id5 Posted June 25, 2008 Report Share Posted June 25, 2008 Just wandered across this on in the online FT Vietnam has suspended gold imports http://www.ft.com/cms/s/0/5541c9a6-4151-11...00779fd2ac.html Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 Just wandered across this on in the online FT Vietnam has suspended gold imports http://www.ft.com/cms/s/0/5541c9a6-4151-11...00779fd2ac.html Of course the price will now go sky-high within Vietnam. Could this happen at some stage in the US and UK as well? The price would then explode in a buying panic, which is when you maybe would like to sell and switch into houses or general stocks. But I think we're still far from this. Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 A headline from the HPC blog says: Rates rise to more normal levels Mail: Lenders send two-year fixed loan rates soaring past 7% for first time in a decade Keep in mind, 7% IR is still BELOW long-term average! Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 Of course the price will now go sky-high within Vietnam. Could this happen at some stage in the US and UK as well? The price would then explode in a buying panic, which is when you maybe would like to sell and switch into houses or general stocks. But I think we're still far from this. It does pose the scenario where physical could move well away from paper given the paper isn't necessarily geographically constrained, i.e. a London traded ETF may hold gold in Switzerland. It does tempt me to look at my physical weightings. Link to comment Share on other sites More sharing options...
LargelyIgnorant Posted June 25, 2008 Report Share Posted June 25, 2008 So, this is where you ended up, GF How are you? All going to plan, isn't it? Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 So, this is where you ended up, GF How are you? All going to plan, isn't it? Hi Largely Ignorant Yeah, started a thread here earlier this year, and it took off right from the start. Dr Bubb is now nicely dissecting them into monthly parts. Yes, all the chickens come home to roost. Houses targeting below 100 oz gold, the DOW will drop to below 1oz. It's happening right in front of our eyes. But it's volatile and in slow-motion, so many people just can't see it and buy financials on the 'dips' all the way down. EDITed for clarity. Link to comment Share on other sites More sharing options...
Bobsta Posted June 25, 2008 Report Share Posted June 25, 2008 Just wandered across this on in the online FT Vietnam has suspended gold imports http://www.ft.com/cms/s/0/5541c9a6-4151-11...00779fd2ac.html This article was posted Monday. Any likelihood that with Vietnam as "the #1 importer of gold due to rampant inflation" that it was this news that caused the sharp downturn? Seems a little unlikely to me as you would expect some in the market to know about this before it was made public... but still a potential option IMHO. Nothing further seems to have been disclosed about sudden margin requirement increases or forced hedge-fund position closures. Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 It does pose the scenario where physical could move well away from paper given the paper isn't necessarily geographically constrained, i.e. a London traded ETF may hold gold in Switzerland. It does tempt me to look at my physical weightings. I hold physical PMs in Switzerland, the UK and Germany. I would like to hold some in Asia, preferably UAE, Hong Kong, or Russia. The latter two are not part of the American Empire and would therefore greatly diversify geopolitical risk. Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 Scumbags aren't they. Pretending they are decreasing LTVs as a result of demand i.e. blaming the borrower. What they are really saying is HOUSE PRICE CRASH IN FULL SWING WE ARE GETTING OUT ! Link to comment Share on other sites More sharing options...
alexreeve Posted June 25, 2008 Report Share Posted June 25, 2008 http://news.goldseek.com/GoldSeek/1214373960.php So in a curious cycle we can see inflation of house prices resulting in a deflationary bust that causes a policy response that leads to inflation in consumer prices which causes a further deflation of asset prices. In the case of housing, consumer price inflation reduces disposable income available for financing the purchase of homes and induces a deflationary downward spiral, the opposite of a real estate boom. Where does this leave investors? If you sit on cash then inflation will erode the spending power of your money. If you invest in deflating assets then you are losing money. What you require in this environment is a way to protect the value of your money. It is only going down in value because the central banks are printing more and more money in a necessary but vain attempt to shore up asset prices, at least in nominal terms. The answer is to convert to a currency which is not subject to an inflating money supply. It will then rise in value while other currencies sink, and will still be available when asset prices bottom out and look a good buy again. Step forward precious metals as the only true money and repository of value. The supply of gold and silver is relatively fixed, and only inflating by the amount of annual production which is around two per cent of total available supply. But hold on a minute. Prices of any commodity are determined by two essential factors: supply and demand; and speculative flows of money. If asset markets weaken further and investors gradually abandon them – or all suddenly jump for the exit door in another Wall Street crash – then the relative attractiveness of gold and silver will become apparent. There are also considerable short positions in gold and silver which would amplify the price movement in the event of a sudden shift of money into precious metals. Therefore gold and silver are not only likely to prove highly defensive assets in an inflationary environment for general prices, and a deflationary one for stocks and real estate. A big price spike like that seen in the late 1970s is perfectly likely. How high could prices of precious metals go? The Schroder Alternative Solutions Gold and Metals Fund launched last week predicted $5,000 an ounce for gold in the next few years. Silver has arguably greater potential for price gains, with the largest short position and tightest supply situation and could top $100 from $17 an ounce today. That is why more and more smart money is choosing precious metals as an asset class. The cycle will later turn and real estate and shares recover their appeal once a recession has beaten inflation. But that is a several years away and not yet even on the horizon. Link to comment Share on other sites More sharing options...
drminky Posted June 25, 2008 Report Share Posted June 25, 2008 Of course the price will now go sky-high within Vietnam. Could this happen at some stage in the US and UK as well? The price would then explode in a buying panic, which is when you maybe would like to sell and switch into houses or general stocks. But I think we're still far from this. 'Vietnam’s communist authorities have temporarily suspended all gold imports in a bid to tackle the country’s spiralling trade deficit and help support the depreciating local currency, the dong.' Long dong anyone? Does that mean gold is bad for a strong dong? hmm might have to rethink my strategy! Link to comment Share on other sites More sharing options...
id5 Posted June 25, 2008 Report Share Posted June 25, 2008 ... Does that mean gold is bad for a strong dong? hmm might have to rethink my strategy! Caused a laugh and brightend today Link to comment Share on other sites More sharing options...
marceau Posted June 25, 2008 Report Share Posted June 25, 2008 Well, it's FOMC day. What does everyone predict? My bet is no changes to the base rate, a load of stealth liquidity measures and an even bigger load of nonsensical woolly jawboning about keeping an eye on inflation (without saying they'll actually raise rates). Of course the market, being stupid, will probably buy the DOW AND sell oil and gold in moves which run completely contrary to each other. They just won't be able to shake that reality-defying optimism that the Fed has it all under control. Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 Well, it's FOMC day. What does everyone predict? My bet is no changes to the base rate, a load of stealth liquidity measures and an even bigger load of nonsensical woolly jawboning about keeping an eye on inflation (without saying they'll actually raise rates). Of course the market, being stupid, will probably buy the DOW AND sell oil and gold in moves which run completely contrary to each other. They just won't be able to shake that reality-defying optimism that the Fed has it all under control. I'm inclined to agree - no action but a lot of rhetoric. I'm actually more interested in the oil inventories figures and think that'll lead to a move in a strong move in crude one way or another, hopefully upwards. I'm undecided how that'll affect gold although, like you, expect bullish fundamentals to lead to negative action! On another note, I'm disappointed with silver's lack of a recovery this week. In the event of a bullish move in gold, it has a lot of catching up to do. Link to comment Share on other sites More sharing options...
marceau Posted June 25, 2008 Report Share Posted June 25, 2008 I'm inclined to agree - no action but a lot of rhetoric. I'm actually more interested in the oil inventories figures and think that'll lead to a move in a strong move in crude one way or another, hopefully upwards. I'm undecided how that'll affect gold although, like you, expect bullish fundamentals to lead to negative action! On another note, I'm disappointed with silver's lack of a recovery this week. In the event of a bullish move in gold, it has a lot of catching up to do. Silver could be a very good buy here, it's been thrown on the floor like no-one wants it. But you'd have to be very brave to go long right now. I suppose that's where the profit is, buying when everyone else is fearful. I have a long from $16.69 and I'm wondering whether to hold onto it or sell out now just in case. I'm pretty sure PMs are going to take a knock today, and even if it's only for a very short time that still means I could be able to buy back lower. Edit: Just sold at $16.76. I believe the market will react in a manner negative to gold whatever the Fed says. I'm on standby to buy the dip (if it happens). Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 Silver could be a very good buy here, it's been thrown on the floor like no-one wants it. But you'd have to be very brave to go long right now. I suppose that's where the profit is, buying when everyone else is fearful. I have a long from $16.69 and I'm wondering whether to hold onto it or sell out now just in case. I'm pretty sure PMs are going to take a knock today, and even if it's only for a very short time that still means I could be able to buy back lower. Edit: Just sold at $16.76. I believe the market will react in a manner negative to gold whatever the Fed says. I'm on standby to buy the dip (if it happens). I'm still long in core positions but also have a short term CFD position from the drop earlier in the week. I got stopped out in the mid-day (US) move yesterday and re-opened this morning . I'm half-expecting a move lower but no lower than $16.60 and very short-lived (i.e. I don't mind riding it out), but don't want to miss a possible leap. Fingers crossed Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 ... and feeling increasingly contrarian after listening to the naked short podcast posted above. Potent stuff. Link to comment Share on other sites More sharing options...
G0ldfinger Posted June 25, 2008 Author Report Share Posted June 25, 2008 Is this a scheme for getting rid off Bernanke? The IMF is apparently going to do a Financial Sector Assessment Program (FSAP) in the US. Must be embarassing. Link to comment Share on other sites More sharing options...
drminky Posted June 25, 2008 Report Share Posted June 25, 2008 Silver could be a very good buy here, it's been thrown on the floor like no-one wants it. But you'd have to be very brave to go long right now. I suppose that's where the profit is, buying when everyone else is fearful. I have a long from $16.69 and I'm wondering whether to hold onto it or sell out now just in case. I'm pretty sure PMs are going to take a knock today, and even if it's only for a very short time that still means I could be able to buy back lower. Edit: Just sold at $16.76. I believe the market will react in a manner negative to gold whatever the Fed says. I'm on standby to buy the dip (if it happens). I've almost given up trying to figure out how the hell your average joe trader (or average hedgie) thinks anymore.. The media, Government and educational instituions have done such a brilliant job of dumming down and spinning ass-backwards truths all over the place that barely one in a thousand seems to understand what is actually going on anymore - let alone the people in charge! I love the bloomberg article yesterday about gold: http://www.bloomberg.com/apps/news?pid=206...fer=commodities ``Inflation makes gold go lower because central banks have to raise interest rates to control it,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. ``Higher inflation means higher interest rates and that's negative for gold.'' Umm.. inflation is BAD for gold now? it took a lot more than a few quarter-point hikes to stop gold's run in the 70s.. Link to comment Share on other sites More sharing options...
Magpie Posted June 25, 2008 Report Share Posted June 25, 2008 Umm.. inflation is BAD for gold now? it took a lot more than a few quarter-point hikes to stop gold's run in the 70s.. To be fair, the article goes on with another quote: ``Gold would benefit from less hawkish central banks, as we believe investors turn to gold when inflation is rising and central banks are forced to be dovish,'' Reade of UBS said. ``That can happen, especially if the credit crunch intensifies. At the moment, the tone of central banks suggests growth, rather than inflation targets, will be sacrificed. This is not a good scenario for investors in gold.'' They're right up to the point that, if banks were to seriously act against inflation, that's not great for gold. Essentially the mistake the article's making is to believe that they are getting serious yet. Inflation itself is good for gold. Effective central bank action against inflation could be bad, but we haven't seen any of that yet. Link to comment Share on other sites More sharing options...
Bobsta Posted June 25, 2008 Report Share Posted June 25, 2008 I'm still long in core positions but also have a short term CFD position from the drop earlier in the week. I got stopped out in the mid-day (US) move yesterday and re-opened this morning . I'm half-expecting a move lower but no lower than $16.60 and very short-lived (i.e. I don't mind riding it out), but don't want to miss a possible leap. Fingers crossed $16.58 ATM ... let's see if it holds.... Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 Silver could be a very good buy here, it's been thrown on the floor like no-one wants it. But you'd have to be very brave to go long right now. I suppose that's where the profit is, buying when everyone else is fearful. I have a long from $16.69 and I'm wondering whether to hold onto it or sell out now just in case. I'm pretty sure PMs are going to take a knock today, and even if it's only for a very short time that still means I could be able to buy back lower. Edit: Just sold at $16.76. I believe the market will react in a manner negative to gold whatever the Fed says. I'm on standby to buy the dip (if it happens). Your sale looks good Marceu. Inventories up, oil off $3. There was some major volatility in the silver price in the hour before the announcement. It seems to be clinging to the $16.60 level though. Link to comment Share on other sites More sharing options...
marceau Posted June 25, 2008 Report Share Posted June 25, 2008 Your sale looks good Marceu. Inventories up, oil off $3. There was some major volatility in the silver price in the hour before the announcement. It seems to be clinging to the $16.60 level though. This is looking ugly now, but it's being driven by pure fear so may not have much further to run. If we break $876 there'll be more downside (although I'm not convinced it will be much more), but if we bounce off $876 we could get a nice rally. The Fed could drop things further, but we all know that they're just going to talk without any action, so buying on a dip created by their jawboning seems like a good bet to me. Link to comment Share on other sites More sharing options...
woody Posted June 25, 2008 Report Share Posted June 25, 2008 This is looking ugly now, but it's being driven by pure fear so may not have much further to run. If we break $876 there'll be more downside (although I'm not convinced it will be much more), but if we bounce off $876 we could get a nice rally. The Fed could drop things further, but we all know that they're just going to talk without any action, so buying on a dip created by their jawboning seems like a good bet to me. It is clearly being taken as an opportunity to take profits or short oil and ramp stocks. I think the move in gold/silver is somewhat secondary and they seems to be bouncing around a lot. As oil is down $4 now, I'm interested in the $130 level as for the last few weeks that has been the bottom of the trading range. Link to comment Share on other sites More sharing options...
Itinerant Wanderer Posted June 25, 2008 Report Share Posted June 25, 2008 I must confess Gold and Silver have me flumoxed at the moment. Although I freely admit I haven't traded them well, my portfolio is worth less than several months ago and I haven't traded THAT badly. I am now fixed in some longs and won't trade but simply hold. However it still amazes me that G&S remain stuck in a range and keep getting smacked down every time they try to break out. I'm more convinced than ever they are a good investment in the medium term but I'm generating a better return on my cash at the moment! Why is this? I know markets can remain irrational - I'm one of those STRs who STR'd too early (but not much too early). Fortunately housing is now falling back in line with the laws of gravity. However it took far too long (for my comfort) for housing to do this. I hope G+S won't take an equally long time to rise in line with inflationary pressures. Perhaps I should just not look at forums and prices until the Autumn... if the Fed keep bluffing about rate rises and haven't stuck them up by then, then maybe G+S will start getting a second look. Link to comment Share on other sites More sharing options...
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