wrongmove

have they got deflation in Iceland at the moment

 

and any TA users in Iceland that predicted their currency collapsing

I don't know - I just posted that I am a bit of a TA skeptic, but I certainly find TA, and the opinions of those who use it, of interest.

Far enough comment, but could you qualify it?? For example, he is very bearish on gold short term/ medium term.....

 

Correct me if I am wrong, but I very much doubt Ker is bearish on gold altogether.

 

 

Edit: Given the idiosyncracities in both the market and the economy these days, I would not take too much notice of TA.

Well, he's bearish on the short, medium and long term, so I would say he is pretty bearish overall.

As for TA, I am still a bit of a skeptic, but less so than I was initially. I posted the article as it chimes with the OP in this thread, and reminds that some people see downside, as well as upside, to the PoG - to broaden the debate. I am interested in what the TA users make of the analysis.

On the technical front, Merv Burak has been pretty accurate so far. He is very bearish on gold for TA reasons, similar to Ker.

Technically Precious with Merv

"For week ending 17 October 2008

It’s been down hill all week with only Wednesday providing a minor bit of relief. It looks like we might be heading for new lows as early as this coming week. Never a dull moment......

.......From the long term stand point the indicators are not positive. Gold is below its negative sloping long term moving average line while the momentum indicator remains in its negative zone below its negative trigger line. The volume indicator is well below its negative trigger line. Long term gold can only be rated as BEARISH........

.......On the intermediate term things are no better. Although gold has been tracking a somewhat lateral path for a few weeks it has now broken decisively to the down side and is once more heading lower. It is below its now negative sloping moving average line. The momentum indicator has also moved into its negative zone below its negative sloping trigger line. As for the volume indicator, well that indicator is still moving sideways (although I do not have the volume data for Friday which might push it lower) and is sitting right on top of its trigger line. The trigger itself is sloping slightly to the down side. All in all there is nothing here to grab on to and seem bullish. Gold, on the intermediate term, can only be rated as BEARISH......

.......Other than Wednesday it was a lousy week for gold. Gold is quickly moving away from its short term negative moving average line and the momentum indicator is moving deeper inside its negative zone. The daily volume action is low and not giving us any specific message at this time. Finally, the very short term moving average line remains below the short term line indicating that the down side prevails. The only rating one can give the short term with these indicators is a BEARISH rating..........."

His capitals, not mine, BTW. I would appreciate any comments on his analysis by the TA users.

Article in yesterday's Independent:

Spending on gold nears $3bn as investors flee shares

Investors spent $2.8bn (£1.6bn) on gold on world stock exchanges in the third quarter this year, as individuals and companies fled volatile share markets.

 

According to the World Gold Council (WGC), 145 tons of gold were bought on stock exchanges in the three months to September. This meant that gold held by investors on the exchanges hit 1,000 tons for the first time since the metal was introduced on the US bourse in 2004.

 

Natalie Dempster, the WGC's head of investment, said: "The question we get from high net worth individuals and funds is no longer 'why should we invest in gold?', but 'where can we go to buy it?' "

 

Gold offers a product with a more stable price in the current market than company shares.

 

James Turk, founder of Gold Money, the Jersey-based company that stores precious metals for investors, said he had seen his customer base triple in September. He added that at the end of the third quarter, the company was looking after gold and silver deposits worth $400m, more than double the value a year earlier.

 

Mr Turk said: "Gold is seen as a natural safe haven given the uncertainty in the banking system and the volatility in the stock market."

To put this into context, global mine production is around 2,500 tons, or $60B, per year.

Can anyone find anything positive to say about the sale of my house falling through today and not having a large pot of cash to buy gold with?

First, I am sorry to hear the deal did not go through. This must be very stressful for you, and you have my sympathy, and I am sure everyone elses here too.

At least you must have some equity cushion, if the deal would have generated a large pot of cash. If you do have any cash atm, I would use it to pay down the mortgage, personally, rather than buy gold (remember to discount any gains on investment against the "losses" incurred by continuing to hold debt, rather than pay it down).

Just one thing. The deal falling through is a sign that retail credit is not easily available, even secured credit. Punters do not have access to "unlimited money", even if retail banks do. So maybe you will not need gold as badly as you think. Make sure you are on a fixed rate mortage, and if hyperinflation kicks in, you can pay the mortgage off for the equivalent of one day's rent, and you will have somewhere to live in the aftermath. Not as much fun as making a "killing" on gold, but much, much better than nothing, IMHO.

The very best of luck with whatever you decide to do.

jim sinclair says:

 

# Sliver will demonstrate the fact that it is more industrial a metal than precious.

 

He had me worried then about my silver but then I realized hes talking about sliver not silver, phew.....

Trouble is, when is a good chance of a subsequent rise? Gold can make a good rise in just a matter of hours, often during U.S. trading when I'm out working. I'd rather be in gold than cash by default and sell out on a spike to get back in on a dip.

Don't ask me! I can pretty well guarentee you will do better by just trying to buy when you see value, and holding on until the value disappears (hopefully because the price has risen, or because things have changed). I bet experienced traders can have a lot of fun in this market, but it doubt it will be fun for a beginner. Is it 10% of spreadbetters that actually make a profit, or is that an urban myth?

Most spikes result in a fall and selling on spikes would usually be successful as long as you have patience to wait for the dip. But if gold moves up to a higher level then you would have to buy in at a loss.

You don't have to think like this if you are trading.

You bought, then sold on a spike. You banked a profit.

You will next buy when you see a good chance of a subsequent rise (or short a fall). It doesn't matter what price you rejoin at, as long as you re-exit with a further profit. I'm not a trader, but I think it is an entirely different mindset.

From a personal point of view I do agree with Goldfinger, and I do think that at least to me, the commentators credibly is improved by the them also choosing to put their money where there mouth is, similar to what DrBubb said in the Commodity Watch podcast after the Fred Harrison interview.

 

But my point is that the commentator is then exposed to the 'your just saying that because it makes you money' attack which is often used in the mainstream media channels (and Internet trolls) to discredit peoples positions. This is almost always an unjust criticism because the most important thing about the advice given, is not whether it makes money for the economic commentator, it is that the economic advice is based on sound and consistent judgment and that the commentator has a proven track record of good advice. Such as people like Peter Schiff/Jim Rodgers etc...

I like to read both. The views of those on the coal face are always highly valuable IMHO. You can easily filter out the pure VIs. They don't bother to address the downside risks. And there are always downside risks.

But I also like to read the take of the "disinterested". It can add objectivity, and some people just don't have the temperament for all-in full-time trading and investment, but have an excellent understanding of how the system works.

.......

 

I didn't realise how little gold the central banks actually had hold of, or how much of it was in the form of jewelry.

 

And if China keep producing at that rate what implications will that have, if any?

Well, the East would rise pretty damn fast if we switch to gold as money at this point!

Perfect! Please tell us where on Ebay or elsewhere you will soon sell this below spot gold and silver. I am very interested in 1oz silver coins and Sovereigns.

 

EDIT: Or did you mean you're sure too, rather than you're shipping too?

You really haven't grasped a word I have posted, have you?

edit: there really is no answer to your post. I have stated my case as clearly as I am able. It is just a theory, but I believe it is more than adequately backed by the data. I will have to respectfully agree to disagee with you on this one!

I am sure the Indians and the arab gold bazars will ship their cheap below-spot gold over soon.

So am I.

I gave my arguments. One thing people should keep in mind as well is that it is not only us paupers who bet on gold. There are surely some very wealthy and influential people (with very good lawyers) who do the same. Not sure government would really like to start messing around with them.

There are some very wealthy people who enjoy cocaine, too. They don't get the law changed, they just avoid it.

I feel like I've followed the white rabbit down the hole. Can anyone give me back some semblance of a grasp on 'reality' and tell me why we're having such a massive spike downwards in PMs? The only explanation I can summon up is massive manipulation.

(hot) money drove it up there in the first place.

Removing that (hot) money will bring it down.

Why all the surprise on the way down, and not a comment on the way up?

Is it possible gold is being dumped to cover Lehman's CDS positions?

I just posted the same on another thread! Big loses for sellers of Lehmans CDS need to be settled (in cash)

I am reliably informed that the paper versus bullion gold war is lost by paper gold at a $930 close.

 

Jim Sinclair

This seems a silly thing to say to me, when the physical market in the East is five times a big as the Western investment market.

I was just looking at the BV market board. For a couple of seconds in Zurich in euros it was €511 vs. €534 (rounded to the nearest euro).

 

It lasted just a couple of seconds then when to normal prices (640 - 651).

 

Maybe their system (which was probably upgraded a few days ago) is suffering some glitches?

 

How are the trading volumes compared to normal? Anybody know? System overload?

Was BV designed with this sort of volitility in mind?

That is US inventories, you would need to compare this to every other consuming country's inventories. The US are consuming less, there can be little doubt, but is this drop in consumption being offset by emerging countries increase?

There is little evidence I can find for that - most are predicting dropping global demand, and OPEC are starting to talk about supply reduction, but I don't know.

i believe we are very close to the end of the USD rally, the key factors for the reversal are:

 

- bottom in the stock market

- bottom in the currency pairs, which in USD/CAD & AUD/USD is likely to be right now and with posibility to bottom next week in other currencies

- bottom in oil, which is technically deeply oversold, and the reversal may happen anytime. (75 oil is the lowest point in the downtrend channel)

 

so, i think it is going to be next week, and my position is , that "this is it" for the dollar. an ABC up and a new downtrend. we may be starting the first wave next week, and the 3rd wave, the strong one, right after the elections.

Ker, your posts are among the highlights of GEI for me. I am much less of a TA skeptic than I was say a year ago.

I would be very interested on your view of this. Above, you say that oil is technically deeply oversold, and yet in the physical market, inventories are rising, and are above average for the time of year. So oil looks if anything slightly overbought in the physical market.

How should I reconcile these facts? In a major, multiyear bear, would things tend to look a bit technically oversold all of the way down?

Depleted uranium (19.1) has a very similar density to gold (19.3), so faking bigger bars would be easier and harder to detect today than pre-nuclear industry days. Then you had to use platinum, which rather defeated the object. DU is cheap enough to make bullets out of.

In fact, an alloy of 8.5% Pt (density 21.45), with 91.5% DU, then gilded with Au, would have exactly the same density as gold, but cost only about 10% of the real thing.

.....

(Saying that, maybe all you need to do to verify purity of gold bars is a density check?)

.....

Depleted uranium (19.1) has a very similar density to gold (19.3), so faking bigger bars would be easier and harder to detect today than pre-nuclear industry days. Then you had to use platinum, which rather defeated the object. DU is cheap enough to make bullets out of.

Excellent point.

 

It could get nasty if the IRS remain blinkered to depreciation and insist on capital gains tax.

Especially if they set it at 95% as an "emergency measure" with wide support from the gainless population.

All in one basket is never a great idea, surely. If you really expect hyperinflation, I would at least put a roof over your head first, if you haven't already.

There are two well formed rising support lines from 750 and 825 and the news is bullish.

It's hard to argue a case against this at the moment.

I echo Goldfinger and Narcos comments.

If ever a situation was made for gold, this is it. Even I can't believe it hasn't taken off. I wish it would. I sometimes think that until we get this last little firework out of the way, people have an excuse for maintaining that "get rich quick" mentality, rather than finally, for the first time in about 80 years, looking reality in the eye again.

(Not aimed at any individual here, or elsewhere, just at the late 20th century mindset, which really should have moved on a decade ago, and now finally may)

So a rate cut causes POG to drop by $20??

man, this is just wierd.

I don't think that most buyers of gold are that worried about inflation, much more worried about instability. Any tangible asset will hedge inflation to some extent, but most assets are going down rather quickly.

So I would expect "good" news for the general economy to lift shares and commodities and dent gold, but only for the 10 minutes it takes to work out that the news isn't really that significant.

I have to say, I thought that gold would either rocket or plummit this week. So far it has done neither - it is actually working as a safe haven, and very ironically, a hedge against a strong dollar! Still, you takes your gains when you can get them, I'm sure.

Why are they interested in keeping the price of gold down, if they own so much of it?

I am not convinced that they much care about the PoG. It is a tiny market, they could sink gold, or send it to the moon, any time they want. But all I see is the usual patterns of trading activity and volitility I see everywhere else, somewhat exagerated by the small size of the market.

Why don't they tell us how much gold they have and how much is out on loan?

No-one cares?

Why don't they tell us exactly what kind of assets will be bought at what kind of prices?

Because they are a bunch of robbin' b'stards and they haven't even worked it out for themselves yet.

Why don't they publish M3 anymore?

So they can cover up the deflation and pretend that their policies are working. I would have said the same about inflation a year ago. But it doesn't work. M3 is all around us. We can see what is going on in large chunks of M3 by just looking out of the window or picking up a paper.

What would you do if you had $50-70tn in unfunded foreign and social liabilities and foreign central banks that own several $tns of your money?

I would try to spin the situation out until I retired, and hope the next guy has an idea

If they print dollars, they cancel their debt, but also their entire asset base. Foreigners can just move in and clean up. Far worse than deflation in this respect. They would have to shut down trade to prevent this, and because they have no means to pay. It would only look tempting to a complete idiot, so I accept I it may happen, but I consider it very unlikely. The American people are not a bunch of morons, despite what some say, and they are not afraid to act, when the times call for it. It took a big drop on the dow to scare them into the bail-out. To actually print money is a big step up from there.