Roundtable: Will Gold Beat Oil in 2010?

In each of the last two years, a single commodity has taken center stage, helping to frame the storyline for the broader market. In 2008, oil's jump up to $147 a barrel became a contributing factor in tipping our already precarious economy into the Great Recession. Then in 2009, as a result of the ensuing economic turmoil, gold truly entered the spotlight, reaching a peak near $1,220 before cooling off slightly as the decade came to a close.

With 2010 not even a week old, we asked a collection of Fool contributors and analysts which commodity -- gold or black gold -- would dominate the coming year. Here's what they had to say:

Alex Dumortier, Motley Fool writer: Which of the two will outperform the other in 2010? I think gold’s story is more convincing than that of oil. I expect global economic growth to remain tepid next year, keeping demand for oil in check. Not so for gold. 2009 could mark the beginning of a secular change in this market, as central banks and international institutions were net buyers of gold for the first time in over 20 years. The BRICs (Brazil, Russia, India and China) collectively upped their gold reserves by nearly 50%. China, which runs the largest trade surplus with the U.S. among all our trading partners (and is thus accumulating dollars faster than anyone else), increased its gold reserves by three-fourths, yet gold remains just 1.5% of its total reserves.

Increased demand for gold isn't limited to central banks, either. As of Dec. 29, the SPDR Gold Shares ETF (NYSE: GLD  ) owned 1,133 tonnes of it, more than China and surpassed only by the U.S., Germany, France, and Italy.

The fear that inflation will erode the value of the dollar is entirely legitimate. The government is already doing a first-rate job of debasing the currency, but this show may be just getting started. We should expect the fiscal position of the U.S. to continue deteriorating over the next several years, creating enormous temptation for the government to monetize its debt through a massive dollar-printing campaign. In this context, gold must surely appear increasingly attractive to foreign central banks, institutional investors and individuals alike. I’m giving it the nod over oil in 2010.

Christopher Barker, Motley Fool writer: Both are solid choices for capital preservation amid a currency crisis for the U.S. dollar and other structurally impaired fiat currencies.

All the untold trillions of dollars in failed derivatives contracts -- and the unavoidable resurgence of the deleveraging event -- land squarely upon the lap of these strained currencies. As the one currency that is immune to debt-driven impairment, gold remains the superior choice.

Oil could outperform gold if counter-cyclical relative strength in the dollar continues amid the artful perpetuation of a fairy-tale recovery myth, but when the enormity of our predicament becomes common knowledge, it's gold that you want to hold. Yamana Gold (NYSE: AUY  ) remains enormously undervalued. But there's a third color of gold: silver. With a ratio of 65:1, silver is the obvious choice at this juncture, which is why I chose Silver Wheaton (NYSE: SLW  ) as my top pick for 2010.

Joe Magyer, Motley Fool Inside Value senior analyst: I'm going with black gold here. I think it is fairly priced right now, frankly, though a strong economic rebound would probably drive prices north of $100 again. The real driver of my oil pick, though, is that gold is an asset whose value is driven almost purely by speculation. Gold doesn't spin off cash or find itself predominantly used for industrial purposes. Buying an asset that creates no value and hoping to sell it for a greater price later? No offense, but there's a name for that. Don’t get mad, gold investors. Just look elsewhere.

Toby Shute, Motley Fool writer: I don't view oil or gold as fundamentally undervalued today, but macro events could easily drive prices higher. 2009 was light on armed conflict, and the world may not be so lucky in 2010. Sovereign default risks are also looming in places like Ukraine and Greece, not to mention my home state of California.

The stock prices of commodity producers are also riding high, so it's getting harder to dig up companies that are clearly undervalued, as Venoco (NYSE: VQ  ) was when I highlighted it in early October.

Your best bet may be to go with a company that's reasonably priced, run by good people, and charting a clear path to transformative value creation. That was part of the thinking behind my pick of ATP Oil & Gas (Nasdaq: ATPG  ) for best stock of 2010, and it's a reason I like Fronteer Development Group on the gold side.

Mike Pienciak, Motley Fool writer: Reluctantly, I have to concede that gold likely has a better chance of outpacing oil in 2010, rather than vice versa. However, that doesn’t mean that I consider gold a good long-term investment.

I've previously argued that an increase in the money supply alone isn’t enough to drive inflation -- a view shared by my colleague Seth Jayson. And while I readily admit that mid-single-digit inflation could be lurking in our near-term future, the yellow fervor of 2009 appears to be discounting a more menacing outcome. Even so, I see substantially higher oil prices as more of a 2011-12 phenomenon. And regardless of my own thinking on inflation, I believe that general fear and government distrust, combined with a quest for easy returns, have a good shot at driving gold considerably higher.

For those looking for a long-term investment plus inflation protection, I'd stick with oil, where deepwater driller Transocean (NYSE: RIG  ) and top-notch services player Core Labs (NYSE: CLB  ) both deserve a look.

So there you have it...
Gold narrowly wins this debate, with the caveat that oil may potentially be the long-term outperformer. Now that you've heard from our experts, we want to hear from you. Please vote in the Motley Poll below, and then tell our community why you voted that way in the comment section.

David Williamson assembled this roundtable. He owns no shares of the companies mentioned. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (38) | Recommend This Article (56)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 05, 2010, at 4:58 PM, Fool wrote:

    I do have some small plays in GLD, SLV and UDN, but I don't believe that the actions of the government and the Fed will necessarily cause the dollar to drop precipitously. Remember, that to balance the extra infusion of cash into the economy, which was very much the right thing to do, there were trillions of dollars lost in the stock market of 2008-early 2009, and in the housing market as well. The housing market might recover in terms of sales, but not, IMHO, in terms of value. Many people who lost in the stock market got out and didn't participate in the runup of 2009, and those that stayed in are still mostly down a fairly significant amount. Bottom line is, I wouldn't be in a mad rush to bet against the dollar in 2010. Maybe a prudently small portion of a portfolio..

  • Report this Comment On January 05, 2010, at 5:10 PM, parkhere2 wrote:

    Taking issue with Joe Magyer who argues gold creates no value while oil does. As an amateur gold bug, I argue the gold IS value while oil acts as a catylst to power industry thus creating value. In other words the writer compares apples to oranges. Are the central bankers around the world continuing to stack their vaults with gold to "create" value. I think not.

    Parkhere2

  • Report this Comment On January 05, 2010, at 5:17 PM, dymty wrote:

    With what will you buy your oil?

    In the Wiemar Republic, people carried their money in sacks and wheelbarrows. Not that we've seen this extreme, but isn't there a correlation here?

  • Report this Comment On January 05, 2010, at 5:26 PM, TMFJoeInvestor wrote:

    @Parkhere2,

    You make a fair point, though I'll add that countries (including the U.S.) have built up strategic oil reserves.

    If I have a barrel of oil, I have confidence that I can sell it based on consistent, necessary demand for it. With gold, my confidence in the ability to sell it is based mostly on my belief that other buyers believe they can find a willing buyer, and so on. In that way, and as my buddy TMFTheSnake has pointed out elsewhere, that makes gold akin to a fiat currency in that it is a store of value that trades well above its underlying industrial or commercial value.

    Food for thought, at least. By all means, keep the comments coming. I take it as well as I dish it.

    Joe

  • Report this Comment On January 05, 2010, at 5:26 PM, jrj90620 wrote:

    Just because the Fed has managed to devalue one U.S. Dollar from 1/20 oz of gold to 1/1120 oz of gold,or a 98% decline,doesn't mean the Dollar will continue declining.I mean,is the financial condition of the U.S. worse than it was during the preceding decades,when the Dollar declined?Oh well,guess I'll just take my chances with my gold stocks.

  • Report this Comment On January 05, 2010, at 5:29 PM, TMFJoeInvestor wrote:

    @dymty,

    If you think our economy will flounder to the point that we'll nearly abandon fiat currency, I think you'll find that folks won't exactly be able to shell out what equates to today's current buying power of $1,110 for an ounce. If you really expect such a dire situation, I'd instead recommend a hunting rifle and some canned goods.

    Joe

  • Report this Comment On January 05, 2010, at 5:31 PM, Dogbone48 wrote:

    Gold stock have out performed the market for the last 10 years. I see no change this year. Gold mine stocks are a better hedge than gold. Easier to get in and out and you don'h have to hold the gold. Always buy 4 or 5 mining stocks.

  • Report this Comment On January 05, 2010, at 5:38 PM, Dannysea wrote:

    Though I vote for gold now, 2010, oil is going to be bread and butter shortly after, as economies struggle and continue to cascade. And when economies run out of speculation resources, they turn to the bread and butter needs, like oil. With oil resources falling further and further behind, and third world economies consuming more and more, prices for the black will heat up further and further, no matter what the industrial companies do to go green.

    Then add into this pot, gold supply, though being held in reserve, is twice the demand. Someone along the way will get greedy and flood the market with supply, and the market will go from greed to panic.

  • Report this Comment On January 05, 2010, at 5:57 PM, ArizonaLoon wrote:

    Talk about things that make you go hmmmm...

    Well, the price of Gold is one of them. Humans fickle nature is another one.

    To get to the point: IMHO Gold will probably out perform Oil in 2010, but not because it is a good investment.

    Gold will out-do oil for several reasons, but mostly because there is a WHOLE BUNCH of cash out there that needs to be invested, and it has to go somewhere.

    On top of that, look at the news. Especially the "world is coming to an END" and other talk preying on peoples fears that we hear so much.

    Nonetheless, while I tend to agree with people who say "what we really have to worry about is an overpopulated planet and limited resources", and that we will have a HUGE amount of problems if we don't figure out a non-traditional way of dealing with this (the traditional way being war), I don't think Gold is the answer that will help each of us deal with these problems over the long term.

    (I mean if we really start blowing chunks through the turbine, there probably are going to be quite a few other things that will be more precious (and liquid) than Gold, right?)

    In fact, I find it a bit ironic that we have so many Gold protagonists in our ranks.

    I'm such an idealist, but I sort of viewed the Fool community as a group of investors looking for consistent long-term return. You know, strategic investors looking to build a fortune that will last, not only for their (hopefully) early retirement, but for their children as well. (can you hear the violin? the trumpets? Got the warm fuzzy feeling yet???)

    Seriously though, isn't even having a discussion about whether we should actually consider speculating on a commodity sort of ODD?

    Fool on!!!

    Loon

  • Report this Comment On January 05, 2010, at 6:12 PM, dymty wrote:

    I'm not speculating that the dollar will be abandoned, but this almost becomes a chicken-and-egg scenario, and it all depends on dollar strength. Some fiscal policy will be spun and relative stabilization will hold, eventually. In the mean time, strap in.

    I would agree that short term, gold will edge out oil, but there's no denying that there is a finite supply of oil, which then favors oil long-term. Keep in mind that a huge number of synthetics are derived from oil. Even as oil is slowly replaced as a fuel, it will still remain in strong demand.

  • Report this Comment On January 05, 2010, at 7:33 PM, peters46 wrote:

    I won't speculate on one-year time frame. It is in the hands of speculators (in a way, I guess that is agreement with gold speculators). Longer term, oil has to come out ahead. Not just oil for power, oil for almost everything: Plastics, chemicals, fertilizer, pharmaceuticals.

  • Report this Comment On January 05, 2010, at 8:06 PM, NotJesseL wrote:

    I'm definitely in the oil and gas camp. China is buying cars from GM at a greater rate than the US is for all but two months in 2009. BRIC countries are ramping up in my opinion. Its good that we have more electric cars, smaller cars, more energy conservation, etc. but there are a couple billion people about to move into the "middle class". I think this will make oil and gas a good play again. To make this into an investment instead of a speculative play, I would go with higher dividend yields and keep an eye on which companies are doing serious R & D such as might make for a good moat in a few years and which are just along for the ride.

  • Report this Comment On January 05, 2010, at 8:29 PM, xetn wrote:

    I voted on silver because:

    it also has a very high use rate for industry,

    can be used as MONEY.

    The production of silver is lagging that of gold. The US Mint keeps running out of the stuff to make silver dollars.

    (Of course the US Mint keeps running out of gold too.)

  • Report this Comment On January 05, 2010, at 8:35 PM, dexter7590 wrote:

    Mining stock along oil and gas stock hold equal positions in my portfollio. I don't believe that either will be a loser this year and don't really care which outperforms the other for both will be profitable.

    I'm more intrigued with the ExxonMobil purchase of XTO and the impact on natural gas over the next several years. There is a lot of money to be made in natural gas as the demand inevitably increases.

  • Report this Comment On January 05, 2010, at 11:35 PM, Dobbes wrote:

    I voted for oil.

    If you are going to invest, it makes more sense to be in the commodity that producers can hedge at increasingly attractive prices. The forward curve on oil is significantly steeper than gold, its not even close.

    I wrote all about it here:

    http://caps.fool.com/Blogs/ViewPost.aspx?bpid=311756&t=0...

  • Report this Comment On January 06, 2010, at 1:27 AM, manishkumar wrote:

    I believe that both of these are dangerous plays at this time. An increase in oil price beyond $100 will start crimping economic growth and this will self-correct the price of oil.

    As for gold, well the fact is the only scenario in which people will run towards gold is a financial crisis, since otherwise, you dont get money by holding gold. What is the chance of a financial crisis with central banks all ready to flood currencies?

  • Report this Comment On January 06, 2010, at 1:51 AM, TMFAleph1 wrote:

    @manishkumar,

    You wrote: "What is the chance of a financial crisis with central banks all ready to flood currencies?"

    There are different types of financial crisis. As such, the risk of a recurring banking crisis at a time when central banks are printing fiat currency on a wholesale basis is low; however, the risk of another type financial crisis is potentially very high. Think sovereign debt crisis, for example.

    Alex Dumortier, CFA

  • Report this Comment On January 06, 2010, at 7:30 AM, cheongwee wrote:

    We may be surprise that not gold nor oil will perform, but the dollar will shines. I agree with Bob Prechter.

    But i do agree that gold is still bullish long term. So if gold do correct, do use ther opportunity to buy some.

  • Report this Comment On January 06, 2010, at 8:11 AM, henryking54 wrote:
  • Report this Comment On January 06, 2010, at 11:32 AM, XMFSinchiruna wrote:

    Silver is already starting the year with relative strength to gold. The ratio is down from 65:1 at the time of writing to 62.5 today.

  • Report this Comment On January 06, 2010, at 11:49 AM, dschleicher wrote:

    As long as you believe either or both of oil and gold will be going strong, get some shares of FICDX, my favorite mutual fund that provides a nicely diversified portfolio of stocks that also has a low correlation with the US stock market!

  • Report this Comment On January 06, 2010, at 1:15 PM, alexxlea wrote:

    It takes a real alchemist to turn gold into fuel for your tanks, ships and planes.

    Oil has more strategic importance in the new landscape. Decreasing American-allied powers= Increased need for countries to fend for themselves... and many countries we consider friends are already short on resources.

  • Report this Comment On January 06, 2010, at 1:32 PM, parkhere2 wrote:

    Consider this: The world will run out of oil sometime in 2250--sooner or later depending on how effiecently we convert to alter fuels like nuclear, natural gas and hydrogen. In 2250, 75% of all gold ever mined will still be above ground--not consumed. Why is that? A foolish, barbaric, useless relic?

  • Report this Comment On January 06, 2010, at 5:11 PM, 11787HOT wrote:

    As long as Goldman Sachs, ICE, and the JPM's

    dont manipulate the futures contracts on Oil again.

    They made tons of money making false contracts on

    undelivered oil. Which by the way is in many storage tankers all over the world.

    We are over paying for fuel and food because the

    hiking of prices by these greedy ......

  • Report this Comment On January 06, 2010, at 6:25 PM, rfaramir wrote:

    Mike "previously argued that an increase in the money supply alone isn’t enough to drive inflation", but actually an increase in the money supply IS the very definition of inflation. Price inflation usually follows, but that separate phenomenon depends on other factors. We are in the Bust stage of the Boom-Bust cycle caused by Central Banking (see Austrian Business Cycle Theory). This means that malinvestments that entrepreneurs were tricked into making (by artificially low interest rates) are being liquidated and jobs are being reallocated to where they will make more wealth. This doesn't happen instantly, so first jobs are lost, then later people get more appropriate jobs. During this painful readjustment, prices of goods and labor both fall, in real terms. If government tries to reinflate the bubble, prices in dollar terms may rise or fall, depending on the amount of new dollars reaching the consumers versus the severity of the readjustment. So if you're waiting for price inflation, you may not see it immediately.

    But new dollars issued by the government (printed by Treasury or created by the Fed) do not go directly to the consumers. They first become 'reserves' in the banks' accounts at the Fed and then become loans to producers and consumers in a leveraged (fractional reserve) fashion. When the government prints a billion dollars, about 10 billion dollars may reach the consumers who then bid up prices with them.

    When the government inflates but banks don't lend, we have a dangerous backlog of potential money supply about to burst onto the scene as soon as the banks change course. Especially since the government, seeing banks not lending to consumers (who have a hard time paying loans back when they lose their jobs), inflate extra hard, and threaten the banks to restart lending.

    We're in for a boat load of inflation in the not-too-distant future. When? I don't know. It's whenever the banks start lending out their reserves again (at a 10-to-1 ration, remember).

    Both gold and oil will rise with the debasement of the dollar, but which will rise more? I suspect gold, if only because oil also needs a thriving economy to be in demand, and government is shredding the private sector with its policies and burdening indebted consumers with ever higher taxes and future taxes (the borrowings will have to be repaid sometime by future taxpayers).

  • Report this Comment On January 06, 2010, at 6:56 PM, henryking54 wrote:

    Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster. Gold is a memorable metal that occupies a special place in the human mind.

    Industrial uses of gold include:

    Jewelry

    Dental

    Financial

    Medical

    Electronics

    Aerospace

    Computers

    Awards

    Glass

    Gilding

    Most of the ways that gold is used today have been developed only during the last two or three decades. This trend will likely continue. As our society requires more sophisticated and reliable materials our uses for gold will increase. This combination of growing demand, few substitutes and limited supply will cause the value and importance of gold to increase steadily over time. It is truly a metal of the future.

    http://geology.com/minerals/gold/uses-of-gold.shtml

  • Report this Comment On January 06, 2010, at 11:42 PM, manishkumar wrote:

    @TMFMarathonMan

    Alex,

    Debt crisis have happened in the past - remember Argentina, Mexico, Thialand ....

    world carried on...Gold did not skyrocket.

    The only debt crisis which has a possibility of causing Gold to skyrocket is a US debt crisis. Any other crisis (like Dubai / Greece in recent past) will only strengthen dollar - as a safe resort.

    And I find it difficult to understand how that can happen as long as the Federal Reserve is ready to print dollars. There is a lot of talk about foreign governments not agreeing to buy US bonds. But over 12 months of 2009, the Chinese actually purchased MORE treasury bonds, instead of liquidating what they had.

    We need to question some common wisdom that gets repeated again and again :-)

  • Report this Comment On January 06, 2010, at 11:44 PM, manishkumar wrote:

    .

  • Report this Comment On January 07, 2010, at 9:10 AM, euroedmus wrote:

    How can a person who says that gold creates no value while oil does be a Senior ANALyst here? Gold is a VALUE itself and has been a value for centuries and thousands of years. As for inflation: this is the only way how buffoons from the USA can get rid of their national debt. So please tell me the stories that gold is over-valuated! Gold is not an investment. Gold is the only value on a planet which holds its value. Proved by the history.

  • Report this Comment On January 07, 2010, at 9:49 AM, lemoneater wrote:

    What I'm wondering is if anything will beat both gold and oil? It sounds like some have voted for silver. Silver has some of my vote also. I think I was too late entering for gold or oil. If I understand correctly, the question is not so much about the utility of the commodities themselves but what holds the best value.

    Leaving the question of which commodity is the safest currency behind, what I want to know is what stock will create the most value monetary and humanitarian, no matter whether its value is best expressed in gold, oil, silver or even the USD. That is why I'm interested in medical and technology stocks.

  • Report this Comment On January 07, 2010, at 12:26 PM, TMFAleph1 wrote:

    @manishkumar,

    You wrote:

    "The only debt crisis which has a possibility of causing Gold to skyrocket is a US debt crisis. Any other crisis (like Dubai / Greece in recent past) will only strengthen dollar - as a safe resort.

    And I find it difficult to understand how that can happen as long as the Federal Reserve is ready to print dollars."

    The last sentence internally inconsistent, as you are saying that you don't understand how a US debt crisis could occur when the Fed is ready to print dollars. In fact, the willingness to print dollars with abandon is a fundamental cause of a debt crisis.

    China doesn't have an infinite appetite for U.S. Treasury bonds, and that appetite won't increase if they believe the U.S. is willing to simply monetize its debt by printing dollars.

    I don't think it's coincidence that China increased its gold holdings by three-fourths last year -- they want to diversify their dollar exposure.

    Alex Dumortier, CFA

  • Report this Comment On January 08, 2010, at 11:52 AM, Gordrovich wrote:

    In view of the statement that gold is the only (thing) on the planet that holds its value, I'm surprised no one points out its history since the last time its price was pushed up substantially. My mother-in-law, a German with some memory of the hyper-inflation after World War I, bought gold in the mid-70s at about $800, and now its price is around $1,200. Had she invested the $800 for 35 years at a 5% after-tax return, she'd have $4,400.

    Of course, this time things are different. Haven't we heard this before?

  • Report this Comment On January 08, 2010, at 3:39 PM, Retirefunds wrote:

    We like gold and gas for now, not oil, however that could change in mid 2010. We found some tech darlings under the radar which are doing very well, however, come mid 2010 the jury is out.

  • Report this Comment On January 08, 2010, at 5:29 PM, AaronRogers wrote:

    Oil No question. The same amount of gold that was on Earth 10,000 years ago is about the same now (some has been used in manufacturing or what ever). Gold's value only chnges on the strength of currency and confidence.

    Oil on the other hand is used and gone. Oil also trades on currency and confidence. Keep it Simple. Oil will always outsurpass gold until there is no need for it.

  • Report this Comment On January 08, 2010, at 6:54 PM, Fool wrote:

    Mine is a simple question:

    Please let us know ETFs we can purchase that track the price of oil if we believe oil prices will rise substantially.

  • Report this Comment On January 08, 2010, at 11:53 PM, rubenamy wrote:

    I know this is cheating.... But ALL commodities should do well as long as we are inflating the money supply.

    Silver and Oil should continue their performance levels based on the fact that we are consuming/diluting them at an industrial scale that is eventually going to be difficult to sustain.

    Gold will manifest its way back into the soveriegn balance sheets and function to something like a gold standard toward the end of this decade. Unless the US finds a way to pay it's debts . It will also continue to do well until the leverage is reestablished in the equities market.

    Remember - there has not been a single fiat currency that has stood up against the test of TIME. Every government has made the mistake of inflating them to the point of worthlessness.

  • Report this Comment On January 09, 2010, at 12:16 PM, FlorisHJ wrote:

    I didn't answer the poll - none of the options looked right to me. I'm not smart enough to decide "one thing will dominate". So I diversify. I have some oil-like ETFs (USO and DBO - when you compare their charts you see that over time the latter performs better; something to do with the methods they use for tracking the oil price, cost structure, and contango, I'm sure), and some gold ETF (GLD) as part of a diversified portfolio. These elements have performed very well for me, but they are not (and should not be) the only thing in my portfolio.

    As the economy rebounds, scarce resources will go up in price (oil); if it continues to slouch, money will flee to safe havens (gold). Either way the enormous US debt will devalue the dollar over time, and commodities denominated in dollars will rise accordingly. I'm a hedger. May not get rich fast, but hope to get rich slowly.

  • Report this Comment On January 12, 2010, at 10:12 PM, jennifergmd wrote:

    Ok- so the choice is between gold and oil here. I think both are headed much higher from here. But when was the last time the average person went out and bought a barrel of oil? It is much easier to buy a gold (or silver) coin than a barrel of oil. So for the average investor- you need to ask which is more practical?

    I think when the issues addressing precious metal price manipulation are dealt with (or overcome) then you will see much higher prices. I am not sure why people say gold does not have intrinsic value. Was it not that long ago that our dollar was based on gold? How much would those living in Venezuela wish they had gold instead of their local currency? Ask them if gold has an intrinsic value. Ask those trying to live on interest rates how valuable their CDs are right now.

    I suppose we should listen to those saying to buy gold at $200/oz as to how high they think it will go. Those who did not suggest that clearly did not know what was in store years down the road. After all- it was Tom Gardner, your fearless leader who made the great call to put all of the million dollar portfolio kitty into the S&P right before the collapse. I think you need to find people who made the initial call on gold 10 years ago and find out what they are saying.

    Now- oil is going to $ 100-200 / barrel in the next year or two. Everyone is so U.S. centric that you can't ignore the number of cars being purchased in China (soon to be followed by India). They will drive the price of oil up beyond belief. Still not sure how I will easily store oil in my home though. But the easy oil is gone. Did anyone notice how quickly the reserves of oil were used up after the crash and how quickly the price of oil rose?

    This debate of one vs the other is silly. I own a lot of gold and silver and many of the energy companies that will profit on higher energy prices. People outside of this country are buying gold and silver. There are many more of them than us. Regarding silver- if all of the silver available for investment were divided up by the people in our country, there would only be enough for about 2 ounces each (that was the world supply). So when the rest of the world figures that out, look out.

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