GOLD

[G0ldfinger]

You still can't separate gold from the S&P at the moment. Gold fundamentalists need this unhealthy relationship to break down:

The paper nutters and fiat bugs are responsible for this correlation. But they will be blown out of the water sometime soon.

[romans holiday]

The paper nutters and fiat bugs are responsible for this correlation. But they will be blown out of the water sometime soon.

C'mon GF, you are better than this... why not adapt a little?

 

As for bugs, whether a gold or fiat bug, they are overly attached towards something. They will never change their view towards something because of deeply held prejudices. I don't mean prejudice in a derogative way - a prejudice is something that will not change no matter the evidence; like an a priori truth such as 2 + 2 = 4. You could ignore the market price of gold, and insist that gold is worth the moon... but most bugs don't, and the market price is followed very closely.

 

Can the investor afford prejudices... whether fiat or bullion ones? Investors should be more pragmatic and flexible, and not wedded to either "fiat" or gold... not be a bug towards anything. There is a time for everything right.

[nixy]

C'mon GF, you are better than this... why not adapt a little?

 

As for bugs, whether a gold or fiat bug, they are overly attached towards something. They will never change their view towards something because of deeply held prejudices. I don't mean prejudice in a derogative way - a prejudice is something that will not change no matter the evidence; like an a priori truth such as 2 + 2 = 4. You could ignore the market price of gold, and insist that gold is worth the moon... but most bugs don't, and the market price is followed very closely.

 

Can the investor afford prejudices... whether fiat or bullion ones? Investors should be more pragmatic and flexible, and not wedded to either "fiat" or gold... not be a bug towards anything. There is a time for everything right.

 

Talking about prejudice...... bloke on HPC says 'dollar up gold down.....simple' in an innit kind of way.

 

So I spent an hour trying to figure out how to up load images from print screen and posted this......

 

Comments?

 

[50sQuiff]

The paper nutters and fiat bugs are responsible for this correlation. But they will be blown out of the water sometime soon.

 

GF, I hope and think you're right. But a Greek bailout will postpone the decoupling I fear. We may have to wait for Portugal or Spain to stare into the abyss before Gold becomes monetized/de-commodified in the minds of investors.

 

The above graph is causing me some serious cognitive dissonance - I'm substantially long gold and short the S&P.

[romans holiday]

Talking about prejudice...... bloke on HPC says 'dollar up gold down.....simple' in an innit kind of way.

 

So I spent an hour trying to figure out how to up load images from print screen and posted this......

 

Comments?

 

 

 

 

I think the long term trend in gold will hold, but for now it looks to be consolidating while the dollar strengthens.

[romans holiday]

GF, I hope and think you're right. But a Greek bailout will postpone the decoupling I fear. We may have to wait for Portugal or Spain to stare into the abyss before Gold becomes monetized/de-commodified in the minds of investors.

 

The above graph is causing me some serious cognitive dissonance - I'm substantially long gold and short the S&P.

Leveraged?

 

I am long gold in my "buy and hold" account [bullion]. And also long dollar in the "trading" account [looking to buy silver at bottom prices]. No leverage and no dissonance.

[romans holiday]

 

 

Some long term projections. Even if the dollar strengthens to 88 or 90, I doubt gold will decline much below 1000. I am bullish on gold as an investor, and bullish on the dollar as a trader.

[dietcolaaddict]

Anyone got a view of where the major resistance lines are now $1080 is cleared?

[Errol]

Anyone got a view of where the major resistance lines are now $1080 is cleared?

 

You're trading gold?

[dietcolaaddict]

You're trading gold?

Hi Errol

 

I'm a 'buy and hold and accumulate' man for gold (not necessarily silver and platinum though).

 

But life circumstances have got in the way - GF newly out of work and needs some help with fees for upskilling. I guess if there is one investment better than precious metals it is people. Provided the people come good that is!

 

 

Edit - GF = girlfriend, not G0ldfinger.

[Fortune]

I think the bottom has gone and past. DOW just broken out of the falling wedge. 'Risk' is back in vogue, so expect gold to retest the previous highs. I think resistance is at 1100, 1160, 1180, 1200, and 1224. With support at 1040 and 1055. In sterling, resistance is at 700 and 724. Major support at 680 and 666 (!).

[Perishabull]

I picked this comment up from the bottom of an article on the telegraph, apparantly it's from the Gartman Letter;

 

"Last Thursday, Mr. Terry Smeeton, former head of

foreign exchange and gold at the Bank of England, who retired only last year, made the following

statement:

“[The gold sale] is not a policy I would have advocated when I was at the bank. I am sad

this action has been taken…It’s clearly a Treasury decision in which the Bank has

had to acquiesce.”

 

There is a remarkable degree of controversy and fevered speculation in the wake of the recent

decision to sell half the UK’s gold reserves. Most extreme has been the following rumor repeated

Friday by the widely read Gartman letter:

“There is a rumor sweeping through the markets concerning Mr. Gavyn Davies, one of

Goldman Sachs European economists[Ed. Note: at this point, for the sake of

transparency, we must note that Goldman Sachs is a long standing and revered client of

The Gartman Letter in New York, London, Hong Kong, and Tokyo, on the international

equities, metals and foreign exchange desks; thus reporting a rumor concerning

Goldman is a bit more difficult than would be the norm, in all honesty. None the less, the

rumor is being given such wide dissemination that we’ve no choice but to report it here]

and a close friend and economic advisor of Prime Minister Tony Blair and Chancellor of

the Exchequer, Gordon Brown. The rumor suggests that it was Mr. Davies who urged

Mr. Blair and Mr. Brown to prevail upon the Bank of England to reduce its gold reserves.

The rumor further posits that Goldman Sachs is short 1000 tonnes of gold for future

delivery. We are, of course, not privy to Goldman’s gold trading position…The rumor,

true or not…is becoming more and more widely debated by gold market participants.”

 

Goldman Sachs short 1000 tonnes, that's a serious position equivalent to 35,273,962 ounces ($38 billion), or 352,739 futures contracts. Adding all the open interest across all of the Gold futures contract months you arrive at something north of 460,000 so this rumour is effectively stating the squid controls 3/4 of the Comex. Is this likely or even possible? Furthermore, with this sort of controlling share they could effectively move the market in whatever particular direction required to push some people into/out of the dollar and equities. If people see gold heading down they are going to be buying dollars. Interestingly Gold does appear to have quite an increasingly strong correlation to the S&P500.

 

 

I've included the correlation co-efficient in this chart (the red line), notice how this year it has stayed north of 90% rather than move up and down in a cyclical fashion like last year. The particular feature to note is that despite the undulations in the S&P500 the correlation between it and Gold have stayed solid, unlike last year when corrections in the S&P500 or Gold occurred the correlation broke down temporarily. This appears to be consistent with the above rumour in my view.

[malvern hills]

'a close friend and economic advisor of Prime Minister Tony Blair and Chancellor of

the Exchequer, Gordon Brown'

 

erm, this rumour is from 1999

[Perishabull]

'a close friend and economic advisor of Prime Minister Tony Blair and Chancellor of

the Exchequer, Gordon Brown'

 

erm, this rumour is from 1999

 

This is a good example of what can happen if you only get 4 hours sleep. Apologies.

 

That said it is rather striking how solid the correlation between gold and equities is this year, it looks as though they got married at the turn of the year. Just need to figure out when the divorce is...

[TW11]

Gold COT looking a little better for the bulls. Euro should catch a short term bounce around here too.

 

Off work today, lots of time to catch up with things - it's all deeply bearish for everything. I suspect there's money to be made for the really nimble. I'm coming round to the idea of the 'All Currencies Are Crap' trade. Bought some gold stocks...haven't bought any for six months. Not massively comfortable cos I am worried about overall market weakness - but that nervousness makes me think there must be a bottom somewhere around here, we'll see...

 

 

Edit: I see good support around 1050 and the 200dma is showing at 1022 tonight, should be ok but doesn't work if the EU (Greece et al) blows up over the weekend.

[seekingclarity]

I just see gold as a hedge against uncertainty. As long as investors/ CBs remain uncertain about the economy, trade and currencies, gold will continue to perform well. Also, I see even Sarkozy has been talking about a new Bretton Woods lately.

 

 

Nice.

[Errol]

Down-pointing wedges tend to resolve to the upside ...

 

[DoctorSolar]

Down-pointing wedges tend to resolve to the upside ...

 

I saw that in the latest article from Richard Russell. The rest is well worth a read too:

 

The Last Man Standing

 

 

I think and ponder and wonder. I believe current unsustainable debt is literally "eating up" the world. This should end in both deflation plus monetary inflation through the production of junk, fiat money. Ultimately, the survivor, the "last man standing" will be gold. Ironically, Americans have lost or forgotten the meaning of gold. Which is why only a tiny percentage of Americans now own any gold.

 

Americans have totally forgotten the meaning of gold and silver. I prove it to myself every day. I buy something in a store and present a gold one ounce coin as payment. Invariably, the clerk looks at the coin and replies, "We can't take that. What is it anyway?" Sad, and rather ominous.

 

As I write, gold is selling at about 1097 an ounce or still below 1100. A while back I wrote that gold below 1000 was a bargain. Now I'm saying that gold below 1200 is a bargain. Buy it while 95% of Americans have never seen or held a gold coin. In fact, there are large ads in the newspapers every week, ads offering to buy your gold in exchange for fiat paper. And people are doing it. What our Forefathers knew about money has been forgotten. The Founding Fathers would shake their heads in wonderment if they could see the nation they founded as it stands today.

 

In other words don't muck about trying to get your gold position perfectly timed. Get a core position NOW and average in whatever else you feel necessary.

 

 

[Errol]

Btw, a great place to get the latest gold/silver articles is - 321gold.com.

[DoctorSolar]

Interesting interview with Pierre Lassonde on King World News

 

+ 50% chance of gold touching 950 again but probability of anything lower than that tails off very rapidly

+ Gold to hit 1200 again this year

+ Gold price to ebb back and forth buffetted by deflationary and then inflationary forces for perhaps as much as 2-3 years (sadly no price range was given)

+ Gold mania blowoff top could start in 2-3 years and last for up to 6 years!

+ Many gold mining companies are under performing the metal as they haven't been able to increase their margins.

[romans holiday]

+ Gold price to ebb back and forth buffetted by deflationary and then inflationary forces for perhaps as much as 2-3 years (sadly no price range was given)

I like the use of "buffetted" denoting chaotic conditions. Inflationary perceptions and deflationary forces could buffet the price every which way... where sometimes those deflationary forces take the price of gold up, and at other times down, and then inflationary perceptions do the same.

 

All we need to do now is get Warren Buffet involved.

[G0ldfinger]

http://www.bloomberg.com/apps/news?pid=206...x_gAo&pos=3

Goldman’s O’Neill Says ‘Something Brewing’ in China on Currency

 

By Simon Kennedy

 

Feb. 15 (Bloomberg) -- Goldman Sachs Group Inc. Chief Economist Jim O’Neill said China may be poised to let its currency strengthen as much as 5 percent to slow the world’s fastest growing major economy.

 

“I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”

Oops, and all of a sudden it would be 5% cheaper for 1 billion Chinese to buy gold, oil, copper, silver, whatever. Darn it!

 

OK, now imagine they do 50%.

 

And then 100%.

 

And then 200%.

[electroweak]

New all time High in EUR today! - thanks, Wren!

 

EUR 809.84 /Oz

[G0ldfinger]

New all time High in EUR today! - thanks, Wren!

 

EUR 809.84 /Oz

 

http://gold.approximity.com/since1968/Gold_EUR.html

http://gold.approximity.com/since1968/Gold_EUR_LOG.html

[Fortune]

Slightly off-topic. I wonder if anyone picked this up at the end of last year....

 

Mark Pittman, Reporter Who Challenged Fed Secrecy, Dies at 52

 

Nov. 30 (Bloomberg) -- Mark Pittman, the award-winning reporter whose fight to make the Federal Reserve more accountable to taxpayers led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52.

 

Pittman suffered from heart-related illnesses. The precise cause of death wasn’t known, said his friend William Karesh, vice president of the Global Health Program at the Bronx, New York-based Wildlife Conservation Society.

 

“He was one of the great financial journalists of our time,” said Joseph Stiglitz, a professor at Columbia University in New York and the winner of the 2001 Nobel Prize for economics. “His death is shocking.”

 

Read the rest on Bloomberg http://www.bloomberg.com/apps/news?pid=206....8yo&pos=12

 

The comments on Zero Hedge are very interesting to say the least:

 

Mark Pittman, the Loeb Award-winning Bloomberg journalist, a personal friend, a legendary financial reporter and the first person to sue the Fed (in conjunction with Bloomberg News) and win, passed away on Wednesday. He was 52. Our thoughts are with his family. Zero Hedge staffers met with Mark days before his death at which point we discovered he was working on a major financial expose. We would be humbled to pick up the torch and bring his last opus to closure.

 

We are sure Bloomberg News will keep Mark's spirit alive, and will continue his lifelong pursuit of eliminating secrecy and opacity, and bringing truth and justice to all corners of high finance.

 

Mark shall be missed.

 

A response from his daughter can be found here: http://www.zerohedge.com/article/mark-pitt...#comment-144919