Perishabull

Oh dear! Also, does that mean you're a non-gold VI?

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

People have been comparing the recent rise in the price of silver to the commodity bubble of 2008. In my opinion the two phenomenon are entirely different. The bubble was caused by speculators gambling with massivly leveraged positions. Current price increases, on the other hand, reflect a shortage of available silver and is being driven by small investors trying to preserve their wealth.

 

Government sales of around 50 million ounces of silver per year, every year, for a hundred years, have kept the price artificially low.(see http://www.silverinstitute.org/supply_demand.php#demand.) Low prices allowed to silver being used as an industrial metal. Now that the above ground supply has now been almost completely wasted prices must start to rise.

 

Just to bring supply and demand into equilibrium the price of silver has still got to increase massivley. Furthermore, as the price increases, investors will be reminded that silver is a store of value. For it is rare, in demand and can not be destroyed.

 

Not only is the price of silver set to rise massively but the price increases will be permanent. Buy and hold.

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" ?

Regarding the London Mint Office coins...

You are not buying a normal Sovereign here folks;

"Specifications

Description: King George V last circulating type gold sovereign, minted 1911-1925

Quality: Exemplary - similar to that shown

Weight: 8 grams

Size: 22mm diameter

Metal alloy: Gold, 22 carats pure (.9167)

Obverse (portrait) designer: Bertram Mackennal

Reverse (St.George) designer: Benedetto Pistrucci"

These are metal alloy with 91.67% gold not the 99.99% or whatever you normally get

The gold I have is in Zurich (Bullionvault). I sold an amount with the intention of buying back in within a relatively short period so it remains in sterling.

In terms of bank accounts being frozen etc it is a possibility albeit a remote one, I think governments will do anything in their power to prevent a banking collapse as it would destabilise society. If gold becomes contraband I wouldn't fancy trying to trade it either, potentially very risky, there would be all sorts of sharks prepared to use violence to take it from you. Of course the higher gold goes, the more it becomes seen as money, goldmoney also allows you to make payments in goldgrams. If that takes off, people using gold instead of fiat, then it could also have a de-stabilising effect on society therefore forced sale to the government is probably the most likely scenario in my view.

I just carry on buying regardless of price. It's going to well in excess of $1650 eventually so who cares what the price is now?

I don't know how many of you have looked at the gold in other currencies charts that trader Dan on jsmineset has posted. Gold in GBP looks like it is going parabolic. My gut feel is that gold will be sideways this year and in fact I sold 8.5% of mine to buy back in when (if) it goes lower.

Who will be the major buyers above $1000?

As the gold story filters more into public perception I believe it will become more mainstream, this in turn could lead to it becoming a staple of retail portfolios whereas, by and large, at the moment it is not. This of course will take time to play out. There needs to more buyers and my feeling is that in the future it will be Joe Public acting on the advice of your standard Independent Financial Advisor.

I sold 8.5% of my gold a few days ago at $900 with the intention of trading with this amount to try and increase my overall amount.

Sure glad I didn't sell more than that!

A large tract of this selling is no doubt due to hedge fund redemptions triggering forced liquidation to meet demands for cash, this causes asset price devaluation and leads to further redemption requests, forced liquidation and the cycle repeats. I'm no expert but hedge funds would probably need to sell x% of all positions in order to raise cash rather than select a particular sector otherwise this would disrupt their current hedging model.

Possibly this is one of the reasons why Jim Sinclair stated there would be huge volatility. Dan Norcini on jsmineset.com also alluded to the covering of large shorts, this would account for some of the large upward spikes in the price.

I was about to buy a large quantity when the price was at $880 but hesitated.

In any market where assets are owned on leverage and the credit that the leverage is based on is being wound down I would expect to see continued downside in the price. I would also expect to see a gradual continuing reduction in the volatility as the amount of credit in the market is rebalanced with the amount of credit willingly supplied to the players in the market. Roughly translated I am going to purchase again when the price calms down and goes sideways for a bit, maybe at 600 - 700 with no wild swings.

The $64,000 question is will the downward trend in gold end with a sudden event like Pakistan chaos, inflation getting out of hand or a bond collapse? I am thinking March next year but that may be leaving it too late.

I saw one interview of Roubini where he was asked about what he does with his own money, he is a very risk averse investor. Opting for mutual funds etc. The man would have made a fortune shorting banks and buying gold but he is too busy being an economist and professor I guess.

Just for the record I'm 10% in physical Gold/Silver on a 1/5 ratio. I had also purchased Dec Call 800 Gold warrants that I have just bailed out of (lightweight) at a modest profit due to the incapacity of my thinking to concur with gold being much above 800 by year end. You may know me as an amateur (and you would be correct) however I simply cannot connect all the dots to such a comprehensive degree to assert a definitive view that gold will be north of $800 by year end. It appears obvious to many no doubt, but not to me.

And so...what if we are all wrong?

George Soros, along with other prominent investors, holds no shame in admitting that he gets things wrong from time to time, after all, it's in our nature isn't it? Otherwise senseless wars would not occur, economic crisis would not occur, people would never make mistakes would they? Unless we get things wrong sometimes.

So what if you are wrong? Yes you? What if we are all wrong, what if the hyper-inflationists are wrong, what if the deflationists are wrong? What then?

The point I bring to this table is that our strongly held views can sometimes ensure that differing, and sometimes valid views are blindsided by our strongly held position or view. And these strongly held views can sometimes immediately discount an opposing point of view, without due thought or consideration.

If money is printed to replace money being lost as a result of malinvestment is that inflationary, deflationary or simply keeping things as they were in relation to the initial investment? As far as I can see it may be temporarily inflationary since it brings funds into the system that can be used for another purpose immediately rather than being trapped in a deflating asset. That said the deflating asset will, at some stage, be sold and will realise at least some value, that will then add to the replaced funds at some stage, and therefore add inflation to the system.

Is gold a barometer of inflation? Is it? Is it a barometer of peoples confidence in the banking system/currency? If a barometer of inflation then why should gold reach an inflation adjusted level?

Is it dangerous to visit the same forums day by day Jim Sinclair et al? Without considering other points of view?

Ok everyone I would like to get a broad consensus of opinion on what the price of gold will be by year end. Optimists AND pessimists please.

I don't think $1000 will be re-tested this year and think $960 by year end.

I think we will be looking at a moderate rally in US equities until year end however I expect the dollar index is going to be 72 by year end.

What do you think?

Perishabull

Yes it certainly has bubble characteristics, it's difficult to call though as the factors that influence the market are many (inflation/deflation/geopolitical etc) making it difficult to call (unlike the housing market for example). So wrongmove, hypothetically, if you had funds to invest in gold at what price point would you feel content to invest for a long term hold?

PB

Hi there folks, well, like the rest of you I think we have all been surprised by the recent price action in the gold and silver markets. I have 11% exposure to these metals having increased my silver holdings at $17.1 just a few days ago! Oddly I'm not massively concerned, worst case scenario is that a medium term holding becomes a long term holding. It does strike me as odd the sudden turnaround in sentiment however, this to my eye seems to be some rather clever PR work and timely intervention in the markets by Uncle Sam and it's worked very well it has to be said. It almost seems like some cosmic joke, gold and silver take a beating during the Olympics...definately planned.

In the medium term I don't see oil sub $100, this in my view will support continued worldwide inflation at unsustainable levels. Once everyone realises this then the gold and silver bulls (and commodities) should march on for the last leg of the secular bull market, how long this takes is anyones guess but my feeling is up to 9 months.

I was going to say I feel sorry for those that went all in however that only really applies if this is the end of a bubble.

I got in with 800 call (Dec) warrants at 880, two days too early it would seem as I wrongly gauged there would be some serious support at that level.

Some points to consider;

"Be courageous when everyone else is getting fearful" - I think these are Buffetts words

Market manipulation - How long? How far? How much?

The first point gave me the courage to go for it however what about the second? My gut feeling is that those that pull the levers took advantage of gold's decline to blow through positions, in gold, certainly the dollar, possibly other markets. I'm no expert but the move in the Euro/Dollar looked exceptionally unnatural and the DJIA daily chart on Friday just doesn't look right.

Sir Isaac Newtons words;

"Actioni contrariam semper et æqualem esse reactionem: sive corporum duorum actiones in se mutuo semper esse æquales et in partes contrarias dirigi."

Or for those of us that don't speak latin - All forces occur in pairs, and these two forces are equal in magnitude and opposite in direction.

In other words "For every action there is an equal, but opposite, reaction".

I believe that if you push a spring hard enough and let it go, it might just fly back in your face and give you a bloody nose, or if you give it a hard enough push then it might knock you out.

I also believe in the law of unintended consequences, the failure of man to recognise that his actions are contributing to problems rather than mitgating them is a widespread problem, I believe.

What are your thoughts?