marceau

You'd better send a commiseration bottle over to HPC as well.

Seconded

Thirded.

This move has me spooked, either we're looking at imminent meltdown and this really is the moment gold ascends to the heavens, or we're about to set up a doozie of a double top at $1030.

Not the time for taking a risk tbh.

Yes alot of growth was fuelled by credit.

 

However, alot of growth was created by ingenuity, creativity, inspiration, invention, hard work, tenacity, productivity, IT, globalisation, improved terms of trade and so on.

 

In other words the boom grew on the back of these basic factors which allowed more credit to come through and so on.

 

Let us not assume that with credit contraction all of the basic factors of growth will be eradicated. Value in terms money may be reduced significantly but the gains (health, science, efficiency, IT, invention, inter-dependence etc etc) will not be lost forever.

 

So lets not be too alarmist here. Growth will return but will be measured in different ways perhaps.

Maybe, time will tell. Those sectors which were heavily fuelled by debt growth are toast though, there will be no innovation to save finance or real estate. Perhaps retail has a chance, but it's a slim one for the foreseeable future. The market became so distorted it's hard to tell where genuine productivity ended and credit fuelled fortune began. I have a funny feeling that the debt effect made up a huge percentage of growth compared to sustainable productive output.

And then there's the actions being taken by world governments, which will delay the price/profitability discovery process and hinder genuine innovators and producers for years to come. It's grim out there now, but I see absolutely no cause for optimism in the future. Long, slow and painful - words people are going to have to get used to.

Yes, Warren Buffet is a shyster and Bolton is a fool.

 

For the stock market to go up there has to be earnings from somewhere. I can't see earnings coming from anywhere. We spent tomorrows earnings yesterday. It is time to payback debts.

This is it, this is exactly it, where is the growth? Without growth dividends will shrink. Without growth, even a p/e of 2 is too high! Where will companies make their money?

I can't understand why people don't see this. All of the growth for the last decade was paid for by borrowed money, as Pluto says, tomorrow's earnings spent yesterday. That could mean almost a decade without growth before we take into account the effects of the recession.

The only sectors with a hope of growth are commodities and new tech/innovations (and even they will struggle). The rest is, quite simply, fcuked for a generation (should they survive at all).

The only way these indices will go up long term is Zimbabwe-style, in which case I'd far rather be holding gold than share certificates.

I guess this is the volatility we have been discussing for the last year+. What do we attribute this recent volatility to? Is it simply people skimming off profits?

It's more likely to be people panicking at the smallest bit of news. The majority of the market simply hasn't got a clue where the 'smart money' went.

There's no longer a crowd to follow, so the brain dead folks who create the big price moves are looking for someone to lead them by the hand. As a consequence they're piling into and out of assets en masse based on Bloomberg headlines, all in the hope they magically pick the right one and a trend emerges.

The trend will form eventually, then we get the stampede and the morons pay over the odds for assets owned by the smart money. Happens every time, and this will be no different.

So at this stage we on GEI are either smart, or totally deluded. I know which one my money is (literally) on.

Dr Bubb - I am inclined to agree with you re: the altogether too great a consensus emerging in the MSM on the predicted increase in the gold price - here is another example in the Telegraph today:

 

<a href="http://www.telegraph.co.uk/finance/markets/questor/4512793/Questor-how-to-play-the-coming-gold-price-jump.html" target="_blank">http://www.telegraph.co.uk/finance/markets...price-jump.html

</a>

 

what to do?

Also note that Goldman sachs have followed UBS and upped their '09 average price prediction for gold to $1000 from $700 - doing the opposite of what Goldman say is usually the go!

 

Of course on the forex markets just as soon as the press all decided the AUD would break parity with USD (at 98c) it promptly dropped to 60 odd, same story GBP/EUR.

 

Still - I am not selling my gold. Maybe this really is where it goes mainstream.

 

matt

The last Telegraph gold article came smack bang in front of a massive sell-off. I'm wary of this price action as it just seems too obvious, and by extension has a high chance of being a sucker move for johnny-come-lately bulls.

You're right though, at some point gold will have to start getting mainstream acceptance in order to truly blast to new highs. Now seems as good a time as any (fingers crossed).

(I wonder what the Gold Threaders think of this - from the DrB Diary):

 

But BE CAREFUL WITH GOLD, as there is a real chance the rally could fizzle out right here !

 

 

I want to see it punch through that trendline. I may sell more today now that I have spotted this.

A pause, a slight pullback, and then a punch thru would be ideal. Meantime, I am feeling that the values

offered on the Oil side may be a better Buy or Hold right now.

 

THAT GOLD MOVE UP is weakened by three gaps, since the motive force seems for Gold's move has

been coming outside NY trading hours. I presume it is people fleeing a weak Sterling and weak Euro.

 

Right now, I see GBP rallying to $1.42 or better, and so Gold may be due a pause - or worse !

FWIW I'm going to stick my neck out and agree. I think gold's about to take a monster hit. The way it broke $900 wasn't right - no follow through and a weird hover. That looks like weak longs being given the 'opportunity' to get sucked in to me.

I haven't sold any of my Xmas mining purchases, but I'm certainly not buying this particular rally. I'll reconsider if we get some sustained volume above $900, otherwise back down we go - and there's a long way to fall.

Total morons over there, they are still slagging Cgnao off, those idiots who lost in BTL and are sitting 50% in negative equity, and those in cash earning 1 per cent a year in a currency that has lost almost 50% in 1 year v the dollar. deserve evrything they get, it's the J6P folks I feel sorry for, they don't stand a chance with Cyclops in charge, they will lose everything.

Yep, if Brown likes it or owns it, it's sure to fail. He neither likes nor owns gold - that should tell people everything they need to know about where to invest for the future.

Hehehe. $880 and $900 broken.

IT'S BACK

WHY do people try and trade THIS:

 

http://gold.approximity.com/since2006/Gold_GBP.html

Makes no sense at all IMHO.

Totally agree. Coincidentally, I just posted this in the mining section about SLW:

For what it's worth though, I think frequent trading in this market is a recipe for disaster, it's time to hoard and hold. One wrong step in trading could see you lose 10% in a single day at the moment - and that's without leverage. A bit too much risk for my appetite, given the current circumstances.

Why risk it? As old JS says - Do you really want to be the guy who went broke trading gold, during the greatest gold bull market in history?

I wish I had bought more yesterday... Only managed 20 oz... I am on a buying spree!

You're buying 20 ounces a day? Leave some for the rest of us.

W T F just happened ????????? [given that PMs just jumped 2%, and USD/GBP just fell 0.4% in 1/2 hr]

 

- did Whitehouse decide to bale out the big 3 or something?

They were at critical support/resistance and broke through. For gold, breaking through $834 means an attempt at major resistance around the $900 mark is a good probability.

If it goes through $900, then the shorts will get squeezed to hell and we'll probably pop back to the highs above $1000 in a very short space of time. But I can't see that happening for few months yet.

Edit: I guess the market is finally waking up to the inflation risk. The Fed really let the cat out of the bag when it started buying Fannie and Freddy debt directly.

Since that's mainly US$ versus Euro it would.

 

I must go to bed. It's 2:15am. As usual I miss all the action

It'll be interesting to see what's happened by the morning.

 

Night all

2:15

Have a good sleep, I don't think even the NY halfwits will want to get in the way of this one.

Also the USDX has just broken it's 50 day MA. This is the first time this has happened since the bounce.

Technically I would say gold will now grind its way up to a test at $900. If that suceeds then there won't be a rocket big enough to cover what happens next.

If it fails then it's back to the lows (or worse). I'm tempted to trade the journey up to $900, standard setup, wait for the NY / London fix smackdowns and buy, sell the next morning before NY opens.

This is what is happening:

 

It's a shame this doesn't show the UK, where the gold and silver rockets have long since gone. Those wanting to escape now will have to pay extra for the privelage.

Well that's interesting.

 

The EURUS$ is rising fast.

 

The US$JPY has just dropped below 92. Now at 91.4.

 

And of course, what else could happen, gold and silver are rising fast.

 

I thought we'd have to wait a bit longer !!!!

 

£557.70/oz

This is definately gold in currency mode, the broader markets (from what I can see at least) are barely changed. Optimistically I could say that some important people just cottoned on to the fact that certain currencies are toast, and are only likely to become blacker toast (or in the dollar and sterling's case, cinders) as time goes on.

Proportionately, I hold very little cash, so this all suits me fine. I had been using the last few months to build up some cash for some selected buys in the new year. Based on the recent performance of the £, I'm starting to wish I hadn't.

I just wish Gordon Brown was taking some flak for this. Anyone holding large amounts of cash must be able to see their wealth disappearing before their eyes, why aren't they complaining? He's robbing them blind while telling them he's a hero.

Great sage or feeling the squeeze?

 

 

 

Meanwhile, silver in backwardization (1 month)?

Entirely plausible, it would just be the IMF's equivalent of margin selling to boost liquidity. Whether this is true or not, I'm expecting a broad asset dump before we hit Xmas.

Very nice call so far Marceau. Good to see your touch hasn't deserted you.

 

I bought a little at $9.32 last week. Glad I stuck it out and dismissed all this talk of $6.60.

Thank you, it was quite a rally in silver. I've just sold half of what I purchased this morning and have set a stop at the $10 mark for the rest. Paper profits admittedly, but it all adds to the slush fund for mining equities and physical gold.

I just can't shake the feeling that we're going down before Xmas, though, so I'm staying careful (I certainly wouldn't rule out a sub-$7 silver abberation).

A must read. Very information article, with very good charts:

 

 

Trader Dan Comments On Antal Fekete’s Recent Article

Posted: Dec 05 2008 By: Dan Norcini

http://jsmineset.com/index.php/2008/12/05/...recent-article/

 

On backwardation.

 

 

Re this one posted above:

 

RED ALERT: GOLD BACKWARDATION!!!

by Antal E. Fekete,

Gold Standard University Live

December 5, 2008

http://financialsense.com/editorials/fekete/2008/1205.html

From memory, backwardation (and warnings of backwardation) have so far proved to be a total red herring in predicting default on delivery. On the other hand I remember it being an extremely reliable buy signal for silver (and on freak occasions gold) for almost a decade, so I plan to take out some minis on Monday, with an aim to short term gain (a watchful eye will hopefully avoid short term pain).

Gold having a bad hair day.....

Test at $740 imminent

It bounced well the first time. There will be a retest though and I can't say I'm optimistic. Xmas is coming and a large proportion of the market will want to dump before the holiday.

November US unemployment rate just came out.

 

533,000 nonfarm payroll jobs lost!

 

Largest monthly drop since Dec 1974.

 

Unemployment rate has gone from 6.5% to 6.7%

 

This is starting to look very nasty.

 

Edit: Gold, oil, DOW all down.

Horrific. The helicopter drops can't be far away now, I can hear the rotors turning already.

I think this may be the start of the next downleg. Sadly it's going to be a downleg for everything.

Here are my stink bids, which I adjusted after today - GFI @$5.35, SSRI @ $6.75 and SLW @ $2.65. Too high?

However, you never know what an impending market holiday can throw up. Waiting a few weeks may bring some stunning bargains.

Let's do some rock-solid gold TA:

 

It's amazing what you can see when the noise fades away. Nice chart.

New thread time - hurrah.

For the record I can see some major declines in pretty much everything (including gold) as we run up to Christmas.

Not that it really matters, you just can't get an ounce of gold for love nor money these days.

It might be worth putting in some stink bids on miners just before the markets close for the holidays though. And there's always the prospect of an end of year tax sell off to create a few bargains. Happy hunting.