GOLD

[Johan van der Smut]

Well, at least there's been a small uptick for the day, from $819 to $825.

[torino]

fantastic ... Sorry to be blunt, but what is your obsession with people being so badly burned that they have to "get out?"

 

I suspect the level varies massively from person to person and from time to time. For any using easily tradable methods (vs physical holding) they may choose to exit and re-enter the market to a varying degree on a regular basis. As such, there is no "sell up" price.

 

Most people's opinion on when to sell will also based on the wider state of world economies, as such it's difficult to pick an exit price here and now.

 

 

I am trying to find out if there is a price level of gold which could create a sentiment of uncomfort, malaise, disbelief and panick among gold holders.

If you could answer some of my questions, this would really be helpful as you are a gold holder.

 

 

[Wanderer]

To add more, I find today's events on the markets astonishing. Events in the Caucasus suggest a level of political risk unseen in months (set against the background of rising inflation and the credit crunch) and yet the FTSE pushes up, oil goes down and gold takes a whupping. Its as if we've got the 'August' crew firmly sat at the traders' desks right now.

 

Why I didn't hold fire and wait out August before I went in with my last (biggest) wadge of G+S I'll never know. And I'll kick myself big time for a while now. Muppet.

 

However I don't want to double-up my mistakes by selling out at a low so, Fantastic, I'll hold tight a while.

[bitbigt]

...my short term expectation is that we'll see 800, or even 750 in a worst case scenario (all depends on USD going forward - see next post).

I've just checked and at this moment in time,

33% of anaysts are bullish on EUR/USD, while 0% are bearish

17% of anaysts are bearish on GBP/USD, while 0% are bullish

 

...i.e., after the forced rise in the dollar, analysts now generally expect it to fall back against the EURO (a currency not being debased) but gain further against the pound (an economy where house prices are collapsing, being one year behind the States in economic cycle)

 

Sanity at last, and positive for gold, especially if you're holding in GBP

[Wanderer]

I am trying to find out if there is a price level of gold which could create a sentiment of uncomfort, malaise, disbelief and panick among gold holders.

If you could answer some of my questions, this would really be helpful as you are a gold holder.

 

One more point then, since you ask. CYCLICAL THINKING ALERT!!!! I'm tempted not to sell now as I obviously have made a mistake buying the wrong side of this cliff-jump downwards. If the price went down further, say to 750, and it happened before I could sell, my temptation to hold would be stronger (as I would anticipate a bounce). How would I depart Gold? I suppose there must be a capitulation price somewhere, but that in part depends upon whether Mrs W. brought pressure to bear to cut our losses.

[radge]

I wish I'd waited a couple of weeks as well, but ho hum! Picked up a wee drop today. I'm still confident over the medium term. I just wonder what's brewing? The PPT has been content with Au > $850 all year, what's changed or what have they got in the pipeline?

[bitbigt]

Well, at least there's been a small uptick for the day, from $819 to $825.

...I'm starting to wonder if this might not float back up to 840 over next few hours: now that would be encouraging.

[pieshop]

And your reasons for wanting to find this out are? Why exactly do you have to 'defend gold going as low as 666'? What do you mean by defend? I assume some sort of debate - if so, with whom, why etc. If you provide more background you may get some responses.

 

I am trying to find out if there is a price level of gold which could create a sentiment of uncomfort, malaise, disbelief and panick among gold holders.

If you could answer some of my questions, this would really be helpful as you are a gold holder.

 

Hi everyone,

 

I have had the unfortunate role of defending the "impossible" , i.e. gold going

as low as 666. I was myself suspicious when the number 666 came out, but

not being in occultism, I take it as a mere number

 

- how would you, gold holders, react if gold was to go to 800? 750? 700? 666?

up to which level would you hold? when would you expect call margins?

how low would have gold to go for you to sell? If you were to sell, would you

sell bit by bit or all in one go? would any of these numbers make you sweat or bring panick?

 

- how would you react if this movement was slow and steady?

- how would you react if this movement was accompanied with a lot of volatility?

 

- for this to happen : what % of world bank, IMF and other CBs gold reserve would have to be sold?

 

- who would benefit from these falls?

 

What do you believe is the likelihood of these levels being reached ( may be a why would help me win )

and what amount in loss $ this would represent

- 800 : likelihood / why / loss

- 750 : likelihood / why / loss

- 700 : likelihood / why / loss

- 666 : likelihood / why / loss

[Wanderer]

This from John Nadler neatly sums up the (currently small) 'sell/set a stop-loss' angel on my left shoulder.

 

"Perma-bulls continue to live in denial about the dollar and about the commodities sector. Every drop is a buying opportunity, every rise the start of a new era. But what if - this time - the turn is actually the real thing?

 

Speculative funds poured hundreds of billions into commodities over the past couple of years. Sensing that they had pushed the envelope well past the breaking point, the hedgies are leaving the complex as they perceive that the Fed is not joking about inflation combat, and that regulators are also not joking about oversight of what had become a giant casino - one where "the house" never won. In casino terms, "the die is cast." Rien ne va plus"

 

Most on this site have explained well the 'don't panic' angel on my right shoulder....

[Bobsta]

I am trying to find out if there is a price level of gold which could create a sentiment of uncomfort, malaise, disbelief and panick among gold holders.

If you could answer some of my questions, this would really be helpful as you are a gold holder.

 

I don't think there is... but maybe your research will tell us.

 

Personally, I'm never going to sell my physical gold unless, in many years to come, I need the money and have no other sources of funding. I suspect I would stop buying more at around $750/oz. I've actually lost so much money trading gold that losses to my physical holding really don't bother me.

 

As for my trading - I hold very little paper gold right now (hence my lack of "bother" above). My plan is to buy some when it's low and sell it when it's high. For that to happen I have to be reasonably confident some upwards movement is on the cards. Right now that isn't the case. But it might be next week... or it might take a month... Or I might decide never to trade it again.

[lowrentyieldmakessense(honest!)]

To add more, I find today's events on the markets astonishing. Events in the Caucasus suggest a level of political risk unseen in months (set against the background of rising inflation and the credit crunch) and yet the FTSE pushes up, oil goes down and gold takes a whupping. Its as if we've got the 'August' crew firmly sat at the traders' desks right now.

 

Thinking

I’ve have felt all along that August would bring an intermission anomaly to the travails unfolding in 2008. I fully expected this more because this is a presidential election year and that the DC powerbrokers would do everything in their power to keep the lid on our messes until after November. Presumptive Democratic candidate Obama is vacationing in Hawaii. Presumptive Republican candidate McCain has only been mumbling in the wings. “Famous for being famous” Paris Hilton has surfaced as the 3rd Party (emphasis on PARTY) non-candidate “diversion” for the presidency. The running mates are only as yet speculations before the coming conventions. Nobody is zeroing in our real problems; neither are they detailing their game plans for any turnarounds. We’ve just crossed over into...The Twilight Zone.” Enjoy it… because I fear it is but a temporary aberration. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.

 

someone else expecting a gap up

 

The Good the Bad and the Ugly

The good: The gap at $900 will very likely be covered by a rising gold price at some point in the future – but it may take some time. Nevertheless, the existence of this gap supports the argument that the gold price is firmly entrenched in a primary bull market which will likely continue for many years to come

 

The bad: At its current level, the gold price is sitting below its 43 week moving average. This indicates that the “hype” has likely gone out of the gold price for the time being. Of course, traders will be arguing for a bounce around this level, but I am not so sure. If (by no means certain) the $850 level is penetrated on the downside, then a price of around $700 - $750 is possible within the context of gold’s primary bull trend.

 

The ugly: Within the context of a credit crunch, marginal and undercapitalised gold mines may find themselves in financial difficulties.

 

edit to add

 

anyone know if there are lots of options expiring friday - is this the cause of the fall?

[wrongmove]

I wish I'd waited a couple of weeks as well, but ho hum! Picked up a wee drop today. I'm still confident over the medium term. I just wonder what's brewing? The PPT has been content with Au > $850 all year, what's changed or what have they got in the pipeline?

 

Maybe you could just open your mind a little to the possibility that playing the gold market isn't as simple as just trying to second guess the "PPT"?

 

I'm just throwing a little suggestion out there, thats all. Several successful traders here rarely if ever mention the "PPT" when explaining their stategy.

 

 

 

 

 

 

 

 

[torino]

Wanderer,

 

Thank you for sharing your thoughts and these are completely valid.

Yes I do hold gold - bought in around 2001/2 for my metal work and jewelry making hobbies.

Still have my "work of art".

 

Now I am looking into gold for speculative purpose and I need to put a decent

presentation together - even for a completely ridiculous subject.

 

 

[Johan van der Smut]

This may sound naive, but it stems from a considered conviction that Gold will go up. My chief concern is that conviction stems not from a correct analysis of the situation (I still think it does) but from misjudged analysis as a result of incomplete understanding on my part or group-think at GEI etc. Perhaps I should have been hanging out at Singing Pig etc.!

 

I'm in a similar predicament. A lot of the debate here goes over my head, so I guess I've been putting my faith in those people whose broad views about debt, house prices etc have so far proven to be correct: Peter Schiff, the staff at Moneyweek et al.

 

I work, I'm frugal, I save and I've been locked out of the property market. (Actually that's not quite true. I could have probably bought somewhere poky and horrible a couple of years ago, but the groupthink of "property prices always go up" struck me as terribly mistaken.) I also wanted to turbo-charge my deposit and , when gold was nearing £1,030 and silver approaching £21, I was tempted to sell and make a profit of about 20%. Now I guess I'm looking at a 10% paper loss (several thousand pounds) and wondering how much further prices will fall.

 

I'm actually fairly sanguine about this. If I do lose a few thousand, plus the interest I'd have gained from putting the money in a savings account, I'll put it down to experience. But if my paper losses mount, I don't know how long my resolve will hold. Moreover, if enough investors feel similarly and decide to cut their losses this week, I dread to think what the effect will be.

 

Then there are the siren voices of people like this:

 

Bill Cara

 

In a nutshell, the precious metals are now in a confirmed Bear, and the gold bugs and silver crazies have been duped by their preachers. Now the flock is hearing all the old conspiracy theories, and the dialogue is getting more insane by the day.

 

gold and silver have turned bearish. If that’s a conspiracy, then how is that the commodity index, copper, palladium, platinum, oil (soon), the Euro, British Pound, Canadian and Australian Dollars, and Japanese Yen also turned bearish at the same time? These prices are all linked. We don’t trade in a vacuum.

 

Whenever I hear that financial armageddon is just around the corner, or that some lines on a graph show PM prices about to explode, or [as I did on Jim Sinclair's site and on HPC] that particle experiments at CERN next month might cause the end of the world, my conviction wavers.

 

Although the point about smacking down the gold price at 4.30pm was a good one, I'll admit.

[G0ldfinger]

Hi again,

 

I still have my presentation to prepare and to defend the "impossible".

...

Why shouldn't it be possible? Of course, it could happen. In the 1970s, gold had a huge run-up, then plunged 50%, then had another huge run-up.

50% from $1,000 would be $500. I would be buying all the way down. In fact, silver looks now so attractive to me that I am very, very tempted to buy some on credit (NOT margin).

 

This is exactly when I want to buy: when everyone is predicting the end of a commodities market and price inflation, but the fundamentals scream the opposite.

 

This volatility (in gold) has been predicted by Jim Sinclair for a long time. People on margin will see their lives passing by (is what he said).

 

It's a rollercoaster! Weehheee!

 

EDIT: Last year I thought gold would only by a small chance cross $850 within a year. I didn't even think of $1,000! Now, look where we are. I am tempted to lever myself because gold is DOWN to $850 and below.

[sossij]

What on Earth is all this mithering about?? Why isn't everyone buying? How often have we all wished gold was cheaper and now we have a (ahem) golden opportunity to load up - I've just bagged some more I'd be in for some more at these prices except I'm off on holiday tomorrow... oh well.

 

Remember: nothing has changed - the Fed and the other central banks are pumping enormous amounts of smack into a sick dog and there's ever more parasites bleeding its barely functioning corpse dry - good luck everyone and remember...

 

[bitbigt]

Lease rates rising nicely:

http://66.38.218.33/charts/g_leaserates.html

 

My general view is that this means that people are no longer being encouraged to take gold away to short it to suppress prices.

 

But the other side of the same coin would be that the CBs realise that gold may now be artificially low, and they're better served by getting their gold back to make some money as the price rises.

 

Whichever way you look at it, the gold carry trade was thriving these last few weeks, but its now shutting down even though gold has yet to demonstrably bottom.

[Johan van der Smut]

This from John Nadler neatly sums up the (currently small) 'sell/set a stop-loss' angel on my left shoulder.

 

"Perma-bulls continue to live in denial about the dollar and about the commodities sector. Every drop is a buying opportunity, every rise the start of a new era. But what if - this time - the turn is actually the real thing?

 

Speculative funds poured hundreds of billions into commodities over the past couple of years. Sensing that they had pushed the envelope well past the breaking point, the hedgies are leaving the complex as they perceive that the Fed is not joking about inflation combat, and that regulators are also not joking about oversight of what had become a giant casino - one where "the house" never won. In casino terms, "the die is cast." Rien ne va plus"

 

Most on this site have explained well the 'don't panic' angel on my right shoulder....

 

Nadler at least adds a crumb of comfort at the end:

 

Oversold? Sure. Is the bottom in place? Not so sure. Will stormy sessions continue to unnerve? Absolutely sure. Liquidate core holdings out of fear? Not on your life. Holding on to 'life insurance' for your asset basket? Priceless.

[lowrentyieldmakessense(honest!)]

Why shouldn't it be possible? Of course, it could happen. In the 1970s, gold had a huge run-up, then plunged 50%, then had another huge run-up.

50% from $1,000 would be $500. I would be buying all the way down. In fact, silver looks now so attractive to me that I am very, very tempted to buy some on credit (NOT margin).

 

be careful

 

plunges in the 70's - yep must be the start of a commodities bear market

 

pretty amazing the drop given the events in Georgia

 

maybe Precthers right re gold to fall (i'm still buying though)

[mongoose]

What are peoples thoughts on the 300dma? We are at about that level, and that has held well over the past 3-4 years.

[bitbigt]

This from John Nadler neatly sums up the (currently small) 'sell/set a stop-loss' angel on my left shoulder.

 

"Perma-bulls continue to live in denial about the dollar and about the commodities sector. Every drop is a buying opportunity, every rise the start of a new era. But what if - this time - the turn is actually the real thing?

 

Speculative funds poured hundreds of billions into commodities over the past couple of years. Sensing that they had pushed the envelope well past the breaking point, the hedgies are leaving the complex as they perceive that the Fed is not joking about inflation combat, and that regulators are also not joking about oversight of what had become a giant casino - one where "the house" never won. In casino terms, "the die is cast." Rien ne va plus"

 

Most on this site have explained well the 'don't panic' angel on my right shoulder....

Nadler - "he doth protest too much"

Let him throw his insults, if he reads the market differently to me and others, so be it.

 

...And for the record, I'm not a gold 'Perma-bull' at all. Check my posts, I've said I was waiting on a top of 1200-1500 to exit safely. I think it 'could' go a lot higher in this decade, but risk-reward seems less favorable at those levels, and anyway I'd be happy to then have more than doubled my money.

 

The fundamentals really have not changed (if anything they're getting even more bullish for gold), and until they do I see no reason to change my long term investment strategy.

 

It's interesting how so many people (perhaps Nadler amongst them) just see a blindingly obvious current trend (e.g., gold falling) and feel they need to then argue its going a lot further. Nothing moves in one direction forever, and its often when everyone's saying 'I told you so' that the market turns.

[Johan van der Smut]

Why shouldn't it be possible? Of course, it could happen. In the 1970s, gold had a huge run-up, then plunged 50%, then had another huge run-up.

50% from $1,000 would be $500. I would be buying all the way down. In fact, silver looks now so attractive to me that I am very, very tempted to buy some on credit (NOT margin).

 

This is exactly when I want to buy: when everyone is predicting the end of a commodities market and price inflation, but the fundamentals scream the opposite.

 

This volatility (in gold) has been predicted by Jim Sinclair for a long time. People on margin will see their lives passing by (is what he said).

 

It's a rollercoaster! Weehheee!

 

The problem that some of us have is that it's difficult to judge whether your position is self assured or fundamentalist.

[CIGA]

Markets are 90% psychological 10% logical

Don't be in that 90%, think logically - Gold and Silver have very very strong fundamentals.

 

Hold tight, this bull doesn't want anyone along for the ride and will try anything to push you off.

 

 

 

[torino]

And your reasons for wanting to find this out are? Why exactly do you have to 'defend gold going as low as 666'? What do you mean by defend? I assume some sort of debate - if so, with whom, why etc. If you provide more background you may get some responses.

 

 

Why : because it is my homework.

with whom : my training buddies.

why: because that's the scenario I have been given to defend.

 

any input from you?

 

[bitbigt]

The problem that some of us have is that it's difficult to judge whether your position is self assured or fundamentalist.

Hi Johan van der Smut

Am I right in sensing that you're looking for something solid to grasp onto to help you choosing how to manage your PM investments? If so, please may I suggest you bring it back to basics: Just decide for yourself whether you think the next few years will be all about inflation/stagflation or deflation - without getting confused into thinking the credit crunch 'is' deflation (as its not)

 

If the former, keep and buy, if the latter then sell

 

It really is as simple as that, and what's happening now is short term volatility which PMs will always be subject to

...because to paraphrase

"GOLD Markets are 99% psychological 1% logical in the short term"