50sQuiff

Gold wanted to go in the opposite direction to equities and they smashed it back down. As you say, this is welcome. The chart looks just like a BOJ yen intervention, yet no-one thinks that's a conspiracy theory.

"But I think some large amounts of Gold may have been recovered in pre-historic, and pre-industrial times" I think this is unlikely. On what basis do you believe gold was more abundant and recoverable? I do agree with you about the likelihood of large quantities of unaccounted gold though. The Philippines example was a good one, and it's a no-brainer that China and Russia do the same on a larger scale. Then there is good old 'Foundation X' What I don't agree with is your line of thinking that says these elites, who seek to preserve inter-generational wealth over hundreds of years, are somehow waiting for a gold bubble to unload it. They will hold whatever keeps their great-grandchildren wealthy and powerful. Ergo, they will hold gold, land and so on. It's why there is never any net private divestment of gold in a given year. They never sell their land either.

Indeed, I'm just talking about investors, BTL hacks and second-home-is-my-pension types. As possible marginal price-setters right now I think they're pretty important to the market. To own the roof over one's head has utility that I don't think you can easily measure in currency.

Thanks for running the numbers. I think the people who say "inflation adjust prices don't matter" are missing something. The continued underperformance of property as an inflation hedge will slowly erode the key pillar of property investment: "you can't go wrong with bricks and mortar". Once it becomes clear property is an extremely poor inflation hedge this class of investor may move into precious metals and mining shares. This could still take years though, such is the entrenched perspective on property.

Silver has had the kitchen sink thrown at it in the last 6 months and they STILL couldn't break its uptrend. Speaks volumes imo.

I think folks looking for $15 are dreaming. The trend is completely intact for silver:

In pure NSA terms Halifax has just hit a low not seen since July 2009. Big monthly fall for this index.

Indeed, why bother implementing an illegal retrospective tax on legal tender when you've got all those ETFs and bars to tax? Anything is possible I suppose, but I'm betting that they won't go that far. On another note, Clive Maund has called gold as well or better than anyone this year. He called the top, got bullish at the bottom of the correction and cooled off when we were about to consolidate downwards. He's now bullish and calling for a breakout. See his latest here: http://www.marketoracle.co.uk/Article31930.html His full list of articles: http://www.marketoracle.co.uk/UserInfo-Clive_Maund.html

I wonder if they actually took delivery, or whether it's still safely in the BoE vault being used to 'back' GLD? Some food for thought form GATA and a campaigning Mexican journalist: http://gata.org/node/10481

I don't have any myself but they're gold, they're legal tender, what's not to like?

Interesting, please do share your 'indicators' as we progress I had an interesting signal of my own during the recent short-covering spike to $1920. A gambling spread-bettor type in the office was massively leveraged long gold. He was the only person I've met in real life who had any interest in gold, and his way to play it was massive leverage paper trading. In the violent correction that ensued I have no doubt he lost his entire position and possibly his account. Unfortunately he moved to one of our overseas offices during the process so I couldn't get a handle on the situation.

Just to play devil's advocate, some have argued that because silver is a strategic metal for industrial, energy and military purposes, it's more likely to be requisitioned if supplies become scarce. Personally I don't buy that. Governments will be able to monopolise new mine supply to take care of their needs.

Eh? By your own definition, none of the assets I listed are liquid in Britain.

I would've thought gold is being sold because it's liquid globally. Can you spend your BP shares in Tesco? Or gilts, US Dollars or your ISA bank statement for that matter?

Bit of a strawman argument about Sprott from your hedge fund manager friend. Did he ever say "put all your money into silver NOW" at $50? He's always advocated dollar-cost averaging over time, as far as I know. Whether he was recommending silver at $4, $30 or $50 is immaterial. If you followed his advice you would have done very nicely. I wish I had listened earlier.

But central banks aren't speculators so you have to look at their motivations and psychology differently. Brown's gold sales were not only the end of a political war on gold, but a desperate act to bail out a major bullion bank. As the famous quote from GATA goes: Moreover, I believe central banks were buying at the peak in 1980 because Europe truly thought that the dollar system was about to break down (well chronicled in Gold Wars by Ferdinand Lips). Volcker made a stick save and they looked foolish. Smart investors like Jim Sinclair saw it coming and moved into bonds. This time it isn't going to happen - we're at the end of the dollar reserve system's lifecycle and a top in bonds rather than the beginning of a new secular bull. So I think the monetary stars are aligned very differently this time around. We're also in a global depression cycle now so no country has an incentive to accept a strengthening currency. This position has been vindicated by the Swiss going against their entire raison d'etre and devaluing.

Perhaps I'm mistaken but algorithmic trading - by definition - must be technical in nature (ie. based on rules or heuristics). With the dominance of such trading it seems that the short-term trader has no choice but to pay strong attention to technicals. The prevalence of fibonacci retracements, for instance, is incredible, including in the long-term gold charts (cf. Alf Field). I think at some point (perhaps in Elliott's time), there were emergent phenomena that could be observed in markets. When the algorithms began to arbitrage every one of them away, we're left with purely self-fulfilling prophecy. The end result is chaotic high volatility isn't it, due to the market being one big feedback loop dominated by computers.

Paulson Schmaulson. Kyle Bass has guns, physical gold and a million dollars in nickels in a vault. Now that's commitment.

I would've thought the US agences could be very persuasive! He has leant a lot of underserved credibility to GLD over the years and his gold funds have underperformed. You would've thought his sheer prominence after the 2008 crisis would've made him conservative. Instead he seems to have a abandoned strict risk controls and turned into one of the worst performing funds in the world. On the other hand, maybe he's become delusionally rich, or he's human and just kept screwing up. Anyway, this is just a 'fringe' speculation on my part.

Perhaps this is for the Fringe section, but it's crossed my mind that the Fed/Treasury may have said to Paulsen "you can keep your ill-gotten gains from the mortgage crisis if you help us out with a little problem, otherwise it's Guantanamo for you my friend". His performance this year has been beyond shocking for an elite hedge fund manager and the timing of these sales is Gordon Brown-esque, just as Europe is falling to pieces.

A combination of a resilient international economy, HNW BTL investors, obscene housing benefit and HUGE numbers of house-sharing Eastern Europeans (so many 'family homes' sliced and diced into flats and shared houses) all combine to ensure rents in London are numbingly high. I'm thankful I negotiated a 12% reduction in 2009 and I've kept at that level since.

Fair enough Bubb - your house, your rules. That image is pretty popular around the web so still a harsh ban in my view. And apologies - it's not for me to tell you how to popularise your forum. In any case, I'm glad some of us questioned the wisdom that trading options is the best way for people to better and protect themselves. I hope some good will come of it all. When I heard a veteran like Dan Norcini talking about how the most hardened traders are getting shredded by volatility and market interventions, I had to wonder how wise it was for non-professionals to be stepping into the breach at this point. You were encouraging it in the most unqualified and blasé fashion. I quite like the idea of trading as a potential sideline - I am a former gambler after all. But I freely admit I would be "scared money" in this climate so I steer clear. From a personal perspective, I made the prediction that brokerages may go bankrupt and options accounts could just disappear, with the implication being that corrupt practices are being used to mask insolvency. When this exact scenario came to pass just a few weeks later with MF Global, I was surprised at how you downplayed the situation.

Completely unjustified. Not only is the image he posted perfectly accurate, you goaded him into it by - once again - mischaracterising "buy and holders" as idiots with no cash who refuse to countenance any dips in price. Not only do I welcome these buying opportunities, I also waited patiently for it for several months. I have cash flow and consider gold a savings vehicle, rather than an investment or trade. Hence the "buy and hold" approach. This thread should be for general gold commentary, so it doesn't need the "buy and hold" subtitle. You and Pixel need to call a truce before the forum degenerates completely. Difficult times are ahead and this is a forum has role to play. It's full of interesting people and it also caters to a certain type of HPC poster that doesn't hate every private sector business or profession. I'm glad I came across it and you need to welcome more people looking for something beyond HPC. For what it's worth, I think you would do better to place less emphasis on trading options and more on the macro investment themes, politics, philosophy and longer-term investment opportunities and so on. GlobalEdgeTraders.com would attract a very different crowd, and therein lies your problem. Posting about "kicking the crap" out of long-term investors with your options strategies, on a forum called GlobalEdgeInvestors, seems really likely to put people off. The dangerous part is that a new reader, somewhat new to financial markets like I was a few years ago, would actually get the idea from this forum that he should be shorting gold as a strategy, based on your posts.

I wonder if the Russian or Chinese central bank would agree with you? Shrimps like us can pick up our bullion for a while longer yet, but the giants of the world have to accumulate slowly or the price will run and gold will go into hiding.

You have to bear in mind these transactions and prices were settled months ago. I've updated the thread here: http://www.greenenergyinvestors.com/index.php?showtopic=15252&st=40&gopid=231103entry231103