Where Is Gold Going In This Market

[churchill]

A Spot Gold ETF With Storage in Singapore

http://seekingalpha.com/article/218996-next-up-a-spot-gold-etf-with-storage-in-singapore

[churchill]

Intermediate Low in Precious Metal Stocks?

http://www.financialsense.com/contributors/chris-puplava/intermediate-low-in-precious-metal-stocks

[churchill]

China's double gold game

David Hargreaves takes perhaps a tongue-in-cheek look at China's policy on gold and concludes its citizens may be being urged to buy gold so the Central Bank doesn't have to.

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=109449&sn=Detail

[Somnambulist]

Intermediate Low in Precious Metal Stocks?

http://www.financialsense.com/contributors/chris-puplava/intermediate-low-in-precious-metal-stocks

Well, yesterday wasn't much fun for my Canadian juniors, mostly gold and silver stocks. The Dow went down 2% so of course mine went down more. I think some people got margin calls and had to sell their good stuff to pay for the bad. That's why I've kept 25% cash in my portfolio for the last few months. I'm too greedy to raise that percentage but '08 could happen again, after which we could sweep in and buy quality for pennies on the dollar.

Edit - I sleep well at night because I have 1/3 of my wealth in physical gold. Just don't ask where I keep it, but I'll give you a hint - not at home.

Edited August 12, 2010 by Somnambulist

[Abrak]

What I meant better explained here

Monday, August 2, 2010

Relativity: What is Physical Gold REALLY Worth?

http://fofoa.blogspot.com/

A very good article but one I find illogical - btw that's my problem not anyone elses.

But if your need is to store $100,000 worth of present value in gold, it doesn’t matter how much gold you get. All that matters is that whatever weight you get reliably and efficiently stores your value. One ounce could do just as good of a job as 100 ounces. In fact, one ounce would do a BETTER job than 100 ounces! The less gold it takes to store your value, the better it does its job. This particular “gold dynamic” sets it apart from all commodities.

One ounce would store your value more efficiently and stably than 100 ounces because A) your storage and security costs would be lower (efficiency), and if one ounce is worth $100,000 then that infers gold is being valued by many more people relative to when it was $1,000 per ounce. This wider distribution brings with it a more stable base of valuation and less relative volatility in price (stability).

I simply do not understand this argument. It simply makes a statement about perceived value versus fiat. This comment is totally illogical This wider distribution brings with it a more stable base of valuation and less relative volatility in price (stability). A stabler base of valuation must by definition end up with increased volatility of price because you are pricing it against more volatile fundamentals.

Anyway, what I really want to know is why gold acts as a risk asset nowadays while it should be, by definition, a far better non-risk asset than anything else. Because its value must be in the lack of risk and the risk must be in its perceived value.

[churchill]

Intermediate Low in Precious Metal Stocks?

http://www.financialsense.com/contributors/chris-puplava/intermediate-low-in-precious-metal-stocks

Well, yesterday wasn't much fun for my Canadian juniors, mostly gold and silver stocks. The Dow went down 2% so of course mine went down more. I think some people got margin calls and had to sell their good stuff to pay for the bad. That's why I've kept 25% cash in my portfolio for the last few months. I'm too greedy to raise that percentage but '08 could happen again, after which we could sweep in and buy quality for pennies on the dollar.

Edit - I sleep well at night because I have 1/3 of my wealth in physical gold. Just don't ask where I keep it, but I'll give you a hint - not at home.

I've also been worried about my mining shares in case of a sell off - see ;

If Deflation Wins, What Will Gold Stocks Do?

http://www.zerohedge.com/article/guest-post-if-deflation-wins-what-will-gold-stocks-do

[Somnambulist]

Intermediate Low in Precious Metal Stocks?

http://www.financialsense.com/contributors/chris-puplava/intermediate-low-in-precious-metal-stocks

Well, yesterday wasn't much fun for my Canadian juniors, mostly gold and silver stocks. The Dow went down 2% so of course mine went down more. I think some people got margin calls and had to sell their good stuff to pay for the bad. That's why I've kept 25% cash in my portfolio for the last few months. I'm too greedy to raise that percentage but '08 could happen again, after which we could sweep in and buy quality for pennies on the dollar.

Edit - I sleep well at night because I have 1/3 of my wealth in physical gold. Just don't ask where I keep it, but I'll give you a hint - not at home.

I've also been worried about my mining shares in case of a sell off - see ;

If Deflation Wins, What Will Gold Stocks Do?

http://www.zerohedge.com/article/guest-post-if-deflation-wins-what-will-gold-stocks-do

I bought my first PM stock in about '03 or '04, when spot gold was at about 375USD, dreaming of the leverage it would provide. But it hasn't turned out that way. Physical has tripled and my stocks are somewhere between a double and a triple. Of course, my portfolio has tripled twice, first from late '05 to May '06, and then again from late '08 till early '10, but we all know what happened in '08 up to November. Steve Saville (you can google him) recently wrote that the gold price reflects not current money supply, but rather people's level of distrust in government and its ability to do the right thing now and in the future, in which case gold is still cheap. If Saville is right, I can imagine gold doing well in a deflationary environment because production costs of mining would go down while demand for gold remained high. Mind you, from what I've read, hyperinflation is always preceded by deflation, and as one poster said on ZH, there is already more deflation than is apparent because banks are hiding bad assets instead of writing them down.

Another issue is taxation - if governments tax gold enough, they don't need to confiscate it. Have you seen this?

http://www.safehaven.com/article/17108/hidden-gold-taxes-the-secret-weapon-of-bankrupt-governments

[churchill]

Are Gold Bugs = Apple Borg Collective?

http://www.zerohedge.com/article/are-gold-bugs-apple-borg-collective

[flying]

Gold seems to be going sideways very nicely.....Could be an interesting week. Sproing?

[Abrak]

I am totally mystified by this. As is the writer of the article whose initial comments are totally wrong. Is it some way related to gold?

http://blogs.marketwatch.com/fundmastery/2010/08/12/5-year-tips-hit-bottom/

[churchill]

"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

[churchill]

I am totally mystified by this. As is the writer of the article whose initial comments are totally wrong. Is it some way related to gold?

http://blogs.marketwatch.com/fundmastery/2010/08/12/5-year-tips-hit-bottom/

No Idea ! But these guys may help ?

Deflation and negative TIPS yields

http://blogs.reuters.com/felix-salmon/2010/08/13/deflation-and-negative-tips-yields/

TIPs are the best

http://ftalphaville.ft.com/blog/2010/08/13/315691/tips-are-the-best/

[churchill]

Is this it ?

People in the East are buying gold because their currencies are getting stronger and inflation is going up - So they can afford more now and preserve their wealth in the future /

People in the west are buying gold because their currencies are falling and want to protect their assets - as they know they will be able to buy less in time /

So until economies / currencies come to a more even playing field gold will go up ?

India gold buying edges up as rupee strengthens

http://in.news.yahoo.com/137/20100817/748/tbs-india-gold-buying-edges-up-as-rupee.html

Edited August 17, 2010 by churchill

[cloudhopper]

Is this it ?

Is this what Churchill?

[cloudhopper]

Reposted from Badge on the Financial Crisis thread-

The Secret of Oz" by Bill Still

http://www.youtube.c...h?v=D22TlYA8F2E

The economy of the U.S. is in a deflationary spiral. Nothing can stop it -- except monetary reform.

1. No more national debt. Nations should not be allowed to borrow. If they want to spend, they have to take the political heat right away by taxing.

2. No more fractional reserve lending. Banks can only lend money they actually have.

3. Gold money is NOT the answer. Historically gold ALWAYS works against a thriving middle class and ALWAYS works to create a plutocracy.

4. The total quantity of money + credit in a national system must be fixed, varying only with the population.

-------------------------------------

Well I thought this was a good video. AFAIK all failed fiat currencies have been successfully replaced by new fiat currencies and "gold money" is no solution.

Not to be construed as a condemnation of gold or anything else of intrinsic value as a good store of wealth during a transition however.

Now that the recipients of fascist state-sponsored bread and circus in the US appear to have a political majority they will continue to democratically facilitate looting the treasury and stop the needed monetary reforms.

Edited August 18, 2010 by cloudhopper

[churchill]

Reposted from Badge on the Financial Crisis thread-

The Secret of Oz" by Bill Still

http://www.youtube.c...h?v=D22TlYA8F2E

The economy of the U.S. is in a deflationary spiral. Nothing can stop it -- except monetary reform.

1. No more national debt. Nations should not be allowed to borrow. If they want to spend, they have to take the political heat right away by taxing.

2. No more fractional reserve lending. Banks can only lend money they actually have.

3. Gold money is NOT the answer. Historically gold ALWAYS works against a thriving middle class and ALWAYS works to create a plutocracy.

4. The total quantity of money + credit in a national system must be fixed, varying only with the population.

-------------------------------------

Well I thought this was a good video. AFAIK all failed fiat currencies have been successfully replaced by new fiat currencies and "gold money" is no solution.

Not to be construed as a condemnation of gold or anything else of intrinsic value as a good store of wealth during a transition however.

Now that the recipients of fascist state-sponsored bread and circus in the US appear to have a political majority they will continue to democratically facilitate looting the treasury and stop the needed monetary reforms.

'Gold money is NOT the answer.'

Agreed but until a solution is found and with Inflation in the East and Deflation in the West people will increasingly buy gold as a hedge to protect against uncertainty IMO - So it is likely to be going up for some time /

[churchill]

I am totally mystified by this. As is the writer of the article whose initial comments are totally wrong. Is it some way related to gold?

http://blogs.marketwatch.com/fundmastery/2010/08/12/5-year-tips-hit-bottom/

No Idea ! But these guys may help ?

Deflation and negative TIPS yields

http://blogs.reuters.com/felix-salmon/2010/08/13/deflation-and-negative-tips-yields/

TIPs are the best

http://ftalphaville.ft.com/blog/2010/08/13/315691/tips-are-the-best/

This sounds logical

"What the heck is going on with the negative yields seen in 5-yr TIPS?

The mass media/blog view seems to be that a negative TIPS yield implies slow or negative economic growth/deflation ahead. I have a different perspective on the negative TIPS yield. The rate of return by the investor in a TIPS bond is determined by the coupon as set by the market at issuance plus the adjustment made to the principal amount of the bond as determined by the Government-calculated Consumer Price Index. In theory, the total rate of return over any 6-month period should equal the rate of inflation in the economy, thereby giving the the TIP security the quality of preserving purchasing power of money invested. But does anyone really believe that the cost of living over the past year is equal to the 1.3% that is reported by the Government? Reeeally?

So, why would you pay a price for a 5-yr. TIPS bond which starts you out with a negative yield? Those who have suggested that a negative yield implies that the market is forecasting deflation are wrong. The way a TIPS return is calculated, in the event that the CPI were to go negative, the principal amount of your investment would decline. Who would invest in that? I guess Dennis Gartman might.

The only reason I can think of that a sophisticated investor would buy into an inflation-adjusted investment at an initial price which yields a negative return is because the investor believes that there will be substantial positive principal adjustments between now and the maturity of the bond 5 years later. In other words, the investor believes that even the fraudulent Government-calculated CPI will have to reflect much higher levels of inflation in the near future. There can be no other rational explanation. hel_l, even Warren Buffet is now warning about inflation, so the smart money must see something that monkeys on CNBC and in the mainstream financial advisory/money management business can not.

Those of us who understand that the Fed/Govt is inextricably painted into an inflate or collapse corner also understand that today's asset deflation (mainly housing and banks) will lead to Bernanke's attempt inflate/hyperinflate the money supply to fight this deflation. Otherwise his famous speech in 2002 was a complete lie. While Treasury bonds may seem like a relatively safe-haven right now, the only way to protect yourself from the impending credit crisis part deux and concomitant acceleration in inflation is to load up on physical gold and silver. "

http://truthingold.blogspot.com/

[churchill]

For China, it’s diversify, diversify, diversify

out of US paper into --

http://ftalphaville.ft.com/blog/2010/08/18/318866/for-china-its-diversify-diversify-diversify/

[Abrak]

I wonder if anyone knows what is going on with Thailand and gold because it is all very strange.

You will see on one TV's Nation News posts this rather innocuous comment about the trade figures.

Gold imports reached 44.57 tonnes, worth $1.7 billion last month, up 203 per cent from $126.6 million in June. This was due to the lower gold price in the world market, which dropped by 3.01 per cent month on month to $1,231 per ounce in July.

Now as with all Nation economics news there is a lot of nonsense, but I suspect that US$1.7bn figure is actually correct because....

Thailand reported a trade deficit of US$939 million (Bt29.6 billion) last month, the biggest deficit in two years

[Abrak]

I wonder if anyone knows what is going on with Thailand and gold because it is all very strange.

You will see on one TV's Nation News posts this rather innocuous comment about the trade figures.

Gold imports reached 44.57 tonnes, worth $1.7 billion last month, up 203 per cent from $126.6 million in June. This was due to the lower gold price in the world market, which dropped by 3.01 per cent month on month to $1,231 per ounce in July.

Now as with all Nation economics news there is a lot of nonsense, but US$1.7bn figure is actually correct because....

Thailand reported a trade deficit of US$939 million (Bt29.6 billion) last month, the biggest deficit in two years

Thailand usually reports a US$1bn C/A surplus every month. So this gold import has effectively turned the trade account from a decent surplus to a sizeable deficit. Something very similar happened in either January or December. Now US$1.7bn of gold is presumably piddly shit in the real world but it is a huge amount for Thailand to import in 1 month (that is usually a years imports.) It means gold imports were as high as oil.

Now theoretically I would have thought that only the BoT could actually afford to import that size. The last US$1bn though didnt seem to end up on their balance sheet although they are so wealthy now that I am sure the odd US$1bn slips through the works here and there as an accounting error.

Anyway to put things in perspective 1Q 2010 Chinese demand for gold was 100 tonnes and Thailand an economy less than a tenth its size imported 45 tonnes in one month. And there was a similar sized import six months ago. Monthly imports are usually about 5 tonnes. And the US$1.7bn is actually correct and not a misprint.

[churchill]

I wonder if anyone knows what is going on with Thailand and gold because it is all very strange.

You will see on one TV's Nation News posts this rather innocuous comment about the trade figures.

Gold imports reached 44.57 tonnes, worth $1.7 billion last month, up 203 per cent from $126.6 million in June. This was due to the lower gold price in the world market, which dropped by 3.01 per cent month on month to $1,231 per ounce in July.

Now as with all Nation economics news there is a lot of nonsense, but US$1.7bn figure is actually correct because....

Thailand reported a trade deficit of US$939 million (Bt29.6 billion) last month, the biggest deficit in two years

Thailand usually reports a US$1bn C/A surplus every month. So this gold import has effectively turned the trade account from a decent surplus to a sizeable deficit. Something very similar happened in either January or December. Now US$1.7bn of gold is presumably piddly shit in the real world but it is a huge amount for Thailand to import in 1 month (that is usually a years imports.) It means gold imports were as high as oil.

Now theoretically I would have thought that only the BoT could actually afford to import that size. The last US$1bn though didnt seem to end up on their balance sheet although they are so wealthy now that I am sure the odd US$1bn slips through the works here and there as an accounting error.

Anyway to put things in perspective 1Q 2010 Chinese demand for gold was 100 tonnes and Thailand an economy less than a tenth its size imported 45 tonnes in one month. And there was a similar sized import six months ago. Monthly imports are usually about 5 tonnes. And the US$1.7bn is actually correct and not a misprint.

Is it not just ongoing increasing demand from Central Banks and investors in this region ?

Asia set to become gold bullion HQ

http://www.commodityonline.com/news/Asia-set-to-become-gold-bullion-HQ-31089-3-1.html

India's gold merchants are expecting a sustained pick-up in sales for the second round of festivals, as a reviving economy and stable prices may aid sentiment, triggering a reversal in declining trend in imports. http://in.reuters.com/article/idINIndia-50959020100820

China Greenlights Gold: The Secret and Not-So-Secret Plan

http://seekingalpha.com/article/221015-china-greenlights-gold-the-secret-and-not-so-secret-plan

Edited August 20, 2010 by churchill

[ExpatJ]

Does anyone here buy and sell gold on a week-week/month-month basis taking advantage of small rises/falls..or do most investors just buy and hold on to have a long term store of wealth?

[churchill]

Generally I am buy and hold and think that is best with pm's- that is for as long as you think that , as Gartman says ' the line is going from the bottom left to the top right ' ( and even then he changes his mind every week or so )- When I did try to trade I got it totally wrong & chickened out just before it broke 1000 usd having held from 500 usd - I have recently bought back in - but am wary of a market crash and may sell some after September - but for a 6 months plus view buy and hold IMO-

Edited August 20, 2010 by churchill

[flying]

Not much of a jump as it sits never far from 1200 these days.... & in reality with the premium for coins has been over 1300 USD often already but I agree

Gold to Jump to Record $1,300 in Six Months as Rally Resumes, Goldman Says

By Kim Kyoungwha - Aug 11, 2010 10:01 PM GMT-1000

Gold may rally to a record $1,300 an ounce in six months, driven by low interest rates and the prospect of renewed quantitative easing in the U.S., according to Goldman Sachs Group Inc.

“The recent selloff has left speculative long positions in gold oversold relative to U.S. real interest rates,” analysts David Greely and Damien Courvalin, wrote in a note yesterday. This has “set the stage for a rally to our six- month gold-price target of $1,300 an ounce,” they wrote.

The Federal Reserve has resorted to direct bond purchases, also known as quantitative easing, as part of its response to the world financial crisis. The U.S. central bank said this week that it would reinvest principal payments on mortgage holdings into long-term Treasury securities to support growth.

Gold for immediate delivery, set for a 10th annual advance, touched an all-time high of $1,265.30 an ounce on June 21. The precious metal was at $1,201.35 at 3:10 p.m. in Singapore.

Long positions are bets that prices may gain. Real interest rates are the difference between nominal interest rates and inflation.

Still, there may be a considerable risk gold will drop in the longer term if the Fed tightens monetary policy earlier than expected, the analysts said.

Goldman recommended buying platinum for October delivery on the New York Mercantile Exchange as recovering global automobile demand will likely continue to put “upward pressure” on autocatalyst demand, the report said.

[cloudhopper]

http://online.wsj.com/article/SB10001424052748703908704575433670771742884.html?mod=WSJ_hpp_sections_personalfinance

[flying]

http://online.wsj.com/article/SB10001424052748703908704575433670771742884.html?mod=WSJ_hpp_sections_personalfinance

Nice way of stating it...

Instead, "gold is a currency" whose daily price is a gauge of the market's concern about the "potential diminishment" of the purchasing power of the dollar and other paper currencies, says Paul Brodsky, a principal at New York's QB Asset Management.

[churchill]

Cancer & Desperation of QE2

http://news.goldseek.com/GoldenJackass/1282766700.php

[flying]

Cancer & Desperation of QE2

http://news.goldseek.com/GoldenJackass/1282766700.php

Thanks Loved it

Their talk of an Exit Strategy in the last several months was summarily dismissed as nonsense, propaganda, and wishful thinking by the Jackass here on a consistent irrefutable basis.

Hey they used my Hologram analogy too

The urgency of the QE2 Launch will be made quite clear by the Hologram Leaders occupying positions of power, after they digest the latest housing data.

Edited August 26, 2010 by flying

[Naam]

latest prices of physical precious metals. perhaps of interest for the resident aficionados? prices in CHF, divide by 1.0235 to obtain USD price.

Edited August 27, 2010 by Naam

[flying]

latest prices of physical precious metals. perhaps of interest for the resident aficionados? prices in CHF, divide by 1.0235 to obtain USD price.

So how many of those 1000 gram bars is the Mrs. getting for her Birthday present?