wrongmove

Nothing wrong with trying to shed a little light on the situation by looking past the obvious? Or at least as far as the obvious! If you are in the dark, why are you so sure of yourself? If we're speculating, and of course we are, then why would the 'powers that be' wish to trash the dollar when they have just had such a long, easy period to accumulate. Much better to just trash prices, and then clean up, surely?

Well, hardly a reasoned answer, but I was expecting the more usual "why don't you buy dollars then", or simply "hyper, hyper" in big red capitals, so I guess your range is increasing!

Er, what exactly is the dollar falling against, at the moment? I can't call -8% DoD in shares a freefall, yet the dollar, which has been buying more property, equities and commodities, and other currencies, with each passing day, is in free fall?

It doesn't mean anything. It just looked quite pretty while it lasted!

somewhat OT, but there is a strong symettry in last couple of days chart for gold

I can find no evidence of this. Many Indian articles on gold routinely quote the spot price in both dollars and lakh: The Hindu ".....The yellow metal has stood virtually alone amid the rubble in the wake of the U.S. financial crisis. At present, ruling around $850-870 an ounce or Rs. 13,000 per 10 gram, gold is off its peak of $1,033 an ounce scaled on March 17 this year........." The rupee is currently 47.8 to the $. so the above figures are consistant with the same price in India as in US.

They always do it. Gold gets back to within $50 of where it was last week, out come the rockets, and it stalls again......

That drop (in EUR/GBP) had occured before the end of trading friday - it's just carried over from then.

Indeed. cf LIBOR.

Usually, an increase in demand causes an increase in price, not the other way around?

Cheers. It's quite strange! Massive upheavals, blanket news coverage, and yet everything was more or less where I left it!

Also, high valuations seem to be turning the very important Indian market into net sellers rather than buyers, even in the festival season. Never heard of that before: Your gold will get you lesser than before... "....Sellers making a kill Jewellers in Zaveri Bazaar say that the selling trend among retail customers has increased by around 40 per cent since September 18 – the day gold rates soared by a record high of Rs 1,265 (over 10 per cent) in a single day. “All those people who purchase jewellery at Rs 11,500 levels in mid-August are waiting for the best price to sell,” said Bhoopad Jain of Jugraj Kantilal and Co – one of the largest gold buying stores at Zaveri Bazaar. Jain said that the selling movement kicked off after gold touched 12,000 levels. Until then, 10 per cent of people were selling gold, and the rest were buying, but now 30 per cent are buying, and 70 per cent of the customers are selling gold. ........" I know many here think that the physical gold markets of India and the East are irrelevant, but I belive they are the only thing that puts a bottom on the PoG. If they start to sell, they have loads of it, so could put a top on the price as well. Greeting all, btw! I go away for a couple of weeks, hearing rumours of turmoil, but when I get back, everything seems to cost much the same as when I left!

More on this from Ambrose Evans-Pritchard Global credit system suffers cardiac arrest on US crash ".................The Federal Deposit Insurance Corporation FDIC has already exhausted half its capital cleaning up after the collapse of IndyMac. It may need half a trillion dollars of fresh money to cope with the 120-odd lenders on its sick list. Professor Nouriel Roubini from New York University warns that several hundred banks will go under before this hurricane has exhausted its fury. John Chambers, head of sovereign ratings at Standard & Poor's, said America's AAA grade is safe for now. The Fannie/Freddie bail-out is not comparable to ordinary state debt. It is backed by housing collateral, mostly based on prime mortgages. "In the worst case scenario, the losses from Fannie and Freddie will be 2.5pc of GDP. This is not to belittle the unprecedented actions of the last two weeks. "For the US to lose its AAA we would have to see the sort of financial distress that occurred in the Nordic countries. It could get that bad. There's no God-given gift of a AAA rating. The US has to earn it like everyone else," he said. Charles Dumas from Lombard Street Research said America's dependency on foreign money would carry a high price. "The ultimate test will be whether this seriously jeopardizes the reserve currency role of the US dollar. China finances the US government. So as long as the Chinese are willing to accept an annual loss of 15pc on their holdings of US bonds in real yuan terms, this can go on, but the decision lies in Beijing. What is clear is that it will take the US decades to pay this off," he said. Hans Redeker, currency chief at BNP Paribas, says the US debt scare is vastly overblown. America's total government debt is 48pc of GDP on IMF measures, compared to 57pc for Germany, 94pc for Japan and 108pc for Italy. "The debt levels are nothing compared to Europe, even after Fannie and Freddie. America still has great leeway," he said. "We think the next phase of this crisis is going to be a repatriation story as American investors bring their money back from frontier markets. The US broker dealers were 60 times leveraged and now they need to take assets back onto dollar balance sheets."..................................."

This is not a secret or a surprise to me. I'm actually more bearish than most here! Many here think everything is going down except gold. I suspect absolutely everything may go down! Sorry if I'm not all champagne smileys and hats in the air - as I have said many times, I am in the "buy 10% and hope it does badly" camp. We clearly need a probably long, and certainly painful, period of "rebalancing" (paying off debt), so bad times are inevitable IMHO. This has been self evident for years now. I just cannot see any upside to the collapse scenario, whether you have a few sovs under the matress of not.

If US lose AAA, then yes, that would be bullish for gold, in quite a big way. Certainly in dollar terms. No real movement on the dollar. Anyone heard any more on this? I'm away for a couple of weeks soon. I'm not going to miss a currency collapse am I?

Who thought they were controlling commodity prices?

Firstly, congratulations on today! I would like to respond to the chart bit though. I used to be a TA skeptic, preferring fundamentals. Unfortunately, fundamentals do not work so well in a credit bubble, so I haven't been able to find much value. Now with gold, I simply do not understand the fundamentals, I know the arguments, but beyond physical buying and selling, I cannot "prove beyond reasonable doubt" these theories to myself, so I am unhappy about using this in FA, and I don't have spare cash for what for me would be speculation, not investment. From a "normal" market physical point of view, IMHO, gold is now at the top end of sustainable at about $850, but of course this is not a normal market. So from a physical based value point of view, IMHO, gold would now be a sell, but that is totally irrelevent, because it never got cheap enough to be a buy in the first place (say about $650, with $750 "fair value"). With a value cap on, IMHO of course, you haven't held gold since about $800ish on the way up first time (I never held) The only TA I know is what everyone knows - a few bottoming/topping patterns and a few rules. Stuff that's not even in the introduction sections of what DrB and others use. But the gold chart said sell a good while back, even to me, (as did the equity charts). But now, it has made a "higher high" on volume, a tentative buy signal. If it drops a bit from then zooms through this high, that would be even more bullish. The above is a very cautious approach to TA, so has missed the bottom by about $100, due to massive lack of knowledge on the subject, but I am quoting figures I posted earlier, the above is not just hindsight, and says buy some at this lull at $860, and some more at $860 if it rises off a dip from here. That wouldn't be too bad an entry point if it hits $1650. A quote from the TMF Gold board in response to a complicated argument about deflation and gold I love the complicated arguments, (and the poster of that quote went on to recommend a long list of ETFs,) but for someone like me who doesn't understand gold fundamentals, it's not a total disaster, IMHO, DYOR. Be fun to see what happens tomorrow! My little pile of cash certainly couldn't keep up today edit: but good wishes, all the same. my pile of cash is so little, that even I barely have a vested interest in it!

From Reuters: "Gold climbs nearly 7 pct on safe haven buying, oil Wed 17 Sep 2008, 13:56 GMT LONDON (Reuters) - Gold rallied nearly 7 percent on Wednesday to a two-and-a-half-week high of $830.10 an ounce, as a wave of risk aversion triggered buying of the precious metal as a safe haven and oil prices climbed. Traders say losses among investment banking stocks and doubts about the government's rescue of insurer American International Group have sparked a flight to safety. AIG's share price was down 41.33 percent at 1451 GMT while spot gold was trading at $826.70/827.80 an ounce at 1451 GMT, up from its nominal New York close of $775.55 an ounce."

Does anyone know? usdx has done naff all. Big buyer, I guess.

Well, I do not pretend to understand the fundamentals of gold (beyond physical demand), and I very much doubt that leap was due to physical demand - too quick. But the charts seem quite readable, even to a novice like me. I prefer fundamental analysis, but it can't really be applied to gold, in the way I understand it (except for physical demand/supply).

That was not my intent. I am just a cautious individual (when it comes to dosh)

Just be careful you don't jinx it with the rocket pictures. They have been a very good contrary indicator so far Have to say that was impressive. If it breaks the last peak (about $840?) on volume, the chart would start to look good again, even to a skeptic like me.

Some more here from good old Nadler of Kitco Fed Draws Lines "More surprises came into an already clouded market picture today and only added to the confusion, frustration and fear that was omnipresent. First, let's cut to the chase. The Fed did NOT cut rates. Disappointed? Well, if you are among those looking for subsidies in the way of lower rates, sorry. Elated? Well, if you were long dollars, this might be a nice day to log some profits into the trading books. Confused? Well, if you are a mutual fund client or bank customer, you have your job cut out for you in trying to figure out who is safe and who may fail. A gold bug? Well, there are good news and not so good news for you too. First, the good news. Gold did not melt down after the Fed decision. It did not fall beyond $775. Now, the less than good news. Unless it moves higher, and fast, the metal will lose part or all of its safe haven status - much like oil already has. We have to be blunt. Yes, it is a wonderful alternative currency, it can be an excellent hedge against many a thing. But the safe-haven attribute which has already come into question in February of 2007 could be at risk once again. And this time, investors may not be as forgiving. Gold is currently failing to live up to its safe-haven billing. It is being overwhelmed by asset liquidations and the hoarding of cash. Oil is a big contributing factor, of course, but the most intense pressure is coming from funds and investors scrambling to get out of anything that bears any price risk. Russian stock markets just crashed hard on the back of oil and gas going up in smoke. Systemic risk has never been higher. In light of all of this, gold has no business no being at $1000 minimum. While bullion's resilience above $775 impresses some, the bigger question is why the metal is unable to get going. The answer may lie in the psychology of deflation that is currently gripping investors.......... ............Nervous trading and wider swings will define the action tomorrow - much as they have in previous sessions. US CPI fell in August, driven by slumping energy values. Gold remains vulnerable to the asset liquidation trend and may not be able to overcome it, or the free-fall in crude oil as it heads to the $80's range. Then again, one really bad news item could have the $800 mark being taken out in a blink. Right now, a less likely probability in the wake of what we have seen thus far. Gold pundits/speculators beware of Mr. Fuld having lived in denial. Not a good example to follow. Focused Trading."

I think that is exactly the point I made. Gold acted as a safe haven during Lehman, but was not profitable.

I think the reaction to the US IR decision may illustrate the point I am trying to make (gold sort of like cash, but not as good as bonds, silver not really money - all in the eyes of the market of course, my view is irrelevent, of course) Leading up to the decision, Au rose, I'm guessing on speculation of a cut, then dropped back down on the hold. Silver just caried on sideways as it had all aftenoon.