GOLD

[Pixel8r]

By looking at the two charts below, we should see silver lead gold higher over the next couple of weeks.

 

 

[Steve Netwriter]

Precious metals find floor after sell-off

Friday August 15

http://biz.yahoo.com/rb/080815/markets_precious.html

 

Losses across precious metals were led by silver, which slipped 12 percent or $1.76 an ounce in Asian trade, amid talk of large-scale selling by a Far Eastern bank.

 

 

[notanewmember]

Thats, fine - banks sell, we should BUY.

[rgleeson]

I have to say, I'm as excited aboout PM now as i've been in 12 months. The physical shortage hints to me that natural cornering of the market that some predicted could be at hand.

 

The alternative explantation, that the physical vendors have all gone Short doesn't ring true.

 

If I was investing in Silver (which I wish I had some money for) I sure as hell wouldnt be placing advance order for silver with vendors that promise delivery in 90 days, that sounds like a promise to pay bearer to me!! and introduces counter part risk!!!!!

[rgleeson]

If the bullion vendors take payment but promise delivery in the future (and they arent taking a short position), then they must have a "paper" contract for delivery to secure thier future supply.

 

This is the event that could cause the unwind. But I wouldnt trust that supply to come through...

[romans holiday]

...do you, however, buy into the argument that inflation will be good for gold

...do you, however, agree that a weaker pound does stoke up inflation

 

More generally, I think agree with your general thrust if what you're saying is that, since all fiat currencies will become worth less (whether or not they are eventually worthless) then it will hard to notice that unfolding devaluation as none of them will provide a reference point to 'see' those falls against

 

That ultimate reference will be the cost of 'stuff' that does not depend upon credit (e.g., food, gold, energy, rather than house prices, stock markets). And stuff going up vs currencies is inflation.

 

Well, I think both the inflationary and deflationary forces presently at work are ultimately good for gold. Gold will always be a safe haven in a time of financial instability. I think the prime mover of the gold price in the short/medium term will not be the fundamentals and our apriori rationalizations. I am very wary of buying into some foolproof argument or system as I suspect I will only be disappointed when the market refuses to conform to it. Of more importance is the way in which market pyschology plays out. I imagine this will be extremely erratic and the charts rather than portraying some sensible pattern for us to discern will show the palpitations of a market in heart attack mode.

 

Also, am not sure about whether fiat needs to be hyperinflated away in order for gold to come into its own. There are many possible end games. Possibly, a country like the states will look into the abyss of hyper-inflation and pull back. I still think gold would be good even in a deflationary depression as dollars would have been debased and more powerful currencies would be competing for commodities. Gold would be one such stronger currency. But I am only speculating here. I find it more useful to imagine a few possible outcomes than argue for one. The only certainty is uncertainty... opps... besides gold being a good bet in any eventuality involving a crisis.

 

Edited to add; The reason I posted on this topic was to state that deflationary forces are nothing for gold holders to freak out over.

[warpig]

I think people over estimate the time it will take for this to play out. How many more straws are there to put on the camel's back?

 

Grrrrr. Head hurts now.

 

Panic Selling in Gold: What's Next?

 

http://www.minyanville.com/articles/index/a/18537

 

 

The author (a former racehorse tipster and philosophy graduate !) seems to think deleveraging will neutralise and overpower inflationary pressures. Anyone like to comment on that?

 

[romans holiday]

I think people over estimate the time it will take for this to play out. How many more straws are there to put on the camel's back?

 

Yeah, but it is one tough stubborn camel with a lot of VI looking after it. Camels know how to put up a good fight.

[warpig]

Agreed, but you will only know with hindsight that it was the last straw. The prospect of sitting out of the market waiting for a huge correction fills me with fear.

 

Yeah, but it is one tough stubborn camel with a lot of VI looking after it. Camels know how to put up a good fight.

 

[rgleeson]

 

Physical disconnect:

 

http://silverstockreport.com/2008/disconnect.html

[romans holiday]

Agreed, but you will only know with hindsight that it was the last straw. The prospect of sitting out of the market waiting for a huge correction fills me with fear.

 

Yes, me too! The main thing is to have a position and hold it. Short term prices mean diddley squat. we know that there will be panic selling... then panic buying.... main thing is to add to your postion when you can and keep your eye on the end prize.

[Steve Netwriter]

Al talks with Bob Moriarty and Greg McCoach about US economic issues.

http://www.kereport.com/audio/0816-04.mp3

 

Bob (of http://321gold.com/ ) has a very recognisable voice

 

Stock market major crash by Oct.

Totally against the manipulation conspiracy theories, but...Central bank intervention to push up the U$.

Gold is at a bottom.

The danger is not subprime. The danger is US$596 trillion of derivatives.

 

 

16th March 2008 Bob prediction (as mentioned in the one above):

 

Bob Moriarty tells us about his newest dire prediction for the economy, and if his record tells us anything we should be worried.

http://www.kereport.com/audio/0315-04.mp3

[Dispassion]

Yes, me too! The main thing is to have a position and hold it. Short term prices mean diddley squat. we know that there will be panic selling... then panic buying.... main thing is to add to your postion when you can and keep your eye on the end prize.

 

I agree, panic buying or selling isn't profitable, but the thing that I don't see on this forum is discussion about exit strategy. Most posters hold gold, want the price to go up and don't like to see negative posts about it, but to have a forum that only attracts people who believe that the gold market will outperform all others indefinitely is likely to mask the risks.

[romans holiday]

I agree, panic buying or selling isn't profitable, but the thing that I don't see on this forum is discussion about exit strategy. Most posters hold gold, want the price to go up and don't like to see negative posts about it, but to have a forum that only attracts people who believe that the gold market will outperform all others indefinitely is likely to mask the risks.

 

There is a thread on exit strategy somewhere here. If I remember correctly, GF put a lot of time into this.

 

My personal exit strategy is to completely ignore the short term price of gold and focus instead on the long term ratio of gold to property and the likes of the DOW. As this ratio becomes more favorable, I will slowly start to exit my position. I am expecting this to be near the end of a secular bull market culminating in a manic phase where every man and his dog are wanting to buy gold/silver. In my opinion, this is a few years away.

 

As far as the short term POG goes, I expect to see it go down... then up... then down... then sideways ... up and down again... as Mr Market panic buys and sells.... shorts, squeezes and covers.

[G0ldfinger]

There is a thread on exit strategy somewhere here. If I remember correctly, GF put a lot of time into this.

...

Sorta. http://goldismoney.info/forums/showthread.php?t=195370

[Dispassion]

$850 region looks to have lots of support based on MAs, previous bottoms and retracements, but for it to hold are we predicting the end of the correlation with Euro/Dollar and Dollar Index, or are we prediciting a change of direction for the dollar too?

 

Apologies, if this is old news, I've been away for the last week or so.

 

11 Aug, John Authers demonstrates that the long term correlation of commodities with the dollar has ended.

http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html

 

It looks to me that the threat of global recession is leading the markets, driving down commodites, which has lead to the strengthening of the dollar and that gold's response is still more closely matched to the dollar. If we are to see a global recession and continuing strengthening of the dollar, do people see an end to this trend too and over what timescale, or are still people looking to TA as a predictor of future gold price?

[Pixel8r]

It looks to me that the threat of global recession is leading the markets, driving down commodites, which has lead to the strengthening of the dollar and that gold's response is still more closely matched to the dollar. If we are to see a global recession and continuing strengthening of the dollar, do people see an end to this trend too and over what timescale, or are still people looking to TA as a predictor of future gold price?

 

I think this dollar strength is a temporary thing. They are just paving the way for the next wave of write-downs. I don't buy into the bubble popping of commodities, I believe this is just a healthy correction in a bull market. Think the commodities super cycle will be resuming soon.

 

Ask yourself how can the dollar be gaining strength when they are bailing out everything, while running the printing presses at full speed.

[notanewmember]

http://www.marketoracle.co.uk/index.php?na...le&sid=5913

 

Gold and Silver Extremely Oversold

".....Large government mints and refiners are having difficulty meeting the demand and some are rationing supply to large dealers.

 

Large wholesalers, retailers and institutions such as the Perth Mint are experiencing huge demand and even as spot prices have been falling sharply, there are little or no sellers and buyers are continuing to vastly outnumber sellers.

 

Another indication of the sharp tightness in the bullion market is seen in the fact that premiums are rising very significantly on nearly all bullion coins and bars. Wholesale prices for some bullion coins have risen 2% to 3% in a matter of weeks.

 

This huge demand is not being reflected in the futures market where the speculative hot money of large hedge funds and institutions with short term horizons is leading to materially lower prices. Leveraged margin players who were long have had their heads handed to them on a plate as the shorts are pushing prices as low as possible in order to maximise profits.

 

Clearly, this situation is not sustainable as ultimately the laws of supply and demand of the physical metal will dictate prices and not the speculative and manipulative antics of black box, momentum following traders.

 

Large, smart money is accumulating physical bullion away from the more risky leveraged casino that is the futures market. Thus, this latest of vicious sell off is set to be another sharp correction in the gold bull market designed to as usual flush out the weak hands. The bounce when it comes will likely be just as dramatic as the shorts attempt to cover en masse. Should some large players decide to stand for delivery of near term futures contracts when they expire, then we could see some real fireworks and gold will be above $1,000/oz in very short order."

[cgnao]

This is the mark of the derivative beast.

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Bernanke Tries to Define What Institutions Fed Could Let Fail

 

Aug. 18 (Bloomberg) -- Ben S. Bernanke is still trying to define which financial institutions it's safe to let fail. The longer it takes him to decide, the tougher the decision becomes.

 

In the year since credit markets seized up, the 54-year- old Federal Reserve chairman has repeatedly expanded the central bank's protective role, turning its balance sheet into a parking lot for Wall Street's hard-to-finance bonds and offering loans through its discount window to investment banks and mortgage firms Fannie Mae and Freddie Mac.

 

The lack of clearly defined limits may put the Fed's independence at risk as Congress discovers that its $900 billion portfolio can be used for emergency bailouts that might otherwise require politically sensitive appropriations and taxes.

[kernull]

a prediction of silver to 6 bucks:

http://4.bp.blogspot.com/_R55OJ80AZ4U/SKlw...BADgoodNews.png

source: http://denaliguidesummit.blogspot.com/

if oil goes to 80, gold hits 600 and gold/silver ratio goes to 100 at that moment, this is price is possible.

[HPCsoYESTERDAY]

a prediction of silver to 6 bucks:

http://4.bp.blogspot.com/_R55OJ80AZ4U/SKlw...BADgoodNews.png

source: http://denaliguidesummit.blogspot.com/

if oil goes to 80, gold hits 600 and gold/silver ratio goes to 100 at that moment, this is price is possible.

 

Try buying physical silver for anything near spot at the moment.

 

In other news, Freddie mac ends up 25% down on the day.

 

A paper price of $6 for silver is exactly that, a paper price.

[kernull]

not yet for dollar to reverse. however oil has the last word, should speak this week.

[G0ldfinger]

http://www.timesonline.co.uk/tol/money/pro...icle4559063.ece

Melanie Bien at broker Savills Private Finance, says: “Property is a long-term investment so to suggest that investors will now start selling up because prices have fallen over the past year after years of house-price growth is madness. With prices falling, now is not a good time to sell. The best thing landlords can do is sit tight - and the vast majority will do exactly that. The housing market will recover and some normality will resume in time."

How can someone be so clueless??

[kernull]

Try buying physical silver for anything near spot at the moment.

 

In other news, Freddie mac ends up 25% down on the day.

 

A paper price of $6 for silver is exactly that, a paper price.

 

I just spoke to a jeweler , friend of mine that lives in Taxco, the Silver capital of Mexico, he said this is a good time to buy and they sell at (day_high+day_low) / 2 of NY spot price. This problem of delivery happens only in US I guess.

[njpurser]

http://www.timesonline.co.uk/tol/money/pro...icle4559063.ece

 

How can someone be so clueless??

By choice, wunderkind, by choice.

 

Nick