Catflap

Best of luck with it all

 

But I should add that I think hard commodities will fall further still over next 6 - 12 months before recovering. That said, I would/will start easing (back) in at a little below current levels.

Ta

Yep, think your right - now I've seen the relationship between the dollar index and commodities/gold then I've got two options now. To hopefully still make a small profit in the coming weeks and then go short for the next dollar rally or just stay invested where I am and come back in a years time.

One question I've been meaning to ask re shortage of bullion gold/silver - if the next pullback/dollar rally takes gold and silver lower still and there isn't the physical available then is simply buying anything made of gold/silver an option?

Even if there's no coins or bars there is still physical stuff everywhere just in a different form? (ie jewelry etc). The reason I say this is that I've seen loads of comments about there being a shortage!..... at the end of the day gold is gold in any form surely and the price will go up the same.

What's likely to happen in the mania phase?..... will people buy anything that is made of gold?

Oh and another question for anyone reading - why are people buying new silver and paying VAT?..... surely 'secondhand' silver is better as there is no VAT?

I'll also stick my neck out with a prediction for this month...

 

- next few days DOW and FTSE start to fall precipitously, such that they reach 10000 and 4500 by month end

 

- emergency base rate cuts happen or are signalled (BoE missed its chance today)

 

- commercial bank baleouts extended / increased

 

- Sterling will fall further, reaching 1.65 vs USD

 

- oil does not fall below 90 (and probably not much below 100), and the fact that its refusing to go lower will become a palpable concern

 

- inflation stats rise significantly

 

- all the above will cause a ramp up in fear, and gold will start to rally (6-8% up in USD, 10-15% in GBP)

That would bail me out nicely - I thought I had timed the commodity bottom perfectly and dumped a load of money in after the big drops, but have lost a little these last few days. This rally has to end this week - $ and financials doing better than finite commodities ffs!!. We ARE in a secular commodity bull run with volatilty and pullbacks - the trend is up, just need to hold it together and go against the sheep!

Hopefully the US $ index has peaked.

A great Zeal article from last year which explains the changing relationship between gold and the dollar index from stage 1 (the first few years of the bull run) to stage 2 (where we are now):

http://www.zealllc.com/2007/goldusdx.htm

Gold Targetting ABC Trend to $900:

http://www.marketoracle.co.uk/Article6073.html

we are right at the intermediate top in the $USD

Great chart Ker - do you have a source or is it your own work?

I've been buying commodities recently since the bottom so this should really help to determine another top. I might have to consider setting up a dollar account when I sell rather than leave it in sterling cash.

Any further analysis on Elliot waves for the US dollar index from anyone would be great - still learning this one, so simple explanation needed

Here's a good read as well (showing how US Dollar is a mirror image of commodities):

http://www.marketoracle.co.uk/Article5911.html

BlackRock Gold & General today put in a higher low

It's worth putting what VedantaTrader recently wrote over on HPC (Northern Ireland section) as he's a top poster - the link to the thread where this quote comes from:

http://www.housepricecrash.co.uk/forum/ind...=83754&st=0

Gold is a fantastic buy. I mean I m not a gold bug out of trendiness, or any bias to the yellow stuff. For 20 years gold was a terrible investment, and there will be a time again when it won’t be appropriate to buy gold, but to sell gold. Gold is incredibly cheap.

Most people seem to look at just the monetary hedge of using gold as an investment, and forget to study the supply and demand fundamentals. Like peak oil, peak gold exists also. Production for gold peaked out in 2004, and in that time demand has reached records, especially in India and China. Forget even the monetary inflation being bullish for gold, but the supply and demand fundamentals are extremely bullish for gold also. My price target for gold is anywhere between 4000 USD to 10,000USD. I know that it is a big range to target, but I have my reasons for that. We can discuss it in another post.

Perhaps someone can talk him into posting a bit here?

Isn't it 'normal' to get a strong pull-back half way through the commodity cycle?

http://www.marketoracle.co.uk/images/adench2-jan15.GIF

Why shouldn't it be possible? Of course, it could happen. In the 1970s, gold had a huge run-up, then plunged 50%, then had another huge run-up.

50% from $1,000 would be $500. I would be buying all the way down. In fact, silver looks now so attractive to me that I am very, very tempted to buy some on credit (NOT margin).

 

This is exactly when I want to buy: when everyone is predicting the end of a commodities market and price inflation, but the fundamentals scream the opposite.

 

This volatility (in gold) has been predicted by Jim Sinclair for a long time. People on margin will see their lives passing by (is what he said).

 

It's a rollercoaster! Weehheee!

 

EDIT: Last year I thought gold would only by a small chance cross $850 within a year. I didn't even think of $1,000! Now, look where we are. I am tempted to lever myself because gold is DOWN to $850 and below.

I was looking at what happened to gold in the 70's at around '74 because that was 8 years into the bull market in commodities and one year past the peak of house prices in '73 - it does seem like a little bit of history is repeating. Cue 2008 which is also 8 years into the bull run in commodities and one year past the peak of house prices. My own view, FWIW is that it's worth looking at what happened in this period from '74 onwards insofar as the same things are happening - gold might recover to it's previous high before falling like it did to a low in August 1976 or this could be it falling now - who knows.

It was from that point in August 1976 that gold rocketed so this same point might well be 2 years away IMO - that's when I will be seriously looking at gold, once the deflation in house prices is largely over in 2010.

The fundamentals have not changed. What we see is a nice correction in a roaring bull market.

 

The same people who were asleep at the wheel when the whole mortgage mess developed (or who even caused it) are now telling us the (commodities) inflation threat is over? Yeah, sure. I am betting against them with all I have.

 

Edit: typo.

Me too, but biding my time a little - this commodities bull run is set to last another 10 years and is far from over.

By the way, does anybody have reliable figures for average full-time salaries in 1980? U.S. or U.K would be good.

For 1980, mean gross weekly earnings for adult full-time employees in Great Britain were £110.20 which is £5,730 a year - from the ONS data I have.