romans holiday

Both those posts are bearish on palladium and platinum. I've always thought gold would outperform palladium, platinum and even silver. The reason being I consider gold in the process of re-monetization [a currency] and not a commodity. This makes it deflation proof. My record is looking OK so far.... it is not stretching the imagination too far to see further deleveraging taking the price of platinum below gold.

Add to that a double top... which is bearish [for palladium].

The longer term perspective. Whereas I might consider putting 50% of my capital in gold, I wouldn't put more than 5% in palladium. Gold looks like a safe haven, palladium a speculative punt, or good to trade.

You'd have to be a brave soul hanging on to Palladium here. Nor does Platinum look a lot better. Gold looks solid.... might have to do with it being considered a currency in "unusually uncertain" times..

Cool graph! I think we could be waiting a very long time then.

Yes, the problem with buying in pounds is the pound is more volatile than gold these days. This is why I've always advocated holding dollars if you were holding off from buying gold [the US dollar being a stronger central currency]. Now that gold is monetized and more stable than the pound, the long term trend line shows where to buy in pounds. As you say, now looks a good time to buy.

Not that relevant for a gold thread, but a pretty picture anyway. Looks like the lows of 2008 are going to be revisited. Not for gold though of course.

Nice... 10%... not. The Euro/ dollar cross could likely be at 1.10 by the end of the year.

All the talk is about deflation. Bond yields are pushing the lows. And yet gold pushes up. So much for the orthodoxy that deflation is negative for gold. Also, dollar and gold moving up together here.

The kiwi dollar and silver usually move together. If the Kiwi continues to roll over here against the US dollar and head down towards 0.66 over the next couple of weeks, could see silver down near $16.

Gold behaving like a currency here. Strengthening with the Euro lately against the dollar. As gold strengthens its aggregate price should prove a lot "stickier". On some headline news out of Europe, the Euro would fall, the dollar would go higher.... and gold will have kept its gains and in turn go higher still.

Read updated signature. I agree that Yen will not outperform gold. I disagree that Yen is a "turd".

It was an interesting article how gold was being compared to Yen. This is something that interests me also- I think the behavior of say the US dollar and Yen will be quite distinct against gold as say the Euro and pound. And then Aussie and Kiwi [minor currencies] will be in a different ball park again. But the author's take on gold was that it was speculative, and involving the "greater fool" principle. I reckon this showed an ignorance towards gold. Assets are the objects of speculation. Gold is not an asset, therefore not speculative. It is a currency... or a liquid form of capital. Well, my 2 cents worth anyway. Of course, this doesn't mean that there could be some speculative money in gold [hedge funds looking for an inflation hedge... or chasing a "bubble"], but you'd think that would have been washed out with deflation dominating the headlines these days.

That the Yen should continue to strengthen is predictable in hyper-deflation. Core funding currencies will strengthen due to "short-covering". The article has half truths. Here is one; that gold is not really an investment. Too right! Yet the author fails to perceive gold is in the process of being re-monetized... ie, increasingly performing the function of a currency for both investors and central banks. The investor is dis-investing when buying gold. The reason gold is strengthening alongside Yen is in a period of uncertainty it becomes a prime form of liquidity.... being the strongest symbol of money. Even the Yen has political uncertainty hanging over it... even though it should continue to strengthen. The dynamic of a debt deflation, where short-covering on currencies swells the currency, will also continue to crucify their economy. I expect the same to happen in the US.... and gold to continue strengthening.

Looks like a pattern's shaping up in the "major" currencies. A lot more volatile compared to the "central" currencies below. Aside from the forced liquidation in '08 [which was beneficial to the central currencies], the rate of gold's strengthening against the central currencies is steadier. Yen on steroids and has held its own against gold... for now.

Why don't you set up a sluice box, and let the flow of the water do most of the work. Small pieces you will find in the riffles. You can also collect the "concentrate" [mostly black sand, but where the fine gold is to be found], put in a bucket and set up a "blue bowl" operation at home where you can separate the fine gold a lot more efficiently than with a pan. Most very fine gold is lost when panning.

Yep. I like how it captures the steady strengthening of gold over the long term. It also shows there is not much "excess" to the upside from the trend line. But I still have a question puzzling me; say gold continues to only modestly strengthen against the US dollar [just for arguments sake] at say 20% a year, would it matter that much whether the chart was a logarithmic or a linear scale? I gather logarithmic charts are best for the large exponential moves. Or in other words, say all currencies stay relatively strong against assets, but gold in turn strengthens against currencies... we would be looking at gold/ US dollar in terms of an fx exchange.... and not as a "mop for excess liquidity". I mean, it wouldn't make much sense to map the kiwi dollar against the UD dollar logarithmically right?

The volatilty of gold looks to be settling down compared to previous years. Does this signal a steady strengthening along the trend line? I'd be happy with that... given that currencies might also be strengthening against assets. Link to last month's thread: http://www.greenenergyinvestors.com/index....st&p=177466

In Japan it was the corporate sector which had to deleverage. In the Anglo-sphere economies it is the private sector that has to deleverage. Once the psychology shifts from inflation expectation to deflation expectation you might as well....... tell the tide not to come in.

Debt deflation is the common factor.

The problem with that approach is it is too "US-centric". I see Bill Gross of Pimco is talking of "structural" solutions. The US is the leading country in a global economy... any way out of the predicament will have to involve a re-setting of the international currency system. The free-floating "Washington Consensus" system worked in a period of expansion, but will crush the economy in a contraction; ZIRP reserve funding currencies will see an extended period of short-covering on capital flow/ flight back to the centre.... spiking their currencies and crucifying their economies. Japan is the the future for developed economies.

Gold is not revalued. It itself becomes the basis of valuation. The higher price of gold only reflects the devaluing/ depreciation of currencies. Gold is pricing currencies now rather than the other way round. The rationale for Central Banks to buy gold is basically the same as it is for investors. A diversity away from too high an exposure to other currencies which have an uncertain future hanging over them. I don't think though that higher gold prices will push asset prices up. Gold prices will go up while other major currencies also strengthen as investors liquidate assets and go into the strongest forms of liquid capital.

Both agree and disagree. I agree with the possibility that the dollar could end up backed by gold. Not because it is sliding towards zero though, but because it will end up spiking against other currencies [even worse than the Yen]. Deleveraging "short-covering" will do this to the dollar despite the "fundamentals". This would crucify the US economy and some kind of international rebooting of the currency system would be required. The dollar could then be devalued against gold while other currencies could be appreciated. This would restore balanced trade by fixing the currencies at the appropriate levels to gold. A national solution is no solution at all. To restore global trade, we may need to see an international solution.

The dollars might not be hyper-inflated, but the prediction sure is.

If gold consolidates to 1100, could see silver around 15.