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I'm curious why you think this? This is perfectly contrary to my beliefs. Why would you want to back a nag in a steeplechase? We all know currencies are going to fall at the jumps, it's just some with throw their rider sooner than others, will they not?

 

In answer to your question, what about Hedge funds, Central banks or Pension funds? Are you not of the opinion that gold is headed higher until there is something else worth putting your money into? Cash is the one thing I don't want to own at the moment. There is no other light at the end of the tunnel except a golden hue IMO.

 

TOO MANY GOLD BULLS - be very careful now!

 

I have seen polls where 90%+ of the people polled were bullish on gold.

 

From my Feb. diary:

Dash for cash - Why?

People have become too bullish on gold.

Something like 90% of people polled were saying that Gold was a "Buy." Here's a question: If you thought gold was headed higher to $1,000 or $1,500, would you wait for the market to run up to buy it, or would you have bought already. If those who are planning to buy gold have bought already, who is going to do the buying to lift it higher? This may be a problem for the gold market from here.

 

 

I am still long gold shares (quite a few of them in fact), so if Gold runs higher, I will make money.

But I have been lightening up everyday in a "dash for cash"

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I think it's helpful to look at the long-term trend. If as I do, you believe Gold is in a bull phase, and one of the significant drivers is real rates (interest rates minus the "price inflation rate"), then I think the end of the coil pattern in 2007 is a very useful reference point.

And trend lines of 20% and 40%/year mark the two extremes of a reasonable expectation.

Thus the green area marks the region of "reasonable price", using conservative expectations.

 

GoldUS_090131_perc.gif

 

We are currently smack bang in the middle of that area.

 

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Something like 90% of people polled were saying that Gold was a "Buy." Here's a question: If you thought gold was headed higher to $1,000 or $1,500, would you wait for the market to run up to buy it, or would you have bought already. If those who are planning to buy gold have bought already, who is going to do the buying to lift it higher? This may be a problem for the gold market from here.

 

Got a link to these polls, Dr.B? Who was polled? Makes a big difference. Are you talking hedge fund managers, high wealth individuals or was it a massive poll of the general population? Certain people saying it's a 'buy' is one thing - lots of buying actually being done is another. Did they poll China and other central banks?

 

Those that didn't consider or have reconsidered gold. If you are still planning - you haven't yet followed through on your plans. Have many of those capable of buying big bullion (or a big percentage of those capable of buying a bit of bullion) moved into the game yet? Then there's the whole COMEX price issue swizz lark too...

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In answer to your question, what about Hedge funds, Central banks or Pension funds? Are you not of the opinion that gold is headed higher until there is something else worth putting your money into? Cash is the one thing I don't want to own at the moment. There is no other light at the end of the tunnel except a golden hue IMO.

 

No one seems to get this and yet it's staring them right in the face - equities is where the money will go next. Stocks are down a massive 45%, inflation is very low and interest rates are very low - as Adam Hamilton from Zeal says, this wasn't a stockmarket crash it was a panic and the two are different as crashes begin with overvaluation. We didn't have an overvalued stockmarket in in 2007/2008 - panics tend to reverse themselves when the dust settles.

 

So what happened at the end of 1974 when stocks had crashed by around 45% and gold was at a new all time high?. They traded places for the next 18 months - gold fell by 43% and the Dow went up by around 73% in that period up to August 1976.

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I just sold some gold to buy silver with the cash.

 

So I hope there's a nice correction in silver in the coming weeks.

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No one seems to get this and yet it's staring them right in the face - equities is where the money will go next. Stocks are down a massive 45%, inflation is very low and interest rates are very low - as Adam Hamilton from Zeal says, this wasn't a stockmarket crash it was a panic and the two are different as crashes begin with overvaluation. We didn't have an overvalued stockmarket in in 2007/2008 - panics tend to reverse themselves when the dust settles.

 

So what happened at the end of 1974 when stocks had crashed by around 45% and gold was at a new all time high?. They traded places for the next 18 months - gold fell by 43% and the Dow went up by around 73% in that period up to August 1976.

 

So you see fundamental justification for equities to rally 50% or more despite a recession, a debt-laden consumer and global monetary and fiscal policy aimed solely at devaluing fiat currencies ?

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I thought I'd create the new thread before anyone reminded me :P:D

Living 1 day in the future, you have an advantage. It's still January in Europe!

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TOO MANY GOLD BULLS - be very careful now!

...

If your boat is loaded with gold and silver, accumulated over the years, then just sit back now and enjoy the ride. The time to load up was over the last year.

 

EDIT: I will possibly buy some more palladium soon.

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If your boat is loaded with gold and silver, accumulated over the years, then just sit back now and enjoy the ride. The time to load up was over the last year.

 

EDIT: I will possibly buy some more palladium soon.

 

I just carry on buying regardless of price. It's going to well in excess of $1650 eventually so who cares what the price is now?

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TOO MANY GOLD BULLS - be very careful now!

 

I have seen polls where 90%+ of the people polled were bullish on gold.

 

From my Feb. diary:

Dash for cash - Why?

People have become too bullish on gold.

Something like 90% of people polled were saying that Gold was a "Buy." Here's a question: If you thought gold was headed higher to $1,000 or $1,500, would you wait for the market to run up to buy it, or would you have bought already. If those who are planning to buy gold have bought already, who is going to do the buying to lift it higher? This may be a problem for the gold market from here.

 

 

I am still long gold shares (quite a few of them in fact), so if Gold runs higher, I will make money.

But I have been lightening up everyday in a "dash for cash"

 

Q: Who is going to be buying the gold to propel it higher?

 

A: The 98% of people who haven't bought it yet! With all this renewed press coverage by the gold analysts it will inform a lot more people about the situation. As people realise that they have been sold deflation, by the central banks, but really it is inflation they will be facing when the governments start monetizing debt buy buying there own treasuries. We need to remember we, as gold holders, are in the minority.

 

I think we are just starting out on another mini bull run in gold, similar to September 2007.

 

 

 

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Open interest is still a miniscule 348,000 contracts, far, far off from the peak made back when gold took out $1,000 where it peaked above 593,000. Can you see why this market is in such a bullish posture with the open interest readings at such a low level and gold less than $80 away from the $1,000 level? The funds could add another 150,000 new longs and the open interest would still be almost 100, 000 off the peak! That is simply astonishing to this long-time trader.

Doesn't this suggest that the bulls are once bitten twice shy? It could be that any pull back will be far less severe than from the March peak, rather than a new higher peak being imminent.

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Why are you comparing this to 1974 and not the Great Depression? Are you of the opinion this is just a recession? I think you're right, but your timing is completely wrong. In the GD equities fell 90%, so if looking in the rear view mirror gives a good indication of what is to come, then we are only half way there. The dust has far from settled IMO.

 

No one seems to get this and yet it's staring them right in the face - equities is where the money will go next. Stocks are down a massive 45%, inflation is very low and interest rates are very low - as Adam Hamilton from Zeal says, this wasn't a stockmarket crash it was a panic and the two are different as crashes begin with overvaluation. We didn't have an overvalued stockmarket in in 2007/2008 - panics tend to reverse themselves when the dust settles.

 

So what happened at the end of 1974 when stocks had crashed by around 45% and gold was at a new all time high?. They traded places for the next 18 months - gold fell by 43% and the Dow went up by around 73% in that period up to August 1976.

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Why are you comparing this to 1974 and not the Great Depression? Are you of the opinion this is just a recession? I think you're right, but your timing is completely wrong. In the GD equities fell 90%, so if looking in the rear view mirror gives a good indication of what is to come, then we are only half way there. The dust has far from settled IMO.

 

I think comparing our situation today to the Great Depression has been greatly overdone, for starters the overvaluation in the stockmarkets peaked in early 2000 so that year is the equivalent to 1929. Once again the massive fall was in the new technologies but this time the extent of the fall of these shares wasn't shown in the Dow but instead in the Nasdaq which crashed 77% - had it not been for all the money that was pumped out by Greenspan and not being on a gold standard then I'm sure the Nasdaq could easily have gone to 90% as well.

 

So the way I see it, 2000 to 2008 would have been the equivalent period for the stockmarket and we are now past that point - I just think there's every reason to believe that the worst has been priced in and that the US markets see recovery beginning in late 2009. Even though it will take the UK much longer before there is any sign of recovery, the UK stockmarket moves with the Dow so will follow it upwards.

 

We will just have to see what happens but I feel gold having risen so much doesn't have much upside left (coming to a seasonal peak as well) and possibly more downside (low inflation, low interest rates) whereas stocks now have little downside left having fallen around 45% with the possibility of great upside potential. Nothing goes up or down forever and gold will have it's turn again once all this printed money starts flooding into the economies but I just don't see this happening for a little while yet.

 

A healthy debate though - gold bulls need to be careful right now and be psychologically prepared 'if' the price does go down by around 40% again over the next 18 months and not be shaken out at any low but instead go on to accumulate more. That is a challenge but also where the best profits are made if you truely believe in the fundamentals as I do too - I just see a window of opportunity to make some decent money on a possible stockmarket rally in the next 12-18 months but I could easily be wrong.

 

This was a great article and I'm sure Steve might like to read it as he also likes Adam Hamiltons work..... he might not now ;)

 

http://www.marketoracle.co.uk/Article8285.html

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I think comparing our situation today to the Great Depression has been greatly overdone, for starters the overvaluation in the stockmarkets peaked in early 2000 so that year is the equivalent to 1929.

...

A healthy debate though - gold bulls need to be careful right now and be psychologically prepared 'if' the price does go down by around 40% again over the next 18 months and not be shaken out at any low but instead go on to accumulate more. ...

Interesting points. However, I do think that 2007/2008 was the big one. It came in two waves, as LIeBOR shows. Gold might indeed take longer to really reach the heights it's going to reach, so if we can accumulate for another fews years that would indeed be a great opportunity.

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I recall someone on here or HPC saying that when they saw things like this is was time to get out of gold:

 

post-1939-1233429430_thumb.jpg

 

No it would be the complete opposite of that advert that would be a warning. It would be an advert selling gold not offering to buy it (on the cheap).

 

These people are just looking to get the gold at well below spot price and make a killing. They rely on there being lots of sheeple.

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