Where Is Gold Going In This Market

[longtom]

Will the gold price come down when the stock markets are nosediving soon, or will it shoot up??? I just can't seem to find any logic in the movement of prices nowadays. Gold never seems to come down to the 600/700$ predicted by so many last year. I cannot wait much longer .

[Abrak]

The one thing I find about gold that is strange is this - those who make a anguement for holding a particular currency appear so stupid that it makes you want to hold something else, whilst those who justify their arguments for holding gold tend to send you back to that particular currency!!

[flying]

Will the gold price come down when the stock markets are nosediving soon, or will it shoot up??? I just can't seem to find any logic in the movement of prices nowadays. Gold never seems to come down to the 600/700$ predicted by so many last year. I cannot wait much longer .

IMHO any day is a good day to trade some currency for money.

You do not need to buy all you had planned to buy in a day either. You can ease into it if you like.

I was lucky & that is all it was....luck. To buy pretty much all I wanted at 730 + 50 prem over spot.

When I bought folks were saying ....Oh wait it is coming down to 450 soon enough

If you want to buy do not assume it is always available first off.

Secondly the cost of holding real physical gold is not what you see as spot price.

So say you wait for 700 & the premium is 100 ?

Looking at the condition of the worlds economy if you really feel like gold is where you want to be then I would not wait too long. The price of gold seems to be coiling for awhile now it will go sproing soon again IMHO

[Abrak]

The price of gold seems to be coiling for awhile now it will go sproing soon again IMHO

Is 'sproing' a prediction it will go up or down.

the only reference I have to 'sproing' is Zebedee from the magic roundabout who did both - go up and down - but was nor well known for his investment advice (although I was a little young to remember). 'Time for bed was his catch phrase which considering it was given before 6pm didnt hold much credibility.

[flying]

The price of gold seems to be coiling for awhile now it will go sproing soon again IMHO

Is 'sproing' a prediction it will go up or down.

the only reference I have to 'sproing' is Zebedee from the magic roundabout who did both - go up and down - but was nor well known for his investment advice (although I was a little young to remember). 'Time for bed was his catch phrase which considering it was given before 6pm didnt hold much credibility.

You know for a long time gold was range bound below 890...Watching where it is now & how it easily goes back & forth in its new range it seems like it is getting ready for a move up another level. So yes sproing in my reference is a release of energy. Take a spring & wind it tight..........Let it go & *sproing*

I am not one to predict a crazy jump to the moon but I can see it moving to a new level of say 1000+ & trading back & forth again between that & 1150

Gaining energy again. It seem plain as the nose on my face that gold is not going away. It is in the news often as other countries enforce that notion too.

You know folks have options to the USD & I see gold as one of those options & Silver too.

But folks versed in other currencies probably see something there too. I do not have that ability/skill so have not looked there.

Lastly please note before certain individuals point it out.....

I have never said it is an investment. I have just chosen to redeem some of my Fiat currency for Metals that have always been considered money. The fact that I am in reality up a nice percentage in both is just a nice coincidence

Edited May 19, 2009 by flying

[Abrak]

Flying,

i am with you 100% here. I have owned gold with modest but not spectacular success and silver with an even worst record especially with one of those if I/did I/should have kind of hindsights records.

Still why Marx explained why gold was a store of value and Bernanke explained why the dollar wasnt - given all the progress of the last 100 years oil, soya beans or wheat would seem more appropriate. (P.S. I do not hold these things but it just seems logical.)

[Abrak]

Flying,

i am with you 100% here. I have owned gold with modest but not spectacular success and silver with an even worst record especially with one of those if I/did I/should have kind of hindsights records.

Still why Marx explained why gold was a store of value and Bernanke explained why the dollar wasnt - given all the progress of the last 100 years oil, soya beans or wheat would seem more appropriate. (P.S. I do not hold these things but it just seems logical.)

Oh the one thing I found analysiny mining stocks from a fairly basic point of view is that hey never appeared particularly 'cheap'. You would wpuld have been lag indicator of the gold price. Traditional view has it that gold stocks are 2-3 x geared to the gold price but I have never found that although I have only looked at the majors which have tended to underperfprm (I think). I dont know why.

[flying]

Flying,

i am with you 100% here. I have owned gold with modest but not spectacular success and silver with an even worst record especially with one of those if I/did I/should have kind of hindsights records.

Still why Marx explained why gold was a store of value and Bernanke explained why the dollar wasnt - given all the progress of the last 100 years oil, soya beans or wheat would seem more appropriate. (P.S. I do not hold these things but it just seems logical.)

Oh the one thing I found analysiny mining stocks from a fairly basic point of view is that hey never appeared particularly 'cheap'. You would wpuld have been lag indicator of the gold price. Traditional view has it that gold stocks are 2-3 x geared to the gold price but I have never found that although I have only looked at the majors which have tended to underperform (I think). I dont know why.

Well like I said I was just lucky timing wise with both Gold & Silver.

As for the other examples you give oil wheat etc,,,,,that would be a different mindset....more of an investment.

I was not kidding when I said went to metals not as an investment. The thing I am buying now in my own form of preparation are only things I can hold myself.

Not a piece of paper that says I own this or that elsewhere.

Perhaps I will again join into the investment markets. But at this time that is a game for folks who know ...or think they know...much more than I do.

In fact this excerpt from a blog I like says it very well here.....

If something looks like bait, and smells like bait, it probably has a hook in it somewhere.

The notion of trading in markets against market makers and insiders trading for their own trading profits heavily equipped with zero cost government funds and advantageous information would be almost laughable if it was not such a tragic abuse of productive capitalism and free markets.

Keep that in mind when you trade the short term, or try to interpret the daily actions of the markets. Most short term movements have nothing to do with the fundamentals, and everything to do with the dealers and shills peeking into your hand and running bluffs against the small traders and the funds and institutions.

Most investors have no business trading options or forex or futures at any time.

Everyone's situation is different, but overall this looks like an especially treacherous bear market, made doubly difficult by the actions of the Treasury and the Fed in bankrolling malinvestment, imbalances and corrupted price discovery.

When in doubt, get out. Don't get hooked by greed. And don't step in front of a market operation to run prices up or down. Wait for the longer term trends to assert themselves, and avoid the trap of calling tops and bottoms and attempting to be 'the first' in ahead of a market move.

From this site which is as I said IMHO a very good one.....

http://jessescrossroadscafe.blogspot.com/

Edited May 20, 2009 by flying

[cloudhopper]

Interesting link VIBE thanks. Even more interesting is that it's written by someone who thinks we're headed for a deflationary depression.

[Abrak]

I'd like to veer slightly off topic here for a moment (am I allowed to?)

I am not a gold bug I bought it a couple of years ago for various reasons which have come half right and half wrong and it has done pretty well. I think on the basis of relative perfomance alone, while there are a few that believe that this a reason to expect more outperformance, there are those that are worried that its performance has already been reflected in its price movement.

Unless you are a total gold bug there is no reason to believe that gold will necessarily be the best hedge against inflation or that it will perform that well in deflation, or economic crisis from current levels. It may be that wheat, rice, oil etc currently near record lows (not oil of course) are better bets.

I have no problem with anyone telling me this total crap but would appreciate a reason.

[cloudhopper]

Unless you are a total gold bug there is no reason to believe that gold will necessarily be the best hedge against inflation or that it will perform that well in deflation, or economic crisis from current levels.

Well I think that there are some very good reasons out there including those just posted on this thread but that's not why I own it. It's all subjective in the end anyway (and my peasant taste runs toward bars instead of coins).

It may be that wheat, rice, oil etc currently near record lows (not oil of course) are better bets.

Those things may indeed be better "bets" but only as short term trades. Actually good idea to have some close at hand to consume just in case, but IMO gold is wrongly included in the "commodity" group. But I always tend to think in the longer term (just prior to the one in which we're all dead).

[churchill]

German firm plans gold ATMs to feed explosive growth in physical gold demand !

A German asset management firm plans to set up 500 gold automatic teller machines across Germany, Austria and Switzerland as appetite for physical gold surges.

Private investors should hold up to 15 percent of their wealth in physical gold, according to a German asset management company which plans to set up 500 "Gold-To-Go" ATMs in Germany, Switzerland and Austria this year.

A gold-dispensing automatic teller machine (ATM) was on display at Frankfurt's main railway station for a one-day marketing test on Tuesday.

A one-gram (0.0353 ounce) piece of gold, the size of a child's little fingernail and about as thin, cost 31 euros ($42.25) -- a 30 percent premium to the spot market price.

The flat rectangular piece, bearing the imprint of Belgian metals and speciality materials firm Umicore (UMI.BR: Quote), came out of the cash-only ATM in a tin box, including a certificate of authenticity.

continued at http://www.mineweb.com/mineweb/view/minewe...5&sn=Detail

[HardenedSoul]

Unless you are a total gold bug there is no reason to believe that gold will necessarily be the best hedge against inflation . . .

Heard it put quite neatly recently . . . "Gold isn't really a hedge against inflation. It's a hedge against government profligacy"

I don't see governments pulling all this liquidity out of the global economy anytime soon. Neither does the People's Republic of China

By the way, who was the idiot who, at the beginning of the year, said that oil wouldn't get above $50 a barrel during 2009 AND that we'd seen the highs in gold at around $880/oz ?

Edited May 20, 2009 by HardenedSoul

[flying]

By the way, who was the idiot who, at the beginning of the year, said that oil wouldn't get above $50 a barrel during 2009 AND that we'd seen the highs in gold at around $880/oz ?

Oh I know hmmm started with a V but when put with last name looked like a W

heheh I have not seen Vic in awhile. If he would just come back & give another prediction I know we can break the 1k mark

[longtom]

VV, please wait 1 more day so I can buy some, then you can make your prediction for a new low .

[old wanderer]

I was in Thailand with my wife in April/May. I had quite a bunch of money setting in 2 Thai accounts for the past few years. We went down and drew it mostly out. Then to China town, and traded the paper for 5 baht and 10 baht gold ingots.....Easy....and just a easy to sell them at some time in the future. Several shops (no one shop had enough gold for what we wanted) gave us certificates certifying they would buy back the gold for what we paid....not that is a pretty bullish stand to take on any commodity.

[Naam]

By the way, who was the idiot who, at the beginning of the year, said that oil wouldn't get above $50 a barrel during 2009 AND that we'd seen the highs in gold at around $880/oz ?

Oh I know hmmm started with a V but when put with last name looked like a W

heheh I have not seen Vic in awhile. If he would just come back & give another prediction I know we can break the 1k mark

Vic's claims were 50% right and 50% wrong. you have to admit that is a better record than the one of the average politician

[Naam]

I was in Thailand with my wife in April/May. I had quite a bunch of money setting in 2 Thai accounts for the past few years. We went down and drew it mostly out. Then to China town, and traded the paper for 5 baht and 10 baht gold ingots.....Easy....and just a easy to sell them at some time in the future. Several shops (no one shop had enough gold for what we wanted) gave us certificates certifying they would buy back the gold for what we paid....not that is a pretty bullish stand to take on any commodity.

and you think you get the same money even if the price of gold should fall? if yes, then i envy you for your strong "faith"

[simcity]

I was in Thailand with my wife in April/May. I had quite a bunch of money setting in 2 Thai accounts for the past few years. We went down and drew it mostly out. Then to China town, and traded the paper for 5 baht and 10 baht gold ingots.....Easy....and just a easy to sell them at some time in the future. Several shops (no one shop had enough gold for what we wanted) gave us certificates certifying they would buy back the gold for what we paid....not that is a pretty bullish stand to take on any commodity.

While I think buying gold is not a bad idea & if you live in Thailand buy from yowarat is good.

2 points I will like to make on your post

Shops buying back for what you paid! That is impossible..

Second, you said: just a easy to sell them at some time in the future.

Not so shops have close during turbulent time in yowarat at the past for few days

But yes, good to have few baht

[churchill]

This seems like a very sensible view - However I think I will be staying invested for the next 6 months or so .

Don't Let The Glitter Hypnotize You

As fear grows of looming inflation, many are saying that gold is a great way to protect your wealth. Just ask Ayn Rand or Ron Paul. There are even commercials on TV now encouraging people to invest in gold - before it's too late! That's all rubbish.

One particularly strong proponent of buying gold is economic commentator Peter Schiff. He lays out the typical argument in his market outlook from his firm's website:

In a world in which fiat money-substitutes are continually debased by governments around the world, we believe that gold remains the most honest and accountable form of money. When financial uncertainty abounds, it becomes increasingly important to hold assets with value that cannot be diluted by government monetary policy. Gold has been chosen as a store of value and unit of exchange since the dawn of civilization due to its inherent properties: rarity, durability, fungibility, divisibility, and portability.

Ultimately, as the current crisis runs its course, the value of a gold-based monetary system may once again gain favor with productive nations looking to safeguard the value of their savings. In such a scenario, gold would spike in value as central banks became net-acquirers of gold, rather than net-sellers.

On what planet does anyone really believe that a gold-based monetary system could return to productive nations? That seems like wacko doomsday talk to me. It's hard to even begin to imagine the amount of gold that would be necessary for that to work. Do you really see nations - especially like China, Brazil and India, who are becoming increasingly important in the world economy - suddenly embracing a gold standard?

Then there are the economic consequences. If all currencies were pegged to gold, then you would no longer have floating exchange rates, which virtually every legitimate economist will tell you are essential to efficient international exchange.

The strongest criticism I see against buying gold, however, is that it's just another commodity. As a result, it's subject to market whims just like other commodities. A giant gold mine is discovered in Siberia? The value of gold decreases. A deep recession leads to people buying less jewelry? The value of gold decreases. Platinum becomes a stronger preference for wedding bands? The value of gold decreases. Gold, like every other commodity, cannot hide from supply and demand shocks in the market.

If you are worried about cash and want to invest in a commodity, then go for it. But why gold? Sure, it's shiny and pretty. But so are diamonds. And so is platinum. What makes gold so special? As far as I can see, just the rhetoric behind it.

http://ftalphaville.ft.com/blog/category/commodities

[Naam]

I was in Thailand with my wife in April/May. I had quite a bunch of money setting in 2 Thai accounts for the past few years. We went down and drew it mostly out. Then to China town, and traded the paper for 5 baht and 10 baht gold ingots.....Easy....and just a easy to sell them at some time in the future. Several shops (no one shop had enough gold for what we wanted) gave us certificates certifying they would buy back the gold for what we paid....not that is a pretty bullish stand to take on any commodity.

While I think buying gold is not a bad idea & if you live in Thailand buy from yowarat is good. 2 points I will like to make on your post

Shops buying back for what you paid! That is impossible..

Second, you said: just a easy to sell them at some time in the future. Not so shops have close during turbulent time in yowarat at the past for few days. But yes, good to have few baht.

it is possible. if the price of gold is higher than the price "Old Wanderer" paid any goldshop will buy his gold "for what he paid"

[lannarebirth]

By the way, who was the idiot who, at the beginning of the year, said that oil wouldn't get above $50 a barrel during 2009 AND that we'd seen the highs in gold at around $880/oz ?

Oh I know hmmm started with a V but when put with last name looked like a W

heheh I have not seen Vic in awhile. If he would just come back & give another prediction I know we can break the 1k mark

On the former point, it was me that didn't expect to see oil above $50(the dunce cap emoticon seems to be missing). I even said I didn't expect to see it above that level in the next 5 years. My sole caveat being if this "financial crisis is for real". No doubt it has and is trading above 50, I have my doubts however if the financial crisis is much more than an elaborate heist. Certainly it has caused millions of individuals a personal financial crisis.

[AlexLah]

Please allow me to share wif you my highly advanced, mathematical, scientifically approved model........

My sincere apologies for the pixel distortion as I am not a MS-Paint Professional.

As Harmonica seems to enjoy some kind of holiday somewhere I thought, well why not do some charting.

According to this model where I added some helplines for easy reading, Gold could go up and reach somewhere 965-980 level in the coming 2 months.

But I could be wrong........

(Chart is one year chart YTD).

[flying]

Wow I am starting to wonder if the mere invocation of VV's claim is a powerful tool in itself

I wake today & see gold on the march uphill yet again,,,,,,,,,

[flying]

However I think I will be staying invested for the next 6 months or so .

I will agree with you

Then there are the economic consequences. If all currencies were pegged to gold, then you would no longer have floating exchange rates, which virtually every legitimate economist will tell you are essential to efficient international exchange.

Oh boy..... bad time in history to tell us what the economist think

What makes gold so special? As far as I can see, just the rhetoric behind it.

Gee sounds like pretty much everything that is considered valuable today.

[Abrak]

The strongest criticism I see against buying gold, however, is that it's just another commodity. As a result, it's subject to market whims just like other commodities. A giant gold mine is discovered in Siberia? The value of gold decreases. A deep recession leads to people buying less jewelry? The value of gold decreases. Platinum becomes a stronger preference for wedding bands? The value of gold decreases. Gold, like every other commodity, cannot hide from supply and demand shocks in the market. Actually this one of the very arguments why people like gold in times of economic trouble. The stock of gold is so high relative to underlying demand (at least 50 years) that say a drop off in demand for jewellry in a recession has minor economic impact. Compare that with steel where a drop off in demand puts factories out of business and reduces its price to marginal cost.

If you are worried about cash and want to invest in a commodity, then go for it. But why gold? Sure, it's shiny and pretty. But so are diamonds. And so is platinum. What makes gold so special? As far as I can see, just the rhetoric behind it.This is the point though. A lot of golds store in value is traditional and based on the ability to store and trade it easily. It has proved its point by performing well in difficult times but maybe there are better commodities to buy. Wheat consumption did not fall in the depression and meat consumption that largely determines wheat consumption actually increased on a per capita basis. These sort of commodities are at near rock bottom prices and while you couldnt buy them as play against inflation/risk/problems 100 years ago there are now ETFs I would guess

The fact that gold is going up doesnt make me more bullish about future rises - just that I should look harder for better commodity plays with little downside and as much upside.

ANYWAY AS SOMEONE ONCE POINTED OUT 'GOLD IS FOR BULLS, I AM BUYING GUNS AND CANNED FOODS'

http://ftalphaville.ft.com/blog/category/commodities

Edited May 21, 2009 by Abrak

[flying]

These sort of commodities are at near rock bottom prices and while you couldnt buy them as play against inflation/risk/problems 100 years ago there are now ETFs I would guess

The only problem with this is in light of this *new* collapse which is not the same as the old depression or anything else we have seen Do you want to be based in what is turning out to be a very crooked market? Which may soon be regulated by the biggest of all crooks? Or would you rather hold your own wealth?

ANYWAY AS SOMEONE ONCE POINTED OUT 'GOLD IS FOR BULLS, I AM BUYING GUNS AND CANNED FOODS'

It has always been assumed that the first precious metal acquisition is lead.

Edited May 21, 2009 by flying

[Naam]

Wow I am starting to wonder if the mere invocation of VV's claim is a powerful tool in itself I wake today & see gold on the march uphill yet again,,,,,,,,,

Flying, may i again draw your attention to the fact that perspectives are somehow different and do not depend only on "the eyes of the beholder" but also the "location from where viewed"? a Brit or a continental €uropean who is interested in gold does not care about its value in dollar terms. what counts for them is the price of gold in the currency of their preference, which is in most cases the home currency.

if during a certain period the USD gold price increases by 10% but USD loses 11% vs. €UR (that's what happened recently) the german goldbug is not rocking overjoyed in his chair. those who protect and hedge their USD denominated assets are of course pleased.

[flying]

Flying, may i again draw your attention to the fact that perspectives are somehow different and do not depend only on "the eyes of the beholder" but also the "location from where viewed"? a Brit or a continental €uropean who is interested in gold does not care about its value in dollar terms. what counts for them is the price of gold in the currency of their preference, which is in most cases the home currency.

if during a certain period the USD gold price increases by 10% but USD loses 11% vs. €UR (that's what happened recently) the german goldbug is not rocking overjoyed in his chair. those who protect and hedge their USD denominated assets are of course pleased.

True & that is a lot of ifs & buts you have thrown in there

But I see your point. Also as you say we who are trying to protect our USD assets are pleased today. But we know the pendulum swings both ways.

Edited May 21, 2009 by flying

[Naam]

True & that is a lot of ifs & buts you have thrown in there

But I see your point. Also as you say we who are trying to protect our USD assets are pleased today. But we know the pendulum swings both ways.

there's not a single "if" or "but" in my posting which reduces the contents of the stated facts!

moreover, i think it is wise for an investor to hedge his USD exposure, e.g. by buying gold, if he was unwise enough not to diversify or the individual circumstances did perhaps not allow a diversification. that applies especially to those who are living in an area where their expenditure is in a currency not pegged to the USD.