GOLD

[CIGA]

Let's hope so, I am now all in. I personally don't think we will see the 800's again.

 

Never take anything for granted.

 

Gold and silver bulls were banging on about silver never seeing the 12's again in early 2007, silver dipped heavily and into the 11's in July 07.

 

This however was the ultimate gift as silver soared from there to the 20's.

 

Lesson - always have some spare dry power to spend in the sales.

 

[MattFC]

Never take anything for granted.

Lesson - always have some spare dry power to spend in the sales.

 

True.. however you don't want to miss getting in the rocket before liftoff.. so when does one get to the point that you blow the powder before its too late.. I guess thats the million oz question

 

[Wigler]

I don't own any gold yet (was paying of debts) and want to start ASAP, is it too late?

 

What takes precedence, cash savings or gold?

[warpig]

For me it was this last dip, IMO it's too close to gamble now.

 

True.. however you don't want to miss getting in the rocket before liftoff.. so when does one get to the point that you blow the powder before its too late.. I guess thats the million oz question

 

[MattFC]

For me it was this last dip, IMO it's too close to gamble now.

 

Loaded up to.. 918 yesterday.. was aiming today, but just missed the 919 blip, hope to complete early next week

[MattFC]

I don't own any gold yet (was paying of debts) and want to start ASAP, is it too late?

What takes precedence, cash savings or gold?

 

Welcome Wigler.. I see you have just joined. It would be worth you reading some of the threads on this site re cash vs gold.. suffice to say, your have done well with the first step (paying of debts)..

 

 

 

[wren]

I don't own any gold yet (was paying of debts) and want to start ASAP, is it too late?

 

What takes precedence, cash savings or gold?

Welcome, Wigler.

 

Many would say you should have enough cash to survive say 3 months with no income (others 6 months).

 

Given that the price of gold is extremely volatile, I reckon cash for 3 months would be better than spending it all on gold, but, of course, it depends on your personal circumstances. For example, many if they became unemployed could get unemployment benefits etc. so the 3 months cash is less crucial.

 

On balance, I'd say you need some emergency cash, and if you have enough, get gold after that.

 

About is it too late? In my opinion certainly not, but if you can buy soon, I'd say do it before the end of August. Big increases in gold price tend, on average, to occur in the September to end of January period (although not every year is the same).

 

@Matt

 

Got any links to threads on cash versus gold?

[Steve Netwriter]

Anyone see anything here...suggests a return to high 800's?

 

Very funny

 

[G0ldfinger]

Yesterday I bought one hell of a Sterling silver knuckle buster for 50 bucks (underneath the palm tree...). I think it´s almost 0.5 ounces.

 

When I see silver, I just wanna buy it. OK, gotta get another Pina Colada. I burnt the lower side of my arms despite 2 layers of shirts and factor 45. And no one uses solar power here.

[harold bishop]

And no one uses solar power here.

 

'cause oil is just too cheap

 

[markdo]

A little more insight into this topic from the Casey Daily Resource:

 

Instead of the usual NY gold commentator that I post most days, here's an e-mail that was sent to me by a very good friend. It was sent to him...and I'm including it here completely unedited for spelling, grammar, punctuation...or capitals. The guy that wrote this certainly knows his stuff...and probably knows more than I do...so I thought I should share his insights...

 

"two time frames am working with...

 

"gold options expiration is on monday, so da boyz are shooting for that close, but think they might have shot their wad a bit early here. i bought 1 part (of potential 4 parts total) on today's (Wednesday - Ed) close... will buy every lower close thru rest of july (thursday) when gold rollover has done.

 

"but for the *big* move, am trying to hold out til end of august to go "all in"... as that will be silver's last roll before the longer time frame (3 months) for the December contract. any and all big lows by then will be expected to be bullet proof.

 

"thru the summer, they get to one-two punch the metals with alternating rollovers each end of month, but gold will enjoy December as front month for 4 (count em!) months straight after aug 1st... and silver will join in for 3 months. that's so key to the futures market. everything waxes and wanes with the rolls. and December is only time both gold and silver are on same wavelength.

 

"luv it.

 

"just gotta hang in there about 6 more weeks of this silly summer season. "

 

http://www.caseyresearch.com/

 

Could someone explain in relatively simple terms why and how rollover dates in gold/silver impact their prices?

 

 

[Steve Netwriter]

I've been meaning to research this. This might help:

 

Roll-over psychology

 

The structure of the futures market requires that each quarter a contract is closed and the position re-opened again for the next future period. This ‘roll-over’ has a marked psychological effect on inexperienced investors.

 

Having taken the relatively difficult step of investing some of their savings in gold futures they are required to make repeated decisions to spend money, closing the old contract and re-opening the new just to keep a long gold position open. With futures there is no ‘do nothing’ option, like there is with a bullion investment.

 

The harsh fact of life is that if investors are right about gold long term and wrong short term many of them who participate via futures will be expelled at rollover date if they have lost money in the previous quarter. It is much harder to pay up and re-invest after a loss than to do nothing, as would be the case with physical bullion securely stored. Investors who fail the psychological test of roll-over will leave their position, rather disappointed not to have made money as quickly as they had hoped, and many will never return to benefit from the long term correctness of their view of gold.

 

So before deciding if futures are suitable for them investors should seriously consider whether or not they are psychologically equipped to re-buy again and again after disappointment in the previous quarter. Patient but convinced gold bulls who don't like losing money may be better advised to spare themselves this psychological test and buy physical.

http://www.galmarley.com/framesets/fs_trad...utures_faqs.htm

 

 

and

 

Getting Started in Technical Analysis

By Jack D. Schwager

http://books.google.co.uk/books?id=dm6EvSz...8&ct=result

 

 

[id5]

Yesterday I bought one hell of a Sterling silver knuckle buster for 50 bucks (underneath the palm tree...). I think it´s almost 0.5 ounces.

 

When I see silver, I just wanna buy it. OK, gotta get another Pina Colada. I burnt the lower side of my arms despite 2 layers of shirts and factor 45. And no one uses solar power here.

 

Ouch! Sounds like you have a very fair skin there Goldfinger

[TinBrick]

Could someone explain in relatively simple terms why and how rollover dates in gold/silver impact their prices?

 

Another reason I came across somewhere recently, but can't find the link to, is that if the gold price at rollover is, say, sub-$920, any call options for prices in excess of that expire worthless. It is in the interests of the institutions which wrote the options for the price to be lower at rollover time (assuming they have written more calls than puts). They may therefore heavily short the gold future price in order to depress the price.

[bitbigt]

About is it too late? In my opinion certainly not, but if you can buy soon, I'd say do it before the end of August. Big increases in gold price tend, on average, to occur in the September to end of January period (although not every year is the same).

Hello Wigler.

I'd support wren's comments, but suggest that the autumn rally in prices is often strongest between mid-August and mid-September, so waiting until end of August might be a bit risky.

More generally, I believe that 10-40% of ones available cash should be in gold (I'm at 35%). Certainly not 100%

...and then cross all your fingers like the rest of us

[Dispassion]

http://www.kitco.com/lease.chart.html

 

I'm finding the current troughs in gold lease rates and gold price to be interesting. Perhaps, very few want so be in a volatile market over summer holidays, but by my reckoning we've only seen lease rates hit zero, once before, in March when they went negative. This trough is deep and wide, anyone got any explanations?

[stevecook172001]

http://www.kitco.com/lease.chart.html

 

I'm finding the current troughs in gold lease rates and gold price to be interesting. Perhaps, very few want so be in a volatile market over summer holidays, but by my reckoning we've only seen lease rates hit zero, once before, in March when they went negative. This trough is deep and wide, anyone got any explanations?

Fear of a deflationary recession by investors. A lot of them are jumping ship in anticipation.

 

Whether they are right or not is another question. One I shall leave others to answer.

 

However...

 

If you think they are wrong, you hang on in there.

 

If you think they are right, you jump ship yourself before it gets any worse.

 

 

[Dispassion]

Fear of a deflationary recession by investors. A lot of them are jumping ship in anticipation.

 

Whether they are right or not is another question. One I shall leave others to answer.

 

However...

 

If you think they are wrong, you hang on in there.

 

If you think they are right, you jump ship yourself before it gets any worse.

 

That explains the trough in gold price, but I'm still not understanding why such a wide and deep trough in lease rate has coincided with it.

 

I've read in a number of places that gold acts as a hedge against deflation too. I don't pretend to understand the fundamentals of gold under deflation, I've not looked into it because I don't think the central banks will let it happen unless a far greater force crops up than those at play at the moment.

 

Allastair Darling, for example, has pretty much abandoned the MPC's inflation target, though he expects inflation to be back on track by the end of 2009, but I'd guess that these targets are based on an optimistic view of wage restraint rather than negative equity driving up pay settlements.

http://www.hm-treasury.gov.uk/media/9/5/le...ernor170608.pdf

[wren]

http://www.kitco.com/lease.chart.html

 

I'm finding the current troughs in gold lease rates and gold price to be interesting. Perhaps, very few want so be in a volatile market over summer holidays, but by my reckoning we've only seen lease rates hit zero, once before, in March when they went negative. This trough is deep and wide, anyone got any explanations?

This suggests that shorters are getting tired.

 

Here's an article from Jan '06.

http://www.financialsense.com/fsu/editorials/2006/0119.html

 

The falling rates suggest there is less demand for leased gold in a rising gold market. That is a very rational thing to do considering a lease on gold is actually a short on gold. The other thing this could mean, however, is that the official sector (central banks) are arbitrarily lowering rates to inject more official gold surreptitiously into the gold market.

[Dispassion]

This suggests that shorters are getting tired.

 

Here's an article from Jan '06.

http://www.financialsense.com/fsu/editorials/2006/0119.html

 

Yup, it looks like there's less shorting going on than ever before, so I'd presume that it's longer term investors that have sold off recently, perhaps financials liquidating assets?

[kernull]

"Congress Approves Housing Market Rescue Bill"

http://www.cnbc.com/id/25862539

 

another motive for traders to drive the $USD higher on monday

[safebetter]

Which Juniors?

 

Gold is going to $1200 in 2008.

 

· Gold is going to $1650 on or before January 14th, 2011.

 

· The US dollar is going to USDX .5200

 

· Gold is getting ready for its third attempt at $1000.

 

· The so called dollar rally is a total joke.

 

· The junior gold shares sector are where the shorts are the greatest and the bargains the best with good companies looking at 1000% gains from today's lows.

 

Anyone have any idea which Juniors is Jim Sinclair referring to?

 

I know DrBubb likes Royal Gold many like Yamana.

 

Comments welcome.

 

SafeBetter

 

[Pixel8r]

Which Juniors?

 

Suggest you have a look on the GEI Mining & Precious Metals forum.

 

 

[stevecook172001]

To nail my colours to the mast:

 

Gold will fluctuate wildly over the coming weeks and months as the world markets reel and panic like rabbits in the headlights, not knowing which way to turn. The FED, and others are desperately trying to monetize all of the defaulted debts by stuffing the accounts of the lendors with fresh, crispy new dollars. This is turning a lot of "potential" money in the form of credit into available fiat. This, I presume, is very inflationary.

 

However, I believe we have just passed the peak of our hydrocarbon energy supplies. There is no alternative to these suplies. As the energy suplies dwindle, so must the real economies of the world. In the event of a static fiat supply, this in itself is inflatinary in the relative sense that a delfation of supply of the thing that money is exchanged for without a commensurate deflation of supply of money will mean the same number of dollars are chasing a scarcer resource. Debt default can, in some ways, be seen as the economy kind of self regulating it's money supply to come back into equilibrium with the economic need for it.

 

However, the FED is trying to inflate the nasty debts away. This ony serves to exacerbate the problem and make the eventual deflation of the money supply that much more severe when it comes. And I think it must come, at some point. The destruction of fiat will be so great that a deflationary implosion is eventually inevitable. Of course, we may well get Zimbabwean style inflation, major civil disturbance and the total wrecking of people's fiat deposits along the way.

 

At the very end of this dark trajectory we are now headed for, gold will almost certainly be a more valued form of money than fiat simply because fiat, by that point, will have no credibility at all. Along the way, from here to there, though, I think that the price of gold will rise to dizzying heights, plummet to unimaginable lows, and then begin it's slow ascendency to the position of a "new" global currency.

 

The question is:

 

How long is your long term view?

[Compounded]

That explains the trough in gold price, but I'm still not understanding why such a wide and deep trough in lease rate has coincided with it.

 

I've read in a number of places that gold acts as a hedge against deflation too. I don't pretend to understand the fundamentals of gold under deflation, I've not looked into it because I don't think the central banks will let it happen unless a far greater force crops up than those at play at the moment.

 

Allastair Darling, for example, has pretty much abandoned the MPC's inflation target, though he expects inflation to be back on track by the end of 2009, but I'd guess that these targets are based on an optimistic view of wage restraint rather than negative equity driving up pay settlements.

http://www.hm-treasury.gov.uk/media/9/5/le...ernor170608.pdf

 

http://www.goldensextant.com/LandisAMA.html

 

Has some interesting comments about how the purchasing power of gold has changed in periods of inflation and periods of deflation and some figures in the appendix.