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Good lord!! Did anyone else SEE THIS?!

 

News at 10 tonight, clearest signal of gold ramping if ever i saw one. i am in no doubt news is orgastrated.

 

2 news stories, 1) Negative equity family, feelin porer and more house prices to crash.

2) Mini documentary on gold in southafrica, as gold can only go up.

 

BBC! Now i am worried. I think I should sell.

I thought the subtext of the piece was that gold had already gone up to crazy levels.

 

I thought the piece about buying equities on Newsnight was hilarious. The "experts" kept insisting that the price of equities reflects the situation in 12-18months time. 18 months ago the FTSE was at a high, was it reflecting the situation now???

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Britain showing signs of heading towards 1930s-style depression, says Bank

 

http://www.telegraph.co.uk/finance/finance...-says-Bank.html

The Chancellor acknowledged at the G20 meeting that the economic situation was grave but pledged not to allow a repeat of the Depression years. The ministers promised to pump more cash into their economies if necessary in the next few months.

:blink:

Oh great, a meglomaniac.... who thinks he is in charge.

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Paulson goes for gold - http://ftalphaville.ft.com/blog/2009/03/17...-goes-for-gold/

 

That’s John not Hank, of course. And the scourge of the banking industry has just made a big bet on the yellow metal.

 

This statement was released by Anglo American on Tuesday afternoon. (emphasis ours)

Anglo American announces the sale of its remaining 11.3% shareholding (39,911,282 shares) in AngloGold Ashanti Limited to investment funds managed by Paulson & Co Inc for $32.00 per share in cash, generating proceeds of $1.28 billion. The proceeds will be used for general corporate purposes. Consistent with Anglo American’s stated intention to dispose of this non-core holding, Anglo American no longer owns any shares in AngloGold Ashanti.

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Very long article:

 

FT: Haven-sent gains for gold

 

With the dollar so strong can we really see gold holding more than $1000 an ounce?

Mr K C Ong, London

 

Suki Cooper: Gold’s legacy as a monetary asset and with key consumption being outside of the US means there is a positive relationship between the dollar and gold prices. A weakening dollar would certainly appear to be broadly supportive of an uptrend in gold prices, but the converse does not necessarily hold true. In the past, a strong dollar has not necessarily prevented gold prices appreciating.

 

Although the gold/dollar relationship is strong it is not one that will unquestionably cause an equal and opposite reaction. History shows this relationship tends to weaken during periods of dollar strength, and the relationship becomes stronger during periods of dollar weakness. Back in March 2008, when gold prices breached the $1000 level for the first time, the dollar had hit record lows against most major currencies as well as inflationary concerns being ripe.

 

This time, gold prices have rallied despite the traditional drivers not being supportive. Instead this rally is being driven by safe haven buying in light of concerns over the broader economy. Investor demand has been tremendously strong. In our view, prices are more likely to make a sustained move above $1000 in the second half of the year in line with our expectations for the dollar to weaken against the euro.

 

................................................................................

.....................................

 

At what point will gold become less attractive than other asset classes?

Vish, unknown

 

SC: Given its dual role as a commodity and a monetary asset, gold prices tend to flourish in an environment that is supported by its fundamentals and the external environment. Thus if its underlying physical market balance is in excess surplus and there is not sufficient investment demand to soak up that excess, prices would come under pressure.

 

Investors buy gold for many different reasons, as a dollar hedge, equity hedge, hedge against market uncertainty, inflation hedge, and as a safe haven asset to name but a few.

........

http://www.ft.com/cms/s/0/ebcc1cda-07d2-11...?nclick_check=1

 

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move to commodities once inflation takes hold

 

 

 

http://www.safehaven.com/article-12850.htm

 

The reality is that the precious metals complex outperforms AHEAD of reinflation, while the rest of the commodity sector outperforms DURING the ensuing inflation. Gold stocks perform best when their margins are expanding. That can happen when the price of Gold stays flat and cost inputs (oil, steel, labor) fall. It can happen when gold rises and rises faster than cost inputs. When inflation begins to take hold, the precious metals complex has already anticipated it. Inflation raises the cost of everything. As the cost of steel, oil and labor rise, it hurts the profit margins of gold producers. Hence, gold companies outperformed during the deflation and early reinflation of the 1930s, but underperformed during the inflation of the 1940s.

 

How did the gold stocks do in the 1970s? The aforementioned BGMI index, rose from a bottom of less than 100 to a peak of about 1300. Let's call it a 14-bagger. Outstanding right? Well, consider that the price of Gold rose from $35/oz to as high as $888/oz. That is a 25-bagger! Gold stocks unperformed Gold despite a rising gold price. Why? Because of rising commodity prices and rising inflation, gold companies didn't benefit as much as you'd expect. In relative terms, gold stocks were better performers in the 1960s. The BGMI rose very nicely, while the price of gold remained fixed.

 

In the early 2000s, there was a fear of deflation. As you can see from the chart below, from 2001-2003 gold stocks strongly outperformed gold as well as commodity stocks. Gold bottomed before the rest of the commodity sector and advanced before inflation began to take hold. As inflation began to take hold, the gold stocks underperformed both gold and commodity stocks and even while the price of gold rose from $600 to over $1,000.

 

Conclusion

 

It appears the consensus is wrong on both counts. One side says there is no inflation on the horizon, so the precious metals sector isn't an appropriate investment. The other side says that there will be hyperinflation, so buy gold. Hyperinflation may be good for physical gold but it is deleterious to everything else including society and the political structure. The reality is that the current macroeconomic environment is most advantageous for gold stocks and then gold. However, if and when inflation begins to take root the precious metals complex will underperform and your funds will best be utilized elsewhere. For more on this analysis, visit our website and consider joining our newsletter. Good Luck!

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Getting close to 900. May be a significant level for pog as some investors see 900 breached and decide to sell while others decide to wait for it to go lower before buying.

 

gold.gif

Good time to buy I'd say :D

 

8HrGoldTrend.jpg

 

 

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(From GEI's Dashboard, an accurate view on Gold ? ):

 

PRECIOUS METALS

1237185166066494300.gif

 

+ Bubb's view, including targets:

 

I think Gold can correct to GOLD-$850 (GLD-84) to fill the Gap down there. If gold jumps above Gold-$945 or so, I am probably wrong. If it drops from here, I expect Gold to be stuck in a trading range out to July-August.

 

+ Counter-opinions :

(I am looking for an up-to-date, and articulate counter-opinion. Please offer one, or suggest one.)

 

= =

(CAN YOU provide the counter-opinion?):

http://www.greenenergyinvestors.com/index.php?showtopic=6254

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(From GEI's Dashboard, an accurate view on Gold ? ):

 

PRECIOUS METALS

1237185166066494300.gif

 

+ Bubb's view, including targets:

 

I think Gold can correct to GOLD-$850 (GLD-84) to fill the Gap down there. If gold jumps above Gold-$945 or so, I am probably wrong. If it drops from here, I expect Gold to be stuck in a trading range out to July-August.

 

+ Counter-opinions :

(I am looking for an up-to-date, and articulate counter-opinion. Please offer one, or suggest one.)

 

= =

(CAN YOU provide the counter-opinion?):

http://www.greenenergyinvestors.com/index.php?showtopic=6254

Pretty much agree with you DrB that pog could go lower here in the short/medium term. I suspect there are a few factors which could cause it to go even lower than 850:

 

- the market could turn from inflation expectations to deflation expectations

- the dollar could strengthen even in the face of QE as investors seek to hold dollars as asset prices continue to deflate

- the rally in stocks could continue for a bit

- the rally could falter, DOW could collapse further causing further forced liquidation in other assets such as gold

- oil/gold average ratio 14:1 [funny how this one has fallen off the radar]

 

Conversely:

 

- gold could reverse and go to 950 if the dollar starts to decline

- gold goes to the moon given some hyper-inflationary event [but can not see this happening anytime soon]

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What's keeping the POG down? Don't people know there is a depression coming. :o Deleveraging, seasonal trends, demand or manipulation? The lack of news at the moment is really frustrating.... :angry:

The market can remain irrational longer than....... just as well most here aren't on margin right? ;)

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Getting totally whacked - at 894 at the moment. :o

 

On our way down to 885, 865, 840, or even to 805? I don't think we will breach 865 though (but I could be wrong). :unsure:

 

885 breached. Now at 883.80...

 

next waypoint 865. I will consider adding a small amount back into GoldMoney around then. I am ever mindful of Bubbs 840 warning...

 

 

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