GOLD

[kernull]

for me it is the double bottom at 915. I am waiting for gold to soar in a minor slip of the dollar.

[simonc]

http://www.fxstreet.com/news/forex-news/ar...9a-6a18b7f7809a

 

It's all over for gold

 

Or is it just that UBS have offloaded all theirs to cover margin calls

 

 

Gold's Bull Market Could End Its Long Run This Year - UBS

 

SINGAPORE (Dow Jones)--UBS says that gold's bull market could end its impressive run as early as this year.

 

"While you are likely to hear a lot of bullish commentary on gold in the next few days we warn you that there are some fundamental reasons the market could turn bearish." said Allen Sheals, Executive Director of the Client Solutions Group at UBS.

 

UBS cited evidence that the jewelry market is weak, continued central bank selling of gold - implying that the banks think it is expensive - and the lack of any direction from hedging and dehedging activity.

 

"Demand destruction is now happening in the jewelry market." said Sheals, speaking at a commodities conference in Singapore.

 

UBS also said there is anecdotal evidence that scrap supply is starting to become a bearish factor for gold, although it did not offer any specific data.

 

Sheals said sales from European central banks are likely to outweigh any purchases by central banks from Asia or oil producing nations.

 

"Going forward on a net basis there is going to be plenty of selling from the central banks," said Sheals.

 

Dehedging activity is unlikely to offer support to the gold market going forward as it has in the past few years, said Sheals.

 

"Producer dehedging is now all but over."

 

Sheals added that strong investment flows from hedge funds, through ETFs and through commodity index funds, though supportive, are exactly what you would expect when the market is so elevated.

 

Another supportive factor identified was private investment flows into allocated holdings and physical bullion, but Sheals suggested the very nature of these flows made them hard to quantify.

 

He acknowledged that buying of gold as an inflation hedge continued to be a strong bullish driver, but noted that central bank action to fight inflation could quickly turn the inflation outlook into a negative factor for bullion.

 

UBS did not provide a specific downside target for gold but Sheals said their overall view was that the current level just above $930 a troy ounce was likely to be unsustainable.

[wren]

This CNBC interview with Paul Van Eeden talking about monetary inflation, oil etc. is quite good (dated 28 May). He also argues that money supply increase is not necessary even in a growing economy.

 

Gold at 922.50 has fully recovered from today's midday smackdown.

[bitbigt]

It's all over for gold

 

I would fully agree with them, IF I could believe that "central bank action to fight inflation" will be effective and inflation comes under control this year.

Ultimately, of course, we will find ourselves back in a low inflation world, where economies are back in some kind of balance again, and so then gold will correct back down. But that's quite a few years away

 

So if instead you believe (like most people do, even CBs themselves!!!) that inflation is going to get much worse this year and next before the global slowdown has any chance of ameliorating it, then gold will go up a long way from here.

[kernull]

Or is it just that UBS have offloaded all theirs to cover margin calls

 

I am not worried about jewellery demand and banks selling gold. I am more worried about the money being burst at stock markets & housing. This money would not enter commodities and can actually create bad deflation. But since FED is there to prevent that, we may not see any big drops like many analysts predict.

[dietcolaaddict]

"The same sort of thing happens in markets. It is the source of the saying that “markets spend 90% of the time making up their minds and 10% of the time doing what they have to do”. Countervailing pressures build up causing minor tremors. Then pressures continue to build until there is a major change in the market place, the equivalent of an earthquake.

Yes, well phrased. As Steve points out, the market conditions are more positive than 2006. So I guess the similarity we are seeing is down to market machinery, habit and psychology.

 

I'm reckoning late August onwards for the take-off, as my previous analysis showed the months after to be the optimum season for gold price gain, certainly in the last decade. However I'm biased - as that's my next buying opportunity.

[Tune2001]

http://www.fxstreet.com/news/forex-news/ar...9a-6a18b7f7809a

 

UBS cited evidence that the jewelry market is weak, continued central bank selling of gold - implying that the banks think it is expensive - and the lack of any direction from hedging and dehedging activity.

 

Errr, not selling to try and supress the price of gold then?

 

[u4d18]

Here's two interesting graphs Gold and Wheat normalised for inflation: -

 

 

 

 

I wonder about the ratio between gold and wheat, not sure where I could get data on this. Kind of reflects my opinion that gold is an indicator of supply/demand of basic commodity to maintain present lifestyle.

 

[lardoon]

UBS cited evidence that the jewelry market is weak, continued central bank selling of gold - implying that the banks think it is expensive - and the lack of any direction from hedging and dehedging activity.

Do you think Gordon thought Gold was expensive wwhen he sold his Gold??

 

On another note I wanted to quote some of Jon Nadler comment today (http://www.kitco.com/ind/nadler/jul082008A.html) mentioning the Hulbert Gold Newsletter Sentiment Index (HGNSI)

Consider the latest readings from the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 64.3%.

 

That's the highest level for this sentiment gauge since March, when gold bullion was above the $1000 level. At that time, the HGNSI rose to a marginally higher level of 65.4%. Over the six or so weeks following that reading in March, of course, gold bullion fell by more than $100 per ounce. To put this contrast another way: The average gold timer is, for all intents and purposes, just as bullish today as when an ounce of gold bullion was trading for more than $100 more. This suggests that the gold timers are more accurately described as being stubbornly bullish than as pessimistic.

 

The HGNSI's record high, according to the Hulbert Financial Digest, is 90%, or just 25 percentage points higher than where it stands now. That means that the majority of the in-and-out traders that affect the shorter term trends are already invested in the gold market; relatively few of them remain on the sidelines to propel the market higher by turning bullish in the future.

 

Another way of putting this: Risk in the gold market is at above-average levels right now.

He seems to have a point (to me anyway)

Anybody know how to track this HGNSI and how often it is published?

 

Another point that makes me sceptical of a dramatic and imminent PoG rise is the hanging oil price cool-down which should have a negative effect on Gold...

 

My 2 cents - I think we are still due for some range-bound trading with some more downside risk (but what do I know! )

[Steve Netwriter]

Like that graph Steve, looks like gold is laughing at the world as the markets go to hell in a handbasket.

 

Anyone for wave three?

 

 

 

(I'll reply to the other posts later)

[Steve Netwriter]

Totally off topic, but I just learnt how to draw a duck

Not too bad considering I used a mouse

 

 

:lol:

[warpig]

You know what, I am amazed at people's lack of intelligence in congunction with the current crisis, to the point where I can't even put my frustration

in to words! I still get that look when I try to talk to people about it, where it would seem more politically correct to shit myself on national TV.

 

What is wrong with everyone?

[Steve Netwriter]

You know what, I am amazed at people's lack of intelligence in congunction with the current crisis, to the point where I can't even put my frustration

in to words! I still get that look when I try to talk to people about it, where it would seem more politically correct to shit myself on national TV.

 

What is wrong with everyone?

 

I think that's such an important question that I'm going to start a thread based on it. I hope you don't mind.

 

Why don't most people get it ?, What is wrong with everyone ?

http://www.greenenergyinvestors.com/index.php?showtopic=3617

 

[warpig]

Of course not, I hope someone can find the missing link, it's driving me mad.

 

I think that's such an important question that I'm going to start a thread based on it. I hope you don't mind.

 

Why don't most people get it ?, What is wrong with everyone ?

http://www.greenenergyinvestors.com/index.php?showtopic=3617

 

[Steve Netwriter]

I wonder about the ratio between gold and wheat, not sure where I could get data on this. Kind of reflects my opinion that gold is an indicator of supply/demand of basic commodity to maintain present lifestyle.

 

I can do you Agriculture and Gold if that's any help ?

 

 

http://www.stockcharts.com/charts/performa...;GKX,$gold

 

And Gold versus Agriculture:

 

 

 

Agricultural Commodities Index ($GKX), Definition

An index of agricultural commodity contracts, including Wheat, Red Wheat, Corn, Soybeans, Cotton, Sugar, Coffee, Cocoa, and Orange Juice. Compiled by Goldman Sachs.

 

 

[Steve Netwriter]

I've seen this 'bath' shaped chart a lot recently, including from JS. Do we really think the price is following this line going forwards. If we do the price is going exponential RIGHT NOW !?

 

Just my view.

I have a healthy skepticism of technical analysis. I think some of it is more trustworthy than others.

I think support/resistance levels are important, and have a significant affect on trading.

Personally I don't take too much notice of the more "esoteric" patterns. I find them more useful as a summary of history, rather than a predictor of the future.

 

So IMO the "smile" just shows that the price dropped and levelled off, then started to climb slowly and has accelerated.

 

I'm going to stick my neck out and say exactly where I think it's going

 

 

[Steve Netwriter]

Nice curve(s) Steve.

Any chance you could share one with a log scale? I'd be *very* interested to see how that looks right now.

 

Personally I'm still cautious/nervous but if we manage to stay above $915 all this week then I might join the "we're going exponential" camp.

 

Silver's strange M/W formation yesterday has me scratching my head, I must say.

 

How's this ?

 

 

[Steve Netwriter]

This CNBC interview with Paul Van Eeden talking about monetary inflation, oil etc. is quite good (dated 28 May). He also argues that money supply increase is not necessary even in a growing economy.

 

Gold at 922.50 has fully recovered from today's midday smackdown.

 

Thanks

 

A voice of sanity

 

Increase of $13 to $130 on oil caused by expansion of monetary supply

 

Increase from $3 to $13 due to other factors, including supply/demand.

 

Interviewer says:

"But it hasn't shown up in the inflation numbers" :lol:

 

That's because it doesn't include oil !!!!

 

TMS = M3 = 6%.

 

 

What excellent comments from Paul

 

[Steve Netwriter]

Marc Faber: Ben Bernanke is gold buyers best friend 20080318

 

Marc Faber on 2008.03.18 on CNBC says that in short term gold could easily go down 20% but in long run, due to Mr Bernanke policy, gold will go much higher against the dollar, and the dollar will be worthless.

 

[u4d18]

I can do you Agriculture and Gold if that's any help ?

 

Thanks for this, it's perfect.

[Steve Netwriter]

Pleased I could help

 

---------------

 

Now I think I've slipped into gaga land. Help me please :blink:

I first saw this on Teletext, and couldn't quite believe what I was reading.

 

Inflation 'unacceptably high,' Fed's Lacker says

http://www.marketwatch.com/news/story/infl...&dist=msr_1

 

WASHINGTON (MarketWatch) -- Inflation rates in the United States are "unacceptably high," and elevated inflation demands additional "vigilance" by the Federal Reserve, said Jeffrey Lacker, president of the Richmond Fed Bank, on Tuesday. The risks of a severe downturn have receded, he said. It "makes eminent sense" for the Fed to raise interest rates as the risks diminish. Lacker is not a voting member of the Federal Open Market Committee this year. Lacker's speech at the National Economic Club was nearly identical to one he gave three weeks ago

 

The comments on that article say it all !

[alexreeve]

Pleased I could help

 

---------------

 

Now I think I've slipped into gaga land. Help me please :blink:

I first saw this on Teletext, and couldn't quite believe what I was reading.

 

Inflation 'unacceptably high,' Fed's Lacker says

http://www.marketwatch.com/news/story/infl...&dist=msr_1

 

 

 

The comments on that article say it all !

The comments are quality

 

My favourite:

Fantastic! So the subprime / credit crisis has passed, gas has come back down to $2 a gallon, our financial institutions have mended their problems, our dollar has regained the 40% purchasing power it lost since 2002, we're no longer at war with two countries and we now have a competent President and Congress in office. That's a relief! Now I can go back to reading Mark Hulbert's articles and buying the market blindly on every dip!

[knavel]

Marc Faber: Ben Bernanke is gold buyers best friend 20080318

 

He didn't say the dollar would be "worthless", just lose its value against everything else.

 

As an anecdote I actually found this site when I was researching Faber when it was proposed I hire him on the recommendation of my Asian director to speak at at party we had in Bangkok. It was an interesting presentation and I had fun taking him to task on a lot of his assertions post the speech. A lot of what he says is great, some BS, but he is definitely food for thought. Only difference is that in our contract we had to play up to his ego and refer to him as "DR Marc Faber." I guess NBC has more weight and doesn't have to call him Dr.

[Steve Netwriter]

He didn't say the dollar would be "worthless", just lose its value against everything else.

 

Sorry, just quoting the YouTube info

 

 

[knavel]

Sorry, just quoting the YouTube info

 

Likewise! I actually checked it a couple of times. Maybe he said something like this more than once.