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As some of you know I am a customer of Alpari. They recently gave away some free charting software.

I thought I'd leave it running to see how well it does...or doesn't!

 

3517tci.jpg

 

Short at 10.30 GMT this morning? I don't think so...

 

Anyone who thinks that all the info is right there in a chart and fundamentals don't make any difference will be crying right now!

 

Ignore Fundamentals at your peril; as CGNAO says Technical Analysis will take you to the poor house.

 

Think for yourselves people - there is a funking good reason why they give it away!

 

:lol:

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As some of you know I am a customer of Alpari. They recently gave away some free charting software.

I thought I'd leave it running to see how well it does...or doesn't!

 

3517tci.jpg

 

Short at 10.30 GMT this morning? I don't think so...

 

Anyone who thinks that all the info is right there in a chart and fundamentals don't make any difference will be crying right now!

 

Ignore Fundamentals at your peril; as CGNAO says Technical Analysis will take you to the poor house.

 

Think for yourselves people - there is a funking good reason why they give it away!

 

:lol:

jim sinclair

 

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Does anyone think that the price is being moved by cunning longs possibly from the East - or is it normal buying?

 

I think this picture will answer your question:

 

slide_3638_51838_large.jpg

 

Weak President, who doesn't even know what P/E ratio is. Just a talking head...probably a good actor, but needs a decent script.

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As some of you know I am a customer of Alpari. They recently gave away some free charting software.

I thought I'd leave it running to see how well it does...or doesn't!

 

3517tci.jpg

 

Short at 10.30 GMT this morning? I don't think so...

 

Anyone who thinks that all the info is right there in a chart and fundamentals don't make any difference will be crying right now!

 

Ignore Fundamentals at your peril; as CGNAO says Technical Analysis will take you to the poor house.

 

Think for yourselves people - there is a funking good reason why they give it away!

 

:lol:

 

Volume is the key-price is only the resultant force of volume, however in the chronology of price change, human-mind/intellect-receipt of information-processing-then decision/action-volume-price. Trying to trade with price without fundamentals is extremely difficult, with volume and price it can be done.

 

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As some of you know I am a customer of Alpari. They recently gave away some free charting software.

I thought I'd leave it running to see how well it does...or doesn't!

 

3517tci.jpg

 

Short at 10.30 GMT this morning? I don't think so...

 

Anyone who thinks that all the info is right there in a chart and fundamentals don't make any difference will be crying right now!

 

Ignore Fundamentals at your peril; as CGNAO says Technical Analysis will take you to the poor house.

 

Think for yourselves people - there is a funking good reason why they give it away!

 

:lol:

 

Technical Analysis belongs in the same category as: Crystal Balls, Horoscopes, Almanacs, Tea Leaves, and Reading Palms. It will lead you to ruins.

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MSM Reporting on the record Gold price :lol:

 

http://news.bbc.co.uk/1/hi/business/8373769.stm

 

Gold hits new record high on weakening dollar

 

Demand for gold increases in the run-up to Christmas ;)

The price of gold has hit a new all-time high, boosted by continued concerns about the weakening dollar.

 

Gold hit a record of $1,167.35 an ounce, up by about $15 from Friday's closing prices.

 

The expectation that US interest rates will remain low has put pressure on the dollar, making gold more attractive as an investment. ;)

 

Growing demand from emerging markets, particularly in Asia, is also helping to drive the price of gold higher.

 

Emerging market governments are looking to diversify their foreign exchange holdings and are buying gold as a result.

 

"Sentiment is very upbeat and gold is looking increasingly attractive," said Stefan Graber at Credit Suisse.

 

Analysts expect the price of gold to continue rising.

 

"It looks like $1,200 will be seen much sooner than expected," said Afshin Nabavi at gold bullion refiner MKS Finance.

 

 

 

 

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http://money.cnn.com/2009/11/23/markets/go...8Latest+News%29

 

Gold surges to a fresh record

 

The precious metal continues a record run on concerns about the U.S. dollar and economic jitters. Analysts see $1,200 an ounce before year's end.

NEW YORK (CNNMoney.com) -- Gold rallied to an all-time high Monday, climbing ever closer to $1,200 an ounce, as the U.S. dollar slid and investors showed nervousness about the economy.

 

December gold was up $20.90 to $1,167.70 an ounce, after having climbed to a record $1,173.50 earlier in the session.

 

The rally came as the dollar weakened against its main trading partners, with the euro climbing 0.8% to $1.4979. A softer greenback makes commodities that are priced in dollars cheaper for investors holding other currencies.

 

"We're seeing significant dollar weakness, and I think that's the main driver today," said Joe Foster, portfolio manager for the Van Eck Global International Investors Gold Fund.

 

The weak dollar has sent gold surging more than 10% this month as investors flocked to a safe-haven investment. Demand for gold and other so-called tangible assets, which tend to store value better than equity-based investments, often rises in times of economic uncertainty.

 

Gold is also being supported by a growing expectation in the market that central banks around the world will move to increase their hoards.

 

India's central bank bought 200 metric tones of gold from the International Monetary Fund earlier this month, and the central bank of Mauritius bought a smaller amount last week.

 

"We believe the activity of central banks and seasonal weakness in the U.S. dollar in the final four weeks of the year will sustain the strong rally in gold prices," analysts at Deutsche Bank wrote in a recent research report.

 

Meanwhile, gold is benefiting from a "break-down of confidence" as investors fret about growing fiscal deficits and the ability of governments around the world to oversee the financial system, Foster said.

 

Given the current momentum in the gold market, and the growing interest from big investment funds, analysts expect prices to continue rising.

 

"We might have a bit of a pull-back, but the long-term trend is higher," Foster said. Gold will probably top $1,200 some time in December and could climb to $1,300 early next year, he added.

 

First Published: November 23, 2009: 12:15 PM ET

 

 

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UUUHHHH i thought they were selling :lol::lol::lol:

 

 

http://in.reuters.com/article/fundsNews/id...E5AM1A020091123

 

 

Russia c.bank buys 0.5 mln oz gold in October

 

Mon Nov 23, 2009 6:29pm IST

 

MOSCOW, Nov 23 (Reuters) - Russia's central bank gold stocks rose by 0.5 million ounces (15.6 tonnes) or by 2.6 percent in October to 19.5 billion ounces (606.5 tonnes), data on the bank's web site www.cbr.ru showed.

Russia's central bank has said it aims to increase gold's share in its reserves this year [iD:nLG124285] to keep its investments diverse. The metal is also seen as a safe-haven at times of financial market turbulence and economic crisis -- a status which has helped send the price of gold XAU= to record highs this year.

 

The web site said the total value of gold in the bank's stocks rose to $20.4 billion at Nov. 1 from $18.8 billion a month earlier. Gold made up 4.7 percent of Russia's total gold and foreign exchange reserves -- the world's third largest -- which stood at $434.43 billion at the start of November.A source in the Russian state precious and metals repository Gokhran said the gold did not come from its stocks.

 

The central bank was not immediately available for comment. ;)

 

Russia's Finance Minister Alexei Kudrin said last week Gokhran, subordinated to the ministry, will sell 30 tonnes of gold to the central bank this year.

 

The central bank had been steadily building its gold stocks this year from 16.7 million ounces on Jan. 1, 2009.

 

The largest monthly increase this year -- of 0.6 million ounces -- took place in July, when stocks rose to 18.3 million ounces from 17.6 million.

 

In September Russia's gold stocks were the world's ninth-largest. [iD:nSP482249]

 

The central bank's reserves include gold, foreign currency and Special Drawing Rights (SDRs), an international reserve asset that is essentially a currency of the International Monetary Fund, and some other assets. (Reporting by Aleksandras Budrys and Polina Devitt; Editing by Keiron Henderson) ((aleksandras.budrys@reuters.com; +7 495 775 1242; Reuters Messaging: aleksandras.budrys.reuters.com@reuters.net))

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http://www.marketwatch.com/story/new-gold-...ream-2009-11-23

 

New gold bugs making gold investments mainstream

 

Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation.

 

"I have never been a gold bug," Paul Tudor Jones, chairman of hedge-fund giant Tudor Investment Corp., wrote in an Oct. 15 letter to investors. "It is just an asset that, like everything else in life, has its time and place. And now is that time."

 

Tudor has been building positions in gold and other precious metals in recent months and they now represent the firm's largest commodities exposure, he noted.

 

 

SPECIAL REPORT: THE NEW GOLD BUGS

Now or never

Gold has long been favored by a fringe of the investment world, but this year some of the world’s leading hedge fund managers have loaded up on the precious metal. Why gold and why now?

• Are the new gold bugs getting in at the top?

 

Greenlight Capital, run by David Einhorn, reversed a long-time aversion to gold, while Kyle Bass's Hayman Advisors LP held more than 15% of its portfolio in gold and other precious metals earlier this year. Eton Park Capital, headed by former Goldman Sachs /quotes/comstock/13*!gs/quotes/nls/gs (GS 172.58, +2.57, +1.51%) trader Eric Mindich, has also got in on the act.

 

"I can't remember in 20 years so many respected investors focused on a single strategy," said Bradley Alford of Alpha Capital Management, which invests in hedge funds. "Some of these people are icons of the industry with at least 15-year track records. It's a losing proposition to bet against guys like that. They aren't billionaires because they make bad bets." It's not only hedge funds. Managers of mutual funds and insurance company portfolios are often limited in how much gold they can buy, but these investors have been purchasing the metal for their personal accounts, according to Ed Yardeni, president of Yardeni Research.

 

"A surprising number of level-headed folks, who I have known over the years, are confessing to me that they've become gold bugs," he said. "They're starting to give more respect to what was for a long time considered the lunatic fringe."

 

The original gold bugs have been fans of the metal for decades. They yearn for the past, when the so-called Gold Standard was the central cog of the world's currency system. A similar system known as the Bretton Woods Agreement tied the U.S. dollar, and all currencies pegged to the dollar, to the price of gold. When the system broke down in 1971, there was no longer a limit on the amount of money that could be printed by governments.

 

Gold bugs hung on grimly as prices dropped in the '80s and '90s amid quelled inflation and roaring stock markets. But gold prices began climbing at the start of this decade, when the Federal Reserve slashed interest rates to revive the U.S. economy in the wake of the dot-com bust.

 

That helped fuel a housing and credit market boom that came crashing down last year, triggering a global financial crisis and the worst recession since the Great Depression.

 

The Federal Reserve, headed by Ben Bernanke, responded by slashing interest rates to almost zero and spending more than $1 trillion buying long-term U.S. Treasury bonds and mortgage-backed securities and other debts from collapsed housing giants Fannie Mae /quotes/comstock/13*!fnm/quotes/nls/fnm (FNM 1.02, -.00, -0.01%) and Freddie Mac /quotes/comstock/13*!fre/quotes/nls/fre (FRE 1.14, +0.00, +0.01%) . See latest on Fed's efforts.

 

That's stabilized the economy, but some leading hedge fund managers worry about the long-term consequences of this so-called quantitative easing and are using gold to protect themselves.

 

'Grandpa Ben'

"The Fed is making loans collateralized by toxic waste and has now begun a policy called 'quantitative easing' -- a fancy term for 'printing money,'" Greenlight's Einhorn wrote in a January letter to investors.

 

 

Reuters

 

David Einhorn of Greenlight Capital, Inc.

 

Printing so much new money will cut the value of the U.S. dollar, which could fuel rapid inflation. In such an environment, the solidity of gold could shine.

 

"If the chairman of the Fed is determined to debase the currency, he will succeed," Einhorn added. "Our instinct is that gold will do well either way: deflation will lead to further steps to debase the currency, while inflation speaks for itself." Einhorn initially invested in the Market Vectors Gold Miners ETF /quotes/comstock/13*!gdx/quotes/nls/gdx (GDX 51.91, +1.09, +2.15%) , which tracks shares of gold-mining companies. He'd also bought call options on gold, as well as buying the metal directly, according to Greenlight's January investor letter, a copy of which was obtained by MarketWatch.

 

Since Einhorn launched Greenlight in 1996, he's shunned gold and other broad economy-based trades in favor of tracking down under-valued and over-priced stocks.

 

"We never thought we would ever buy gold or gold stocks," Einhorn wrote in January, recounting the lesson he learnt from his grandfather's obsession with the precious metal.

 

"David's grandfather Benjamin was a gold bug," Einhorn recalled. "From the time David was 10, Grandpa Ben took every opportunity to tell David about the problems with fiat currencies and the coming inflation and advised that the only sensible thing to do was to buy gold and gold stocks."

 

Einhorn's grandfather followed his own advice for the last 30 years of his life and lost money.

 

"Being a patient investor is one thing. Being 'wrong' for three decades is quite another," Einhorn noted.

 

'Grandma Cookie'

However, Greenlight Capital lost more than 15% last year -- its first ever annual loss -- as the global financial crisis rocked the hedge fund industry. Einhorn had rightly warned of the demise of Lehman Brothers /quotes/comstock/11i!lehmq (LEHMQ 0.11, -.00, -2.93%) before it happened, but he underestimated the broader impact of such an event.

 

 

What's driving gold higher?Frank Holmes, CEO of U.S. Global Investors, tells MarketWatch's Laura Mandaro that it's possible for gold to top $2,300 an ounce.

"The lesson that I have learned is that it isn't reasonable to be agnostic about the big picture," he said during an Oct. 19 speech at the Value Investing Congress in New York.

 

At the same conference four years earlier, Einhorn advocated his Grandma Cookie's approach of investing in stocks like Nike /quotes/comstock/13*!nke/quotes/nls/nke (NKE 64.44, +0.52, +0.81%) , IBM /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 128.02, +1.06, +0.84%) , McDonald's /quotes/comstock/13*!mcd/quotes/nls/mcd (MCD 63.99, +0.02, +0.03%) and Walgreens /quotes/comstock/13*!wag/quotes/nls/wag (WAG 39.41, +0.44, +1.13%) , over his Grandpa's holdings of bullion and gold stocks.

 

"I explained how Grandma Cookie had been right for the last 30 years and would probably be right for the next thirty," Einhorn said. "However, the recent crisis has changed my view."

 

Gold should do "fine" until policymakers and politicians show more monetary and fiscal restraint. The metal will likely do "very well" if there's a sovereign debt default or currency crisis, he added. See how Einhorn is betting on a possible currency death spiral.

 

Einhorn said last month that he moved all his positions into physical gold because it's a cheaper, more-certain and more-liquid way of investing in the metal. Read about options for worried gold investors.

 

Physical delivery

Hayman Advisors, a Dallas, Tex.-based hedge fund firm run by Kyle Bass, became another proponent of holding physical gold this year.

 

Most precious-metal investing has historically been done via paper futures contracts on COMEX, part of the New York Mercantile Exchange, owned by CME Group /quotes/comstock/15*!cme/quotes/nls/cme (CME 325.82, +2.83, +0.88%) .

 

However, Hayman expects more demand for physical delivery of precious metals. That could cause problems because there are only enough inventories in COMEX warehouses to supply 15% to 30% of open interest on futures and options contracts, the firm explained in a presentation to investors earlier this year.

 

"It is prudent to focus efforts on obtaining physical delivery of metals backing paper contracts 'while supplies last,'" Hayman wrote in its presentation, a copy of which was obtained by MarketWatch.

 

Faster Monopoly

Bass, Einhorn and others are holding gold because they're concerned that a damaging bout of inflation will be triggered by the efforts of several central banks to stabilize economies by pumping lots of new money into the global financial system.

 

 

Reuters

 

Hedge fund director John Alfred Paulson, president of Paulson & Co Inc.

 

Excluding Japan, the world's major currencies have experienced money supply growth of 15% to 55% in the past three years, Bass estimated in an Oct. 2 letter to investors.

 

The Hayman managing partner compared the efforts to a game of Monopoly in which the banker decides money is too tight, the "velocity" of the game is slowing down, or a few players are about to go broke.

 

 

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Dunno if this is Financial Planner, AKA Jonathan Davis in the FT.

 

http://www.ft.com/cms/s/0/5416fbc0-d604-11...bdc0,s01=1.html

 

 

 

Ignore Buffett – gold’s time has come

 

By Jonathan Davis

 

Published: November 22 2009 11:37 | Last updated: November 22 2009 11:37

 

There are many reasons why sensible columnists prefer to steer clear of writing about gold. One is that you get the weirdest responses. Twenty years ago they would arrive in funny shaped envelopes, often in green ink, often from individuals with extraordinarily peculiar views about the world. These days the risk is that anything you say will be instantly picked up, recycled and commented on in a thousand online blogs. Not all of that community are interested in constructive dialogue. Gold retains its capacity to excite the most extreme polarised views.

 

A second reason for thinking better of writing about gold is the Warren Buffett problem. When asked for his views about gold, he typically replies with the answer, along the lines that gold has never been a good store of value and is unlikely ever to interest him as a home for his money. Gold, he says, “gets dug out of the ground in Africa or some place. Then we melt it down, dig another hole, transport it halfway round the world, then bury it again and pay people to stand around guarding it”. It has, he argues, “no utility”. There will always be other things that he would rather own.

EDITOR’S CHOICE

A steady hand at the tiller wins out - Nov-15

Lords of finance, culprits of crises - Nov-08

Japan sovereign debt crisis looms - Nov-01

Repeating the past will add to regrets - Oct-25

Our quest for a far less risky future - Oct-18

How exactly the mighty have fallen - Oct-11

 

Although doing back-flips when circumstances change is one of Mr Buffett’s greatest strengths, he appears to have been true to his word in never having made a significant investment in gold or gold shares. In the late 1990s, he did briefly place a large bet on the price of silver, based on a personal analysis of the supply and demand equation for the metal which turned out to be quite flawed. He has been known also to recycle Mark Twain’s famous description of a gold mine as a “hole in the ground with a liar at the top”.

 

If the world’s greatest investor doesn’t think gold deserves consideration, has he got a point? A serious criticism of gold is that it may not in the strictest sense be an investment, in the Ben Graham sense of generating returns that can be analysed and valued. It can be lent out, for sure, but that has to be set against storage and insurance costs. While physical supply and demand clearly play a part in determining the price of gold, its performance is influenced by fluctuations in demand from investors (which a Grahamite purist might label as speculative interest).

 

The arrival of liquid, freely tradeable exchange traded funds in precious metals, some but not all of which are backed by physical collateral, is further encouraging this trend. With the sharp run up in the dollar price of gold this year, coupled with a notable recovery in equity markets, new gold funds are emerging by the week. John Paulson, the hedge fund manager who did so well out of the credit crunch, is the latest to launch a gold fund. Such high profile launches can only heighten interest in gold and more highly geared gold shares, and might in normal times be seen as early evidence that gold is entering a speculative bubble and must be heading for a nasty fall.

 

However, these are far from normal times. While the seeds of a future bubble in gold are being sown, we are a long way away from any kind of climax. Despite growing media attention, gold remains surprisingly underowned by private investors. More people talk about it than actually own it in volume. Every trend-following speculator who is buying gold today for bandwagon reasons is, I suspect, comfortably matched by seasoned wealthy and professional investors accumulating gold for traditional defensive reasons, not to mention central banks desperate to reduce their dollar dependency.

 

Whether or not you care to define it as an investment, gold offers protection against the devaluation of the dollar and the eventual re-emergence of inflation that Mr Buffett himself has identified as the inevitable consequences of the financial crisis and governments’ response to it. While he may be right that buying the Burlington Northern railroad is a better way to profit from eventual recovery in the global economy, the rest of us mere mortals will not be easily convinced to dump our gold and other commodities yet.

 

The point about gold is not to own it for some intrinsic reason, as gold bugs do, but because today’s unprecedented economic conditions make it a sound and defensible two way bet on the future. If gold’s time is ever going to come, we are living through just such a time now.

 

Although a sharp upward snap in the dollar looks possible in the short term, the real gold bubble still lies ahead.

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Dollar down to 71/72 by the end of the year, probably a bounce back up to 76/78 in the new year. Back down to 71 may/june then 60, 50....

 

Every currency in the world will fall in value against Gold over the next 2/3 yrs. The only place you can be is Gold/Silver related assets, and if your not...your STUPID!

 

Bob Chapman Nov 23rd

 

Part 1

Gold

Part 2

The Dollar

 

 

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More on the new Paulson Fund.

 

Paulson gold fund imposes stiff rules, hires gold unenthusiast Reade

 

* Paulson's Golden Investors Have to Commit $10 Million

* Gold fund to require a one-year lockup

* Paulson bets that gold prices will keep rising

 

By Svea Herbst-Bayliss

Reuters

Friday, November 20, 2009

 

BOSTON -- Investors tempted to put money into star hedge fund manager John Paulson's new gold portfolio will have to commit at least $10 million and leave the money locked up for at least one year, according to a prospectus.

 

In return, Paulson & Co., one of the world's biggest and most successful hedge fund firms, says it can deliver returns that top gold prices, at a time analysts are betting that rising demand will make the metal even pricier.

 

Since founding his New York-based firm in 1994, Paulson has concentrated mostly on merger deals and the credit market. A bet that housing prices could fall on a national level famously earned him roughly $3 billion in 2007. Now Paulson is making a concentrated bet on miners and other bullion-related investments because central banks are buying gold and he expects prices to keep rising as demand outpaces supply.

 

Gold prices reached an all-time high of $1152.85 an ounce this week.

 

Paulson has hired two gold industry experts: Victor Flores, HSBC's former senior gold mining analyst, and John Reade, a former senior metals strategist at UBS. Reade had originally planned to join Credit Suisse.

 

Paulson introduced his plans to some existing investors earlier this week. Other potential clients are getting a look at the details in a private prospectus obtained by Reuters.

 

While Paulson is best known for his bet on the credit market, he has included gold stocks in his funds for several years and currently has at least 10 percent of the firm's roughly $30 billion invested in this sector. Paulson's Advantage Plus fund has gained 18.62 percent this year, topping the Standard & Poor's 500 14.72 percent gain, in part because of out-sized gains in certain gold stocks. The fund holds AngloGold Ashanti, which has outperformed the rise in gold prices by 30 percent this year, and Centamin Egypt, which has gained 118 percent since Paulson began buying it at $1.26 in 2007.

 

Potential investors in the new fund, which is set to launch in January, will pay Paulson a 1.5 percent management fee and a 20 percent incentive fee. Analysts termed those rates reasonable considering Paulson's track record and the fact that some other prominent fund managers command performance fees of 30 to 50 percent.

 

Investors will be able to get their money back twice a year after having given the fund firm 60 days' notice.

 

The minimum investment is considered high at a time when investors are still smarting from losses of about 19 percent in 2008 -- a slump that prompted pension funds, endowments and wealthy individuals to pull billions out of the $1.5 trillion industry.

 

Gold has long been popular as a hedge against inflation, which some economists fear is on the verge of rising sharply given extremely low interest rates set by the U.S. Federal Reserve and other central banks.

 

Paulson's prospectus quotes William Poole, the former president of the St. Louis Fed, as saying "We are very vulnerable to an inflation explosion."

 

While Paulson's portfolios have long been winners, some potential investors expressed concern that the portfolio could be volatile and fall fast if gold prices retreat.

 

Paulson Hires Gold Stars for His Fund

 

By Carolyn Cui

The Wall Street Journal

Friday, November 20, 2009

 

Hedge-fund manager John Paulson has hired two high-profile gold analysts as he ramps up his new gold fund.

 

John Reade, who was head of precious-metal strategy at UBS AG before briefly joining Credit Suisse in October, will join Paulson & Co. in mid-January and be based in London, according to people familiar with the fund.

 

Victor Flores, a senior mining analyst with HSBC Holdings PLC, joined the firm in New York.

 

Mr. Paulson told his investors this past week that he will start a new fund in January that will invest in shares of gold miners and other bullion-related investments. He argued that the bull run for gold was only at its start at Tuesday's meeting with investors.

 

Mr. Reade, who spent 13 years at UBS, is well-regarded in the industry. In early February when gold was trading below $900 a troy ounce, his team at UBS sharply raised its gold-price forecast to an average $1,000 an ounce from $700. So far this year, gold has averaged $953. However, he warned in late September that gold could expect a correction, triggered "by a pause to U.S. dollar weakening."

 

In August, Mr. Flores, as a lead author of "The Senior Gold Book" at HSBC, wrote that the dollar "continues to pay the price for years of financial indiscipline," which should support gold prices.

 

However, in the same report Mr. Flores noted that buyers have overpaid to acquire gold-mining companies during the past decade because of high gold-price assumptions. "Most of the potential value created by the deals ... was eaten up by the premium that was paid," he wrote.

 

This finding could serve as a cautionary call to Mr. Paulson, who has been on a buying binge of gold producers including shares of AngloGold Ashanti Ltd. and Kinross Gold.

 

 

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Welcome to Stage Two of Gold's Bull Market

 

James Turk | Nov 23 2009 11:29AM

 

Bull markets are marked by three distinct stages, and when gold climbed above $1,000, it only entered its second stage. In other words, gold has much further to climb in the months and years ahead.

 

So don’t be misled by what you may hear or read in the mainstream media and even much of the alternative media. After all, how many commentators have correctly identified gold’s bull market, now a decade old?

 

As Robert Blumen cogently argues: “Many of the financial media have a pronounced anti-gold bias. Of the writers and news anchors now calling gold a bubble, not only did they fail to identify the stock market bubble in the 90s or the subsequent housing market boom as a bubble, they actively promoted the excesses of those unsustainable booms, encouraging their viewers or readers to participate. For the most part, these pundits have failed to identify a rising gold price as an investment trend at any point in the past ten years (during which gold had a positive return each and every year).” Robert then goes on to observe the silly incongruity of their warnings about gold: “Witness the irony of the financial media transformed from hypesters who never saw a bubble they couldn’t promote into bubble vigilantes, issuing concerned warnings to ‘get out [of gold], now, before you get hurt.’”

 

http://www.lewrockwell.com/blumen/blumen19.1.html

 

There are different ways to determine relative value, and one of these is gauging market sentiment, which is what a bull market’s three stages communicate. During the first stage of a bull market, the media and most investors alike focus on past issues, rather than future potential. Over the past decade one consequently heard all the reasons not to own the gold.

 

An old and trusty adage says that bull markets climb a ‘wall of worry’. In gold’s first stage, there seemingly was a lot to worry about. But most of these worries were emotional in nature and not logical. Few paid attention to relative value, which is the proper determining factor when making decisions about your portfolio. Truth be told, I too was worried, but I didn’t let it keep me from accumulating gold and recommending to anyone reading my analyses to do the same.

 

Gold is now in its second stage, and of course, the worries don’t disappear. They never do because there are always emotional reactions that at first blush offer seemingly plausible reasons for not taking the right action. But there is a notable difference in this stage compared to stage one. Look how many people are writing and talking about gold. Gold has moved from apathy and neglect – stage one characteristics – to growing attention. But importantly, instead of embracing gold and analyzing it to determine relative value, today’s attention is one of widespread disbelief and skepticism that gold can climb higher. These are exactly the responses one should expect to emanate from stage two.

 

As gold climbs higher, we will eventually enter stage three. The timing of its arrival cannot be predicted, but we will know it has arrived when commentators who have been consistently wrong about gold will be telling everyone willing to listen to buy gold. But at some point in stage three when gold no longer is relatively good value, it is when I will be advising to reduce your gold holding by spending or investing it. We are, however, a long way from there, so my advice for now remains the same as it has been throughout this decade. Continue to accumulate gold. View it as your savings account. Savings are always a good thing, particularly when you are saving sound money.

 

by James Turk

 

 

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Just to show I don't always post bullish news, laughable though I think.

 

Gold to fall under $1,000 by year-end: forecaster

 

SAN FRANCISCO (MarketWatch) -- Gold futures will fall below $1,000 an ounce by year-end and fall as low as $800 an ounce next year, said U.K. forecasting firm Capital Economics Monday. New York gold futures Monday hit a new high of $1,174 an ounce. Economist Julian Jessop attributed bullion's recent surge to a desire for insurance against the risks of inflationary bubbles in other assets and a U.S. dollar collapse. "These risks are probably much lower than generally supposed," he wrote, adding his forecast depends "crucially" on at least a partial recovery for the U.S. dollar. "While we do not think that gold is yet in a bubble, the weakness of underlying demand at these record price levels is at least a warning sign," he wrote.

 

 

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Interesting article on how mining production is falling during this bull run.

 

Big Gold Must Acquire or Acquiesce

 

Introduction

 

In the Gold mining world as in life, Darwin’s law of survival of the fittest holds true. The large Gold mining companies (which we shall refer to as “Big Gold” hereinafter) need to continue growth in order to survive. Big Gold needs to replace their mined out resources in order to continue their existence and to grow......

 

503905-12589002721055-Marco-G-.jpg

 

 

 

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