GOLD

[headmelter]

Good point. Perhaps, a good place to start buying. Depends of course on your own personal risk analysis and risk appetite, that is, how much of your worth is already in gold and how much is sill exposed to economic meltdown. I am in no great rush to buy as am already pretty much bunkered down.

 

 

Trading opportunity?

[ologhai]

This is just another one of those low moments that makes me doubt my stash, but from experience... I have had this feeling a few times only to see gold price rocket. Perhaps I should buy a few more ounces while at this price.

 

Deep down, I can feel gold is a very good choice, at least for my surplus cash, but I get a bit sea sick riding these volatile waves.

 

In recent times, I'm actually beginning to feel as if I'm starting to get my sea legs with gold; not completely, but a lot more than when I first started buying.

 

Psychologically, I found it helped to sell a bit in February when gold felt (temporarily at least) a bit toppy. Having 'taken profits' a little, I then found that I wasn't so concerned about which way gold was going to go next -- either it went down (in which case, I could start averaging back in again -- which I've begun to do), or it carried on going up (in which case, I still held more than I'd sold, and having experienced gold's volatility as you have, then I 'knew' it wouldn't keep going up without some form of retracement sooner or later, in which case I'd just sell a little more, or wait for the expected retracement to take it to the same level or lower than I'd sold some).

 

I know that many regulars to this thread think that any form of gold trading is madness. However, after watching gold doing its thing for quite a long time now, I felt as if I might have -- not spotted a pattern as such -- but certainly noticed that volatility is very much a part of how gold gets to wherever it's going. And, as I say, psychologically, it has quelled the nausea somewhat!

 

It sometimes feels as if one should buy when fear is saying that enough's enough and it's time to get out, and sell when greed is saying that you should quickly buy a load more before you 'miss the boat'...

[romans holiday]

Trading opportunity?

Good opportunity for those who either have kept some dry powder or those that went "fishing" at the peak. fwiw, if I was all in, I wouldn't sell now, with risk/reward more limited, but wait for the next time round [unless for some reason you think pog will tank]. Also, if the dip is prolonged there is still a good op to buy cheaply with acquired income.

[Steve Netwriter]

I seem to be in disagreement with quite a few on here at the moment.

I've posted quite a long bit of analysis and predictions here for anyone interested:

 

Forex Discussions, Charts, Musings, Predictions

http://www.greenenergyinvestors.com/index....st&p=105089

 

 

[marmite]

The markets in the US are they open on Monday ????? Will thin markets be used to bash down gold at the begining of next week ????

[Mr Pipples]

The markets in the US are they open on Monday ????? Will thin markets be used to bash down gold at the begining of next week ????

 

Think US and CAD markets are open Monday - confirmation would be good.

[stobar]

The markets in the US are they open on Monday ????? Will thin markets be used to bash down gold at the begining of next week ????

 

Last time we had thin market trading over Xmas, PMs moved significantly higher...

[Steve Netwriter]

Sometimes the gold action sticks out like a sore thumb. It just doesn't match the rest of the environment.

 

So:

 

Here come...

 

From:

 

[electroweak]

And this from one of the shortest shorts out there:

 

JP Morgan hikes 2009, 2010 gold, silver price views

 

08 Apr 2009 - 13:00

 

LONDON, April 8 (Reuters) - J.P. Morgan has raised its gold

price forecasts for 2009 and 2010, citing prospects for

inflation and weakness in the dollar as supportive factors for

the precious metal.

It also raised its outlook for silver prices. It now sees

silver averaging $13.90 an ounce in 2009, against a previous

forecast of $11.00, and $13.40 in 2010, against $10.00.

The bank lifted its 2009 price view for gold to $960 an

ounce from $831 previously, and its 2010 forecast for the

precious metal to $950 an ounce from $825.

"Investment demand continues to act as an offset, to some

degree, to a very weak physical market in precious metals, gold

in particular," the bank said in a research note.

"Inflation and / or U.S. dollar weakness do however need to

materialise to justify gold above $1,000. In the meantime, the

threat of these factors will support prices."

Spot gold was quoted at $886.30/887.80 an ounce at

1117 GMT.

 

[Steve Netwriter]

A bit of a rollercoaster.

 

So now....

 

I love the Longs

From: http://www.youtube.com/watch?v=oLox_LG9UUE

 

 

[Steve Netwriter]

And this from one of the shortest shorts out there:

 

JP Morgan hikes 2009, 2010 gold, silver price views

 

08 Apr 2009 - 13:00

 

Am I the only one who feels like reaching for the sick bag when I read that stuff ?

 

Is that from "Cartel News Weekly" :lol:

 

[bitbigt]

Can someone please pull together a chart comarison of the VIX versus gold price in several currencies (I'm travelling and limited access to internet)

 

I suspect it might tell us something interesting

[FWIW]

Can someone please pull together a chart comarison of the VIX versus gold price in several currencies (I'm travelling and limited access to internet)

 

I suspect it might tell us something interesting

 

Here you go for Gold$ Vs VIX

 

http://stockcharts.com/h-sc/ui?s=$GOL...id=p28327405002

 

 

[FWIW]

I am thinking we are at a crossroads here:

 

 

 

[marceau]

I am thinking we are at a crossroads here:

 

As are the rest of the markets. I really hope the wrong conclusions weren't drawn from the G20, if they were then gold will be in a world of pain over the next few months.

 

Fingers crossed that we break out of the downward channel, but I have a funny feeling the falls will continue.

[nicejim]

Insight: Gold standard debate roars on

http://www.ft.com/cms/s/6c43927c-2456-11de...144feabdc0.html

 

 

Unfortunately I'm up to my 30-day limit for free articles on the FT site but the above might interest people here, as may the below. I'll be reading them next week.

 

 

Ten principles for a Black Swan-proof world

http://www.ft.com/cms/s/0/5d5aa24e-23a4-11...144feabdc0.html

[FWIW]

Insight: Gold standard debate roars on

http://www.ft.com/cms/s/6c43927c-2456-11de...144feabdc0.html

 

 

Unfortunately I'm up to my 30-day limit for free articles on the FT site but the above might interest people here, as may the below. I'll be reading them next week.

 

 

Ten principles for a Black Swan-proof world

http://www.ft.com/cms/s/0/5d5aa24e-23a4-11...144feabdc0.html

 

 

Here you go:

 

A few months ago, Terry Smith, head of Tullett Prebon, the interdealer broker, chaired a panel at the World Economic Forum meeting in Davos which was asked to produce one concrete recommendation to fix the global financial crisis.

 

The top pick? Not anything on toxic assets or fiscal spending. Instead, this gaggle of leading financiers called for a new reserve currency, akin to an old-style gold standard.

EDITOR’S CHOICE

More columns by Gillian Tett - May-08

In depth: Lehman Brothers - Oct-15

 

“Two-thirds of the world’s assets are denominated in a fiat currency issued by a country whose authorities are taking policy actions which seem inevitably to lead to its debasement,” explains Mr Smith, noting that “it seems . . . the Chinese have now concluded that this is not acceptable”.

 

Just a bit of pie-in-the-sky posturing of the sort that often occurs in high-altitude Davos? Perhaps. But Mr Smith is hardly a do-gooding, state-loving dreamer; on the contrary, Tullett Prebon is about as ruthlessly free-market as they come.

 

Moreover, these musings about a gold standard are currently cropping up in all manner of unlikely places. One savvy European property developer (who aggressively sold most of his holdings in early 2007) recently told me that he is now moving a growing proportion of his assets from government bonds into gold, even at today’s elevated prices.

 

“The logical conclusion of where we will end up eventually is with some type of gold standard,” he explains, arguing that future inflation will almost inevitably cause a future collapse in government bonds.

 

Half a world away in the Middle East, some sovereign wealth funds now say that they are stocking up enthusiastically on food and gold, due to similar reasoning.

 

Meanwhile, in New York a (still) formidable American hedge fund recently circulated private research that echoes the reasoning of Mr Smith. Most notably, this hedge fund points out that since the world abandoned the gold standard on August 15, 1971 credit creation has spiralled completely out of control.

 

But this four-decade long experiment with fiat currency is not just something of a historical aberration, it argues – but potentially very fragile too. After all, the only thing that ever underpins a fiat currency is a belief that governments are credible. In the past 18 months that belief has been tested to its limits. In coming years it could be shattered, particularly if the current wave of extraordinary policy measures unleashes a wild bout of inflation.

 

Hence the chatter about a gold standard. Indeed, as the debate bubbles up, some financiers are now even emailing each other an extraordinary little essay that Alan Greenspan himself wrote in support of a gold standard back in the 1960s, called “Gold and Economic Freedom”*.

 

In the years since he penned this essay, Greenspan has partly backed away from those ideas (and he blatantly ignored their implications when he was at the Fed.) But now they look prescient.

 

“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets . . . [but] in the absence of the gold standard . . . there is no safe store of value,” Greenspan wrote back then, pointing out that without a gold standard in place, there is little to prevent governments indulging in wild credit creation. “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

 

Of course, for the moment all this muttering about gold is simply wild speculation. Even if western leaders suddenly were to decide they wished to turn back the clock, the logistics of embracing a new gold standard would be mind-boggling. UBS, for example, calculates that the US reserve of gold are so small, relative to its monetary base, that a price above $6,000 a tonne would be needed to reintroduce a gold standard. To implement that standard in Japan, China and the US, the price would be more than $9,000. Moreover, right now few western governments have any motive to even entertain the debate, given that inflation may soon seem the least bad way to tackle the current overhang of debt.

 

But what this debate does show is just how much cognitive dissonance – and utter uncertainty – continues to stalk the markets. It might seem almost unthinkable to propose a return to a gold standard, in other words. However, the key point is that the last 18 months have already produced a stream of once unimaginable events.

 

Given that, shell-shocked investors are increasingly reluctant to rule anything out, as they stare at such uncharted waters. So while I would not bet today on a gold standard returning any time soon, I would also not bet that the debate dies away. Nor would I bet that the gold price crashes too far from its current rate of $900, while so much fear continues to stalk the world.

 

*http://www.financialsense.com/metals/greenspan1966.html

 

gillian.tett@ft.com

 

Copyright The Financial Times Limited 2009

[lowrentyieldmakessense(honest!)]

Hence the chatter about a gold standard. Indeed, as the debate bubbles up, some financiers are now even emailing each other an extraordinary little essay that Alan Greenspan himself wrote in support of a gold standard back in the 1960s, called “Gold and Economic Freedom”*.

 

In the years since he penned this essay, Greenspan has partly backed away from those ideas (and he blatantly ignored their implications when he was at the Fed.) But now they look prescient.

 

“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets . . . [but] in the absence of the gold standard . . . there is no safe store of value,” Greenspan wrote back then, pointing out that without a gold standard in place, there is little to prevent governments indulging in wild credit creation. “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

has he - i know he didnt carry them out - but doesnt he still stand by them

 

 

http://www.usagold.com/gildedopinion/greenspan-gold.html

In closing, I would like to pass along an anecdote reported by SmartMoney's Donald Luskin in a 2002 interview of Ron Paul. Paul told Luskin the story of his owning an original copy of "Gold and Economic Freedom," (which I reference above) and asking Greenspan to sign it. While doing so, Paul asked him if he still believed what he wrote in that essay some 40 years ago. That tract, written during Greenspan's days as a devotee of Ayn Rand, is a strongly worded, no-holds-barred attack on fiat money and the central banks as an engine of the welfare state. It also endorses the gold standard as a deterrent to politicians' penchant for running deficits and printing money. Greenspan -- enigmatic as ever -- responded that he "wouldn't change a single word." -- Michael J. Kosares

 

 

 

http://dollardaze.org/blog/?post_id=00527

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

 

[lowrentyieldmakessense(honest!)]

Insight: Gold standard debate roars on

http://www.ft.com/cms/s/6c43927c-2456-11de...144feabdc0.html

 

 

Unfortunately I'm up to my 30-day limit for free articles on the FT site but the above might interest people here, as may the below. I'll be reading them next week.

 

 

Ten principles for a Black Swan-proof world

http://www.ft.com/cms/s/0/5d5aa24e-23a4-11...144feabdc0.html

i quite like taleb but does he mention fiat currency and central banks in those ten principles

[azazel]

UBS, for example, calculates that the US reserve of gold are so small, relative to its monetary base, that a price above $6,000 a tonne would be needed to reintroduce a gold standard.

 

Goldfingers lucky day! UBS not too hot on their calculations. $6000 a tonne, Id buy bullion vaults entire stock.

[bitbigt]

Here you go for Gold$ Vs VIX

 

http://stockcharts.com/h-sc/ui?s=$GOL...id=p28327405002

Excellent!

 

Even with the artificially high USD price of gold during 2008 (due to the transiently weak dollar) a pattern emerges..

 

...to see it, go to http://stockcharts.com/h-sc/ui on two webpages, view both as weekly periods and non-log scale, and set one page to $VIX and one to $GOLD

 

In April 2007 and in October 2008 the VIX (a 'fear' scale) suddenly shot up (look at the RSI chart), and on both occasons this triggered the start of a major bull run in gold. Then, in May/June 2008 and also this last month or two the VIX has fallen, promting a steady sell off in gold. In short, in the recent past at least, gold's rise has been catalyzed by a spell of economic panick, and as that fear subsides gold starts to fall again. I personally think the main panick phases of the credit crunch are behind us, and its now just long and painful road to recovery, so gold will continue to ease from here.

 

Frizzers seems to generally agree with this, in that he's just written for MoneyWeek saying gold is driven by collapsing government (which I take to mean a state of disaster emerging):

http://www.moneyweek.com/investments/preci...over-14714.aspx

 

But he goes on to claim that gold does not rise in response to consumer inflation. He's correct over short time periods and during mildly high inflation (e.g., autumn of 2008, when gold was falling even though high inflation was always in the news), but I'd strongly disagree with him about this relationship over longer time periods. For example, see here;

http://www.sharelynx.com/chartstemp/FreeGoldSilverCPI.php

 

So short term it is fear that drives gold up and down, but longer term gold holds its value against fiats depreciation (i.e., reacts to inflation).

 

And so if we get the tidal wave of inflation many of us are expecting in the next 5-10 years, which will be accompanied by good deal of fear, then it should be a perfect storm for promoting the gold price skywards

[HPCsoYESTERDAY]

 

I can see some sense in what you're saying bigt, esp. with regard to the 'fear factor' gold buying driver seemingly subsiding. However, I note that the 08 spike was not particularly accompanied by high VIX. Also, there are big unkowns going forward here with regard to Chinese gold buying appetite.

 

imho, the greatest factor contributing to further declines in pog (short-term) are another strong DOW rally. Therefore, (for me) the question is, what is the prospect of a further strong DOW rally?

[UpTheKhyber]

Any short-term DOW rallies will purely be due to another round of spin being swallowed by the gullible.

 

Is there any significant industry sector which isn't introducing lay-offs, pay cuts and/or reduced working hours for its staff? The consumer engine which has been driving western consumer and easter producer economic growth is going to remain stalled until that situation changes. Cash strapped western consumers = lower corporate revenues. How are even the current share prices increased justified in such an environment?

 

The only way western consumers are going to increase spending again is if western governments successfully debase their currencies just enough to make the western debt burden serviceable without this resulting in either stagflation or excessive inflation.

 

I'm not finding that very probably right now, and until that situation changes a core gold holding with trading on currency volatility looks like the closest thing to a safe bet right now. Disclaimer: I have a reasonably low appetite for risk as my day job is not trading.

[marceau]

I can see some sense in what you're saying bigt, esp. with regard to the 'fear factor' gold buying driver seemingly subsiding. However, I note that the 08 spike was not particularly accompanied by high VIX. Also, there are big unkowns going forward here with regard to Chinese gold buying appetite.

 

imho, the greatest factor contributing to further declines in pog (short-term) are another strong DOW rally. Therefore, (for me) the question is, what is the prospect of a further strong DOW rally?

 

 

Idiocy could drive the DOW rally beyond all reasonable levels - and I'm seeing idiocy all over the place at the moment.

 

All it takes is one more DOW upsurge and the 'dead cat bounce' predictors will be completely dismissed, then it could be months before we return to reality.

[G0ldfinger]

UBS, for example, calculates that the US reserve of gold are so small, relative to its monetary base, that a price above $6,000 a tonne would be needed to reintroduce a gold standard.

 

Goldfingers lucky day! UBS not too hot on their calculations. $6000 a tonne, Id buy bullion vaults entire stock.

Do they mean $6,000 per gram?