GOLD

[TrueNorth]

Dr Vince Hooper from the Australian School of Business at the Univ of NSW warns that a second economic shock wave is on its way

 

Listen here:

http://mpegmedia.abc.net.au/rn/podcast/200...090829_0732.mp3

 

Very interesting, thanks for posting.

 

Btw, is it just me, or do other people also assume everything they hear in an Australian accent is a wind-up?

 

[Steve Netwriter]

Very interesting, thanks for posting.

 

Btw, is it just me, or do other people also assume everything they hear in an Australian accent is a wind-up?

 

I find the Kiwi accent quite amusing sometimes (no offence).

 

A serious news item could go like this:

 

"He was found did on his dick" (dead on his deck).

 

But today I had to laugh when a lady said "this is up for auction. It was signed by Michael Jackson before his death".

 

Before :lol:

 

After would presumably fetch more

 

[TrueNorth]

I find the Kiwi accent quite amusing sometimes (no offence).

 

A serious news item could go like this:

 

"He was found did on his dick" (dead on his deck).

 

But today I had to laugh when a lady said "this is up for auction. It was signed by Michael Jackson before his death".

 

Before :lol:

 

After would presumably fetch more

 

Good one.

 

For me, I think it's from watching Kath and Kim. And that guy that does pretend news.

[Indium]

It looks like there is very little to say about gold at the moment

[Mr Pipples]

Go for Gold and Silver: Strategist - http://www.cnbc.com/id/32638139

 

Hennecke stressed that investors should go for physical forms of gold and other precious metals rather than "paper gold investment scheme where there isn't full backing, where the metal might be leased out or used for derivatives. That's crucial because there is 80 times more paper gold in the market than actual physical metal in existence in the planet."

 

Latest from Mish on gold: What's Behind Moves In Gold, Prechter, etc. http://globaleconomicanalysis.blogspot.com...es-in-gold.html

 

1) What was behind gold's move in the Great Depression?

2) What was behind gold soaring to $850 in the 80's?

3) What is behind gold collapsing to $250?

4) What is behind gold soaring again now?

 

Clearly it is not expansion or contraction driving the price of gold, but rather something else. That "something else" is credit issues.

[wren]

Anyone remember where that vid is please post it again here for the benefit of those who missed it.

It's the first link in my signature.

 

[romans holiday]

It looks like there is very little to say about gold at the moment

The bastion of stability. The ballast in vertiginous markets. The refuge of the frugal. The macro solution to an economic mess.... etc etc etc

[jinbal]

Again:

 

Gold popping up

 

Dow struggling

[romans holiday]

Big money moving into both Yen and gold here. Buying the Yen is the risk averse trade par excellence... gold may give Yen a run for its money in this role in the near future.

 

I think this should pretty much put to bed all those worries about how gold performs in deflation.

[Pixel8r]

Turning point for gold as Central Banks become buyers

 

With the possibility of Central Banks becoming net gold buyers and the speculation that the IMF gold may be sold "off market" gold analyst Jeff Nichols remains bullish on the precious metal's prospects.

 

Author: Lawrence Williams

Posted: Wednesday , 02 Sep 2009

 

In his latest deliberation on the gold market, specialist gold analyst Jeff Nichols believes that gold has reached a turning point with purchases from official sources - Central Banks and sovereign wealth funds - perhaps outweighing sales as attitudes to the metal as a reserve asset become much more positive.

 

In particular Nichols points to China and Russia as two key nations with relatively low proportions of gold in their reserves as likely to be net buyers in the future - even if only soaking up gold from their own domestic production which otherwise would come on to the market. China announced earlier this year, for example, that it had moved 454 tonnes of gold into its reserves since 2003 - but still has only about 1.5% of its assets in gold. China's accounting system is complex. The gold is, apparently bought by one government entity, but need not show up in its reserve statements until an internal transfer has been made into reserves - or so it says. This in effect means that its real gold reserve position is far from transparent and there is certainly a view that China is continuing to buy gold from domestic sources - Nichols surmises at a rate of around 75 tonnes a year, but again this has not shown in official reserve figures as yet and would only do so when it suits China to announce changes in holdings.

 

Russia too, with only around 2% of its assets in gold, has been making purchases from domestic output - and with prime Minister Putin stating publicly that the country should hold 10% of its reserve assets in gold there is considerable scope for ongoing purchases. According to Nichols, some reports suggest the country has added some 40 to 50 tons to its official reserves so far this year while other reports put purchases this year at 90 to 100 tons.

 

The key, though, has to be the attitude of the European Central Banks, which have been selling significant quantities of gold onto the market over the past ten years. The U.K. is the prime example of this when then Chancellor of the Exchequer, Gordon Brown, who has, despite this financial disaster for country, built up a decidedly unwarranted reputation for financial prudence, sold half the U.K.'s gold reserves right at the bottom of the market, costing the country some several billions of dollars by some estimates.

 

Overall, the European banks are said by Nichols to hold on average about 55% of their reserve assets in gold - way above while Asian nations only about 1.5 - 2% - hence the big scope for purchase increases in the areas where economic growth has the highest potential. Be this as it may, Nichols reckons European Central Bankers' attitudes are changing towards gold as an asset with the recent sharp fall in gold sales from official sources representing a renewed respect for gold as a reserve asset and reliable store of value.

 

But perhaps key to the perception of bankers seemingly renewed confidence in gold will be the fate of the IMF sales programme of 403.3 tonnes scheduled to help support lending to the poorest countries. IMF membership is expected to approve these prospective sales before its annual meeting this October.

IMF strategists have suggested sales might occur gradually over two or three years - and generally within the new Central Bank Gold Agreement (CBGA) quota of a maximum sales level of 400 tonnes a year. However Nichols notes that others believe all 403 tons of IMF gold may be sold "off the market" directly to one or a few central banks - with China, Russia, India, Brazil, or the Gulf states mentioned as possible buyers. If this happens this would be a huge boost for the perception of gold's position as a monetary asset.

 

Coming back to Europe though, with the CBGA quota being reduced from maximum sales of 500 tonnes a year under the previous agreement to 400 tonnes a year under the new one, which comes into effect at the end of the current month, this is further expression of changing attitudes. It is felt that those Central Banks which have been keen to sell gold will have already done so - indeed sales during the final year of the current agreement are likely to be shown to have slipped to only around 150-160 tonnes as against the 500 tonne quota, and there is evidence that in the latest quarter official sources were actually net gold purchasers.

 

With the IMF sales already pretty well discounted by the markets, investment demand holding up and Central Bank sales seemingly diminishing, the portents for gold look reasonably strong for the immediate future.

 

As Nichols concludes "We are bullish on gold for the next few years, largely because of our reading of the macroeconomic situation - and the high probability of an overly stimulative monetary policy for years to come. But a more positive official section attitude - with some countries wishing to increase the proportions of official reserves held in gold - is simply one more support for a much higher price over the next several years.

[warpig]

Thanks I was looking for this.

 

Go for Gold and Silver: Strategist - http://www.cnbc.com/id/32638139

 

Hennecke stressed that investors should go for physical forms of gold and other precious metals rather than "paper gold investment scheme where there isn't full backing, where the metal might be leased out or used for derivatives. That's crucial because there is 80 times more paper gold in the market than actual physical metal in existence in the planet."

 

[Mr Pipples]

Well, figured I'd be looking to buy on close <935 or >965... Hmmm... Could be a breach to the upside?

[TrueNorth]

Well, figured I'd be looking to buy on close <935 or >965... Hmmm... Could be a breach to the upside?

 

Gold is sniffing £600. Now at £598.60, and US $ 971.30.

 

 

 

[bakachu]

Has anyone else noticed that if they 'catch' a gold price breakout on the kitco charts as it's happening, it then stops at that very moment and then drops down as soon as they refresh a couple of seconds later?

[Mr Pipples]

Has anyone else noticed that if they 'catch' a gold price breakout on the kitco charts as it's happening, it then stops at that very moment and then drops down as soon as they refresh a couple of seconds later?

 

I glared at the chart for you - better?

 

EDIT: oops. The thought of a rocket picture just fleetingly crossed my mind - seems that was enough.

[Quest]

 

[Mr Pipples]

Pinched from GIM: http://goldismoney.info/forums/showpost.ph...postcount=28983

 

 

EDIT: well - maybe not. 990/995?

[warpig]

Looks like we're off to the races. It's a relief to be > £600/t oz, even if it was just for a couple of moments.

[FishingwithJesse]

I don't see any $ USD BULL here : Do you ?

 

Ted Spread (US TREASUY - EURO SPREAD)

 

20.02 Change -0.539

[dietcolaaddict]

 

Wow! It's getting close to that $1000 barrier again.

[azazel]

Golds rocketing. Good old Ker, a coincidence? I think not Looks like the perfect set up for a big move up over the autumn and winter. I'll drink to that!

[FWIW]

Golds rocketing. Good old Ker, a coincidence? I think not Looks like the perfect set up for a big move up over the autumn and winter. I'll drink to that!

 

Ker is worth his weight in gold...and silver....

 

Please don't ever agree with us Ker - we will all be doomed when that happens!

 

[aardvark]

good old ker! i seem to remember the last time he predicted $450 the price also shot up the next day.

[G0ldfinger]

A nice analysis. Personally I think that hyperinflation is the only way for the US because of the exact consequences of a default Lynch describes

 

http://www.glgroup.com/News/Dollar-destine...blic-42857.html

Dollar destined to be second class currency in world's largest banana republic

 

September 1, 2009

 

* Analysis by: Michael Lynch

* Analysis of: The Dollar's Fate

* Published at: www.nytimes.com

...

 

The mainspring of the American commercial and industrial system is broken. If it is not repaired, and soon, the general economy will continue to spiral down into lethargy. This will inevitably lead to political consequences now only dimly foreseen. The town hall demonstrations during the congressional summer recess were subtle indications that Americans are beginning to realize that the functionaries cannot cope with the gathering storm. The eye of this awesome turbulence now looming well above the horizon is the ruined U.S. Treasury. Plans to run the national debt up to $9 billion by 2019 have catastrophic dimensions. With a currency that has no future, the political game cannot long go on. The only exit strategy remaining now is default which the government is reluctant to embrace (to say the least). The current financial philosophy leads to eventual chaos. Default, of course, has its own peculiar consequences. The greatest one is that the U.S.A. immediately loses superpower status and is reduced to the role of banana republic. Little consolation can derive from the fact that it will be the world's largest such state. Without the ability to finance anything, American foreign policy will become fiction, domestic policy will amount to oratory without substance. The American people will quickly tire of the moribund federal government and replace it with one that can be more easily controlled. It is difficult to say exactly what form the new government might be. Perhaps a unicameral legislature composed of the several governors with a governor-in-chief of brief and limited power. The citizenry would formally or tacitly bring into being their powers of political assassination, popular political tools in all of the BRIC countries.

...

From this will emerge an international system of trade with the U.S.A. largely excluded unless gold is used to pay for transactions. When the gold is gone, international transactions cease. None of the above suggests that the world is coming to an end. The Soviet Union, for much of its 70 year tenure was not a world power. Modern Russia is still a work-in-progress. China, only now, is coming into its own. India has unrealized potential. Brazil, with great oil potential promises to be a power for years. The European Union will prosper. Life will go on, even for Americans, but their standards of living will decrease as the dollar fades.

[huntergatherer]

Wow! It's getting close to that $1000 barrier again.

Could this really be possible ? : $650 Au before $1007 Au (so close and yet so far)

 

We may have seen a blow off high for the 30 year T-bond when the price moved up and out of the channel that has been in effect since 1987. This channel was in place for 22 years without being violated in either direction. A blow-off high may indicate that a breach of the lower channel line will occur. A close below the lower channel line will indicate rising interest rates. That would be bullish for the U. S. Dollar and bearish for gold Vis a Vis the U. S. Dollar.

 

A final blow-off move is often indicative of a reversal of trend about to occur. A blow-off move out of a 22 year old channel may be a warning of major changes taking place. A change of the long term trend for the 30 year T-Bond means higher interest rates.

 

$650 Au before $1007 Au?

 

Gold bullion has completed 5 waves up and is working on its 3 waves down. The final [C] leg down of the 3 wave correction is missing and may soon begin. When the [C] leg is complete the next bull phase should begin.

 

not to expect an imminent parabolic move to the sky for the precious metals complex. In due time yes but there are indications hidden in the charts that may be telling us not yet, not yet.

 

http://www.marketoracle.co.uk/Article13102.html