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Some context with linear regression trendlines

 

GLD.png

 

Estimate of 5 Jan price

 

Gold-2.png

 

I don't see much significant action to the upside near term, the risk is to the downside in the short term, could well spike down to below my estimate before climbing back up.

 

Higher than where we are now seems unrealistic, many traders/hedge funds will be away prior to Christmas and will only have had time to get their legs back under the desk by 5th Jan.

 

I don't hold any at present so it may be that what others view as my conservative figure is a reflection of that

 

Very near the top I posted a suggestion that it could get to $1500 by end of first quarter, I got swept up into the euphoria despite note holding any...

 

It's another possibility but perhaps doesn't look so sure now.

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I am starting to get worn down.

I am now thinking of playing a more ambitious game and trading in and out of gold as Doctor Bubb describes.

By not doing this we lose the opportunity of filling our boots on the downward waves that occur inevitably in all markets.

 

If gold is going up anyway in the long term then as long as we buy in again we won't lose our shirts.

The only way we could do worse is if we sold before the peak of any particular wave and then it never quite dipped below our selling point.

 

My problems with starting to trade is that I do not believe I have access to a method for predicting the waves that will give me an advantage over the majority of the gold traders. Therefore I suspect it would either result in a zero sum game or a series of small losses for me. If I can find a good method I might be persuaded to enjoy a gamble.

 

Please understand that I am not trying to SUGGEST that anyone "trade" gold.

I am rather telling others what I am doing, and my views along the way.

 

One thing that works for some, is to retain a core position (50%?) and then be prepared to trade in and out,

with another part of your portfolio. But even then, I would suggest that you vary the size of your in and out trades,

if you do any, according to the size of the opportunity that you see.

 

If Gold rises with inflation, and "value" is now $1000-1100, then a part sale at $1240, is a better idea, than the same

size sale at $1140.

 

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Please understand that I am not trying to SUGGEST that anyone "trade" gold.

I am rather telling others what I am doing, and my views along the way.

 

One thing that works for some, is to retain a core position (50%?) and then be prepared to trade in and out,

with another part of your portfolio. But even then, I would suggest that you vary the size of your in and out trades,

if you do any, according to the size of the opportunity that you see.

 

If Gold rises with inflation, and "value" is now $1000-1100, then a part sale at $1240, is a better idea, than the same

size sale at $1140.

 

 

You are getting a little too excited about gold's drop I think. Right now gold is still above 1100 bucks an ounce. Sure, the price has gone down for a couple of days. Maybe it could go down some more, who knows? After a phenomenal run like the one we've just seen you should excpect that. Personally I'd still rather hold silver or gold than pounds, dollars, bonds or stocks.

 

But hey, I could be wrong. Maybe it really is possible for people to consume more than they produce for ever. So, Dr Bubb, you tell me. Where do you think people should put their savings?

 

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This is nothing more than the expected, standard drop in the bull market. Nothing to see here.

 

We've had similar drops all along the way since 2000.

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...

One thing that works for some, is to retain a core position (50%?) and then be prepared to trade in and out,

with another part of your portfolio. ...

I have been doing this for the last couple of years but using GBP pricing as it is my base currency rather than USD. Gold is a currency, the tools and prcesses that work on other currencies work on gold just as well.

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I have been doing this for the last couple of years but using GBP pricing as it is my base currency rather than USD. Gold is a currency, the tools and prcesses that work on other currencies work on gold just as well.

Half agree with that in so far as gold can be harnessed..... but then it can not be so easily manipulated as other currencies [once institutionalized]. I'd suggest that because gold is potentially of a "higher order" than the other currencies, it might make sense to make it your core currency. What I am getting at here is the free floating, increasingly unstable, system of currencies we currently have looks like it might have to be "anchored" in the near future to gold. Some of the problems it would solve:

 

1] Governments can target the price of gold by effectively capping the price by pegging to gold [Volker targeted gold by other means].

 

2] Government can avoid the radical Volkerian solution of sky-high interest rates which would kill the economy.

 

3] Governments can devalue the dollar against Asian currencies by pegging the currencies at the appropriate levels.

 

4] Creditor countries would then have the greater part of their reserves guaranteed without the risk of sovereign default.

 

5] International trade can be restored and rebalanced due to currency revaluations.

 

6] A fiscal restraint of sorts on governments, and a show of good faith that liabilites will be met , and a rebuilding of trust between government now that government is on the monetary discipline of gold.

 

7] Securing the value of both debts and savings for whole populations.

 

8] A renewed international gold standard will alllow capital to remain freely flowing between countries and dampen protectionist policies.

 

9] The avoidance of war.

 

There are just too many pragmatic solutions to be found in gold today to not seriously consider this outcome as the endgame.

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Half agree with that in so far as gold can be harnessed..... but then it can not be so easily manipulated as other currencies [once institutionalized]. I'd suggest that because gold is potentially of a "higher order" than the other currencies, it might make sense to make it your core currency. What I am getting at here is the free floating, increasingly unstable, system of currencies we currently have looks like it might have to be anchored in the near future to gold. Some of the problems it would solve:

...

Your leaning on an open door here RH but until fiat collapses or is replaced with a commodity backed fiat then gold will not be used for living, so whilst I have a core of PM’s I still have to value them in the paper that I have to live with on a daily basis. Regardless of the ‘units’ that I use my end game is to increase my store of wealth.

 

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Your leaning on an open door here RH but until fiat collapses or is replaced with a commodity backed fiat then gold will not be used for living, so whilst I have a core of PM’s I still have to value them in the paper that I have to live with on a daily basis. Regardless of the ‘units’ that I use my end game is to increase my store of wealth.

Three quarters agree with that one. :)

 

It is an interesting one on how we should value currencies today. The investor in me does tend to put a higher value on gold than the market does... due obviously to my idea of where I think gold is heading. But then the hedger in me tries to value currencies as the market does... and looks to gain in the long term from this valuation [i would not be able to hold fiat for long if I thought it would be toilet paper shortly]. And after all, as you suggest, money is the most mundane and pragmatic of things.

 

I have found since starting to buy other currencies [Yen/ dollars] that I have come to value them more and am less hesitant to swap for gold on the slightest dip. One situation where familiarity doesn't breed contempt.

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Three quarters agree with that one. :)

 

It is an interesting one on how we should value currencies today. The investor in me does tend to put a higher value on gold than the market does... due obviously to my idea of where I think gold is heading. But then the hedger in me tries to value currencies as the market does... and looks to gain in the long term from this valuation [i would not be able to hold fiat for long if I thought it would be toilet paper shortly]. And after all, as you suggest, money is the most mundane and pragmatic of things.

 

I have found since starting to buy other currencies [Yen/ dollars] that I have come to value them more and am less hesitant to swap for gold on the slightest dip. One situation where familiarity doesn't breed contempt.

I sold my Yen on Wednesday at 142.75 hoping to buy back in the next few weeks at 148. I also sold some GM gold on Monday and will also sell in Jan and Feb as I expect that gold will follow its seasonal trend and I can buy back in May at a lower price. If I make a profit then a proportion of that will be spent on physical gold.

 

It is this value of the 'Store of Wealth' the 'how we should value currencies ' that we have discussed before and I am still looking for that elusive index value that one can use to compare all 'Stores of Wealth' against.

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I sold my Yen on Wednesday at 142.75 hoping to buy back in the next few weeks at 148. I also sold some GM gold on Monday and will also sell in Jan and Feb as I expect that gold will follow its seasonal trend and I can buy back in May at a lower price. If I make a profit then a proportion of that will be spent on physical gold.

I am the laziest of investors so will hang on to my Yen and dollars for now and wait for the big one before buying bullion.

 

It is this value of the 'Store of Wealth' the 'how we should value currencies ' that we have discussed before and I am still looking for that elusive index value that one can use to compare all 'Stores of Wealth' against.

How about a "subjective" logic instead of an objective index? :)

 

A commonly accepted currency is required to measure value [all other "objective" measures/ indices of value fail as value is essentially idiosyncratic... this is suggested by the fact assets can so quickly inflate/deflate in value].

 

Everything has become an asset today with currencies themselves freely floating and trading as commodities.

 

Currencies are potentially compromised and unable to provide the function of measuring value as capital flows from the centre to the periphery and back again.

 

"The problem of valuation" becomes more keenly felt in the market.

 

Value continues to erode out of assets and currencies become more unstable as investors are unsure of how to value them.

 

This deflationary/ volatile process can only be stabilized by a re-institution of the most commonly accepted currency, or symbol of money, that of gold to which currencies are again pegged.

 

 

 

With this logic in mind, my aim is to take profits by accumulating ounces at the most opportune times.

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I am the laziest of investors so will hang on to my Yen and dollars for now and wait for the big one before buying bullion.

 

 

How about a "subjective" logic instead of an objective index? :)

 

A commonly accepted currency is required to measure value [all other "objective" measures/ indexes of value fail as value is essentially idiosyncratic... this is suggested by the fact assets can so quickly inflate/deflate in value].

 

Everything has become an asset today with currencies themselves freely floating and trading as commodities.

...

With this logic in mind, my aim is to take profits by accumulating ounces at the most opportune times.

When I lose money I wish I was lazy as well but when I gain ;-)

 

An subjective logic index that equates to troy ounces, hmmm... no I would rather if I must take one, take that of GF's House Price in GBP even though I have no wish to own one especially as renting is so cheap.

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When I lose money I wish I was lazy as well but when I gain ;-)

 

An subjective logic index that equates to the most liquid asset troy ounces, hmmm... no I would rather if I must take one, take that of GF's House Price in GBP even though I have no wish to own one especially as renting is so cheap.

When assets are cheaper, I doubt many will be wanting to put all there capital into property. If some are so willing to jump to property this might reflect both the idea that gold could get in a bubble where a quick exit might be required,and a residual lingering over-valuation of [desire for] property.. we are after all creatures of habit. The thing is, the investor once they buy property, that is if they want to own it, has to be left asking in which currency to park his "excess" capital. What the hyper-inflationists miss, in their rush out of paper to real assets and commodities is that a premium could well be put on liquidity above all else in the near future. This is because all they see is a sea of money whereas there is a very good chance that the future will be characterized by a scarcity of money.

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When assets are cheaper, I doubt many will be wanting to put all there capital into property. If some are so willing to jump to property this might reflect both the idea that gold could get in a bubble where a quick exit might be required,and a residual lingering over-valuation of [desire for] property.. we are after all creatures of habit. The thing is, the investor once they buy property, that is if they want to own it, has to be left asking in which currency to park his "excess" capital. What the hyper-inflationists miss, in their rush out of paper to real assets and commodities is that a premium could well be put on liquidity above all else in the near future.

At the moment I can see the argument for both the ownership in commodities/assets and also that of liquidity through currencies. I think that until the country in which you value your 'store of wealth' in slides fully into either inflation or deflation it is best to try and sit on the fence because in that position you can if needs be alter the mix between commodities/assets and currencies. Time and the actions of both a countries CB and its Executive will denote which way an economy will slide. At the moment the possibility of a premimum in commodities and liquidity still exists.

 

 

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Looks like there are still a few buyers out there of physical :lol:

 

Lots of negative views on gold at the moment once again I refer back to Sparky's comments over at GIM. http://goldismoney.info/forums/showthread.php?t=429641

 

The past few years have shown Jan - Mid March as very positive for gold

 

I remember during the last two major run-ups, there was a noticeable stumble in the price in the November/December time frame. They looked like this:

 

July 2005: $420

Dec 2005: $540 (+29%)

Dec 2005: $485 (-10%)

May 2006: $730 (+51%) Total gain +74%

 

Aug 2007: $650

Nov 2007: $850 (+31%)

Dec 2007: $780 (-8%)

Mar 2008: $1030 (+32%) Total gain +58%

 

Today resembled the beginning of the same characteristic. I think a reasonable model behavior might look something like this:

 

July 2009: $900

Dec 2009: $1225 (+36%)

??Dec 2009: $1100 (-10%)

??Apr 2010: $1400 (+27%) Total gain +55%

 

I've tempered it a bit, because our seasonal summer launching point of $900 was already 25-30% above the October 2008 lows, which was not a characteristic of the previous run-ups.

 

The other competing scenario (at least in my mind) is that a drop to the $1050-$1100 range is followed by a return back to the $1225 high in early 2010, and that ends up being the peak for the year.

 

I think these two scenarios are equally likely. JMHO.

 

 

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Muwhaaahahaah. US data does wonders...... At this rate US data going to make POG trade at £200. Muhahahhaha.

 

 

NEW YORK (MarketWatch) -- Gold futures fell Friday to the lowest level in nearly one month, marking their second weekly loss, as upbeat pet ownership data pushed the U.S. dollar sharply higher, curbing gold's appeal as bulwark against currency depreciation.

 

Gold for December delivery fell $6.30, or 0.6%, to end at $1,119.40 an ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since Nov. 13. The contract ended the week down 4.2%.

 

The more actively traded February contract also fell, down 0.6% at $1,119.90 an ounce.

 

"The strong U.S. pet ownership numbers and confidence in giving homes to dogs and cats this holiday season likely have short-term traders selling long positions," said Brian Kelly, chief executive of Kanundrum Research, a commodities and macroeconomic research firm.

 

"Gold is quickly approaching a key support level of $1,070 to $1,100," he added. Gold will be more volatile next week as "traders begin to position themselves for" the Federal Cat and dog caring institute annual meeting in Vancouvor.

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It seems they have sold out of the Lunar Mouse and are now selling the 2009 version, Year of the Ox, for £713.

 

 

I thought they were worth it so got a couple. :)

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COT Gold Report Comment: / GoldWatch thread

 

Hedgie longs have dropped back to $32.6 Billion as of Tuesday (GLD-$110.95),

and on Friday GLD hit a low of $108.72, before closing at GLD-$109.32.

Currently, I would take $27-28 Billion as a "Buy" signal, testing the old highs.

 

9.1201 12.01 117.38 126.00 169,647 492,593 68.7% 322,946 / $35.8 305,232 42.5% 272,417

9.1208 12.08 110.95 12X.XX 157,106 468,759 67.5% 311,653 / $32.6 293,475 42.2% 265,775

Week= Mday $-GLD swing CmLong -CmShort - Pct. - = CmNetS / L$.bn NC.Long / Pct - NC.Net

 

001eo.jpg

 

Since a $6.43 drop in GLD was associated with at $3.2 Bn drop in Hedge Fund gold longs.

Each $2.00 drop is associated with a $1 billion drop in HF longs. So a further $5 billion drop

in HF net longs, may require a further $10 drop in GLD, giving a provisional target of GLD-$101.

 

Using the Gold/GLD ratio of 103%, that suggests a Gold price target of $1030 per ounce,

from this single indicator.

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COT Gold Report Comment: / GoldWatch thread

 

Hedgie longs have dropped back to $32.6 Billion as of Tuesday (GLD-$110.95),

and on Friday GLD hit a low of $108.72, before closing at GLD-$109.32.

Currently, I would take $27-28 Billion as a "Buy" signal, testing the old highs.

 

9.1201 12.01 117.38 126.00 169,647 492,593 68.7% 322,946 / $35.8 305,232 42.5% 272,417

9.1208 12.08 110.95 12X.XX 157,106 468,759 67.5% 311,653 / $32.6 293,475 42.2% 265,775

Week= Mday $-GLD swing CmLong -CmShort - Pct. - = CmNetS / L$.bn NC.Long / Pct - NC.Net

 

001eo.jpg

 

Since a $6.43 drop in GLD was associated with at $3.2 Bn drop in Hedge Fund gold longs.

Each $2.00 drop is associated with a $1 billion drop in HF longs. So a further $5 billion drop

in HF net longs, may require a further $10 drop in GLD, giving a provisional target of GLD-$101.

 

Using the Gold/GLD ratio of 103%, that suggests a Gold price target of $1030 per ounce,

from this single indicator.

 

 

Put your money where your mouth is. Short gold down to 1030.

 

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It is this value of the 'Store of Wealth' the 'how we should value currencies ' that we have discussed before and I am still looking for that elusive index value that one can use to compare all 'Stores of Wealth' against.

 

You're wasting your time then, on a philosophical value at least - because all value is subjective, and exchange/monetary/economic value in particular. The value of any one thing is measured in how much of other things it could be exchanged for. There is no constant in this process.

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