romans holiday

Dip postponed compliments of India.

Yep, will be interesting to see what the dollar does here. I hope to start buying at around the $14ish level [around 1200 in Yen, which effectively makes it a dollar or two cheaper having recently strengthened]. I plan to also keep some cash reserves in case we see the "big one" a la Hoye. Will it be a merry or scary Xmas?

Looks like we might have some good buying opps coming up. If the dollar continues to strengthen we could see the DX at 78.5 and silver at 14.50. Even if this strength in the dollar turns out to be a head fake, it still proves how vulnerable silver is to a dollar bounce. For the record, I have both large silver and large cash positions at the moment.

Interesting development. Contrary to popular belief SDR does not refer to the Standardised Death Rate of currencies but to Special Drawing Rights: "SDRs are defined in terms of a basket of major currencies used in international trade and finance. At present, one SDR is the sum of 0.6320 US Dollars, 0.4100 euro, 18.4 Japanese yen and 0.0903 pound sterling". With another 3000 odd tonnes of gold, and deposited funds from a multitude of countries, at the disposal of the IMF, could SDRs emerge in the future as some kind of new gold backed currency? I think such a "new Bretton Woods" currency may be eventually required in order to restore stability to currencies and balance to trade. I doubt the Yuan will "de-peg" from the dollar until some such currency is instituted.... and only then will they "write down" the value of their dollar reserves... once the bulk of those reserves are guaranteed by currencies pegged to/ stabilized by gold.

Not if currencies are tied/stabilized to gold first. This would involve something of a "Copernican revolution" in the way in which we think about prices, where gold is no longer priced by currencies, but currencies by gold.

Yes, it should be increasingly obvious that gold is now no longer considered a commodity, or inflation hedge, but considered a currency and has been in the process of "monetization" by investors and CBs. CBs [mostly Asia] without a decent core holding will continue to build. As a currency, I doubt the price will explode to the up-side, by some sudden flood of liquidity, but incrementally climb as modern currencies slowly decline. That said for the long term, if there is another credit crunch episode, gold may slump a little on forced liquidation, but would recover quickly.

Yes, the monetary aspect of gold seems to be asserting itself well here. Silver is still more a commodity than money in the minds of investors. Not saying that it will not do well in the future.

Great chart gf, but I thought the idea was to put the longer term aspects of gold on the "G0ldfinger's GOLD Thread: Longer Term Aspects, Facts, charts, and discussions on gold and related topics" thread, and leave this thread for "Daily news, comment and analysis on the gold market".

The problem is that more often than not we read what we want to into charts... or then only read, and then post, the articles that support our own wishes or preconceptions when it comes to gold. This reminds me of the "theory-laden view of observation" where the viewer always projects their theory [or wishes] onto observations, in order to make sense of/ interpret those observations, and where accordingly one can can never be purely objective. I doubt whether any of us, whether bull, bear or bug, can fully extricate themselves from this, but being aware of it leads to less dogmatic views.

I won't. Gold is the hedge against uncertainty. The US dollar is a hedge against gold. Yen is a further hedge against the dollar. I don't have a "portfolio". Nobody can say with any certainty what will happen short term [though volatility looks probable due to market confusion]. That said, most agree here - in some degree - on the long term. Knowledge and understanding are quite different things.... usually one is had at the expense of the other. Psychological balance is vital for the investor.

It all depends on whether the dollar is rallying here or not. It looks like it is but this could be a head fake. Even if the dollar turns back down again, I expect to see it rally sometime within the next few months. For the record, I do not delay gold purchases for lower prices, only silver ones. I am quite content with 40% in gold at the moment.

I mean that there is a good chance that you will be able to buy silver for lower prices soon. As was outlined in the post. As I also said in the post "who knows". Maybe I know that I don't know, and accordingly hedge against the uncertainty.

None taken. Silver is in decline now. I sold a little for Yen a while back and though silver spiked up afterwards, it is now back to the level at which I sold in Yen [Yen has strengthened/ silver weakened]. I still have a large position in silver, the reason I sold a little was I wanted to raise some cash in case of a big slide in silver. That slide could be developing now... then again it could not... which is why I am hedging. With silver, I do not see it as just a clear cut decision to sell or hold. I have something like 30%in silver and though I suspect silver might decline here would not sell it [i might be wrong]. Rather, I would be buying at lower prices with cash positions... if I am right. This is hedging not trading. The aim is to eventually swap silver [speculative and vulnerable to the market] to gold when the ratio is favorable. [though I had one ear on Hoye, I have always suspected we would see one last wave up in the market/silver before a downturn... we might still see that ..who knows].

Many are expecting a dollar rally and with it a gold correction. We could easily see gold go back through 1000 but I doubt even a spike in the dollar will see gold go through 900 [QE effectively put a floor in at 900 imo]. Gold will quickly recover as a safe haven currency and whereas the dollar may benefit initially by a knee-jerk [perhaps forced short covering] reaction in the market, gold will continue its incremental and solid upward move to new highs. Many here have pounds. I imagine they would weaken faster than gold, so in order to take advantage of a possible dip, you would want to first buy dollars or Yen with Sterling. I wouldn't sell gold here, never do.

http://globaleconomicanalysis.blogspot.com...n-european.html [Posted previously by Wren] Mish is making a timely comment here when all eyes are on the dollar. If the dollar rallies, what will gold do? Though it will no doubt weaken a little, Mish is also suggesting here that gold is a currency in its own right and could easily in turn strengthen alongside the dollar [as a safe haven for capital] as economies and currencies continue to struggle. The way I see it, gold is in the process of monetization and why would you sell a strengthening currency for a weakening one? Silver on the other hand is quite a different story.

You could be right. Whether or not one bought here has to depend on whether they already had a heap.

If we see some credit after-shock, or some such thing to send the market on a dive, I think the post QE floor of 900 should hold. I wouldn't bother selling gold here, but silver is another story. Would ideally like to sell it for gold and dollars should we see another spike up. If the market carries on down, not too concerned as silver will eventually bounce back, and will be a good opportunity to buy further silver with cash reserves.

Harry Dent on Goldseek Radio. The D-War continues. Govts checkmated. 2011, a half of mortgages will foreclose. The stock market rally could extend a few more months http://www.radio.goldseek.com/players/dentplayeroct27.php

I lightened up a little [though held on to most]... around that price somewhere no doubt. I decided I wanted to increase my cash position with which I could hedge for lower prices should they come. I have recently acquired a lot more cash, so now feel comfortable buying a little silver at around these levels.... no rrush, looks like it could go lower. I would still be keeping a decent amount of powder dry for a possible deleveraging/ credit aftershock dip. For me, it comes down to having both a core bullion position and a hedge with which I am comfortable. Peace of mind is priceless. I do not want either fear or greed, or any emotion, to disturb my equilibrium.

It requires a zen-like discipline to build a cash position once you have been enamoured with gold. Repeating the following mantra may help.....the investor must not be ruled by emotion... the investor must not be ruled by emotion...

If I remember right, you already have a solid position in gold... imo it makes sense to either just buy outright or average in to gold if you want to increase that position. If you arlready hold gold, there is no rush to buy silver. Silver is a different kettle of fish. You should wait on the sidelines for a decent dip in the price in what looks like a very volatile market. Any dip in gold will not be in the magintude of what you see in silver. Common sense stuff really... not sure what the "disagreement" is about tbh. It seems that some are offended that one should wait for lower prices. As I have a relatively large cash position, I might buy a little silver soon. What I am saying is nothing more than the time-honoured investment principle of making sure to keep some powder dry..... should the big dip come along.

My point was that today's price action is clear evidence for what some have been saying about having a hedge against lower prices. Blinkers comes to mind.

Silver down over a dollar in a day. The price is obviously vulnerable here. Clearly, it makes sense to keep some serious powder dry for the bigger dip that might come at some point.

I am pretty much in the camp looking for a market reversal and dollar strength, yet I think it will be next to impossible to time it. I am not sure about it taking place in the next few weeks, perhaps it will be in the next few months. The markets could just continue to meander sideways here. I wouldn't be surprised to see one last hoorah in the markets before the reversal. And then it might take some catalyzing event for that reversal to take place. Looking at the silver/gold chart. I wonder if we might see the ratio stick at around 60 for a couple more months, as it did at 70, before closing to near 50 on one last spending spree in the market. But then, I half suspect this is just reflecting my own [Xmas] wishes.