Where Is Gold Going In This Market

[cheeryble]

vulgar diamonds are a girl's best friends

Don"t tell my wife.

[yoshiwara]

For human adornment I value human artistry (say carving) on stones....not expensive stones,,,,,much more than I could ever value the glitter of gold or diamonds, which I consider vulgar (especially glitter-cut gold as sold in Thailand, and diamonds are even worse, ghastly).Some day the world will follow as I am the archetype of good taste.

Your just calling out gold and diamond as vulgar because of your own dislike of the socio economic connotations that the materials have; but actually "craftsmanship and artistry" are things which can be appreciated what ever the material medium. View from the eyes or taste are just as subjective as ever.

Aesthetics and artistic appreciation cannot be reduced to a purely subjective (relativist) position. On the other hand I do like pearls.

[mccw]

"""Getting back to Gold, adjusted for the increase in money supply, Gold is now cheaper at $1400 than it was at $500. Thats right. There are exponentially more uncollateralized Federal Reserve Notes (aka US dollars) electronically circulating through the dying beast known as the US economy now relative to the supply of Gold than back when Gold as at $500, while debt has increased by hundreds of percentage points and wages are up less than 1%. Margin debt (the money that is borrowed to buy stocks) on the New York Stock Exchange is at an all-time high. The global debt and derivatives pile recently topped $1 quadrillion."""

-rt

[Naam]

Getting back to Gold, adjusted for the increase in money supply

source: Mr Max Clown Guru Keiser i presume?

"gold is also cheaper per capita because global population increased."

source: http://www.naams-rubbish.org

[yoshiwara]

"""Getting back to Gold, adjusted for the increase in money supply, Gold is now cheaper at $1400 than it was at $500. Thats right. There are exponentially more uncollateralized Federal Reserve Notes (aka US dollars) electronically circulating through the dying beast known as the US economy now relative to the supply of Gold than back when Gold as at $500, while debt has increased by hundreds of percentage points and wages are up less than 1%. Margin debt (the money that is borrowed to buy stocks) on the New York Stock Exchange is at an all-time high. The global debt and derivatives pile recently topped $1 quadrillion."""

-rt

Well, to summarise, gold is a rubbish protection against so-called fiat currencies. Thanks mccw.

[mccw]

Thought you'd enjoy that one

[ajarnpot]

cheeryblye I agree with you completly, my stash of interesting stones was a good plan. I told the wife, I told everyone in the pub,

I will be swapping interesting stones for food and cars and all sorts role on the debt collecters.

Be interesting to see this debt business sorted out us pay china what is 80 % of the trillion$ debts,

they will ask who ever it is for some of that,

and I will begin to see my lifes work of collected stones becoming useful hooorah

[Naam]

Tuesday, June 4, 1:01 PM ET

• Gold's (GLD -1.1%) back under $1,400 as the Reserve Bank of India clamps down further on speculative purchases by restricting import
  of the metal under a deferred payment plan. The restriction had
  previously only been applied to banks. The country likes gold, but
  produces very little, making it an important importer.
• http://seekingalpha.com/currents/post/1063501?source=email_rt_mc_readmore

[Khun Jean]

"""Getting back to Gold, adjusted for the increase in money supply, Gold is now cheaper at $1400 than it was at $500. Thats right. There are exponentially more uncollateralized Federal Reserve Notes (aka US dollars) electronically circulating through the dying beast known as the US economy now relative to the supply of Gold than back when Gold as at $500, while debt has increased by hundreds of percentage points and wages are up less than 1%. Margin debt (the money that is borrowed to buy stocks) on the New York Stock Exchange is at an all-time high. The global debt and derivatives pile recently topped $1 quadrillion."""

-rt

Not entirely right.

The gold price is based on the amount of paper contracts and their price. The amount of paper contracts has increased a lot too. Then you have that almost 99% of those contracts are traded among a few players. These factors mean that the gold price is whatever they want it to be.

The gold price still dictates the price of gold, until it doesn't anymore.

That moment will happen when delivery is impossible AND known to the masses.

Never before people run to the stores (Asian countries) to buy gold when its price goes down. It is a signal that the world is not the same anymore and a different set of rules took over.

[yoshiwara]

"""Getting back to Gold, adjusted for the increase in money supply, Gold is now cheaper at $1400 than it was at $500. Thats right. There are exponentially more uncollateralized Federal Reserve Notes (aka US dollars) electronically circulating through the dying beast known as the US economy now relative to the supply of Gold than back when Gold as at $500, while debt has increased by hundreds of percentage points and wages are up less than 1%. Margin debt (the money that is borrowed to buy stocks) on the New York Stock Exchange is at an all-time high. The global debt and derivatives pile recently topped $1 quadrillion."""

-rt

Not entirely right.

Never before people run to the stores (Asian countries) to buy gold when its price goes down.

That's right. They all run to the shops when the price goes up.

[Khun Jean]

I should have added that they run to the store to BUY at lower prices.

In previous times the reaction was to sell quickly.

[sbk]

Off topic bickering removed, this isn't about you guys and nobody really wants to read it, thanks

[fletchsmile]

Looks bad new for gold.

Sell off in equities today. Dollar weaker. Both should be positive for gold. But gold is also falling....

Wouldn't like to have significant amounts or be heavily invested in gold at this stage. A little as diversification might make sense, but even that seems to being called into question now. Not behaving as "insurance" either ....

Fletch

[Naam]

Looks bad new for gold.

Sell off in equities today. Dollar weaker. Both should be positive for gold. But gold is also falling....

Wouldn't like to have significant amounts or be heavily invested in gold at this stage. A little as diversification might make sense, but even that seems to being called into question now. Not behaving as "insurance" either ....

Fletch

the actual application of gold as "insurance" wasn't required until now. let's hope it won't be required in future.

[yoshiwara]

Looks bad new for gold.

Sell off in equities today. Dollar weaker. Both should be positive for gold. But gold is also falling....

Wouldn't like to have significant amounts or be heavily invested in gold at this stage. A little as diversification might make sense, but even that seems to being called into question now. Not behaving as "insurance" either ....

Fletch

the actual application of gold as "insurance" wasn't required until now. let's hope it won't be required in future.

The requirement of gold to be 'insurance' is a forlorn one, but certainly peddled by one or two guests on CNBC as the price goes down in front of them. The next blah throw of the dice will be the 'world is ending and then you will see!' play.

[Naam]

Looks bad new for gold.

Sell off in equities today. Dollar weaker. Both should be positive for gold. But gold is also falling....

Wouldn't like to have significant amounts or be heavily invested in gold at this stage. A little as diversification might make sense, but even that seems to being called into question now. Not behaving as "insurance" either ....

Fletch

the actual application of gold as "insurance" wasn't required until now. let's hope it won't be required in future.

The requirement of gold to be 'insurance' is a forlorn one, but certainly peddled by one or two guests on CNBC as the price goes down in front of them. The next blah throw of the dice will be the 'world is ending and then you will see!' play.

being the son of parents and grandson of grandparents who experienced what happened in Germany twice, i am well aware that the "end of the world" is not required to proof that precious metals can be a 'hansum' insurance.

[yoshiwara]

Looks bad new for gold.

Sell off in equities today. Dollar weaker. Both should be positive for gold. But gold is also falling....

Wouldn't like to have significant amounts or be heavily invested in gold at this stage. A little as diversification might make sense, but even that seems to being called into question now. Not behaving as "insurance" either ....

Fletch

the actual application of gold as "insurance" wasn't required until now. let's hope it won't be required in future.

The requirement of gold to be 'insurance' is a forlorn one, but certainly peddled by one or two guests on CNBC as the price goes down in front of them. The next blah throw of the dice will be the 'world is ending and then you will see!' play.

being the son of parents and grandson of grandparents who experienced what happened in Germany twice, i am well aware that the "end of the world" is not required to proof that precious metals can be a 'hansum' insurance.

It ended up in 'Canada'. You (probably)know what I am referring to. That is not the story today. Edited June 12, 2013 by yoshiwara

[yoshiwara]

'Gold obsession will ruin investors' says Barry Norris

....who also refers to gold as "the world’s laziest investment".

Spot on. http://www.trustnet.com/News/432955/gold-obsession-will-ruin-investors-warns-norris/

(from Trustnet.com an excellent website for investors in Investment and Unit trusts)

[LibertyNinja1776]

'Gold obsession will ruin investors' says Barry Norris

....who also refers to gold as "the world’s laziest investment".

Spot on. http://www.trustnet.com/News/432955/gold-obsession-will-ruin-investors-warns-norris/

(from Trustnet.com an excellent website for investors in Investment and Unit trusts)

Interesting article Yoshiwara but for all the wrong reasons I think.

Using his flawed logic the Dow should be at only 5000. Then he uses the same logic to call gold "expensive". The only thing he proves is that the CPI is a "CP Lie". Anyone who uses CPI "core inflation" for price targets is an idiot. If QE had not pushed up equities, his great performing fund (with figures conveniently quoted since the 2009 lows) would probably be under water.

Here's a much better macro assessment from Marc Faber - free of bullshit. From Hedge Funds World 2012.

He has 25% of his assets in gold as a long term position and also lives in Thailand. A great country for gold buyers and owners.

If you are indeed from Japan you should be very concerned about your country's debt burden. Kyle Bass has a lot to say on Japan, but he may be early in his predictions. These guys may seem like doomsayers but they are a good early warning system (sometimes too early).

But worth paying some attention to. ;-)

[yoshiwara]

'Gold obsession will ruin investors' says Barry Norris

....who also refers to gold as "the world’s laziest investment".

Spot on. http://www.trustnet.com/News/432955/gold-obsession-will-ruin-investors-warns-norris/

(from Trustnet.com an excellent website for investors in Investment and Unit trusts)

Interesting article Yoshiwara but for all the wrong reasons I think.

Using his flawed logic the Dow should be at only 5000. Then he uses the same logic to call gold "expensive". The only thing he proves is that the CPI is a "CP Lie". Anyone who uses CPI "core inflation" for price targets is an idiot. If QE had not pushed up equities, his great performing fund (with figures conveniently quoted since the 2009 lows) would probably be under water.

Here's a much better macro assessment from Marc Faber - free of bullshit. From Hedge Funds World 2012.

He has 25% of his assets in gold as a long term position and also lives in Thailand. A great country for gold buyers and owners.

If you are indeed from Japan you should be very concerned about your country's debt burden. Kyle Bass has a lot to say on Japan, but he may be early in his predictions. These guys may seem like doomsayers but they are a good early warning system (sometimes too early).

But worth paying some attention to. ;-)

Marc Faber always entertaining and I like watching his interviews on CNBC, but too doomy and gloomy for me.

PS IMHO gold is a deadweight. Prefer income. Income, income, income.

Edited June 14, 2013 by yoshiwara

[LibertyNinja1776]

Marc Faber always entertaining and I like watching his interviews on CNBC, but too doomy and gloomy for me.

PS IMHO gold is a deadweight. Prefer income. Income, income, income.

Sure, but with rising bond yields, rising rates and rising inflation the income investments lose capital value like crazy, especially long term treasury bonds - hence warnings from the likes of Bill Gross. This also leads to tightening of credit and liquidity, affecting the economy and income investments.

High inflation has historically been bad for stocks also. (Esp in terms of real purchasing power, like Marc's comparison to Mexico in the early 80s.)

Sure, it hasn't happened significantly yet, but further money printing will be kicked off by it as rising rates will detonate the debt bombs in whatever country it occurs. A vicious cycle just like sub-prime on bank's balance sheets, but this time involving governments. Hence many asset classes heavily rely on QE, low rates, and the status quo. For now and maybe a few more years. But gold will rise well before then. But it may not have fully bottomed yet.

[yoshiwara]

Marc Faber always entertaining and I like watching his interviews on CNBC, but too doomy and gloomy for me.

PS IMHO gold is a deadweight. Prefer income. Income, income, income.

For now and maybe a few more years. But gold will rise well before then. But it may not have fully bottomed yet.

So that's alright then and a clear pointer to the future......

[yoshiwara]

Marc Faber always entertaining and I like watching his interviews on CNBC, but too doomy and gloomy for me.

PS IMHO gold is a deadweight. Prefer income. Income, income, income.

Sure, but with rising bond yields, rising rates and rising inflation the income investments lose capital value like crazy, especially long term treasury bonds - hence warnings from the likes of Bill Gross. This also leads to tightening of credit and liquidity, affecting the economy and income investments.

High inflation has historically been bad for stocks also. (Esp in terms of real purchasing power, like Marc's comparison to Mexico in the early 80s.)

Sure, it hasn't happened significantly yet, but further money printing will be kicked off by it as rising rates will detonate the debt bombs in whatever country it occurs. A vicious cycle just like sub-prime on bank's balance sheets, but this time involving governments. Hence many asset classes heavily rely on QE, low rates, and the status quo. For now and maybe a few more years. But gold will rise well before then. But it may not have fully bottomed yet.

I wasn't thinking bonds and inflation a gold bug bear that just fails to happen and even when it does gold can fall flat on it face. Have other forum thread readers also noticed that even though it has been pointed out to gold bugs time and time again that gold doesn't always work in the face of inflation eg 1980-2005, they go deaf, deaf, deaf? Edited June 16, 2013 by yoshiwara

[Jayman]

• In new legislation (enacted May 23rd) the French government has forbidden sending all forms of currency – coins,cash, and all forms of precious metals (coins, bars, and jewellery) by mail

Please deposit your saving in a bank, where we can get at them if needed

http://www.bullionstreet.com/news/france-bans-shipment-of-gold-silver-and-cash-through-the-mail-system/5001

The legislation was published on Legifrance, the French government entity responsible for publishing legal texts online.

It was not announced by the government and not covered in the media. There were no communications and nobody in the government justified or explained this decision.

Edited June 16, 2013 by Jayman

[LibertyNinja1776]

Interesting stuff Jayman - nice Bernanke avatar.

It was not announced by the government and not covered in the media. There were no communications and nobody in the government justified or explained this decision.

It is telling that people giving up US citizenship is at an all time high. Much for the same reasons.

[LibertyNinja1776]

a gold bug bear that just fails to happen and even when it does gold can fall flat on it face.

gold doesn't always work in the face of inflation eg 1980-2005, they go deaf, deaf, deaf?

As Marc says, inflation does not manifest itself equally or at the same time across say (1) real estate, (2) stocks, (3a) consumer prices or (3b) commodities/gold or (4) bonds.

1980 to 2005 - During those good times of credit expansion in the private (& public) sector, of course yield assets will attract significant capital with low risk of default on bonds or bad dividends or stock performance or real estate. So we got a rise in (1) and (2), the dollar we relatively strong keeping (3a) and (3b) in check.

Bond yields were also falling during that part of the bond market / interest rate cycle - 1980 to ~2012. So fixed term bonds (4) appreciated while yields fell.

(Something interesting happened in 2008 which may be a little bit telling for the future. With (1) and (2) falling, (3 - commodities) went ballistic. This then fell in 2008 in a deflationary environment.)

About today's re-flation - my thinking goes something like this:

Now we have a different environment entirely. People are too indebted for (1) to boom again. P/Es are already high for (2), but some fuel may be left to lift stocks. ie capital exiting (4) ie. bonds.

Whenever bond rates rise (Bill Gross says that's now) capital value will fall on bonds creating a stampede. (The Fed will have to ramp up current policy and print more money.) So a bit more capital could flow into stocks, but a correction is probably overdue.

So we have (a) rising inflation, ( without a healthy economy to invest in and © policy driving falling currencies, which naturally lifts (3) commodity and consumer prices internally. Which of the following will capital flow into next?

(1) real estate - not significantly IMHO, consumers are unfortunately too indebted already.

(2) stocks - probably yes, but P/E's are relatively high, but could rise further.

(3) consumer prices and commodities - yes, likely, with currency wars and money printing.

(4) long term bonds - um, no.

I think a rise in (3) is likely, and probably (2) on scared money from Europe in the next year or so. However in the meantime...

a gold bug bear that just fails to happen and even when it does gold can fall flat on it face.

For some insight into the gold market, here's a good insiders perspective into what drove the two Friday "gold smashes" of April 12 and May 17 - these are largely responsible for where gold is today. http://kingworldnews.com/kingworldnews/Broadcast/Entries/2013/5/19_Andrew_Maguire.html

Any technically aware trader knows that price action takes a while to turn, despite whatever the fundamentals may be.

[yoshiwara]

Any technically aware trader knows that price action takes a while to turn, despite whatever the fundamentals may be.

Empty of content but good for my Christmas crackers.

[midas]

Gold Premiums in Vietnam Hit $217 Over Spot In Heavy Demand

The Central Bank hopes that the sale of gold into the market will reduce the very high premiums paid by gold buyers in Vietnam, the largest buyer of gold in Southeast Asia after Thailand and one of the largest physical buyers of gold per capita in the world.

http://jessescrossroadscafe.blogspot.co.uk/2013/06/gold-premiums-in-vietnam-hit-217-over.html

Edited June 18, 2013 by midas

[Naam]

Viet Nam Gold (background info)

Vietnamese citizens purportedly blame the government and SBV for these high premiums and short supply. Despite importing 95% of its gold in 2011, the country has not officially imported any gold since then, according to GFMS.

“The primary goal of the State Bank of Vietnam is to control the domestic gold market to stop price manipulation,” State Bank of Vietnam governor Nguyen Van Binh.

Since July 2012, the government has had responsibility for the production of gold and Saigon Jewellery Company (SJC) is the national brand. When SJC was announced that it was going under government control and would be the sole supplier, citizens expressed concerns that the gold market would now be controlled like a currency.

the Vietnamese government manipulates the gold price in order to stop gold price manipulation.

[LibertyNinja1776]

Gold Premiums in Vietnam Hit $217 Over Spot In Heavy Demand

Naam, you seem to be quite knowledgeable about local markets. Do vietnamese shops buy thai 96.5 gold for a similar premium?

They must be doing something to make it difficult for regular joes trying to arbitrage by carrying jewelry in.

Another question - for buying 99.9, is Tang Toh Kang or Bangkok Assay a better place to buy?