Ret45

I think we need to step back a little and look at what is actually happening here. 1. In the past week physical gold has gone from being in plentiful supply to, at times, practically out of stock. When is the last time that happened? 2. BV has posted a warning that the market is very thin and it is trading on wide margins. When is the last time that happened? 3. Gold as a safe haven is now being discussed in the mainstream media, on chatshows and by people on the bus. When is the last time that happened? 4. Gold spot price this week came close to year high in EURO, and very high in STG. Price for coins is at year high. So what does all this mean? We know that there are a myriad of factors influencing the spot price of gold, and gold is a manipulated commodity. So prices will fluctuate depending on those factors. But one thing is for certain, when gold becomes scarce its value will rise. I think the talk of waiting for the dip to buy is irrelevant, the shortages we saw this week may become the norm. And at the rate that things are unfolding, and with the growing shortages, there is a real risk of being caught out. You have been warned.

JS added this note.... Posted On: Thursday, October 02, 2008, 12:09:00 PM EST Protecting Your Financial Self - An Addition Author: Jim Sinclair Dear CIGAs, I have no doubt that $1650 will come. My concern is not that it will not happen, but that I am much too conservative in my long-term price objective since 2000. If major banks can be torn apart how can we have faith in the small local institutions that hold most of your ready cash? When I said “This is IT,” it is not something that I take lightly. Never in 49 years in finance have I seen a set of circumstances so challenging to the man in the street. What I am getting at is a simple question. Are you prepared? You have heard us talk repeatedly on removing financial intermediaries between you and your assets, but the time has come for us to recommend going one step further: Hold enough cash at your household to last you a month or two. It may be largely unnecessary for the majority, but what do you have to lose? If your bank should fail this will save you a lot of grief in the short term. If they do not, you still have all your cash that can easily be deposited back into your account. Regards, Jim

With commodities, there will always be more dips, we had one earlier today! The trick is not to get too greedy in terms of trying to catch the bottom of the dips.

Gold now within 3% of all time high for eurolanders...

From CNBC Analyst: Dollar May Sink, So Look to $1,500 Gold Topics:Commodities | Gold & Precious MetalsBy CNBC.com | 01 Oct 2008 | 08:28 AM ET Text Size Aaron Smith, managing director at Superfund Financial, sees gold as a good bet as he believes it will rise to $1000 an ounce by year-end, and $1500 in two to three years' time. "We think the prognosis is quite bearish for stocks and actually if you are buying stocks long-only at this point it's in my view sort of a sophisticated form of gambling," Smith told CNBC. "But there's no reason to be too too nervous. Investors could take advantage of cheap prices in commodity markets and benefit substantially from that in the next two to three years." "If you have to buy stocks it's better to have commodity stocks than financial stocks. But we believe we're shifting to an era of real assets where real assets will be valued more than paper assets like stocks and bonds. So we want to have exposure to the real underlying commodity. The best one that investors can buy in this kind of market environment today is gold." Part of gold's appeal is because "there is tremendous downside potential in the U.S. dollar." Investors could take advantage of the dollar's recent rally to take a position in gold, he suggested.

Brilliant call, went long also last week. Up 10% today.

Interesting dicotomy developing according to this extract from BV report today - looks like hedge fund boys aren't taking flight to gold yet. More time to buy! Surveying 28 professional gold traders, investors and analysts at the end of last week, Bloomberg found 11 were bullish, while nine said to sell. The remaining four were "neutral". The latest US options-and-futures data – released after Friday's close – showed hedge fund traders and other "large speculators" continuing to slash their bullish betting on gold and growing the number of short contracts they hold. As a proportion of their total position, the number of bullish contracts held by institutional speculators fell below 70% to its lowest level since June 2007. Private individuals trading gold derivatives also slashed their bullish bets – and also for the eighth week running – while building their largest short position since May 2005. Back then however, the bullish ratio for "small speculators" stood above 75%. Last Tuesday it stood at a record low of barely 58%. On the other side of the trade, meantime, professional traders acting for gold miners, refineries and bullion banks – often called the "smart money" for their cautious but prescient trading in gold – grew their long positions to an all-time record, pushing their bullish ratio to its own record above forty-one contracts in every hundred.

This is on the Elliott Wave site - questioning why gold has not performed given all the insecurity in the markets... Home > Precious Metals Gold: NOT The “Safe-Haven” You Think It Is By Nico Isaac Fri, 05 Sep 2008 14:30:00 ET Email | Print | RSS | My Updates Bookmark and share It! According to mainstream financial wisdom, when the plane of the U.S. economy runs out of fuel in mid-air and starts hurtling toward the earth’s surface, investors do have one parachute of safety: Precious Metals. Alas, things aren’t so hunky dory. Over the past year, passengers aboard Flight Wall Street have repeatedly hit the “Eject” button -- only to find that gold's parachute fails to open. Take, for instance, the just-experienced “Carnage” of Thursday, September 4. On that day, the U.S. stock market suffered a complete system breakdown: the Dow Jones Industrial Average plunged 344.65 points into fresh bear market territory. If ever there was an event to release the precious metal parachute, this across-the-Big-Board plummet SHOULD have done so. Yet -- at the day’s end, gold followed stocks down, below the psychologically important $800 per ounce level. (Will Gold Provide Shelter From the Financial Storm? The September 2008 Elliott Wave Financial Forecast reveals whether NOW is the time to park your money in precious metals. Get the full story today) I have two-and-a-half words for you: “What Safe-Haven?” Over the last year, every major engine of the U.S. economy -- from real estate to retail, employment to energy, and credit to commodities -- has malfunctioned. Yet, gold prices are down more than 20% alongside a 15% decline in the Dow. Which brings us to Main Street’s “exception” to the stocks down, gold up rule: A greenback rally to 11-month highs. To wit: “Gold Drops On Dollar Gains. The dollar’s strength or weakness remains the number one factor in determining the direction of gold.” (Sept. 3 Reuters) Sorry Charlie, such logic does not fly. And to prove it, the July 21, 2008 Short Term Update put together a myth-busting chart of the 52-week correlation between the U.S. Dollar Index & gold, and stocks & gold since 1999. (Reprinted below) Amidst the confusion of failed cause-and-effect analysis, it’s easy to lose track of actual events; namely this: Since setting a record high on March 17, gold prices have lost more than 20% in value. In the days leading up to the reversal, Elliott Wave International President Bob Prechter went against the bullish gold bandwagon and presented a special March 14 Elliott Wave Theorist. In Bob’s words: “What’s Next For Gold? If the relationship shown here holds true, and if gold behaves as it did in 1980, it should peak concurrently with the economy.” Don’t get caught with a faulty parachute

I think you are right in that a collapse of the current economic system will force society to fundamentally question and reject the debt-based system (I'm not sure previous systems were much better - such as class based systems where the majority were poor and never tried to compete with their 'betters'). But if we are talking about people losing faith in fiat then its going to take a long time, perhaps years of rampant inflation before people realise that that the system is broken, and years more before they come up with something better (what else is there - a return to the gold standard?). A lot of the doomsday stuff - git a gun and stock up on tinned soup everybody - is more wishful thinking then anything else.

I'm not sure that most people in the western world would agree with you that it is good news. The collapse of the global economy would bring enormous suffering to a lot of people, including GEI members' family and friends (unless you have enough gold salted away to look after them all!). I very much agree that the global economy is built on crumbling foundations and that we seem to be entering a phase of accelerated crisis. But who's to say that the shakeout won't take five or ten years, with plenty of twists and turns along the way. Its a mistake to underestimate human capacity to adapt and innovate in the face of crisis. All empires come to and end, including financial ones, but knowing that doesn't make it any easier to predict their demise with any degree of accuracy.

What's the good news?

In relation to the whole infaltion/deflation debate, what is the conventional wisdom regarding mortgages - is it better to have a fixed mortgage in anticipation of hyperinflation or is it better to be tracking ECB rate in anticipation that rates will have to be cut to stimulate economy. And yes, i know the real answer is to have no mortgage but that's not possible until gold starts behaving itself

anyone calling the bottom - or is that a pointless exercise...

we can't expect the markets to act rationally on a month to month basis. This is a big dip in an even bigger upward trend, anything else defies all markets laws, and you can only defy them for so long.

On the train home this evening was reading the new Soros book on the credit crisis. It is well worth a read, he has called the current events very well. From a staid, academic type investor, some of views are hair-raising "A significant part of the monetary reserves currently held in US government bonds will be converted into real assets. This will reinforce and extend the current commodity boom and create inflationary pressures. The decline of the dollar as the generally accepted reserve currency will have far reaching political consequences and raise the spectre of a breakdown in the prevailing world order. Generally speaking, we are liable to pass through a period of great uncertainty and destruction of financial wealth before a new ordeer emerges" We live in interesting times, my friends. Hold fast, we are not the mad ones. I give it six months in a post US election environment before the walls come tumbling down. Very pleased to be getting filled at USD 778! Transferring more funds to BV as I speak. Ret

Tomorrow is decision day for me as funds land in BV a/c tomorrow. I realise I am lucky that I was too lazy a few months ago to pursue the idea of buying gold, given that pog has fallen. But now that I can its difficult to buy into a sliding market - trying to decide should I buy in one go tomorrow or just take a dollar cost averaging approach? What would you do?

Out of curiousity (and I know this is the wrong thread), how are you planning to buy into oil? EFTs?

I am still new to this and was reading through some Jim Rogers interviews today. One thing that struck me was that, while he is confident in predicting general trends, he accepts the difficulty in predicting short term blips in the market. For instance, while he is very bullish on gold, it wouldn't surprise him if gold fell steeply short term etc. He talks in terms of trends over years and seems to resign himself to the fact that the human emotion element and irrational behaviour can maintain unsustainable market postions far longer than would logically be expected. It seems to me that the general population won't switch to gold gradually over time, more likely that a sudden and dramatic surge in POG will catch the attention of the mainstream media and then the talking heads in the media will explain to us all (with the benefit of hindsight) how predictable and logical the move to gold was all along.

Thanks Steve. by the way, when you say "diversify" are you talking about ensuring that your physical gold is spread among different gold brokers to be on the safe side. Is one gold broker considered safer than any other - GM vs BV? I have a terrible feeling I may become a gold junkie...are there signs i should look out for, like when you say to yourself things like "that weekend away must have cost me an oz!" by the way Steve, I looked through some of your posts - you are the Eminem of finance! (and probably as frightening to middle class people everywhere). Can you sing?!

thanks for threads. looks like its BV for me then!!! I am in eurozone so guess I'll buy in euros and store in Zurich (used to live in CH and am very comforted by the fact that every Swiss man over 20 has a gun tucked away in his house and has to refresh his military service for two weeks every year - I always wondered why, now I know its to protect the gold!)

ok, so I'm new to the party so please excuse if you have been asked this a thousand times before. I have just opened a BV account. Before I hit the button, is there any real difference between ETF, BV and buying coins???