GOLD

[azazel]

Pixel looks like a bl00dy genius right now.

 

 

 

You mean old and grey and slightly eccentric?

 

 

[Pixel8r]

 

You mean old and grey and slightly eccentric?

 

 

[romans holiday]

Looks like I hit that one bang on!!!

 

The question is were now, I say the pattern breaks and we carry on through the resistance.

 

The problem with this chart is it's linear [i have to say I'm surprised you're still using linear charts]. If gold was to continue strengthening at around say 20% a year that chart would soon look parabolic.

 

A 20% increase around the year 2007 saw gold go from 800 to 960. A 20% increase today would see gold go from 1400 to 1700..... in nominal numbers nearly twice the increase.

 

Another problem with the linear chart is it gives the appearance of more volatility than there actually really is.... not to mention giving the appearance that a good sized correction is imminent. The bullish will expect a further parabolic rise, the bearish will expect a large correction.

 

 

The log chart belows shows a more measured and stable pace in gold's rise especially in the latter years [more stable as it has progressed], and well answers the critics who suppose it's in a bubble.

 

[surfdude]

So which is the better chart to look at gold - linear plotting the nominal gains or logarithmic plotting gains as percentage increases and why is one better than the other?

 

Would like to hear the discussion on this.

[romans holiday]

So which is the better chart to look at gold - linear plotting the nominal gains or logarithmic plotting gains as percentage increases and why is one better than the other?

 

Would like to hear the discussion on this.

Percentages and ratios provide relations between numbers, which is of prime importance as opposed to isolated numbers in themselves. A focus on numbers devoid of context is the essence of money illusion.

 

Steve Netwriter would have much to contribute to this debate.

[romans holiday]

So which is the better chart to look at gold - linear plotting the nominal gains or logarithmic plotting gains as percentage increases and why is one better than the other?

 

Would like to hear the discussion on this.

If gold could be practically considered a currency, which it is nowadays in the market, then it would be useful to use a decimal point in the price to denote this.

 

Thus instead of $1400, you'd have say 1.400 against the dollar. It is the relative percentage move between gold and currencies which is of importance. This way instead of being shocked or jubilant by a $100 dollar rise [money illusion], you would only see a relative strengthening rise of 7% to 1.500 in a currency.

[surfdude]

If gold could be practically considered a currency, which it is nowadays in the market, then it would be useful to use a decimal point in the price to denote this.

 

Thus instead of $1400, you'd have say 1.400 against the dollar. It is the relative percentage move between gold and currencies which is of importance. This way instead of being shocked or jubilant by a $100 dollar rise [money illusion], you would only see a relative strengthening rise of 7% to 1.500 in a currency.

 

Perhaps it is best valued logarithmically when considering value and linearly when looking for technical indicators such as support, resistance, momentum and possible turning points.

 

What do you think?

[romans holiday]

Perhaps it is best valued logarithmically when considering value and linearly when looking for technical indicators such as support, resistance, momentum and possible turning points.

 

What do you think?

Log is best for the longer term. Most here are looking at the medium/ long term trends in gold, which is best understood on the log chart as stated above.

 

As for the short term, there is not much difference at all between the log and linear charts.

 

The distortion arises when looking at the long term on the linear chart.

[warpig]

From:

[Jake]

Joyous! I love these Hitler remakes.

[Pixel8r]

The problem with this chart is it's linear [i have to say I'm surprised you're still using linear charts]. If gold was to continue strengthening at around say 20% a year that chart would soon look parabolic.

 

A 20% increase around the year 2007 saw gold go from 800 to 960. A 20% increase today would see gold go from 1400 to 1700..... in nominal numbers nearly twice the increase.

 

Another problem with the linear chart is it gives the appearance of more volatility than there actually really is.... not to mention giving the appearance that a good sized correction is imminent. The bullish will expect a further parabolic rise, the bearish will expect a large correction.

 

 

The log chart belows shows a more measured and stable pace in gold's rise especially in the latter years [more stable as it has progressed], and well answers the critics who suppose it's in a bubble.

 

As far as I am concerned you are being a pedantic MF!

 

I first posted that chart in September '09, predicting that we would be on a surge to around $1400. At the time you were saying that I was wrong and that we would be going back down into the 900's.

 

Of course a log chart is better, but it does make any difference if a pattern is plotted and a projection is made from it.

 

Can't you just accept that it was a very good prediction in sept '09?

 

 

[romans holiday]

As far as I am concerned you are being a pedantic MF!

 

I first posted that chart in September '09, predicting that we would be on a surge to around $1400. At the time you were saying that I was wrong and that we would be going back down into the 900's.

 

Of course a log chart is better, but it does make any difference if a pattern is plotted and a projection is made from it.

 

Can't you just accept that it was a very good prediction in sept '09?

No I'm not being pedantic at all. Using a linear chart instead of a log chart leads to all sorts of distortions, which have been highlighted. Why don't you think about that objectively rather than taking such a personal and nasty approach.

 

Frankly, I'm amazed your still using these linear charts. Move on... and spare the abusive language.

 

[Pixel8r]

No I'm not being pedantic at all. Using a linear chart instead of a log chart leads to all sorts of distortions, which have been highlighted. Why don't you think about that objectively rather than taking such a personal and nasty approach.

 

Frankly, I'm amazed your still using these linear charts. Move on... and spare the abusive language.

I can't be bothered to reply to you, everyone else can already see what your like and I don't need to waste my time.

 

 

[HPCsoYESTERDAY]

No I'm not being pedantic at all. Using a linear chart instead of a log chart leads to all sorts of distortions, which have been highlighted. Why don't you think about that objectively rather than taking such a personal and nasty approach.

 

Frankly, I'm amazed your still using these linear charts. Move on... and spare the abusive language.

 

surely it's about perspective - i can look at a graph in log and linear and appreciate both for what they are

[romans holiday]

I can't be bothered to reply to you, everyone else can already see what your like and I don't need to waste my time.

That's not very nice. Who's "everyone else"? Probably a few sharing your small world view no doubt.

[romans holiday]

surely it's about perspective - i can look at a graph in log and linear and appreciate both for what they are

It's an interesting one. The thing is people tend to get way too emotional....excited or depressed.... with moves on the linear chart.

 

The moves on a linear chart are effectively magnified .... the log charts put them in a better, more rational, perspective.

 

So for example, gold is now at 1400. Many who are looking at a linear chart are thinking gold has risen too far... and you'd have to be carzy to buy here in "bubble territory". Whereas in fact, if you looked at a log chart, it looks more sensible to buy here as gold is seen to be just quietly strengthening at 20% or so.

[electroweak]

No I'm not being pedantic at all. Using a linear chart instead of a log chart leads to all sorts of distortions, which have been highlighted. Why don't you think about that objectively rather than taking such a personal and nasty approach.

 

Frankly, I'm amazed your still using these linear charts. Move on... and spare the abusive language.

 

and

Who's "everyone else"? Probably a few sharing your small world view no doubt.

 

me for one, GF another, a silent bunch of lots of other people, I'm sure. Not very nice of you either!

 

RH, all due respect but I think you have missed the point?

Pix posted that exact chart (minus the latest prices) 2 years ago. It was reposted, because it has proved so accurate.

We all recognise it and with a log scale we might not. It's more about the uncanniness than the distortions. In case you hadn't noticed, Pix has moved on. And I think you should be a bit more civil too?

 

Nice one, by the way Pix.

[romans holiday]

RH, all due respect but I think you have missed the point?

Well, the point is we were discussing log chart versus linear charts. Simples really.

 

As you know, I don't consider myself a "gold bug". All I'm trying to do is put forth a more mainstream view of why gold is and will do well. You'd have to agree that the "gold bug" hyper-inflation free-market anti-government view does tend to alienate the wider audience.

 

Wouldn't you agree that if gold was discussed as an alternative currency, without the other baggage, it might help others understand it at a more mainstream level? Isn't that the point of a gold thread... rather than high-fives and self-congratulations?

 

Actually, I have become to despair of late that this site is hoplessly "far right/ libertarian" in its economic and political views. After 2 years of posting here, i haven't seen much of a widening of the debate. I think this doctrinaire approach will only blinker people as to what will happen politcally and economically... not to mention what gold will do.

 

 

[azazel]

I value your opinion RH, although Im firmly in the goldbug hyperinflation anti government view. I think its a dumb idea to hold dollars as they are at the heart of the problem and will ultimately fail IMO, but the dollar rallied in 2008 when most expected it to crash. So you might be right in your strategy one day, but for me, its "buy and hold silver and gold" (hey a nice little rhyme)

 

The thing that impresses me most about you is that you dont get abusive or worked up,regardless of what others say to you. It would be nice if you acknowledged when you were wrong or when others were right though.

[romans holiday]

I value your opinion RH, although Im firmly in the goldbug hyperinflation anti government view. I think its a dumb idea to hold dollars as they are at the heart of the problem and will ultimately fail IMO, but the dollar rallied in 2008 when most expected it to crash. So you might be right in your strategy one day, but for me, its "buy and hold silver and gold" (hey a nice little rhyme)

 

The thing that impresses me most about you is that you dont get abusive or worked up,regardless of what others say to you. It would be nice if you acknowledged when you were wrong or when others were right though.

Thanks Az. the thing is I don't see it in black and white, right and wrong terms [i often criticize "rationalism"]. To me it is all about probabilities and being flexible.

 

I could say of "gold bugs" [i interrogate the word as don't think it's a derogative term] that they are wrong because gold has not rocketed upwards at the pace they thought.... with an imminent hyper-inflation.... but I couldn't possibly say that. Would the gold bugs be "wrong" if gold didn't hit 1650 in January? I still think we're due a correction by the way.... but because this is only probable not certain, I'd say buy anyway.... that is, if you didn't have a decent position.

 

Everyone here agrees that gold is going higher... what we disagree on is the pace.. and how much it may correct. This is not a subject for certainties, rights and wrongs... frankly, I find that language immature.

 

What this thread should be discussing is how to best read gold now... and whether it's worth waiting for a correction or buying presently.... in the context of whether you own gold already or not. I'm sure there are a lot of readers wondering if they should buy... and amused at the squabbles of those who are stuffed to the gills.

[Carlton]

Gold Stocks now… are likely the greatest market play, in anything, of the past 100 years.

 

http://www.kitco.com/ind/Thomson/nov102010.html

 

How 'bout them apples?

[G0ldfinger]

Pixel got a 2-day break for foul language. Please everyone, watch your language. I know that these abbreviations come in handy, and I like to use "FFS" every now and then, but language directed at other posters should meet a minimum of politeness no matter how heated the factual discussion.

[romans holiday]

Deregulation set to lift China gold demand

 

http://www.reuters.com/article/idUSTRE6A914220101110

Plans to free up China's gold market are likely to boost imports of the precious metal to satisfy investor demand, putting the Middle Kingdom on course to eclipse India as the top global consumer in a few years.

 

China, the world's largest consumer of base metals and the second biggest user of oil, is on gold bugs' radar screens, with any hint that Beijing may want to boost its gold holdings rippling through international markets, sending bullion higher.

 

So far China's central bank has shied away from the international market and has instead been building reserves from its domestic mining industry, the largest in the world.

 

But that may change after the People's Bank of China said in August it would let its banks export and import more gold in a program to drive the development of the country's market in the precious metal.

 

By opening up the market, the PBOC may be able to draw tonnes of gold into China, which it could then pick up on the domestic market, without disrupting market equilibrium too much.

 

"The way they will accumulate a massive amount of gold is by opening up imports and making sure there is heck a lot of gold swishing around in the domestic market," said Mark Pervan, a senior commodities analyst at ANZ.

 

"It's just too big a player in the market. Investors are looking for any signs of China buying gold on the world market. If Beijing said it was buying 100 tonnes, prices would leap, not because of this 100 tonnes, but because of the 300 tonnes the market would expect to follow."

 

ALTERNATIVE INVESTMENT CHANNELS

 

Appetite for the precious metal has grown rapidly in China as investors worried about inflationary pressure turn to alternative investment channels.

 

Demand was expected to rise to around 600 tonnes in 2011, according to a Reuters survey of five analysts, and may go even higher.

 

"The jewelry sector is growing, as is demand for investment gold. A clampdown on property investment and speculation in other markets has resulted in more money going into gold and jewelry," said William Adams, analyst at FastMarkets.com.

 

"Jewelry demand in China has probably managed to rise and may even be growing at a faster pace than the average over the decade of about 7 percent."

 

China's gold consumption this year is forecast between 450 and 600 tonnes, with a consensus of 500 tonnes, analysts surveyed by Reuters said. The WGC estimates demand at 510 tonnes.

 

Several researchers have urged Beijing to increase its gold reserves to diversify more of its $2.6 trillion in foreign currency reserves, and a more open market would allow the central government to build stocks of gold more quickly, without sending tremors through the international market.

 

Although no detailed follow-up rules have been announced, analysts expect Beijing to open up the gold market as a prelude to deregulation of bond and foreign exchange markets.

 

............

[carbon junkie]

Pixel got a 2-day break for foul language. Please everyone, watch your language. I know that these abbreviations come in handy, and I like to use "FFS" every now and then, but language directed at other posters should meet a minimum of politeness no matter how heated the factual discussion.

I'm with Pixel, it doesn't matter how acurate some posters are on this site there are others who are infuriating with their continued lack of grace in the face of being wrong for months and months on end.

 

I think you should reinstate Pixel and give him/her a bit more leeway as IMO the response given to Pixel was very ungracious in view of the accuracy of Pixels chart.

 

IMO Pixel has given a great deal more to this site than the poster to whom the quote was directed.

 

IMO there are some on this site who need to stop lecturing and start listening to those with a proven track record of being acurate.

 

I might also like to point out that it seems to me that a lot of the posters on this site are British but many of the mods are not - I think its an over reaction in many cases as the language is lost in translation.

 

We do actually swear quite a lot in the UK its is part of our cultural makeup. Now for example if you go across to the North American sites there is virtually no swearing its all hugs and kisses and annoying little smiley blinking icon type things that most Brits would never use. In fact I know it really annoys many UK posters but that is life.

 

I think a lot of the banning these days is merely a cultural misunderstanding.

[carbon junkie]

That's not very nice. Who's "everyone else"? Probably a few sharing your small world view no doubt.

I am afraid I take Pixels track record over yours anyday.

 

You seem to be totally impervious to the growing iritation many of your replies have.

 

I don't actually think you listen to any other posters.

 

Its a fault on your part IMO.