Where Is Gold Going In This Market

[SantiSuk]

What one contrarian UK sheet is telling its punters today. I edited out all the stuff about what do drop and just left the headlines in.

I confess I am extremely concerned that the market has got way ahead of itself in Q4 2010. These sort of guys have been saying this for all of 2010 of course and have missed some good equity gains, but I suspect they may be proved right before not too long. Have been flirting with thought of gold all year - my New Year's resolution likely to be buy some gold and increase cash liquidity from 10% to 30% until we get better long run directional indications

----------------------------------------------------------------------------------------------------------------------------

This is Your

"Four Minute

Warning"

(Continued...)

Let's get going...

Toxic Investment #1:

Get out of the property market

—

NOW

Toxic Investment #2:

Dump the FTSE… before it's too late!

Toxic Investment #3:

Drop the euro before it completely collapses

Toxic Investment #4:

Beware! The "bond bubble" is about to burst

What

should

you be doing with

your money right now?

Before I tell you, allow me to introduce myself and explain why you should heed these warnings...

My name's Toby Bray. And as publisher of

MoneyWeek

magazine I have the privilege to work with some of the most dedicated writers, analysts and expert financial researchers in the UK.

Your

"Survival Blueprint"

for the years ahead

I'll be frank...

Right now, we are very bearish.

Most investments are dangerously overpriced.

The wider economic situation doesn't look any better either...

On the one side, you have a whole army of bankers, politicians, and economists fighting for a system based on debt and counterfeit money...

On the other, there's a legion of bad loans created by the credit boom still poisoning the financial system.

The fact is this crisis is simply not resolved. The bad debt has not been worked out of the economy. And until it's dealt with, most investments will suffer in the years ahead.

Unfortunately a lot of people are blind to that fact... and will get financially hurt because of it.

But good investors don't sit in a state of paralysis during times of upheaval.

So... what should you do?

First of all...

Survival Action #1:

Buy defensives and "bear market protectors"

Survival Action #2:

Get the right dividend payers into your portfolio now

Survival Action #3:

Ride gold all the way to $2,230... or even more!

Here at

MoneyWeek

we first recommended our readers buy gold in November 2001.

Back then it traded for under $290 an ounce.

Today it's around $1,300.

That's an incredible 348% rise.

And of course it begs the question... is gold still a "buy" today?

Our opinion is simple:

Yes

.

I'll show you why. But first, consider this…

Golden Gains: Quadruple your wealth in just 10 years

Over the last 10 years, just holding gold would have quadrupled your wealth

It makes you wonder, how many thousands of hours did stock analysts slave away in the walls of the Square Mile?

How many hedge-fund managers crunched numbers late into the night?

And how many billions of pounds got blown on financial advisory fees… before somebody figured out that this one simple move could beat them all?

From 1999 until now, all you had to do was own gold — and without the help of a single fund manager or expensive advisor, you could have more than

quadrupled

your wealth.

And that's one of the crucial things we at

MoneyWeek

advised our readers to do.

Impressive? Go back over the last 25 years and you'll find something even more surprising…

…the single best year for stocks produced only a 31% gain.

…while gold had a year with gains of 100.2%.

…and precious metal coins topped the charts at 198.8%!

Now I'm sure you're asking, after such a run, is this already over?

No. In fact, we think it has barely begun...

Why gold's going higher still

Gold: The only true bull market of the next 10 years

During the 1970s and early '80s, the yellow metal soared

2,329%

.

We're not even a fraction of that move today — at just 348% in gains so far.

And that's despite the fact that today's markets carry an even BIGGER surge of demand, much TIGHTER gold supplies, and the huge threat of more debt, paper money, and real-term inflation than at any other time in history.

If gold was to rise today from trough to peak by the same percentage move as it did in the 70s... you're talking an eye-popping gold spike to $23,450 per ounce.

Now, we're not saying it will go anywhere near that high.

In truth, we pray it won't.

Because to see that happen, you'd need to be following the news from the safety of your bomb shelter, as all around you civilization breaks down.

But the fact is… today, we're locked in a period of intense confusion and fear.

And that's why gold is going up.

Recovery, some say, will boost consumers' appetites, resulting in higher inflation and a higher price for gold. If we fall back into recession, say others, Central Banks will print more money and gold will rise anyway.

In short, if the economy improves, gold rises naturally. If it doesn't improve, the authorities will force it up.

Either way, we think gold will go much higher than it has so far.

How high?

Adjusted for inflation, the 1980 gold peak of $850 gives you a price of $2,230 still on the horizon today.

That's more than enough for you to make a fortune on the next gold move.

But realistically, it could go higher still.

And right now some of the world's most renowned gold experts agree.

•

Roger Weigund of

Trader Tracks

says,

"we forecast gold at a minimum price of $2,960 with a probability of much higher prices... Gold is the only real money in the world and its rally has barely begun."

•

Equity Strategist's

Christopher Wood says,

"Gold is likely to more than triple from the current level to $3,500."

•

Mining maven and gold expert Doug Casey thinks it'll go even higher — according to him we'll see $5,000.

•

Gold expert and best selling financial author James Turk recently said that as early as 2015, we could easily see gold at $8,000 per ounce.

That's over

500% higher

than where it trades today.

•

And even the reserved Wall Street Journal posted data that shows that if you could put the dollar back on the gold standard — gold right now would go for $7,648 per ounce.

You get that number by divvying up all the $2 trillion of new cash out there… by all 261.5 million ounces of gold the U.S. government claims to have in reserve.

Keep in mind, every time the dollar drops 1% (and it's been dropping a lot lately), gold's been going up about 4.7%.

Another 15% drop in the dollar alone could easily put us over $1,990 gold — a spike of 70%.

The question is: which gold investments should YOU be buying today?

-----------------------------------------------------------------------------

Blah blah - I cut the advertising

Edited December 28, 2010 by SantiSuk

[mania]

Gold and Silver looks like its done with its rest

Also a new lawsuit against JPM and  HSBC for Silver Manipulation

http://news.silverseek.com/SilverSeek/1293546686.php

Edited December 28, 2010 by mania

[churchill]

All seems very probable ..

Widening deficits and rising Treasury yields – the tide turns

http://www.financeandeconomics.org/Articles%20archive/2010.12.28%20Treasuries.htm

[hhgz]

It's interesting that, with everything that has happened during the past two years, gold is only trading NEAR its historic high. I would have expected it to be significantly higher. Regardless, during the past decade the price of gold has increased by a factor of 5.6. That's pretty good. In the same time period, accounting for a stock split., Apple stock increased by a factor of 64. That's simply amazing.

[AlexLah]

Dear all very well respected members of the "brotherhood"

It has been a tremendous year for most of us and I am more then happy to show you all the fruit of what my sophisticated charting model has brought me (and some of you that payed attention).

Remember I said Gold would reach THB 20.000 by year end and look where it is now. The model showed it would breach a thousand USD and go beyond that previously.

Below I have plotted the 1 YTD chart and as you can see for yourself, it nicely follows the trend lines and important data points (the dip slightly off). As you can see from starting point D it went all up to L just as expected and then a down movement just below where we crossed H. Then an upward movement right until the I where it indicated a downward movement as indicated by the upper circle crossing with H and I.

You can see the rest for yourself, if something not clear feel free to ask.

Happy investing in physical Gold all, if you understand the model you will know Gold has only 2 ways to go.......

[mania]

What do the chart readers here think of gold?

Silver no problem but gold is a little more interesting

Higher lows still for gold but I would be interested in a interpretation

http://3.bp.blogspot.com/_H2DePAZe2gA/TR1kMAedeyI/AAAAAAAAPeQ/HOysmXjg4X4/s1600/golddaily1.PNG

http://1.bp.blogspot.com/_H2DePAZe2gA/TR1kOMnOBBI/AAAAAAAAPeU/DK2oMFWzcwI/s1600/silverweekly1.PNG

[churchill]

From Egon von Greyerz of Matterhorn Asset Management

Hyperinflation Will Drive Gold To Unthinkable Heights

We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments. Thus most of these assets are also worth-less.

.... continued http://www.zerohedge.com/article/matterhorn-closes-year-style-hyperinflation-will-drive-gold-unthinkable-heights

[mania]

e-gold.com which was suppose to be a internet payment backed by PM's now has approved payment by USD

That didn't last long

http://blog.e-gold.com/

[old wanderer]

What do the chart readers here think of gold?

Silver no problem but gold is a little more interesting

Higher lows still for gold but I would be interested in a interpretation

http://3.bp.blogspot.com/_H2DePAZe2gA/TR1kMAedeyI/AAAAAAAAPeQ/HOysmXjg4X4/s1600/golddaily1.PNG

http://1.bp.blogspot.com/_H2DePAZe2gA/TR1kOMnOBBI/AAAAAAAAPeU/DK2oMFWzcwI/s1600/silverweekly1.PNG

Right now I am "ALL IN" with silver, however as we watch the closing of the gold/silver ratio, there will be a time I will move back to gold. 8 months ago the ratio was 60oz of silver for 1 oz gold. Today as silver continues to outperform gold, it has closed to 46:1.

There is a symbiotic relationship between gold and silver. For many years that ration was fixed at 16:1. Silver has only a fraction of the volume of trades as gold, so it is "thin". However the movement of one will effect the other. Just on 31 Dec trading if we look at the ratios, Gold up 1.25% Silver up 1.48%.

What is important to understand about gold, it will always be the safe haven for wealth. The US dollar has been the reserve currency for the world for many decades, instead of gold. However as the US Government continues to devalue their currency by printing worthless money, having the Federal Reserve buy is debt (when the Fed has no money), by simply printing money to pay for the bonds, I would expect the wheels to come off this wagon in the next few years. Never believe things are too big to fail, or just because it has never happened before it cannot happen again.

As my wife and I were preparing to leave Thailand about 2 years ago, I had about a million baht in a Thai bank. Took it all out except for 5000b and went to China Town and bought some gold bars. Now my wife likes gold, but she like the security of money in the bank as well. I think we paid about 8500b for 1 baht gold. I get asked at least once a month "How much gold now?"...20,000/baht was my reply last night....I have a happy wife that thinks I am so smart...

The Thai baht is tied to the US Dollar, when/if it falls the baht will fail as well. Gold will not make any money, it will just preserve what you have. However others that are forced to sell, will drive prices down and you can pick up some real bargains.

Silver is where my attention is at this time. However it is difficult to do much in Thailand with silver. I would suggest a "Pool" account with Kitco (Kitco.com). There is a $0.42 buy/sell spread in silver, and you can take physical delivery at any time, or just leave money on account and trade. For Thailand they do have a depository bank in Hong Kong. However taking physical delivery of silver or gold, you still have a problem with Thailand as they are both on the list for customs for import.

Good luck, and keep thinking outside the box.....things do happen that are not expected.

[Naam]

The Thai baht is tied to the US Dollar, when/if it falls the baht will fail as well.

i hate to spoil an interesting story by stating the fact that instead of 55+ Baht 13 years ago (1998) one US-Dollar buys 29.70 Baht today. however, i apologise if a difference of 46% can be called "tied to". :jap:

[old wanderer]

The Thai baht is tied to the US Dollar, when/if it falls the baht will fail as well.

i hate to spoil an interesting story by stating the fact that instead of 55+ Baht 13 years ago (1998) one US-Dollar buys 29.70 Baht today. however, i apologise if a difference of 46% can be called "tied to". :jap:

Naam:

You have always been an astute commenter on Thai finances. I did not want to make a thesis of my above comments, however some historic perspective is in order so that one might understand the dynamics of how the baht which was at a stable 25b/$ for 20+ years went to 56 baht and back down to 29 today.

From 1985 to 1996, Thailand's economy grew at an average of over 9% per year, the highest economic growth rate of any country at the time. Inflation was kept reasonably low within a range of 3.4–5.7%.[19] The baht was pegged at 25 to the US dollar.

On 14 May and 15 May 1997, the Thai baht was hit by massive speculative attacks. On 30 June 1997, Prime Minister Chavalit Yongchaiyudh said that he would not devalue the baht. This was the spark that ignited the Asian financial crisis as the Thai government failed to defend the baht, which was pegged to the basket of currencies, where U.S. dollar was the main component, against international speculators. Thailand's booming economy came to a halt amid massive layoffs in finance, real estate, and construction that resulted in huge numbers of workers returning to their villages in the countryside and 600,000 foreign workers being sent back to their home countries. The baht devalued swiftly and lost more than half of its value. The baht reached its lowest point of 56 units to the US dollar in January 1998. The Thai stock market dropped 75%. Finance One, the largest Thai finance company until then, collapsed.

The Thai government was eventually forced to float the Baht, on 2 July 1997. On 11 August 1997, the IMF unveiled a rescue package for Thailand with more than $17 billion, subject to conditions such as passing laws relating to bankruptcy (reorganizing and restructuring) procedures and establishing strong regulation frameworks for banks and other financial institutions. The IMF approved on 20 August 1997, another bailout package of $3.9 billion.

Thai opposition parties claimed that former Prime Minister Thaksin Shinawatra had profited from the devaluation, It has been investigated by the court of justice and despite comments from former Thaksin cabinet member Sanoh that "There were four people who got involved in the Baht depreciation, i.e. Chavalit, Thaksin, Thanong and Pokin," no case has been filed against Thaksin for this or any other parties.

By 2001, Thailand's economy had recovered. The increasing tax revenues allowed the country to balance its budget and repay its debts to the IMF in 2003, four years ahead of schedule. The Thai baht continued to appreciate to 29 Baht to the Dollar in October 2010.

While it was technically true the baht was tied to a basket of currencies, not just US Dollars, today we are back to that basket with US Dollars making up the major component. Also it is interesting to note prior to the devaluation, Thailand was at a 9% growth rate, and had high interest rates. There was a lot of borrowing in the USA and Europe at much lower interest rates, moving the money to Thailand and collecting a much higher rate, Once the alarm bells started to ring, a lot of that money was withdrawn, causing another part of the crises.

But this thread is about gold, so through out all of this, if your funds were held in gold, you would have come out in pretty good shape.

As I said above I am All IN with silver right now, just because of the tie between gold and silver and the ratio between them. Some time in the next 5 years I will be back in gold, and it is a lot easier to store than silver.

[92302]

One who has not invested in physical gold in the last 2 or 3 years is a clueless nincompoop.

[Naam]

One who has not invested in physical gold in the last 2 or 3 years is a clueless nincompoop.

unfortunately not all of us are brilliant investors like you

[churchill]

2011 – THE YEAR OF CATCH-22

http://www.theburningplatform.com/?p=9053

[mania]

2011 will likely be a difficult year, and 2012 will be worse if the current trends continue. The recklessness and hubris of the central government is an awful thing to watch. I am afraid that it will likely reach a climax and turn away from the current path when the real economy 'hits the wall.' I am not confident that the developed countries will be able to resist the call to fascism in the name of expediency. Too few did so in the 1930's. And even then the denial and recriminations may be quite alarming and confusing.

http://jessescrossroadscafe.blogspot.com/2011/01/gold-weekly-chart.html

[Naam]

the sky will be falling in 2011 and the world will end in 2012!

http://www.naams_shullbite-blog.org

[Naam]

the tendency of rising interest rates is not beneficial for precious metals. that is why i will get rid of my paper gold today.

ahmm... did i mention i bought it back two days later?

who said i am not consistent? of course i am not Consistent, i am Naam! Consistent's actions are irrelevant for me. i make my decisions as i please.

[Naam]

as I think the Euro is headed for dollar parity, I would expect that...

another dreamer who needs a rubber sheet between the linen and the mattress

These guys have been the top FX forecasters over the past 18 months.

"TD Securities predicts that the euro will trade at $1.13 by year-end, compared with $1.38 as of Oct. 1, and drop to parity against the dollar next year."

http://www.bloomberg.com/news/2010-10-03/no-stopping-yen-as-euro-reaches-parity-in-top-markets-forecast.html

Regards.

8 days left for the "top FX forecasters" to be proven right or wrong

only 14% to go.

what's the latest from "top FX forecasters"?

[AlexLah]

the tendency of rising interest rates is not beneficial for precious metals. that is why i will get rid of my paper gold today.

ahmm... did i mention i bought it back two days later?

who said i am not consistent? of course i am not Consistent, i am Naam! Consistent's actions are irrelevant for me. i make my decisions as i please.

No no no no no, just admit you had a good look at my "Chart" and had this <deleted> moment..........

[Naam]

the tendency of rising interest rates is not beneficial for precious metals. that is why i will get rid of my paper gold today.

ahmm... did i mention i bought it back two days later?

who said i am not consistent? of course i am not Consistent, i am Naam! Consistent's actions are irrelevant for me. i make my decisions as i please.

No no no no no, just admit you had a good look at my "Chart" and had this <deleted> moment..........

i admit that i did not make the pick but relied on the recommendation of an "anal" from one of my banks.

[crusader79]

Trouble in Minerville:

http://seekingalpha.com/article/244452-a-precious-metals-wish-for-2011-stop-the-darn-transactions?source=yahoo

[churchill]

Some talk of a major correction at these levels and pm shares have been underperforming /

but Fresnillo up nicely today which may boost other pm stocks in the US /

But a lot hindges on the USD -and with China giving Euro support and talk of India buying Oil from Iran in non-$ , perhaps attention is about to switch from Euro to USD /

[churchill]

Fresnillo Up 5% On Slim Takeover Rumors

'And while speculation is healthy and all, it is also completely useless. We will follow this one closely as this could just be the M&A catalyst that sends shares in the PM space through the roof. '

http://www.zerohedge.com/article/fresnillo-5-slim-takeover-rumors

[churchill]

Now that is over , are we at a nice base & building support for higher prices - Buy the dips /

It's Déjà vu All Over Again

http://fofoa.blogspot.com/2011/01/its-deja-vu-all-over-again.html

[Naam]

It's Déjà vu All Over Again

http://fofoa.blogspot.com/2011/01/its-deja-vu-all-over-again.html

yada yada paper gold, yakety-yak physical gold... What if yesterday's "dip" was not the result of... most auspicious... ramba zamba they will eventually be politically default... the real thing... if I were a Central Banker... if any of this rings true...

[mania]

Fractal Gold Report for January 4, 2011

by David Nichols

The big story in gold as 2011 gets under way is the configuration of the weekly pattern, which has moved into position for a $200 trending move.

The weekly fractal dimension is up to 65, and that is precisely the same reading where the last weekly trend launched. That trend was a whopper, too, taking gold from the $1,160 area up to around $1,370 before the trending energy was exhausted and the consolidation pattern finally took over.

As a side note, it's highly bullish that gold has managed to fully consolidate the weekly chart while at the same time managing to move significantly higher than $1,370. This has been a very good consolidation period for gold.

That last weekly trend established a precedent for gold to move up over $200 while the fractal dimension moves from the mid-60s (fully consolidated/re-energized) down to below 30 (fully exhausted/out-of-energy).

So the weekly chart is looking really good right here, and it could definitely support a big move up of at least $200 into the anticipated top around February 18th.

As I've been discussing, it's my guess that the bulk of this move -- or perhaps even all of the move -- will come in a single 11 trading day period between now and the top.

Interestingly, we have been seeing 11-day bursts of upside energy during this consolidation period, so the precedent is already established. The difference will then become the magnitude of the move higher, as gold should travel about twice as far in the same amount of time.

The terminal peak should correspond to Day 64 - 65 for this timing cycle, which is set to hit around Feb 18th, or perhaps one week later to coincide with Day 64 for the subordinate cycle. The likely candidate days for the launch of this "end-spike" are the main cycle dates, around Day 21 (which has already passed), Day 32, Day 43, or perhaps even out to Day 54.

In the very short-term, the 150-minute chart is fully re-energized after the up move on Friday, and the down move on Monday.

So the conditions remain ideal for a blazing move higher, but it's also one of those things that is hard to pin down ahead of time, as the energy mix has to catalyse just right. It should be coming soon, and we'll definitely know it when we see it.

[Naam]

we'll definitely know it when we see it

wisdom! :jap:

[churchill]

2011 – The year when money starts to die

Between 1716 and 1720, John Law tried to rescue the French government from bankruptcy with a scheme that came to be called “The Mississippi Bubble”. His strategy was to set up two entities: a bank whose purpose was to issue paper money, and a company whose primary but undeclared function was to refinance government debt. Law realised that he had to confiscate all gold and silver other than smaller quantities, and force French citizens to pay their taxes and buy shares in the Mississippi Company, only with the bank’s newly issued notes. These were the three essential elements of his scheme.

This is precisely what central banks in the US, Europe, Japan and the UK are doing today. They are rigging the markets by buying government debt at artificially high prices with freshly created paper money, having previously excluded gold and silver from any role as legal tender. The following quote from John Law, could equally be attributed to a central banker of today: “An abundance of money which would lower the interest rate to two per cent would, in reducing the financing costs of the debts and public offices etc. relieve the King.” This is quantitative easing, pure and simple, and John Law had fully anticipated modern central banking. Law’s scheme ended in disaster and as a precedent for today’s central banking this should worry us greatly.

... continued http://www.financeandeconomics.org/Articles%20archive/2011.01.05%20Money%20dies.htm

[churchill]

The 50 day moving average at 1377 is important - If that is broken gold could plunge /

'After a $325 rise in 2010, gold bullion yesterday suffered its steepest one-day loss since July – down by $34 at the U.S. close after an intra-day low of -$40. The chart below shows the sell-off plunging the gold price down to right on top of its 50-day moving average. Also, the “triple top” could point to more downside in the short term.'

http://www.favstocks.com/gold%E2%80%99s-mania-phase-still-ahead/0530772/

[churchill]

Trading Community Beginning to Turn Against Gold?

http://www.forexhound.com/article/Stocks/Stocks/Trading_Community_Beginning_to_Turn_Against_Gold/274379