GOLD

[Pixel8r]

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

I think the long bond action, which is going on at the moment, is going to be the ignition for this next lift in gold prices. Over the next few months we should see the dollar come under a lot of pressure and PM prices start to surge.

 

I don't think this will be the final mania stage though just another wave in the action. Mania I believe will come towards the end of 2011. I think that the final level of gold prices will be a lot higher than $1650 and that price will just be a way point. We are nowhere near the mania stage yet, the institutions aren't even interested yet really, hedge funds are starting to position themselves though.

 

Jim has said that he expects gold to reach Alf's numbers, which are $3500 on this wave (3) and up to $10,000 on the final wave (5). He has also said that his $1650 target is too low and that he would be leaving us to it at this level, I hope he doesn't.

 

I think the last year and half has been the due to the efforts of the ppt to control things, they also realise that they have to let the prices go sometimes, which I believe is about to happen. Just look at the action in gold and silver miners recently, there must be a lot of short covering going on, ahead of the coming surge.

 

 

 

[Wanderer]

I must say, everyone on here is getting remarkably relaxed about smack-downs these days. Time was when a good $25 smack-down of an afternoon would bring out several posters in a panic. Or have such folk simply given up out of nervous tension?

 

 

[Pixel8r]

I must say, everyone on here is getting remarkably relaxed about smack-downs these days. Time was when a good $25 smack-down of an afternoon would bring out several posters in a panic. Or have such folk simply given up out of nervous tension?

Everyone is now looking forward to them as an opportunity to stock up, at the expense of the ppt.

[electroweak]

I must say, everyone on here is getting remarkably relaxed about smack-downs these days. Time was when a good $25 smack-down of an afternoon would bring out several posters in a panic. Or have such folk simply given up out of nervous tension?

Things seem to have changed subtly over the last month or two; when the smackdowns happen, gold still seems to finish in the upper 1/3 of the day's trading range. Whilst I don't see that happening today, it has made everyone a bit more relaxed.. maybe... or was that ...complacent..

[FWIW]

Things seem to have changed subtly over the last month or two; when the smackdowns happen, gold still seems to finish in the upper 1/3 of the day's trading range. Whilst I don't see that happening today, it has made everyone a bit more relaxed.. maybe... or was that ...complacent..

 

I'll get excited when it gets to $740 per oz....

 

 

 

[G0ldfinger]

... 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. ...

The only thing that needs to happen is that someone large buys a little. And that's it.

[G0ldfinger]

I must say, everyone on here is getting remarkably relaxed about smack-downs these days. Time was when a good $25 smack-down of an afternoon would bring out several posters in a panic. Or have such folk simply given up out of nervous tension?

It's a pure $1,000-joke. Nothing else. As if this number was meaningful. As if $2,000 was meaningful.

 

The Chinese are laughing in public at the Secretary of the US Treasury. What do you need to know more?

[G0ldfinger]

Next target $1,400:

 

http://gold.approximity.com/gold-silver_watch.html

[Perishabull]

Comex already hiked the margin requirements to trade gold once already, there is nothing to stop them repeating this in order to cap gold if things get heated. As much as I enjoy Jim Sinclair's site it's difficult to believe that an objective viewpoint can be formed by a mind with an interest in a gold mine.

 

Follow this for an old piece on Jim Sinclair here;

 

https://www.kitcomm.com/archive/index.php?t-2014.html

 

"Sinclair's love of carrot juice recently turned into a 25-kilo-a-week habit that was brought to a halt only when his doctor grew alarmed at the orange tint to his skin." Now it is possibly unfair of me to pick up on this but is this not an indication of someone that can tend to an extreme? The reference to Sai Baba highlights what I think may be a deeply spiritual element of his psyche that perhaps tempers him somewhat.

 

Jim was extremely successful once before in gold, that in itself is a risk as extreme success can affect the mind such that a belief forms that it can be repeated. I'm not saying he's right or wrong, I'm trying to look at it without bias.

 

He also quotes Alf Field's numbers that are way beyond his estimate, still at least if Alf's numbers aren't reached they are Alf's numbers eh?

 

I believe that gold should have gone far higher than it did, especially following the collapse of Lehmans, the fact that it didn't makes a statement in itself.

 

The above chart mirrors my view, gold will ascend over time at a "managed" pace so as not to cause too many ripples in world financial markets. You are looking at a long game here though folks I think, $5000 may be over 15 years or more out from here.

 

The new and revitalised gold standard is unlikely to appear, a currency based on a basket of a variety of commodities or bonds or other instruments is far more likely to bring about stability and therefore be agreed upon by world governments.

 

Perishabull

 

PS I personally don't own gold at the moment.

[G0ldfinger]

... PS I personally don't own gold at the moment.

Oh dear! Also, does that mean you're a non-gold VI?

[Perishabull]

Oh dear! Also, does that mean you're a non-gold VI?

 

I'm not adverse to owning gold, I bought at $815 and sold at $950. I view the gold market in the same way I view other markets. I don't have a particular penchant for one over another. A bias towards one may blind me from potential profit in another.

[FWIW]

Nothing wrong with buy low sell high...

 

 

 

I hope...

 

 

 

Got gold? I mean, do you really 'get' it?

[Pixel8r]

hedge funds are starting to position themselves though.

Julian Robertson Bets the Farm on Inflation

 

Simply put, Julian Robertson is the definition of a hedge fund legend. And, his success is noted by the fortune he has amassed as he now graces the Forbes' billionaire list. He has pioneered a successful investment methodology, he has generated outstanding returns at his famous hedge fund Tiger Management, and his influence has sprouted some of the most successful modern day hedge funds in the form of the 'Tiger Cubs.' And, most importantly, he predicted the financial crisis two and a half years ago in an interview with Value Investor Insight. When he talks, you listen.

 

For those unfamiliar with Robertson, we'd highly recommend checking out the profile/biography we just wrote on him. In that piece, we have outlined exactly why you should follow him (and the Tiger Cubs for that matter too). As we detailed in his profile, Robertson has a unique investment methodology. He takes a macro approach, finds a smart idea, researches it exhaustively, and places a big bet. And, when he feels he is more than correct, he will 'bet the farm.' And, it looks like we have identified Robertson's next play where he has and will continue to 'bet the farm.'

 

Julian's Big Bet

 

While this is not a new position for Robertson, his constant confidence behind the play has inspired us to look at it more closely. Today, we are going to highlight Julian Robertson's steepener swap play. In layman's terms, he is betting on inflation. Taken from eFinancialNews, "Steepeners are a type of interest rate swap, where one party agrees to pay the other a fixed rate in exchange for a floating rate, which is derived from the difference between long and short term rates. Many of these products also use high leverage, where the difference between the two rates is multiplied by up to 50 times to produce a higher return."

 

He thinks rates could hit 7% easily and could go as high as 18%. We agree with him on this play and we first published our very basic rationale behind shorting US Treasuries back in October of last year. The main point we're focused on is the wager that inflation is in our future. If such an outcome came to fruition, yields on long-term Treasuries would rise. When the yields increase, bond prices will drop, thus benefiting the short position. While the vehicles noted in this article are all slightly different in construction and purpose, they all broadly wager on the same outcome: inflation. Julian's talked about this play in numerous forms, and we actually first heard about his 'curve steepener' play in January 2008 in Forbes. That piece highlighted how Robertson was "long the price of two-year Treasuries and short the price of the ten-year Treasury - betting that the difference, or curve, in the yield between the two will increase." Such a play is negative on the US economy and Robertson executed it because he felt the Federal Reserve would continue to flood the economy with money. And, he has been right.

 

 

[G0ldfinger]

...I view the gold market in the same way I view other markets. ...

In that case I would just trade Google or RBS.

[drbubb]

How is this call doing ?

"Gold may be done here - Be careful"

 

Early/Mid May, is also a fine time for a top

No guarantee. Just be careful.

 

Canadian Dollars have outperformed Gold

 

 

Earlier this week, I sold half of my C$, and bought Puts on Sterling (FXB) when FXB was above $1.64

 

I still think the "buying window" in gold will be late July or August

[romans holiday]

How is this call doing ?

"Gold may be done here - Be careful"

 

 

 

Canadian Dollars have outperformed Gold

 

 

Earlier this week, I sold half of my C$, and bought Puts on Sterling (FXB) when FXB was above $1.64

 

I still think the "buying window" in gold will be late July or August

Good call DrB. I also had C$ and bought silver with them a little earlier than that top. While the US$ was tanking, the C$ was mostly tracking silver so I just decided to put into silver. The market looks increasingly confused and over the course of the year I wouldn't be surprised to see it continue up, then whiplash to the downside and then up again. I am thinking silver is one way to play this; ride the market up as the hot money goes into commodities then sell silver for gold and US dollars. One for the booking of profits and the other for continued speculation.

[ecoface]

How is this call doing ?

"Gold may be done here - Be careful"

 

 

still think the "buying window" in gold will be late July or August

 

I got my head bitten off a few days ago on this thread for mentioning gold was overbought.

 

 

[G0ldfinger]

I got my head bitten off a few days ago on this thread for mentioning gold was overbought.

In a hyperinflation gold will be the single most overbought thing.

[bitbigt]

I got my head bitten off a few days ago on this thread for mentioning gold was overbought.

Not by me

 

There are a several of us long-term believers in gold who suspect there will be a significant correction before a far larger rise in price over coming many years

[G0ldfinger]

Not by me

 

There are a several of us long-term believers in gold who suspect there will be a significant correction before a far larger rise in price over coming many years

There is also a large group that believes that most of these 'corrections' are mostly irrelevant under a long-term perspective.

 

http://gold.approximity.com/gold-silver_watch.html

[wren]

There is also a large group that believes that most of these 'corrections' are mostly irrelevant under a long-term perspective.

Yes, but some are trying to maximize their ounces.

 

Personally I am not so keen on swing trading as I think I would probably not gain for lack of skill. However, as I said a week ago I have cash to buy gold and silver but I am willing to wait and move in cautiously. I already have a lot of gold and silver (for a small investor at least) so I already have the "insurance".

 

By being careful I may gain a few percent, which is why at the moment I am slowly cost-averaging in on my further silver purchases. A few percent extra is not insignificant especially if the gold price doubles in the next couple of years, which I think is likely. Silver might treble in the same period.

 

I may also avoid the bad feeling of going all in and being under water for the new purchases if a correction occurs. So I try to find a happy medium which reduces my stress level.

 

My bullion accounts now stand as follows:

 

Gold: 44.6%

Silver: 28.9%

Cash (euros): 26.5%

 

Gold and silver percentages are up slightly from last weekend. A couple of gold bids were filled on a minor correction and I made several small silver purchases.

[Compounded]

I must say, everyone on here is getting remarkably relaxed about smack-downs these days. Time was when a good $25 smack-down of an afternoon would bring out several posters in a panic. Or have such folk simply given up out of nervous tension?

 

I have got used to it - understand the fundamentals and wait - gold certainly takes it's time.

 

I think the real point is the alternative mainstream saving media are rubbish.

 

And the only other way is by being clever and swapping from from one fashionable asset to the other earlier than the crowd; thats difficult even with Dr Bubb giving his not inconsiderable investing experience for nothing.

 

[Errol]

There is also a large group that believes that most of these 'corrections' are mostly irrelevant under a long-term perspective.

 

Put me in that group.

[THEBIGMAN]

There is also a large group that believes that most of these 'corrections' are mostly irrelevant under a long-term perspective.

Yeah, the buy-to-let crowd

 

Seriously, I actually do agree with you on the whole, GF. I'm just reminded of a wise old dog who warned us not to underestimate the gnomes of Zurich.

[Pixel8r]

Yes, but some are trying to maximize their ounces.

 

Personally I am not so keen on swing trading as I think I would probably not gain for lack of skill. However, as I said a week ago I have cash to buy gold and silver but I am willing to wait and move in cautiously. I already have a lot of gold and silver (for a small investor at least) so I already have the "insurance".

 

By being careful I may gain a few percent, which is why at the moment I am slowly cost-averaging in on my further silver purchases. A few percent extra is not insignificant especially if the gold price doubles in the next couple of years, which I think is likely. Silver might treble in the same period.

I too am trying to increase my ounces, to some success. The method I am using is swapping between metals using the gold silver ratio as my guide. That way you keep in the metals rather than cash which is being quantitively eased. Using this method involves trading once or twice a year, not once or twice a week, so reduces fees and the possibility of getting it wrong.

 

I agree that I am taking a long term approach to my investing in precious metals, short term fluctuations are not really important. I am more interested in the big picture.