GOLD

[ecoface]

Sorry in delay in answering - been busy!

 

So, the RSI > 70 which means it is overbought according to TA - Time to sell?

 

Firstly, lets run down history road a little and the RSI indicator. It was created by Wiley in 70's and was initially used in stock trading. It was created due to the gaps that occur in the trading of illiquid stocks and shares.

 

Here is some analysis and wise words: http://www.danielstrading.com/education/te...ength-index.php and I quote:

 

Selling when the RSI is above 70 or buying when the RSI is below 30 can be an expensive trading system. A move to those levels is a signal that market conditions are ripe for a market top or bottom. It does not indicate a top or a bottom. A failure swing or divergence accompanies your best trading signals.

 

Next, which time period are you using for RSI? The figures I have for gold are:

Daily = 62.3%, Weekly = 59.2% and Monthly = 61.6%

 

Now none of these indicators are above 70%. So have you been looking at intra-day timeframe? Oh dear. Remember that Wiley stated that the longer time periods trump the earlier ones.

 

Also, would like to clearly state that even if you had an RSI > 70% for whatever timeframe, then Overbought does not mean imediately SELL. According to TA text books that I have read, you need to ensure that RSI comes back below 70% then start to sell.

 

Thanks for the detailed reply which is most useful. FWIW I only use RSI as a minor TA along with CMF, Volume, and usual patterns and so on, certainly not in isolation which is what your email implies. I couldn't be bothered to write a long speil about all the reasons...

 

If it was as easy as just using RSI to show a sell date when it got above 70 then how rich we would all be!

 

(As a point of detail RSI on my 6 monthly chart for PHAU shows RSI above 80).

[Pixel8r]

Have I missed the posting about this ?

Just quickly scanned through this thread. Nothing

 

I thought it would be all the talk.

 

http://www.numismaster.com/ta/numis/Articl...;ArticleId=6745

 

which followed:

http://www.24hgold.com/english/news-gold-s...butor=Rob+Kirby

 

.899 gold.

 

Then there is:

http://harveyorgan.blogspot.com/2009/06/ju...commentary.html

and

http://www.youtube.com/watch?v=7d3IUU-GXb8

 

Not to mention Latvia

 

Thanks for these Steve, adds some weight to Jim Willie's claim about Germany pulling their Gold from the US.

 

THE HITMEN COMETH, Jim Willie - http://www.greenenergyinvestors.com/index.php?showtopic=6746

 

Roll on July/August I'm prepared

[sideshow]

Do you guys prefer buying coins or bars for large physical purchases?

[electroweak]

I think CG said:

first 300 oz: sovereigns.

next 300 oz: 1 ounce coins

next 300 oz: kilo bars

after that: 400 oz bars.

 

I think those numbers could be reduced a bit, but variety can't hurt imo.

[Pixel8r]

Do you guys prefer buying coins or bars for large physical purchases?

I use goldmoney, which you can take delivery from of bars if you so wish. I feel it is safer and easier to leave it in the vault though.

 

 

[ziknik]

So when the currency gets trashed:-

 

They say you have made a massive capital gain -

 

You say all you have done is maintain the value of your savings.

 

They are the system servers & it doesn't matter how corrupt the master as long as the pension is guaranteed.

 

Yes, that’s right as far as I know. But it only applies if you sell (or trade) the gold/silver.

 

In-hand physical has an advantage in this respect because it is impossible for the authorities to prove when the items were sold or traded.

 

Someone on here (I Think Pixel8r) was told by their accountant that currency depreciation against USD can be offset against capital gains tax for assets priced in USD. I’m not sure if this is true. In any case, USD is going to depreciate too so it probably won’t help much

 

I have just been speaking with my accountant about this issue.

 

He has advised me that it could be argued, that the gain was not in the actual asset going up, but the currency going down, so CGT could be avoided. You would need to record the dollar price (as that is the currency gold is traded in) at the time of purchase and sale.

 

http://www.greenenergyinvestors.com/index....amp;#entry87402

 

EDITED

[FWIW]

Thanks for the detailed reply which is most useful. FWIW I only use RSI as a minor TA along with CMF, Volume, and usual patterns and so on, certainly not in isolation which is what your email implies. I couldn't be bothered to write a long speil about all the reasons...

 

If it was as easy as just using RSI to show a sell date when it got above 70 then how rich we would all be!

 

(As a point of detail RSI on my 6 monthly chart for PHAU shows RSI above 80).

 

Ahh i see - I only look at physical gold prices, because I only buy physical or GoldMoney. Looks like you are looking at phau gold etf. Now I'm pretty sure all gold etf's are overbought regardless of RSI!

 

I only picked on RSI as I use that in combination with Fib retracements, macd and moving averages. I don't use much else. I try and keep it simple.

 

 

 

 

[sideshow]

I think CG said:

first 300 oz: sovereigns.

next 300 oz: 1 ounce coins

next 300 oz: kilo bars

after that: 400 oz bars.

 

I think those numbers could be reduced a bit, but variety can't hurt imo.

 

I'm currently only 11% in gold. 20% assorted coins, 51% 10oz Pamps, 27% Bullion Vault.

 

Looking to increase exposure but slightly wary of buying bigger than 10oz.

[allyjcambo]

I put some money this time last year into the Ruffer Baker Steel Gold fund (my way of getting exposure to non-large cap gold mining shares). Like almost everything else, the fund suffered in Autumn 2008. However I see from my most recent statement that the losses have been made up such that I am back now at 'level par'. Just a thought, but I am wondering if I should sell out now and then drip the proceeds back into the fund over the next 12 months. I think this gives me a better chance of benefiting from any dips in price which I am expecting later this year.

 

Anyone got any thoughts on this?

[electroweak]

I put some money this time last year into the Ruffer Baker Steel Gold fund (my way of getting exposure to non-large cap gold mining shares). Like almost everything else, the fund suffered in Autumn 2008. However I see from my most recent statement that the losses have been made up such that I am back now at 'level par'. Just a thought, but I am wondering if I should sell out now and then drip the proceeds back into the fund over the next 12 months. I think this gives me a better chance of benefiting from any dips in price which I am expecting later this year.

 

Anyone got any thoughts on this?

The math is easy, but the psychology is hard...

 

Investopedia:

As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off.

 

(not a recommendation, but a point to consider)

EDIT if t'were me, I'd hang on.

[FWIW]

I put some money this time last year into the Ruffer Baker Steel Gold fund (my way of getting exposure to non-large cap gold mining shares). Like almost everything else, the fund suffered in Autumn 2008. However I see from my most recent statement that the losses have been made up such that I am back now at 'level par'. Just a thought, but I am wondering if I should sell out now and then drip the proceeds back into the fund over the next 12 months. I think this gives me a better chance of benefiting from any dips in price which I am expecting later this year.

 

Anyone got any thoughts on this?

 

I think what are talking about is dollar cost averaging down (DCAD). I think this is a good way to buy volatile stocks, but you need to have a firm plan before you start. For example, lets say you have approx $10,000 you want to invest. What you should do is this:

 

Month 1 - invest $100

Month 2 - invest $200

Month 3 - invest $400

Month 4 - invest $800

Month 5 - invest $1600

Month 6 - invest $3200

 

Now all that adds up to $6,300. You can of course use the 3,700 as a rainy day fund or just buy and hold. Of course if you can do this for the full 12 months then I personally think that you will be in the money!

 

This can be dangerous though, it can be like throwing good money after bad. However, as each month passes you buy more than your existing holding. This is why you need to have a plan and stick to it regardless of the price or any news.

 

[nicejim]

Now I'm pretty sure all gold etf's are overbought regardless of RSI!

 

Overbought or not, it looks like America woke up this morning and bought some more, and silver too. Nice movements upwards in the "Twighlight Zone" all day, and with GBP down I'm glad I've not got the balls to trade this.

[tinecu]

I think what are talking about is dollar cost averaging down (DCAD). I think this is a good way to buy volatile stocks, but you need to have a firm plan before you start. For example, lets say you have approx $10,000 you want to invest. What you should do is this:

 

Month 1 - invest $100

Month 2 - invest $200

Month 3 - invest $400

Month 4 - invest $800

Month 5 - invest $1600

Month 6 - invest $3200

 

Now all that adds up to $6,300. You can of course use the 3,700 as a rainy day fund or just buy and hold. Of course if you can do this for the full 12 months then I personally think that you will be in the money!

 

This can be dangerous though, it can be like throwing good money after bad. However, as each month passes you buy more than your existing holding. This is why you need to have a plan and stick to it regardless of the price or any news.

Reminds me of a system for roulette (that works! you just have to more than double to cope with 0 and 00).

[wren]

Do you guys prefer buying coins or bars for large physical purchases?

I prefer GoldMoney and BullionVault for large quantities. I keep only a few one ounce coins.

[allyjcambo]

I think what are talking about is dollar cost averaging down (DCAD). I think this is a good way to buy volatile stocks, but you need to have a firm plan before you start. For example, lets say you have approx $10,000 you want to invest. What you should do is this:

 

Month 1 - invest $100

Month 2 - invest $200

Month 3 - invest $400

Month 4 - invest $800

Month 5 - invest $1600

Month 6 - invest $3200

 

Now all that adds up to $6,300. You can of course use the 3,700 as a rainy day fund or just buy and hold. Of course if you can do this for the full 12 months then I personally think that you will be in the money!

 

This can be dangerous though, it can be like throwing good money after bad. However, as each month passes you buy more than your existing holding. This is why you need to have a plan and stick to it regardless of the price or any news.

 

Thanks for your thoughts Chris and FWIW.

 

I've been very impressed with much of Bob Hoye's analysis (as you probably know, he sees gold stocks performing much like the dot-coms of the mid/late 90's). His view is that gold stocks will generally move with the stock market but overall will be net up. I think pound cost averaging is a decent way of playing this trend.

[Pixel8r]

Dear CIGAs,

 

A major criteria for the most significant move in gold, called a Golden Pillar, is the demise of the long bond. This is why you must understand that hyperinflation is a product of a currency event that occurs in the midst of the worst of business conditions. The event is locked in and loaded by quantitative easing.

 

The first window in time for this event is the early 4th quarter of 2009. When it starts it runs quite quickly. Within 12 to 18 month from the initial rumblings hyperinflation consumes the currency.

 

The first rumblings are here and now below .8200 on the USDX. Below .7200 and you will be looking back at $1224 as gold runs towards $1650.

 

This is definitely on its way.

 

The commercial interests are still not ready for this. For the commercial interest to either miss this move or be buried by it is a reach. It could happen, but is unlikely to happen without a fight. We will be watching closely to call it for you.

 

In truth the best possible action would be for gold to decline from some level into the third week of this month and then launch forward. However, to those utilizing gold to insure their standard of living and life it makes no difference at all. The reason for that is gold is going to $1650 and then on to Alf’s numbers.

 

The goons are now making fools out of themselves in gold equities. The gold share hit yesterday was GRANDSTANDING in an attempt to shake out stock for a cover.It is apparent to me that the shorts are getting very itchy to cover. That is what dirty tricks are all and only about.

 

I really can’t understand why anyone wants to trade here or try to market time here. It is so obvious to the trained eye that the train is pulling out of the station for biggest move so far in gold. Stop trying to time everything to the minute. You want a full position - do it and do it now.

[bakachu]

Dear CIGAs,

 

<Snip>

 

As much as I like the re-assuring tone of these kind of 'notices', they always seem to employ the same, almost manipulative, techniques upon the reader.

 

Things like:

 

'This is whats going to happen, heres lots of numbers to prove it'

 

'Dont try to be clever or think for yourself, just follow what we say'

 

it reminds me of the war general who sits comfortably away from the fight while he commands the foot soldiers on the front line.

 

Just felt the need to get that out!

[romans holiday]

As much as I like the re-assuring tone of these kind of 'notices', they always seem to employ the same, almost manipulative, techniques upon the reader.

 

Things like:

 

'This is whats going to happen, heres lots of numbers to prove it'

 

'Dont try to be clever or think for yourself, just follow what we say'

 

it reminds me of the war general who sits comfortably away from the fight while he commands the foot soldiers on the front line.

 

Just felt the need to get that out!

Good point. Sinclair is leading a crusade of sorts.

 

But as investors, every man should be his own general and have a strategy. He can not afford to be a mere foot soldier.

[romans holiday]

Job numbers just came through, lower than expected. "ONLY" 345,000.... fewest since the month of September. Gold down also on the feel good factor.

[Pixel8r]

Good point. Sinclair is leading a crusade of sorts.

 

But as investors, every man should be his own general and have a strategy. He can not afford to be a mere foot soldier.

I agree that it is always best to do your own research and to come to your own conclusions, rather than follow some bod's advice off a website.

 

I posted that because I agree with what he is saying and believe we are getting very close to a large lift again in gold prices. Jim Sinclair should be praised for the work he has done in informing the general public in the manner he has, for free off his non subscription website. It is easy to deride such selfless acts.

 

 

[romans holiday]

I agree that it is always best to do your own research and to come to your own conclusions, rather than follow some bod's advice off a website.

 

I posted that because I agree with what he is saying and believe we are getting very close to a large lift again in gold prices. Jim Sinclair should be praised for the work he has done in informing the general public in the manner he has, for free off his non subscription website. It is easy to deride such selfless acts.

Yep, could be a good buying op coming up. Keeping my eyes on silver.

[bakachu]

I posted that because I agree with what he is saying and believe we are getting very close to a large lift again in gold prices. Jim Sinclair should be praised for the work he has done in informing the general public in the manner he has, for free off his non subscription website. It is easy to deride such selfless acts.

 

How will prices lift off? I think many here (including myself) are expecting a mania phase where everyone and their dog are rushing to buy assets in order to safe guard their wealth, thus sending gold and silver 'to the moon'.

 

The only problem is, despite everything which has happened so far, the $1000 barrier remains an elusive barrier to break.

 

I'm sure people like Jim Sinclair know that in order to reach $1600, a mania phase does need to kick off, or some kind of 'black swan' has to happen. Are they doing their little bit, or using their influence inorder to kick-start this? Is the intended audience of such articles being primed to be the first wave (or sacrificial lambs even!) in an attempt in getting to $1600?

 

For the record, just so you know where I am coming from, I have been holding for a while, I have been disappointed by the recent failures to take $1000 (like alot of people I think), but overall I'm better off than where I started, so its all good

 

I can't help but feel alot of the current mess/events was priced into gold very early on when it rose steeply in late 2007. To push it further to the next level will take things going pear shaped for the value of the dollar, or/and the bond markets. As time goes on, the chances of hitting a mania phase seem to be dwindling without any shocks to the system (Or are we the mania phase for the smart money?!).

 

I really not commenting about Jim's persona or anything like that (to be fair I really dont know anything about him), I'm just genuinely interested in the discussion of the psychology of it all

[THEBIGMAN]

Dunno if this has been linked to already but it's quite a good read...

http://www.telegraph.co.uk/finance/comment...ct-trinity.html

 

...Also a great interview with Antal Fekete: http://www.professorfekete.com/articles/AEFDailyBell.pdf

[romans holiday]

How will prices lift off? I think many here (including myself) are expecting a mania phase where everyone and their dog are rushing to buy assets in order to safe guard their wealth, thus sending gold and silver 'to the moon'.

I've never bought into the moon thing though it does make for good hyperbole..... and who knows might even happen.

 

I have just bought gold and silver as superior currencies while other currencies buckle under deflation and debt. Keeping my eyes on the bond market.

[FWIW]

I bet someone in China is laughing right now!

 

Watching two photo-copiers churn out all out this fiat crap whilst manipulating the gold price down!

 

Now we can all sit back and watch the who can lie the best with a straight face competition between the yanks and the brits.

 

Got gold?