Gold Is A Giffen Good... Get Some While The Gettin’s Good + An Unpopular Opinion about Gold
Occasionally I have to laugh at myself and my fellow goldbugs.
I can say that because I am one.
For years I have seen people (including myself at times) become obsessed with buying something as close to “spot” price as possible.
Although I am guilty of this myself, its pretty silly when you think about it. If you are buying gold or silver, there is probably at least some expectation in your mind that it will go up in price in your local currency.
Do you have an expectation that it will go up more than the couple percentage points you are chasing for that close to spot price deal?
For me, I try my best not to waste a lot of time thinking about it.
In my unpopular opinion, the time spent worrying about how close to spot you are getting something for is a mitigated advantage because every day you wait to buy gold is another chance it might take off in your local currency
https://www.goldmoney.com/research/live-prices-and-charts
Today gold sits near a 52 week high in USD terms and near an all time high in other currencies.
Gold tends to be a Giffen Good:
https://en.m.wikipedia.org/wiki/Giffen_good
TLDR:
People want it more the more expensive it gets.
I understand there is a psychological satisfaction in thinking you are getting a “good deal” on precious metals, but I would argue that its all a good deal at this point in the cycle and that precious metals are so severely undervalued that its not worth the risk of waiting around to shave off a few bucks.
Small example....
On Wednesday this spin top:
Today:
Since Mene prices its 24 karat gold by weight, this Spin Top is just about $20 more today that it was 48 hours ago.
It’s the price of gold itself that is moving and not the price over spot.
Would you rather:
1.Buy an ounce of gold for $1000 spot price with a 10% premium
2.Buy an ounce of gold for $2000 spot price with 5% premium.
Think about it, you gold bug!
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The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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