GOLD

[drbubb]

(New Jan.2009 thread / started on Dec. 28th)

 

"...I am alert to a possible breakout in Gold over $860, an important resistance level.

I am a little concerned that the Gold bulls are getting a bit to complacent. But I hasten to add that January is normally a good month for Gold and Gold stocks. If Gold does breakout over $860, it could move $100 rather fast. And this time it seems likely to drag CDNX (and the Juniors) up with it. The tax-oriented selling that we see in the 4th quarter must be over by now. So the move in CDNX could be a sharp one."

 

- above, from Dr.B's Trading Diary:

http://www.greenenergyinvestors.com/index.php?showtopic=5460

 

==

 

Jan. 2009 thread:

[romans holiday]

Off to sell seven ounces today. First time I have ever sold gold. Reasons being:

 

1] I have all my cash in gold/silver [would like to "diversify" a little into mining producers].

2] POG is spiking at the moment.

3] Good chance of another temporary low in POG next year with further forced liquidation.

4] Sitting on a pile of bullion in South Korea.

5] To prove to myself I can part with gold when needed.

 

Gold has not gone to the moon, which many expected in an inflationary environment. Rather, it is performing extremely well in a macro-deflation where all asset classes, bar gold and certain currnencies, are deflating. With other currencies now deflating or showing weakness, the market is recognisng gold as itself a sound currency. Without wanting to sound smug, I think it should be obvious to all now, whatever their macro or economic view, that gold is proving to be the safest store of value as we reap the whirlwind. Good luck everyone for the coming momentous year.

[drbubb]

Your reasons make sense. I presume you will hold onto some.

 

Gold here (today) is more or less on the 12 months moving average, and so there's a good chance your cost was below this.

The 252d.MA also often proves a resistance or support level

 

Meantime, major gold stocks (GDX) are still trading about 20% below the 252d.MA (near $40)

GDX ... update

 

Here's CDNX - which has hardly moved as GDX doubled ... update

 

I suppose the weak performance is partly due to tax selling, and partly do to concerns that these companies will be unable to finance themselves (at reasonable prices) and will just burn up cash.

[romans holiday]

Yes, only selling a small percentage. And selling that at a profit. I definitely still consider gold my core position in this scary economy. The gold I sell will go into one or perhaps two of the better known mining producers.

 

I consider it as a bit of a speculation as am firmly in the greater depression camp [hence the relatively small amount invested] .

 

Personally, I see the best "investment" strategy being conserve your worth [in the strongest currencies], watch assets deflate and then buy in a few years time. The wildcard though is [hyper] inflation. If we see that, buy property with 50% mortgage.

[drbubb]

Here's a game you might play:

 

+ Buy a Feb.GDX Call (in the money)

+ Sell a Jan.GDX Call (at the money, or out of the money)

 

If the market goes sideways, the Jan.GDX call expires, leaving you a cheaper cost for the Feb.Call.

If the market goes up, and the GDX call is exercised, you can exercise the Feb. call

If the market goes down, you have limited risk, and more time.

 

If you like the looks of this, some numbers can be put in the above, to see if the structure makes economic sense.

 

I already have position on.

I am long Jan.GDX.$25c and short Jan.GDX.$30c.

This structure was put together in Oct. and it happened by me first buying the Jan.GDX.$25c, and then after the

market bounced a few days later, selling the Jan.$30c for more than I paid for the $25c. So I can only win now.

I may exercise the $25call, and sell a higher strike Feb. call, to buyback the Jan.$30call.

 

This type of trading comes natural to some who have options experience.

 

(Should I add this to the Diary, I am wondering.)

[romans holiday]

Interesting DrB. And I will be following your diary with great interest. But personally I am in the "batton down the hatches" mode. I will be keeping things as simple and as safe as possible. If I started trading now I would only be a beginner and given the stage of the cycle [a possible K winter] I think the chances are that even many well-experienced traders will have a hard time of it. Also, as you mention in the diary, whether or not, or how, one trades depends on your lifestyle. I like to consider myself a man of leisure... in my free time.

[goldenbee]

Woke up to gold over £600. I saw a 1/2 sov for £66 at a local pawn shop on xmas eve, hope it is still there today.

[BradleyWong]

(If Gold does breakout over $860, it could move $100 rather fast.

 

Okay. Hopes this correct.

Gold now $884 - and Dollar weak too

 

[Rikk03]

Venezuela has declared that it is going to confiscate all foreign owned gold mines (biggest is Canadian) and subsequently is going to double production. This action is in response to the current price of oil - since 90% of their revenue is from oil the price falls are seriously hurting them. This action is a part of a wider plan to diversify away from oil.

 

Article was on the BBC thismorning. It wouldn't surprise me if other countries do the same action.

[Steve Netwriter]

I consider it as a bit of a speculation as am firmly in the greater depression camp [hence the relatively small amount invested] .

 

Maybe I have been reading too much recently

 

But that statement sounds too positive to me :blink:

 

I'm thinking "Just a depression? No, it'll be worse than that, we're talking end of an empire"

 

The question is, how many empires ?!

 

Oh, and the idea that gold is spiking. Yes maybe short-term, but also quite likely just up up up all the way to ............ infinity and beyond !

Or more precisely, until the gold 'price' is adjusted enough to match the amount of currency in the world, which is a long long way up !

 

 

[frizzers]

Your reasons make sense. I presume you will hold onto some.

 

Gold here (today) is more or less on the 12 months moving average, and so there's a good chance your cost was below this.

The 252d.MA also often proves a resistance or support level

 

Meantime, major gold stocks (GDX) are still trading about 20% below the 252d.MA (near $40)

GDX ... update

 

Here's CDNX - which has hardly moved as GDX doubled ... update

 

I suppose the weak performance is partly due to tax selling, and partly do to concerns that these companies will be unable to finance themselves (at reasonable prices) and will just burn up cash.

 

Look at those bolinger bands on CDNX. It's ready to go.

 

Some of us saw the move in gold stocks:

 

http://www.moneyweek.com/investments/stock...-now-14142.aspx

 

Feeling v. bullish on gold juniors here.

 

Bubb, you mentioned near-term producers elsewhere. Which ones are you looking at?

 

 

[drbubb]

I mention various stocks in the DrB-Diary.

Can we discuss this there?

http://www.greenenergyinvestors.com/index.php?showtopic=5460

[cgnao]

£500 goodbye kiss shortly.

 

 

Update and target for this move. Beware short term pullbacks.

 

[Errol]

£700!

 

I want a lower sterling price!! I need to buy more!

[safebetter]

£720 by May 2009, the printing press must be running at 450' Fahrenheight, to just prevent combustion!!

 

You could say we are already there:

 

1oz Gold Krugerrand

 

SafeBetter

[enrieb]

Super-rich reel as fortunes cut in half

The Sunday Times

December 28, 2008

http://business.timesonline.co.uk/tol/busi...icle5404353.ece

 

Britain's super-rich have seen their fortunes collapse by half in the economic downturn, with more than £200 billion of their money just melting away.

 

Research for the 2009 Sunday Times Rich List, to be published in the spring, suggests that the fortunes of the 1,000 wealthiest people in the UK have fallen more than 50% from £412.8 billion in the list for 2008 to about £200 billion.

 

The value of some assets, including hedge funds and property firms, has been shattered by as much as 90%.

 

The destruction of the wealth of Britain’s richest is so great and sudden that it has been likened to the bursting of the South Sea bubble in 1720 or the depression of the early 1930s.

 

If some of these super rich had kept some assets in gold then they wouldn't have lost so much wealth, people always want to buy while its going up and never when the price is low. Still at least with the price rising we don't have to listen to those arguments about why gold isn't worth anything, though I am sure they will reappear when the price falls back.

 

 

[Pixel8r]

Oh, and the idea that gold is spiking. Yes maybe short-term, but also quite likely just up up up all the way to ............ infinity and beyond !

Or more precisely, until the gold 'price' is adjusted enough to match the amount of currency in the world, which is a long long way up !

 

Sorry have been on the Remy tonight

 

[Steve Netwriter]

Sorry have been on the Remy tonight

 

 

Don't apologise. That's more or less exactly my prediction :lol:

 

[electroweak]

Get Ready.. a report has surfaced that this item was found on the Frankfurt U-Bahn....

 

[Errol]

The real price of gold - National Geographic article.

[Mr Pipples]

"When", not "If" BY ROB KIRBY - http://www.financialsense.com/Market/wrapup.htm

 

...When this gap can no longer be filled, paper gold and fiat burns.

 

Failure to disclose will not alter the outcome. It’s a question of “when,” not “if.”

 

Got physical gold yet?

 

Here is an article for your favorite mining CEO by Peter Degraaf - http://www.financialsense.com/fsu/editoria.../2008/1229.html

 

This article deals with the blatant manipulation that has been occurring in the gold and silver markets, and offers a solution. While this scandal has been going on for many years, at last more and more people are becoming aware that it is going on. ...

[cgnao]

The real price of gold - National Geographic article.

 

MUHAHAHAHHAHAHAHAHAHAHAHAHAHA

 

Powerful people hate it and desperately try to destroy it but they can't.

 

No single element has tantalized and tormented the human imagination more than the shimmering metal known by the chemical symbol Au. For thousands of years the desire to possess gold has driven people to extremes, fueling wars and conquests, girding empires and currencies, leveling mountains and forests.

 

....

 

Humankind's feverish attachment to gold shouldn't have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold's luster not only endures; fueled by global uncertainty, it grows stronger.

[lowrentyieldmakessense(honest!)]

MUHAHAHAHHAHAHAHAHAHAHAHAHAHA

 

Powerful people hate it and desperately try to destroy it but they can't.

Humankind's feverish attachment to gold shouldn't have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold's luster not only endures; fueled by global uncertainty, it grows stronger.

 

its a medium of exchange and history has proven that it is the best medium of exchange decided by the free market (people)

 

my guess is that Mr Keynes was well aware of this - but Governments can control paper far easier than they can control Gold. That control is about to end.

[Mr Pipples]

Gold and Silver in 2009 by James Turk - http://news.goldseek.com/JamesTurk/1230583965.php

 

You'll like this!

[romans holiday]

No single element has tantalized and tormented the human imagination more than the shimmering metal known by the chemical symbol Au. For thousands of years the desire to possess gold has driven people to extremes, fueling wars and conquests, girding empires and currencies, leveling mountains and forests.

 

....

 

Humankind's feverish attachment to gold shouldn't have survived the modern world. Few cultures still believe that gold can give eternal life, and every country in the world—the United States was last, in 1971—has done away with the gold standard, which John Maynard Keynes famously derided as "a barbarous relic." But gold's luster not only endures; fueled by global uncertainty, it grows stronger.

 

The facts are, whatever the iconoclasts think, gold has certain properties. Physical properties which makes it function extremely well as money. And metaphysical ones that captivate the human mind and make it an extremely valuable substance.