GOLD

[HPCsoYESTERDAY]

link plays video - http://finance.yahoo.com/tech-ticker/artic...DJI,XLF,USO,XLE

 

Washington Wants Oil Down, Stocks Up Before Election, Harrison Says

 

Posted Sep 09, 2008 01:03pm EDT by Aaron Task in Investing, Commodities, Banking

 

With the nationalization of Fannie Mae and Freddie Mac, it's impossible to argue the Federal government isn't playing a crucial and growing role in the financial markets.

 

"Call it socialism, manipulation, intervention, [or] desperation. Call it what you will but don't underestimate the mandate," says Todd Harrison, CEO of Minyanville.com.

 

"The agenda [of policymakers] is very clear," he continues. "They need to stabilize the system [to] avoid the unthinkable -- a crash that's going to suck global capital markets in the abyss."

 

Certainly there's an economic benefit to avoiding a global financial market collapse. But Harrison has long argued policymakers had two major goals ahead of the election they are still pursuing: lower oil prices to $100 or below, and get equity prices higher.

 

Given all that's transpired in the past year, from the bailout of Bear Stearns to the Fed's special financial vehicles for Wall Street to this weekend's intervention, one thing is clear: The "invisible hand" in the markets these days belongs to Uncle Sam

[1waving]

The possible A-B-C down from the all time high with the C wave breaking down into a 5 wave form looks to be in it's final wave v with just one more low to complete the pattern, probably in the next couple of days.

 

 

 

 

Rapid price rejection from a new low would be a good start for a bullish move.

 

.

 

[ziknik]

Article on gold price in Telegraph today. I’ve not noticed it posted.

 

http://www.telegraph.co.uk/money/main.jhtm.../bcngold109.xml

 

So what about the short term outlook?

…

After a six-year bull market, bullion may well be in for a consolidation phase within the $750 - to $1000 band. It should find a floor at around $750 (a price any lower would result in mine closures) but will struggle to hold onto any gains above $1000.

 

If our assumption is correct, gold equity shares that can show consistent cost savings and improved production targets should be able to show some meaningful earnings growth.

 

For once, we believe investors should find better performance from gold shares than exchange traded funds, as the mines come to terms with the spiralling cost factor that has hurt them so much in the past.

 

And over the longer term?

 

Over the longer term, we remain positive on gold, based on a mix of macro and supply-demand drivers. The forces that have propelled gold for the past 5 years are firmly in place, and policy prescriptions for the credit crisis seem powerfully and uniformly reflationary.

 

Gold has shown resilience during a period of seasonal slack, while weathering investor profit-taking without material damage.

 

We believe gold will be well positioned into the final quarter of the year, when fabrication tightens the market.

 

This does not map directly to gold prices, but prepares the ground for macro catalysts to enter. While these are impossible to forecast, with systemic financial stresses intensifying in the US and spreading to Europe and emerging markets, the probabilities favour gold.

 

[crudeFool]

Article on gold price in Telegraph today. I’ve not noticed it posted.

 

For once, we believe investors should find better performance from gold shares than exchange traded funds, as the mines come to terms with the spiralling cost factor that has hurt them so much in the past.

 

Wish I could bring myself to buy any more gold shares, which is probably a good signal to myself to do so. I've been killed over the last couple of months, despite having some of the shares quite a long time:

• Blackrock Gold and General - main holding, still up 30%
• Minefinders - down almost 50% - sob
• Tyhee - even worse - down 60% -wail
• Silver Wheaton - down 10%, was up 100%
• Emed - still up 10% on this, but only small holding

 

Still, you got to laugh.

 

My big mistake was greed. Had money in gold ETF, which if I'd left the money in there would still have been doing pretty well now, but nooo, crude knew better. When the price of gold was reaching record levels, I decided I could make even more money with the gearing the shares would give me. You live and learn and fortunantely overall I'm still in profit, but this is thanks to getting into PM's back in 2005. If I'd been a late comer I'd never touch them again!

 

I seem to buy shares when I should be buying physical and buying physical when I should be in shares! What are people thinking of doing now - get physical which in GBP terms is still quite high or buy more shares which have been hammered / mauled? I might just start paying bits off my mortgage with the £500/month I've been gambling, I mean investing

 

Regards,

crude.

[gasket37]

Wish I could bring myself to buy any more gold shares, which is probably a good signal to myself to do so...

 

great post - brutal honesty

 

and hello to another EMED holder

 

i was looking at minefinders myself a couple of weeks ago and they were around $10. haven't looked at the chart until just now and i see what you mean.

 

they have a great 'story' though - john dooty (sic) on FSN this reckons someone will take them out at these sort of levels @ around $12 share (??)

 

so you might get a profit yet!

 

 

 

 

[Ret45]

On the train home this evening was reading the new Soros book on the credit crisis. It is well worth a read, he has called the current events very well. From a staid, academic type investor, some of views are hair-raising "A significant part of the monetary reserves currently held in US government bonds will be converted into real assets. This will reinforce and extend the current commodity boom and create inflationary pressures. The decline of the dollar as the generally accepted reserve currency will have far reaching political consequences and raise the spectre of a breakdown in the prevailing world order. Generally speaking, we are liable to pass through a period of great uncertainty and destruction of financial wealth before a new ordeer emerges"

 

We live in interesting times, my friends. Hold fast, we are not the mad ones. I give it six months in a post US election environment before the walls come tumbling down.

 

Very pleased to be getting filled at USD 778! Transferring more funds to BV as I speak.

 

Ret

[mattyboy]

OK - so we're all a bit bruised.

Here's a hypothetical question:

 

If you could get back all your losses on PM's and Juniors now, but only on the condition that you put all the money into a bank account and left it there (GBP, AUD or USD let's say) - would you do it?

 

 

[Ret45]

we can't expect the markets to act rationally on a month to month basis. This is a big dip in an even bigger upward trend, anything else defies all markets laws, and you can only defy them for so long.

[electroweak]

we can't expect the markets to act rationally on a month to month basis. This is a big dip in an even bigger upward trend, anything else defies all markets laws, and you can only defy them for so long.

I reckon this down move is LEHman unwinding some massive gold position out of sheer need for capital.

[FLASH]

OK - so we're all a bit bruised.

Here's a hypothetical question:

 

If you could get back all your losses on PM's and Juniors now, but only on the condition that you put all the money into a bank account and left it there (GBP, AUD or USD let's say) - would you do it?

 

You should suggest this offer to the central banks im sure they would be more than happy to bail us out on the condition we never purchase PM's again

[drbubb]

That's brave. How far out are you going? I'm mulling this too. January 65s maybe.

 

not many- basically a reset on a part of the prior position

 

by day's end, it didnt look so clever

 

[drbubb]

great post - brutal honesty

 

and hello to another EMED holder

 

i was looking at minefinders myself a couple of weeks ago and they were around $10. haven't looked at the chart until just now and i see what you mean.

 

they have a great 'story' though - john dooty (sic) on FSN this reckons someone will take them out at these sort of levels @ around $12 share (??)

 

so you might get a profit yet!

be careful,

i have heard some doubts about how easy it will be to make money mining that deposit

 

[narrowescape]

Not far off a 5% drop now

[ares]

Yeah, this hammering has really hurt. Over the last two years have consistently made most of the common mistakes, over leverage, selling low and buying high, not taking profits, playing with future (very bad idea!) etc but I had thought I was learning lessons and so losing a bit on the way was part of it.

 

But facing the latest sell off has really had my portfolio hit rock bottom, tried to call the bottom and took on a bit of leverage turned out trying to catch a falling knife is a bad idea, funny that

 

Expensive lessons... but valuable none the less. Still my 50% in physical G&S are not going anywhere, and I am young always time to make more money (I hope!) key will be trying to keep my family prepared for the coming times... maybe they can benefit from my lessons lol

 

Any of you guys suffered really bad losses, and how did you turn things around?

[anciom]

Yeah, this hammering has really hurt. Over the last two years have consistently made most of the common mistakes, over leverage, selling low and buying high, not taking profits, playing with future (very bad idea!) etc but I had thought I was learning lessons and so losing a bit on the way was part of it.

 

But facing the latest sell off has really had my portfolio hit rock bottom, tried to call the bottom and took on a bit of leverage turned out trying to catch a falling knife is a bad idea, funny that

 

Expensive lessons... but valuable none the less. Still my 50% in physical G&S are not going anywhere, and I am young always time to make more money (I hope!) key will be trying to keep my family prepared for the coming times... maybe they can benefit from my lessons lol

 

Any of you guys suffered really bad losses, and how did you turn things around?

 

always a rollercoaster it seems. i made the same mistake of not taking the gains and buying back in at the low.

as a hedge i have bought stocks in junky banks and builders, and so it seems as one goes up the other goes down and so on.

 

so im remaining static to above REAL inflation more or less.

i wasnt looking to make i was looking to preserve. + i got some new business projects moving.

 

the gold i can leave as a hugely long term pension pot. im not worried really (gulps)

[drbubb]

TOO MANY "LOWS"?

Here's another mathematical argument...

Here's the "once-trod path" chart for the Gold Bug's index (HUI) ... update : daily

 

 

That's a weekly chart (above).

 

Yesterday's action was:

HUI: 260.25 Change: -26.29

Open: 286.54 High: 286.54 Low: 259.52

Percent Change:

-9.17%

That huge fall brings it neatly into the once-trod-path

 

The prior high, before the OTP up was: Dec.2, 2003: 258.60

and almost touched again on Jan.6, 2004: High O.D.: 258.02

 

HUI's ALL TIME HIGH:

Monday, March 17, 2008

Closing Price: 505.76

Open: 514.89 High: 519.68 Low: 496.25

 

50% of that is: 259.84

 

HUI-260-ish looks like a great target for this move down

 

[ologhai]

OK - so we're all a bit bruised.

Here's a hypothetical question:

 

If you could get back all your losses on PM's and Juniors now, but only on the condition that you put all the money into a bank account and left it there (GBP, AUD or USD let's say) - would you do it?

 

I don't know... Is it, say, a 6% bank account, and how long must I leave the cash in it?

 

*reaches for calculator*

[Steve Netwriter]

Investors Panicking Out of Gold is Not the Answer

Commodities / Gold & Silver Sep 09, 2008 - 11:39 AM

 

By: Chris_Galakoutis

http://www.marketoracle.co.uk/Article6194.html

 

Investors are choosing to buy the dollar and dollar denominated investments despite the fact negative real interest rates prevail in the US. That is akin to fleeing one burning building -- the Euro and other foreign currencies that will suffer the consequences we are told -- into the “safety” of the inferno next door, completely ignoring the shining beacon of light and safety that is gold.

 

We have been told for the longest time that gold is a horrible investment since it pays no interest. I don't know about you, but I will take no interest over negative interest rates any day of the week and twice on Sunday.

 

We therefore continue to believe that gold and silver, as well as oil and natural gas, offer the best protection against the current economic climate. When the markets finally come to their senses, those brave enough to have stuck it through should be richly rewarded.

 

[Steve Netwriter]

Physical Gold for Sound Money and Trustworthy Governments

Commodities / Gold & Silver Sep 09, 2008 - 02:21 AM

 

By: Dr_Ron_Paul

http://www.marketoracle.co.uk/Article6185.html

 

Last week I discussed how sound money contributes to peaceful relationships around the world. It is not gold, in and of itself that excites me, but the many benefits of sound money. Another benefit is financial security.

 

Can sound money give you financial security? There is something very comforting in knowing that what you earn today will retain its purchasing power in the years to come. Indeed, the same silver dime that bought a loaf of bread in the 1960's can still buy a loaf of bread with its precious metal content - which is worth about $1.00 today. An ounce of gold has always been about evenly exchangeable for a finely tailored men's suit, which these days is roughly $800. And in these days of fluctuating gas prices, when priced in gold, oil has been stable. Meanwhile, since the creation of the Federal Reserve, the fiat dollar has lost 94% of its purchasing power. The erosion of purchasing power rapidly accelerated when it was completely uncoupled from gold in 1971. This sort of fluctuation in the medium of exchange creates a lot of uncertainty in the marketplace and necessitates that you either take extraordinary defensive maneuvers, or face financial ruin.

....

 

[Steve Netwriter]

Gold Trades in Narrow Range Despite Supply Shortfalls

Commodities / Gold & Silver Sep 09, 2008 - 06:14 AM

 

By: Mark_OByrne

http://www.marketoracle.co.uk/Article6190.html

 

The disconnect between the leveraged futures market and the physical bullion market continues with many wholesalers and retailers finding it hard to source and supply bullion coins and bars in the U.S. and internationally. This is particularly the case with silver bullion coins and bars (all bars except 1000 ozt silver bars are becoming difficult to source) in the U.S. and with gold bars in Asia. Gold Investments is continuing to be able to supply our clientele with all their physical bullion needs without delays but only through an extensive network of wholesale suppliers internationally.

 

Reuters quotes a bullion dealer in Singapore. "Demand from our regular customers such as India, Indonesia and Thailand is still there. There's a shortage of physical bars in this region, which also helps support premiums."

 

Gold remains taboo in most financial and economic commentary

Much of the financial and business press still fails to grasp the magnitude of the current crisis and Pollyanna, delusional analysis remains the order of the day in large part. Gold and silver bullion remain the preserve of the smart money. This smart money which has been ahead of the curve and realised the extent of the problems facing the U.S. financial system and hence global economy, remains a tiny fraction of the international investment community.

 

Gold remains taboo in most of the financial and economic community – it is largely ignored and when it is occasionally covered it is often done so in an unbalanced and biased fashion by non experts who know little or nothing about the supply and demand fundamentals and the other very strong fundamentals driving the market. The media and investors remain obsessed with equity markets and wrongly assume that a one day stock market rally signifies some form of return to economic health.

 

[ologhai]

That is akin to fleeing one burning building -- the Euro and other foreign currencies that will suffer the consequences we are told -- into the “safety” of the inferno next door, completely ignoring the shining beacon of light and safety that is gold.

 

I'm not sure this analogy helps really. This makes it look as though people are a bit stupid because they're ignoring an obvious 'shining beacon of light and safety'. But if gold is such a thing, it's hiding its light under a bushel somewhat lately, so perhaps people can be forgiven for not noticing it.

[Mr Pipples]

Crikey, it's getting to Jim. (Or everyone is getting at Jim.) http://www.jsmineset.com/

 

I HAVE A JOB TO DO AND I INTEND TO DO IT, SO EVERYONE ATTEMPTING TO STOP ME KINDLY GET OUT OF MY WAY.

[Magpie]

Can sound money give you financial security? There is something very comforting in knowing that what you earn today will retain its purchasing power in the years to come. Indeed, the same silver dime that bought a loaf of bread in the 1960's can still buy a loaf of bread with its precious metal content - which is worth about $1.00 today. An ounce of gold has always been about evenly exchangeable for a finely tailored men's suit, which these days is roughly $800.

 

This is such drivel, and such a good example of how nonsense gets endlessly repeated.

 

If a finely tailored suit costs $800 bucks today, then early in the year an ounce of gold bought about 1.25 suits, now it buys one. In the late nineties it bought about 0.6-0.75 suits. In 1980 it probably bought about five suits.

 

Yes, gold won't depreciate like fiat currency. But why perpetuate this inaccurate myth that its value is eternally stable? It's not like we don't have damn good evidence to the opposite, even looking at the last few months.

[warpig]

Good point.

 

This is such drivel, and such a good example of how nonsense gets endlessly repeated.

 

If a finely tailored suit costs $800 bucks today, then early in the year an ounce of gold bought about 1.25 suits, now it buys one. In the late nineties it bought about 0.6-0.75 suits. In 1980 it probably bought about five suits.

 

Yes, gold won't depreciate like fiat currency. But why perpetuate this inaccurate myth that its value is eternally stable? It's not like we don't have damn good evidence to the opposite, even looking at the last few months.

 

[G0ldfinger]

I'm not sure this analogy helps really. This makes it look as though people are a bit stupid because they're ignoring an obvious 'shining beacon of light and safety'.

Yes, of course.

But if gold is such a thing, it's hiding its light under a bushel somewhat lately, so perhaps people can be forgiven for not noticing it.

Yes, of course. The important thing is to be a little ahead of the crowd.

 

No one in the central banks or governments wants you to believe that gold is a safe haven. They have done a terrific job achieving this. But of course, it is.