bitbigt

I just can't help thinking that this is all coming from the lack of 'meltdown news' over the last few days...

And/Or its all about the falling oil price! That's the one thing the PPT needed to push down, and they've obviously been working overtime to make it happen.

I think that's what has caused this temporary increase in confidence amongst investors - hence stocks up, dollar up, and PMs down.

But that's not a durable new reality, because of the basic supply/demand equation ...Chindia is not using less oil day by day, even if its perhaps not increasing its use so rapidly. Meanwhile the rate at which its being pulled out of the ground and refined is barely increasing. So I suspect oil will find a floor at 120-ish, whereupon the fear will start to return to the markets and PMs will reach for new highs. Alternatively, if PPT do manage to push oil down to nearer 100, then I'm happy with that also:

a. We can buy lots of oil ETFs, expecting price to hit 200 in next few years

b. gold and silver will revisit the 880 / 16.50 range, and we can buy lots of these also

c. markets and economies will race ahead, pushing inflation through the roof, followed shortly thereafter by gold

I haven't sold a thing and don't intend to do so, there is the chance they'll try and knock out the stops at $920 as well but I think that would really be pushing it too far.

A few dollars eithers side of 920 is 920 as far as I'm concerned. And like loads of others, this up and down noise is never going to make me sell. Remember, we were at 870 just 2-3 weeks ago, and then 970+ just a few days ago. We held 950 damn well, and we've only dropped to 920 due to a desperate recent big effort by the PPT to squeeze PoG and PoO, and support the dollar and the DOW. That can't last. The economy and the dollar are fundamentally undermined, and that will be come clear to all within a matter of weeks or months now.

And just in case the PPT blow all there remaining reserves and thereby push PoS to sub 17, I'll top up there

You still have to admire how well they've managed to kill off gold over the last few weeks with absolutely no fundamentals to back them up. That has to take real skill. Maybe in future they should put it to good use by actually producing something worthwhile, rather than robbing Joe Six-pack through inflation and gold manipulation.

Good point! And in all seriousness, wouldn't it be nice if these clever people could come clean: tell people they're going to chop the value of Western currencies, that everyone will be poorer for a while, and how they'll thereby create the possibility of re-invigorating our economies on firm foundations whilst being able to divert new money to help those most in need. Yes there would be some panick (which they could skillfully manage), and some people might even make money out their gold investments [ ] - but given honest leadership we could all start respecting the authorities, and work with them to move beyond the innate problems of fiat currencies and the use of excessively low interest rates. That's really the ONLY way to bring about enduring stability and strength for our economies, rather than muddling through with the smoke and mirror temporary 'wealth' people think they have.

Or am I wrong? Is it perhaps necessary to continually and forever keep increasing the wealth gap, and imposing painful boom/bust cycles, to squeeze maximal growth out of an economy?

EDIT: the Swiss model would suggest that more honest models can work. They educate their people well, respect their views on all matters via small 'counties' that make many of their own rules and can call their own referenda, and everyone works hard and to a high quality. Their currency is therefore stable - especially in times of turmoil elsewhere - and they're still now comfortable with a base rate of just 3%. Consequently the populace is all quite wealthy, genuinely!!!

Agreed. 920 absolute floor (as I posted last night) but I really don't think we'll get there!

Just reminding us all what several of us said one week ago week. ...and I still feel the same way.

time for a new poll me thinks.. I for one am not 100% PM although +ve fiat cash. I would be interseted in peoples % blend, cash vs gold vs silver vs mining shares vs other shares vs gilts/NSI

Of my total wealth, 60% is liquid.

Of this,

- 40% is in PM or commodity stocks (2/3 the former)

- 30% in tax free high interest bonds

- 30% in cash in Northern Rock where 100% is guaranteed by the government

The latter would be smaller, but I only got my hands on that 30% in last few months.

Holding cash and bond money in reserve for buying oil, BRIC stocks, and property when respective prices drop to extreme lows. Most keen to get it out of Sterling before its value drops over next year or so.

I am sure that chrysophobes exist, but most of the antagonism about gold on BBs in not chysophobia, it's just a dislike of that minority of goldbugs that think they know it all, and that they know what is best for everyone. That attitude riles people, whatever the subject matter.

Interesting... ...but there are two things in what you said:

Goldbugs being right

Goldbugs being cocky and patronising about it

I personally think the first point is true, but on the second point I find most goldbugs to be intellegent respectful individuals, not cocky 'barstewards'

Your comment suggests you disagree on this latter point?

Chrysophobia....

I'm definitely a Chrysophile for the next year or so, at which point I plan to see how the world looks and re-evaluate the attraction of our yellow metal

Contrary to wren's experience, I don't know any Chrysophobes. Everyone I ever chat to about gold says things like "yes, of course, gold is never going to loose it value". They just don't buy any because its "too complicated" compared to putting ones money in the bank. I only wish they'd realise that "yes, of course, fiat is always going to loose it value"!!!

So I suspect that:

'philes' for gold, 'philes' for fiat: 99% of people (Joe Public)

'philes' for gold, 'phobes' for fiat: 0.9% of people (most posters on this bb)

'phobes' for gold, 'philes' for fiat: 0.1% of people (wrens recent discussants)

So wren, you need to stop wasting your time on this latter tiny group of people

...instead, we should be trying to put the hoards of Joe Public off of fiat!

More generally, on a day like this, its good to note this MoneyWeek article out today:

http://www.moneyweek.com/file/50927/why-go...mping-buys.html

£500 per point spreadbet at 945.5, really hoping it doesn't fall again now

I had a total of £89/pt on Silver just stop-out around 1800. Came out of a meeting and turned my phone on - bosh! That hurts, trust me.

Still, we know the risks, don't we?! Play with fire n all that.

Good luck igglepiggle and sincere commiserations Bobsta

And guys: if you're meaning 1 pt = 0.01 USD for silver and 1 pt = 0.1 USD for gold then those are large spread bets! ...tread carefully

Jim has been overrun with phone calls again!

 

Dear CIGAs,

 

The wave of phone calls from all over the world overwhelmed me once again today.

 

Here are your answers:

 

As gold rose and the dollar slipped once again into the .7200 area a poor picture was being painted as legislative action neared for Fanny and Freddie.

It seems that the key panic point is .7200 on the USDX.

The Fed's perma-hawk spoke loudly about what will not happen - Fed increases of the discount rate.

Crude came down today, blamed on the apparent hurricane fear fading. Major support starts at $125, and if that is not the bottom it will not be far below.

All the dollar bulls and energy bears were pulled out of the closet as talking heads.

Fancy accounting footwork is the entire reason why some bank earnings look better. They are not. In fact many of the best looking ones are the worst off.

$25 billion for Fanny and Freddie will not cover a $5 trillion problem. It isn't even worth being called a bandage.

After all the substance-less noise used to paint the day better passes, we return to face the 3rd attempt at $1000 and the euro moving past $1.60.

 

Gold is headed to $1650 and the euro to $2. That is only for starters.

 

Respectfully yours,

Jim

In short - the PPT doing what the PPT does best.

And they'll keep doing it, with decreasing effectiveness ...note: gold is still no lower than it was on Monday morning, despite PPT efforts

Expect 920-1000 ranging (probably 940-980) for a few weeks more, until mid-august when annual buyers will flood in

EDIT: Gold's in the Telegraph today: http://www.telegraph.co.uk/money/main.jhtm...2/ymgold122.xml

Sorry for my lack of clarity. I guess what I was meaning to say is that if their was first a period of chronic or hyper inflation followed on by a period of deflation it would mean something quite different for our pounds or dollars than if we faced either hyperinflation or deflation.

 

If deflation followed on from hyperinflation, remember those pounds will have been debased. We could then face something of a double whammy; we would have less of a debased currency. Given this scenario it is difficult to say that POG would be lower in pounds. Could be a lot higher in pounds.... but those pounds could be worth a lot less than 2008 pounds. [Remember, with globalization, products will gravitate to the strongest currencies, so the purchasing power of debased currencies will likely remain weak]

 

As for the value of POG. That would be an oxymoron. It does not make sense to ask the value of a price. You would first have to ask the value of what you priced something in. The real value of gold will reside in what people are prepared to pay for it, in money or in real assets, and I would imagine the value will increase [the price in stirling would be irrelevant].

 

I think a copernican revolution in thought is required when we start to entertain the idea of a debased currency. Our currency is on a slippery slope and is no longer a fixed point.

http://en.wikipedia.org/wiki/Copernicus

 

Hope that clarified things a little

Thanks, that helps.

I guess the problem in any such discussions is identifying the 'base reference' against which to value the 'things' (cash, gold, stocks, houses...) one might put ones wealth into. The 'cost of living' seems one good reference ...though I'm not talking about inflation stats - I mean the real 'price' of 'paying for' a normal western lifestyle. Gold is another candidate reference, but that only works over very long time scales (decades/centuries). Short term (months/years) gold goes up and down relative to the cost of living, just like other assets and currencies! Other reference options would be average salaries, and even house prices (though again, over years/decades).

But one cannot INVEST in 'cost of living' nor in 'average salaries' to preserve wealth. Instead, one can invest in gold and property. The trick, therefore, is to buy these two asset classes when they're low against 'cost of living' and against 'average salaries' and sell when they're high. Hence my plan: hold gold now while its going up, and move the gold money into houses when gold has peaked and houses are at rock bottom. Then I'll sit in my house regardless of future property value fluctuations (as its a home as well as an asset), and take the rental earnings over decades from the rental properties (note: rental houses earn money, gold does not earn interest!)

Lucky kids although I presume you want to instill a good work ethic. I think it was Peter Jones (as in Dragons Den).. or one of them anyway, who had a good idea with respect to controlling his kids incentives around wealth. He offered to match each pound they earned.. with one from the trust fund. I liked it!

Getting off topic... but yes, they are lucky, though I don't think inheriting £2/3M each is so exceptional. That's one years bonus for many fat cats these days.

Regarding work ethic, I think that's over-rated [and I'm not surprised to hear such an idea from a money-obsessed dragon]! The attitude we try to instill in our rugrats is that its 'just money' - be gad you've got some, and don't be profligate with it, but also don't let it dictate your decisions. If you have little money one day, you'll still get by (and believe me, I know!!!!). Instead, concentrate on doing things in your life that interest, challenge, entertain, and fulfill you.

....there endeth the sermon

PS: they also play MoshiMonsters (http://www.moshimonsters.com/), which is a great way to teach them the rules of earning money ('rox') and buying (virtual) stuff

I can also envisage a deflationary period in the near future.... yet do not think it will be adverse to the value of POG. I imagine that if fiat has not only been debased but also become scarce, gold will be the best currency to have.

Sorry for my stupidity, but I'm not sure I understand this. Do you mean...

- 'deflationary period': cost of living lower in pounds sterling, &

- 'falling POG': price of gold lower in pounds sterling, &

- 'stable value of POG': value stable/increase relative to cost of living?? (but falling in pounds sterling)

If so, surely its even better to have ones wealth in pounds sterling (or assets that are not decreasing in monetary value, e.g., Swiss property) at that stage?

Why not just hang onto a little for your kids.

The two of them have got 1kg each now, and that will not be sold until they're adults and can decide for themselves. Hope to make that 5kg each by the time they're 18. And all being well, they'll also inherit £1M of rental properties and a large family home. ...unless I screw up with the above plan, and/or go insane and blow it all in my final years

Well nearly at 1000....just a little curious.......have any of you considered at what point you will stop buying bullion. At 1000, 1200, 1500 or +??

Interesting question ...and perhaps its appearance on this bb is a sign that a top is in sight (even though quite a way off still)?

To answer this question, I think it's important to work out WHY you're putting your money into gold (or whatever). It's presumably either to try to get rich, or to avoid getting poor (since currencies are all becoming worth less), or you are 'investing' the money for some future plan (e.g., buying a house, a pension). But in all cases, you need an exit strategy, and you need to stick to it !

In my case I want...

a. to try to get out of cash and into assets as much as possible, so that currency devaluation is circumvented

b. to specifically use my money and investments to buy primarily a nice family house, and also some rental property

Given the above, and from my understanding of global economics, my CURRENT prediction and plan is....

- to have 1/3 of all my available funds in PMs, and have achieved this since late 2006 [already enough profit for small family house]

- other 2/3 is secure in cash/bonds and being used to buy rental propertys in Switzerland (..can explain why if you're interested)

- will put big chunks of that 2/3 into oil if price drops to 100, or BRIC stock market when its cheap (later next year?)

- feeling certain gold will reach 1200-1500 in next year, I'm possibly/probably going to sell then, as I will then have enough to buy the desired house and want to lock that in (though will delay purchase a year or two more until UK house prices are bottoming and people are desperate and will do a great deal for cash)

- may delay the gold selling a little if the pound hasn't yet collapsed as it surely will in next 12-24 months

- feeling uncertain gold will go to 2000 or above (it really should, but the PPT may not let it) I am expecting to sell ALL rather than just most of my gold

- from 2010 onwards I'm expecting deflationary recession, and gold price falling, so I don't want to be caught holding when that happens

- will eventually buy some more gold when price again gets cheap, as a long term investment for the kids

...but the world is full of surprises, and so all the above can change

I've added some silver today. Could not earlier because of cash flow constraints. But happy to buy below $20 anyway. Slightly over 50% in physical silver now.

Well done, and good timing! You benefitted from last Friday's big (and overdone) pullback

I wonder, are you USA based, or just a night-owl (like me)

My feeling is that, as per cgnao's other thread, we're seeing a bit of a dead cat bounce in world stockmarkets:

- Citi losses not as bad as feared

- Various other data not as bad as feared

- Freddie and Fannie looking to secure their own funding (previously prevented by SEC ruling)

- Big bull runs the last two days on Wall St and London

- Evidence of carry trade re-igniting

- Gold & Silver down

Couldn't agree more Bobsta!

...And even with this temporary bounce/confidence in stock markets [which is only bluechips, not BRICS or AIM!!], and despite PPT actions, the gold price is demonstrating a very strong 550 floor. This is very bullish for gold. Furthermore, as I and others mentioned in last few days, it also looks like oil money e.g., Soros) is now moving into gold.

So the 800's are now a thing of the past, 900's will be with us for a while longer (weeks), and then its into 4 digits!

Regarding silver, I think it will mirror gold (or do better), so yesterday's drop will probably be cancelled out in new day or two. I don't see any other major pullbacks.

Has it? Change on the day was down about 0.4%, difference from high to low was about 1.7%. Isn't this well within normal trading ranges? (I'm not having a dig by the way - I do genuinely want to know if there's something I'm missing!)

I'd tend to agree. The big news today is that after days of blatant manipulative knockdowns, and oil falling (implying IR rises, less inflation, and stronger dollar), gold is still refusing to go below 950. We're where we were this time last night, and so its cost the PPT a lot to even maintain the status quo.

So what I'm reading from current charts is a great deal of gold price strength! Well done those of you who held fire and bought at 950.

I'd suspect the run up today was hot money from oil speculators flowing out of oil and into gold (those smart guys know this is the next bubble in the making). The PPT know this also, which is why they had to change their plans from taking a day off and instead had to dig deep in their pockets late in the day for more money to try to hold gold down. And they basically failed.

So I predict more of the same tomorrow - significant run up (perhaps even starting in Asian trade), followed by a reactionary knockdown by PPT that is even less effective than today.

THE BIG BATTLE has now begun - smart oil speculators with loads of cash wanting to buy gold up, vs PPT trying increasingly desperately to hold it down. The PPT will become swamped, possibly in a week or so, but definitely in a month or so when the autumn strength returns and inflation has clicked up even further.

You're having a good run bigtbigt!

...Probably luck! ...but despite finding I'm 'basically' right 3/4 of the time - I do not day trade because one tends to get cocky, place bigger and bigger bets, and then one bet goes spectacularly wrong! Been there, done that

...So with gold I INVEST with a time frame of months/years. Whereas with stocks I do kinda trade but with a time frame of weeks/months. Typically clearing 15% after tax per year.

...but this 'success' could all go tits up at any stage! ...especially with today's manipulated markets.

I've also "lucked in" today as I forgot I had some buy orders around 955 ... they went and triggered.

I wasn't so lucky with my Bullionvault account though. I set up some cash to transfer earlier this week. One lot on Tuesday, another on Weds. I thought the first transfer would've completed yesterday but it hadn't. I checked this morning at 9.30am ... nothing. And then I get an email at 11am (when I was offline / offsite) to say that BOTH transfers had arrived. Only now am I online (from a train) but I've missed that lovely little buying op window. Grrr... I think BV have some human intervention in their cash handling process which causes this strange effect.

That's a bummer! But win one loose one, not so bad

I also just missed out ...on yesterdays market bottom. Sat there with finger on trigger at mid-day, but instead decided to place a buy limit (still pending) on several markets 1.5% down on where things were at the time. Then the US went and pulled things up and not down. Never mind. No money lost - the first rule of investing!!!!!

But I also think tomorrow may break the pattern from the last two days (so be careful whoever was planning to trade that). PPT may take a day off, as they'll have spent quite a lot the last 2 days.

I hope this was heeded, and no-one on this bb lost on a short today

Somewhere between $910 and $920 would be the next major support. Personally I think if it dips below $950 (or $947) it's more likely to be a bear trap than an extended correction. But don't bet your life on it.

Agreed. 920 absolute floor (as I posted last night) but I really don't think we'll get there!

So you did! Sorry not to acknowledge. Actually to be honest, I think I may be suffering from gold fever these days. I do not pay much attention to the daily fluctuations [though I do like to follow the commentary on them here]. I must be a hopeless case because I just want to buy as soon as I can... whatever the digits say.

 

What am I doing for my two month holiday you may ask. Panning for gold in New Zealand.

No need to apologise, but very decent of you to do so. Its not possible to remember everyones predctions

...I'd be the first to admit my guestimates are not anywhere nearly as logically justfied as e.g., those from Marceau. I just closely monitor all relevant global events (e.g., Freddie, Fannie, FED/PPT reaction), watch the fundamentals (e.g., inflation, employment, exchange rate trends), keep one eye on technicals, and glean gold sentiment from various indicators. Then digest it all and (via something that is art more than science) judge where the PoG is likely to go. It's hard to summarise all that thinking in a few line posting - and since its all just glorified guesswork, it doesn't seem worth it to try to write it all down. Plus we're all doing those same analyses anyway

Bottom line - take my (or anyones) predictions with a big pinch of salt ...but feel free to laugh out loud and rub my nose in it if/when I get it very wrong

Sheeesh... Jim called that one well... just over 950 now.

 

Happy days.... big pay day on Monday..... and never have the patience to wait.

 

Marceau, you called that well also a few days ago! I like your rational approach but I am just a hopeless out and out gold bug these days.

They sure did call it well, but I hope you don't if I remind you that they weren't the only ones. I, for example, predicted the coming knockdowns would take us to a 950-960 floor 2 days ago (Jul 15 2008, 04:48 PM), as well as stating a 975+ finish for Tuesday evening

Regarding this weeks high inflation numbers in UK and USA, it is curious that this hasn't helped golds rally!

I'm guessing this is telling us that inflation is not news, and so rising monthy CPI figures alone will not dramatically drive people towards buying gold.

Instead, gold seems to rise most dramatically when fear is increasing, e.g.

- first run up to 1000: due to striking collapse in dollars value

- recent 100 point run up from 880: due to stock market collapsing again

Extending this logic: one would argue that these recent increases in the inflation numbers tend to give people more faith in the likelihood of imminent interest rate rises in UK and USA (something I actually feel certain will happen - but that's another story for another day), and that will strengthen the dollar and REDUCE FEAR - i.e., bad for gold!!!

This is what I think will keep a lid on gold for the next month, until the autumn buying period kicks in at the same time that speculative oil money flows into gold.

Hi All ...Travelling and so can only pop online occasionally ...and having done so I see the knockdown to precisely the 550-560 range I commented on a few days ago. Now lets see if that holds...

The knockdown may happen again tomorrow, in which case the PPT really is pulling out all the stops (also knocking oil and supporting dollar). But hey, this can't go on forever. In the very worst case scenario they'll push gold to 920, but I actually think 940-950 is FAR more likely to be the bottom. Interesting how they've started doing their knockdowns at the end if the London trading day (rather than the open of the US market) - so leaving Europe feeling shell-shocked overnight and so less likely to buy it back up again next a.m.

But I also think tomorrow may break the pattern from the last two days (so be careful whoever was planning to trade that). PPT may take a day off, as they'll have spent quite a lot the last 2 days.

So I'm open to the possibility of either another wimpy knockdown (945 by close), or another mini-rally back up to 970. Not an easy day for trading (if that's your thing)

Gold was Fed-whacked too in the last 30 minutes of London trading.

Just checked in...

...ha! Is that the best you can do PPT? Gold rose by over 100 in a week or so, and your best effort today knocked it back to where we started this morning. Now get back in your box, lick your Freddie and Fannie wounds, and let us rebuild to finish over 975 by bedtime (which is what I think will now happen)

In all seriousness: after so many days of spectacular gains, this mild knockback is actually quite pathetic. Even more so when you realise oil has fallen today.

I now suspect we'll see 2-3 weeks of ranging between 960 and 1000 (or 950 if the PPT dare to use up loads more ammo), bumping up against that ceiling several times before it yields just in time for the August/September rally to [pick a number and double it!]

The UKs June CPI was 3.8%, and the inflation story is in the public's center of attention.

Oil speculators starting to loose money

So the perfect storm is brewing:

- recent rally has restored much confidence in gold

- assault on 1000 underway

- Autumn strong period almost upon us

- oil speculators starting to look for the next bubble

- inflation rising rapidly in percentage terms and in public awareness

EDIT: "...finish over 975 by bedtime (which is what I think will now happen)"

...in the 10 minutes it took me to write the above posting, my prediction started to come true - honest, no cheating

Nope, but wow, what a mess!

I like the fact that the photographer hasn't told them off - they're still smiling. Great parent!!!!

I wonder if the CBs are equally happy at the mess their little (w)bankers have caused? ...after all, it was they who left all the money (paint) laying around for their toddlers to splash it around everywhere!!

Oh, yes it is!

Your kids Chris? ...they're adorable