wrongmove

Repeats of Gladiators fill that niche, IMHO (Not to mention the extremely uncivilised conditions endured by many of the world's population)

That is why it is called a barbarous relic, rather than just barbarous! Banks hold many assets, of which gold is one. And as you say, they are selling off now. This has to be done slowly, just dumping the lot would trash the price. There is definitely a market for "bling", and probably always will be, although overly high valuations threaten even this. (e.g. Gold is Old) I am not trying to say that gold doesn't have its place in a portfolio (including the banks). If I was as loaded as a bank, I would probably have 5-10%. What proportion of their "wealth" do CBs hold as gold? Are there any reliable figures for this?

I disagree. Everybody buys houses. In a bubble, everybody buys more, and maybe a few are sucked in who would otherwise not buy. Very few trade gold, and in a bubble these very few trade more, plus a few are sucked in who would not otherwise buy. And if you are expecting more deflation, I hope you are keeping your paper dry!

I have explained elsewhere why I think that PMs as global money are as relevent today as horses are to transport. Of course I may be wrong, but I just see no evidence that a) they would make a good money, and b ) that the market takes this view or is likely to any time soon. edit: I do not see an end to the credit crunch btw. The situation is a total mess. My main disagreement with many here is on how bullish this is for PMs, not the underlying situation

That's fine - they are rather attractive (silver ones). But looking for insights in the coin market seems a bit like judging the housing market from the price of bricks.

This is consistent with my theory. 1 oz silver coins are a tiny market. The silver price is not driven by 1 oz silver coins. If the refiner buys the 1000oz bars, with delays, then has to incur cost by melting and recasting, then has to sell at a reduced price, is it any wonder that they are hard to come by at the moment? And this is happening when greatly lower prices for silver have finally attracted physical demand, exacerbating the supply problem (for teeny weeny £10 silver coins)

One explanation. Punters saw an opportunity and went for the throat. They will have profited handsomely. This can only happen in bubbles, when there is lots of hot paper flying around. Try massively shorting a market based on solid fundamentals, i.e. physical demand. There was a disconnect between physical demand and price. Some spotted it and did well. Others ignored it, and did less well. I accept that G&S could be manipulated. Oil, copper, aluminium etc would much less easy, yet they have tanked too. G&S are tiny - a bumper sticker on the vehicle of commodities. I'm not sure that they are as crucial to the world at large as some here think.

I have already given my take on this several times. Physical demand is up, because of hugely lower prices. That is normal. It is only in bubbles that higher prices increase demand, rather than reduce it, IMHO. However, these huge drops would ruin any dealer who stocked up at $18 then had to sell at $11. So retail products are in short supply, and I predict they will remain in short supply until some price stability returns and they can safely restock. If there is still divergence once we see price stability, then I will admit I was wrong. But until then, this shortage of retail products looks entirely predictable and straightforward to me. And it seems that some dealers are managing to maintain normal premiums, even now.

I don't think I would ever commit more than 10% or so. Commodities (and PMs) are boring, in reality. What I mean is, in a "normal" market, their price is constrained by supply and demand. Things like oil are hard to cut back on, but not impossible, but most will simply stop being used if the price gets too high. This even happens to gold (e.g. gold is old) So commodities generally chug along, providing decent yield (unlike gold which actually costs money to hold, either through storage costs, or massive spreads on physical. Even lease rates can go negative! Some point at this as evidence of the bogey man. Many of the same people lend their gold/silver to BV or GM, and pay them for the privilege!). Occasionally, they become flavour of the month, and a bubble forms. I am not good at playing bubbles. The jewelry buyers are back in gold, and are currently supporting the price by buying some of the gold that speculators are selling. But the gold season ends in a month or two. So by my way of looking at things, gold may not be far off "fair value", but still historically expensive (if we ignore that one and only gold bubble that many seem to take as a reference point). Silver would have me more concerned. One of the main uses was photography, both in film and in prints. Now people use CCDs and printers, so I don't know where "fair value" is for silver. It has a long history of doing nothing for years on end, so without yield, I don't really see the point in holding long term. So I am not a big fan, based on what I call fundamentals, but if the price dropped to near or below the cost of production, I might have a punt. But not a big one. And I wouldn't be expecting a quick return. If I had a big wad, I would hold maybe 5-10% as a hedge, buying more if the price dropped to maintain the percentage, and selling if it rose strongly, again to maintain the percentage. I am not very convinced that PMs would be much use is TSHTF big time. We would not revert to gold, IMHO, we would evolve something new, if we have to abandon "fiat". Even a cursory look shows that gold is totally unsuitable as money in the 21st century. (I have elaborated on this elsewhere) What does make me laugh is the stupidty of some of the arguments. I have seem comments like "every country in the world has a fiat currency, but none have ever survived" Looks to me that they are all currently surviving (except Zimbabwe), and in fact it is true to say that "all the world once used a gold system, but none have survived". I may be totally wrong about PMs, but my views are based on my instincts and my research. I am not trolling, just trying to broaden the debate. If you are in PMs because of your instincts and your research, then the very best of luck. But even if we are in a secular bull market, there is no harm in avoiding some of the dips. What is wrong with a wide, trailing stop?

With all respect, what is new from the bulls? They are still chanting the same mantra, but no-one complains. G&S are not just having a bad week. Silver has halved, ffs.

The old high was formed at a time when physical demand from traditional gold purchasers was on the floor. The buyers were speculators. A bit like housing, where the BTLs displaced the FTBs and drove up prices too high. Now the hot money has run to the exits, the price is back down, and the Indian's are buying again. That's a bubble, in my book, now deflated. How do you define a bubble?

Why should they? The vociferous bulls are still here after they have tanked. And I could easily dig up loads of old posts stating "you will never see $850 gold again" etc, but I haven't. If the detractors go long near the bottom, when they see value, based on their assessment of the fundamentals, what will you say to them then?

I didn't say people had been pumped and dumped, I said that some people feel they have been pumped and dumped. I'm not going to call a top. I do not have a crystal ball. I do not say "when" instead of "if" when speculating about the future. I did say that the chart looked ugly when that double top formed, and broke through the base on volume. But no-one knows the future, and certainly not me.

Hate is an emotion, dangerous thing when investing/speculating. I put it in "" so as not to offend unneccesarily. These assets are merely "out of favour" to some here, but to others they are hated. In general, the "haters" seem to be well in and holding, whereas the less emotional seem to be waiting on the sidelines for now. Not much buying or shorting seems to gert mentioned, well not in any meaningful quantity. To me it looks like the uberbull arguments are in tatters, but they are constructed to be impossible to disprove. i.e. they never state a stop loss - they have no exit point, so they cannot be proven to fail - that 20%, 30%, now 100% (in Ag) rise, and much, much more is always just around the corner. No one can prove it isn't. When will it happen? Soon, later, whenever, but never a disprovable prediction. (With the honourable exception of DrB, who puts his cards on the table and his money where his mouth is, and fesses up and analyses his mistakes, and other notable exceptions, but anyway I am just talking about the uberbulls here - you know who you are ) There are a lot of people out there, who, rightly or wrongly, feel "pumped and dumped". There is a vocal handful of uberbulls on here, but I just wonder what it will take to attract back the hot money needed to form a new bubble.

According to IG it is 752 at the close of Globex. Silver down over 5% in day. If this was any of the "hated" assets (property, cash, equities) their would be "black xxxday" threads. Why the difference? It just looks like denial to me. Luckily, people don't vent here when they reach the anger stage, they just politely move on. That's what it looks like from here, FWIW.

Commodities have gone down by around 33% on average. Gold is tiny compared to commodities, yet is has tracked them very well. How can anyone successfully intervene in the commodities market (over many years now, if we believe the stories)? Commodities trading is backed with real demand by real consumers. That demand stems from the entire global manufacturing industry, infrastructure development and public sector consumption. i.e. everything except services. The derivatives market is many times bigger than this. How can it be shifted by any secret organisation?

This could turn out to be the shortest lived prediction ever.

Maybe, just maybe, normal rules of supply and demand have been re-established, not turned on their head. Speculators tend to use paper, whereas the reason silver is mined is to satisfy physical demand (industrial demand, jewelry and coin collectors). Of course physical demand is increasing, now the "price is right". I would imagine that physical demand has been "pent up" due to the "excessive" valuations seen a few months ago. But the speculative demand required to push PMs above the prices that physical buyers will tolerate seems to have evaporated. Just a theory........

F&F certainly wasn't a surprise - it didn't come out of the blue, whereas Darling's pronouncements were truly out of the blue. Not the substance of what he said, just the fact that he chose to say it at all. With F&F it seems to be a case of sell on the rumour, buy on the news. Option 1: F&F is indicative of major systemic problems. Buy gold. Sell everything else. Option 2: The willingness to intervene in F&F means things are not so bad. Buy shares. The markets seem to have chosen the "blue pill" once again............ .................and then gold starts to come up on the outside! Time for bed, I think! Good luck and good night!

I don't hold, but PMs do look broken to me at the moment. "Get well soon" is about all you can say. I'm guessing gold is up a touch in euros, but down a touch in sterling, whereas oil is up in all 3 currencies. The apparent leverage of gold against the dollar is not there tonight, i.e. its acting like just a inverse dollar, not amplifying dollar drops as before. I'm probably just reading way too much into very early trading. Many will be waiting for the reaction in Europe and especially USA before commiting to big positions.

It peaks at qabout $811, then drops back to about $809. Is BV being a bit slow?

Dollars recovered sharply, silver has gone nowhere, gold falling back already and strangest of all, DOW and FTSE futures up strongly!!!??? Well, that was a fun 30 mins! Beats the hell out of me. I'm not a gold bull (or bear, particularly, at $800) but I agree with many of the views held here on the economic fundamentals in the US, UK and much of the Eurozone. I know that F&F has been expected for a long time, so was probably priced in to a good extent, but why stock markets should rally and gold not respond to the news is beyond me. Anyone have any idea?

Well it looks like a gimme. We shall see.

$811 on IgIndex now - I'm very surprised, expected a much bigger leap. Must still be down in most currencies. Edit: oil up $2 too. Weird, and I would imagine a little disturbing for some.

Gold will need to rise about $12 to stand still in sterling, but if normal patterns are followed, I would guess gold in dollars will rise about twice this. Where are you getting live PM data from? Is it publicly accessible?