romans holiday

It was certainly an excellent entry point.

 

And where do you reckon the Dollar Index / Gold would be trading at with Silver at $100?

Gold? It's on the base-line now [1600] so in 2 years the base-line should be around 2300/ 2400 [20 odd % yearly appreciation]. From there it should go on a wild spike at some point. Assuming the spike is similiar to the recent one which saw gold go from 1500 to 1900, gold could predictably spike from say 2300 to 3000.

So silver spiking to 100 could see gold spike to 3000.... in 2 years or so.

Dollar index? Haven't the foggiest. Only doubt it will collapse.

No certainties. Just calculated risks.

The trade has been a long time in the making and based on my macro views combined with the charts.

Why AGQ over SLV? Just wondering

Because I'm looking to trade the volatility in silver, and not to increase silver ounces but US dollars. I only buy and hold gold. This also acts as a hedge against an equally heavy holding in gold.

I don't strictly consider it a complete 'hedge' though as see gold and dollars as complementary forms of liquidity. Gold should still outperform dollars, but by trading those dollars against silver the dollar position may well outperform the B&H in gold... as gold is only rising 20 odd % yearly against the dollar.

This heavy and leveraged trade also provides an exit plan. There's a good chance that buying double silver at 26 and again around 30 will give over a 1000% return if silver spikes through 100 in the next 2 or 3 years. Best to sell on the spike when it comes because every chance that silver will then correct to 50.

I don't think silver leverages gold, all it leverages is the volatility to both sides. In the aggregate it should appreciate at a similiar rate to gold... 20 odd % a year.

Gold down $17.70 -- near $1,658 .

Testing the $1650-1660 support level

 

 

There must be some happy folks out there, enjoying the discount.

 

I might pick up a few GLD calls, or Bull Spreads to today, but save "powder"

for later, in case Gold breaks support, and gets cheaper.

Heavy buy order on double silver not quite hit yet, with gold at 1630, silver 31.80

A GOOD TIME to make some careful comparisons is now !

 

 

== Current Pattern : update 2011-12

 

 

Yes, as was argued earlier the current pattern resembles '06 much more than '08.

http://www.greenenergyinvestors.com/index.php?showtopic=16087&view=findpost&p=242939

GOLD:

I think we are coming up to an important test at/near GLD-$160 = Gold:$1650-1660

 

Whodathiunkit when Gold was threatening to jump thru $1800 ?

Ho hum.... all pretty predictable really. This from August last year:

http://www.greenenergyinvestors.com/index.php?showtopic=2874&view=findpost&p=224764

And this from a bit earlier in August... on the run-up to the spike:

http://www.greenenergyinvestors.com/index.php?showtopic=2874&view=findpost&p=222418

Looking a little toppy here. Wouldn't be surprised to see it consolidate around these levels for a bit.

Familiar pattern in gold here, seen a few times before:

 

Here's the retracement I was looking for. Heavy buy order is still on at 50.

Retracement in silver continuing.

Buy order at 50 [2nd buy order, got the first at 40... both are heavy buys], but will be getting itchy fingers at 55 no doubt.

A longer term view. Looks like a solid bottoming pattern to me, with a higher high.

So far, GLD/Gold have beat Bonds as a safe haven

 

Yes, as the reverse liquidity triangle predicts; Bonds will perform well, but gold even better.

When you think in terms of liquidity, they are conceptually on the 'same side', not on 'opposite sides in a battle'. It doesn't really mean much for the trend in the gold price if money velocity is low, the US dollar strengthening, and T-Bonds performing well [actually mis-leading if the past trend is anything to go by]. Gold will also perform and even better as a prime form of liquidity.

An obvious reason, oft-stated by Gold gurus like Jim Turk:

 

"Gold (& silver too!) is the only 'money' that is not someone else's liability."

When gold is thought of as just another form of liquidity [though perhaps the strongest] then a doctrinaire approach is unrequired.

Gold can attract buying, if Fiat currencies implode and credit contracts.

 

But it is not the only asset favored under such circumstances.

Deflationists don't think 'fiat' currencies will implode. On the contrary, they think they will strengthen... relative to assets.

And deflationists think no assets are favored under deflationary conditions

Example: Gold may attract safe haven buyers in the same way that T-Bonds have done.

 

What may be coming up is a battle between Gold and Bonds

Getting closer to the mark here. Yes, gold and T-Bonds attract safe haven buyers as you would expect in a deflationary environment. The 'battle' between Gold and Bonds hasn't eventuated yet. In fact a few gold-buying deflationists have been predicting all along that gold, T-Bonds and the US dollar are all good holds. Why? Because they are all strong forms of liquidity against which asset prices are deflating.

Exter's liquidity triangle summarises it relatively well. Note, gold, dollar, bonds are not 'opposites' but all beneficiaries of monetary value as it erodes from assets down into the bottom tiers of liquidity. The driver is a debt deflation and a preference for liquidity:

 

It sounds Deflationary to me - Not good for Gold prices

Disagree.

There are a few that have never stated the case for gold on [hyper] inflationary concerns. The gold buying deflationists are not only happy with that chart, but predicted it. They also predicted higher gold prices at the current annual rate of appreciation.

Unless it really is just another commodity

At times it will be treated that way; when all the hedgies get on the inflation trade and then jump off again. But underlying this volatility is the monetary aspect, an alternative form of liquidity, which quietly moves gold up in the aggregate 20 odd % a year. It helps then to see the gold price in terms of an exchange rate. That way it doesn't look so 'expensive'.

 

Yes, that happened in january I think ????

There will be times when the dollar and gold will strengthen together, and times when they move contrary. It's simplistic to think these two currencies, two forms of liquidity must always move contrary to each-other.

That they could both strengthen in the aggregate is due to a preference for liquidity in a debt deflation.

Suppose the Dollar rises instead? Then Gold may fall, perhaps back to $1650, even $1550 and lower

Suppose they rise together [in the aggregate]?

???

Readers can be of any stripe.

Do you think talk of Buying and Selling Gold is of no interest to those still learning about it?

 

I suppose the real question is: Who is the audience for this or any other thread about Gold

It will obviously be of interest.

And I think you've hit the nail on the head there.... 'this or that thread about gold'. Think about having a trading thread, and then an investing thread because they will attract different audiences... though will also over-lap. It's not about exclusion, but drawing distinctions. When you want to focus on your trading pot, you'd post in the trading thread. When you wanted to focus on increasing your longs, you'd post in the B&H thread [look how confusing it was on the previous page]

Two threads with distinct topics, involving different perspectives, aims, and motives. I know for one, I'd be interested in contributing also to a trading thread [though I focus more on the trading of silver].

Anyway, I'm going to leave it for others to express their opinion on whether it's a good idea to have separate threads for trading and investing in precious metals.

I hear you, but I don't really see why.

 

For those whose "Core position" is 100% of their Gold holdings, I do not see why they cannot just ignore the Trading ideas, or simply take them onboard when they want to Grow or Shrink their Gold holdings.

 

By seeing all the Trading ideas, after a while they may get a sense of which ones really matter to them. So they could ignore 80% or 90% of them, and only react to the Major Signals. They might even ask those who are talking about Trading, "Is this a Major or Minor Buy, from your point of view?"

Do you really think that a reader of a gold thread must either be a trader or a 100% B&H type?

I'd say that many of the readers here are just curious about gold, and then thinking about whether to buy a bit, or a lot, or not. They are obviously going to be more interested in long term trends.

Don't you see your forum as contributing valuable information to a wider readership? Or would you rather see the forum have a more insular focus?

When I signal a "Buying Opportunity" as at the beginning of the year, the pure B&H guys might think of that as an Ideal Gold-Adding Opportunity. Do you see what I mean?

Yep, gotcha.

I think the pure B&H established their core position years ago, and not looking to buy more.... or shouldn't be. though that kind of information is looked for by those thinking about a good entry point.

Still think you need separate threads between trading gold and investing in it. The perspectives are quite different which leads to confusion.

Edit. The use of the linear chart above is misleading. It makes this correction resemble '08 instead of '06, which it resembles a lot more closely.... so far.

 

Since then, I have taken some profits, selling into strength on the way up through $1700.

And I am now awaiting the next buying opportunity. Have I missed it?

Maybe. But I don't think so.

Ok, so you are short term trading gold while on the other hand looking to increase your longs [i do something similiar but on a longer frame and with silver.. though no need to increase my longs in gold]. Have I got that right?

When you say 'longs' I'm assuming that refers to B&H not just the entering of a trade right? Can you see how it gets confusing, and why I suggested having separate threads for trading and investing/ B&H?

The way I trade is: First, I form a big picture view. And then zoom in on a Daily or Intraday chart to place the actual Trade.

 

Here's the Weekly view, and I have featured the 76d.MA= 18wk, and 144d.MA= 30wk.MA ... update

 

 

What do you see here?

I am interested in two main things:

 

+ Where the 18wk. Crosses the 30wk. MA : to the Downside in Red, and to the upside in Blue.

 

+ Where 30wk MA "rolls over" and starts moving lower.

 

The first indicator has given three SELL signals, and we are on the Third one now. We are close to a BLUE "BUY" signal, but it has not yet been flashed. For that to happen, the GLD price needs to climb back over the 30wk=144d MA, and the 18wk=76d MA does too.

 

GLD-Weekly-Closeup-chart

 

Let's see if that will happen soon.

 

The 30wk.ma is now close to rolling over, which might signal a deeper correction. Methinks we have a critical week or two ahead of us.

? If you sold on the red and then bought on the blue, you'd be paying more than what you sold for. And if you sold on the latest red sell signal you'd have sold gold for 1500 odd.

Doesn't that, for trading purposes, then make them classic lagging indicators? The best sell indicator [if trading] has to be the spikes.

Edit: I think I see the confusion here. If you are trading to increase gold, and add to your longs on gold then those sell/ buy indicators wouldn't work.

Where the indicators would work is if one was already long gold and then sold. Or again, if one was not long gold and looking to buy. But here I'm confused again. Because in the first instance you'd be 'losing your position' [though taking a profit]. I assume in the second instance one is going long. Seems to me you're not so much trading gold here as looking for a good entry point.

edit

Assuming you want to add to your longs [not just day trade], why use a daily chart? Why not the weekly chart?

Don't you think that the weekly chart is more predictable if you were looking for 'waves' etc? The trend lines are too easily broken on the daily... way more erratic and unpredictable.

Wonder if it's an attention span thing?

 

DONT SHOOT.... DONT SHOOT!

 

I could be wrong!!!

Is that a typo? Don't you mean DON'T SHORT! DON'T SHORT!?

Hate anyone to think that that's my attempt to 'ramp'.....

I'd rather wait for GLD-$160 or lower - which I think we will see

Yes, likely that gold and silver will come off a bit more here. But think the lows are in with just more consolidation [higher lows] before the upward trend continues.

I look at Gold over various time horizons.

For my next possible entry, I like to look within a 6 months window, and maybe 3 months

If you look at the longer term chart, around now looks like a reasonable entry point don't you think? It shows gold well consolidated to its 'base line'.

Gold is never an easy buy.

Okay.

Here's what I am looking at: update

 

 

The next drop could be (not: "must be") imminent.

A further quick rally to GLD-$168 would not invalidate the Bearish view,

and there are Bearish and Bullish scenarios beyond that.

 

As frequent traders will know, the market situation is rarely clear-cut.

I don't hold substantial trading positions in Gold now. (I do have some core Longs though.)

I slimmed down in the rally beyond $1700, and am awaiting the next Big Buying opportunity,

but shall probably take longs in Gold stocks, as well as Gold.

 

If Gold quickly shoots up to $1900 and beyond, will have missed something, unless I find another entry.

But I do NOT expect that. Does anyone else here?

Gold has been consolidating well for a good few months after the spike to 1900. If you take the 50 week moving average as a rough base-line then it wouldn't come as too much a surprise to see gold spike through 1900/ 2000 odd with the coming months.

The chart you are using looks too short term if you're also thinking about what gold will do in the next few months [ie, will it spike to 1900]. If you're thinking about whre gold will be in the next 3 - 6 months, why not 'stand back a bit' and look at the wider trend? Surely the trend is obvious to the unbiased observer.

And just to add, saying there is an obvious trend does not entail a 100% certitude. Rational investors looks for trends and take calculated risks.