Where Is Gold Going In This Market

[flying]

here you go:

now now....you know I know better

[badge]

So with Gold at new highs Ive ran my ruler over it, and depending on what data I put into my model I get varying Long Term targets, the most poignant of which lie at 1355/65/90, so really anywhere between 1350-1400(!), and then 1575-1600. All rather vague then!

Theres some less potentially significant targets along the way at 1365, 1460 and 1515 too.

In a 'back of fag packet' moment I put Spot AG in too, and came up with Long Term targets around $23.50, 26.30 and 27.50. How that gels with AU or how likely they are to be met I dont know; just a bit of fun

Fantastic run from AG of late.

$23.50 inspired a $1.20 correction; $26.30 a mere $0.20c.

As spot is approaching $27.50 I suppose I should get the ruler out again

[badge]

So with Gold at new highs Ive ran my ruler over it, and depending on what data I put into my model I get varying Long Term targets, the most poignant of which lie at 1355/65/90, so really anywhere between 1350-1400(!), and then 1575-1600. All rather vague then!

Theres some less potentially significant targets along the way at 1365, 1460 and 1515 too.

In a 'back of fag packet' moment I put Spot AG in too, and came up with Long Term targets around $23.50, 26.30 and 27.50. How that gels with AU or how likely they are to be met I dont know; just a bit of fun

Fantastic run from AG of late.

$23.50 inspired a $1.20 correction; $26.30 a mere $0.20c.

As spot is approaching $27.50 I suppose I should get the ruler out again

$27.50 is the next hurdle still, but the model shows around $32.35 as the next sell signal - not far off a 61.8% retrace of the all time high - with $34.50 and $37.25 likely the following inflexion points.

As before, liklihood of these longer term prices being reached etc etc unknown

Edited November 6, 2010 by badge

[churchill]

Zoellick seeks gold standard debate

Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank.

continued .. http://www.ft.com/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz14eCESz00

Edited November 8, 2010 by churchill

[Naam]

Zoellick seeks gold standard debate

Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank.

did Zoellick say something about auditing how much gold these economies possess or will possess?

[cloudhopper]

Zoellick seeks gold standard debate

Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank.

continued .. http://www.ft.com/cm...l#axzz14eCESz00

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

Gold is already serving in this capacity IMO regardless of any formal recognition of this fact.

[ExpatJ]

Does any one know which institutions are managing the gold ETFs in Thailand? anyone bought into them?

[churchill]

Zoellick seeks gold standard debate

Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank.

did Zoellick say something about auditing how much gold these economies possess or will possess?

Not as I recall

This from ZH for more .....

World Bank President Robert Zoellick Calls For Return To "Old Money" Gold Standard

http://www.zerohedge.com/article/world-bank-president-robert-zoellick-calls-return-old-money-gold-standard?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

[Naam]

even a partial gold standard for any currency is wishful thinking and worth zilch if the underlying amount of gold cannot be verified by independent auditors.

[churchill]

Agreed - Ron Paul would be a start

Ben Bernanke’s Worst Nightmare: Chairman Ron Paul

'Auditing the Fed is only the beginning, as one might expect from the author of End the Fed. Carney writes that Paul told NetNet, “I will approach that committee like no one has ever approached it because we’re living in times like no one has ever seen.” Among his other objectives: using subcommittee hearings to educate the public about Austrian economists’ view of the business cycle, namely that it is a result of central banks’ shenanigans rather than something inherent in the free market, and auditing the U.S. gold reserves in preparation for monetary reform, either by legalizing competing currencies or by returning to the gold standard (or both). '

...http://www.thenewamerican.com/index.php/usnews/congress/5104-ben-bernankes-worst-nightmare-chairman-ron-paul

[flying]

Paul told NetNet, “I will approach that committee like no one has ever approached it because we’re living in times like no one has ever seen.”

I just hope he does not get suicided

[flying]

Well...............

Silver has just surfed over the $26/oz mark

Yes my Klingon friend that is in US dollars only

Still the word impressive comes to mind

Jeez I just posted that 2 days ago & it seems silver has touched $27 & went back to $26.80 over in Euro/Asia land tonight

Will be interested to see if it can do it tomorrow ( Monday) here in the West

Silver has been flat out smoking

[Naam]

AU/AG ratio <52! you like that Flying, isn't it?

[flying]

AU/AG ratio <52! you like that Flying, isn't it?

Yes I like it but you know I had that old 55/1 figure & after researching I am thinking

we have a long way to go.

Although many say 15/1 is the historical major.

Will be interesting to see how far it goes.

I am holding

PS: old article I think I may have shown you?

http://www.gold-eagle.com/editorials_03/sanders030703.html

Edited November 8, 2010 by flying

[ExpatJ]

Headline news on cnbc right now- world bank wants to star a debate on moving back to gold backed currency regime- what are the implications for Gold price?

http://www.cnbc.com/id/40064723

[Naam]

Headline news on cnbc right now- world bank wants to star a debate on moving back to gold backed currency regime- what are the implications for Gold price?

lukewarm brain farts which can't be implemented do not impress the price of gold.

[Abrak]

Although many say 15/1 is the historical major.

That ratio is very historic. I mean the ratio was roughly 15/1 give or take 20% from 1300 to 1860. The 1860-65 bull run in gold (negative real rates driven) spoilt that and although gold entered a 70 year bear market until 1934 the gold/silver ratio never really recovered. I dont think it has gone below about 30/1 in the last 100 years.

Actually I think a more interesting ratio is the value of silver stock to gold stock. There is quite a lot of gold around because noone seems to be able to find a viable way to get rid of it. I think the figure is about 0.75/oz per human - so say US$1,000 each. (Of course if there really is 100x as much paper gold than physical then everyone has US$100,000 of the stuff (when I say everyone - the sawdust eating mud hut dwellers of the world simply make up the numbers.))

The numbers for silver are pretty vague (to be honest the Indians seem to have large amounts of it turned into various bits of junk) noone quite knows what happens to it. I had a silver spoon that evaporated in a Uri Geller experiment. By all accounts JPM etc the silver bullion is leased out to a greater extent than gold. So I dont see much more than 0.2oz of silver per head which is US$5. (I was always impressed that Warren Buffett had to become the largest holder of silver in the world, simply to hold it.)

[ExpatJ]

Headline news on cnbc right now- world bank wants to star a debate on moving back to gold backed currency regime- what are the implications for Gold price?

lukewarm brain farts which can't be implemented do not impress the price of gold.

Look warm brain farts are behind most of the bull/bear runs in stocks and commodities in the last 50 years !

[Chunky1]

why does Naam keep trying to say that it's impossible to use gold as a reserve currency? it current makes up >75% of the federal reserve in various European nations.

[ExpatJ]

why does Naam keep trying to say that it's impossible to use gold as a reserve currency? it current makes up >75% of the federal reserve in various European nations.

Yes, you are correct its perfectly possible if governments wanted to do it- but i think Naam was being funny (??)

[Chunky1]

i have seen him make dozens of posts about "there isn't enough gold". i guess he doesn't understand that gold would appreciate from current price levels if it was to become the worlds currency reserve.

Edited November 8, 2010 by Chunky1

[lannarebirth]

i have seen him make dozens of posts about "there isn't enough gold". i guess he doesn't understand that gold would appreciate from current price levels if it was to become the worlds currency reserve.

So you're saying the Krugerrand : Bakery ratio could hit 1? Interesting.

[churchill]

i have seen him make dozens of posts about "there isn't enough gold". i guess he doesn't understand that gold would appreciate from current price levels if it was to become the worlds currency reserve.

So you're saying the Krugerrand : Bakery ratio could hit 1? Interesting.

Certainly not in thailand - perhaps France /

[flying]

Although many say 15/1 is the historical major.

That ratio is very historic. I mean the ratio was roughly 15/1 give or take 20% from 1300 to 1860. The 1860-65 bull run in gold (negative real rates driven) spoilt that and although gold entered a 70 year bear market until 1934 the gold/silver ratio never really recovered. I dont think it has gone below about 30/1 in the last 100 years.

Actually it has.....

The article I referred to has a 16/1 monetary ratio. Interesting read actually

Here are a few excerpts

RETURNING TO THE MEAN

Over the years markets tend to return to their mean or average values. However, as they correct they also tend to overshoot the mean, swinging like a pendulum first too far to one side, then too far to the other.

Based on year end average prices, the 1792-2002 mean ratio is 31.32. If the ratio merely returned to that mean over the bull market's course, silver would rise about 2.4 times faster than gold. However, based on the extreme ratio swings of the last 125 years, and the ratio's drop in the last precious metals bull market, I believe it is safe to speculate that the ratio will drop much, much lower than the 200 year mean. In fact, my target is 16:1, the bottom of the last bull market.

What makes the ratio work? Why would it return to the old monetary ratio at 16:1? I presuppose that both gold and silver are money, although both have been politically demonetised. That demonetisation, and the devaluation it causes, has encouraged lower order uses of both metals, in jewellery, for instance. However, periodically the metals' monetary character reasserts itself, and the old monetary ratio reappears.

THE PHYSICAL GOLD/SILVER RATIO

I have seen wildly differing estimates of the physical occurrence of gold and silver in the earth's crust. What difference does it make? It's a fair guess that one factor determining the gold/silver value ratio is the physical ratio in the earth's crust. Over the years I have found that ratio of given as low as 10:1 and as high as 40:1, but usually at 12:1. I asked a mining engineer, and he turned up definitive data.3

According to AGI Data Sheet 57.1, "Abundance of Elements," on average silver occurs at 0.07 parts per million, and gold at 0.004 parts per million in the earth's crust. Thus the naturally occurring ratio is 17.5:1.

Interesting - that's not far from the last monetary ratio - 16:1 -- set when both gold and silver were still universal money in the last century. Nor can I forget that when the great Bunker Hunt was investing in silver back in the 1970s he was often heard to say he expected the ratio to fall to 5:1. Never forget, either, that year by year industry consumes silver, while most of the gold ever mined still sits in a vault (or hangs around a neck) someplace. For 100 years and more that industrial consumption has put steady downward pressure on the ratio.

Edited November 8, 2010 by flying

[flying]

Headline news on cnbc right now- world bank wants to star a debate on moving back to gold backed currency regime- what are the implications for Gold price?

Yes the talking heads are allover it on CNBC here in the US this morning.

Of course they are saying....IMPOSSIBLE it could never happen there is not enough gold.

Of course it is possible even if the swap was Thirteen trillion USD & you had only 2 ounces of gold.

It is just they cannot comprehend a price of 6.5T/ounce

Personally I dont see it happening obviously & in fact hope it never does.

I hope gold remains free to seek its price unencumbered.

But something like this could work its way in..............Whether or not that would be good I don't know...

The revaluation of the SDR should be occurring around the end of 2010. As you know it is composed of a valuation basket of currencies that is adjusted every five years. There has been a recent change in voting power in the IMF that may give more weight to the BRICs and those who favor a broader basket that includes gold and silver. India, China and Brazil Become Major Players in the IMF. This is also of importance because we forecast that the SDR is going to be a likely candidate to supplant the Dollar as the world's reserve currency, a move that will be resisted and delayed by the Anglo-American financiers.

I do not know of any plans to change the valuation basket of the DX US dollar index. It is obviously out of date as the breakdown on the chart below shows. In previous postings of the very long term Dollar Chart I have warned that the projections may not be realized because the index is heavily weighted to the developed nations. 82 percent of the valuation is attributed to the euro, pound, and yen.

http://jessescrossroadscafe.blogspot.com/2010/11/very-long-term-us-dollar-chart.html

I am pretty cynical & tend to think those that control the $$ now would love to control a world currency...Which of course they already do in a sense through this world reserve currency but....It does not slip the view of many that this WRC is falling apart at the seams.

So Im sure TPTB would love to slip into the next

Just musing

Edited November 8, 2010 by flying

[flying]

You know I woke to Gold over $1400 as it sits at $1407/oz as I write

But Silver has caught my attention again now at $27.66 already....Sheesh !

[Naam]

why does Naam keep trying to say that it's impossible to use gold as a reserve currency? it current makes up >75% of the federal reserve in various European nations.

1. it is interesting that only two european nations match this claim. the de facto bankrupt countries Greece (76.5%) and Portugal (79.6%).

2. forex reserves have nothing to do with the here often discussed backing of a currency by gold as opposed to "reserve currency". the actual currency in circulation is a multiple of the reserves in virtually any country. even if the reserves of any country would consist 100% of gold it wouldn't make any impact on the value or backing of the actual currency.

what part of "item 2" is too difficult to understand?

[Chunky1]

ok perhaps i mixed up ur intention re: reserve vs backing.

[churchill]

You know I woke to Gold over $1400 as it sits at $1407/oz as I write

But Silver has caught my attention again now at $27.66 already....Sheesh !

The PM market is hotting up - silver now over $28 /

More pressure on JPM , HSBC -

Andrew Maguire Re-Emerges: Ex-Goldman Trader Exposes JPMorgan, HSBC In Latest Silver Price Manipulation Class Action Lawsuit

http://www.zerohedge.com/article/new-whistleblower-emerges-ex-goldman-trader-exposes-jpmorgan-hsbc-latest-silver-price-manipu

and gold is also on the up on the back of silver -

also There is speculation that GLD will have to increase its holdings by about 200 tonnes ! which must be supporting gold further

Edited November 9, 2010 by churchill

[flying]

The PM market is hotting up - silver now over $28 /

and gold is also on the up on the back of silver -

Yes I saw that & am pretty impressed daily.... Also noted the dollar going up today with silver & gold.

Silver has some legs now & it does make me think the stopping of the manipulation may have something to do with it.

I mean it is jumping 3%+ daily that is not the norm