Where Is Gold Going In This Market

[Naam]

30 year high for silver

after generating losses for 20 years (1980-2000)

1. It's not about looking backwards - one can always find prices in the past in certain time frames that fit a theory -

2. Looking forwards , as best we can - Silver looks like there is more demand than supply and it looks like prices may have been kept artificially low - So perhaps about to rocket - Gold same

3. PM Stocks are on the verge of a breakout and could rocket -

4. But anyone's guess - perhaps - we have a housing boom in the US , employment picking up , a usd surge , a dow crash , Bernanke stops prin=ting etc /

1. looking at facts and stating the results have nothing to do with a theory.

2., 3., 4. looking forward = "looks like, may, perhaps, guess, could".

[Naam]

So with Gold at new highs Ive ran my ruler over it, and depending on what data I put into my model I get varying Long Term targets, the most poignant of which lie at 1355/65/90, so really anywhere between 1350-1400(!), and then 1575-1600. All rather vague then!

Theres some less potentially significant targets along the way at 1365, 1460 and 1515 too.

In a 'back of fag packet' moment I put Spot AG in too, and came up with Long Term targets around $23.50, 26.30 and 27.50. How that gels with AU or how likely they are to be met I dont know; just a bit of fun

how long is "Long Term" Badge?

[cloudhopper]

http://www.zerohedge.com/article/central-banks-no-longer-selling-gold-duh-factor-1010

[Naam]

http://www.zerohedge.com/article/central-banks-no-longer-selling-gold-duh-factor-1010

Dyler Turd (aka Mr Zero) at his best:

"So market zero supply, and demand that is growing exponentially, means higher prices, eh?"

perhaps he should face reality, walk into a goldshop anywhere in the world and see for himself whether there's zero supply and exponential demand?

[churchill]

http://www.zerohedge.com/article/central-banks-no-longer-selling-gold-duh-factor-1010

Dyler Turd (aka Mr Zero) at his best:

"So market zero supply, and demand that is growing exponentially, means higher prices, eh?"

perhaps he should face reality, walk into a goldshop anywhere in the world and see for himself whether there's zero supply and exponential demand?

The're doing their best in China /

Gold sales surge in China

'In Hangzhou in eastern China, gold stores say their business increased by around 50 percent during the Mid-Autumn holiday. Some products even sold out.

Yang Chaohong, Zhejiang Store Manager of China Gold Group said "Sales of gold jewelry increased by 50 percent, and sales of gold bars surged by 100 percent. One customer even bought 10 kilograms of gold at once."

http://english.cntv.cn/program/bizasia/20100927/101608.shtml

[churchill]

30 year high for silver

after generating losses for 20 years (1980-2000)

1. It's not about looking backwards - one can always find prices in the past in certain time frames that fit a theory -

2. Looking forwards , as best we can - Silver looks like there is more demand than supply and it looks like prices may have been kept artificially low - So perhaps about to rocket - Gold same

3. PM Stocks are on the verge of a breakout and could rocket -

4. But anyone's guess - perhaps - we have a housing boom in the US , employment picking up , a usd surge , a dow crash , Bernanke stops prin=ting etc /

1. looking at facts and stating the results have nothing to do with a theory.

2., 3., 4. looking forward = "looks like, may, perhaps, guess, could".

need a warp drive

Edited September 27, 2010 by churchill

[churchill]

Is gold becomming a must have ?

Investing in gold is likely to be a winning strategy for pension funds whether spot prices of the precious metal rise or fall, the gold fund manager of the Teacher Retirement System of Texas told Reuters on Sunday.

'Overall, he expects prices to trend higher, however, with the current limited exposure of major funds to gold meaning the precious metal had substantial potential for growth.

Even a relatively small redistribution of assets into bullion could have a disproportionate effect on price, he said.'

http://www.reuters.com/article/idUSLNE68Q01P20100927

[cloudhopper]

Even a relatively small redistribution of assets into bullion could have a disproportionate effect on price, he said.'

Like backwardization...

[Naam]

http://www.reuters.com/article/idUSLNE68Q01P20100927

"From a portfolio manager's vantage point, it doesn't matter what gold does, if it goes up or down," he said."

yep, it does not matter! because a portfolio manager manages other people's money

[churchill]

http://www.reuters.com/article/idUSLNE68Q01P20100927

"From a portfolio manager's vantage point, it doesn't matter what gold does, if it goes up or down," he said."

yep, it does not matter! because a portfolio manager manages other people's money

Yes - They don't care as long as they get their payment / Most people get ripped off by FA's who only care about their commission / Hence I think less investment in stocks and more in pm's /

[churchill]

'The managers of all four reserve currencies are playing fast and loose: the Fed is clipping the dollar; the Bank of England is clipping sterling; the European Central Bank is buying the bonds of EMU debtors to stave off insolvency, something it vowed never to do just months ago; and the Bank of Japan has just carried out two trillion yen of “unsterilized” intervention.

Of course, gold can go higher'

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8026324/Gold-is-the-final-refuge-against-universal-currency-debasement.html

[churchill]

Speaking of which, it looks like inflation 4-5 years away:

what about the doom&gloomers (e.g. Marc Faber) who prophesy 'zimbabwean' inflation rates for the U.S. of A. and slightly less for the rest of the world? your personal view on inflation in general and beyond the time span of 4-5 years please LRB. personally i can't reach any conclusion. there is a set of facts which points to deflation and another set which indicates high inflation.

Inflation here , deflation there - It will get ' there ' in the end with the endless money presses - USD / Euro down Asian currencies up - gold desired by the East ( Nepal now wants to buy ) and needed by the west to protect falling currencies . So conclusion Gold up ?

I think everyone is basically saying the same thing. Surely there will be inflation eventually? Endless money printing? But falling money supply. The reason that Faber sees Hyperinflation is that he knows there is too much debt to raise interest rates high enough to choke off inflation and once inflation expectations get built in, inflation tends to accelerate.

My pet theory at the moment is that we are in for a period of 'stealth' inflation. In fact, I feel it is already here. Namely I just 'feel' there is a lot more inflation around than the numbers suggest (which is about as analytical as saying the economy is bad because the restaurant next door is empty.) It is odd however, how much money US corporates are making and how high their margins are. Commodity prices are going up. And it would be remarkably convenient to inflate away your debt without having inflation or raising rates.

However, if there is inflation why are M2 and M3 aggregates so weak (M3 growth is currently negative). The most obvious answer is disintermediation. Namely that banks have increased their margins by offering negligible interest rates and actually raising lending rates in some cases. When this happens both borrowers and depositors bypass the banks. There have been large inflows into bond funds for instance. M2 and M3 do not capture this as they focus on long term and short term deposits in the banking system. While the banks arent lending there has been substantial corporate bond issuance. So actual 'M' could be quite a lot higher than reported 'M'. This would also explain why M3 has been weaker than M2.

Eurozone M3 sharply on the rise

'Eurozone M3 yearly growth in August increased much more than expected, to 1.1% vs. 0.2% in July, showing a positive monthly flow of EUR 81bn. This represents the highest rate of growth since September 2009 and, as we have stressed several times, remarks that the recovery trend in M3 is well-grounded.

In addition, further evidence comes from the fact that M1 growth seems now on a clear declining trend, decreasing from 8.1% to 7.7% yoy in August. Credit to the private sector kept increasing as well, accelerating to 1.2% from 0.8% yoy (the latter revised slightly downward form the previous 0.9% yoy).

The counterpart analysis fully matches our picture of the credit cycle at this juncture, with household lending already consolidating its recovery, and corporate lending now exhibiting an upward trend. In detail, in regard to loans to households, the yoy growth accelerated from 2.7% to 2.9%. Once again, this was driven by lending for house purchase, which marked the eleventh consecutive increase and now stands at 3.5% yoy.

In regard to corporate lending, the yearly growth rate remained in negative territory, but increased from -1.4% to -1.1%, the highest pace over the last year. More importantly, as we expected, loans to non-financial corporations showed in August a positive monthly flow of EUR 17 bn. Summing up: The August figures on monetary developments do not provide meaningful surprises.

The recovery of growth of money and credit to the private sector seems to proceed, the latter being well supported by the pick-up in household lending and by progressive improvements in corporate lending. Nevertheless, as credit developments remain rather contained, the risks of inflationary pressures stemming from the monetary channel remain indeed limited.'

http://ftalphaville.ft.com/blog/2010/09/27/353491/eurozone-m3-sharply-on-the-rise/

[badge]

So with Gold at new highs Ive ran my ruler over it, and depending on what data I put into my model I get varying Long Term targets, the most poignant of which lie at 1355/65/90, so really anywhere between 1350-1400(!), and then 1575-1600. All rather vague then!

Theres some less potentially significant targets along the way at 1365, 1460 and 1515 too.

In a 'back of fag packet' moment I put Spot AG in too, and came up with Long Term targets around $23.50, 26.30 and 27.50. How that gels with AU or how likely they are to be met I dont know; just a bit of fun

how long is "Long Term" Badge?

As long as it takes. Your guess is as good as mine It simply shows that if AU & AG rose to those prices they may encounter a reaction.

I quoted price targets derived from all data; 1968 to present. Unfortunately I have found no consistently practical model regarding time or cycle targets, and thus dont have a clue!

If the price targets were to be met this year, or 2015, it would make no difference to the signal.

[cloudhopper]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8026324/Gold-is-the-final-refuge-against-universal-currency-debasement.html

[Abrak]

http://www.zerohedge.com/article/central-banks-no-longer-selling-gold-duh-factor-1010

Dyler Turd (aka Mr Zero) at his best:

"So market zero supply, and demand that is growing exponentially, means higher prices, eh?"

perhaps he should face reality, walk into a goldshop anywhere in the world and see for himself whether there's zero supply and exponential demand?

The're doing their best in China /

Gold sales surge in China

'In Hangzhou in eastern China, gold stores say their business increased by around 50 percent during the Mid-Autumn holiday. Some products even sold out.

Yang Chaohong, Zhejiang Store Manager of China Gold Group said "Sales of gold jewelry increased by 50 percent, and sales of gold bars surged by 100 percent. One customer even bought 10 kilograms of gold at once."

http://english.cntv.cn/program/bizasia/20100927/101608.shtml

I dont put a lot of store by this website www.kitco.com but most gold websites are a little whacky.

All the evidence suggests that for both gold and silver, industrial demand be it jewellry or otherwise has fallen off considerably and has been replaced by investment demand. It appears that investment demand is much higher than at the 1980s bubble peak but that should be expected as golds investment demand combined with price is more likely to be relative to the money supply in some form or other.

There is also a chart showing the holdings of a gold backed paper currency known as an ETF which have become increasingly popular. Obviously GLD is the biggest and could become the Central reserve currency in the world whereby we all swap GLD paper amongst ourselves. GLD is very transparent compared to the Fed. This would actually have the advantage of being independent from any one country which would rectify the inherent domestic/global monetary dilemma. Of course paper has always debased gold in the past so it is highly unlikely.

http://www.kitco.com/charts/CPM_charts.html

[flying]

hmmmm

[churchill]

More on China

China set to take centre stage in gold market

'"The Chinese government... used to be afraid of too much gold being imported into the country, because that meant a drain of U.S. dollars. Now, this is nothing."

He said moves announced in August by the People's Bank of China to allow more Chinese banks to export and import gold mean the shortfall is increasingly likely to be met by gold bought on the global market, rather than domestically.

Chinese demand is the key driving force for a number of key commodities, such as copper, but its status as the world's biggest gold producer as well as its second biggest consumer has meant its impact on the wider gold market has been muted.

This could be changing, said the WGC, a gold industry lobby group.

"The answer to the question of why gold is not like copper, or iron ore, with (China representing) a big percentage (of total demand)... is that in the past few years the access to gold has still been limited," said Cheng.

"Going forward, with these measures, access will be much easier for investors who want it. In the next few years, you will see the real gold demand for China."

"I think the trend will follow other, base metals, because there will be no regulatory barrier for people who want to have gold," he said.'

http://www.sharenet.co.za/v3/news_disp.php?id=535053

[churchill]

Bank of England tells savers: Screw you; we're debasing the currency

http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html

[Naam]

"Sales of gold jewelry increased by 50 percent, and sales of gold bars surged by 100 percent. One customer even bought 10 kilograms of gold at once."

and paid in cash with 1,432 CNY 1k and 2,865 CNY 500 banknotes which he carried in his deep trouser pockets

[Naam]

"He said moves announced in August by the People's Bank of China to allow more Chinese banks to export and import gold mean the shortfall is increasingly likely to be met by gold bought on the global market, rather than domestically."

the Chinese know how to do business! first they export domestically mined gold and then they buy back the shortfall on the global market. then they use the profit (everybody knows that offshore gold is much cheaper than domestic gold) to gamble in Macau and the new casino in Singapore.

[Abrak]

Bank of England tells savers: Screw you; we're debasing the currency

http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html

Very sound advice from the bank of England. I have never met anybody who got rich by saving money in a bank.

Personally I think it is immoral and that time belongs to God.

As Flying said 'you shouldnt feed the beast.'

Still I love this bit of Central Bank thinking.

"Very often older households have actually benefited from the fact that they've seen capital gains on their houses."

Oh so the housing bubble was a good thing was it?

Why anyone should receive interest by giving their money to a banker who will then take it pay himself a bonus and then lend to a wafe under London bridge in return for his recording rights on his forthcoming Albums which he will take and split into 5 different assets which he will sell for exactly the fee he is being paid for the financial innovation of his product, is beyond me.

[lannarebirth]

Bank of England tells savers: Screw you; we're debasing the currency

http://www.telegraph...t-spending.html

Very sound advice from the bank of England. I have never met anybody who got rich by saving money in a bank.

Personally I think it is immoral and that time belongs to God.

As Flying said 'you shouldnt feed the beast.'

Still I love this bit of Central Bank thinking.

"Very often older households have actually benefited from the fact that they've seen capital gains on their houses."

Oh so the housing bubble was a good thing was it?

Why anyone should receive interest by giving their money to a banker who will then take it pay himself a bonus and then lend to a wafe under London bridge in return for his recording rights on his forthcoming Albums which he will take and split into 5 different assets which he will sell for exactly the fee he is being paid for the financial innovation of his product, is beyond me.

Financialism. People who never read a book seem to get it.

[churchill]

'Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world. This world monetary earthquake will carry many lessons.'

http://ftalphaville.ft.com/blog/2010/09/28/354756/25-currency-interventions-in-a-one-week-band/

Edited September 28, 2010 by churchill

[churchill]

BOE's Posen Demands More QE, Wants To Buy Corporate Debt

http://www.zerohedge.com/article/gold-spikes-after-boes-posen-demands-more-qe-wants-buy-corporate-debt

[lannarebirth]

Speaking of which, it looks like inflation 4-5 years away:

what about the doom&gloomers (e.g. Marc Faber) who prophesy 'zimbabwean' inflation rates for the U.S. of A. and slightly less for the rest of the world? your personal view on inflation in general and beyond the time span of 4-5 years please LRB. personally i can't reach any conclusion. there is a set of facts which points to deflation and another set which indicates high inflation.

I think Mr Faber is as incredulous as me. Who could have anticipated this level of intervention? About 20 years ago I decided I wanted to be the guy with cash at the end of a credit cycle. Now, I'm choking on it.

Inflation? Deflation? Well, it's always been inflation to solve the problem hasn't it? I see the stealth inflation Abrak speaks of, in economies where imbalances existed (Thailand for instance) and I can't imagine there wouldn't be deflation in some sectors of western economies. Commercial real estate for instance. Things have beeen "pencilling out" grandly at 4% interest rates, but show me the upside for a would be buyer. It just ain't there, despite whatever meddling the Fed may do.

Edited September 28, 2010 by lannarebirth

[flying]

Geez went to bed last night thinking it was the start of an Oct. pullback in gold. I think the overnight lows were $1276 or $1286?

Wake up this morning & it is up $14 at USD $1310/oz

Silver at USD $21.75 60/1 G/S ratio

Edited September 28, 2010 by flying

[flying]

Very sound advice from the bank of England. I have never met anybody who got rich by saving money in a bank.

Personally I think it is immoral and that time belongs to God.

As Flying said 'you shouldnt feed the beast.'

Well yes & no

I did say dont feed the beast and in fact I dont. I intend to do my part to help starve the beast but....

In that same post I also said...

It is almost tempting to just throw my hands up & say ok they want us to consume like we use to.....go in debt like we use to..All just to keep this illusion/emperors clothes in tact...

Fine lets go....how hard can it be? We can consume, go in debt etc.. If that is all it takes we are up for it.

But I have kids and someday probably grand kids too. I feel this mess is ours to clean up & hopefully we will find a way. If that means obliteration of the current system so be it.

So in reality I do still save.... 50% cash & 50% metals I just do it outside of the system.

If I were to tell anyone to spend it would not be in support of the beast & lets face it that is how most consumers do spend.

They like to say savers but the reality is the majority of middle class has little or no savings now.

I think when they encourage spending they are hoping for the old over spending/ credit card debts to resume their old pace. That in turn feeds the beast best not folks living within their means & putting a little away for a rainy day.

Edited September 28, 2010 by flying

[Naam]

Geez went to bed last night thinking it was the start of an Oct. pullback in gold. I think the overnight lows were $1276 or $1286?

Wake up this morning & it is up $14 at USD $1310/oz

Silver at USD $21.75 60/1 G/S ratio

there is a pullback Flying. not for you but for a bunch of those who don't use USD as a reference currency.

[Naam]

About 20 years ago I decided I wanted to be the guy with cash at the end of a credit cycle. Now, I'm choking on it.

my plans were more extreme. five years ago i planned to sit on 95% cash in various currencies by the end of 2010. not till the end of a credit cycle but till the end of my/our life cycle.

but the crisis, greed and the possibilities to make additional dough in other asset classes, enabling me to diversify in assets which might -or might not - compensate unknown negative results of the crisis/global situation, made my plan not feasible.

[flying]

Geez went to bed last night thinking it was the start of an Oct. pullback in gold. I think the overnight lows were $1276 or $1286?

Wake up this morning & it is up $14 at USD $1310/oz

Silver at USD $21.75 60/1 G/S ratio

there is a pullback Flying. not for you but for a bunch of those who don't use USD as a reference currency.

Yes we are reaping the benefits of a dual purpose currency here