Plastic Elastic
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Posts posted by Plastic Elastic
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That was a good call, so far at least.
GDX today with 10th August marked;
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.
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Im not follwing whats going on here...can anyone explain in laymans terms? From my limited understanding, margin calls are when a bank requests capital...are we saying that speculators are borrowing to invest in Gold?
Apologies, Im trying to learn..bear with me!
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.
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They are doing their jobs!
When prices "go parabolic", the risks get higher and they SHOULD raise margins.
As the writer said "as we expected".
The real problem for the gold market was the one-way speculative move into gold
I wholeheartedly agree with this!
JBTFD
Also reported at ZH --> And There's Your Perfectly Leaked Explanation: CME Hikes Gold Margins, Again, This Time By 27%
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.
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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.
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As the price of gold rises, the ecological cost mounts
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
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Joe Strummer and The Mescaleros - Silver and Gold
What a song!
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"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.
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A similarity: the corruption of public morals.
All civil society needs a public morality. In Weimar common decency broke down as people sought to physically survive. This is comparable to today, though to a much lesser extent, where the old idea of "honouring your debts" is vanishing as people seek to financially survive. The thing to note is the corruption of the monetary system leads to the corruption of morals.
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.
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So is now a good time to buy gold? I mean this month rather than, say, in 6 months.
Can get Britannias for £805. That a good price?
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
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[...]
I just have a strong view that the BoE is petrified of sterling being attacked by bond vigilantes later this year or early 2011. The capital / currency flows out of £ and lack of confidence in the £ trumps everything IMO. Higher interest rates will keep them away. The June "eturdency" budget kept the vultures away, but only until the Autumn. Then, and only then will we see if these cuts will come through as aired. If the coalition wimps out, which is my view they will, then the £ will bollock out, and so IRs will have to increase to compensate.
Talking of politicians, my guess is that they would rather accelerate the pain, in order to give them a better chance of re-election in 4 years as by then times will be relatively better. The last thing they want is a long drawn out torture.
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.
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Look at the COT data!
I don't like this.
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POG seems to be holding firm in the face of the equity sell off today.
It'll be interesting if it can contiune to hold during a big selloff - may reflect the reduced leverage that the big selloff last year has caused?
Interestingly, POG is holding up despite strength in the USD, hence price rises in both EUR and GBP! Inverse relationship broken for now?
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Interestingly, Bob Hoye's $960 mark seems to be holding firm today.
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Steve,
I have asked you this before so apologies . What is the URL of that site which has the gold chart with the COT position underneath?
Thanks
CC
Obviously I'm not Steve but do you mean this one?
Perhaps it is a good sign that the Commercials are increasing their Long positions again. They have been relatively short for a long time and I think everybody (including myself) chose to ignore it.
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Maybe it's quite important to note that in the last three years we have not seen more than five consecutive weeks of falling gold prices. We are currently in the fifth week, and this current drop is only the second time this is happening. The last time this happened was the big correction in spring 06.
http://stockcharts.com/h-sc/ui?s=$GOL...id=p26646984441
Edit: link again...
Edited again for you, Steve
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a uk listed it Middlefield Canadian Income Trusts
http://www.theaic.co.uk/find_compare/trust...rust.asp?id=MCT
Geographical Sector Industry Sector % of Total Assets
Canada Oil & Gas 42.0
Canada Investment Funds 29.8
Canada Property 10.6
Cash & Fixed Interest Net Current Assets 8.6
Canada Resources 8.3
Canada General Industrials 0.7
ARC Energy Trust 5.2
Penn West Energy Trust 4.5
Vermilion Energy Trust 4.1
Crescent Point Energy Trust 4.1
Enerplus Resources Fund 3.5
Focus Energy Trust 3.1
Canadian Oil Sands Trust 3.1
Yellow Pages Income Fund 2.7
Zargon Energy Trust 2.6
Westshore Terminals Inc T 2.6
http://www.advfn.com/p.php?pid=legacydaily...delay_indices=1
cant find awebsite for these
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.
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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%.
but the margin requirement onlz remains a small fraction of the price.
GOLD
in Gold, FX, Stocks / Diaries & Blogs
Posted
If the pattern continues beyond the two wedges then the gold price should continue marching upwards but it should also move backwards in time
