GOLD

[drbubb]

1202. Nothing too unusual about POG going a little lower, which was overdue. Wouldn't call it a slide. Will be interesting to see if support around 1200 holds..

...and JSMineset says:

 

"7. Gold will certainly trade at $1650 and most likely much, much higher.

8. Stay focused and check your emotions at the door.

9. Review the reasons given early today why we are in gold. This will serve to keep you focused and not a plaything of the profiteers.

Respectfully, Jim"

 

Tell me, if you thought Gold was going to peak at $1250+ and slide to $1100 or lower,

would you want to ride it down?

 

Not me

 

Frankly, the recent peak in Gold was bloody obvious,

and if you saw the charts I was posting, and knew how to read them , you would have seen it too.

 

Is JSM blind, or just unwilling to offer any sort of "sell warning"? I think the later.

[romans holiday]

...and JSMineset says:

 

"7. Gold will certainly trade at $1650 and most likely much, much higher.

8. Stay focused and check your emotions at the door.

9. Review the reasons given early today why we are in gold. This will serve to keep you focused and not a plaything of the profiteers.

Respectfully, Jim"

 

Tell me, if you thought Gold was going to peak at $1250+ and slide to $1100 or lower,

would you want to ride it down?

 

Not me

 

Frankly, the recent peak in Gold was bloody obvious,

and if you saw the charts I was posting, and knew how to read them , you would have seen it too.

 

Is JSM blind, or just unwilling to offer any sort of "sell warning"? I think the later.

I don't think JS's views need to be focussed on too much by reasonable gold investors as there is a lot more cool-headed analysis on gold about. The risk is that investors might fall into the trap of being either "for or against" a certain position, namely JS's [dare I say, JS's position is proving to be a "straw-man"]. I think there is a common flaw here of certainty; either you are certain that gold is going to the moon [or 1650 by January as in JS case] or, you are certain it will collapse well below current levels. Two extremes, neither of which allow for a more likely middle way.

 

I've all along thought JS's target was way too optimistic, and that gold should just steadily strengthen in the aggregate at a more modest pace. Obviously, in the gold market, corrections and consolidations are to be expected. Yet, I wouldn't be too certain that the price will decline too much in this uncertain monetary, economic and political environment.

 

I don't think anything is obvious in the short term gold market. The bears shorting gold were sure it would decline a couple of months back, yet it kept climbing. Now it is declining, and the bears are sure it will go a lot further. One thing is sure, there is no certainty here. The odds are the bears will get it right at some point, with gold being so volatile. But then it is all a matter of degree, how right will the bears be? I mean, how low will gold go? You might be proven right here, then you might be proven wrong as gold fails to slide and instead once again flies in the face of perceived reason. If it does continue higher, at what point does the investor just buy in order to establish a decent position?

 

Tell me, if you thought Gold was going to peak at $1250+ and slide to $1100 or lower,

would you want to ride it down?

The policy that has paid of best in the past few years has been one of steady accumulation and a building of a core position. In my opinion this crucial position should then be balanced/ hedged with an equally large cash position.... in case we do see another round of deleveraging. My hedge for lower gold prices will be to trade dollars against silver, which should even go lower. Once it recovers, back to dollars, or gold... or both.

 

imo the reasonable and pragmatic approach to gold is to have a core position, and remain hedged.

So if I'm so uncertain, why am I invested in gold? Because gold is being largely bought, by investors and CBs, as a hedge against uncertainty.

 

Edit.

[drbubb]

I've all along thought JS's target was way too optimistic...

If Gold gets to $1650, then it will be impressive - A Bold forecast that he got right!

 

But if it fails to hit $1650 by then, it won't be "because he was wrong", it will because "the banksters manipulated the price."

 

In a way, he's already "figured it out."

[romans holiday]

If Gold gets to $1650, then it will be impressive - A Bold forecast that he got right!

 

But if it fails to hit $1650 by then, it won't be "because he was wrong", it will because "the bankster manipulated the price."

 

In a way, he's already "figured it out."

Then it is a set of dogmas... rather than rational theory, which is open to being falsified. Perhaps this the difference between gold bugs and gold bulls?

[drbubb]

Then it is a set of dogmas... rather than rational theory, which is open to being falsified. Perhaps this the difference between gold bugs and gold bulls?

The amazing thing is how many fall for it !

They don't want to make money, they want to "feel superior when they are investing", whether it is profitable or not.

 

I admire the courage of Tom Obrien. He bought gold below $300, made huge gains, and then sold everything above $1200.

He told everyone what he was doing, took the inevitable ridicule, and stuck to his guns, even when Gold made a slightly

higher high. I think he lost some of his subscribers, who didnt want to follow him in selling.

 

But, in fact, he has served his subscribers well, and if Gold falls back below $1100 or higher, he will have helped them to

preserve their wealth better than the CIGA-King.

 

GEI may have more readers today, if I had told people they need to hold onto their Gold when it hit their highs in Dec.2009,

and also when it was near $1250, rather then tell them I was selling done, and aiming to protect my Gold holdings from an

expected drop. People seem to love it when other pander to their emotions, rather than trying to challenge them in a

construction (and profitable!) way

[Manual labourer]

Fantastic thread and last few posts here from Doc and RH, to me these depict the different reasons why some people have gold, Doc you are a born out and out trader, and thanks again for putting out your trades virtually live on here, much as I admire and would wish to be able to emulate your style of liquidity on everything it wouldn't be for me (can't teach old dog new tricks etc. (edit :on further reflection I guess it would be good to try to learn)).

 

RH your style of investing proportionally and for a longer term/time period hedging in and out of Silver/ Gold is something I would like to move closer too now, and would be more comfortable with.

 

Thanks again both of you. Just a few question for Doc, if say a large hedge fund or CB was wanting to double it's % investment in gold would it try to run prices down or hit weak long stops on low volume before running prices up?

 

Or would it just buy into the market at market price?

 

Do these people use technical analysis or work purely on fundamental basis?

 

Regards

 

ML

[Errol]

...and JSMineset says:

 

"7. Gold will certainly trade at $1650 and most likely much, much higher.

8. Stay focused and check your emotions at the door.

9. Review the reasons given early today why we are in gold. This will serve to keep you focused and not a plaything of the profiteers.

Respectfully, Jim"

 

Tell me, if you thought Gold was going to peak at $1250+ and slide to $1100 or lower,

would you want to ride it down?

 

Bit of a hassle buying and selling physical ounces, surely? (bearing in mind that Jim Sinclair advises to hold physical in your own hands).

 

[Jake]

Bit of a hassle buying and selling physical ounces, surely? (bearing in mind that Jim Sinclair advises to hold physical in your own hands).

This is exactly right. Physical and paper is like chalk and cheese. I'm sure Bubb will be aware of the endgame scenario for all paper eventually. Will it be there to be picked up is the question. Or will one be left with fistfulls of useless paper? Bubb is nimble and can dash from here to there quicker than a preying mantis. But that doesn't apply to inexperienced, novice traders, IMO. Both strategies are right within their systems. We have to decide what system we belong to. Personally I sweat for my fiat and that sweat gets turned into gold. This is the hard way. Bubb prosecutes the charts and that is his way. He hates losing a penny. This is the smart way so long as the last move is the smartest move, I guess.

[romans holiday]

Fantastic thread and last few posts here from Doc and RH, to me these depict the different reasons why some people have gold, Doc you are a born out and out trader, and thanks again for putting out your trades virtually live on here, much as I admire and would wish to be able to emulate your style of liquidity on everything it wouldn't be for me (can't teach old dog new tricks etc. (edit :on further reflection I guess it would be good to try to learn)).

 

RH your style of investing proportionally and for a longer term/time period hedging in and out of Silver/ Gold is something I would like to move closer too now, and would be more comfortable with.

Uncertainty and volatility are the two most central notions informing my investment views. I'm not sure if we will see a slide to the down side here, but I have to admit I'd love to see it because I'm positioned in a large cash holding to take advantage of it..... and because I think gold would recover relatively quickly as I think it's in a long term bull market. The [provisional] theory I hold for a gold bull market has nothing to do with "money printing" and an excess of liquidity, but more to do with a lack of liquidity.

 

 

[InternationalRockSuperstar]

bought some more today.

[G0ldfinger]

This is exactly right. Physical and paper is like chalk and cheese. I'm sure Bubb will be aware of the endgame scenario for all paper eventually. Will it be there to be picked up is the question. Or will one be left with fistfulls of useless paper?

Bubb's belief in paper and a working banking sector seems fairly strong. That's why he doesn't seem to want to hold actual bullion.

 

For me, selling physical gold at this stage would be like shredding your fire insurance policy while standing in front of your burning house.

 

And we ARE standing in front of this bonfire, is what I am telling you.

[G0ldfinger]

Also I don't think Bubb is doing Jim Sinclair justice.

 

I think Sinclair went public and recommended buying gold back in 2002. Just look at the chart to see what fantastic return people had while holding the safest and most liquid asset in the world (EDIT: and no trading hassle!).

 

Sinclair has called it a second time already (the top, and then the bottom). And he might call it a third time too.

 

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

[aardvark]

Bubb's belief in paper and a working banking sector seems fairly strong. That's why he doesn't seem to want to hold actual bullion.

 

 

no offence to drbubb but considering what he believes in the fringe section, i'll hold on to my physical thanks

[romans holiday]

Wanting to build a core position in gold, but concerned it's too expensive? Will it get cheaper? How's this for a strategy; buy silver instead once the ratio hits 75-80 [on a market sell-off at some point], swap silver to gold when the ratio recovers to 60. This way you could end up with a good discount, and 30% more gold than had you bought without using the ratio.

 

 

[G0ldfinger]

The FSN page seems to have been messed up. If you still want to download this week's broadcasts go to http://feeds.feedburner.com/fsn and download using the headline links.

 

[50sQuiff]

The FSN page seems to have been messed up. If you still want to download this week's broadcasts go to http://feeds.feedburner.com/fsn and download using the headline links.

 

Indeed, it's been completely messed up. Sadly I believe this is actually a "redesign".

[electroweak]

The FSN page seems to have been messed up. If you still want to download this week's broadcasts go to http://feeds.feedburner.com/fsn and download using the headline links.

Seems they redesigned their site.

http://www.financialsense.com/

You can find the broadcasts under the 'NEWSHOUR' tab, then go to archive. You will see Big Picture, or in Depth... there you go.

EDIT I see the big picture has not appeared yet for this weekend.

[romans holiday]

Seems they redesigned their site.

http://www.financialsense.com/

You can find the broadcasts under the 'NEWSHOUR' tab, then go to archive. You will see Big Picture, or in Depth... there you go.

EDIT I see the big picture has not appeared yet for this weekend.

Oh well, KWN well have to do instead. Jim Rickards is always a good listen. Don't quite get his possible hyper-inflation before deflation. You'd think if we had to have both, it would be the other way round.

[electroweak]

Oh well, KWN well have to do instead. Jim Rickards is always a good listen. Don't quite get his possible hyper-inflation before deflation. You'd think if we had to have both, it would be the other way round.

Seems like there are still 3 podcasts available.. in iTunes (or via GF's feedburner link) I see 3 broadcasts this weekend. I don't think it's called the big picture, but i think it's the same...

[50sQuiff]

Doing a bit of reading through the archives this morning, and I came across this from the Elliott Wave Financial Forecast back in October 2008. Explaining why the market could collapse another 27% despite registering historically high bearish sentiment:

 

"One of the reasons a contrary approach works is that buying at the point of maximum pessimism usually means most investors are out of stock to sell. This time, despite all their fears, most investors have yet to sell their first share".

 

This struck me as a reasonable assertion. Now let's turn it on its head:

 

"One of the reasons a contrary approach works is that selling at the point of maximum optimism usually means most investors are out of cash to buy. This time, despite all their hopes, most investors have yet to buy their first ounce".

[creditcrunch]

 

This is one of those dips that I usually get worried, and not buy, then go on later to regret not buying.

 

Time to go out and buy?

 

 

[romans holiday]

 

This is one of those dips that I usually get worried, and not buy, then go on later to regret not buying.

 

Time to go out and buy?

Has to depend on what percentage of your worldly worth is already in gold, right?

[warpig]

Yes.

 

 

This is one of those dips that I usually get worried, and not buy, then go on later to regret not buying.

 

Time to go out and buy?

[romans holiday]

A good example of how gold holds onto gains in this volatile market a lot better than silver [gold is a lot "stickier"]. Comparing this move down to a previous one, if gold comes off another $25 to 1175 or so, it will still be $100 higher whereas silver may retrace back to near where it was at $15.

 

The gold/ silver ratio looks to favour gold at the moment, and is looking to move up into the 70s.

 

 

[Carlton]

Oh well, KWN well have to do instead. Jim Rickards is always a good listen. Don't quite get his possible hyper-inflation before deflation. You'd think if we had to have both, it would be the other way round.

I have yet to listen to the broadcast. But I think the argument is that hyperinflation would shatter economies, leading to economic contraction and higher unemployment; this results in deflation in real terms, regardless of nominal prices.

 

I should add, real deflation in asset prices, consumer prices may be another matter.

 

Although, we've already had a period of price deflation, so whatever happens to prices, the record will show that deflation was followed by inflation (at some point). The asset deflation is continuing. So really the only question is how long will the deflation continue? 1 year? 20 years? And what will consumer prices be doing? And how do we profit from asset deflation and the movement in consumer prices? And will asset deflation make core currencies more valuable or will it eventually undermine confidence in the core currencies, perhaps due to QE?