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DrBubb, on 26 September 2011 - 04:19 PM, said:

After a nearly $400 drop off this year's high, we can finally say Gold's 12-year bull market is over.

What a load of bollocks.

Agreed, Warpig. Nothing has changed. Sure, gold was overbought. Silver too. Doesn't affect why I am buying it though. BTFD. Simple.

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Quiff,

No one gets it right all the time - Neely has a good track record.

And he doesnt claim perfection like some the Gold Buy & Hold wizards do.

("Never ever ever ... sell you gold," is my definition of a nonsense.)

 

(Sorry to say this, but some here have lots to learn about how markets work,

and I fear they will learn the hard way. Don't say I did not warn you.

 

You'll be citing Jon Nadler next!

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I just reinvested 25% of my silver profits into Gold bullion, a no-brainer for me really. I have a lot of dollars in a trading account so it's a nice hedge for that, I am not convinced of the view that there will be hyperinflation at some point, nor that gold will ever be part of a monetary unit. However, I realise I could easily be wrong and want to hedge against that. If there is one thing you can count on, it's for politicians to repeatedly make bad decisions. I am quite sure that if gold were to be considered as part of a monetary unit, it will be the very last option available on the table, and by that time things could be a real mess. I've done very well indeed with silver, but it's far less well rounded as a hedge than gold is.

 

I may put another 25% of profits in over the next few days. I'm keeping the rest since if the precious metals story turns out to be complete bolshoi longer term, I still have the gains to show for it.

 

 

I'm a fan of Moses Kim from expectedreturnsblog.com, he seems quite shrewd and reckons there's more to come on the downside. His latest post;

 

 

Gold’s Collapse Continues

 

"As I write this, gold is trading at $1591 in the overnight markets, after trading as low as $1531. Surprised? You shouldn’t be. Gold was overstretched and needed a breather. I am actually starting to think we will see gold in the $1400 range.

 

Gold has monster corrections all the time, yet people are surprised when they come. Every time gold rallies, gold bugs say the world is ending and hyperinflation is imminent. This doesn’t make sense to me. Treasuries are hitting high after high, which means the interest payments on our debt are holding stable, and somehow gold is supposed to skyrocket? Let’s be objective here.

 

True believers in gold should take a one month vacation and not even look at the price of gold. When your vacation is over, buy gold at whatever price it’s trading at. I honestly believe this is a better strategy for most people than the alternative, which is to constantly monitor gold prices and buy and sell in an emotional frenzy. Let gold bounce off the 200-day moving average, then let’s start talking about a rally."

 

 

 

As an aside William Patalon III, Executive Editor, Money Morning posted a story on 20th September, the headline -

 

Why We Know Gold Prices Are Headed Higher

 

You gotta love it, gold now $200 lower. I'll be paying close attention to this guy in the future!

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From DrB's Diary... Look what Neowave has come out with !

 

NEOWAVE: Gold's Bull Market is Over

 

 

I wonder if one day this call might also be filed in the same round cabinet that Tom O'Brien's call is filed in.

 

Screenshot2011-09-26at183332.png

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From DrB's Diary... Look what Neowave has come out with !

 

 

The REAL PROBLEM now is there are not enough shorts.

 

If there were more shorts, then we would see buying driven by short-covering.

The parabolic move up, chased them out, and brought in too many new bulls, who were way too complacent, and maybe still are.

 

From above:

 

 

Now I just got this email from Glenn Neely who has a good track record forecasting Gold prices:

 

NEOWAVE: Gold's Bull Market is Over

 

 

After a nearly $400 drop off this year's high, we can finally say Gold's 12-year bull market is over. For quite some time I've warned that America was on the verge of an entirely new type of economic environment - Deflation! Since our last bout of deflation was 80 years ago, this is a situation virtually no living American can remember. The impact on banks, home values, debts of all kinds and consumers, will be profound. This means that everything denominated in U.S. dollars will - over the next few years - begin to drop in value.

 

That will cause huge problems for all legal contracts based on payments in U.S. dollars, especially housing loans.

 

 

Are we headed down to $1200 or even $1000?

"Anything can happen," Gentles.

"Never ever ever sell your gold."

Indeed ! - what piss-poor advice that could seem in a few months.

This headline looks a bit silly. The big names get it spectacularly wrong all the time. to think of a couple; the "bond king" turns bearish on US bonds, Rick [from Rick's Picks] jumps from deflation to hyper-inflation.

 

What's needed is rational analysis as opposed to knee-jerk reactions. Gold being down $400 [after a super quick run-up] is not really that big a deal; in real terms the correction is simliar to 2008... and we all know how quickly gold bounced back.

 

I can't post my usual chart now.... but the long term log shows gold correcting to the long term trend line. Doesn't look like the end of a bull market to me.

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DD:

Don't forget what I said: "Anything can happen."

I reckon, You are far too complacent.

I have been warning you and the others to be careful, think for yourself, and not listen only to the perma-Bulls.

 

Just trying to be right and sit tight.

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I know this is slightly off topic but I'd like to ask a question about a gold backed currency. If say the Euro was backed by Gold and also the Pound.....I suppose the Pound wouldn't have been able to devalue against other currencies so easily? So, when a country is experiencing economic problems, they cannot devalue when they have a gold backed currency to increase exports and even encourage companies to set up in their particular area? I'd be grateful is somebody could answer this for me.

 

A country on a gold standard can still devalue by changing the ratio of banknotes to gold. The US did this in 1933 changing the ratio from $20 per ounce to $35 per ounce. There were some European countries that also devalued during the WW1/interwar period.

 

It is less easy under the gold standard, however, because it requires an explicit policy decision from the government, as opposed to allowing loose monetary policy to gradually depress the value of a fiat currency. That explicit policy decision may be difficult with respect to domestic and international politics.

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A country on a gold standard can still devalue by changing the ratio of banknotes to gold. The US did this in 1933 changing the ratio from $20 per ounce to $35 per ounce. There were some European countries that also devalued during the WW1/interwar period.

 

It is less easy under the gold standard, however, because it requires an explicit policy decision from the government, as opposed to allowing loose monetary policy to gradually depress the value of a fiat currency. That explicit policy decision may be difficult with respect to domestic and international politics.

Yep, when Roosevelt unilaterally messed around with the gold standard, the poor brits weer utterly shocked. They thought America would carry on where they couldn't any longer.... that is, maintain a relatively stable international monetary system. It could be argued, from a monetray perspective, that Roosevelt's "nationalist" policy contributed and emboldened nascent nationalist movements elsewhere... and helped lead to the breakdown of international order.

 

Of course, if only the US were now on gold, they would have the option of devaluing. As it is, if deflationary forces persist and become stronger. the US could be crucified on a strong dollar. Going back onto an international gold standard may end up being a way to devalue their dollar relative to other currencies, and stabilize trade.

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This headline looks a bit silly. The big names get it spectacularly wrong all the time. to think of a couple; the "bond king" turns bearish on US bonds, Rick [from Rick's Picks] jumps from deflation to hyper-inflation.

 

What's needed is rational analysis as opposed to knee-jerk reactions. Gold being down $400 [after a super quick run-up] is not really that big a deal; in real terms the correction is simliar to 2008... and we all know how quickly gold bounced back.

 

I can't post my usual chart now.... but the long term log shows gold correcting to the long term trend line. Doesn't look like the end of a bull market to me.

 

Yes I agree. The 144/150 day MA is important here. Currently around 1580, which it dipped below yesterday very briefly then shot back off like a scalded cat. I think we will see a few weeks of base-building now, maybe retesting the 144/150 day MA along the way. I hope so as I hate these spikes and am much happier with the more orderly progress we usually see.

 

Ross Clark has support at around 1547:

 

http://howestreet.com/2011/09/precious-metals-body-evidence-parameters-monitor/

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Jim Rogers' view on gold:

 

 

We have discussed before that gold has been up 10 years in a row, which is very unusual in any asset class. So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong.

 

I doubt if it will go to $2000 an ounce in 2011, it is more likely to have a correction which will last for several weeks, several months. It has been very strong. If it goes down some more, I would buy more gold as I have told you many times.

 

http://articles.economictimes.indiatimes.com/2011-09-26/news/30204713_1_base-metals-precious-metals-silver-and-gold

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The Chinese Mean To Control The Global Gold Market

 

Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province– the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China’s five year plan– which means it is part of China’s strategy for dominance in global financial markets and the global economy.

 

Pan Asian will allow Chinese to speculate in gold futures contracts or buy physical gold through an account with a bank or broker. All 320 million customers of the giant Agricultural Bank of China will. simply be able to use their Renminbi, the Chinese currency, from their bank accounts to trade gold. Sounds bloody dangerous doesn’t it.

 

It means the spot market in gold could be headed for China– and away from London’s Metals Exchange or the Comex in New York. I’d like to know who is going to oversee and regulate all this action. For example, when the Comex raises margin requirements to dampen speculative fervor– will China bew governed by that? I doubt it very much.

 

In June you’ll be able to buy spot gold or futures contracts in China. It also means that the Chinese currency- not dollars– will for the first time become the ruling currency used in one of the major speculative commodities of our age. All eyes will be on the influence of the gold trade in China rather than New York, London, Switzerland or South Africa.

 

Another reason for registering the reality of gold as a trading vehicle, an investment for households, central banks, hedge funds, endowments. Another bullish force behind the powering of gold prices higher.

 

No wonder George Soros has bought back some or all of the gold position he sold around $1600 an ounce.

 

http://www.forbes.com/sites/robertlenzner/2011/09/27/the-chinese-mean-to-control-the-global-gold-market/?partner=yahootix

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Yes I agree. The 144/150 day MA is important here. Currently around 1580, which it dipped below yesterday very briefly then shot back off like a scalded cat. I think we will see a few weeks of base-building now, maybe retesting the 144/150 day MA along the way.

I bought Gold/GLD today* (Thursday) in the extended hours session at: $154.78

 

That is below Wednesday's:

Close: $156.22 - $4.41 / % Change -2.75% / Volume 21,775,951

Open $160.73 / Day High $161.29 / Day Low $155.56

 

That is equivalent to: $154.78 x 10.29 (21d MA of ratio) = $1,593

 

Using $1580 / 10.29 = GLD-$153.55

 

 

*A small number of Oz. - hedging Calls sold two days ago at a higher price

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The Chinese Mean To Control The Global Gold Market

 

Get ready for the Pan Asian Gold Exchange, scheduled to open in June, 2012 in Kunming City, Yunman Province– the gateway to all of Southeast Asia. This is serious, as the Pan Asian Gold Exchange is a part of China's five year plan– which means it is part of China's strategy for dominance in global financial markets and the global economy.

 

 

 

I do not know how Chinese can control the global financial market by starting PAGE? In my uneducated opinion, there would be many such physical gold exchanges within every sovereign country. Perhaps multiple within one country.

 

As far as I understand, the sovereigns will do their dealing via BIS.

 

PAGE is just the beginning. But I doubt it would give Chinese any advantage long term. It will be seen as Chinas attempt to bring down the western control over gold market and thus the financial market. It would just put a deeper divide between the west and China.

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too late to edit above, but i should have added this.....

 

This chart encapsulates the complete gold bull since Browns bottom; the mirror image log pattern is coming to an end (i.e. the % price range of total price is getting smaller). The duration of the 1st phase is now (more or less) equal to the 2nd phase.

 

Can it stay within its range for the foreseeable future?

 

Yes of course, but as a consequence of the 'narrowing' pattern, time is limited.

 

What comes after?

 

Take your pick

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