Where Is Gold Going In This Market

[badge]

All the talk of Burgers is based on the infamous (but apparently not to this thread?) Economist Big Mac Index.

http://www.economist.com/blogs/dailychart/2011/07/big-mac-index

IT IS nearly 25 years since The Economist cooked up the Big Mac index.

The index is a lighthearted attempt to gauge how far currencies are from their fair value. It is based on the theory of purchasing-power parity (PPP), which argues that in the long run exchange rates should move to equalise the price of an identical basket of goods between two countries. Our basket consists of a single item, a Big Mac hamburger, produced in nearly 120 countries. The fair-value benchmark is the exchange rate that leaves burgers costing the same in America as elsewhere.

[flying]

CME Raises Margin Requirements on Gold, Treasuries,Energy & Swiss Franc's

Like Jesse said.....Why Be Subtle? Why not just machine gun the life boats?

PDF attached from CME

C166E416d01.pdf

Edited August 11, 2011 by flying

[Naam]

All the talk of Burgers is based on the infamous (but apparently not to this thread?) Economist Big Mac Index.

i'd like to hear your personal opinion on this Badge.

[Lost in LOS]

sold today:

CH0103326721

CH0047533572

bought today:

CH0047533549

Naam, can you do this in English, not all of us are rocket scientists

[Lost in LOS]

dam_n, I sure am glad I brought a sh*t load of gold in the past...

[ExpatJ]

Futures are up big time for US stock markets right now...not good for gold prices. Lets hope for some more bad news from Europe today...

[flying]

Futures are up big time for US stock markets right now...not good for gold prices. Lets hope for some more bad news from Europe today...

I would actually like to see gold consolidate/catch its breath here for a bit.

That would show a lot of strength

[churchill]

Futures are up big time for US stock markets right now...not good for gold prices. Lets hope for some more bad news from Europe today...

We have enough bad news already .... rising markets are not always bad for Gold - I think with more QE - markets and commodities including Gold will be supported - currencies are the problem /

The west has to encourage growth / inflation / & devalue currencies to reduce debts IMO

The US is very happy , as indicated by Bernanke , to have a weaker $ - The Euro is also too strong to encourage growth in most of Europe , and the Yen too strong for Japan , Swiss Franc ...etc

[cloudhopper]

CME Raises Margin Requirements on Gold, Treasuries,Energy & Swiss Franc's

Like Jesse said.....Why Be Subtle? Why not just machine gun the life boats?

PDF attached from CME

C166E416d01.pdf

Hasn't seemed to reduce the price volatility much if any...

[12DrinkMore]

sold today:

CH0103326721

CH0047533572

bought today:

CH0047533549

Naam, can you do this in English, not all of us are rocket scientists

He already did

yesterday sold all silver ETFs, sold all CHF hedged gold ETFs, bought for the proceeds unhedged gold ETFs

ETF's issued by the ZKB

http://www.zkb.ch/de...toff_fonds.html

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

Edited August 11, 2011 by 12DrinkMore

[Lost in LOS]

Futures are up big time for US stock markets right now...not good for gold prices. Lets hope for some more bad news from Europe today...

if the stocks go higher, i will sell my last 4 stocks. sold 20 of them friday and monday and wish i would have sold all

if the gold goes lower I i will buy more

[ExpatJ]

Futures are up big time for US stock markets right now...not good for gold prices. Lets hope for some more bad news from Europe today...

if the stocks go higher, i will sell my last 4 stocks. sold 20 of them friday and monday and wish i would have sold all

if the gold goes lower I i will buy more

Wise- i think even if there is a stock rally today/tomorrow, trend is still downwards for now..

[Naam]

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

actually a more logical than shrewd move however in no way connected to potential SNB actions. CHF had an excellent performance but... trees don't grow sky high. there is a limit even for CHF. one also has to take into consideration what part of appreciation was caused by safe haven seekers. once the tide turns... we touched parity with EUR day before yesterday but today we are at 104.20

disclaimer: i still hold some 8.5% of my portfolio in CHF denominated bonds and cash. but i don't mind that an AAA rated debtor yields 6.45% in CHF.

there... there... calm down... don't get too excited asking me which AAA rated debtor

[Naam]

sold today:

CH0103326721

CH0047533572

bought today:

CH0047533549

Naam, can you do this in English, not all of us are rocket scientists

these are ETFs issued by Zürcher Kantonal Bank. ETFs backed 100% by physical gold/silver, physical delivery on demand.

[ExpatJ]

Just bought more units of my gold fund on Monday and its already up 7% by today- wow, fastest return i have ever had outside of a casino i think. Silly money- gold is ripe for a correction

Edit- correction 'only' 4% increase. I know naam, you have been beavering away ready to ask which gold fund increased 7% since monday

Edited August 11, 2011 by ExpatJ

[ExpatJ]

Given there is a good chance of a correction in gold prices, albeit with equally good chance that gold prices will increase further in next 3-9 months-

Anyone planning on selling some/all of their gold now to take profits before a possible correction?

Anyone planning to just hold and wait/hope for continued increase in coming months?

I'm torn...would be good to hear feedback ...

[flying]

Given there is a good chance of a correction in gold prices, albeit with equally good chance that gold prices will increase further in next 3-9 months-

Anyone planning on selling some/all of their gold now to take profits before a possible correction?

Anyone planning to just hold and wait/hope for continued increase in coming months?

I'm torn...would be good to hear feedback ...

Judging by your previous post it appears you trade paper gold?

If so your situation is different.

In my case I am only physical no paper

I have in the past swapped large amounts of Silver into Gold ( again both physical )

As such at this time I have no intention of selling.

My reasons for accumulating these last few years are all still in tact with no reason to liquidate to cash.

If those reasons change of course I would sell.

but with physical it is not a matter of selling for small corrections as there are premiums involved.

Not to mention trying to re-acquire quantities of physical is not as easy as clicking a mouse at times.

For Instance....Back in Oct 2008 gold was $735/oz but trying to find decent amounts was near impossible.

If your a paper trader your situation is of course different.

Good Luck

Edited August 11, 2011 by flying

[churchill]

I would say take some profits as gold rises and buy the dips ..

Market jitters cause Thai gold rush

http://english.aljazeera.net/video/asia-pacific/2011/08/201181163514490850.html?utm_content=automateplus&utm_campaign=Trial5&utm_source=SocialFlow&utm_term=tweets&utm_medium=MasterAccount

[cloudhopper]

i have never bought any asset with the primary expectation that it appreciates in value. since i started investing my aim was to acquire and own assets which generate income/cash flow and allows, within certain parameters, extrapolations. asset appreciation is not always welcome as it lowers yields and puts pressure on the investor to realise profits. after cashing in profits the problem how to reinvest the proceeds are back and if no better alternatives exist realising profit is a zero sum game.

Mathematically Naam there is no distinction between the 2 cases you state above. If an asset appreciates by 20% and you sell 20% of it (actually 16.67% if you want to be pedantic), that is effectively no different than allowing the asset to give you a dividend of 20%. In each case, you wind up with an asset worth exactly what you paid for it, and 20% of its value in your pocket. The difference is simply that in the case of a dividend, the sale is forced on all investors, while in the case of capital appreciation you have the option of taking the dividend or leaving it in the investment.

Gold does generate cash flow if you want to treat it that way. You simply sell a portion every time it exceeds your purchase point. Your amount of gold goes down, but the value of that gold in fiat remains constant and you continually receive money. No different than your other investments. As a bonus you even get to decide for yourself how much the dividend will be and how much you want to see in appreciation.

I am afraid that, mathematically, there is a distinction gregb. Even if your gold appreciates at a constant 20% per year, you will need to sell an increasingly greater fraction of your remaining stack to generate the same annual return. Until it's gone anyway.

[churchill]

Germany’s Best-Selling Tabloid Bild's Front Page Encourages Readers To Buy Gold

http://www.zerohedge.com/news/germany’s-best-selling-tabloid-bilds-front-page-encourages-readers-buy-gold

[gregb]

i have never bought any asset with the primary expectation that it appreciates in value. since i started investing my aim was to acquire and own assets which generate income/cash flow and allows, within certain parameters, extrapolations. asset appreciation is not always welcome as it lowers yields and puts pressure on the investor to realise profits. after cashing in profits the problem how to reinvest the proceeds are back and if no better alternatives exist realising profit is a zero sum game.

Mathematically Naam there is no distinction between the 2 cases you state above. If an asset appreciates by 20% and you sell 20% of it (actually 16.67% if you want to be pedantic), that is effectively no different than allowing the asset to give you a dividend of 20%. In each case, you wind up with an asset worth exactly what you paid for it, and 20% of its value in your pocket. The difference is simply that in the case of a dividend, the sale is forced on all investors, while in the case of capital appreciation you have the option of taking the dividend or leaving it in the investment.

Gold does generate cash flow if you want to treat it that way. You simply sell a portion every time it exceeds your purchase point. Your amount of gold goes down, but the value of that gold in fiat remains constant and you continually receive money. No different than your other investments. As a bonus you even get to decide for yourself how much the dividend will be and how much you want to see in appreciation.

I am afraid that, mathematically, there is a distinction gregb. Even if your gold appreciates at a constant 20% per year, you will need to sell an increasingly greater fraction of your remaining stack to generate the same annual return. Until it's gone anyway.

No. This is not true. In fact, you would sell an increasingly smaller fraction each time, but the remainder would still be worth the same amount. It would never completely disappear. It would be much like a radioactive material that way. You could specify a half life for it, but it would never go to 0.

[cloudhopper]

Germany's Best-Selling Tabloid Bild's Front Page Encourages Readers To Buy Gold /quote]

"Gold remains in a strong upward trending channel and until we see a breach of this to the downside, it should continue to move higher."

Can't argue with the experts.

Edited August 11, 2011 by cloudhopper

[cloudhopper]

No. This is not true. In fact, you would sell an increasingly smaller fraction each time, but the remainder would still be worth the same amount. It would never completely disappear. It would be much like a radioactive material that way. You could specify a half life for it, but it would never go to 0.

OK math was never my favorite subject. You have convinced me that what you are saying is true.

Edited August 11, 2011 by cloudhopper

[Naam]

i have never bought any asset with the primary expectation that it appreciates in value. since i started investing my aim was to acquire and own assets which generate income/cash flow and allows, within certain parameters, extrapolations. asset appreciation is not always welcome as it lowers yields and puts pressure on the investor to realise profits. after cashing in profits the problem how to reinvest the proceeds are back and if no better alternatives exist realising profit is a zero sum game.

Mathematically Naam there is no distinction between the 2 cases you state above. If an asset appreciates by 20% and you sell 20% of it (actually 16.67% if you want to be pedantic), that is effectively no different than allowing the asset to give you a dividend of 20%. In each case, you wind up with an asset worth exactly what you paid for it, and 20% of its value in your pocket. The difference is simply that in the case of a dividend, the sale is forced on all investors, while in the case of capital appreciation you have the option of taking the dividend or leaving it in the investment.

Gold does generate cash flow if you want to treat it that way. You simply sell a portion every time it exceeds your purchase point. Your amount of gold goes down, but the value of that gold in fiat remains constant and you continually receive money. No different than your other investments. As a bonus you even get to decide for yourself how much the dividend will be and how much you want to see in appreciation.

I am afraid that, mathematically, there is a distinction gregb. Even if your gold appreciates at a constant 20% per year, you will need to sell an increasingly greater fraction of your remaining stack to generate the same annual return. Until it's gone anyway.

No. This is not true. In fact, you would sell an increasingly smaller fraction each time, but the remainder would still be worth the same amount. It would never completely disappear. It would be much like a radioactive material that way. You could specify a half life for it, but it would never go to 0.

that's what the gold aficionados did in the 80s and 90s till they died of starvation.

[Naam]

Gold does generate cash flow if you want to treat it that way. You simply sell a portion every time it exceeds your purchase point. Your amount of gold goes down, but the value of that gold in fiat remains constant and you continually receive money. No different than your other investments.

i can only shake my head in sorrow

[churchill]

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

actually a more logical than shrewd move however in no way connected to potential SNB actions. CHF had an excellent performance but... trees don't grow sky high. there is a limit even for CHF. one also has to take into consideration what part of appreciation was caused by safe haven seekers. once the tide turns... we touched parity with EUR day before yesterday but today we are at 104.20

disclaimer: i still hold some 8.5% of my portfolio in CHF denominated bonds and cash. but i don't mind that an AAA rated debtor yields 6.45% in CHF.

there... there... calm down... don't get too excited asking me which AAA rated debtor

'zerohedge

Swiss Franc Slides 5.5% Vs. Dollar; Biggest Loss Since 1978'

and up ..

currencies looking like stocks ...

Edited August 11, 2011 by churchill

[churchill]

Swiss Central Bank Ponders "Temporary" Peg to Euro; Franc Trades Sharply Lower; This a Bluff? What Does it Take to Maintain a Peg? "Temporary" Defined

http://globaleconomicanalysis.blogspot.com/2011/08/swiss-central-bank-ponders-temporary.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

[manarak]

Swiss Central Bank Ponders "Temporary" Peg to Euro; Franc Trades Sharply Lower; This a Bluff? What Does it Take to Maintain a Peg? "Temporary" Defined

http://globaleconomicanalysis.blogspot.com/2011/08/swiss-central-bank-ponders-temporary.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

I really wonder about that move.

Maintaining the peg would totally ruin Switzerland if people keep buying CHF as they did over the last months.

Last year's interventions already cost the SNB about 21 billion!!!

The SNB's chief is being threatened of being let go, so he had to announce something.

I don't know what to do with this bold announcement.

My gut feeling is that this 5% loss will be regained over the next 2 weeks.

The EUROloonies just begun buying italian and spanish bonds...

What about portuguiese and irish bonds?

I can't see how people will just stop buying CHF.

And how would negative interest rates be implemented, exactly? Will someone come to my home every month and puncture a % of my banknotes?

[muchogra]

Since my last asking if anybody played the derivative market in Thailand, no one has had answered except derogatory comments asking me back if I have been struggling to pay my rent or if I owned cattle and ranches. Very good questions indeed! Hey, but what's the point? I don't suppose you gonna give me a dime if I ask anyway?

I lost USD2,000 trading silver in a jiffy about 30 years ago when it was in the range of USD3 to USD 4 ago reading off my Quotron or something which I paid USD400 to get real time quote. Wow, that was quick!

Hey, I got it back 30 years later. I bought 1,000 pieces of silver eagle in Feb when the spot price was 18.5 through my kid in the states. I think I paid USD21 though - a premium. My kid brought 10 back to me to Thailand with the rest in the states. Have I sold these? No! Did I sell elsewhere? Yes, at around USD49 in April! I needed rent money then!

Again I ask, do any of you trade derivatives in the Thai market?

[muchogra]

Reading myriad of knowledge from people who undoubtedly qualified for being financial columnists or analysts, I sometimes wonder if some can boast the same in other countries except in Thailand where 1 million or more can buy you the same prestige. I know I can't!