Dispassion

John Authers on the current risk adversion.

http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html

US 3 month t-bill yield at lowest point since 1941

46 users are reading this topic

Exciting times huh?

What's the biggest daily percentage move up in gold of all time?

The movement in gold price does seem a day or two belated, but seems to coincide with the recaptialisation of the Fed.

Look at those Gold lease rates - Sept.16th

 

1-month 0.7761% +0.3409

2-month 0.8209% +0.2379

3-month 0.8906% +0.2276

6-month 1.0520% +0.2607

1-year : 0.9954% +0.2646

/see: http://www.kitco.com/market/LFrate.html

 

This is bullish. Even paper Gold is getting hard to find & borrow.

The big jumps of yesterday are noteworthy

 

6 month rates over 1% ! - we dont see that very often

I've been working on the pricinple that the only reason to borrow gold is to short it.

Am I missing something?

http://www.federalreserve.gov/newsevents/p...y/20080916a.htm

Interesting, I don't think the markets are going to like this!

BIG FREEZE coming?

 

I reckon that there is a real chance that they will Freeze all of Lehman's derivatives trades tomorrow,

and let the rest of the market continue.

 

They they will look for a way to unfreeze trades as they are booked out. They will only do so, if a majority of banks have agreed to this solution

You think the Fed and US treasury will set a precedent and let one of the big four fail?

I've not been following this story but I think that there are emergency meetings expected to conclude before the Asian markets open today. I think they want to put pressure on the other banks to bail them out, I don't expect the banks to take this on completely but I'm expecting to see some news in the next few hours on it.

I just got back from a month long break.

Has there been any great insights into the direction of the Euro/Dollar or into gold decoupling from it?

I could read all thousand or so, posts, but I'm sure that someone won't mind summarising for me.

The world's a very interesting place at the moment, I just hope that it's still interesting when all these power struggles are over. It looks like we're going to need a global state soon, but I don't see it being lead by Russia or the US and Europe doesn't seem to be making much progress.

I would be very surprised if gold was not used as an unnoficial currency in Zimbabwe

I believe that the Rand is the popular unofficial currency in Zimbabwe.

Debt (Fiat) is Slavery; Gold is Freedom (10/17/2005)

http://people.hofstra.edu/Jean-paul_Rodrigue/blogs.html

 

We are getting towards the last mile (or 1.6 kilometer) of an experiment that began for the United States in 1913 with the creation of the Federal Reserve. To put a complex story simple, the dollar was gradually moved away from an asset (gold) based currency to a faith (fiat) based promise to pay which is likely not to be fulfilled. The last strike was done in 1971 when the dollar was finally disconnected from any restraint except the whims, greed and fears of a cabal of individuals operating obscurely, answering to just a few. Not many realize that placing the control of a currency in the hands of governments and Central Banks, which are simply tools of the State, is a process that is the cause of much distress for the average citizen even if the promise is always "price stability". Instead of having money being subject to market forces reconciling the interests of savers and borrowers, money is created out of "thin air", by dictat (this is where I think the creationist theory applies the most), and pumped into the economy by truckloads (and soon by helicopters). Where the money ends is often difficult to predict, but the outcome is always the same; inflation.

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Debt is the enemy of freedom.

Freedom, for who though?

If world currencies were to return to asset based currencies then how would governments prevent the increasing divide between wealthy families and poor families? Money supply does serve a purpose in free market economies, but is the problem with the money supply or the free markets themselves? Regardless of monetary system, freedom for people, in general, can only come from an equal distribution of productivity and the nature of using money to make money is the enemy of this. Proponents of free markets would argue that without personal investment, productivity cannot be planned to efficiently increase standards of living, but the fact that half of the world lives on 2 dollars a day indicates, to me, that analytical planning would struggle to do worse.

Here's some stats on freedom:

http://www.globalissues.org/article/26/pov...facts-and-stats

http://www.guardian.co.uk/money/2006/dec/0...ternationalnews

What do you use to define the dollar in absolute terms? The USDX is 57.6% the euro.

The USDX Components

I don't, over the timescales that we are interested in I don't believe that there is a good measure of the purchasing power of any currency apart from inflation figures.

I posted a similar chart a week or two ago, here. I'm just observing that the gold price has acted as a magnifier on the relative value of the Euro to the Dollar for a number of years and that the current movement in the Euro/Dollar and dollar index has been lead by Euro weakness instead of Dollar strength.

I think this dollar strength is a temporary thing. They are just paving the way for the next wave of write-downs. I don't buy into the bubble popping of commodities, I believe this is just a healthy correction in a bull market. Think the commodities super cycle will be resuming soon.

 

Ask yourself how can the dollar be gaining strength when they are bailing out everything, while running the printing presses at full speed.

I think that the key factor affecting the gold price, isn't how quickly the dollar devalues in absolute terms, but how it performs relative to the Euro.

$850 region looks to have lots of support based on MAs, previous bottoms and retracements, but for it to hold are we predicting the end of the correlation with Euro/Dollar and Dollar Index, or are we prediciting a change of direction for the dollar too?

Apologies, if this is old news, I've been away for the last week or so.

11 Aug, John Authers demonstrates that the long term correlation of commodities with the dollar has ended.

http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html

It looks to me that the threat of global recession is leading the markets, driving down commodites, which has lead to the strengthening of the dollar and that gold's response is still more closely matched to the dollar. If we are to see a global recession and continuing strengthening of the dollar, do people see an end to this trend too and over what timescale, or are still people looking to TA as a predictor of future gold price?

Yes, me too! The main thing is to have a position and hold it. Short term prices mean diddley squat. we know that there will be panic selling... then panic buying.... main thing is to add to your postion when you can and keep your eye on the end prize.

I agree, panic buying or selling isn't profitable, but the thing that I don't see on this forum is discussion about exit strategy. Most posters hold gold, want the price to go up and don't like to see negative posts about it, but to have a forum that only attracts people who believe that the gold market will outperform all others indefinitely is likely to mask the risks.

Well, my wealth has not been preserved particularly well going down the route of PM's (But that is more to do with my terrible timing, for which I slowly learning to improve!) The thing is I understand the arguments, I know what challenges they face and there only route out but they have bouncers on the fire exits!

This volatility is exaclty why I, unpopularly, argue that gold is not a preserve of wealth but a speculative investment.

Although the long term trend holds, you really wouldn't consider your wealth to have been preserved if you bought at any of the troughs in this chart and sold at the subsequent peak.

http://en.wikipedia.org/wiki/Image:Longter...ldlogtr1800.png

Relative to stocks, volatility of 300% is common and 4,000% in the extreme. Over lifetimes purchasing power may be relatively constant for a quantity of gold, over the time scale of years to a decade, the story is very different.

Sure, how's this :

=============== $1,032 TOP

x SQRT (Fibo.6812): x 0.8257 (that's a meaningful number, SQRT of 68.18%

TARGET ======== $ 852 RETRACEMENT LOW

 

Howzat ??

$850 region looks to have lots of support based on MAs, previous bottoms and retracements, but for it to hold are we predicting the end of the correlation with Euro/Dollar and Dollar Index, or are we prediciting a change of direction for the dollar too?

stefanmo on GIM is doing a regression plus chart on a regular basis:

http://goldismoney.info/forums/showpost.ph...p;postcount=175

 

I personally don't have USDX data.

Pretty similar, but this is to be expected since the Euro is most of the basket in the dollar index.

http://www.akmos.com/main/forex/usdx.html

Bottom line - watch USDX, don't watch EUR:USD to better predict the price of gold

This is a good point, perhaps Goldfinger can produce a plot to correlate the dollar index with the dollar price of gold, for comparison.

Good chart!

Showing clearly that the correlation between Eur:Usd and gold began at the start of 2006 and as held very well since then.

Some charts posted here yesterday showed how well gold has tracked EUR:USD - but only since the US started lowering interest rates this last year or so.

You asked for raw data in a previous post, I don't have it, but I'm sure it can be found.

The correlation goes back further than one year, but has become stronger since the credit crisis took effect, for the moment I'm of the opinion that gold is acting as a magnifier on EUR:USD. I think it could take time for this correlation to leave the markets as I expect that it's ingrained in trading strategies.

As major currencies weaken together, I'd naturally expect gold to trade more like commodites and out perform them in a recession. The question, for me at the moment, is how long gold will take detach from the the Euro dollar ratio if the Euro is to weaken further against the dollar.

John Authers on currencies and commodities followed by a summary of the credit crunch to date.

http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html

how about this one:

$828.80

If Small C is equal to Small A, the target for Small C would be about $828.8 ($986.0-$158.2).

http://news.goldseek.com/AlfField/1218028638.php

 

 

now, imagine how many people will lose buying at 850 , get burned, and miss the run to 1600, because they will be thinking it will go to 730 or 650 or somthing like that ....

I think if we get this low we'll be at the 300 day MA, correct me if I'm wrong but, I'm pretty sure that gold hasn't retraced that far, with respect to MAs, for the entire bull.

Considering the gold chart in isolation, the odds are very much in favour of the longs between here and $850.

However, the correlation with the dollar is still very stong and from a technical perspective, this is what is holding gold back. The euro/dollar is right at the bottom of it's trading range at the moment, it'll be interesting to see where it goes from here.

Recently I read quite a good article which claimed that deflation is better for gold. I wish I could remember where it is

I've read this in a number of places. Interestingly, they all also argued that gold doesn't, historically, perform very well at times of inflation. Which would seem contrary to the most commonly held view that I see on gold forums. I don't want to ignite the whole - what is gold debate, but it seems to me that gold's purchasing power, historically, has varied wildly, if I recall correctly, by two orders of magnitude, so I don't see it as a preserve of wealth, but as a speculative investment with good prospects in the current economic climate.

Looks like gold lease rates have gone negative again!

I'm sure some of you can explain this, but I've not had much luck finding an explanation that I have much confidence in, so far.

Agree, Ker. 850 most probably by next Tue, assuming we get a mini bounce from here

We're well in the MA support range now.

The region around 850 looks very strong.

If we see $825 again, then I'd be thinking the bull is over.

OK, I have moved all the posts that resulted from my innocent little post to a new thread.

Do you know how much work that is ?!

I am never going to make the mistake of asking an innocent little question like that in the wrong place again

 

It's here:

 

The History of Gold, And why it makes a good money

http://www.greenenergyinvestors.com/index.php?showtopic=3963

 

I hope that's OK with everyone

Good plan.

Although the discussion about what gold is seems trivial to me, it does seem to be a very popular discussion, so to prevent it polluting a more useful thread, my suggestion would be that it is pinned in the main discussion, and that the scope is opened to promote a discussion on how gold has performed historically against currencies and at times of economic stability, inflation and deflation, but this is just the suggestion of a newbie to the forum and meant to be taken as such.