarded computer parts. (A very good business btw). But beyond this, there is nothing intrinsically valuable about it.

Salt was currency 5000yrs ago. It was scarce, was mined, and there was an active market in it. We laugh now, but then, it was serious business and fortunes were made trading salt.

Gold is money and nothing else. -The late JP Morgan

Why argue with 5000 years of history? Research the history of money a bit and you will realize that the Federal Reserve Notes you have in your wallet are a complete fraud. There is no bubble in gold. Most people (99%) in the USA think gold is some over valued useless commodity. How can there be a bubble with that kind of sentiment? Most people in the USA (99%) are going to be left in the financial dust as their dollars lose massive amounts of value over the next decade.

Nigel Tuffnell wrote:

Gold is only valuable if there is a buyer for it. There is nothing hard-wired in people to make them believe gold is valuable.

Salt was currency 5000yrs ago. It was scarce, was mined, and there was an active market in it. We laugh now, but then, it was serious business and fortunes were made trading salt.

There is nothing hard-wired in people to make them believe is valuable.

was currency yrs ago. It was scarce, was , and there was an active market in it. We laugh now... now that all money is made up digital digits in some consortium of central banks.

..because its shiny and cool-looking, and for thousands of years shlubs have been sinking hard-earned shekels into impressing their gals with it...and always will.

That's why its about as safe as anything.

Gold is considered a safe haven because of following reason

1. Historical Value:
Long-Term Stability: Gold has been valued for thousands of years across various cultures and civilizations. Its historical significance and consistent demand contribute to its stability.
Preservation of Wealth: Unlike paper currency, gold has maintained its purchasing power over long periods, making it a reliable store of value.

2. Hedge Against Inflation:
Intrinsic Value: Gold’s value isn’t tied to any single currency, making it a strong hedge against inflation. As the cost of living rises, so does the price of gold.
Limited Supply: The finite nature of gold means its supply cannot be artificially increased, helping to preserve its value over time.

3. Portfolio Diversification:
Low Correlation: Gold often has a low correlation with other asset classes like stocks and bonds. This means it can help balance a portfolio and reduce overall risk.
Crisis Performance: During financial crises, gold tends to perform well as investors flock to it for safety.

4. Geopolitical Stability:
Safe Haven: In times of geopolitical unrest, gold is seen as a stable and secure investment. Its value often rises when confidence in governments or financial systems wanes.
Global Acceptance: Gold is universally recognized and accepted, making it a valuable asset in any country.

5. Liquidity:
Easy to Trade: Gold is highly liquid and can be quickly converted into cash or other assets, providing financial flexibility.
Widely Recognized: Its global recognition means it can be easily bought and sold across international markets.

Gold is crypto for boomers and, unlike crypto, actually has an intrinsic value due to its use in electronics and jewelry.

Nice points generally, but broken down, part of this appears tautological:

It’s considered a safe haven because it’s considered a safe haven.

Not that you can ever get completely away from that in economics. Nor can you find perfect logical grounding on anything, if I understand Russell and Gödel enough (although certainly not all that well).

So I buy gold from Chuck Woolery, then the economy tanks and/or the financial system collapses. Then what? What do I do with this gold? Who's buying it from me? Who's accepting gold as payment? Seriously, I don't understand how this is supposed to work. Are the only beneficiaries Mr. Woolery & Co.?

Tom Thumb, Tom Cushman, or Tom Foolery
Buy gold on TV with the help of Chuck Woolery

I often wondered why the brokers advertise to buy gold. If it were that important, wouldn't they be clamoring for you to sell it to them? Also, do they send you actual gold, or do they send you a piece of paper, or electronic statement saying that you own some gold that you have never seen, nor will ever see? Call me a gold skeptic. The real safe haven is land and food. If you have those, you have what you need.

Sorry, worded the first sentence wrong. I wonder why they advertise to get you to buy their gold.