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do you think gold is a good long term buy at $750 right now, or do you personally think it'll keep going down?

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SFsorrow said:
Now what the heck happened to Rhodium? It fell over $9,000 in value per ounce since June!

How about this, in place of buying the metal itself, why not just buy mining stocks, or etf's of mining stocks. It's way easier to cash in on gains that way then dealing with a physical metal.

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In any case, regarding rhodium, what is said to have happened is:

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      Retirement musical chairs. The manager in charge of procuring PGMs—until a couple of weeks ago—was the second or third man to hold the position in just the three years since the long term and very skilled in PGM trading and hedging holder of that assignment was ‘retired’ after an internal dispute with top management about what he considered counter-productive constraints on responsibility creating unfair liabilities for himself and his staff.
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      Sell & buy back. Shortly thereafter, it’s said, his first successor—who had no prior experience in the PGM markets, sold off the company’s physical rhodium inventory. This since he saw that it had a low cost-basis on the company’s books, and it was then selling at a substantial multiple of that basis. It was also the end of the calendar year, so that he was able to deliver a nice number to the company’s bottom line and be regarded as a hero for that alone. In his total ignorance of the market for rhodium, he assumed that since its price had at that time been flat for a while it would remain flat—and he could buy back just what he needed, around 5,000 ounces a month as he needed it. Since no good deed goes unpunished, it of course happened that rhodium began rising at that time and the feckless seller had to buy material on the market at an average of $2,000 per ounce more than he had sold it for. Thus cash flow for rhodium increased immediately in the next calendar year by $10 million a month and rose from there.

Now we come to our present situation and story. It’s now two years later and the successor to the man who sold the rhodium when he shouldn’t have it is said now decided not to repeat that mistake. So he came up with a new blunder. He decided to stockpile not six-months worth of rhodium as the formerly great corporation had been doing but 18 months worth, and he proceeded to do just that. This meant that the formerly great company wound up holding or controlling by the end of the spring 2008, some 10% of the global rhodium supply. On June 15, 2008 this inventory had a nominal value of nearly $1 billion dollars. The top financial managers of the great corporation announced that they had made a huge amount of money in futures trading even though the formerly great corporation had its worst overall quarter ever in early 2008. Perhaps the top managers even believed that since the rhodium (and platinum) inventory was now priced at all time highs for both metals they actually had ‘made money.’ The problem was that they needed liquidity, so it is said they instructed the hapless PGM buyer to correct his inventory to the previous standard of six months physical. He then actually went to the RSA to see if agreements could be cashed out, or unwound, or sold to another buyer with profits for both the producer and the formerly great company, or changed. The producers wouldn’t do anything but stick to the original terms.

So what would you think would be the worst thing one could do in this situation? You are right. It would be to try and sell a large amount of rhodium into a declining market. The hapless, unsophisticated, unskilled-in-PGM-trading manager, it is said, offered 30,000-60,000 ounces of his 90,000 ounce rhodium inventory to the market. So he not only corrected the slight global market deficit,  but also sent the market into instant surplus. The market collapsed; and the manager was transferred to another country and another job. Rather than having a rhodium inventory marked to market at $1 billion the formerly great company now has a remaining inventory it is said worth at market a maximum of $240 million. We are waiting for the announcement of the nearly $700 million loss, but I don’t think we will see it anytime soon. Perhaps it really never happened.

By the way I heard that the same situation occurred with the formerly great company’s platinum inventory, but that inventory only lost a third of its value in the exact same time period for the same reasons.

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