Catflap

That depends if your simply measuring the stockmarket by it's price or it's earnings and yield - US and UK stocks have been falling in value since the bursting of the dot.com bubble where p/e ratio's were at a peak. On this measure, the real value of stocks has been falling from 2000 to 2009 as gold has been rising but we got to a point where stockmarket valuations got far too low in the crash just like 1974 - the markets were pricing in another Great Depression in a panic sell-off where everything of value was liquidated regardless of fundamentals, gold included through the paper markets. If we now go back to the end of 2008 and the beginning of 2009 then on a p/e ratio stocks had a significant low and had been oversold - eg. UK stockmarket was trading on a p/e ratio of 6.8 on 6 March 2009 the day before this rally started - even China was 8.9 which was incredibly cheap considering it had been over 25 in 2007. You would expect to get these kinds of valuations at the end of a secular bear market in stocks/bull market in commodities. The problem now is that stocks have likely entered another bull market as they did in late 2002/early 2003 which I think could last until the end of the year or beginning of next year but with gold 3 times the price it was back then. Some stockmarkets like China's could go back to their 2007 highs by the beginning of 2010 but even if they did that, they would probably be on a lower p/e to what they were in 2007. The final p/e low for stockmarkets is likely to be towards the end of the next decade a couple of years or so after the gold price peak where stocks will be a screaming buy - that will be the end of the commodity cycle and the equivalent point to August 1982. Maybe there is a graph somewhere that can compare the stockmarket in terms of it's earnings to the POG?

OK - first the graph. I think it's wrong to compare 1929 where the stockmarket was at it p/e peak with 2007 where it wasn't. If you want to compare the 1929 to 1932 Dow with anything then compare it with something like the 2000 to 2002 Nasdaq which had a 77% fall over a similar period of time or the Nikkei from 1989 to 1992, a similar period of time also. Those were p/e peaks of excessive overvaluation and interestingly, those 3 biggest crashes have all started at the end of a '9' year or beginning of a '0' year - I've often thought that the dot.com bubble should have burst in late 1999 but the significance of a new milenium probably carried it through to 2000. Yes - too much bullishness on gold and too much bearishness on equities despite bullish indicators. Does'nt seem likely to me at the moment, but if we go back to the previous highs with all this stimulus money and 0%/0.5% interest rates then we could get back to the previous highs (like in 1976) from where the problems resume. I can't see why equities would correct anymore from here - yields are high so why sell when interest rates are so low? It happened in December 1974 to August 1976 - why should it been any different now?. Gold tends to go up if stocks are going down and visa versa. Talking about inflation, what inflation?!..... that could be years away. Yes, there could be high inflation or even hyperinflation in the future if things get really bad but that's a long long way off. We are getting a small amount of deflation at the moment which will gradually turn back to low inflation but we are a long way off even getting back to even 80's or 90's style inflation let alone 70's or hyperinflation. Before we can get high inflation the banks have to be repaired and acting normally again - as I see it, all this money that is being created to support the banks isn't going to come flooding out in a hurry just yet. Remember that gold isn't a hedge against inflation like many say it is but is a form of insurance against corrupt government and the worst economic conditions - investors will always put their money where they can make the best return, even if that means dumping gold in the short-term.

I think this article is actually a warning of what could happen next with gold based on where the stockmarekts are at, although the author doesn't want to tell you anymore unless you pay a subscription. I've done a lot of work on this myself and know what he's getting at, although he refuses to spell it out directly he's basically saying that if you are overcommitted, leveraged or have all your eggs in the gold basket you may be in for a rough ride from here. That's why he is quoting the stockmarkets, because in in terms of duration and falls we are at a similar point to early 1975 from where gold made a big correction (although it was more overvalued back then in relation to peoples earnings at that point than is the case today) Given there is so much bullishness on gold and still much bearishness on equities, the contrarian would be betting the other way - ie. a big rally in equities and a decent (large?) correction in gold. The correction in gold in the mid-70's would have had many on here heading for the exits and feeling very depressed which is why the author of this article is saying 'be careful here'. Not many people saw the large crash in stockmarkets and commodities coming and everyone (myself included) was bullish on commodities for the future. I've been doing exactly the same thing and also believe a bull market is already underway in equities for the same reasons - people will keep calling this a bear market rally all the way to the top when in fact it is a short cyclical bull market in a long (17 to 20 year) secular bear market that will not end until p/e ratio's are at their lowest towards the end of the next decade.

Gold investment has more room for growth http://www.moneyweek.com/investments/preci...Money%2BMorning

Useful charts of gold in GBP going back to 1973: http://goldprice.org/gold-price-uk.html

Doesn't make any difference as I see it, markets are irrational a lot of the time - inflation lags the increase in money supply so it may not show up for at least another year, maybe longer. Most people (and some traders) don't know about the potential gold bull that is set to last several more years, they have no idea of cycles just what they see on a day-to-day basis - I know it, you know it but the masses that drive the market to the new highs don't know what's going to happen until much later (just like house prices....) For gold to go much higher than £1,000 there needs to be more buyers coming into the market and those are likely to be new investors, like some people reading this thread perhaps who are educating themselves but have no gold positions yet. Without more demand then prices cannot go any higher than they are and that new demand I think needs to come about when less savy investors can actually see inflation going up - just like house prices, when prices start to move up more and more people take notice until you get to the mania phase, the best part.... for us Look at the inflation stats below and remember what happened to the POG from December 1974 to August 1976: http://swanlowpark.co.uk/rpiannual.jsp We've not got anything like this at present - if you inflation adjusted the 42% nominal fall in gold prices in the above period I would hate to think what in comes to in real terms.... so far gold is holding up despite the SM rally which is good but I really can't see it going higher if the SM does what it did from December 1974. Gold up, stocks down, gold down, stocks up - that's how it seems to go. Hopefully really good buying opportunities ahead if enough people pile back into the SM and take it back near to it's 2007 highs (could happen!). Found this which was a fit of fun as well: http://www.bankofengland.co.uk/education/i...eline/chart.htm

That just changed within the last couple of hours!! P&F chart now has a preliminary bearish price objective of 77 for the dollar - perhaps gold is going higher for a while yet.

More gold ramping! Hmm - that was when it was cut loose from it's fixed rate to where it spiked for just one day in January 1980 - the average gold price for January 1980 was $675. I'm not a fan of Jim Rogers and I'm still expecting a significant gold correction if equities have a monster bear market rally (cyclical bull) which lasts until the end of the year or early next year back to the previous highs. Yes, I know everyone is going to think I'm crazy and nearly everyone probably thought this was a crazy idea at the beginning of 1975. If anything this seems more likely to happen today as inflation is low and interest rates are low - the final leg of the of the equity bear market will have to begin at some later point and that's where I see gold taking off again.

Gold not far off entering it's summer doldrums and dollar index looking very oversold on daily and weekly charts: Dollar Index (daily) Dollar Index (weekly) P&F chart also has a bullish price objective of 112: http://stockcharts.com/def/servlet/SC.pnf?...,P&listNum= I don't know if gold will go much higher if the dollar starts strengthening - seasonals in USDX says that it should get stronger from here.

Yep, correct - whatever you do buy the house at the bottom even if the average house is still above 100oz gold, but put as little money down as you can as the last leg of the gold bull coud see house prices and gold rise together (as they did in early '77 to late '79) and peak about the same time.

I agree, a large deposit would still be needed so this argument maybe doesn't work as well for those that are 100% invested in PM's - for those that hold some cash or can get help with a deposit then it still works. I just don't think I would like to risk missing the bottom of the housing market when it came because the average house was still more than 100oz - we all hope it will go well below this but you can never tell what will happen in the future because of what has happened in the past. I'm sure most of us ultimately want to buy a house when they are at rock bottom so we can get on with our lives - postponing the purchase of a house for another 2.5 to 3 years past the bottom in the market because 'UK House Prices in Gold' have not reached their lowest point probably isn't the wisest move. There's going to be the uncertainty of how much further gold prices will rise, trying to time the top and buying into a housing market that could also be at a short-term peak like in late '79. Ultimately, I think the stratergy I outlined may prove better financially, less risky as well being a lot less stressful!

Not sure - it could work differently this time, but I would expect there to be a corresponding rise in house prices along with gold if they reach a bottom sometime between late 2011 and late 2012 and there is significant inflation. The pattern of a mini-boom like this could occur again where house prices peak at around the time that gold makes it's peak in 2014/2015? - the point I was trying to make is that you might not even need that much gold to buy the average house outright, so long as you buy the house at the bottom of the market with mininal money down and hold onto your gold positions. Obviously you still have to make the interest payments, but if you've bought near the bottom then it's likely that this is going to cost the same or less than the cost of renting anyway so it's still a winner. Any spare money could then be invested in the stockmarket at around 2017/2018 which would likely be the absolute low point in price earnings valuations from where a new 17/18 year secular bull market in stocks might begin.

Something I've been meaning to analyse is a UK House Price in Gold 'Offest' - the idea here is that you buy your house at the absolute bottom using the smallest deposit possible and hang on to your gold positions as both houses and gold rise in value. Let's look at what happened last time when gold was in a bull market: Gold averaged $675 in January 1980 when gold hit it's 1-day peak of $850 - converting this 'achievable' average gold price of $675 in January 1980 back into pounds using the following tables found below: http://research.stlouisfed.org/fred2/data/EXUSUK.txt This gives an exchange rate of 2.2641 for that month which gave an achievable gold price of £298 for those in the UK in January 1980. The Nationwide data says that the average UK house price in Q1 1980 was £22,677 (House prices again peaked at around the time that gold peaked after a mini-boom that started in Q2 1977 - this is what you see on the Natiowide graph and it came after the 1973 peak in house prices due to to negative real interest rates and was followed by another recession in 1981) So to recap, back in January 1980: Average house price was £22,677 Average gold price was £298 That means that the average house was 76.1oz of gold. Here's the interesting bit Had you bought where the average house was 76.1oz of gold, you would have been buying around the peak of the housing market The late 70's mini-boom in house prices ended with a peak in Q4 1979 (just before gold peaked in January 1980) and prices fell in real terms for nearly 3 years until another bottom in Q2 1982. The bottom of the housing market after the 1973 crash came in Q2 1977 where the average house was £12,689 - offsetting this house price bottom with the gold price peak just 2.5 years later in January 1980 would have meant the average house was only 42.6oz of gold. As an example, lets say house prices bottom in real terms in Q2 2012 (could be even longer) and gold peaks about 2.5 years later in Q4 2014 - the best stratergy is to buy your house as near to the bottom as possible (as in Q2 1977, Q2 1982* and Q4 1995*) with the least money down if we've got decent inflation and hang on to as many gold positions as you can until the peak. That might be when interest rates start rising and the housing market begins stalling once again - 2014 is just a projection I have but no-one knows how bad this is all going to get and how much inflation will be created. But buying a house as near to the bottom as you can has got to be the best thing you can do - no point waiting for gold to hit a peak before you buy as that will likely be a peak in housing as well!. Catflap (* at the 1982 and 1995 lows you would have put the least money down on a house and everything else into the stockmarket)

Pathetic - I don't know why he just didn't sell the lot and have done with it. Switzerland has a population of only 7.6 million so that is impressive.

I'm not so sure - I think they are both and investors will buy them if gold 'looks' expensive in comparison. http://stockcharts.com/h-sc/ui?s=$PLA...id=p99596281105 http://business.timesonline.co.uk/tol/busi...icle5704941.ece

50+200 DMA isn't precise enough, I think the futures markets tend to use similar DMA's to what I am using. I certainly wouldn't use them for picking tops or bottoms - for that I use stochastics

Both silver and platinum look better value than gold atm: http://stockcharts.com/h-sc/ui?s=$SIL...id=p94531117998 http://stockcharts.com/h-sc/ui?s=$PLA...id=p94531117998

Gold now looking bearish to me - head & shoulders pattern and the crossover with the moving averages: http://stockcharts.com/h-sc/ui?s=$GOL...id=p43996656231

I'm getting conerned that the inflation beast is already stiring with all this money printing. http://www.forbes.com/2009/03/18/consumer-...-recession.html

I'll just add something I read on the HPC newsblog, made me laugh and made me think - 'flashman' seems like a very clued-up city trader who tells it like it is. Hope DrBubb and other EW users on here don't mind as his comments are quite cutting but he seems more than qualified to say such things: http://www.housepricecrash.co.uk/newsblog/...ounce-22461.php

Huge 12% spike up in Randgold Resources this morning.

Stochastics breaking below 80 at exactly the same point as this time last year (mid March) http://stockcharts.com/h-sc/ui?s=$GOL...id=p66370829266

I own Hochschild Mining the other FTSE 250 listed silver miner - done very well for me so far.

A contrarian might take it as a warning bearish signal to sell since it's doing the opposite of what you would expect. This happened in December 1974 when the Dow made it's final low on Friday 6th and gold made a new high 3 weeks later on Friday 27th and Monday 30th. If the bottom in stocks was Monday 9th this week then I think it's possible gold could go higher whilst the market decides what direction it's moving in as everything is at a crossroads right now. So gold could still make a new high if stocks begin an early rally although you wonder with the information at the touch of a fingertip these days compared to 1974 and the use of TA whether the same thing would still happen. Thanks, excellent article - puts all those stories into perspective and how they are done to get people buying at a short-term peak. When you read these predictions of $2000 gold for 2009 you wonder how many people are believing it - the prices people are paying on Ebay and the number of bids each lot is getting is amazing. I think he got a little carried away right at the very end

This is definitely GEI - if you need HPC then here's the link http://www.housepricecrash.co.uk/forum/ind...p;#entry1730468