Where Is Gold Going In This Market

[flying]

there's not a single "if" or "but" in my posting which reduces the contents of the stated facts!

moreover, i think it is wise for an investor to hedge his USD exposure, e.g. by buying gold, if he was unwise enough not to diversify or the individual circumstances did perhaps not allow a diversification. that applies especially to those who are living in an area where their expenditure is in a currency not pegged to the USD.

Yes I was just joking about that as I am so tied to this one poor currency & never look at it from the poor German gold investors side.

Your last comment about currency not pegged to the USD made me think.....I did not know all that were...Thanks any excuse to learn is a good one.

Found this site....

http://www.ehow.com/about_4675892_what-cur...ged-dollar.html

[Abrak]

it is possible. if the price of gold is higher than the price "Old Wanderer" paid any goldshop will buy his gold "for what he paid"

But this would need the assumption that the shop he bought it from in the first place was irrational by selling to him at far too low a price.

Far more likely is that the shops offering 'genuine certificates' to repurchase at 'cost paid' are charging a 'premium' to the current price and then using part of the excess profit earned to cover themselves against a fall in the gold price.

[simcity]

The only certificates I know from Yawalat are the one mentioning where the purchases made from and they will guaranty a buy back at the shop.

This certificate cost 50 baht, as the gold-shop is well know + have stamp on the item, you surely do not need it.

Just one more gimmick

Gold purchase in Chinatown ( yawalat is pretty safe ) I bought / sold without any surprise in the pass .

But you can be sure said: if gold tomorrow, jump 20% shop will not buy it from you at this value, they will wait & see approaches.

In Australia one gallery was selling paintings with a buy back guaranty! When the gallery shut is doors, this promise was terminated.

[churchill]

I have a feeling that we are about to see , in the coming weeks , a big leg up for Gold . I think we will be seeing more fund managers allocating a greater share of their investment into Gold and gold companies and this could have a hugh impact on the price .

[cloudhopper]

An interesting viewpoint predicting a stronger dollar and gold. Not sure I buy the bit about the $ though....

http://goldversuspaper.blogspot.com/2009/0...-from-dead.html

[flying]

I have a feeling that we are about to see , in the coming weeks , a big leg up for Gold . I think we will be seeing more fund managers allocating a greater share of their investment into Gold and gold companies and this could have a hugh impact on the price .

100% agree .......Coiling & getting ready

Silver is also doing quite well.

Pretty decent for both.

[HardenedSoul]

By the way, who was the idiot who, at the beginning of the year, said that oil wouldn't get above $50 a barrel during 2009 AND that we'd seen the highs in gold at around $880/oz ?

Oh I know hmmm started with a V but when put with last name looked like a W

heheh I have not seen Vic in awhile. If he would just come back & give another prediction I know we can break the 1k mark

Vic's claims were 50% right and 50% wrong. you have to admit that is a better record than the one of the average politician

Politicians aren't much of a yardstick by which measure the accuracy of one's predictions. One only has to recall the assurances the people of Britain and America were given by their leaders when they said that their economies were "fundamentally strong".

The fact is that anyone with half a brain could've told you that oil was NEVER going to remain cheap for long and that gold would perform well against systematic debasement of the world's trust-based paper currencies at a time when the erosion of confidence in government was accelerating.

Sure, gold is just metal and its price is entirely determined by people's perception of its value. A dollar bill is just a piece of paper and it is people's faith in the issuing government that determines its value. Er, anyone here got faith in the US government ??

[SoCal]

Yeah, I've got faith in the US government.

Faith that they will screw me at every turn.

[churchill]

US Debt Clock http://www.usdebtclock.org/

[churchill]

Gold Wildly Bullish as Paradigm Shift Underway of Banking Power to Creditor Nations

http://www.marketoracle.co.uk/Article10817.html

"The Germans have demanded all of their gold held in custodial accounts inside the United States to be returned to German soil. The story is not public, but details have come to me from a private source close to the action. The Germans have also given counsel for Dubai to demand all of their gold held in custodial accounts inside London to be returned to Dubai, where a new gold trading center will spring up. In my view, THIS IS THE BIGGEST NEWS FOR GOLD THIS ENTIRE YEAR. The hidden arch-enemy for the US-UK on all matters pertaining to gold bullion is Germany. This is not a well-known concept. Insults were hurled at the US delegation during the London G20 by their ministers. Germany is also advising the Chinese on currency and gold matters. Can one detect some coordination?"

[BigSnake]

In a word UP

[Abrak]

I could be wrong in this observation (I dont follow things that closely) but it appears to me that the last month or so has seen a major move upwards in BOTH the price of gold and stockmarkets.

This would seem something of a rare event as the 2 are usually inversely correlated. Obviously, the same event happened in the second half of last year in a 'dash for cash'.

Assuming this is true what does it tell us? Many Stock market pundits point to the rise in the markets as being a fundamental sign of the end of economic troubles (you know green shoots and all that.) But if that really was the case wouldnt the price of gold have fallen?

A more rational explanation is that investors are now realizing that holding CASH is riskier than holding other assets such as stocks, gold or other commodities. Blowing air back into a deflation consumer based bubble economy doesnt solve the problem it merely buys you some time and causes inflation.

Printing money or 'QE' to support asset prices can always be done but the inevitable result has to be to reduce the purchasing power of the currency (and usually has long term detrimental effects on the economy). Obviously it forces those people holding cash (earning near zero return) and negative real returns to switch into other assets or spend.

What makes investing so darn difficult at the moment is that one invests in the face of near disastrous economic fundamentals combined with unpredictable economic policy. Maybe the stockmarket will fall as recovery fails to deliver. Maybe the government doesnt print and gold gets pulled down by the deflationary spiral?

As far as I can see most investment decisions require too much 'guessing'. I am in gold not because it is shiny or pretty, not because I consider it undervalued, not because it broke out of a double bottom - simply by default - I cant see anything else worth buying.

[HardenedSoul]

Personally, having grown up in a part of West London where people considered it cool to adorn themselves with gold, I can't stand the stuff. Looks tacky beyond belief but all I have to do is own it, not wear it. With the US and the UK printing all day long, I think we've got to the point where gold's rise isn't being so quickly described as a "bubble". The dollar began its death march this week and the DXY closed at 80.04. Sterling hit $1.60 <deleted> and that was after S&P warned about the UK's AAA rating.

The dollar's surprised many since this crisis began but whether it's this month or not, that currency WILL crash and God help investors holding too much of it.

[Abrak]

Gold Wildly Bullish as Paradigm Shift Underway of Banking Power to Creditor Nations

http://www.marketoracle.co.uk/Article10817.html

"The Germans have demanded all of their gold held in custodial accounts inside the United States to be returned to German soil. The story is not public, but details have come to me from a private source close to the action. The Germans have also given counsel for Dubai to demand all of their gold held in custodial accounts inside London to be returned to Dubai, where a new gold trading center will spring up. In my view, THIS IS THE BIGGEST NEWS FOR GOLD THIS ENTIRE YEAR. The hidden arch-enemy for the US-UK on all matters pertaining to gold bullion is Germany. This is not a well-known concept. Insults were hurled at the US delegation during the London G20 by their ministers. Germany is also advising the Chinese on currency and gold matters. Can one detect some coordination?"

I dont know but it is stories like these that really make me question why I hold gold at all....

'The Germans have also given counsel for Dubai to demand all of their gold held in custodial accounts inside London to be returned to Dubai, where a new gold trading center will spring up. In my view, THIS IS THE BIGGEST NEWS FOR GOLD THIS ENTIRE YEAR.'

Now according to this article....

http://www.silobreaker.com/dubai-gold-vaul...263615664947237

...they just opened a brand spanking new gold vault in Dubai less than a month ago. Why it should need the Germans to tell them to stick their gold in it is beyond me. (In fact, it would be far more interesting if the germans had told them not to stick their gold in it.) I love the way it is described as 'given counsel' which usually means 'advice' but a lot more expensive. I would have loved to have been a fly on the wall to see Dubai's reaction to this councelling and I am at least reassured that if this is the biggest news for gold in the entire year I havent missed anything.

[Naam]

Gold Wildly Bullish as Paradigm Shift Underway of Banking Power to Creditor Nations

http://www.marketoracle.co.uk/Article10817.html

"The Germans have demanded all of their gold held in custodial accounts inside the United States to be returned to German soil. The story is not public

because the story is nothing but bullshit

[Naam]

for what it's worth. opinion of the "money changers" i work with:

At a glance

22 May 2009

Falling risk aversion (VIX Index) and lower jewelry demand are not

weakening prices as we initially expected.

Since US dollar weakness is likely to be broader and inflation

expectations are on the rise, we roll over our long-term view.

We now expect gold to target USD 1,050 in the short run. Our 9-12

months' forecast is shifted up to USD 1,100 from USD 980.

Momentum: Price momentum in gold is building. We have changed our

stance and now expect this trend to continue. Key resistance levels are at

around USD 965 and USD 1,005.

Fundamentals:

Our two long-term price drivers for a higher gold price, the

US dollar and inflation expectations, are faster and stronger at work than

was expected. The US dollar should weaken by around 10% versus the

euro and also versus other currencies, i.e., we expect broad US dollar

weakness. Also, inflation expectations are on the rise. With higher

commodity prices, especially in energy and agriculture, inflation could

return earlier. The base effect of lower commodity prices should lose impact

starting in June/July. These two price drivers are overpowering falling risk

aversion and very weak jewelry demand--the key assumptions behind our

initial view of lower prices in the short run. Our new view means investors

can build more positions in gold. Non-US dollar investors should hedge as

much of the strength in gold is purely US dollar related. Since risk aversion

is falling and jewelry demand should stay muted, gold prices should trend

higher but not show signs of an exponential overshoot.

[Lost in LOS]

fearing what is happening in the US i brought a lot of gold...........turning out real well up about 19% in a year and a half work for me especially when i think what is going to happen to the dollar... no fundamentals or education on it, just street smarts. spend all this money you dont have and eventually somebody will have to pay. i would say for sure, before the year is out it will be above 1k, then i will have to think about selling

[Abrak]

fearing what is happening in the US i brought a lot of gold...........turning out real well up about 19% in a year and a half work for me especially when i think what is going to happen to the dollar... no fundamentals or education on it, just street smarts. spend all this money you dont have and eventually somebody will have to pay. i would say for sure, before the year is out it will be above 1k, then i will have to think about selling

Well as Naam constantly reminds us the most powerful argument for holding gold (if you regard it as a currency) is as a hedge against the dollar. Thats certainly why I bought it - the rather weird thing is that both gold and the dollar have gone up since, which I find strange and regard myself as very lucky. Given that the dollar has risen while its fundamentals have deteriorated, the argument to hedge would seem all the more powerful. If you are say China and very long dollars you are almost certainly trying to unwind an unhealthy position (even though you might be apparently adding to it for appearance sake). On that basis alone anything that looks a decent hedge against dollars should perform relatively well simply due to a shortage of supply.

By the way who is buying treasuries? China and Japan's surpluses have collapsed and the 10 year bond yield has gone from 2.5% to 3.5% in two months (when theoretically it should have fallen). I mean we have US$2trn or so of issuance this year and presumably the Fed can only monetize half of that max.

So if the price of gold gets above US$1000, while you might feel like selling, I bet you will find it hard to convince yourself that the dollar is a better bet.

What really scares me the most is that those weirdo goldbugs, living in their log cabins, with their shotguns and canned foods and a large stash of gold under their bed, mumbling fiat, debasement, end of capitalism etc might actually be right.

[flying]

Falling risk aversion (VIX Index) and lower jewelry demand are not

weakening prices as we initially expected.

I think this will become a mantra soon

[Naam]

fearing what is happening in the US i brought a lot of gold...........turning out real well up about 19% in a year and a half work for me especially when i think what is going to happen to the dollar... no fundamentals or education on it, just street smarts. spend all this money you dont have and eventually somebody will have to pay. i would say for sure, before the year is out it will be above 1k, then i will have to think about selling

that's in my opinion too early, assuming that the "inflationists" are right and the "deflationists" are wrong. fundamentals and globally pent up cash which is desperately looking for reasonable yields indicate inflation which might not rear its ugly head within the period you mentioned but a couple of years later. but then... anybody's guess is as good as mine.

[Lost in LOS]

fearing what is happening in the US i brought a lot of gold...........turning out real well up about 19% in a year and a half work for me especially when i think what is going to happen to the dollar... no fundamentals or education on it, just street smarts. spend all this money you dont have and eventually somebody will have to pay. i would say for sure, before the year is out it will be above 1k, then i will have to think about selling

that's in my opinion too early, assuming that the "inflationists" are right and the "deflationists" are wrong. fundamentals and globally pent up cash which is desperately looking for reasonable yields indicate inflation which might not rear its ugly head within the period you mentioned but a couple of years later. but then... anybody's guess is as good as mine.

and Naam,

at what price would you consider selling? incrementally, as in 1/2 at 1k and then 1/4 at 1.2k and then the rest at 1.5k? just curious since you have experience which may make your guess better than mine

[Abrak]

All the governments would have to do, is "re-set" the "value" of gold, and poof, you have enough to cover the current debt. Can it happen? Well, it happened once already in the 1930's with Roosevelt , so I would not be shocked if it happened again, but on a global scale. Question for ya, why is it then, that all the central banks of every country are the largest holders of gold? Do they know something that we dont?

Central banks are the largest holders of gold because currencies used to be tied to the 'gold standard'. Over the past 10 years I suspect they have been the biggest sellers.

Why would governments reset the value of gold? For instance the largest debtor and the largest holder of gold is the USA. To cover its debts it would have to reset the value of gold to at least US$10,000 which would be hyperinflationary. M3 is estimated at about US$10trn so why not just print the debt. I would guess total net worth of all gold is only about US$4trn.

If the price of gold goes up the natural assumption is that the US is a seller not that the largest holder is going to revalue - this would only compound its problems that are bad enough already.

[Abrak]

So your telling me that over the past 7 years that gold has been on a bull run, that the central banks have been SELLING??? Who then, would continue to push up the price to over $1000/oz? All us little fish, doubt it. For the market to go up, you need more buyers prepared to buy at ever higher prices, not huge sellers. I suspect that the banks know that the banking industry is a scam, and the dollar is backed by debt, and have been net buyers of gold, NOT sellers.

I dont know if you are proposing some conspiracy theory whereby central banks are hoarding gold reserves while at the same time showing data to everyone that they have been selling fot the last 40 years or you simply dont know that the price of gold has gone up 'despite' central banks being net sellers.

http://gold-2009.com/gold-2009-central-bank

Simply google it.

By the way if you happen to be some conspiracy theorist - doesnt it sort of undermine the whole theory behind holding gold in the first place. In that one of the reasons to hold it is that Central Banks and Bankers in general are inherently incompetent.

(If you happen to be British please google Gordon Brown gold sales before you place your next vote.)

[flying]

It has always amazed me that the 8133 tonnes of gold at Fort Knox have not been independently audited since ????

http://www.timesonline.co.uk/tol/news/worl...icle5989271.ece

http://www.apfn.net/Doc-100_bankruptcy10.htm

[AlexLah]

What are you talking about you brainless fool, there ain't no Gold here!!!!!!!!

WHERE IS OUR MONEY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Try here you fool!

But it is not fair!!!!!

You better learn!

Edited May 25, 2009 by AlexLah

[Naam]

fearing what is happening in the US i brought a lot of gold...........turning out real well up about 19% in a year and a half work for me especially when i think what is going to happen to the dollar... no fundamentals or education on it, just street smarts. spend all this money you dont have and eventually somebody will have to pay. i would say for sure, before the year is out it will be above 1k, then i will have to think about selling

that's in my opinion too early, assuming that the "inflationists" are right and the "deflationists" are wrong. fundamentals and globally pent up cash which is desperately looking for reasonable yields indicate inflation which might not rear its ugly head within the period you mentioned but a couple of years later. but then... anybody's guess is as good as mine.

and Naam, at what price would you consider selling? incrementally, as in 1/2 at 1k and then 1/4 at 1.2k and then the rest at 1.5k? just curious since you have experience which may make your guess better than mine

that's a wrong assumption as i never bothered buying or selling gold except what the Mrs. keeps in her various safes/bank lockers. i also hardly ever sold any asset incrementally. if my views are positive, i keep it. if my views are negative, i sell. if i am not quite sure, i sell.

[flying]

Gold bugs at last have their perfect trinity

China has doubled its bullion reserves and left us in no doubt that it will spend more of its $40bn monthly surplus on hard assets rather than the toxic paper of Western democracies.

ARTICLE

[flying]

Haahahahahah

Look at the storm trooper they sent to arrest this contractor for paying his workers in Gold coins!

I guess they feel he is a terrorist??

It is actually a interesting story & will be interested to see how it goes.

He has been in court before back in 07

http://www.lvrj.com/news/46074037.html#blo...nts?submitted=y

Edited May 26, 2009 by flying

[Naam]

Gold bugs at last have their perfect trinity

China has doubled its bullion reserves and left us in no doubt that it will spend more of its $40bn monthly surplus on hard assets rather than the toxic paper of Western democracies.

chinese owners of bakeries fear customers who carry Krüger Rands, Gold Vrenelis or Maple Leaves in their pockets

[flying]

chinese owners of bakeries fear customers who carry Krüger Rands, Gold Vrenelis or Maple Leaves in their pockets

See now that has proverb possiblities MAK MAK !!

How about this.................

Chinese bakery owner fear customer with gold in pocket may be a fool

but customer with USD in pocket remove all doubt.