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I keep reading this sort of stuff on here, and I'm not convinced. Surely it means that the increase is geometric, rather than arithmetic. Exponential would look quite different, woudn't it?

An exponential results when a quantity grows by a fixed percentage in each time period. This translates to the amount of growth being proportional to the size of the quantity itself. It is not geometric, just a constant proportion growth rate.

This is why log charts are useful - because they show moves as a proportion of the prior value.

 

e.g. a move from 100 to 110 (ie 10 units) is much less signficant than a move from 50 to 60 (10 units)

This would show on a log plot... the 50->60 move would appear larger.

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I don't agree with this chart. Why should the price of gold rise in a linear fashion when there's nothing linear about this crisis? Icarus's chart is far more accurate IMO.

The longer the time frame, the better logarithmic. If you're looking for short/ medium term corrections then linear would be better, wouldn't it? The linear chart I posted with the trend lines only covers the last few years.

 

Here's logarithmic charts for medium and longer term:

 

 

log4.gif

 

 

log2.gif

 

edit

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Gold is rising now (with stocks).

With a two-day rally that has come on light volume.

 

But an important top may be in (see below).

 

And if the recent lows are broken ... update

zzzl.gif

 

If that GLD-116 Low is broken with big volume, the next drop could be a big one.

Since that trendline up from $680 will get broken too.

zzzn.gif

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Bubb, I think you might be reading your own subjective desires into your technical analysis there. :)

 

Why not take the starting point from 2004/5... before that you see a slump down from '95 to 2000, then that slump correct through to 2004/5. After this date we see the strongest part of the gold bull market.

 

logggss.gif

 

 

I like to think I'm relatively "detached" to the price of gold [well, as much as you could be anyway] as wouldn't mind seeing it go either way; if lower, I can pile into silver with cash, if higher I'm further encouraged by my core postion in gold.

 

Unless there is complete panic and forced liquidation, I doubt gold could really go below 1100... though that said, sub 1000 is always possible, but looking more unlikely; on the logarithmic scale there doesn't seem to be much "excess" in this top.

 

The reason I think gold will stay relatively strong is investors/ CBs are re-monetizing it... by buying it as an alternative currency.

 

 

looooong.gif

 

edited

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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.

 

Thanks for that. Leads me to a question Ive been pondering - has anyone found an automated way of downloading FSN weekly podcasts?

 

+ Same question for King World News ?

 

I have Itunes that works well for others like 2beers with Steve and Martin Wolf.

 

Oops is this off topic - hope we dont need a new thread for a silly question.

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201028NAC425.gif

 

 

After the gold rush

 

Gold is not as expensive as it seems

Jul 6th 2010 | From The Economist online

 

FOR the past nine months, gold has been trading consistently over $1,000 an ounce. It reached a high of $1,259 on June 18th, up 35% from a year earlier. After adjusting for inflation, today’s heady prices are some way off the 1980s mania. The 2010 yearly average of $1,154 is still 29% below the inflation-adjusted price in 1980 of $1,623. Perhaps now is the time to sell. After the January 1980 peak, the price fell by 55% over the following two years.

 

 

They fail to mention the comparable debt figures and how they have inflated over this time period. How convenient. Teenage scribblers or what?

 

 

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It seems to me that there has been an increasingly large amount of bearish reports in the last 4 weeks on POG from traders, investors, financial media etc. Indeed there are so many, this is now the mainstream or groupthink.

 

By definition, you are contrarian if you think the opposite, in that POG will take-off again.

 

Now, ask yourself, if you are genuinely a Contrarian thinker, is it because they all have it wrong, but weirdly had it right when on the last medium rally?

 

I sold 75% of my gold fund when at c.£850 last week (or was it the week before).

 

I personally think that POG in £ will tank if IRs tick upwards.

 

Now that is Contrarian, for those of you who are now going against the mood for POG in $.

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It seems to me that there has been an increasingly large amount of bearish reports in the last 4 weeks on POG from traders, investors, financial media etc. Indeed there are so many, this is now the mainstream or groupthink.

 

By definition, you are contrarian if you think the opposite, in that POG will take-off again.

 

Now, ask yourself, if you are genuinely a Contrarian thinker, is it because they all have it wrong, but weirdly had it right when on the last medium rally?

 

I sold 75% of my gold fund when at c.£850 last week (or was it the week before).

 

I personally think that POG in £ will tank if IRs tick upwards.

 

Now that is Contrarian, for those of you who are now going against the mood for POG in $.

gb.gif

 

 

Gold still looking strong in pounds. The latest spike in pounds/ Euro had more to do with concerns over those currencies, which have now settled down. At what point would you buy back in?

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Thanks for that. Leads me to a question Ive been pondering - has anyone found an automated way of downloading FSN weekly podcasts?

 

+ Same question for King World News ?

 

I have Itunes that works well for others like 2beers with Steve and Martin Wolf.

 

Oops is this off topic - hope we dont need a new thread for a silly question.

 

I use Ziepod to download all my daily podcasts

 

http://www.ziepod.com/

 

Does just about everything apart form KWN and Eric and "The Double"

 

There may be a way to retrive the podcasts from these two but i havent figured it out just yet

 

...or this one. Juice reciver

 

http://juicereceiver.sourceforge.net/

 

Good for XP but isnt too keen on Vista/Win7

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I personally think that POG in £ will tank if IRs tick upwards.

 

With a tougher view on the role of the public sector and the associated budget trimming, interest rates have to be kept very low for a long time, otherwise they really would crash the housing market and further undermine the banks' capital.

Even if rates rise thay will be behind the inflation curve and be negative in real terms -unless a calamity encourages the bond vigilantes to demand much higher rates. I think a period of stealth inflation is ahead - the benign influence of deflation from China will ease as workers there demand higher wages. Overvalued assets will continue to deflate in real terms; but the things we need in our everyday lives will increase in price.

Whilst there are negative real interest rates the price of gold will reflect that and attract buyers. The other variable of course is the £$ relationship - more austerity in the UK and less in the USA or vice versa will govern the moves from a UK holder's perspective. As a buyer from 2003 onwards I have seen the currency ebb and flow but the value of the early purchases are up almost 4-fold. Depends on the time horizon someone has.

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Never believe anything, until its officially denied. I read the story below and thought that on the surface it's a bearish statement for gold and bullish for fiat, but if you look beyond the surface structure of the statements there is a clear warning issued do not devalue your currency or we will change our strategy(my words).

 

China won't dump US Treasuries or pile into gold

2010-07-08 06:36

http://www.chinadaily.com.cn/china/2010-07...nt_10078685.htm

 

BEIJING - China's foreign exchange agency said Wednesday the country's $2.45 trillion reserves are not a "nuclear weapon" to control other nations and its vast holdings of US Treasury debt "should not be politicized."

 

In a question-and-answer statement on its website, the State Administration of Foreign Exchange (SAFE) ruled out the option of dumping its US Treasury securities holdings and called on Washington to be a responsible guardian of the dollar.

 

China is a responsible long-term investor and "doesn't seek the power to control recipients of its investment," SAFE said, in an apparent effort to allay concerns in the outside world that arise whenever Beijing shifts its holdings of US government debt.

 

"Any increase or decrease in our holdings of US Treasuries is a normal investment operation," it said in the statement.

 

The agency constantly adjusts its portfolio to maximize returns, and any changes to its US Treasury portfolio should be seen in that light and not interpreted politically.

 

China has the biggest overseas holdings of US Treasuries, having in April boosted its investment in the securities by $5 billion to $900.2 billion, according to US Treasury data released on June 15.

 

In response to a question on whether China's $2.45 trillion stockpile of foreign currency could be used as an "atomic weapon".

 

"Facts have proven that such worries and concerns were definitely unnecessary," the regulator said.

 

"We will actively deepen cooperation with countries that welcome our investment. If they have any doubts or worries, we will slow down the pace and enhance communication with an aim to achieve consensus."

 

Tepid on Gold

 

The agency acknowledged that financial markets were very concerned at one point that massive US government borrowing would drive the US currency lower.

 

But it said economic conditions elsewhere were also a factor in determining the dollar's trend. The euro zone, for instance, was struggling with high government debt levels.

 

"We must recognize that any depreciation of the dollar is relative to other countries, and other countries or regions also have this or that problem," SAFE said.

 

One of the prime concerns of Chinese Internet commentators is that a long-term decline in the dollar or euro will erode the value of SAFE's portfolio.

 

To that end, SAFE called on the United States and other major countries to take "responsible measures" to maintain the value of their currencies. This meant withdrawing monetary stimulus in a reasonable manner and relying less on deficit spending.

 

SAFE appeared lukewarm about gold as an investment.

 

"It cannot become a main channel for investing our foreign exchange reserves," the agency said, noting the size of the gold market was limited and prices were volatile.

 

Buying more gold would also not help much in diversifying China's reserves.

 

China has increased its gold holdings by more than 400 tonnes in the past few years to 1,054 tonnes. Even if it doubled that amount gold's share of SAFE's portfolio would increase by only one or two percentage points.

 

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Playing around with trend lines now I've got the full Stochcharts package.....

 

Nice chart.... and very bullish!

 

The RSI indicator is looking good also.... touching the lows that have been seen over the past couple of years.

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lognt.gif

 

 

I really do think the posting of rockets on the moves up should be banned from the site. :)

 

Reason being, gold has shown a steady [though at times volatile] strengthening. When the price rockets up breaks to the upside a little, gold investors tend to get a bit over-excited. Afterwards, with the consolidation, people feel a little deflated.....or, it is the turn for the bears get overly-excited.

 

Emotion should be left out of investment. The rational approach would be to focus on the long term steady [and mundane] strengthening of gold which the line above represents.

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lognt-1.gif

Around 20% "return" a year. That would put the price around $1250 at January next year..... and $1500 at January 2012,....and $1800 at Jan 2013................... $2150 at Jan 2014.

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Adrian Ash on the seasonals:

 

http://news.goldseek.com/BullionVault/1278695131.php

But for Dollar investors, since this bull market began a decade ago, buying gold in July or August has only failed once to deliver a gain by year's-end. The 2008 low came at end-Oct. The rest of the time, Sept. worked like a starting gun for strong gains in gold.

 

 

bull.jpg

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Correct me if I'm wrong but didn't gold make it's biggest gains as IR's were rising and then only start to decline as they topped 30'ish years ago? Nevertheless, bond yields won't rise significantly because of the effects of QE2, which feels imminent IMO...

 

Is a contrarian's contrarian still a contrarian? :rolleyes:

 

It seems to me that there has been an increasingly large amount of bearish reports in the last 4 weeks on POG from traders, investors, financial media etc. Indeed there are so many, this is now the mainstream or groupthink.

 

By definition, you are contrarian if you think the opposite, in that POG will take-off again.

 

Now, ask yourself, if you are genuinely a Contrarian thinker, is it because they all have it wrong, but weirdly had it right when on the last medium rally?

 

I sold 75% of my gold fund when at c.£850 last week (or was it the week before).

 

I personally think that POG in £ will tank if IRs tick upwards.

 

Now that is Contrarian, for those of you who are now going against the mood for POG in $.

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