Where Is Gold Going In This Market

[Naam]

UBS

Oil and gold at interesting entry points

Gold prices fell to their lowest levels in the last three months as economic

uncertainties weakened investor sentiment. We believe, however, that

the gold market is likely to be undersupplied when the central banks

become net buyers of gold and that the driving forces behind gold are

more than just exchange rate fluctuations. We therefore reiterate our

view that gold at present levels of USD 1070/oz represents a buying

opportunity. With a target price move to 1250/oz in 12 months (with

possible spikes around 1300/oz), we think risk-reward has recently turned

positive again.

[flying]

UBS

Oil and gold at interesting entry points

Yes.....

Remember a few days back I was saying if it dipped under 1050 U was backing the truck up ?

Well lo & behold the day my wife was off work we slept in & that morning it did in fact dip below

When I woke I saw it went down into the 1040's briefly.

Anyway...I will still do so if the opportunity presents itself again...if Im awake

Actually 1st week of March may be it.

Edited February 10, 2010 by flying

[Abrak]

I might have mentioned this before but it was quite noticeable that Thailand imported over US$1bn of gold last month - it actually created a trade deficit for the first time in a year.

I guess it is not a huge deal - say 25 tonnes - but Thailand's Gold reserves are only about 85 tonnes.

[Orion76]

Abrak - it must be all the girls who have convinced their boyfriends and husbands to buy gold and sell it with a profit in a few months

[sokal]

I have no intention of selling anything

Well actually I would probably sell if gold & the DOW reached a parity of 1/1

In fact even with the new higher prices if it hits a low at the end of the month I may back the truck up one more time.

I am still not comfortable with what I hold in USD & gold/silver is really my only viable option

Looks like the end of the month may play out?

Truck is idling & ready

Ah well turned the truck off

While the end of month low did play out it came nowhere near the spot I would have jumped ( < $1050)

what about gold stocks ? its kind of a cluster fcuck right now, they are following the general market too much. My sources are telling me to get the truck ready.

[churchill]

I agree Gold Stocks have been hammered but I would wait a week or so to see if the Stock Market falls further - Probably depending on the Euro situation and the $

[flying]

what about gold stocks ? its kind of a cluster fcuck right now, they are following the general market too much. My sources are telling me to get the truck ready.

Actually I spoke too soon & did in fact have the opportunity...albeit briefly & missed...this past Friday 5th Feb

I do believe I will have another shot 1st week of March...We will see. If not it is not like I am poorly positioned.

I just wanted to round up a few things & now hold a bit more USD than I care to.

Gold stocks Silver/SLV...etc while not being for me may be for others with nimble feet.

Even things like IMO..Imperial Oil are probably good for 10% like they are every year at this time.

But I am not a market person since 2000

[Orion76]

Not a gold stock expert, but if you're looking at gold stocks I'd try to find their earnings conference call and see if they mention if they hedged to lock in profits.

If they sold their 2010 output at $1200 I'd like the stock more than a company that didn't lock in their profits.

Also there are lots of non-gold mining companies that produce boring stuff that doesn't make the news, they tend to get clobbered less.

[churchill]

I am considering a fund like this one rather than individual companies http://finance.yahoo.com/q?s=GDXJ

[flying]

Moving up today along with the dollar

Kind of funny to consider gold (physical) in reality is still not far from 1200USD/oz

[churchill]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

http://www.zerohedge.com/article/gold-tumb...arket-gold-sale

[sokal]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

http://www.zerohedge.com/article/gold-tumb...arket-gold-sale

China really lost out on buying bulk, now they will have to buy at market like everyone else.

[flying]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

I wonder why they worry at all about this? The market I mean........

It is my understanding this gold like the other 200 ton sold to India is sold in SDR's

It is not like it is dumped directly onto the market. Even if it were it is not much globally.

In any case it does not look like the effect lasted very long if at all.

[Naam]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

I wonder why they worry at all about this? The market I mean........

It is my understanding this gold like the other 200 ton sold to India is sold in SDR's

It is not like it is dumped directly onto the market. Even if it were it is not much globally.

In any case it does not look like the effect lasted very long if at all.

correct! it won't be available in the open market.

[Naam]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

http://www.zerohedge.com/article/gold-tumb...arket-gold-sale

China really lost out on buying bulk, now they will have to buy at market like everyone else.

the biggest goldproducing country on this planet lost out because it is mandatory that all chinese mines sell their gold to China's central bank at market prices whereas the IMF hands its gold out as a present to various interested central banks? Austrian School of Economics... i presume?

[flying]

Reverse Shill

George Soros buys gold despite dubbing it 'ultimate bubble'

George Soros doubled his investment in the world's largest gold fund – just weeks before claiming investing in the precious metal is now the "ultimate bubble".

Mr Soros – a legend in investing circles for his $10bn (£6.37bn) bet against the pound in 1992 which forced sterling out of the European exchange rate mechanism – increased his stake in the SPDR Gold Trust in the last quarter of 2009.

Regulatory filings show that his $8.8bn investment vehicle, Soros Fund Management, raised its stake in exchange-traded fund SPDR by 3.7m shares to 6.2m shares in the three months ending December 31, 2009.

The new shares were bought at a price of $421m, taking his total holding in the fund to $663m at the end of December.

In addition, Mr Soros's investment vehicle owns 11,000 call options that will permit it to buy an extra 1.1m shares should gold prices move higher.

Soros Fund Management also increased its stake in Canadian-based gold producer Yamana Gold, buying 60,880 shares to take its total position to 85,880 shares, worth $973,314 at the end of December.

However, the actions of the Mr Soros's investment fund however seem to be at odds with his own viewpoint. During the World Economic Forum in Davos in late January, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."

Gold hit a new high of just over $1,225 an ounce in December, having rise 40pc in the prior 12 months, and touched an all-time high in euros of €818 an ounce earlier this week. On Wednesday, gold was trading in New York at $1,115.55 an ounce, having hit a one-month high of $1,126.85 earlier in the day.

Mr Soros is not alone in increasing his stake in the SPDR, with new filings also showing that China Investment Corporation (CIC), Beijing's main overseas investment fund, taking a 0.4pc stake in the fund worth $155.6m.

CIC's investment is equivalent to just 0.4pc of the 33.9m ounces of gold maintained by the Chinese government, but is part of a growing trend of major funds investing in the metal.

The World Gold Council said on Wednesday that pension funds began actively investing in gold last year, viewing the metal as a long-term safe haven.

Aram Shishmanian, the council's chief executive, told Reuters that although the organisation does not forecast prices, he believes the gold market will be "robust' in 2010 in spite of an 11pc global drop in demand last year because of weaker industrial output.

[Naam]

opinion from one of my "savings&loan" banks:

The chart-technical picture suggests the gold price consolidation is

coming to an end.

We expect prices to test 2010 highs in the coming months and with

room for more. We believe gold is attractive at present levels.

From a structural point of view, we think the market underestimates

a lack of central bank supply, long-term inflation risks and USD

weakness.

Price consolidation completed

From a chart-technical perspective, the consolidation formation in gold

prices since early December 2009 has come to an end. Despite a nontrending

market environment, the changed technical backdrop should

push prices higher. Additional support comes from a new all-time high

of gold in EUR terms. Investors are realizing that gold is not just a

function of EURUSD alone. We target a price move toward the old

highs at USD 1,220/oz in the coming months. Prices should find some

resistance at around USD 1,125/oz and in the range of USD 1,142/oz

to USD 1,161/oz.

Structural issues have not vanished

A strengthening USD in recent weeks does not mean the structural

problems behind the greenback are off the table. The US still requires

foreign financing via the fixed-income market. With inflation risks

prevailing in the long run, we question if investors will get adequately

compensated for holding the USD. A soaring US debt to GDP ratio

should command a USD risk premium. If not satisfied by an attractive

real interest rate, a weaker USD will do the trick in attracting inflows,

we believe.

In addition, central banks could turn out to be net buyers in the

market. After years of being strong suppliers, this radically changes the

supply and demand picture. The gold market runs the risk of being

undersupplied in the coming two years. Hence, gold is not in bubble

territory and has room to reach USD 1,300/oz in 2010.

[Abrak]

opinion from one of my "savings&loan" banks:

The chart-technical picture suggests the gold price consolidation is

coming to an end.

We expect prices to test 2010 highs in the coming months and with

room for more. We believe gold is attractive at present levels.

From a structural point of view, we think the market underestimates

a lack of central bank supply, long-term inflation risks and USD

weakness.

Price consolidation completed

From a chart-technical perspective, the consolidation formation in gold

prices since early December 2009 has come to an end. Despite a nontrending

market environment, the changed technical backdrop should

push prices higher. Additional support comes from a new all-time high

of gold in EUR terms. Investors are realizing that gold is not just a

function of EURUSD alone. We target a price move toward the old

highs at USD 1,220/oz in the coming months. Prices should find some

resistance at around USD 1,125/oz and in the range of USD 1,142/oz

to USD 1,161/oz.

Structural issues have not vanished

A strengthening USD in recent weeks does not mean the structural

problems behind the greenback are off the table. The US still requires

foreign financing via the fixed-income market. With inflation risks

prevailing in the long run, we question if investors will get adequately

compensated for holding the USD. A soaring US debt to GDP ratio

should command a USD risk premium. If not satisfied by an attractive

real interest rate, a weaker USD will do the trick in attracting inflows,

we believe.

In addition, central banks could turn out to be net buyers in the

market. After years of being strong suppliers, this radically changes the

supply and demand picture. The gold market runs the risk of being

undersupplied in the coming two years. Hence, gold is not in bubble

territory and has room to reach USD 1,300/oz in 2010.

Please bear in mind the guy who wrote that is probably paid a US$1m a year. I love the use of the word 'hence'.

BTW there is something so beautiful about Central Banks turning net buyers.

[flying]

opinion from one of my "savings&loan" banks:

Additional support comes from a new all-time high

of gold in EUR terms. Investors are realizing that gold is not just a

function of EURUSD alone.

[Naam]

Please bear in mind the guy who wrote that is probably paid a US$1m a year. I love the use of the word 'hence'.

BTW there is something so beautiful about Central Banks turning net buyers.

actually it's "them". i know both personally and i also know that none of them earns more than $300k plus bonus a year.

[lannarebirth]

opinion from one of my "savings&loan" banks:

The chart-technical picture suggests the gold price consolidation is

coming to an end.

We expect prices to test 2010 highs in the coming months and with

room for more. We believe gold is attractive at present levels.

From a structural point of view, we think the market underestimates

a lack of central bank supply, long-term inflation risks and USD

weakness.

Price consolidation completed

From a chart-technical perspective, the consolidation formation in gold

prices since early December 2009 has come to an end. Despite a nontrending

market environment, the changed technical backdrop should

push prices higher. Additional support comes from a new all-time high

of gold in EUR terms. Investors are realizing that gold is not just a

function of EURUSD alone. We target a price move toward the old

highs at USD 1,220/oz in the coming months. Prices should find some

resistance at around USD 1,125/oz and in the range of USD 1,142/oz

to USD 1,161/oz.

Structural issues have not vanished

A strengthening USD in recent weeks does not mean the structural

problems behind the greenback are off the table. The US still requires

foreign financing via the fixed-income market. With inflation risks

prevailing in the long run, we question if investors will get adequately

compensated for holding the USD. A soaring US debt to GDP ratio

should command a USD risk premium. If not satisfied by an attractive

real interest rate, a weaker USD will do the trick in attracting inflows,

we believe.

In addition, central banks could turn out to be net buyers in the

market. After years of being strong suppliers, this radically changes the

supply and demand picture. The gold market runs the risk of being

undersupplied in the coming two years. Hence, gold is not in bubble

territory and has room to reach USD 1,300/oz in 2010.

Charts are self explanatory. There is something odd about a call based on a "chart technical picture" that doesn't include a chart but does have several paragraphs devoted to non technical rationalizations. Anyhow, they could be right that it moves up from here. If it does, and to new highs it will be a blowoff top to the LT cycle IMO.

What's your credit union have to say on the matter?

Edited February 19, 2010 by lannarebirth

[siamamerican]

Where is gold going? Historically speaking, it barely keeps up with inflation. There are exceptions (e.g., time of uncertainity - "NOW") and thats where investors get burned. Investors jump on the gold band wagon and make lots of money but history(100 years) tells me that many will lose given time.

Investing in gold is a poker game. Everyone comes to the table with money that remains fixed from a historical perspective, which is shared unequally between the players. I would rather buy into something that has substantially increased in value over the years(i.e., global equities, bonds...). The money is still shared unequally but the whole table might end up in the money.

No problem with "SPECULATING" but there are consequences. Look at banks that speculated on real estate which has historically been a better investment than gold. The global currency fears is just adding to the fuel and, I assume, will just increase the the pain when gold tumbles ( no concrete idea when that will happen).

To speculate on the question, gold will increase in value over the next 3 months and top 1200 because of the global uncertainty. Once the Euro zone gets things under semi-control and the world realizes that the global fiscal stimulus isn't going to have any disastrous consequences, gold will slide. Oh so fun to speculate!

[flying]

Once the Euro zone gets things under semi-control and the world realizes that the global fiscal stimulus isn't going to have any disastrous consequences,

[Abrak]

Charts are self explanatory. There is something odd about a call based on a "chart technical picture" that doesn't include a chart but does have several paragraphs devoted to non technical rationalizations. Anyhow, they could be right that it moves up from here. If it does, and to new highs it will be a blowoff top to the LT cycle IMO.

What's your credit union have to say on the matter?

To be honest there is something distinctly odd about the concept of a gold analyst. It would appear to be an oxymoron.

I mean it really is hard to think of something intelligent to say so you will tend to end up with a more buyers than sellers, chart breakout buy story.

[lannarebirth]

Charts are self explanatory. There is something odd about a call based on a "chart technical picture" that doesn't include a chart but does have several paragraphs devoted to non technical rationalizations. Anyhow, they could be right that it moves up from here. If it does, and to new highs it will be a blowoff top to the LT cycle IMO.

What's your credit union have to say on the matter?

To be honest there is something distinctly odd about the concept of a gold analyst. It would appear to be an oxymoron.

I mean it really is hard to think of something intelligent to say so you will tend to end up with a more buyers than sellers, chart breakout buy story.

$GOLD bounced off its 34 week ema which could be anticipated as it needs "desloping" if it is to fall further. If it comes back to it's 34week ema in the next few weeks it's going lower.

[churchill]

Markets Surprised: Fed Hikes Discount Rate And No Takers For IMF Gold?

No Takers for IMF Gold?

Given the recent announcement by the International Monetary Fund (IMF) that it will soon begin phased sales of 191 tonnes of gold in the open market, this has called into question demand for bullion from official sector buyers, or specifically, central banks around the world. The IMF announcement on Wednesday said, "Prior to any sales on the gold market, sales were first made exclusively to interested central banks, thus shifting gold within the official sector. Now the IMF will begin sales of the remaining gold on the [open] market." What is causing rising tension in the market is the fact that on the same day the IMF made its 'no sale' declaration and its decision to shift the sale to the open market, the World Gold Council, issued its quarterly Gold Demand Trends report, which highlighted the role of central banks as net buyers and demand generators. If the central banks are not prepared to buy the remaining IMF gold, what are the implications? What do they know, that the average buyer does not? Gold is normally a hedge against inflation. The first indication may lie in the price of the bullion itself which is now trading at around USD 1,100 a troy ounce, significantly off its historic high of USD 1,226 an ounce set in December. Given that the Reserve Bank of India did buy all of the 200 tonnes from the IMF as part of the first tranche of such sales last year at USD 1,050 a troy ounce, central banks may now have been deterred by the huge publicity that this sale generated and may look to pick up the bullion through other means or they may have been persuaded that gold prices are likely to fall in the near term as the commodity bubble bursts and the dollar strengthens.

As Dollar Rises, What Next?

The US dollar jumped as the Fed took another step in a gradual retreat from its unprecedented actions to mitigate the deepest financial crisis since the Great Depression. The dollar is gaining ground against the euro, which is down to below USD 1.35. Naoto Kan, Japan’s finance minister, said the Fed’s decision would weaken the yen and not hurt the Japanese economy. The dollar rose as much as 0.3% to 92 yen on the rate announcement, the highest level since mid-January. Given the inverse correlation between the dollar and most other asset classes, that ATCA has observed since 2009, we expect riskier asset classes to display high volatility as the dollar rises.

US Treasury Yields

US Treasuries are declining with yields shooting up. Shorter-dated Treasury yields rose sharply as result of the announcement with the two-year note yield hitting its highest in a month, while the spread between two-year and 10-year yields narrowed. The shorter end is more susceptible to expectations about moves in policy rates. Treasury yields at the longer end were already on the march prior to the announcement as a reaction to the well anticipated news that around USD 126bn of US government debt will be auctioned next week.

Commodities: Oil and Gold

US crude oil futures fell 1.4%, hurt by dollar strength that hit commodities across the board. Gold in the spot market was down 1.1% at around USD 1,106 a troy ounce having declined more than 6% since December. Both the Fed and IMF recent announcements are having an impact on the price of gold.

Asia and Europe Markets Tank

The impact on Asia’s stock markets was sharp. The Nikkei 225 in Tokyo fell more than 2% on Friday while Hong Kong’s Hang Seng index dropped as much as 2.4%. South Korea’s Kospi index was down 1.3% and the MSCI Asia Pacific index fell 1.8%, a two-week low. Upon opening, European share indices are broadly falling, snapping a four-day winning streak, with banks the worst performers.

Next Steps in Fed Exit?

With a slew of other economic indicators –- such as stronger than expected producer prices –- encouraging the idea that economic recovery is on track, there will be every reason for the markets to anticipate that the Fed exit policy is gaining traction. As the Fed moves to the next stage of its “exit strategy”, the increased discount rate paves the way for term deposits and reverse repurchase agreements, mechanisms that the Fed has said could be used to drain the central bank’s reserves. However, it is likely the Fed will begin unwinding emergency settings with asset sales before it starts hiking base rates.

Conclusion

The discount rate going up signals a change in tide of the cost of money. Plenty of liquidity and access to cheap cash fuelled a strong rally in riskier asset classes like equities and commodities in 2009. As governments and central banks around the world start withdrawing that stimulus and tightening monetary policy, markets are bound to turn more volatile, likely curbing returns. Coming so soon after China delivered two surprising increases in banks' reserve requirements this year, the Federal Reserve's move may worry investors in riskier assets who have become quite comfortable with extraordinary amounts of money injected into banking systems during the financial crisis. The market reaction so far also highlights the communications challenge faced by the Federal Reserve. Fed Chairman Ben Bernanke has taken many unorthodox steps during the financial crisis. The return to more normal Fed policy also is likely to follow a somewhat unconventional path adding to bouts of market-jarring uncertainty. The IMF announcement of no central bank takers for its gold is also likely to add to the view that a major verifiable support for gold spot prices is no longer available, amplifying the uncertainty

http://www.mi2g.com/cgi/mi2g/frameset.php?...ress/190210.php

[flying]

The IMF announcement of no central bank takers for its gold is also likely to add to the view that a major verifiable support for gold spot prices is no longer available, amplifying the uncertainty

Interesting....A week or so ago when I said gold may go sub 1050 briefly & would be a good time to buy.

It did in fact go briefly & touch 1045 very briefly then it was gone again to the upside.

Not surprisingly that 1045 was where India bought.

Making me wish I had not missed that point that I was waiting on. Although as I said for me it was just a topping up as I hold pretty much what I want already.

But,,, The same source that alerted me to that possibility also said we may see another in the 1st week of March.

Although they think that one will only be 1080. So for me I may just skip it.

I think all these other sources that see gold demand only in CB's & silliness such as jewelry as being support are missing the boat.

But that is just my opinion & who am I

I think there is a lot of currency in both USD & Euro looking for an entry spot.

We will see

[sokal]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

http://www.zerohedge.com/article/gold-tumb...arket-gold-sale

China really lost out on buying bulk, now they will have to buy at market like everyone else.

the biggest goldproducing country on this planet lost out because it is mandatory that all chinese mines sell their gold to China's central bank at market prices whereas the IMF hands its gold out as a present to various interested central banks? Austrian School of Economics... i presume?

So you actually believe that the IMF is selling gold for the cash ? Why would they sell gold just to put the cash on the same pile that just rolled off the infinite printing press earlier that day ?

[Naam]

Gold Tumbles As IMF Reaffirms Plan To Sell 191.3 Metric Tons Of Gold Over Time in Phased "On-Market" Gold Sales

http://www.zerohedge.com/article/gold-tumb...arket-gold-sale

China really lost out on buying bulk, now they will have to buy at market like everyone else.

the biggest goldproducing country on this planet lost out because it is mandatory that all chinese mines sell their gold to China's central bank at market prices whereas the IMF hands its gold out as a present to various interested central banks? Austrian School of Economics... i presume?

So you actually believe that the IMF is selling gold for the cash ? Why would they sell gold just to put the cash on the same pile that just rolled off the infinite printing press earlier that day ?

the IMF has neither a printing press nor unlimited cash but needs cash. your answer is irrelevant as far a "China really lost..." is concerned.

[flying]

So you actually believe that the IMF is selling gold for the cash ? Why would they sell gold just to put the cash on the same pile that just rolled off the infinite printing press earlier that day ?

the IMF has neither a printing press nor unlimited cash but needs cash. your answer is irrelevant as far a "China really lost..." is concerned.

Actually as Churhills post pointed out.....Not sure if valid yet....But...It seems IMF will sell for cash if they do not find a CB to buy.

As for reason why they would.....

Well it is my understanding that the spirit of the IMF is to help countries that find themselves in a fix.

As such USD or other major currencies is their arrow of choice. I know it sounds bad

But as a monetary Red Cross of sorts.... they need supplies that are most useful where needed.

While everyone knows how much I like PM's...for the IMF fiat is the medicine they use. So it is not surprising to see them

convert some of their reserves to fiat.