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Screenshot2011-08-12at180007.png

 

Gold topped on 20th Feb 2009, 2 weeks before the stock market bottomed.

 

 

I just checked my proprietary DBDT indicator and it gave a buy signal on GDX by the close of trade on 10th August. That's quite interesting for me since historically my indicator has been reasonably accurate with GDX.

 

GDX buy signal 10th August;

Screenshot2011-08-12at182327.png

 

 

GDX 1 year;

Screenshot2011-08-12at182345.png

 

 

If gold remains at elevated levels and crude remains suppressed then I would certainly think there is a strong chance of a very large upward breakout for the gold miners.

 

That was a good call, so far at least.

 

GDX today with 10th August marked;

Screenshot2011-09-06at165426.png

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Blimey - gold just fell off the edge of a cliff and dropped $50!

 

Who, or what is creating this?

 

(Someone called a double top)

Light volume into the second top is a sign recognised by many traders, not just me

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The "double top" painters are now at work.

Very amusing to watch. :lol:

The sophistication shows through in this remark... Not!

 

I suggest you look at the Beating B&H thread to see how I am taking money

off the table, with very little risk

 

This thread is a bit funny.

The real action is in the US Dollar today

idx24_usd_en_2.gif

 

Which is hardly mentioned while Gold tries to put in a possible

Classic Double top, which some purists want to ridicule

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The sophistication shows through in this remark... Not!

 

I suggest you look at the Beating B&H thread to see how I am taking money

off the table, with very little risk

 

This thread is a bit funny.

The real action is in the US Dollar today

idx24_usd_en_2.gif

 

Which is hardly mentioned while Gold tries to put in a possible

Classic Double top, which some purists want to ridicule

Yes, the dollar is well due a bounce, and yes that might see gold consolidate a bit. But that hardly entails that gold will crash. The dollar index is mostly a reflection of Euro/ dollar. If the Euro is in dire straits then it's likely that both gold and the dollar will benefit. Gold would replace the Euro as the alternative to the dollar. And this is leaving all concerns of dollar hyper-inflation to the side.

 

What's the point in "polarizing" on gold, or the dollar for that matter. Because markets are bipolar, does that mean this site must be also? B)

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Yes, the dollar is well due a bounce, and yes that might see gold consolidate a bit. But that hardly entails that gold will crash. The dollar index is mostly a reflection of Euro/ dollar. If the Euro is in dire straits then it's likely that both gold and the dollar will benefit. Gold would replace the Euro as the alternative to the dollar. And this is leaving all concerns of dollar hyper-inflation to the side.

 

What's the point in "polarizing" on gold, or the dollar for that matter. Because markets are bipolar, does that mean this site must be also? B)

Is "$200-300, possibly more" a Crash?

 

That's the sort of move you could easily see out of this set-up.

 

Following is a CLARIFICATION that I also posted elsewhere...

 

The impression one often gets [by the general comments] is that you're bearish on gold, but what you're actually saying here is that you've always maintained a core long position in gold, that is, you're bullish.... and then look to balance that out with some short term trading. I think a lot here do something equivalent [the exception might be the 100% in 100% certain crowd]. That said, having a very large percentage of your worth in gold would be warranted if gold was appreciating as a currency.

That's basically true - though much of my Gold exposure is hedged already - not all.

So if it slides, I will lose very little, and if it rises further I make a bit.

If it drops sharply, my hedges will really "kick in", and I will have cash to load up.

 

I warn others constantly here, and often correctly - not always correctly, because I

I highly vigilant with a large position that I do want to see shrink in value if Gold

falls. And I have found over years of trading, that you need to be alert and open

to news and technical set-ups that can cause a reversal of fortune.

 

As I said: "Complacency can be a killer of performance."

 

This is why I react so strongly to those who preach complacency at times like this when

the technical set-up suggests you should be highly vigilant. We have just seen one of

the best set-ups yet for an important intermediate high in Gold - that doesn't guarantee

we have one. But from this type of set-up, we could see a $200, $300, or greater pullback

in Gold. No guarantees, but I am glad to have done some trades that will protect my

position if this indeed follows.

 

BTW, my overall account is rising in these turbulent markets, so something is working.

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Would love to see a $500 correction here. Doubt it will happen but would love to see it. Buying of physical (if you can get it) will be manic if it drops that much.

Good to see someone has cash reserves left. I piled most of mine in a few years back. :lol:

 

Still have some US dollars earmarked in case we get that big correction, but that would go to work in silver, and then back into US dollars on the silver recovery. Always good to keep some diversity [and hedge] in currencies.

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Is "$200-300, possibly more" a Crash?

Surely it would depend on the time scale. $200-300 in percentage terms is roughly 10%. If it corrected that much in a few days... yes, it would be bordering on a crash. But if it corrected that much over a few months it would feel more like a consolidation.... considering that it did spike recently above the long term trend line. Crash proper territory would perhaps involve gold going below 1500 odd. It could also just bump along sideways for a few months.

 

That's basically true - though much of my Gold exposure is hedged already - not all.

So if it slides, I will lose very little, and if it rises further I make a bit.

If it drops sharply, my hedges will really "kick in", and I will have cash to load up.

 

So small gains or loses if there are no large moves. It would be interesting to know what percentage of your worth is long gold [disclosure of the monetary amount is unnecessary]. If it's not a largish percentage, could your gold strategy be bordering on a zero sum game? If you completely hedge to both sides of the present price then you're protecting yourself from [conventional] currency losses. But what if gold itself is a strengthening currency? The risk is one of going backwards, in real and relative terms, against gold. I labor the point because I don't think you've entertained this scenario seriously. That gold is a currency doesn't entail the view that gold is the only true, or natrural, form of money. Rather, I reckon it's a mediate position between the often polarized extremes on gold.

 

Of course, as a successful trade, or one who gets it right slightly more often than wrong, then you might be able to accumulate profits, in conventional currency terms, that keeps up pace with the long term appreciation of gold. But there are "costs" involved here, in terms of time, that others aren't prepared to make. You'd have to living it near 24/7... screens, digits, charts, analysis, interpretations etc. The difference perhaps between those who choose to work hard on a running machine, and those who sit sipping pina coladas while on a cruise. Right, back to my book. :)

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Andrew Maguire - LBMA Shorts Will be Forced to Take Losses

 

With gold trading near the $1,900 level and silver above $42, today King World News interviewed London Whistleblower Andrew Maguire. When asked about key developments in China regarding the Pan Asia Exchange Maguire stated, “Silver and this 11 kilo gold contract, international rolling spot contract, are the game-changers. This is not going to be welcomed by the naked short LBMA bullion banks. These are competing contracts, but the difference is they are 100% backed by physical metal. That means that this metal will have to be purchased one to one as these contracts open, and not just listed as a paper entry (as the LBMA does in many cases).”

 

“The LBMA bullion banks, as we know, operate on a fractional reserve basis and that’s been backed up by the industry apologists such as Jeffrey Christian. So unlike the LBMA, there is no counter-party risk associated with the ownership of these new Pan Asia contracts.

 

Eric, there have been some delays with regards to fully implementing the trading platform for the Pan Asia Exchange. The bottom line here is that the Chinese made a determination that they did not trust any trading platform or software developed in the West. Consequently, they are designing their own software from the ground up and the new platform will be launched very soon in the fourth quarter.

 

When fully launched, this is going to have two pivotal effects on the supply/demand fundamentals as worldwide business will migrate to this exchange. The last time we discussed retail demand taking place as the new exchange in Asia gets up and running, there will be institutional effects as well. This will force short covering as existing customers of the LBMA move their business to the Pan Asia Exchange. It will force the shorts to crystallize their losses as the tremendous short leverage will have to be unwound.

 

As an example, if you had a pension fund that went to the LBMA and said ‘We want ten tons of gold at $1,700,’ the LBMA banks do not purchase the ten tons of gold at $1,700, instead they merely issue a ledger entry, a ledger receipt and a piece of paper is given to the pension fund, which leads the pension fund manager to believe they own ten tons of physical gold.

 

Because the LBMA does not go out and purchase the physical gold, the price of gold does not experience upward pressure the way that it would under normal supply/demand fundamentals. Meaning supply/demand is not affected as it should be. Now typically this pension fund, like many others will not ask for their physical gold. That’s the system, they (the LBMA bullion banks) know that no one is going to ask for this unallocated gold to be allocated into a physical account. Furthermore they don’t expect this pension fund to ask for delivery....

 

“As soon as these pension funds know that they can have their ten tons of gold physically backed, based on the fact that they get receipts detailing bar numbers and it costs them nothing to do this other than to move their account, many will make that move.

 

In the previous example, they (LBMA bullion banks) would be forced to buy at today’s prices at around $1,900, forcing the banks to crystallize a $200 loss on the previous ten tons of gold, which was a ledger entry at $1,700. Simultaneously, the Pan Asia Exchange will actually be purchasing this ten tons of gold that the LBMA bank never did, forcing the price higher and creating more derivative stress on the LBMA system as this accelerates. This obviously has the effect of exposing the bullion banks to massive derivative losses and risk exposure.

 

It’s going to force true price discovery for gold and no one knows what that is. When you actually crystallize all of this paper derivative gold into physical metal, no one knows what the price will be.

 

So participants will shortly be able to go buy gold on the Pan Asia Exchange, knowing it is backed 100% by physical metal. Although gold can be purchased in any currency, this is China’s way of bringing the RMB into the international market over time as a reserve currency.

 

It enables participants to buy gold in RMB, giving them exposure to gold and silver, one to one backed. This is a true way to diversify out of dollars.”

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Good to see someone has cash reserves left. I piled most of mine in a few years back. :lol:

 

So did Errol and a few others, I imagine ;) . But there are some of us who are still earning fiat to convert into money. Others are sipping pina coladas. Or reading. <_<

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So did Errol and a few others, I imagine ;) . But there are some of us who are still earning fiat to convert into money. Others are sipping pina coladas. Or reading. <_<

Well, when economies turn vicious, it doesn't hurt to sit it out on the side-lines for a bit. I still work when it suits me, but work [in a vicious economy] tends to only cover living costs, and not decent savings.

 

Of course, the old Protestant work ethic still dominates, and family uncomprehendingly think I live the most decadent of lives..... even though I'm a frugal teetotaller. :lol:

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http://www.reuters.com/article/2011/09/07/us-markets-precious-idUSTRE78401J20110907

 

A surprise move by the Swiss National Bank to curb its currency's strength shocked the markets on Tuesday, drove the dollar up and encouraged profit-taking by bullion investors after gold prices hit record highs.

 

Spot gold tumbled as much as $60 from Tuesday's record of $1,920.30, but rebounded half a percent to trade at $1,873.99 an ounce by 0329 GMT.

 

U.S. gold gained 0.2 percent to $1,876.70, off the all-time high of $1,923.7 struck in the previous session.

 

The resilience of gold was widely expected, as mounting worries about the euro zone's fiscal health continued to drive nervous investors to seek protection in the precious metal.

 

....

 

There are signs that investors have become more cautious in joining the gold rush.

 

The Relative Strength Index of spot gold has hovered in the lower 60s so far this month. In August, when gold surged 12 percent on a record-setting rally, the RSI exceeded 70 for 14 out of 23 trading days. A reading above 70 suggests the underlying asset is overbought.

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Gold May Rebound as Swiss Franc Ceiling Reduces Haven Investment Options

 

 

http://www.bloomberg.com/news/2011-09-06/gold-may-decline-for-a-second-day-after-rally-to-record-encourages-sales.html

 

Gold may rebound after falling the most in a week yesterday as investors sought to protect their wealth against declining currencies and economic turmoil.

 

Gold for immediate delivery traded little changed at $1,875.02 an ounce at 11:08 a.m. in Singapore, swinging between gains and losses as equities rebounded. Bullion dropped from a record $1,921.15 yesterday as the dollar advanced for a sixth day against a six-currency basket including the franc after the Swiss central bank set a ceiling on the exchange rate.

 

“We’re going to have pullbacks but there’s a lot of opportunity in gold today and it’s a bull market that will last many more years,” Robert Lutts, president of Cabot Money Management, said in a Bloomberg Television interview.

.......

Safe Haven

“A stronger dollar does usually mean a lower gold price,” Julian Jessop, chief global economist at Capital Economics Ltd., wrote in an e-mail. “However, we see no reason why both the dollar and gold cannot benefit from increased safe haven demand in the event of a further escalation of the financial crisis in the euro-zone.”

.....

“The upside for the franc is now limited, some of the demand for safe havens should be diverted to gold, supporting its price,” Jessop wrote. “We continue to expect gold to rise to $2,000 this year.”

....

“Gold and Treasuries, particularly longer duration bonds, exhibited a significant jump in correlation, as the two started moving in lockstep with each other” after Standard & Poor’s cut the U.S. credit rating on Aug. 5, according to Michael A. Gayed, chief investment strategist at Pension Partners LLC in New York.

 

“It appears that gold is now serving as a viable alternative to treasuries during market turmoil,” Gayed wrote in an e-mail. Treasury 10-year note yields dropped to an all- time low yesterday as bullion rallied to its highest ever.

 

“Even during the dark days of the Lehman Crash in 2008 this was not the case,” Gayed said, referring to the collapse of Lehman Brothers Holdings Inc. which triggered the worst recession since World War II. “It may be gold is behaving like this because investors are concerned about further debt downgrades, and you can’t downgrade a metal.”

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Technically gold looked overbought, it failed to breakthrough after making a new high and is now looking at a classic bearish divergence pattern. All these things were suggesting a market top. Then of course there are hidden forces that make the price drop 60 dollars in two minutes. I love free markets.

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Don't sweat the small stuff. What you have to get right is the fundamentals. Given that the U.S. is like a person on $22,000 a year with a credit card balance somewhere between $142,000 and $2,100,000, there is no question what they will do with their printing press.

 

Technically gold looked overbought, it failed to breakthrough after making a new high and is now looking at a classic bearish divergence pattern. All these things were suggesting a market top. Then of course there are hidden forces that make the price drop 60 dollars in two minutes. I love free markets.

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Welcome GF :D

Can I start off the discussion by asking you whether you have any other predictions for the price of gold.

IMO the best two so far that I have read are from Jim Sinclair and Krassimir Petrov.

Both of which I put on this chart:

 

GoldUS_080220_10000_prediction.gif

 

I thought this morning, it would be nice to add more predictions to it, and see how they all compare.

 

I might skip the Goldman Sachs one of a falling gold price :P

 

Steve

 

I think we are still on target!!! ;):D

 

Regards

 

ML.

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