Plastic Elastic

If the pattern continues beyond the two wedges then the gold price should continue marching upwards but it should also move backwards in time

Well done! It'll be interesting to see what happens to the gap just above the breakout level (ca. 64). I guess it'll be filled soon(ish), together with a retest of the breakout.

I'm not a futures trader but this is how it works how I understand it: One futures contract in gold represents 100oz of gold. If you buy a futures contract you reserve the right to buy the underlying asset when the contract is due. However, at this stage yoy do not have to put down the full amount (i.e. $1,800 x 100 = $180,000) but only a small fraction of the price (margin requirement). As it stands, this margin requirement was raised from $7,425 to $9,450 (initial margin), and from $5,500 to $7,000 (maintenance margin) per contract. Don't ask me what the precise difference is between the two but the margin requirement onlz remains a small fraction of the price. I guess this enables speculators to get leveraged exposure to the gold price.

I wholeheartedly agree with this! Of course, one can always pick with the referee and a lot of people including yourself are now unhappy but, for goodness sake, haven't we had enough financial bubbles already in recent years? Yes, to some extent their actions represent price engineering but do people really want another bubble in gold? In my opinion, there were enough warning signs: charts, volume data, previous similar actions (silver, oil) etc. that this was a speculative frenzy and that some action was going to be taken.

On the Telegraph live ticker of today there is a poll on how high people think gold will go this year: Currently it stands as follows: $1,900 8.89% $2,000 24.8% $2,250 30.43% $2,500 20.26% $3,000+ 15.61% Quite amazing! More than 90% think it'll go over $2000, and about 2/3 think it'll go over $2250! The latter is another 20% rise from where we are today, and that's on top of the nearly 30% it's already risen since early July! 1/3 think it'll rise at least another 33% from here.

Awful! Some more on this also here (scroll down to the comments / discussion): Chris M / Frank B interview, with a link to an article in the Miami Herald

Joe Strummer and The Mescaleros - Silver and Gold What a song!

"He does not expect the price to fall any time soon, largely due to the weak dollar outlook, but warns that, in the long term, the true price of gold must be linked to the cost of its production, which is much less than $1,500 an ounce." ...just playing devil's advocate here: what if they are right? As for a contravening argument, there is a strong link between the prices of gold and crude oil, and the price of crude (i.e. the price of the energy that is needed to dig the stuff out of the ground) should be somehow linked to the price fo gold. Unfortunately, I cannot find a long-term chart to prove it. Can anybody? EDIT: Here it is. Link

I noticed some of that when looking at the MSE Loan forum. It's full of threads like (slightly exagerrated) "I'm a 21 yo placement student. Where can I get a cheap loan to buy a £10K car?" or "I've taken out a loan with Loansharks plc on 2000% APR. Why are they hassling me for money?" Ok, it's to a much lesser extent than Weimar Germany, but I conclude that the UK populace as a whole has either not realised that debt isn't such a good idea, in particular when you can't pay it back, or is subconsciously preparing for a collapse of the currency. Either does not bode well.

Nobody knows! Seasonally, now is a good time to buy. I, for one, have started buying (in £), and I will spread purchases over the month (€ purchases later). The amounts I am spending will, however, not move the markets due to size, to put it mildly

I have a feeling that the £ will at least hold up well until the autumn. Markets are IMHO basking in the feelgood factor of government change and the encouraging noises that are emanating, and are not realising how dire the situation is! The story may be an altogether different one come autumn when George Osborne has to make firm announcements how and where he wants to cut spending. Markets may not take too kindly to the prospect of rising unemployment and reduced consumption, and they may not take too kindly to the UK economy either if no convincing plans are forthcoming. That's the dilemma the BoE is in at the moment IMHO. NS&I have pulled the plug on their inflation-linked certificates. That tells its own story how the government plans to reduce the debt, i.e. inflate it away. They can't do that if servicing the cost of the debt rises with inflation figures. My best guess is they won't raise rates.

Look at the COT data! I don't like this.

Interestingly, POG is holding up despite strength in the USD, hence price rises in both EUR and GBP! Inverse relationship broken for now? pog_v_usd.pdf

Interestingly, Bob Hoye's $960 mark seems to be holding firm today.

Obviously I'm not Steve but do you mean this one? Perhaps it is a good sign that the Commercials are increasing their Long positions again. They have been relatively short for a long time and I think everybody (including myself) chose to ignore it.

Maybe it's quite important to note that in the last three years we have not seen more than five consecutive weeks of falling gold prices. We are currently in the fifth week, and this current drop is only the second time this is happening. The last time this happened was the big correction in spring 06. http://stockcharts.com/h-sc/ui?s=$GOL...id=p26646984441 Edit: link again... Edited again for you, Steve

Thanks for that. Just checked prices on Hargreaves Lansdown: Middlefield Canadian Inc Trust Part Pref Shs Npv (MCT) Sell : 72.00p | Buy : 92.00p | Why is there such a massive spread? I love my small holdings of Penn West, and this IT looks interesting but not at this spread.

For reasons unbeknownst to me, Penn West is up nearly 5% today. Maybe it's found a bottom after it's been beaten down and down and then some more over the last few months? The dividend yield is now something like 15%.