GOLD

[Jacko]

In what currency?

Looks like GBP to me at a first glance. Might not be the best indication of where Gold is heading in general as the price movement of Gold in Pounds over this time period has been effected by the wild ride that pound has taken over the last year.

 

Having said that, I can see a good deal of pressure on GBP due to QE, 0.5% rates etc...so the assumptions made about this chart could be correct...I certainly hope they are...but that could be due to £ weakness rather than a general move in POG.

 

I'd like to see the same chart with the action in $.

[romans holiday]

I have been looking at the movement of the gold price this year against the seasonal change in the price of gold over the last five years and come up with this graph for you all to ponder over. As always do you own reasearch but it seems to suggest that the price of gold is under valued and could go up.

Yes, especially in pounds. Pounds could easily weaken on the reversal of the risk trade, which would see the gold price back up quickly to where it was.

 

If Ihad pounds I would either buy here, or if I really wanted to want for a dip, swap pounds for another currency such as Yen or dollar.

[id5]

In what currency?

The gold price is GBP

[G0ldfinger]

Jim Sinclair:

 

http://jsmineset.com/2009/08/08/in-the-news-today-274/

Just as in the 70s, central banks are human too. They will be buyers on balance prior to 2011.

"It goes without saying that the time to buy gold and silver is now, while 99% of the world remains oblivious to the inevitable collapse of the current monetary system. Buying a “store of value” with a 5,000 year track-record behind it, using soon-to-be-worthless paper is a bargain at any price.

[TrueNorth]

Clive Maund's Gold Market Update published yesterday.

 

Gold's technicals have been looking very promising in the recent past, but there have been two worrying developments over the past couple of weeks which suggest that we may be about to see a vicious shakeout rather than the breakout to new highs that so many are anticipating. One of these developments has been the very high number of advisors calling for an upside breakout on public websites, as many of you will be aware, and the other is the trend of COT data, with the latest figures being at levels that have in the past almost always signalled a reversal to the downside.

 

I always find his analysis very informative.

 

Full article here:

 

Clive Maund Gold Market Update 9 August 2009

[wren]

Max Keiser ... Brown's bottom!

 

 

Yeah we got shafted!

 

The second half is interesting where he visits the Bundesbank just as Lehman's had collapsed.

 

Anyway, he learnt that Germany's gold is in New York.

 

[Pixel8r]

The second half is interesting where he visits the Bundesbank just as Lehman's had collapsed.

 

Anyway, he learnt that Germany's gold is in New York.

Or not as the case maybe

 

[drbubb]

Clive Maund's Gold Market Update published yesterday.

I always find his analysis very informative.

Full article here:

Clive Maund Gold Market Update 9 August 2009

REVERSAL TO DOWNSIDE?

 

That's my fear too...

 

According to Jim Sinclair the dollar has 91 days left to go. I am unsure to what he is referring to, but he has been counting it down for a while now.

 

Hmm.

Well, I think the Dollar is going to rally from here.

It may be the "last rally", if Sinclair is right, but with the number of Gold bulls (at 3%),

I think we will see a Rally.

 

I will be watching the Ratios of Gold-to-TLT, Gold-to-WTIC (Crude), and Gold-to-$SPX,

to tell me when to jump in with "both feet"

[TrueNorth]

That's my fear too...

 

 

 

Hmm.

Well, I think the Dollar is going to rally from here.

It may be the "last rally", if Sinclair is right, but with the number of Gold bulls (at 3%),

I think we will see a Rally.

 

I will be watching the Ratios of Gold-to-TLT, Gold-to-WTIC (Crude), and Gold-to-$SPX,

to tell me when to jump in with "both feet"

 

Interesting Dr Bubb.

 

I am watching the Gold:Silver ratio. I dug up an old article by Bob Hoye from last November (Gold Sector Update - NOVEMBER 25, 2008, posted in the archives of 321gold here Bob Hoye on 321gold), about gold in a credit contraction. He notes:

 

. . . . GOLD/SILVER RATIO

• Beyond being something to trade, the gold/silver ratio has been a reliable indicator of

credit conditions. It declines during a boom and does its greatest service when it

typically signals the contraction by increasing. The key move in 2008 occurred with

the turn up in May from 46. This was with the reversal in the credit markets and the

technical break out at 54 in August anticipated the fall disaster. Often during the more

acute phase of a panic, silver can dramatically plunge relative to gold.

 

• With the break above 54 our target on the full contraction became around 100. That

level for the ratio was reached with the banking crisis that ended in late 1990, when

the last of the 1980 adventures in crude, gold, silver and real estate were finally

written off.

 

• From a high close of 84 on October 28 with that panic the ratio declined to 71 with the

stock market rebound to November 5. The next rise with the next panic was to 83.5

on Friday, November 21, and the ratio can decline for a few months as the financial

markets recover in the first quarter.

 

By my calculations using ££ we're now at 65.75 and turning up as of this morning.

[TrueNorth]

Now that the CRIMCOMEX -- has opened, gold and silver have both fallen off a cliff. Ratio now 65.79.

[creditcrunch]

"It was expected that there would be a renewal, but the renewal itself took some insecurity out of the market," he said, adding: "It wasn't expected that they would reduce the selling volume by 100 tonnes a year."

 

http://uk.reuters.com/article/idUKTRE57932Z20090810

 

There is a gold shortage.

[wren]

A Max Keiser interview on France24, 7 August.

 

In the second half of the video he says only gold holders will be left standing

when the next wave of the financial crash comes (he seems to think this autumn).

[warpig]

Thanks I agree. I think it's simply explained by saying "gold is money" (thanks wren) and by definition it behaves the same as any currency during inflationary or deflationary times, this makes sense.

 

Do people believe we'll see the stock market pumped up again to gold's detriment before winter?

 

When the currency is fixed to gold [a certain amount of gold], it is a truism that its purchasing power decreases when prices increase, and its purchasing power increases when prices decrease.

 

"Inflation" in prices has a much less sinister meaning than that which the word is invested with today, due to the fact we have a completely different monetary system.

 

Agree/ disagree? Or unintelligible?

[enrieb]

Sugar price reaches 28-year high

19:42 GMT, Monday, 10 August 2009 20:42 UK

http://news.bbc.co.uk/1/hi/business/8193390.stm

 

The price of raw sugar has increased to its highest level since 1981, as supply concerns grow.

Raw sugar futures added 3% on Monday, to finish the day at 22 cents a pound.

 

"The main problem is a deficit in sugar supplies," said Nick Penney, a trader with Sucden Financial, a firm that focuses on sugar trading.

 

Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained.

 

Sugar production in India for 2008-09 fell 45% year-on-year, according to a report by Sucden.

And a "drastic fall" is expected for the coming Indian crop, it said.

 

India had less rain in the monsoon season and it was also uneven, damaging a number of agricultural crops.

There are concerns that the pending sugar crop, which will be ready around November, will be inadequate.

 

"This [sugar market] train is running express," said Alex Oliveira, senior sugar analyst for Newedge USA in New York.

"It's feeding on itself."

 

Deflation?

 

Edit: Sorry this probably isn't the best thread for this story, but I couldn't find the right one and I didn't want to start a new one for a single issue story. Still, I think rising commodity prices are always relevant for gold, and the gold thread is sort of a thread for open discussion of a number of issues.

[drbubb]

Thanks I agree. I think it's simply explained by saying "gold is money" (thanks wren) and by definition it behaves the same as any currency during inflationary or deflationary times, this makes sense.

 

Do people believe we'll see the stock market pumped up again to gold's detriment before winter?

 

 

I think that gold will INITIALLY fall with stocks, but at some point will decouple

[Jake]

Thinking of you Dr Bubb! How do you like Chris Weber's advice? I know you would rather rattle and shake but holding might have been a good option instead of buying HK property?? Anyway interesting read from Mr Weber..

 

My Real Objection to 'Paper' Gold

By Chris Weber

 

I myself have not bought and would not buy any of the exchange-traded "paper" gold: GLD, GTU, CEF, or any others.

 

I prefer to only own actual metals. I have mentioned these products as a courtesy to readers, but sometimes I wish I never had gone down that route at all. There are potential drawbacks to all of these products...

 

There have been questions raised about how the holders of GLD treat their gold. Some have charged that they loan it out to central banks for them to short the gold market. There have also been questions about how the metals are held. I prefer not to even have to worry about these issues, so I would not buy GLD.

 

As for GTU and CEF, they pledge to hold actual metals and not lend them out. However, as these are closed-end funds, you can end up paying a premium over the net asset value. Sometimes this premium can be quite high. And I see no reason at all to buy CEF, the Central Fund of Canada. As I write, the premium over metal value is 13%.

 

Further, CEF is a mix of gold and silver. You are better off just buying the metals themselves. Even if you are intent upon buying "paper" metals, instead of buying CEF, you will probably be better off buying your preferred mix of gold in the form of either GTU or GLD and silver through SLV or one of the other ETFs.

 

As for using covered calls – where you sell call options against your shares in GLD or another metal ETF – I have never done this. If you are happy using this strategy, go ahead. You are using a derivative anyway when you buy either GLD or GTU, and using covered calls adds yet another derivative.

 

I simply stay away from derivatives and prefer to own the actual asset. Derivatives have caused big problems in the recent past, and will continue to in the future. I would want to steer investors away from any but physical gold held in your name. This goes to the very heart of good investing.

 

In my experience, I believe that it is the hardest thing in the world for any investor to first identify a bull market in an asset, take a position in it, and then hold on until near the end of that bull market.

 

Most people, of course, don't enter into a bull market until it is well underway. But it is also true that most people do not have the patience to simply hold that asset during all of the inevitable corrections and dull periods that take place during the course of a bull market.

 

These bull markets can last for 20 years, more or less. In urging readers to shun paper gold products that can be sold quickly, I am trying to get them to stay in the bull market and not sell out too soon. Too often, once they sell or trade themselves out, they don't get back in, except maybe at a vastly higher price. If you own your own physical gold in a way that makes it hard for you to sell, it is obviously easier to stay the course of the entire bull cycle.

 

 

 

The Greatest Currency Trade of the Millennium

Why I'm Happy to Hold Wealth in Gold and Silver

 

 

 

 

I get a lot of questions about how best to sell gold. The people who ask them will most likely not reap the full benefits of the bull market. Let's say that gold will continue to correct for another year or so, and drop further. If they are holding GLD or even GTU, it is very easy for them to call their bank or broker and sell out.

 

But if they have the actual asset, either near at hand or in a safe vault far from home, it is not so easy to sell at a whim, or in a moment of temporary fear.

 

So that's really my advice: hold your metals in such a way that makes it both the easiest for you to forget that you have them, and hardest for you to quickly dump them.

 

Good investing,

 

Chris Weber

 

 

[romans holiday]

Sugar price reaches 28-year high

19:42 GMT, Monday, 10 August 2009 20:42 UK

http://news.bbc.co.uk/1/hi/business/8193390.stm

 

 

 

Deflation?

 

Edit: Sorry this probably isn't the best thread for this story, but I couldn't find the right one and I didn't want to start a new one for a single issue story. Still, I think rising commodity prices are always relevant for gold, and the gold thread is sort of a thread for open discussion of a number of issues.

Just a bounce... a temporary.... "sugar high"...

[electroweak]

Funny, but I remember about 2 weeks ago Jim Rogers saying young people these days should invest in sugar and silver...

MAybe one could play the sugar/silver ratio game?? - if only they offered it on GM

[romans holiday]

Funny, but I remember about 2 weeks ago Jim Rogers saying young people these days should invest in sugar and silver...

MAybe one could play the sugar/silver ratio game?? - if only they offered it on GM

Nice idea but I see a flaw. Silver acts like a commodity at times so will often track commodity prices. What would be better is to buy and sell sugar in Yen [safety trade currency].

 

These days, I treat silver as a proxy for commodities [sorry silver-bugs] and would consider selling and buying in Yen/dollars/gold, which can be done at GM.

[bitbigt]

OK... these last few days I've had my finger trembling on the buy trigger, and it was more (good/bad??) luck than judgement that stopped me buying.

I hate buying or selling unless I feel rather certain, and that's the problem!

So I decided to get on top of things, and looked at all the evidence today.

I've boiled it all down to a bold prediction:

GOLD IS GOING DOWN TO BELOW GBP 500

So I'm not going to buy yet.

Now I can get on with my life, and if I'm wrong at least I will know I was confidently wrong :-)

 

[TrueNorth]

OK... these last few days I've had my finger trembling on the buy trigger, and it was more (good/bad??) luck than judgement that stopped me buying.

I hate buying or selling unless I feel rather certain, and that's the problem!

So I decided to get on top of things, and looked at all the evidence today.

I've boiled it all down to a bold prediction:

GOLD IS GOING DOWN TO BELOW GBP 500

So I'm not going to buy yet.

Now I can get on with my life, and if I'm wrong at least I will know I was confidently wrong :-)

 

I know that exact feeling. I suppose that's why technical analysis is so popular -- it gives the courage to your convictions!

 

Am curious what evidence gave you the notion gold is going down below 500?

[romans holiday]

Now I can get on with my life, and if I'm wrong at least I will know I was confidently wrong :-)

Yes, peace of mind is priceless.

[DoctorSolar]

So I decided to get on top of things, and looked at all the evidence today.

I've boiled it all down to a bold prediction:

GOLD IS GOING DOWN TO BELOW GBP 500

I too would be interested in "all the evidence" which led to this bold prediction.

 

EDIT: Personally I think gold will hold in the 900 - 1000 USD area with a breakout at the end of the year early next. Any weakness in the price of gold will be accompanied by strength in USD. Strength in USD means a weak GBP. So I very much doubt we will see prices go lower than 500 GBP. As rh says gold has been monitised and that puts the floor in at 900 USD.

 

Cheers and good luck.

[bitbigt]

Am curious what evidence gave you the notion gold is going down below 500?

I feared you might ask...

 

Other than gut instinct (which usually works quite well, actually), its

 

A. My future predictions (dangerous, but necessary to create and adapt with time/event) are that the 'recovery' is now in motion, and will continue for a year or so. Of course, its as unreal as the recovery that occured between 2003 and 2007, which was built upon ultra-low interest rates. This current recovery is built upon ultra-low interest rates plus QE. Next time around, they won't be any medicine strong enough to revive the patient!! There's also a very large amount of cash in the system (much directly from the QE) looking for a better home than savings accounts, and so we're creating mini-bubbles in stocks and commodities. So for the next year everyone will start to feel secure and rich(er) again, and gold will struggle. Layer in deflation for a year, and gold doesn't have a chance medium term. Finally, the PPT will keep suppressing golds price until they run out of capacity to do that (because they've spent all of germanys gold, etc). But after the next 12 months, the economic 5hit will really hit the fan, and gold will be the place to be.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

GRAPHIC: GoldsFuture

 

But I'll probably change my mind again after I've taken my medicine

[bitbigt]

I too would be interested in "all the evidence" which led to this bold prediction.

 

EDIT: Personally I think gold will hold in the 900 - 1000 USD area with a breakout at the end of the year early next. Any weakness in the price of gold will be accompanied by strength in USD. Strength in USD means a weak GBP. So I very much doubt we will see prices go lower than 500 GBP. As rh says gold has been monitised and that puts the floor in at 900 USD.

 

Cheers and good luck.

Perhaps the words "all" and "evidence" were a bit strong. Hopefully my last post will clarify my thinking, based upon never taking the market for granted ...and I know you'll all give me loads of stick for it (just as you did when I sold in March), but what if I'm right :o :o