bitbigt

I agree, and equally if USD stabilises/strengthens soon (as I think it might) then USD PoG will fall, meaning nothing! But a lot of people are watching the USD PoG, and if it does fail to convincingly pass through 1000 this time around, many might cut and run. Indeed, in my more paranoid monents, I even wonder if this isn't what the PPT are setting up. If so, they'll probably sell gold to start the fall, and then let it gain its own momentum.

Indeed - its important to really dissect what is driving what just now, as its all becoming a bit extreme. Key thing is to remain coldly objective, and not "feel happy or sad", or wedded to preconceptions. There be dragons...!

Could be! A 10% drop wouldn't hurt, as I'd then still be even with my gold sales, but significantly up on my oil ETF and would sell some of that The beauty of diversification

Yeh - there could be idiots around like that I suppose. Personally, since I work in GBP, I'm glad I sold a while back as the Sterling price is still way down and not rising. For me its not about looking for a way back in, its about being relieved I am not suffering the current downtrend in the GBP PoG

I think the concerns raised about this happening after an uptrend rather than a downtrend are significant. Plus there's the question of the low volume. But perhaps more worryingly, this recent rise in PoG to form the second shoulder is not due to a fundamnetal rise the PoG, but simply reflects a depreciation in the USD. Gold in virtually all other currencies shows no such shoulder. A real pessimist might even argue that we've just had an ominous double top, and we're now on our way down - with that fall simply hesitating just now due to the current weakenning of the USD and the impact this has on the USD PoG. ...but who would dare suggest such a thing

Seems we agree on 99% of things, other than - how well the PPT have, can, and will suppress the PoG - the timing at which Western currencies will weaken significantly, both due to, and causing, high inflation Hence I'm not yet conviced that we're right now at the start of 'the big one'

Hi RomansH Firstly: am I "concerned about the likelihood of coming currency crises"? Yes, but I see it unfolding far more slowly and intricately than simply a 'going Weimar in next 12 months' scenario. I am fully aware that the economic system is extremely stressed as loads of bad debts are being paid off or defaulted, as national productivity/employment fall, and as government debts increase. If only the UK were suffering this way, Sterling would nose dive far further. But its a global problem, and so all fiat currencies are in an equal mess. Consequently, they'll all work together to save the fiat system, and supress the gold canary that would otherwise be announcing the problem. In the end, the debt load carried by especially UK and USA will cause those currencies to fall the most, but I do not think they'll absolutely and suddenly fail! This is not a hollywood disaster movie. Instead, I'm expecting high (not hyper) inflation quite a few years from now, unfolding slowly, after a period of deflation. ...with gold suppressed all the time. Given the above, I certainly don't want to be in cash long term, but feel quite safe being so positioned just now whilst house hunting and whilst equities and gold could correct down significantly. Secondly: do I "think economic growth has resumed and everything has returned to normal". Well hardly! And sarcasm doesn't suit you

Very interesting analysis. On a detailed point, we should note that a small number of people have had very high earnings these last few years. So average salaries might be misleading. Median earnings were 25k last year, putting us on 40oz rather than 50oz for a years earnings - much closer to the 1974 peak. Additionally, we should remember that the gold standard had just been broken a short while before 1974, so the world was in the middle of a reactive gold rally at that time, which arguably overshot to the upside. So overall, I still feel comfortable with my view that current gold price is a little above long term average. But far more importantly, I suggest we focus on questions like 1. why did PoG go so high in 1980 2. is the PPT doing far more effective job now than its equivalent did then 3. what will happen to the economy and inflation in next decade I suggest the answers are - because of high inflation and an attempt to corner the silver market - Yes, dramatically so! (gold should have hit USD 2000 already otherwise) - price deflation for a few years before high (and not HYPER) inflation become a problem in the West I think our differing views on these 3 points may explain our different investment strategies better than our guestimates of the relative price of gold

Masterful

I tend to agree for inflation these last 10-15 years - which is when inflation figures have been particularly rigged. But I'm not sure it massively changes ones interpretation of where we are compared to long term average PoG (atypical peak in 1980 notwithstanding). My fear is that the current PoG is just like the initial peak in very early 1970's. Indeed, I think the whole picture argues exactly for that. Hence I'm feeling safer with less in gold just now, planning to buy more if/when we get a 40-50% pull back the next few years, prior to a 10 fold leap over the subsequent decade.

Well... pretty much the majority of people who who post here! If the goal was preserving wealth over the course of ones lifetime, then we should be looking for any non-cash asset that did not come with massive volatility. That implies steadily drip feeding into a healthy and mix of property, stocks, company debt, and inflation protected bonds held to maturity. It would not imply buying only or mostly gold (or any PM), where the volatility can be immense and prices can rise or fall many tens of fold over a short number of years. So surely people are seeing the coming inflation tsunami as something that will send gold through the roof, and hence they want to ride that train - to get rich, not just to preserve wealth. The risk is they time it wrong, or don't sell at the top, and actually loose wealth. Gold is a secure way to preserve wealth over many many lifetimes, not over any particular decade.

Yes - and that's exactly the reason I think as I do. Those charts show how gold had an unprecedented and short term jump in price to USD850, as and when the gold standard was broken. Its long erm average value equates to something like USD 700-800 in todays money. This is even more true for GBP PoG

The answer is in your question... Over long time frames (centuries, or many many decades) gold is arguably the only thing that retains its value. But over years (the time frame on individuals investment horizons) gold can change radically in value. Gold is not now cheap. I actually estimate it to be somewhat above its fair price - due to the fear and problems we've had globally these last 2 years. What is even more surprising is that its price didn't go to twice the levels we've seen, and that is something I put down to manipulation by the PPT. And they aint giving up without a fight! So to now have all your wealth in gold is placing a big bet that i) the PPT won't keep the price under control, and ii) we'll pass straight from a credit crunch period into an era of high inflation (without a significant and stable deflationary gap in between). If those two things apply, gold could simply go up from here. Otherwise, there has to be a risk of a big pull back in the PoG over next 1-4 years. ...IMHO Get this bet right, and you could get wealthy. Get it wrong and you might not break even for the best part of a decade (assuming you have the nerve to leave all your money so invested for that long)

I agree in principle... IF enough people continue to buy and take delivery, AND IF the 'system' isn't changed to prevent the deficiency of real gold becoming apparent, then the fireworks will start But those are big 'IF's I also wonder what those fireworks would look like... if I were holding paper gold (as most people are) then I'd be selling furiously, and the paper price of gold would plummet. Would the price of real gold concidently rocket, or would everyone just loose faith in gold generally (i.e., not distingish paper and real), and also start selling their real gold. It could be like a run on the bank, wre efear and confusion rile the day, with the result that gold would flood the market.

Its interesting you use phrases like "some posters problem" and "want to...negative". It suggests you think they've got some reason to be deliberately biased against gold? I see very few (if any) real gold de-rampers here. Instead, some posters (including me) are just not prticularly biased against gold, or biased for gold - we're just trying to understand it and use it in the context of many other things. Those you criticise are perhaps just less convinced than you that gold is going to the moon, or see things unfolding over a different time frame, or have other priorities beyond getting mega-rich by one single investment. Its a big gamble to put everything into just gold. But if thats the way you've decide to play it, I admire your conviction and wish you well.

To answer, I need to set out the backdrop... I cashed out GBP 200k because A. sterling was ludicrously beaten up by the fearmongers (so GBP gold price was particularly high), & B. we wanted the cash to buy a house (so the risk of another knockdown was too great) We've since decided instead to leave the cash where it sits in Switserland for a year or two, and then convert it to CHF to pay off the mortgages on several BTL's we have there. This is because we expect sterling to strengthen significantly against the CHF in the medium term (CHF has strengthened ludicrously as a save haven over last 2 years, but will fall as recession passes and as banking secrecy in Switzerland erodes). We've already gained a further 8% on the cash in the last 3 months via this plan. All the above is legally tax free :-) We'll still buy a UK house in 6-12 months time (have been looking) but will do that with other investments we're steadily cashing in, plus a UK mortgage. Unless rates go very high by the time we buy, we'll lock in a 10 year and hope to pay off at the end. The monthly interest should approximately match our current rent (which I just negotiated a 5% reduction in) Now to answer your question... Given the above, I am not in a position to risk my cash on a big fall in PoG. And indeed, I think there is at least a 50% chance that gold may have seen its highs in GBP for the next 2-3 years, and may drop quite a bit from here. But I also think there is a reasonable (30% ??) chance gold may go up 20-40% further from here, during next two years. But that extra win wouldn't be worth the risk to me - given my housing needs/plans. Longer term, however (5-10 years) I feel quite certain we will see some serious inflation problems in the West. And that will take gold up to GBP 1000 and probably higher. So I'm planning to start saving extra cash (that I usually find a way to come across) over the next 1-5 years, and will look for a good entry points into gold. We've still got 2kg gold as a core holding that will not be sold, and I'd ideally like to push that to 10-20kg. I'll decide on when to buy (i.e., time and price) without pressure or panic (always the best way) based upon prevailing economic climate, global developments, inflation, and my level of spare cash. So basically, as I get more spare dosh I'll probably be more comfortable buying at higher prices, and vica-versa. If it helps, I would say that over the next 12-24 months I wouldn't want to buy above GBP 500, but would consider changing the whole above plan and buy gold regardless if the price falls to the GBP 300-400 range. If gold rises dramatically well before I expect it to - I'll shed no tears as I've done OK, and I'd be very happy for all you guys/gals that are still holding (so long as you then sell!!!!!!!) ...so if all the BigT family plans work out, in 10 years time we'll own a decent home, have rental income of about GBP 20k per year from Switzerland, a cash pot (after selling my new big stash of gold) of GBP 400k, and a decent final salary pension. The kids will be going off to Uni and I can retire early. ....but I'm not counting my chickens :-)

IMHO, the above is total nonsense. Why nonsense? Many posters here argue that the PPT manipulate and control the gold price very effectively. My statement merely clarifies that they can continue do this very well (as the gold market is very small compared to the other things they're manipulating) as long as they wish to, and its only a total economic failure that will cause them to give up or become impotent.

Thanks, I'll take your pity home with me, plus the 100k profit I have already locked in, plus the 20k I'd have lost if I'd stayed in gold these last 3 months, - and feel quite content :-) Then, when the time is right, I'll buy back in and ride the big run up from a far lower price than today. If not, then I'll tip my hat to you and wave as we sail past each other on our yachts :-)

...I agree! Also, volume is low, and this reverse head and shoulders only really applies after a long term price fall (not a long term price rise) Most importantly, however, UNTIL WE HAVE COMPLETE ECONOMIC BREAKDOWN, GOLD WILL ONLY GO TO THE MOON IF THE PPT WANT IT TO ...AND THEY DO NOT!

Don't count your chickens... http://www.moneyweek.com/investments/preci...-one-14788.aspx

"how long?"... Well at least the next several months. But my best guess overall is - Sterling -- vs CHF (which I'll need to change my GBP money into), about 1-2 years -- vs gold, at least 6 months, and perhaps 2 years - Aussie -- vs gold, at least 2 years (as will continue strengthenning as recession ends and commodities come back into demand) "I wouldn't want to be sitting on pounds waiting for lower gold prices"... Really? So if you had spare cash in GBP you'd be buying gold at these levels?

Sterling and Aussie to strengthen... http://www.moneyweek.com/investments/cash-...Money%2BMorning

Maybe! ...but I think its equally possible that people just over-bought gov bonds when fears about the economy were at their highest (at the same time that they were repatriating USD). Now the fear has decreased, the yield for gov debt is rising to a more reasonable level Don't get me wrong - I think we will have high inflation down the line. But that´s years away, and people with a lot invested in gold may be looking for signs of that inflation too early

I think the charts are clear - these last few weeks gold has not been increasing in value. It is flat or down against most currencies. All that is happenning is that the USD has been depreciating. ...simply because concerns and panic over the economy are subsiding, and the repratriation (buying) of USD is reversing. There is not a major awareness and worry about QE. And all this is exactly what the US authorities want. This way they dilute away their national debt

"...reads like BS from a con-artist." This was exactly my feeling upon listening to this interview. Thanks for making this point Dr B We must be careful to be objective, and not subjectively believe the things we want to hear. I hear nothing in this guys description that objectively convinces me.