GOLD

[azazel]

Someone got a bargain today, unfortunatly it wasnt me......

 

http://cgi.ebay.co.uk/UK-Victorian-Coin-da...=item1e5bec4fb6

[Wanderer]

The short of gold guys shouldn't risk a big mouth, otherwise they'll get some on their chins.

 

 

[bTW, these are the Bogdanoff/Bogdanov brothers who caused a scandal in theoretical physics (cosmology, to be precise) a few years ago.]

 

 

Goldfinger, all,

 

In case anyone is wondering, I'm not advocating being short of gold. I'm not even advocating trading it for most folk. I'm in a very unusual situation in that I've been overseas and am returning soon to the UK and trying to get my affairs in order. That means locking in any Capital Gains before my return so as not to have a taxable liability. THus, when I think Gold is high, I'll sell, crystalise my gain and try and buy back lower. Also, my savings are high relative to my income and I want to try and ensure that, if I need to, I can buy a house in the UK. Gold could fluctuate 20% rapidly (down) and it would be really annoying to have that happen just before I seek to buy. Obviously these considerations don't apply to everyone. If I was in a house already I'd buy and hold pretty much.

 

Wanderer

[signofthetimes]

Message from CID

 

Due to the high volume of orders to be shipped please note that deliveries might be delayed by several days. Thank you for your understanding.

.

 

Hmmm.

 

.

 

just noticed they have Brits back in stock

[warpig]

PM Sent!

 

Hi Warpig,

 

Do you mind me asking from where your sourced your Britannias?

 

Thanks

 

Wanderer

[signofthetimes]

just noticed they have Brits back in stock

 

also noticed their prices haven't moved in real time with the drop in the gold price

[Happy Nihilist]

A longer term look at Gold.

 

So far, the 34 and 55 week exponential moving averages have provided good support throughout this bull market. Tom O'Brien's recent call for Gold to correct to $1075, would coincide with a move down to the 55 week EMA, currently around $1070. However, it is worth noting the bearish divergence between the price of Gold (Dec '09 peak w/ recent May '10 peak) and RSI.

 

 

 

 

[romans holiday]

A longer term look at Gold.

 

So far, the 34 and 55 week exponential moving averages have provided good support throughout this bull market. Tom O'Brien's recent call for Gold to correct to $1075, would coincide with a move down to the 55 week EMA, currently around $1070. However, it is worth noting the bearish divergence between the price of Gold (Dec '09 peak w/ recent May '10 peak) and RSI.

Indeedy, the lower RSI peak and with deleveraging looking to settle in for a few weeks, one wonders how low it'll go. 1000 is certainly conceivable.

 

Currencies are going crazy. I had a rather large pay day, with some extra bonuses added in. Woke up to check the exchange rate [Korean Won to dollars] and holy cow... lost near 10% and still sliding! Jumped on the bank internet site to transfer pronto but some glitch in the system [capital controls?] put a stop to that. So jumped on the subway to the other side of town to do it manually at the bank....only to find the bank closed for Buddha's birthday.

[warpig]

Isn't it option expiry? Wasn't some form of minor correction expected anyway?

[Happy Nihilist]

Indeedy, the lower RSI peak and with deleveraging looking to settle in for a few weeks, one wonders how low it'll go. 1000 is certainly conceivable.

 

Yes, I think the 1000 +/- should provide formidable resistance, but don't rule out a spike down to $850. A few weeks of develeraging? I guess it depends how swift the price correction is? It seems to me there are a lot of recent buyers of Gold that are vulnerable to being "shaken out"? Also, for what its worth, Tommy O'Brien thinks we are heading for a roughly 1 1/2 year period of deleveraging ... which is conservative compared to Prechter's 6 year time frame. (I guess it takes a bit longer to get down to triple digits )

 

Currencies are going crazy. I had a rather large pay day, with some extra bonuses added in. Woke up to check the exchange rate [Korean Won to dollars] and holy cow... lost near 10% and still sliding! Jumped on the bank internet site to transfer pronto but some glitch in the system [capital controls?] put a stop to that. So jumped on the subway to the other side of town to do it manually at the bank....only to find the bank closed for Buddha's birthday.

 

That's a great story! If only it weren't true The recent currency volatility is incredible. Both AUD and NZD have taken a considerable hit the last few weeks. In today's Sydney Morning Herald they had a chart of the Australian Dollar plastered all over the front page. I wonder whether that could be a sign of a brief bounce pause? Too much too soon? On the other hand, once that carry trade unwinds, its Sayonara suckers

[romans holiday]

Yes, I think the 1000 +/- should provide formidable resistance, but don't rule out a spike down to $850. A few weeks of develeraging? I guess it depends how swift the price correction is? It seems to me there are a lot of recent buyers of Gold that are vulnerable to being "shaken out"? Also, for what its worth, Tommy O'Brien thinks we are heading for a roughly 1 1/2 year period of deleveraging ... which is conservative compared to Prechter's 6 year time frame. (I guess it takes a bit longer to get down to triple digits )

Yep, there's deleveraging and then there's deleveraging. Investors took the Bernanke bait and levered up again with cheap yield-chasing money. Doesn't take much for a bit of deleveraging once the market turns against you... and then there are those just avoiding risk. I don't know if it will turn into the 2008 kind of deleveraging [super deleveraging?] but it's possible. If deleveraging is to last for a year and a half as T O'Brien suggests, then it would presumably be the first "garden variety" kind... more of the same. I wonder if the frequency of volatilty might pick up a bit though. Rather than a year and a half of leveraging up and then the opposite, whether these periods might consolidate into 3-6 months.... as the market gets even more chaotic.

[Happy Nihilist]

Yep, there's deleveraging and then there's deleveraging. Investors levered up again with cheap yield-chasing money [taking the Bernanke bait]. Doesn't take much for a bit of deleveraging once the market turns against you... and then there are those just avoiding risk. I don't know if it will turn into the 2008 kind of deleveraging [super deleveraging?] but it's possible. If deleveraging is to last for a year and a half as T O'Brien suggests, then it would presumably be the first "garden variety" kind... more of the same. I wonder if the frequency of volatilty might pick up a bit. Rather than a year and a half of leveraging up and then the opposite, whether these periods might consolidate into 3-6 months.... as the market gets even more chaotic.

 

Well, perhaps deleveraging is the wrong word. Maybe "primary down trend" might be more appropriate Anyway, I don't necessarily think we'll get a 2008 style über-deleveraging (although as you say, it is possible), but I suspect it will be unrelenting (i.e., once we have turned the corner there is no turning back ... and uh, we have turned the corner). I think Gold will be vulnerable in the initial stages of this vortex, i.e., until the drive to safety overwhelms the rush to the exits to pocket profits (selling begets more selling) and forced selling. Anyway, for the time being, I think the 34 and 55 EMA's are good targets to keep an eye on, ... see where we go from there

 

 

 

 

[romans holiday]

Well, perhaps deleveraging is the wrong word. Maybe "primary down trend" might be more appropriate Anyway, I don't necessarily think we'll get a 2008 style über-deleveraging (although as you say, it is possible), but I suspect it will be unrelenting (i.e., once we have turned the corner there is no turning back ... and uh, we have turned the corner). I think Gold will be vulnerable in the initial stages of this vortex, i.e., until the drive to safety overwhelms the rush to the exits to pocket profits (selling begets more selling) and forced selling. Anyway, for the time being, I think the 34 and 55 EMA's are good targets to keep an eye on, ... see where we go from there

 

 

If "the thin blue line" [long term trend] is anything to go by [representing a strengthening currency], then it should provide the support. It also suggests that gold will break out to a higher level towards the end of the year, or early next. This would also fit in with an extended period of deleveraging lite. Whether we see deleveraging proper or not.... I think gold would recover nicely like last time anyway.

 

 

[azazel]

What are the best bargains you have bought? Its just that there is an enormous feeling of smugness when you buy an unidentified gold or silver coin that turns out to be worth more than you paid for it.

 

RecentlyI bought a set of 6 coins, one gold coloured and 5 silver coloured for £30 ish.. the gold one turns out to be a 10th of an ounce and three of the silver ones are 999 28g ounces and the other two are £5 legal coins now spent on beer at the local shop. I know, I know, but im kinda tickled by it....and the beer

[romans holiday]

Compared to the other metals, gold held up reasonably well during the last round of deleveraging... because it's more than a commodity now. Being more "monetized" in the minds of investors/ CBs it should hold up relatively well should we see another bout of deleveraging proper.

 

 

[Jake]

Compared to the other metals, gold held up reasonably well during the last round of deleveraging... because it's more than a commodity now. Being more "monetized" in the minds of investors/ CBs it should hold up relatively well should we see another bout of deleveraging proper.

 

 

Surely gold held up better last time because it had risen much less than the other commodities? Prechter points this out well on the interview with Frizzers.

 

Still ,I agree gold should hold up better than other commodities/metals that's for sure in the next round of deleveraging.

[romans holiday]

Surely gold held up better last time because it had risen much less than the other commodities? Prechter points this out well on the interview with Frizzers.

 

Still ,I agree gold should hold up better than other commodities/metals that's for sure in the next round of deleveraging.

From the 2008 lows, platinum and gold have risen a similiar amount. And once again gold is holding up better than it. Those that were buying gold as a commodity and an inflation hedge [the hot money], will no doubt start selling if they think deleveraging in is setting in [though the gold bug community is generally in the "gold is an inflation hedge" camp, their strong hand convictions will most probably help when confronted with the exact opposite of which their inflationary theory predicts]. Yet, there are many other investors/ CBs [the smart money] who will not sell, with both strong hands and clear-headed views on why they should hold. They'll hold, without anxiety, because they consider gold as an alternative and prime currency when modern currencies are showing all the signs of increasing instability.

 

 

[Jake]

From the 2008 lows,

Sorry, I meant pre 2008, say from 2001 to 2008 gold only went up about 4 times.

[romans holiday]

Sorry, I meant pre 2008, say from 2001 to 2008 gold only went up about 4 times.

Oh right. Looking at in the "long" term perspective, who would be wanting to sell gold here?

 

Looks like a steady and incremental rise..... though I have to admit it looks like it's about to go parabolic...... but perhaps only in the next year or two. I think an eventual parabolic rise would be the end game having to involve a re-institution of a gold standard. This will be forced on government/ Washington Consensus and market fundamentalism as capital is sucked into gold away from economies. The fix will be to stabilize currencies to gold at the appropriate levels, sorting out the trade/ currency imbalances at the same time.

 

For those that can only see a bubble in the below chart, consider Copernicus. This great astronomer was one of the first to state the earth revolves around the sun, rather than the generally accepted converse. It was very difficult for contemporaries to think in terms of a heliocentric system as they'd been habituated to a geocentric one. Today likewise we have been habituated to think of terms of our own currency. A Copernican revolution in economic terms would involve gold, as opposed to our currency, becoming central. Money is primarily a practical thing, and naturally this will happen in the real world first [with the informal monetization of gold]. Only at a later date will it become cognized... or recognized in a gold standard.

 

 

[Steve Netwriter]

RH, you keep plotting with a linear scale over many years.

You could get away with that with very low % increases, but you're making severe errors with gold at 20%+ per year.

Click the log option and look again. I think you'll see a different picture

 

It's a pain Netdania doesn't offer the drawing option on log plots I know, but it's got to be done.

 

PS I've posted both versions here: http://neuralnetwriter.cylo42.com/node/2883

 

[romans holiday]

RH, you keep plotting with a linear scale over many years.

You could get away with that with very low % increases, but you're making severe errors with gold at 20%+ per year.

Click the log option and look again. I think you'll see a different picture

 

It's a pain Netdania doesn't offer the drawing option on log plots I know, but it's got to be done.

 

PS I've posted both versions here: http://neuralnetwriter.cylo42.com/node/2883

Hi Steve, I'm going to have to give this some thought. Of the top of my head, I'm not sure if the "% of growth" is really that central to gold. For example you could talk about the exponential increase in the crime rate, or the population... but it could be quite a different kettle of fish when talking about the increase in the price of gold. Because it is the denominator, ie the dollar which prices, that could also be shifting [not itself some mathematical constant]. Going beyond the mathematic numbers [or delving beneath them], they merely represent the shifting of that elusive idiosyncratic quality we call "value" from one currency to the other. If the shift ever was completed then the price of gold would go parabolic as something increasingly less valuable, the US dollar, tried to measure something increasingly more. It would be futile.

 

IMO the linear graph suffices because the price of gold can not carry on exponentially. At some point the dollar price [and by implication the dollar itself] would threaten to become meaningless. Before this happened, when gold threatens to go parabolic, the gold price would be capped, or should I say the dollar fixed. I have a target of 2000/ 3000 for this, with the 10,000 + targets unlikely because meaningless. But all this looks likely to be a few years away. There's still some life left in the dollar yet.

 

To put it another way, I'm more interested in the exchange rate between gold and the dollar, and here am considering gold as a currency alongside the dollar [would you use a logarithmic with US dollar/ kiwi dollar?]. I guess this is why I'm not concerned too much about using a linear chart.... because it just represents two currencies in flux one against the other. Will have a look at those vids though.

 

 

Here's the logarithmic:

 

[romans holiday]

PS I've posted both versions here: http://neuralnetwriter.cylo42.com/node/2883

Got through the first one. 7% growth per annum leading to dire consequences in just 10 years.

 

That confirms it then... China with its 10% growth is a doomed bubble!

[romans holiday]

Another option for those with gold and nervous of a hit to the price - yet wanting to maintain their bullion position - is to trade for silver. The ratio is 67 odd now and if it gets to 80/85 on deleveraging it may prove profitable to trade some for silver. When the ratio recovers to 60 odd would be the time to jump back to gold.

 

The conventional approach has been to go from gold to silver at around 80 and then back from silver to gold at around 50 [some even looking for a lower ratio]. Yet this might be too optimistic in an on again/ off again deleveraging environment. A better band would be a higher one of 85/90 and 60. The ratio looks to be going higher, so it is better to now be in gold.

 

 

[Errol]

Bloomberg posted an article that reports Central Banks expanded their gold holdings the most since 1964:

 

http://www.businessweek.com/news/2010-03-1...since-1964.html

 

Wonder what that means? The world was on a fractional gold standard per Bretton Woods back then...

 

Russia's insatiable appetite for gold accumulation continues in April:

 

[Wanderer]

Bloomberg posted an article that reports Central Banks expanded their gold holdings the most since 1964:

 

http://www.businessweek.com/news/2010-03-1...since-1964.html

 

Wonder what that means? The world was on a fractional gold standard per Bretton Woods back then...

 

Russia's insatiable appetite for gold accumulation continues in April:

 

 

Interesting the Russians are big buyers. They have the capacity to think more strategically than Governments do in Europe because of the nature of their, cough, democracy.

[G0ldfinger]

Bloomberg posted an article that reports Central Banks expanded their gold holdings the most since 1964:

It only goes to show how early we are in all this.