Where Is Gold Going In This Market

[cloudhopper]

Pimm Fox: You've written about the role of gold in the world economy, Professor Mundell. Do you think that we're going to see any kind of return to the gold standard?

Mundell: [T]here could be a kind of Bretton Woods type of gold standard where the price of gold was fixed for central banks and they could use gold as an asset to trade central banks.

Didn't Nixon unilaterally abolish that standard overnight in 1971 thereby allowing a humongous global credit expansion that's now popping professor?

Don't you wish you had gotten a vasectomy instead of fathering the euro professor?

[Naam]

Mundell: [T]here could be a kind of Bretton Woods type of gold standard where the price of gold was fixed for central banks and they could use gold as an asset to trade central banks.

the central banks could use gold to trade central banks?

[Naam]

Don't you wish you had gotten a vasectomy instead of fathering the euro professor?

Mundell's Mama should have given his Daddy a blowjob instead!

[churchill]

Gold Miners Wield Dividend in ETF Fight

http://online.wsj.com/article/SB10001424052702304665904576381594196584726.html

[anon676545345]

Gold entered short on retest at 1522.

http://imageshack.us/photo/my-images/695/spotgolddfb.png/

Silver has found support short closed at 3472.

http://imageshack.us/photo/my-images/542/spotsilverdfb.png/

[p_brownstone]

"An exhaustive report by Standard Chartered predicts that gold [GCCV1 1526.40 2.00 (+0.13%) ] will more than triple to $5,000 an ounce because of a lack of supply, not just because of a surge in demand that most bullion bugs cite in their bullish calls."

http://www.cnbc.com/id/43396080

Gives no timeframe however.

Patrick

[badge]

Just as fracking and stable - yet low - prices have unearthed an enormous amount of viable NG in the US, high Gold prices have kick started an enormous amount of mining the world over.

China is now the largest Gold producer in the world, it doesnt need to go into the market to buy Gold to increase their foreign exchange reserves in the metal.

Central banks track-record on timing for Gold purchases/sales is appalling, often signaling significant highs/lows respectively.

The greatest demand for Gold currently is for investment purposes only.

Here we have an Investment bank, whos Asian arm is suggesting to buy. Mining shares no less, which have been lagging significantly. Stop the press.

[churchill]

Nominal Gold & Gold vs. Currency, Commodities & Stock Market

http://biiwii.blogspot.com/2011/06/nominal-gold-gold-vs-currency.html?spref=tw

[churchill]

Comex Silver Continues to Fall to Historic Lows

http://jessescrossroadscafe.blogspot.com/2011/06/comex-silver-continues-to-fall-to.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Café+Américain%29

[churchill]

Ah .. feeling a lot more relaxed !

At least one GOP Presidential candidate, Gold Standard bearer Rep. Ron Paul, R-Texas, supports both a U.S. gold standard and a domestic precious metals sector.

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=129424&sn=Detail&pid=102055

[churchill]

Interactive Gold Charts in USD / Euro / GBP / CHF etc ..

http://www.goldmoney.com/gold-charts.html

[RedFxTrade]

Ah .. feeling a lot more relaxed !

At least one GOP Presidential candidate, Gold Standard bearer Rep. Ron Paul, R-Texas, supports both a U.S. gold standard and a domestic precious metals sector.

http://www.mineweb.c...tail&pid=102055

Here is Ron Pauls stockmarket portfolio....RP's Stocks Do you see any weighting towards a particular sector? He has held these for years apparently...I m surprised at RP, I thought it would be full of Linkin, JP Morgan, Citi and Netflix stocks...oh thats probably Barney Franks

[12DrinkMore]

a

Edited June 16, 2011 by 12DrinkMore

[12DrinkMore]

Not so much as where it is going but where it has come from....

[flying]

At least one GOP Presidential candidate, Gold Standard bearer Rep. Ron Paul, R-Texas, supports both a U.S. gold standard and a domestic precious metals sector.

He will get my vote

Not because of his feelings regarding gold. ( Not that I dont appreciate his stand on responsible fiscal policies )

But more so because of his thoughts on foreign policies & the upholding of our constitution

[flying]

Yep...........

Dive in Silver Price a “Setup,” Says Sprott

By Damon van der Linde – Exclusive to Silver Investing News

Eric Sprott is CEO of Sprott Asset Management and a long-time proponent of owning both gold and silver. He is also a long-time proponent of the belief in the conspiracy theory whereby large financial institutions are colluding to drive silver prices down, as when prices fell from around $50 to $32 an ounce in May.

“In my heart of hearts I believe it was a manipulation,” said Sprott in an exclusive interview with Silver Investing News. “There was no market, it was a setup. They’ve just pushed it down. It’s ridiculous.”

The recent price correction has largely been attributed to the increased margin requirements from the CME group. Between April 25 and May 5, COMEX increased silver margins to as much as 12 percent – or $21,600 per contract – from 6 percent, before silver tumbled 25 percent.

“China was closed, the UK was going to be closed that day, it was at the quietest time in the market and we all woke up and ‘bang,’ we had margin call,” said Sprott. “One of the most famous saying in the business is: never meet a margin call. Don’t put up the money, just get outta Dodge. This creates selling.”

Regarding who exactly is responsible for this manipulation, Sprott says that he believes those who initiated the recent drop in silver were large financial institutions unsatisfied with their current volume of holdings.

“We all suspect they’re the same guys that are mentioned in the 2008 lawsuits against the two major players in the silver market,” he said. “The guys who were short who were getting killed were losing huge amounts of money, so it was a perfect time to do something.”

Sprott is referring to two separate lawsuits filed by trader Peter Laskaris in federal court against JP Morgan Chase & Co. and HSBC.

Laskaris claims that the institutions held large positions in silver futures and silver options, then made large trades at key times, made large “spoof” orders that were placed and then canceled after the order has influenced the price, and communicated their trades to each other.

The silver market has long been the focus of manipulation theorists. Fueling this speculation, at a CFTC hearing to consider new rules to strengthen its commodity-enforcement powers, commissioner Bart Chilton said market players have made “repeated” and “fraudulent efforts to persuade and deviously control” silver prices.

In spite of his speculations of manipulation, it would be an understatement to say that Sprott is bullish on silver. Around the time of silver peak, financial blogger Kid Dynamite and later the Globe and Mail reported that Sprott had sold 1.6 million trust units of Sprott’s Physical Silver Trust. Sprott later explained that he was in fact only selling so he could buy back in without the premium.

“Our position in silver did not change,” said Sprott. “If I can buy the silver back at a 20 percent discount from the value, then I can buy back 20 percent more ounces of silver in the physical market. One hundred percent of the proceeds of those transactions went either in the physical silver or into silver equities.”

Sprott also says that the force of quantitative easing is pushing the price of silver. The second round of quantitative easing is drawing to a close as the QE2 trade was “officially over” in late March. Many analysts, including Sprott, are prepared for a QE3 around the corner, and that this would once again drive silver prices to record highs.

“A lot of that QE1 and QE2 are giving a tailwind to gold and silver. If you want to tell me there’s going to be a QE3, I’m going to tell you silver will hit $50 before we even know it,” said Sprott. “I’ve always publicly stated that it will trade at a range based on the gold price of 1/16 of the gold price, that’s what I think it historically was always at and I think it will go back there. The charts tell you that”

Looking to the future, Sprott says he believes demand should push silver to new highs. Over a billion ounces of silver are traded a year and yet around only 900 million is produced. There hasn’t been a huge increase in the amount of silver production in the last 10 years and yet the physical demand for silver, has changed massively. In spite of this demand, Sprott says he is still uncertain over what forces will ultimately drive the value of this precious metal.

“It’s hard to make a call on where for sure all these things are going to go because we don’t know what the next ridiculous policy on the part of central banks and governments are going to be,” he said. “Silver and gold are competitors to fiat currency. They’re competitors and for the capitalist system to function, people have to trust currencies.”

[Naam]

The recent price correction has largely been attributed to the increased margin requirements from the CME group. Between April 25 and May 5, COMEX increased silver margins to as much as 12 percent – or $21,600 per contract – from 6 percent, before silver tumbled 25 percent.

the logical conclusion is that the recent price explosion of silver was caused by 'poor boy type' speculators who not only lacked the funds to match the increased margins and of course not the funds to have the contracts physically delivered.

[churchill]

The Almost Shocking Year-To-Date Divergence Between Gold and the Gold Miners

http://3.bp.blogspot.com/-dXLxm8lzBS8/Tfunsgvy5bI/AAAAAAAARA4/22GUaGN7Q1U/s1600/goldminers.png

http://jessescrossroadscafe.blogspot.com/2011/06/shocking-divergence-between-gold-and.html

But close to a bottom ....

New Vulture Bargain ‘Ops’

http://www.gotgoldreport.com/2011/06/new-vulture-bargain-ops-.html#more

[flying]

The recent price correction has largely been attributed to the increased margin requirements from the CME group. Between April 25 and May 5, COMEX increased silver margins to as much as 12 percent – or $21,600 per contract – from 6 percent, before silver tumbled 25 percent.

the logical conclusion is that the recent price explosion of silver was caused by 'poor boy type' speculators who not only lacked the funds to match the increased margins and of course not the funds to have the contracts physically delivered.

Agreed of course & as I posted back when it was occurring I was happy to see the renters evicted.

But...........in the short term it causes much volatility in the small market that is silver.

Which is why I am glad I swapped out of it.

Funny too that on the opposite end they (CME) have been lowering margins on Gold

I only wish they would totally separate this paper fiction from physical reality once & for all.

On a side note......you got out of miners at the right time too.

I saw that link churchill posted on Jesse's site yesterday

Edited June 18, 2011 by flying

[12DrinkMore]

I like curves, pity that Alex "The One That Knows" La no longer posts them.

So let's look at the gold price over the last two years.

Well that looks nice and linear. Maybe it will carry on this way? Or maybe not? But a nice trend. Time to buy!!!

So how about over the last decade?

Not bad, a continual, and with a generous view, linear up, up and up, looks like a definite trend upwards, surely must continue? Time to buy!!!

And now take a step back, gold price over thirty years.

OH! That looks like a scary spike upwards...... Time to buy???

[Naam]

On a side note......you got out of miners at the right time too.

once in a while i look at them to enjoy my luck. one of the companies stopped trading a few weeks ago, obviously because of fraudulent claims and a fraudulent balance sheet.

http://www.bloomberg.com/apps/quote?ticker=246:HK#chart

[cloudhopper]

.. Time to buy???

Who knows but I don't think that curves going back 30 years have much to say about that. How did it do during the last big depression? The reason I ask is that is the time period that seems most relevant to the current dilemma. The hyper-inflationists are certain that CBs will have absolutely no choice but to print themselves out of default but it seems to me any government going down that road knows that it's paved with escalating input costs. Even if they try there is no guarantee whatever they could possibly succeed in stopping a deflationary implosion of defaulting debt at all levels and other contractual obligations like pensions. Since the financial future (to the extent it can be controlled at all) will be decided by corrupt politicians my answer to your question is 'always'.

[lannarebirth]

You can make a chart look like whatever you want it to if you scale it right.

[churchill]

You can make a chart look like whatever you want it to if you scale it right.

Yes - Really one needs to compare to real interest rates , amount of money in circulation , debts , global wealth ? , gold supply , central bank holdings etc over similar periods -10 , 30 , 50 years to get a feel of today's price and where it might be going -

[lannarebirth]

You can make a chart look like whatever you want it to if you scale it right.

Yes - Really one needs to compare to real interest rates , amount of money in circulation , debts , global wealth ? , gold supply , central bank holdings etc over similar periods -10 , 30 , 50 years to get a feel of today's price and where it might be going -

And of course judge its utility as well.

[churchill]

You can make a chart look like whatever you want it to if you scale it right.

Yes - Really one needs to compare to real interest rates , amount of money in circulation , debts , global wealth ? , gold supply , central bank holdings etc over similar periods -10 , 30 , 50 years to get a feel of today's price and where it might be going -

And of course judge its utility as well.

I think that is where the gold bears fall down they do not understand Gold as a currency , and in today's climate one of THE currencies

Listen http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/6/18_MEP_Nigel_Farage.html

[RedFxTrade]

You can make a chart look like whatever you want it to if you scale it right.

Yes - Really one needs to compare to real interest rates , amount of money in circulation , debts , global wealth ? , gold supply , central bank holdings etc over similar periods -10 , 30 , 50 years to get a feel of today's price and where it might be going -

Absolutely...after all a £1 actually meant a pound weight in silver....there are 16 ounces in a pound weight...and one ounce now costs £22, the exponential increase is scary. Would love to see that charted....a chart of that would make that Gold chart posted by 12drinksmore of what appears to be a spike really be a flat line...

[flying]

Not bad, a continual, and with a generous view, linear up, up and up, looks like a definite trend upwards, surely must continue? Time to buy!!!

And now take a step back, gold price over thirty years.

OH! That looks like a scary spike upwards...... Time to buy???

With that kind of thinking I guess you should load up on USD?

Here is your 30yr

Your 10 year....

Your 1 year

Edited June 18, 2011 by flying

[12DrinkMore]

I have to admit that I do have a certain amount of AU securely imprisoned in a Swiss vault, and am also a member of the club which expects it to rise in value against the declining bits of paper.

But gold is another asset, or asset class, if you include all the miners and paper gold, and subject to the forces of the great tide of money sloshing around. So will gold "return to its long term average"? Or maybe "it is different this time?"

Here is a silver curve for RFT

And while I am on the curves, let's take a look at this one. The DJI from 1900 to date. And note that the vertical axis is not exactly linear, so a far far bigger spike than leads to believe at first glance.

Surely this index is supposed to represent the health of the economy and somehow mirror the value of all the companies that are in the index? Apart from the speculative spike and crash in the late 20's I can go along with the increase in productivity and wealth after the second world war. And then there was a period of relatively flat performance until 1982. After that the sky was clearly not the limit. So the where is the thirteen-fold increase in the index reflected in the real world of things you can touch?

Or are we looking at a massive pumped up Ponzi scheme, based on bloated property, bloated money supply, bloated government, bloated banks and a FED which will "Not Allow Deflation at any cost"?

I guess if you believe in the Bernanke Put, then buying into the DJI is as safe as houses?

Edited June 19, 2011 by 12DrinkMore

[Naam]

Surely this index is supposed to represent the health of the economy and somehow mirror the value of all the companies that are in the index?

you are looking at some face value "12". a face value that is "faker" than a 3½ British Pound note. google a little and find that companies have been continously changed, id est the losers are kicked out and winners are taken onboard. only one single company exists which was a part of the DOW at inception and that is General Electric.

moreover, the individual shares are weighted differently, which is faking the presented picture even more. in other words... the index might gain in total driven by one single share even if the remaining 29 shares lose.

summary: even without the afore-mentioned facts taken into consideration your assumption "represent the health of the economy" is totally off the mark.