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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (4956)	9/15/2002 9:46:55 AM
From: que seria	Read Replies (2) \| Respond to of 39344

Merry, your two articles nicely frame the issue of what PM to buy. I see the choice among PMs as a macroeconomic bet. In one corner: gold, sought as ornament and, historically, money. In the other corner: platinum group metals, featuring platinum as less-sought-after ornament, and all PGMs as important commercial metals. Outside the ring, a wannabe: silver, a second tier ornamental, monetary, and industrial metal. I sold Southernera a while ago based upon the demand picture. Your article cites Asian jewelry market as half of the demand for PGMs, so vehicle production must be a large part of the other half. I fall into the camp of those expecting US final demand to weaken significantly and soon, as consumers are tapped out, and Asia to weaken greatly as a result. If so, vehicle sales and jewelry will be two of the sectors most vulnerable to a drop in consumer demand. I can see wealthy holders of a lot of dollars fleeing into gold or even silver and (in Asia) PGMs. However, if economies continue to remain weak, the less wealthy (including many Asians holding gold instead of dollars) may have to sell dollar, gold, and PGM "savings" as they did after the '98 LTCM crisis hit. The one thing I don't want to bet on is the price of a metal tied directly and almost entirely to jewelry and vehicle demand. If gold buying for investment comes to be anywhere near offset by forced gold sales in tough economic times, just imagine where auto and platinum jewelry demand will be. What makes gold different is that it has been and will be money, and it is something people with extra fiat might buy instead of that new vehicle or new ring. I look for gold to just be an increasing store of value with some spikes; I don't buy into the "to the moon" (or even $600) scenarios of the 'bugs. I'd fear that (especially as a US citizen; but our maladies become the world's). Too much gov't gold in vaults, and too many gov't gunpackers ready to reclaim it if it really comes to pose a threat to fiat. Hard to have a market in "money" that is outlawed as a medium of exchange and a store of value!