Perishabull

Exacto, they aren't afraid of getting short either

The action in the dollar over the last 24 hrs is exactly what he was looking for, a spike down to 74.5 followed by a sharp rally. I thought a catalyst was need - it looks like Dubai the city of gold may have provided it.

I guess this will not be news to you guys but what do you think of this? It appears to suggest gold is markedly undervalued at this point. It is GLD priced in Euros and suggests that we could be in for $1500 towards the end of the third quarter 2010. Look at the points where there was a double top in the ratio, around mid-November 2007 and mid-November 2008. From these points gold went on to rally approx 28%, 30% respectively. Now look where we are, another double top in the ratio..... . . . . ! Also; I'm going to have to get my skates on

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I may be going short on GDX soon but it will be hedged with a long in OIH to profit from a potential expansion in the spread. Before you shoot me down it is not a bearish shot on GDX since if GDX goes up I still profit provided OIH outperforms GDX over the term of the trade. If the set up works out then it will be a bullish trade on the spread, I have no idea what direction each of them are going to go in.

This was posted by CGNAO on www.moneysavingexpert.com; ONLY three times...I wonder if he works for them (or used to)? CGNAO is James Turk!

Fair enough but what I am saying is that if margin requirements are increased sufficiently (to limit speculation) then it is the large traders and small speculators that will struggle to fund positions, not the commercials. It's difficult to see why the CFTC would impose position limits that would favour the large traders and small speculators when that would be fiscally detrimental to the US (Driving foreign capital away from treasuries and into PMs) It would be a massive own goal

Is that who you are planning on selling your silver to? Or are you planning on selling it to someone in the western world? AFAIK the western world bases the price of silver on the Comex price.

As far as I'm aware everyone views the price of silver being the one that is generated daily in the Comex marketplace. The Comex marketplace allows me as a buyer to control many times the amount of silver I could otherwise afford by extending credit to me. If they reduced my credit (by increasing margin requirements) I would be forced to either cut my position accordingly or put up more capital in order to continue to fund my position. Now, lets say the margin requirements are set to double in December. The question you then have to ask yourself is who has the most capital behind them that means they can continue to fund their positions? Is it the large traders and small speculators or the commercials? I don't know the answer to that question but if I had to choose I would pick the commercials. If I had my net worth in precious metals at the moment I would not be feeling secure based on this potential problem. This could be a black swan for precious metals

If margin requirements are increased (ie the credit available is reduced) what mechanism would cause the price to increase?

A long time ago I wrote on the gold thread that a big threat to the gold story is an increase in margin requirements, it's happened once already, I think it will happen again. When you think about it, it's quite amazing that people don't stop to fully consider that the price of gold (Comex) is based on the credit extended to traders / hedge funds etc Everyone knows what happens when credit to buy something is reduced - we've seen it with house prices already. Think about it, lets say margin requirements are set to double on a specific day, announced in advance. It could cause a wave of selling and flight to the dollar. It's probably one of the only bullets left in the US Govt's gun and I'm quite sure they will use it. Gold is diverting foreign central bank money away from treasuries - how long do you think the US is going to entertain that? Watch this space.

More cut and paste efforts...

What are you inferring here FP?

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Perhaps now is not the right time for serious debate

Has my internet browser re-directed me to www.housepricecrash.co.uk? or perhaps www.You'vebeenframed.com? cdswamp, how long an exposure to gold do you possess?

So far, the car has been driving in one direction, it's human nature to expect the car to continue to drive in the same direction, the car has momentum therefore we know it will at least carry on in approximately the same direction for a certain period of time. It's human nature to extrapolate the direction and speed and speculate on a destination. No-one ever expects a car crash, when did you ever speak to someone that had an accident that said, "Oh, yes, well as soon as I arrived at the corner I knew the accident would come upon me" In my experience markets at times tend to deliver what the majority least expect. The number of people expecting a car accident at the moment is almost negligible, and that, I feel, makes it all the more possible. If the government doesn't like me driving at a certain speed along a particular road they have quite a lot of power to limit me, they have laws they can instigate, they can also interfere with the technology (margin) that allows me to drive at the speeds I like to drive. If they they limit my speed whilst I'm flying along at 150mph then it could cause an almighty pile-up... No-one is ever "100% correct", we all know this, intuition and experience teaches us this. I will never forget when Peter Schiff declared "I've never been wrong" - the phrase at the time seemed unutterably ridiculous, that was when he was at the peak of his powers and at that point he was then wrong. Why do I bring this up? Well, the bull market in Schiff has been over for quite some time. We now have a bull market in Faber as far as I can see, and from his recent inteview, I think the bull market in Faber has peaked.

I'm not adverse to owning gold, I bought at $815 and sold at $950. I view the gold market in the same way I view other markets. I don't have a particular penchant for one over another. A bias towards one may blind me from potential profit in another.

Comex already hiked the margin requirements to trade gold once already, there is nothing to stop them repeating this in order to cap gold if things get heated. As much as I enjoy Jim Sinclair's site it's difficult to believe that an objective viewpoint can be formed by a mind with an interest in a gold mine. Follow this for an old piece on Jim Sinclair here; https://www.kitcomm.com/archive/index.php?t-2014.html "Sinclair's love of carrot juice recently turned into a 25-kilo-a-week habit that was brought to a halt only when his doctor grew alarmed at the orange tint to his skin." Now it is possibly unfair of me to pick up on this but is this not an indication of someone that can tend to an extreme? The reference to Sai Baba highlights what I think may be a deeply spiritual element of his psyche that perhaps tempers him somewhat. Jim was extremely successful once before in gold, that in itself is a risk as extreme success can affect the mind such that a belief forms that it can be repeated. I'm not saying he's right or wrong, I'm trying to look at it without bias. He also quotes Alf Field's numbers that are way beyond his estimate, still at least if Alf's numbers aren't reached they are Alf's numbers eh? I believe that gold should have gone far higher than it did, especially following the collapse of Lehmans, the fact that it didn't makes a statement in itself. The above chart mirrors my view, gold will ascend over time at a "managed" pace so as not to cause too many ripples in world financial markets. You are looking at a long game here though folks I think, $5000 may be over 15 years or more out from here. The new and revitalised gold standard is unlikely to appear, a currency based on a basket of a variety of commodities or bonds or other instruments is far more likely to bring about stability and therefore be agreed upon by world governments. Perishabull PS I personally don't own gold at the moment.

It's difficult to see these trends changing soon

Very interesting pdf, thanks for posting

I sold all my gold at $948 and my silver at $13.22. Am I crazy? No, I made a superb profit, partly due to the collapse of the pound and I need to buy a house however... I'm going to get back into silver if it goes much lower because I think silver represents significant value and has huge potential as a long term hold (10 years +), much better than gold IMO. As a side point I think we may be near the end of this correction phase in the PMs as I think Martin Armstrong's turn date will co-incide with a turn down in the EMs, turn up in the PMs Watching isn't quite so tense now though, it's more for fun! As a side point I was thinking about buying Palladium last November, boy do I wish I'd gone ahead with that!

Goldfinger, at what level are you going to sell? (just curious)

I think everyone agrees that part of the reason house prices are falling is because of a contraction in credit. Is it possible that the same thing could happen to Comex gold. Margin requirements for gold were increased last September (effectively a reduction in credit), interestingly this was done on the heels of the largest increase in price in 9 years. I am concerned that the powers that be could do this again, to try and curtail further price increases. http://www.bloomberg.com/apps/news?pid=206...fer=commodities

Icarus, I own physical silver but I'm afraid you are flying into the sun here with your comment. When you say permanent do you mean Dr Irving Fisher's "permanently high plateau" ?