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There is an important factor here which I only recently appreciated.

Those calculations are for the gold price today, not tomorrow, not next week, not next year, and most definitely not in 5 years time.

 

The actual final price depends very much on what happens between now and the peak. If they increase the contributing numbers, the final price will be much higher some time in the future.

 

And that's not ramping, that's plain cold hard facts based on previous "gold accounting" periods. ie based on history :D

yep i know its a moving target

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So if I'm understanding you correctly, Steve and Catflap, the best time to buy a house is when they bottom out and the best time to sell gold is at the blow off top

I'm glad that's been clarified. :lol:

 

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So if I'm understanding you correctly, Steve and Catflap, the best time to buy a house is when they bottom out and the best time to sell gold is at the blow off top and a mortgage would be required between the two. I have been considering doing this myself.

 

The best time to buy gold would have been around 2000 but the best time to sell a house and buy gold was 2005. A big loan to buy gold in 2000 paid off in 2005 with the sale of a house.

 

The trouble now is trying to predict the bottom of houses and not leave selling the gold too late.

Another option is to buy a house with only half your bullion and a 50% mortgage [keep a reserve, why commit all your capital]. That way, you cover yourself if we get high inflation. If it is deflation all the way, you then have the further option to pay off your mortgage if you need/want to.

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So if I'm understanding you correctly, Steve and Catflap, the best time to buy a house is when they bottom out and the best time to sell gold is at the blow off top and a mortgage would be required between the two.

 

Yes, but it was catflap's idea not mine. But when I find time I guess I'll have to chart the two and see if it looks right. It does sound unlikely that the two markets would be exactly in sync, so I think there must be something in this.

 

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Gold's being allowed to run a little, I suppose they don't want to make it too obvious... :rolleyes:

imo there are too many buyers lining up to buy gold now. As soon as it dips, buyers come in to support the price. What would it take for there to be a big sell off now in gold? I can't think of anything. Even if the stock markets sell off in a big way, and the dollar spikes again, investors are not likely to sell gold given that QE has "problematized" the dollar medium/long term. So looks like a range between 900 and 950 with gold going effectively sideways for some time and going higher only once the dollar depreciates, which may take a while.

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Gold's being allowed to run a little, I suppose they don't want to make it too obvious... :rolleyes:

Perhaps 930 is the new 850.

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Excessive shorts from JPM, GS and DB? I do agree that there is massive support, but if they're prepared to throw the kitchen sink at it then really who knows...

 

imo there are too many buyers lining up to buy gold now. As soon as it dips, buyers come in to support the price. What would it take for there to be a big sell off now in gold? I can't think of anything. Even if the stock markets sell off in a big way, and the dollar spikes again, investors are not likely to sell gold given that QE has "problematized" the dollar medium/long term. So looks like a range between 900 and 950 with gold going effectively sideways for some time and going higher only once the dollar depreciates, which may take a while.

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In recent months there has been a "we buy your gold" advert on LBC talk radio (in London). It has a pretty big audience. Just now I turned on for a few minutes and heard an advert for a firm *selling* gold coins & investment bars... mentioning the capital gains advantage on sovereigns & britannias, among other things.

 

I know we're fairly convinced about the inflationary argument for holding gold, but if I was a little closer to sitting on the fence than camped on the goldbug side, I'd consider this a good point to sell up and run away. Very fast indeed.

 

Andrew McP

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In recent months there has been a "we buy your gold" advert on LBC talk radio (in London). It has a pretty big audience. Just now I turned on for a few minutes and heard an advert for a firm *selling* gold coins & investment bars... mentioning the capital gains advantage on sovereigns & britannias, among other things.

 

I know we're fairly convinced about the inflationary argument for holding gold, but if I was a little closer to sitting on the fence than camped on the goldbug side, I'd consider this a good point to sell up and run away. Very fast indeed.

 

Andrew McP

"We" is a dangerous word when it comes to investing. :)

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In recent months there has been a "we buy your gold" advert on LBC talk radio (in London). It has a pretty big audience. Just now I turned on for a few minutes and heard an advert for a firm *selling* gold coins & investment bars... mentioning the capital gains advantage on sovereigns & britannias, among other things.

 

I know we're fairly convinced about the inflationary argument for holding gold, but if I was a little closer to sitting on the fence than camped on the goldbug side, I'd consider this a good point to sell up and run away. Very fast indeed.

 

Andrew McP

Somehow I don't think one advert on talk radio is the culmination of a mania. Although I did meet a regular person who was fairly heavily invested in gold for the first time recently.

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I'll know when a mania has arrived when colleagues at work start talking about gold bullion. I've never heard ANYONE else I know mention gold ever.

 

I'd be surprised if 1% of the population of my town own gold (real gold that is, not electronic gold or gold funds/shares).

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I'll know when a mania has arrived when colleagues at work start talking about gold bullion. I've never heard ANYONE else I know mention gold ever.

 

I'd be surprised if 1% of the population of my town own gold (real gold that is, not electronic gold or gold funds/shares).

 

Agreed. It's easy to think others are all in the know when you seek out others who are, well, all in the know... But I agree, If (and I have really tried to stop even doing it now) I talk about gold people just say, well, yeah but if I buy a house on 1.5% interest and rent it out for ,,,la, la, la,,,. The majority still have no idea.

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On the subject of the head and shoulders pattern in gold :

 

a head a shoulders pattern usually signifies a reversal. A head and shoulders top, for example, might come at the end of a long uptrend.

 

Similarly an inverted h and s will come at the end of a long down trend.

trspth~1.gif

 

This inverted h and s in gold has come after an UPtrend , so it is not an exact technical set up.

 

 

 

http://www.chartpatterns.com/headandshoulders.htm

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I read somewhere that the next time gold hits 999, then the world is going to change...

 

Something to do with the mark of the beast and the 3rd time of hitting it...oh and it it may happen in June...

 

Don't really beleive it myself, but something could happen!

 

 

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I'm with the reckoning that there's a high chance deleveraging is going to kick in again pretty soon. Gold stood up well last time - and I think it'll stand up even better this time (but may still get dragged down some - particularly at first). Think silver will cope better then last time too - but not as well as gold and there's more risk it'll take a fair whack. So, have (this was painful!) swapped a 1/4 to gold and put a 1/4 to $ (in GM - ready and waiting). Didn't like to do it - but I've had more £s of silver then gold for a long time (including during the last round of deleveraging) and this plan seems to make a bit of sense. Also cut back on pm stocks some - but have spread out to lots of juniors. Trying to duck and dive as best I can (got a few bruises but still standing) - we'll see!

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On the subject of the head and shoulders pattern in gold :

 

a head a shoulders pattern usually signifies a reversal. A head and shoulders top, for example, might come at the end of a long uptrend.

 

Similarly an inverted h and s will come at the end of a long down trend.

trspth~1.gif

 

This inverted h and s in gold has come after an UPtrend , so it is not an exact technical set up.

 

 

 

http://www.chartpatterns.com/headandshoulders.htm

I agree that the Inverse Head and Shoulders usually comes at the end of a downtrend, but not always. I believe that when the formation happens it is very strong even in an uptrend.

 

Usually the reaction is the same as the depth of the head. In gold's case the head dropped to around $700, with the neckline being at $1000 (a nice big number). So I believe we will be on for a reaction to $1300 come the break out in mid June.

 

I have found this document which clarifies it a bit.

 

Inverse Head and Shoulders (Head-and-Shoulders Bottom)

 

The inverse head-and-shoulders pattern is the exact opposite of the head-and-shoulders

top, as it signals that the security is set to make an upward move. Often coming at the end

of a downtrend, the inverse head and shoulders is considered to be a reversal pattern, as

the security typically heads higher after the completion of the pattern.

 

headandshoulders-2.jpg

 

Inverse head-and-shoulders pattern

 

Again, there are four steps to this pattern, starting with the formation of the left shoulder,

which occurs when the price falls to a new low and rallies to a high. The formation of the

head, which is the second step, occurs when the price moves to a low that is below the

previous low, followed by a return to the previous high. This move back to the previous

high creates the neckline for this chart pattern. The third step is the formation of the right

shoulder, which sees a sell-off, but to a low that is higher than the previous one, followed

by a return to the neckline. The pattern is complete when the price breaks above the

neckline.

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I have refined my chart showing the inverse head and shoulders in gold a bit.

 

ihcg.jpg

 

 

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