GOLD

[carbon junkie]

Given the signs of withdrawal of monetary stimulus in some locations and rising rates, gold was a bit over extended but so far the pull back in Gold is pretty minor.

 

On the other hand Gold responds to inflation fear nicely but say Dubai debt default which is deflationary sends it down pretty quickly also.

 

Yesterday Gold went from 1135.?? to 1130.?? in a fraction of a second. i have never seen it go up or down like that before. I dont think it was Greece either.

 

Meanwhile whatever the cause there remains an awful lot of weakness in inflationary pressures in real economies with more or less zero chance that is going to change for months if not years to come.

Maybe someone is trying to sell a lot of US denominated debt this week.

 

DYOR

[Perishabull]

Yes, it really depends on the time frame you want to use. In the short/ medium term capital is likely to flow/fly from the peripheral currencies to the central dollar at times. Dollar spike, gold dip.

 

In the longer term, we could see a partial default in the dollar. I think it is very likely to devalue against gold first... though it could well apreciate against other currencies and assets. Eventually, if trade and currencies are to be stabilized, I think a new formalized monetary system will have to be instituted... only then would the Yuan and Asian currencies appreciate against the dollar representing a partial "default". The US might end up begging for this solution after "paradoxically" being crucified on a strong currency as Japan now is.

 

Japan is an interesting example, do you think the US could go Japanese?

[301ouncer]

Hey 301er, that was a pretty savvy move to do back in 2005. You must be over the moon with those 301 ounces with the POG today and the potential gains in the near future.

 

When you do decide to 'cash some in' (in say a few years when it is looking toppy) how will you avoind the banks with your returns? Straight into property?

 

My primary aim after educating myself in HPC and other sources was to protect whatever I have from confiscation through inflation (printing of money) and bankers greed.

 

I had a property to move into that was rent free and big enough to house my family. I always abhored Interest, and the eating of interest. After brief education I decided to get out ASAP of Mortgage = Death Cage (Latin). There was then all the talk of ISA's or some other things but all those products where evil in nature and did not come near them.

 

Interest is what causes poeple to commit sucide and in some guy's case he had only 1.5k in debt to halifax bank that he would loose his property if not paid. Guess what he does just that. Jumps off a cliff.

 

These banks and bankers nothing short of animals. Inhuman with no mercy to anyone and nothing but very mercifull to profit made in any way. Even if it means the invasion, occupation and destruction of socities.

 

I would not fling an eye lid if POG goes back to £300 because I own honest money and nothing else matters. I paid that much for it and happy to keep it that way. I was not looking for no profit whatsoever.

 

As for property it is going down the abyss all the way to 2033.

 

All else is nothing but spin so be in it all to win it all and do not worry of the blamers.

 

 

[drbubb]

GOLD Thread #22: December 2009

Daily news, comment and analysis on the gold market

=====================================

Last page, of Nov. thread: http://www.greenenergyinvestors.com/index....&start=1540

 

Gold (GLD) versus Gold stocks (GDX) ... update

 

MSI#1 (WTIC/USD) has broken, at last:

 

Yesterday's slide in Oil was:

WTIC: $70.82 -1.80 / Pct Chg: -2.48%

USO : $35.87 -0.98 / Pct Chg: -2.66%

 

Gold was down too, and like oil, looks to have further to fall ... update

 

Does the Piper still think this is a little Bear cub of a correction?

 

It looks like Gold may fall at least $180-200 from the top, that's about 15%.

The last 15% up was heralded as a gia-normous prooof of the bull case,

and now they want to brush off a drop of the same size

 

"Stay in step. He's just a small cubby bear. He cannot hurt you!"

[drbubb]

QUOTE (Traktion @ Dec 9 2009, 12:47 AM)

Why have a national reserve currency at all? Why not have denationalised currencies? Indeed, why not just trade in gold/silver weight - it doesn't need a number attached to it (pound, dollar etc) to measure its worth.

 

The argument for dealing with notes, rather than coins can now be side lined. With mobile phone technology edging ever closer to giving us all a digital wallet (even if most don't realise it yet), why do we need notes or coins at all? All we need to know is that whatever "thing" is backing that digital representation is really there. GoldMoney already have an iPhone applet and I noticed an RBS advert for their new iPhone applet too. How long will it be before people start cutting out the ATMs and EPOS and just swap money via their Internet connected phones?

 

There is no reason for governments to be involved in money and I can imagine a world far less manipulated without them involved. A gram of gold cannot be manipulated and has international value. The same can be said for many other PMs too. All the governments need be involved in is the regulation of the companies holding the PMs, if they are needed at all (private audits are likely enough).

 

I can envisage a future where we can simple swap our e-gold/silver as money. Vaults could be distributed around the world, with PMs delivered on demand. Open, clear and simple. People could even choose to let the "bank" lend out some of their money to others. Fractional reserve lending could work fine too, as long as people are aware of the risk of losing their money (no lending is risk free).

 

Hayek discusses such options here: http://www.iea.org.uk/record.jsp?type=book&ID=431. He takes the idea further of having competing currencies of all sorts of types, all operating outside of government control. Whether "hard" currencies would push out the others would only be known from trying it out, but I think a multi-polar, denationalised money world could work very well.

 

This is nice in theory. But the reality is whole populations, and countries, have savings [and debts] that are currently denominated in existing currencies. It is these real world circumstances that have governments [and pragmatic economists] attention at the moment. The questions occupying them is how to preserve the value of savings, how to preserve the international trading system, and how to stave of increasing unemployment. In short, how to avoid chaos. I do not see much advantage in governments now taking a laissez faire approach [after meddling for so long] and letting the chips fall... I think they have to do what they can to limit the damage of a global debt deflation.... and then at a later date look at an ideal solution.

 

Hayek is interesting. Yet I wonder if his writing was too pre-occupied with collectivism... and was therefore essentially reactionary. Imo a pragmatic economics should allow the tension between the private and public sphere to exist and not slide completely into collectivist ideology, or for that matter laissez faire free market ideology. I think the other problem with Hayek is he tends to put too much emphasis in the "collective wisdom of the species". A doctrine that has degenerated to the idea that free markets always know best.. and are wisest. I think the "madness of crowd" hypothesis is nearer the mark.

 

[DoctorSolar]

Can I make a derogatory image of you Dr B? and use it to ridicule you some more about gold being done at 930USD and call it non-combative educated debate?

[allyjcambo]

Can I make a derogatory image of you Dr B? and use it to ridicule you some more about gold being done at 930USD and call it non-combative educated debate?

 

Why not just ignore it, my precious little friend.

I can't speak for Bubb, but to me his point is clear. Gold is not a one way bet and goes up and down like everything else.

The bull market in gold is still very much on, but Jim Sinclair in my opinion is a shill. A bit like Jim Dines. You need to be careful with these guys. To me, that's the point of Bubb's posts: be vigilant.

[drbubb]

Can I make a derogatory image of you Dr B? and use it to ridicule you some more about gold being done at 930USD and call it non-combative educated debate?

 

It has been done already, the derogatory comments, quite a number of times.

 

The bear cub comes from Sinclair's website. It is not my invention. And he is LOSING money on his gold

longs, I never went short gold, I merely missed out some gains.

 

Sure, I said that "Gold may be done here" back in June, before it showed a mild correction into August,

when I expected a seasonal low (which I bought, but only for a very small number of ounces, since I

expected an even bigger dip.) But I never told people to go short, and that phrase was from June 2009,

 

... so: that would be a frigging lie, I might get pissed off (by you repeating an old lie), and suspend you for 24 hours.

And you would deserve it.

 

So go ahead, if you like

[drbubb]

Why not just ignore it, my precious little friend.

I can't speak for Bubb, but to me his point is clear. Gold is not a one way bet and goes up and down like everything else.

The bull market in gold is still very much on, but Jim Sinclair in my opinion is a shill. A bit like Jim Dines. You need to be careful with these guys. To me, that's the point of Bubb's posts: be vigilant.

 

Well said.

I havent said anything inflammatory about Sinclair. He provides a useful service, but as AJC has said,

he tends to be very one-sided. He might be slightly better than Dines, but is made from the same cloth IMHO.

Let's see if he can get his people out near the top. He failed on this latest top. Let's see how important it proves to be.

 

My message - also see my signature:

"The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible."

 

I don't say, as JS, seems to:

"Gold is in a long term bull market. Stay long, buy every dip."

[romans holiday]

Japan is an interesting example, do you think the US could go Japanese?

Yes, I think it's going Japanese now. I have bought gold because of currency instability and uncertainty.

 

I notice the Kiwi dollar [commodity currency] is going gangbusters today but silver down.... unusual. It does look like precious metals ran up too fast recently for the market.

 

I am continuing to raise US dollars and wouldn't mind having up to 40% in dollars [and Yen].... the rest staying in bullion. No certainties and all that.

 

[The NZ CB did not raise the cash rate today, nor has it earlier.... unlike Australia where it is getting towards 4%]

[Perishabull]

Yes, I think it's going Japanese now. I have bought gold because of currency instability and uncertainty.

 

I notice the Kiwi dollar [commodity currency] is going gangbusters today but silver down.... unusual. It does look like precious metals ran up too fast recently for the market.

 

I am continuing to raise US dollars and wouldn't mind having 40% in dollars [and Yen].... the rest staying in bullion. No certainties and all that.

 

Yes I think the same about the US. To have both dollars and gold is probably a smart way to play it.

[drbubb]

Gold retreats as hedge funds sell

http://www.theaustralian.com.au/business/m...f-1225808876526

Who would have thought?

 

Those who thought that the Hedgies were going to be long term holders of gold, should think again

 

 

GOLD fell sharply today as hedge funds sold to exit positions and capture profits before year-end,

perhaps prodded by the US dollar showing some stability lately.

 

February gold fell $US22.50 to $US1120.90 an ounce on the Comex division of the New York Mercantile Exchange. It closed lower for the fourth straight day, near a one-month low. March silver fell US62.7 cents to $US17.18.

 

"We're entering that time where you have end-of-year position squaring by hedge funds," said Michael Gross, broker and futures analyst with OptionSellers.com.

 

"They have been heavily long in the gold and silver markets. But the recent strength in the dollar -- even though it's not up today -- has been enough to trigger end-of-year profit-taking."

 

A weaker US dollar for much of 2009 enabled gold to hit a record high last week, since investors often buy the metal as a hedge against a falling US dollar.

 

However, the December dollar index is up roughly two points since Friday. It was down 0.105 point at 76.225 shortly before the Comex gold pit closed, but was up from a low for the day of 75.875.

 

Tom Pawlicki, analyst with MF Global, also cited the sharp fall in crude oil after weekly energy-inventory data, as another factor undercutting gold. January crude was more than $US2 a barrel weaker around gold's close. Equities were also modestly lower.

 

Funds generally have substantial profits in gold, Mr Gross said. At last week's record high, February gold was up 38 per cent for the year.

. . .

"Normally, December is not when the risk-taking takes place but the book-squaring takes place," said George Gero, vice-president with RBC Capital Markets Global Futures.

 

Furthermore, Mr Gross said, the decline in gold is "feeding on itself" as funds sell in order to capture as much of their profits as possible before prices fall any further.

 

A decline in gold holdings of exchange-traded funds on Tuesday hints at funds exiting positions, Mr Pawlicki said. The amount of gold held by SPDR Gold Shares, the world's largest gold ETF, declined by 13.72 tonnes due to redemptions.

 

"There is potential the market could trade lower over the next two or three weeks," he said.\

 

UNQUOTE ===

[Traktion]

Is it good or bad that my thoughts were quoted there?

 

To point out, denationalised currencies needn't be just PMs, but could be backed by promises, commodities or anything else. If there was demand for such things, I'm sure a free market in money would provide a product.

 

It's interesting to ponder how things will develop in the long term though.

[romans holiday]

Is it good or bad that my thoughts were quoted there?

 

To point out, denationalised currencies needn't be just PMs, but could be backed by promises, commodities or anything else. If there was demand for such things, I'm sure a free market in money would provide a product.

 

It's interesting to ponder how things will develop in the long term though.

If the "free market" were to reign you would have effectively denationalized currencies which would essentially involve bartering for goods with gold or silver or whatever. A near Cormack McCarthy view of the future.

 

On the other hand, we have the continual reign of governments with the institution of an international currency, that is, a gold exchange standard.

 

Which do you think more likely? I'd suggest the first is more attractive to those who view the world along the lines of freedom versus power. Those that view the world along the lines of order versus chaos find the second more attractive. However corrupt we think government is, it is their job to maintain law order... and accordingly it will involve a new international currency/ system.

[aliveandkicking]

If the "free market" were to reign you would have effectively denationalized currencies which would essentially involve bartering for goods with gold or silver or whatever. A near Cormack McCarthy view of the future.

 

On the other hand, we have the continual reign of governments with the institution of an international currency, that is, a gold exchange standard.

 

Which do you think more likely? I'd suggest the first is more attractive to those who view the world along the lines of freedom versus power. Those that view the world along the lines of order versus chaos find the second more attractive. However corrupt we think government is, it is their job to maintain law order... and accordingly it will involve a new international currency/ system.

 

in a free market people dont want to be walking around with kilos of metal as money. So instead they generally prefer claims.

 

How can you possibly believe that people would prefer to barter with metal??

 

Or am i misunderstanding you?

[grumpy-old-man]

Those who thought that the Hedgies were going to be long term holders of gold, should think again

 

 

GOLD fell sharply today as hedge funds sold to exit positions and capture profits before year-end,

 

ETF

GLD

Paper Gold

 

 

I think the long awaited disconnect between paper gold & physical is here personally.

 

Remind me again, how long have those ETF thingies been going for ??

& how long has physical gold been going for ??

 

[surfdude]

301ouncer wrote:

"I would not fling an eye lid if POG goes back to £300 because I own honest money and nothing else matters. I paid that much for it and happy to keep it that way. I was not looking for no profit whatsoever.

 

As for property it is going down the abyss all the way to 2033."

 

2033, isn't that the bottom for property that Armstrong is calling?

 

In a few years time when the gold has had its run won't you use some of it to accumulate assets? Such as a nice farm in the countryside as Faber recommends or consider some other store of wealth?

 

[romans holiday]

in a free market people dont want to be walking around with kilos of metal as money. So instead they generally prefer claims.

 

How can you possibly believe that people would prefer to barter with metal??

 

Or am i misunderstanding you?

Yes, you are misunderstanding me. Notice I "interrogated" free-markets, which was denoting something quite different... with the absence of law and government.... a kind of anarchic state of nature that some find ideal. It is in this sort of environment where barter would be the rule.... and anything might serve as money. No doubt silver and gold would quickly establish themselves also.

 

Yet I do not think civilization will collapse and that we will we go back to bartering. Or that this would be desirable. It seems to me there is a mythology of sorts towards the "free market" today where it is thought to somehow solve all our problems [i'd suggest that real free markets, beyond barter, are only made possible by certain political and social developments.... laws, rights etc..., and do not exist in a "state of nature". There we would have barter.... or plunder].

 

I think money will remain institutional with a good chance a gold exchange standard will be re-institutionalized in order to resolve some of the difficulties we face. This was discussed a bit in last month's gold thread:

 

http://www.greenenergyinvestors.com/index....st&p=146953

[drbubb]

WATCH SOMETHING That the whole world isnt watching...

 

So, should I use my gold and silver to buy a pile of green paper? With Insane government budget deficits, massive printing of money and shrinking gdp how could holding paper possibly be a bad idea?

 

Try telling me something that the whole market doesnt know!

 

As I have said many times:

The US dollar merely needs to outrun other currencies, like the Euro, to strengthen.

 

And a strengthening of the dollar will bring waves of deleveraging, as we are seeing now, as the carry trade is unwound.

 

What the market WASNT PAYING ATTENTION TO (and I was monitoring), was that the Euro was vulnerable to a correction,

thanks to debt problems of sovereign countries, like Dubai, Greece, Spain, and the Balkan and Baltic countries.

 

If you want to make money, you better know something that the whole market doesnt know!

[drbubb]

Hey,

what happened to Pixel?

has he gone into hibernation, waiting for the Bears to lose their grip on Gold?

[G0ldfinger]

... Bears to lose their grip on Gold?

The bears have had no grip on gold since 2000.

 

What the so-called gold bears celebrate is irrelevant noise in along term trend that accelerates.

 

http://gold.approximity.com/gold-silver_watch.html

[Traktion]

If the "free market" were to reign you would have effectively denationalized currencies which would essentially involve bartering for goods with gold or silver or whatever. A near Cormack McCarthy view of the future.

 

On the other hand, we have the continual reign of governments with the institution of an international currency, that is, a gold exchange standard.

 

Which do you think more likely? I'd suggest the first is more attractive to those who view the world along the lines of freedom versus power. Those that view the world along the lines of order versus chaos find the second more attractive. However corrupt we think government is, it is their job to maintain law order... and accordingly it will involve a new international currency/ system.

 

Having denationalised currencies, doesn't mean barter and chaos - it just means the monies are not controlled by governments, but instead private entities. The private entities would have all the powers of a nationalised currency's central bank, except in an equivalent system, the central bank would do doing the lending too (i.e. there wouldn't be the two tier system). The take home point is that the private entities issuing the currency would have a VI in keeping the supply limited; debasing it would lose customers willing to use it. Currently, the commercial banks don't give a fig about the quantity in the search for profit, leaving the central bank in a pickle - bailouts or collapse being the CB's choice.

 

For world trade, the idea of choosing a popular currency, which is known world wide (pan-national) could be a compelling one. Maybe competition would whittle the options down to a handful of options (like with national currencies), but the currencies would not be effected by political whims, regional inflation/deflation challenges etc either. A strong currency, with a good, stable reputation would see people holding and trading with it. If we consider that the international reserve currency was based around gold for this very reason and the USA has proved untrustworthy in being "as good as gold", the arguments are obvious:

 

1. You need something of international value (PMs, commodities?).

2. You can't trust a national currency to remain true to any backing (gold or otherwise).

3. Without backing, a national currency's worth can be manipulated for national gain.

 

With the dawn of the Internet and the digital wallet coming of age, we start to have new choices, beyond which were available at the time of the Bretton Woods. We don't need to carry gold about, nor do we need to carry bits of paper about - we can just access a digital representation of "money", both at the local and international level. With the dawn of these technologies we have:

 

1. A way to pass payment from one end of the world to another in milliseconds (no need to ferry gold or paper).

2. A facility to do this on both Internet enabled computers and now modern mobile phones (which, IMO, could become digital wallets).

3. Because of the Internet, we (or rather our "banks") can now trade between monies extremely easily, using the very liquid currency markets.

4. GoldMoney seems to be realising this potential (not so familiar with BullionVault), by allowing cheap transactions between holders, rather than just selling/buying PMs. Their voyage into iPhone apps illustrates their view on this. How long before they have an online payment gateway (a bit like PayPal), I wonder?

 

With the above in mind, if the governments continue to play games with their currencies, people may choose the above, without government encouragement (in fact, I would expect the opposite of governments). Which brings me back to my original point - why do we need state money numbers on PMs? Why wait for a new national reserve currency? PMs have their own worth, as could denationalised private currencies.

 

If major currencies start to show signs of collapse, people may gravitate to such free market solutions. Once their, the governments would have to make strong arguments to return to their "this one will be better than the last" fiat currencies. At which point, we may be covering new ground... I at least hope we end up with something better and less politicised than the current system.

[grumpy-old-man]

cgnao knows what/where & when will happen, but isn't giving more than a days advance warning lately (on purpose) because he wants to see the paper shouters & gold doubters™ lose everything.....imo.

[Traktion]

Yes, you are misunderstanding me. Notice I "interrogated" free-markets, which was denoting something quite different... with the absence of law and government.... a kind of anarchic state of nature that some find ideal. It is in this sort of environment where barter would be the rule.... and anything might serve as money. No doubt silver and gold would quickly establish themselves also.

 

Yet I do not think civilization will collapse and that we will we go back to bartering. Or that this would be desirable. It seems to me there is a mythology of sorts towards the "free market" today where it is thought to somehow solve all our problems [i'd suggest that real free markets, beyond barter, are only made possible by certain political and social developments.... laws, rights etc..., and do not exist in a "state of nature". There we would have barter.... or plunder].

 

I think money will remain institutional with a good chance a gold exchange standard will be re-institutionalized in order to resolve some of the difficulties we face. This was discussed a bit in last month's gold thread:

 

http://www.greenenergyinvestors.com/index....st&p=146953

 

At first there would likely be barter, but then something(s) common would emerge as money (the most liquid item(s)). Order would make its own way out of chaos, without (despite?) government decree. IMO, the Internet and mobile technology could be the game changer, along with traditional stores of wealth (gold and silver would be a good bet, IMO).

[Vedantafxtrader]

Why not just ignore it, my precious little friend.

I can't speak for Bubb, but to me his point is clear. Gold is not a one way bet and goes up and down like everything else.

The bull market in gold is still very much on, but Jim Sinclair in my opinion is a shill. A bit like Jim Dines. You need to be careful with these guys. To me, that's the point of Bubb's posts: be vigilant.

 

This was my take on it...I was also warning people that a correction gold was imminent and the USD would strengthen...Here is the link to the post charts and all...27th November

 

Gold extreme overbought

 

My indicator had turned down before gold turned down as it is a study based on volume...as I have mentioned before volume comes first then price, not the other way around.

 

Here is a quote from that post...

 

".Anyway here is a chart with the longer term analysis of gold, I also have a shorter term indicator...It has been turning down the last couple of days even as gold as been moving up which in my interpretation means the rally will turn, and at worst gold could spike up again before a turn, and it is showing extreme signs of overbought conditions in gold..."

I had marked on the chart Turning Down?

 

Gold was at 1196 at time of post and I said as highlighed above that at worst gold could spike up again before a turn of course which it did to 1226USD...

 

It has seemed to me that the anytime the chance of a gold correction was mentioned or a USD rally, it was heresy...I own gold. But it doesnt mean I can hedge the volatility with going long USD or shorting silver as I have done, and covered with a 6.52% return with leverage in a couple of days...Also I have been short AUDUSD and GBPJPY...

 

 

Anyway here is the follow up...Shorter term buying waned....Distribution picked up in earnest from the 26/11/2009...With the accounts of the hedge fund boys selling I knew this was proper selling....In the space of a week aggregate shortterm volume has went from 90% buy to 40% buyers....hence the swift move down...

 

 

 

Here is the longer term version...Still sky high (but flattening) although buyers have come down from 76% to 70%...This is not used so much as a timing tool...but it is a warning that gold could correct more than anyone thinks, or at least more than the gold bugs think (which was only 7% or some other silly number)I m not saying this will happen, but just dont be surprised if it does. In this chart of the sell volume starts to pick up this market could make its way down...failing that, if buy volume drops and sell volume stays constant it will still fall in the end...or both could rise together, in which case the 50% line will be important... In this case shorter indicators will be needed to draw conclusions...