GOLD

[PricedOutNative]

No one really knows; flip a coin!

I was convinced by the Gold bulls’ arguments but the recent assent of the US dollar and the fall of gold have perplexed me…

 

 

 

 

Would suit me fine.

 

 

Guys, help me out here please.

 

A lower end six figs (Euros) has just arrived in our BV account.

 

Of course we are itching (not) to commit short-term economic suicide.

 

It really does look wise to do nothing for a while, monitor closely, (& forget the interest loss).

 

You agree?

 

[romans holiday]

Would suit me fine.

 

 

Guys, help me out here please.

 

A lower end six figs (Euros) has just arrived in our BV account.

 

Of course we are itching (not) to commit short-term economic suicide.

 

It really does look wise to do nothing for a while, monitor closely, (& forget the interest loss).

 

You agree?

 

No one knows for certain the short term price of gold. I believe a few people have advised you before to average a certain amount in over a period of time. Sounds like good advice to me.

[Steve Netwriter]

Would suit me fine.

 

 

Guys, help me out here please.

 

A lower end six figs (Euros) has just arrived in our BV account.

 

Of course we are itching (not) to commit short-term economic suicide.

 

It really does look wise to do nothing for a while, monitor closely, (& forget the interest loss).

 

You agree?

 

Hi Laura,

I think we need to split this into short-term and long-term.

 

1. First assess whether long-term gold/silver are in a bull market. If the answer is no.......

 

2. Now consider how best to invest short-term, to minimise short-term angst.

 

My view:

1. Buy a minimum say 5 to 10% gold/silver as insurance.

2. Once that is out of the way, now the question is what % of your total portfolio to put into PMs.

3. Then it comes to short-term timing.

Options:

a. Go all in now

b. Average in over a decided period, like 6 weeks/months.

c. Try and spot the best time (assuming that's not now) and go all in then.

d. Split the money into say 4 chunks, and try and spot 4x best times.

 

The only caveat is the potential for a severe divergence between paper & physical prices, and potential difficulty getting physical.

Who knows what might happen with a black swan event.

 

IMO if you can pick a good dip, it's better to go more silver than gold, simply because it will have dipped more.

Then when it's looking toppy, swap some silver for gold.

 

The best time to buy seems to be when everyone is saying sell, or are calling the end of the bull market.

 

The thing is, if this is only the start of a bull market, and if Krassimir is right about a crisis causing a major rise, then whatever you do now won't matter in 4 years time.

 

You could always check your horoscope

 

[confounded]

No one really knows; flip a coin!

I was convinced by the Gold bulls’ arguments but the recent assent of the US dollar and the fall of gold have perplexed me…

 

You have just given me an idea!

 

If you had enough money and used a leveraged and cheap way to buy big or sell into a market you could move a market against it's fundamentals, this in turn could make even the most hardened informed investors question their resolve and move out of that particular area to another, which in the case of gold would be less damaging to current establishments aim.

 

You could do this in a number of markets, even the stock markets! Wow I feel a real plan coming where you could intervene in the DOW which the rest of the World markets tracks and stave off one of the biggest crashes in history. You could manipulate the futures markets when ever bad news comes out to soften the initial fall, you could even make timely interjection each time the market starts to plunge in live trading, this way you could reduce fear and prevent a very damaging panic induced crash.

 

Fortunately for the guys in charge they don’t need to do this because the DOW is behaving itself and the big warning signal of precious metals is waning by itself, but at least it is something they could try in the future if we have a real monetary crisis on our hands.

 

[bitbigt]

As per my post (did you read it? ), surely this wouldn't happen if the loan capital was destroyed as it was repaid -- to counterbalance the money creation when the load was taken out.

Hi OJ - yes I read it, but couldn't follow the logic (plus had no time then to write a long response)

 

The loan capital, even today, is already destroyed by the creditor paying off his/her loan. But the very fact that any loans are possible (even if just to government) means that, until that loan is full repaid, the money supply has been increased. That increase devalues money and causes inflation. That inflation means that future loans people take out must be bigger (in dollar terms), so continuing the money supply growth ad infinitum.

 

So in short, as I understand it, any borrowing at all in society will create inflation and make it impossible to tie a currency to a never increasing element like gold

 

EDIT: My preferred solution is to simply allow loans but with much higher interest rates, to the degree that the money supply increases only very slowly and at a rate that matches national productivity growth. That way one pound today will buy the same amount of stuff at any time in the future, even though there will be a few more pounds around. But this still precludes a link to gold.

[warpig]

Don't bank on it. I would certainly say the time to buy was last Friday and personally assuming the sale of my house goes through I will initially put 60% of this in to gold/silver. I fail to see why gold is repeatedly over stated as a commodity, central banks do not hoard rice or copper. I think this distinction will soon become prevalent. My advice is average in now.

 

Would suit me fine.

 

 

Guys, help me out here please.

 

A lower end six figs (Euros) has just arrived in our BV account.

 

Of course we are itching (not) to commit short-term economic suicide.

 

It really does look wise to do nothing for a while, monitor closely, (& forget the interest loss).

 

You agree?

 

[Bobsta]

I fail to see why gold is repeatedly over stated as a commodity, central banks do not hoard rice or copper.

A bloody good point, well made! Thanks, I'll use that little nugget (no pun intended) in future conversations on this topic.

 

Laura, I'd definitely convert at least 10% today/this week. I'm a GBP-holder and look what's happened to that against the USD lately.

 

It's your money and your call, but leaving it all there earning no interest when we're nearing the end of August?..... it just wouldn't be my strategy.

[bitbigt]

Hi OJ - yes I read it, but couldn't follow the logic (plus had no time then to write a long response)

The loan capital, even today, is already destroyed by the creditor paying off his/her loan. But the very fact that any loans are possible (even if just to government) means that, until that loan is full repaid, the money supply has been increased. That increase devalues money and causes inflation. That inflation means that future loans people take out must be bigger (in dollar terms), so continuing the money supply growth ad infinitum.

Then again, OJ, I think you may be on to something.

 

There are 2 ways to stop the money supply growing.

 

a. don't allow borrowing (what I was suggesting)

b. ensure that new debt issuance per year is never greater than the amount of old debt being repaid (a version of what you were suggesting)

 

So via option 'b' we could have some borrowing and still avoid inflation, and thereby be able to link the currency to gold!

 

...growth would be slower than it is at present, but

- it would be sustainable without the boom and bust turmoil

- it would reduce the wealth differential between rich and poor

[warpig]

Good advice Steve I plan to do this to bolster my holdings. By the way, I'm a Gemini so I don't think this will help and guide me in one direction!

 

IMO if you can pick a good dip, it's better to go more silver than gold, simply because it will have dipped more.

Then when it's looking toppy, swap some silver for gold.

 

[Justin Thyme]

OMG Freddie and Fannie are simply being HOSED !!!! 20% down . . . Paulson's gonna have to step up

[bitbigt]

Oil shooting up, but PMs not following. Disappointing!

[Justin Thyme]

Oil shooting up, but PMs not following. Disappointing!

 

The tie WILL be cut soon.

 

[bitbigt]

The tie WILL be cut soon.

Fine by me - so long as this involves gold going up and oil going down (which will stave off a slowdown and thereby promote inflation and the gold price increase)

....yes, I know the market will never see it that way

 

Just now, it's completely the other way around

[sossij]

OMG Freddie and Fannie are simply being HOSED !!!! 20% down . . . Paulson's gonna have to step up

 

 

[ologhai]

British Bulls have posted a 'BUY-IF' recommendation today:

 

British Bulls.

 

Whatever THAT means...

[azazel]

British Bulls have posted a 'BUY-IF' recommendation today:

 

British Bulls.

 

Whatever THAT means...

 

I think they are suggesting that we might be at the bottom of the latest fall. Buy with caution having done the research they suggest. They will post a buy confirmed once they are sure.

[G0ldfinger]

This extremely interesting piece was posted by UKGeorge on Axstone's thread on GIM. I improved formatting a little. Bold has been added by me.

 

http://goldismoney.info/forums/showpost.ph...postcount=16610

Subject: UBS Metals Daily: 20/08/08: "Busiest in My Career"

 

We had a long conversation with our physical gold specialist in Zurich yesterday as he wanted to update us on what had gone on in the market over the past few weeks. Erwin, who has traded our physical book for 20years, reports that over the past two weeks our vault staff have been the busiest he can remember across his career with demand for all types of gold from all sorts of clients. The only time we were as busy as this was in the first half of 2005, when rampant demand from India bought allthe gold we could supply. Recent demand has been as strong as this, but more geographically spread: the Middle East, some parts of Europe andother Asia (ex India) have also seen very good buying, with refineries struggling to supply their customer needs. We have heard anecdotal evidence of Indian kilobar premiums above $2/oz, much higher than theusual 60-80c, and other premiums are also extremely strong both inSwitzerland and in the important gold consuming markets. The demand we have seen is strongly suggestive of an evaporation of scrap supply,something that has been a large part of the gold market over the past year, which is another important sign. As the largest clearer in Switzerland we can say with confidence that the physical gold market has demonstrated that it collectively considers gold to be attractively priced between $780 and $820/oz. The last time we saw strong (but not this strong) gold demand was in August 2007 withgold around $660/oz. We had estimated that gold would have to get downto $700-750/oz to be stimulate demand, but this proved too pessimistic:after a year of dull fundamental demand, the gold industry can wait no longer and has had to pay up to $800/oz, a much higher price than we expected. So why, in the face of this very strong physical demand, has gold fallen? The answer is simple: long liquidation by investors andspeculators trading on the OTC and futures markets. The accompanying chart shows how Tocom open interest fell has declined over the pastcouple of months: we showed the COTR for Comex gold on Monday in the daily. Gold ETF holdings have held up pretty well so far with no sign ofthe frantic liquidation seen in the Platinum ETF. But a combination of speculative liquidation and new short selling was enough to counter thestrong physical demand, and gold sank lower. Another way of looking atthe impact of the strong fundamental demand is in gold's performance relative to other precious metals. As we noted in yesterday's Metals Daily, gold has greatly outperformed silver, platinum and palladium and we attribute this to the much greater proportion of price elastic demand for gold than for the other precious metals. The final point to consider is that the recent transactions have been between fast money, selling; and sticky money, buying. A large amount of gold has moved into the hands of longer term holders. And while the frantic demand of the past two or three weeks will probably soon slow, that won't matter: long positioning is now greatly reduced. Any shorts looking to cover may find fewer sellers than they expect considering thestrong hands that now hold gold. We hold our one and three monthforecasts for gold at $850 and $900/oz respectively. All that stands in the way of an impressive tactical gold rally is a correction in the dollar. If you are confident that EURUSD has seen its low for the nearterm, buy gold now. Other short term precious metals forecasts adjusted Following the sell-off across the precious metals markets that has seenall metals fall, we have adjusted our short-term precious metalsforecasts, something that we did not do when we cut our short-term goldprice forecasts a couple of weeks ago. In line with our view in gold, wesee some upside in one month for all precious metals and further upsideover a three month period. We now forecast that platinum will trade to$1550/oz in one month and $1700/oz in three months; we see palladium at$300/oz and $350/oz in one and three months respectively; we expectsilver to increase to $14.70/oz in one month and $16.40 in three months;and we see some recovery in the rhodium price from current levels justabove $4000/oz, although we do not recommend investors trade rhodium dueto the illiquid, opaque nature of this market.

[wrongmove]

This extremely interesting piece was posted by UKGeorge on Axstone's thread on GIM. I improved formatting a little. Bold has been added by me.

 

http://goldismoney.info/forums/showpost.ph...postcount=16610

 

All sounds very plausible to me. The only gold fundamental I understand is jewelry demand (both as adornment and a long term wealth store). But this really dried up over $900. At around $800, it is back, and their will be some "pent-up" demand to satisify which may drive the price up to $900 dollars through the "gold season". They even put the bug fall down to longs hitting their stops, not the bogeyman.

 

But from a punters point of view, this will only take the price back to what it was a month ago, and somewhat less than it has been. It seems that for prices much beyond $900, large speculative demand is needed, and the fundamentals are shot. So while it may go much higher than this, it will be a bubble like any other. Money to be made with good timing, but same as everything else.

 

 

 

 

 

 

 

[warpig]

Can you elaborate please?

 

the fundamentals are shot.

 

[wrongmove]

Can you elaborate please?

 

I thought I had!

 

The demand for jewelry.

 

 

[G0ldfinger]

The fundamentals are stronger than ever. The USD is doomed with what is going on in Fannie/Freddie at the moment. Oil will also soon be back over $130 because supply is falling off the cliff and Russia/Georgia/Iran/Pakistan is not particularly helpful either.

 

The flight from the Dollar and othe fiat like EUR/Sterling will be the main driver. And on dips, when everyone has doubt, the jewelery brigade helps out.

[wrongmove]

The fundamentals are stronger than ever. The USD is doomed with what is going on in Fannie/Freddie at the moment. Oil will also soon be back over $130 because supply is falling off the cliff and Russia/Georgia/Iran/Pakistan is not particularly helpful either.

 

The flight from the Dollar and othe fiat like EUR/Sterling will be the main driver. And on dips, when everyone has doubt, the jewelery brigade helps out.

 

The "jewelry brigade" are the only people who generate demand for physical. It was the speculative paper game that took gold up to above $1000 and back down again. Physical wasn't selling at those prices.

 

 

The rest is speculation to me. No-one knows what the future holds, though a few vested interests like to pretend they do ($1200 by Christmas anyone?). Like all speculation, it may be right, or it may be wrong, but to describe it as "fundamentals" is to devalue that word and its meaning in the investment wprld. (All very much IMHO, of course)

 

 

 

 

[G0ldfinger]

The "jewelry brigade" are the only people who generate demand for physical. It was the speculative paper game that took gold up to above $1000 and back down again. Physical wasn't selling at those prices.

 

 

The rest is speculation to me. No-one knows what the future holds, though a few vested interests like to pretend they do ($1200 by Christmas anyone?). Like all speculation, it may be right, or it may be wrong, but to describe it as "fundamentals" is to devalue that word and its meaning in the investment wprld. (All very much IMHO, of course)

Wrongmove, I think you're wrong on all accounts here. Of course physical was selling at $1,000 - how, otherwise, would you have a London Fixing at this price??

 

Second, thinking that jewelery demand is the only fundamental in gold is a little like thinking that raisins are the only fundamental for grapes (whilst totally neglecting the much bigger wine market).

[ologhai]

Hardly very technical, but it was interesting to me to see an interview with Paul Tustain (CEO of BullionVault):

 

Video on Google Video.

[wrongmove]

Wrongmove, I think you're wrong on all accounts here.

 

I would be extremely disappointed if that was not the case.

 

 

Of course physical was selling at $1,000 - how, otherwise, would you have a London Fixing at this price??

 

Of course some was, but only to gold bugs and very desperate jewelers. There is article after article on Kitco, for example, describing what happened to Indian and physical demand in general in the Spring. It crashed.

 

 

Second, thinking that jewelery demand is the only fundamental in gold is a little like thinking that raisins are the only fundamental for grapes (whilst totally neglecting the much bigger wine market).

 

Totally false analogy. Speculators are not buying physical gold (except for a very few). All wine drinkers are buying physical. The demand for physical from gold bugs is tiny and seems to be largely satisfied by frikkin' eBay, FFS. eBay shifts very little physical indeed, on the scale of things.