Gold in Reality

Recently, together with the growth of Indonesia's economy, the "investment" business also grows especially gold investment, which gives a very great return to the investor, while at the back of the business there's a very big loophole of the business which is unknown by the investor.

I've been quite tired talking to those investors that the Gold's price isn't always going to surge at the end of the day. Shockingly, they stubbornly said that I'm wrong. But let me show my intelligent reader how can I be right.

What is happening globally is the gold isn't surging all the time, but it is surging when people think that it is the safe haven (esp when crisis happen). From the data I gathered, there are two sources at least that can show the price of gold isn't in a very good position currently.

Currently, it has a pattern that happen just like 1980s creating a new high, and after that creating a lower high just like what is currently happening. After that 20 years of hibernation, and starting of the bullish and 5 years later here came the break even point.

What happened at that time was, the economy was doing great at 80s to 2000s before the tech bubble and gold was starting its rally up to the volatile economy since that time. Now, the economy is recovering and I'm afraid that the history repeats again just like when the rally creates the euphoria of the traders before it eventually kills the traders.

Actually if we count using present value of the gold's trade 1981-2001, the BEP should be around 30 years. Just incase we say that there's no discount computed so it's easier to be understood.

Back to Indonesia, people in Indonesia keeps high tone saying that gold never declined, it will always surge at the end of the day. Let's see what actually happen was the IDR devaluated and the inflation was very high. In 80s if I'm not wrong, people still can buy gold with ± IDR5000, what happened was, at that time, IDR5000 people can buy a lot of things, going anywhere by bus only IDR10-20. Come on guys, what happened today??? Gold is IDR500,000, how bout your bus fare??? 1000-2000 at least, which means gold isn't increasing in value, but it's increasing in nominal. Please open your eyes before investing, because GOLD NEVER MAKES YOU RICH, but GOLD PRESERVE YOU VALUE only.