Where Is Gold Going In This Market

[churchill]

.

So with prices at $1250 and $20 for silver are they too high - I think not /

Get serious man. It's a golf ball marker.

Impact of investment banks closing proprietary trading desks

'Should downward resistance continue to evaporate going forward, gold and silver should push through the usually strong fall season to reach into recent record territory and form solid support above $20 for silver and $1250 for gold. At that point, it is anyone's best guess as to how high each will climb, especially with the international banking interests getting out of the way of what is a naturally occurring market phenomenon: the move to hard assets.'

'As commodity prop traders lose their jobs, and are subsequently moved to more benign positions within the investment banking community, spot prices should rise to reflect the considerably higher prices paid at the retail level. Such a move would push both silver and gold above and beyond important dollar figures like $20 and $1250, where they can then move freely with little visible resistance.'

http://www.commodityonline.com/news/Impact-of-investment-banks-closing-proprietary-trading-desks-31698-3-1.html

[churchill]

IMF makes 4th central bank gold sale in year

(Reuters) - The International Monetary Fund said on Thursday that it sold 10 metric tonnes of gold to the central bank of Bangladesh on Sept. 7, using Tuesday's market prices for the transaction. It was the fourth IMF sale to a central bank in a year.

The fund adopted a plan last year to diversify its sources of income and increase low-cost lending to poor countries by up to $17 billion through 2014.

Country: BANGALDESH

Volume sold: 10 tonnes

Date announced: Sept. 9, 2010

more .. http://in.reuters.com/article/idINIndia-51400220100909

Bangladesh to increase investment in gold

'Days after buying 10 tonnes of gold for $403 million from the IMF, Bangladesh said it will increase its investment in gold instead of foreign currencies.'

http://www.commodityonline.com/news/Bangladesh-to-increase-investment-in-gold-31703-3-1.html

[churchill]

Silver taking investor precedence over gold as GSR breaks downwards?

'Many analysts make the point that the historic GSR has been nearer 15 than the current 62.5 (gold at $1250, silver at $20), but then the role of silver has changed dramatically since those days from being a true monetary metal to one which is driven more by industrial demand with precious metals overtones. The only time in recent years when the ratio got down to this kind of level was in 1980 when the Hunt Brothers were trying to corner the silver market and the metal reached a heady $50 an ounce. Given the fate of the Hunt Brothers this is a level unlikely to be repeated in the foreseeable future, but investors and analysts feel that the recent year average in the GSR of around 55 may be attainable again - and at the current gold price this would put silver at around $22-23 at the current gold price, which is a much more realistic target. And, of course, if the gold price does continue to move upwards as many are still predicting, then silver could be dragged up to even higher levels.'

cont .. http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=111209&sn=Detail&pid=102055

[churchill]

Why Gold & Silver?

[teletiger]

$1270.....my nose is bleeding.

Regards.

[Naam]

Such a move would push both silver and gold above and beyond important dollar figures like $20 and $1250, where they can then move freely with little visible resistance.

bakeries, here we come!

[mania]

I dont know about bakeries? But a few years back I bought half my body weight in Silver 1oz coins. If things keep going I could buy a condo or two? I only wish I could claim the same for my gold coins. There I only have the weight of one of my limbs This person has a nice weight, Maybe two legs? about 50 pounds/800 ounces for sale http://cgi.ebay.com/800-Ounces-Gold-Mix-Bars-Gold-American-Eagles-/370402802568?pt=LH_DefaultDomain_0&hash=item563dba3b88

[churchill]

Precious Metals Update

http://www.financialsense.com/contributors/chris-puplava/precious-metals-update

[churchill]

Going for the Gold -- Fundamental as Well as Technical

'In contrast to earlier this year, gold and the dollar have resumed their inverse relationship. The metal and the greenback had rallied in tandem as investors sought shelter from the European sovereign debt crisis back in the spring. With that problem papered over by early summer, investors fled the dollar and flocked to gold.

Most recently, investors have been motivated by anticipated actions by major central banks—to print more money in order to shore up their slumping economies and stave off deflation.

Early Wednesday, Japanese monetary authorities were reported to have intervened in the currency market to curb the surge in the yen's value, which has dealt a severe blow to that nation's export-dependent economy. The yen had traded at a 15-year high, with the dollar fetching less than 83 yen at one point in New York trading. Japan's intervention, its first such action in six years, pushed dollar up sharply, to 84.5 yen, in Asia Wednesday morning.

Prior to that, the U.S. Dollar Index dropped 1% Tuesday while the Swiss franc climbed past the $1.00 level for the first time since last December. And the People's Bank of China set a record high rate for its currency of 6.7378 yuan to the dollar.

Taken together, it's apparent the dollar is in retreat on all fronts. Adding to the pressure is increasing speculation that the Federal Reserve could resume expanding its balance sheet—QE2, for the second phase of quantitative easing—as soon as the Sept. 21 meeting of its policy-setting Federal Open Market Committee. Notably, Treasuries have gotten back on the rally track this week, in part because of possible stepped-up buying by the Fed.'

'expansionary monetary policies around the globe seem aimed at avoiding a too-strong currency for virtually every central bank. With the possible exception of the Swiss National Bank and the Bank of Canada, nearly every central bank is pursuing an expansionary policy to sustain recovery. The Bank of Japan is pushing down the yen while the Fed may be contemplating further security purchases. The European Central Bank has to deal with the sovereign debt crisis, which continues to simmer. Chinese authorities continue resist a full appreciation of their undervalued currency.

So, with every major central bank effectively seeking a relatively cheap currency, the decade-long bull market in gold is intact. That it took so long for gold producers to halt the hedging their output is the main surprise '

more .. http://online.barrons.com/article/SB50001424052970204878604575492853898315796.html?mod=BOL_hpp_highlight

[churchill]

'With the possible exception of the Swiss National Bank and the Bank of Canada, nearly every central bank is pursuing an expansionary policy to sustain recovery.' see above

Not SNB who would rather see inflation than a stronger currency - SNB May Hold Rate as Surging Franc Threatens Recovery http://www.bloomberg.com/news/2010-09-15/snb-may-keep-benchmark-close-to-zero-as-franc-s-surge-threatens-recovery.html

and will increasing prices dampen demand - I think the opposite - increasing prices will increase investor demand - http://www.menafn.com/qn_news_story_s.asp?StoryId=1093366238

until POP , as Soros said gold is probably enering a bubble but a lot higher IMO before it bursts

Edited September 16, 2010 by churchill

[churchill]

Yen Intervention Fans Flames Of Anti-Japanese Rage Across China

Read more: http://www.businessinsider.com/yen-intervention-fans-flames-of-anti-japanese-rage-across-china-2010-9#ixzz0zgoukhMH

4-Colombia central bank buys dollars, peso falls

http://www.reuters.com/article/idUSN1514548320100915

Argentines Say Buy Now as 25% Inflation Outlook Buoys Car Sales

http://www.bloomberg.com/news/2010-09-15/buy-now-mentality-hits-argentina-as-25-inflation-outlook-buoys-car-sales.html

[mania]

Greenspan’s Warning on Gold

http://www.nysun.com/editorials/greenspans-warning-on-gold/87080/

“Fiat money has no place to go but gold,”

[churchill]

A new theory ? on how to calculate where the present gold price should be based on population /

Gold has , since Roman Times or before ? , been used as a currency or store of value - and if we assume that there has always been a pretty standard % of people that have wanted to keep a pretty standard % of gold - Then using Roman Times as a base could we calculate the average price of gold per person ? Do we know the amount of mined gold in the world at that time ?

So the formula would be based on the price of gold in the roman times / multipyied by the no of people / divided by the no of tons of gold -

To calculate where today's price should be - take that figure / times inflation / times no of people / divided by tons of gold now ?

Probably very difficult / impossible to calculate - Could Naam ( a closet gold bull ? ) come up with a formula ?

Does it make sense ? any other theories as to what the correct price of gold should be ? It must be based on supply and demand and if one knows the average demand over the last few centuries and one knows the supply one should be able to come up with a mean price ?

[Naam]

Probably very difficult / impossible to calculate - Could Naam ( a closet gold bull ? ) come up with a formula ?

impossible as relevant data is not available.

[churchill]

Probably very difficult / impossible to calculate - Could Naam ( a closet gold bull ? ) come up with a formula ?

impossible as relevant data is not available.

Oh well just an idea - I don't see that the old theory that one can base the price of gold on the price of a suit holds , as gold supply is going down in relation to population / and a chinese suit in HK or a ( Chinese suit ) in New York

Edited September 17, 2010 by churchill

[churchill]

I have seen POMO mentioned a lot recently / What is it?

Wonder Why Market Just Surged? One Word - POMO

http://www.zerohedge.com/article/wonder-why-market-just-surged-one-word-pomo

[cloudhopper]

I have seen POMO mentioned a lot recently / What is it?

Wonder Why Market Just Surged? One Word - POMO

http://www.zerohedge...d-one-word-pomo

Permanent Open Market Operations - US Fedspeak for the market manipulating they DO admit to.

What, you didn't know where all that money ramping the stock market on no volume comes from?

[Naam]

Probably very difficult / impossible to calculate - Could Naam ( a closet gold bull ? ) come up with a formula ?

impossible as relevant data is not available.

Oh well just an idea - I don't see that the old theory that one can base the price of gold on the price of a suit holds , as gold supply is going down in relation to population / and a chinese suit in HK or a ( Chinese suit ) in New York

one might as well base the price of gold on the length of a string.

[Naam]

I have seen POMO mentioned a lot recently / What is it?

Wonder Why Market Just Surged? One Word - POMO

http://www.zerohedge...d-one-word-pomo

Permanent Open Market Operations - US Fedspeak for the market manipulating they DO admit to.

What, you didn't know where all that money ramping the stock market on no volume comes from?

without the revelation of Dyler Turd i wouldn't have known without "zerohedge" we'd be lost!

[teletiger]

Herr Naam. The value of gold never changes. All other prices fluctuate against gold.

Regards.

sure Sir Tiger. and let's not forget that the earth is flat and -being the center of the universe- the sun rotates around it.

next!

I wonder if Greenspan knows about the earth being the center of the Universe?

Alan Greenspan 2 days ago.......

"if all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it."

'And.....

"Fiat money has no place to go but gold."

http://www.zerohedge.com/article/guest-post-atlas-just-shrugged

Regards.

[cloudhopper]

without the revelation of Dyler Turd i wouldn't have known without "zerohedge" we'd be lost!

Here's one of the beacons I navigate by Dr.

http://maxkeiser.com/2010/09/16/kr78-keiser-report-markets-finance-economic-recklessness/

And featuring a most excellent interview with one of my favorite deflationists.

This should be posted in the financial crisis thread I guess but the deserving abide here...

[churchill]

Probably very difficult / impossible to calculate - Could Naam ( a closet gold bull ? ) come up with a formula ?

impossible as relevant data is not available.

Oh well just an idea - I don't see that the old theory that one can base the price of gold on the price of a suit holds , as gold supply is going down in relation to population / and a chinese suit in HK or a ( Chinese suit ) in New York

one might as well base the price of gold on the length of a string.

What about a Klingon suit - Seems you really are a gold bug!

http://www.newscientist.com/blogs/culturelab/2010/09/it-aint-over-till-the-fat-klingon-sings.html

[churchill]

Factbox - More countries intervening to keep currencies down

http://uk.finance.yahoo.com/news/factbox-more-countries-intervening-to-keep-currencies-down-reuters_molt-4e746c62df3b.html?x=0&utm_source=twitterfeed&utm_medium=twitter

[teletiger]

What about a Klingon suit - Seems you really are a gold bug!

http://www.newscientist.com/blogs/culturelab/2010/09/it-aint-over-till-the-fat-klingon-sings.html

Haha. Excellent piece. Apparently some Dutch crackpo....err people wrote an opera in Klingon.

A little known fact the original name of the opera was to be "the merry widow" (Lehar), but after furious calls from some strange sounding German doctor, the name was changed to "La Wally" (Catalanni), the meaning apparently being lost on our good doctor.

Regards.

[Naam]

Teletiger's School of Eekonomics:

teletiger, on 2010-09-09 07:18, said: Herr Naam. The value of gold never changes. All other prices fluctuate against gold.

[mania]

The price of gold fluctuates with the confidence in fiat.

Confidence down gold up.

As such it looks to rise more in the foreseeable future.

[cloudhopper]

Here's a brief review of money, credit and gold in a fiat economy by someone who's had it pretty much right all along.

http://globaleconomicanalysis.blogspot.com/2010/09/myths-about-whats-economically.html

[mania]

Here's a brief review of money, credit and gold in a fiat economy by someone who's had it pretty much right all along.

http://globaleconomi...onomically.html

You know Mish has been commenting on FOFOA site.

Bit of a flame fest over it lately....

http://fofoa.blogspot.com/

The recent comments at the end of the first article shown

He posts under his real name

Michael Shedlock

Edited September 18, 2010 by mania

[teletiger]

That's a dodgy link there Mania. Leads to some "purple buzz" crap. Even shows up in the reply box.

FOFOA did an excellent trio of papers on hyperinflation.

http://fofoa.blogspot.com/2010_09_01_archive.html

Even with the squabbling, they're all agreed on one thing......"We're doomed"

Regards.

[Naam]

Even with the squabbling, they're all agreed on one thing......"We're doomed"

that we are doomed goes without saying. but those who worked their àsses off to "preserve wealth" and bequeath their heirs with their life savings have the consolation that their cremation is paid for in Krüger Rands or Maple Leaves and not with perfide fiat money.