Where Is Gold Going In This Market

[teletiger]

Anyway, it has been a good run, and I will never be short gold, but for now, I leave the upside to others."

Anybody who is long FRN ($) is by default short gold.

Regards.

[cloudhopper]

Anyway, it has been a good run, and I will never be short gold, but for now, I leave the upside to others."

Anybody who is long FRN ($) is by default short gold.

Regards.

Hugh Hendry and other deflationists think that politicians will only be able to hyperinflate after a deflationary burst causes widespread reductions in living standards. Under this scenario cash and bonds will do better than gold - until that fateful moment arrives when they don't.

Edited October 3, 2010 by cloudhopper

[Englander]

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.

Yes cracking advice from the aptly named Mr Bean, i think everyone should spend their savings on flights out the country and blow it on a holiday of a lifetime, thatll be good for the economy wont it.

Thing is id say my savings have dropped almost 30%, due to spending it because of the 2.75% interest rates and expecting it to be inflated away (so he has achieved what was intended by the 0.5% with me), however most this money was spent overseas, since these not very bright civil servants decided to bail out the indebted ... ironically it was set aside to spend in England on a property once the bubble burst.

To stick to the topic i know only the basics about why one should invest in gold but i do know those who bought in 1980 didnt do too well, and from this data, it seems to be the biggest gold boom in history. http://www.onlygold....ces200yrsfs.htm

No please get a grip of the reality.

What the BOE is saying is that you shouldnt save through a bank. Saving through a bank is spending in terms of paying bankers bonuses etc..

Lets keep this very simple.

Calm down i didnt realise youd get so upset, and my grip on reality is fine, well for someone stranded here waiting to go to work!

I played the property market to perfection until they lowered interest rates to 0.5% and they used QE to bail out the banks ... Nobody predicted this changing of the rules at the end of the game!

My money is in the bank as it enables me quick access should i see a property or 99.9% safe investment worth buying, the best bit of investing i have ever done was to take my money out the stock market in September 07/08 (terrible at dates, but just before the first crash), and itll only be put into something i know a lot about.

My architect friend offered me an opportunity last week to buy his next door neighbours house for 100K, his identical but refurbished house is valued at 180k, then to knock them down and build 4 properties on the site which is in a prime retirement area he has been planning this for years (hardly great timing to start it i know), if it was locked away in some bond for a year then i wouldnt have this opportunity.

If everyone done literally as Mr Bean said and spent their money the banks would go out of business, and he'd be out of a job ... as his pal Merv should.

Edited October 3, 2010 by Englander

[Englander]

To stick to the topic i know only the basics about why one should invest in gold but i do know those who bought in 1980 didnt do too well, and from this data, it seems to be the biggest gold boom in history.

in reality it is not [yet] a boom. adjusted by inflation (U.S. and USD based) the present price of gold has still a long way to reach USD 2,300 an ounce. when using the inflation rate of some other countries and currencies the amount increases to the equivalent of USD 2,600-2,800. but using the short peak of 1980, which lasted only for a few days, for an extrapolation is of course arbitrary.

Ok my first principle after losing money in the past is dont invest in something i dont fully understand or have the slightest cold feet about.

Anyway the chart i sent before is from the first day of the year in all the years listed, it shows gold at 594.90USD in 1980, the peak this year was 850 according to this chart.

However i quickly googled to get a chart adjusted with inflation, and this one seems to show gold as being above its long term average, but below the boom and bust peak of 1980, the website looks as if they know what theyre talking about so i will take it for granted its accurate.

http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm

So i stand corrected its the second biggest gold boom in history.

It was a great investment when Great leader Gordy was telling the world he's about to drop a whole load of it onto the market, did anyone on here buy then and hold? .... now im not so sure.

[Naam]

1. Hugh Hendry and other deflationists think that politicians will only be able to hyperinflate after a deflationary burst causes widespread reductions in living standards.

2. Under this scenario cash and bonds will do better than gold - until that fateful moment arrives when they don't.

1. that deflation reduces living standard applies only to the fistful of countries where owners of immobile property used the bubble to refinance and blow the money instead of reinvesting it at a higher yield than their mortgages. "regular mortals" do not suffer from deflation except if they have to work to earn a living and lose their jobs. besides property prices i don't see any deflationary tendencies. au contraire! what i see is that virtually all commodities are rallying and it will be only a matter of time till high inflation will catch up with all of us. in my [not so] humble view, only a global recession will be able to stop the avalanche of a future rampant inflation.

2. i don't believe (as the deflationists do) that two plus two equals five and claim that cash would be a loser even under a deflationist scenario. looking at bonds (any bonds) an old "bondman" like me does not trust his eyes. the lower the rating, the higher the price pushing bond yields down to unseen depths. and less than a year ago some wannabe economists used to bitch here and called those who invested in UST and Bunds "plain idiots". summary: it is virtually impossible that prices go up further and yields going down, no matter what the deflationists try to convey.

[cloudhopper]

2. i don't believe (as the deflationists do) that two plus two equals five and claim that cash would be a loser even under a deflationist scenario.

No deflationist thinks that cash is a loser in a deflation. Cash is king in deflation.

[Naam]

2. i don't believe (as the deflationists do) that two plus two equals five and claim that cash would be a loser even under a deflationist scenario.

No deflationist thinks that cash is a loser in a deflation. Cash is king in deflation.

sorry for my grammar. should read " I claim that cash would be a loser..." my claim might not apply to each and everybody but i am arguing from my personal perspective.

[teletiger]

as I think the Euro is headed for dollar parity, I would expect that...

another dreamer who needs a rubber sheet between the linen and the mattress

These guys have been the top FX forecasters over the past 18 months.

"TD Securities predicts that the euro will trade at $1.13 by year-end, compared with $1.38 as of Oct. 1, and drop to parity against the dollar next year."

http://www.bloomberg.com/news/2010-10-03/no-stopping-yen-as-euro-reaches-parity-in-top-markets-forecast.html

Regards.

[Naam]

as I think the Euro is headed for dollar parity, I would expect that...

another dreamer who needs a rubber sheet between the linen and the mattress

These guys have been the top FX forecasters over the past 18 months.

"TD Securities predicts that the euro will trade at $1.13 by year-end, compared with $1.38 as of Oct. 1, and drop to parity against the dollar next year."

http://www.bloomberg.com/news/2010-10-03/no-stopping-yen-as-euro-reaches-parity-in-top-markets-forecast.html

Regards.

i wouldn't mind if there forecast is correct. but parity as well as 1.13 is light years apart from today's 1.37xx especially as only three months are left therefore my rubber sheet recommendation for the "parity forecaster" still stands.

Edited October 4, 2010 by Naam

[SiamRose]

2. i don't believe (as the deflationists do) that two plus two equals five and claim that cash would be a loser even under a deflationist scenario.

No deflationist thinks that cash is a loser in a deflation. Cash is king in deflation.

sorry for my grammar. should read " I claim that cash would be a loser..." my claim might not apply to each and everybody but i am arguing from my personal perspective.

In deflation prices are falling, by definition. If prices are falling why would cash be a loser?

[Naam]

2. i don't believe (as the deflationists do) that two plus two equals five and claim that cash would be a loser even under a deflationist scenario.

No deflationist thinks that cash is a loser in a deflation. Cash is king in deflation.

sorry for my grammar. should read " I claim that cash would be a loser..." my claim might not apply to each and everybody but i am arguing from my personal perspective.

In deflation prices are falling, by definition. If prices are falling why would cash be a loser?

in a deflationary environment interest rates are close zero (as they are presently for major currencies). cash has been, compared to other assets, a loser for nearly two years if not placed strategically without taking a reference/home currencies into consideration. deflation does not mean that all prices drop, especially not those which represent the bulk of an individual's expenses. even in a deflationary environment consumer prices for food are likely go up, Japan is a good example to look at.

last not least, whether deflation or inflation hurts or is negligible depends on the specific individual circumstances. a Thai employee earning THB 8k monthly will not benefit if steel and copper prices fall or cars, laptops and immobile property are offered at a lower price. for him/her it's the price of rice, chicken, pork and chilis that counts. on the other hand, somebody who spends less than 10% of his income on food and general household expenses owns the roof over his head and does not plan to buy property or expensive long lasting items is not concerned whether these prices rise or fall.

[Naam]

interesting graph:

[teletiger]

interesting graph:

It should recouple when the Euro hit parity.

Regards.

[flying]

interesting graph:

It should recouple when the Euro hit parity.

Regards.

Today is interesting too

Silver too

[gregb]

To stick to the topic i know only the basics about why one should invest in gold but i do know those who bought in 1980 didnt do too well, and from this data, it seems to be the biggest gold boom in history.

in reality it is not [yet] a boom. adjusted by inflation (U.S. and USD based) the present price of gold has still a long way to reach USD 2,300 an ounce. when using the inflation rate of some other countries and currencies the amount increases to the equivalent of USD 2,600-2,800. but using the short peak of 1980, which lasted only for a few days, for an extrapolation is of course arbitrary.

Ok my first principle after losing money in the past is dont invest in something i dont fully understand or have the slightest cold feet about.

Anyway the chart i sent before is from the first day of the year in all the years listed, it shows gold at 594.90USD in 1980, the peak this year was 850 according to this chart.

However i quickly googled to get a chart adjusted with inflation, and this one seems to show gold as being above its long term average, but below the boom and bust peak of 1980, the website looks as if they know what theyre talking about so i will take it for granted its accurate.

http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm

So i stand corrected its the second biggest gold boom in history.

It was a great investment when Great leader Gordy was telling the world he's about to drop a whole load of it onto the market, did anyone on here buy then and hold? .... now im not so sure.

I like to remind everyone on this thread every few months or so the real reason why you should be long gold. Since the issue has been raised about not investing in something you don't understand, I thought now would be a good time to chime in again. The reason to buy gold has nothing to do with charts or technical analysis, but everything to do with geology and physics. The last gold boom in the 80's started after the United States peaked in oil production during the early 70's. It took several years to recognize the peak, but eventually it was undeniable. This vulnerability led to a political situation where oil was withheld from the market by the major exporters and it spiked. The global industrial economy is intricately linked to oil, and the economy crashed. Eventually, Reagan resolved the political crisis by making a deal with the Saudis, oil retreated, and the industrial economy once again thrived. Thus, gold collapsed. The crisis wasn't real then. It was only a political game.

Unfortunately, everyone seems to forget the details surrounding the reason gold spiked and fell, instead relying on financial analysis which is no more reliable than astrology or voodoo. Today, we have a similar problem, only this time it is global oil production that has peaked, there are no spare Earths floating around to import oil from, and there will be no Reagan to resolve the peak oil problem. This time, it is for real. Business as usual is finished for the remainder of your lifetime, and your children's and your grand children's. This time, the collapse can not be stopped.

Gold will replace fiat currencies, because all fiat currencies are intricately linked to the industrial economy, which requires infinite growth, which requires infinite oil production. Since oil has peaked, economic growth has now also peaked, and all fiat currencies are heading to their intrinsic value. The global industrial economy will crash in stages over the next century or two. There may be short recoveries, but it will quickly be followed by further crashes. Economic decline will track decreasing oil production.

This is as sure as the fact that the sun rises in the East and sets in the West.

Gold is not in a bubble. The bubble is the global industrial economy, which is now deflating, and with it every fiat currency which relies on the myth of progress for value. There is nothing you or I can do to stop it. Energy depletion is real, and physics is a bitch.

If you don't understand the fundamentals of why gold is going where it is, you will be left behind. There is no solution to our predicament. Our current civilization is the Titanic, and gold (and good farmland) are about your only life boats, unstable though they may be. It will take decades or centuries for industrial civilization to fail completely, but failure is absolutely guaranteed. No amount of renewables can replace oil. It is a fantasy to think so.

That is why you buy gold. It is the only currency that will survive the coming collapse, and the only way to preserve your wealth for what lies ahead. You won't get rich off of gold. The industrial economy raised all boats, and now we will all sink together as it goes away. But at the end of the day you will have something rather than nothing, and that might make all the difference to your survival and that of your children.

[Naam]

interesting graph:

It should recouple when the Euro hit parity. Regards.

only 97 days left to parity (according to an anal)

[Naam]

"Gold will replace fiat currencies, because all fiat currencies are intricately linked to the industrial economy, which requires infinite growth, which requires infinite oil production. Since oil has peaked, economic growth has now also peaked, and all fiat currencies are heading to their intrinsic value. The global industrial economy will crash in stages over the next century or two."

i am completely relaxed as i don't believe in reincarnation.

[churchill]

$10,000 Gold?

Kenneth Rogoff

http://www.project-syndicate.org/commentary/rogoff73/English

Interesting comment following by Brian Wills Vice-Chairman, COMEX Board of Governors

"Given the reality of the global financial situation, it makes good sense for individuals [along with the rich and the central bankers that you focus on] to gain some exposure to the price of gold as a hedge. Some Swiss bankers are recommending that their clients accumulate a 7to 10% position in gold. Why isn't it a good idea for small investors to protect their savings? Why is it only a good idea for the rich to protect themselves?

According to a number of sources, gold presently represents less than 1% of the world's total financial assets. This shows how underinvested the world's individuals and institutions are in gold. If this number was to just double in the next few years [far short of the 7-10% range] it would drive gold prices considerable higher. Why shouldn't individual investors benefit from this?

In closing, the gold price will remain quite volitie for the foreseeable future. In the short term the price will have dramatic moves up and down. It's not the kind of market for an individual to trade. However, given the world's major government's fiscal and monetary polices, gold will move to much higher levels. Acquiring a modest investment position in gold to help protect one's savings [wealth] is simply a sensible thing to do.'

and this from http://harveyorgan.blogspot.com/ makes you think !

'I would also like to point out that the massive short positions are killing the banks. I would guess that their average short price position on gold is around $ 500.00

per oz and the total number of tonnes short must be greater than 18,000-20,000 tonnes.(Otc levels, LBMA and Comex)

In silver the average short position price is probably around $7.00 and the collective short position is north of 1 billion oz. The major banks are bleeding profusively!!!'

[neverdie]

Where Is Gold Going In This Market ?

Up, up and away, it would seem.

Edited October 6, 2010 by neverdie

[Naam]

"NEW YORK, Oct 4 (Reuters) - The U.S. Mint said on Monday it will resume offering the popular one-ounce American Eagle silver proof coins, highlighting strong investment demand for the white metal.

The silver coins, to be sold at $45.95 each..."

do these coins have a collector's value too? or are the buyers just brain-amputated?

[neverdie]

"NEW YORK, Oct 4 (Reuters) - The U.S. Mint said on Monday it will resume offering the popular one-ounce American Eagle silver proof coins, highlighting strong investment demand for the white metal.

The silver coins, to be sold at $45.95 each..."

do these coins have a collector's value too? or are the buyers just brain-amputated?

Collector value.

I wonder if the U.S. Mint will be using real silver ? I've already heard the stories about their gold.

[churchill]

Where Is Gold Going In This Market ?

Up, up and away, it would seem.

Would Peta, 23, from Essex ♥ encourage anything else to go up ?

http://ftalphaville.ft.com/blog/2010/10/06/361946/peta-23-from-essex-%e2%99%a5-gold-futures/

Edited October 6, 2010 by churchill

[Naam]

"NEW YORK, Oct 4 (Reuters) - The U.S. Mint said on Monday it will resume offering the popular one-ounce American Eagle silver proof coins, highlighting strong investment demand for the white metal.

The silver coins, to be sold at $45.95 each..."

do these coins have a collector's value too? or are the buyers just brain-amputated?

Collector value.

I wonder if the U.S. Mint will be using real silver ? I've already heard the stories about their gold.

[neverdie]

Where Is Gold Going In This Market ?

Up, up and away, it would seem.

Would Peta, 23, from Essex ♥ encourage anything else to go up ?

http://ftalphaville....5-gold-futures/

No doubt some poor old fool is spending his gold reserves on that

[churchill]

China now Japan

Japan piles into resources, but is it an inflation hedge?

'More details of Japan’s most recent stimulus measures have come out in the last 24 hours, and one of them in particular has got goldbugs and inflationistas’ tongues a wagging.

And that would be the move to create a sovereign wealth fund more focused on resource-related investments than previously imagined'

continued ..

http://ftalphaville.ft.com/blog/2010/10/06/362201/japan-piles-into-resources-but-is-it-an-inflation-hedge/

[SiamRose]

'I would also like to point out that the massive short positions are killing the banks. I would guess that their average short price position on gold is around $ 500.00

per oz and the total number of tonnes short must be greater than 18,000-20,000 tonnes.(Otc levels, LBMA and Comex)

In silver the average short position price is probably around $7.00 and the collective short position is north of 1 billion oz. The major banks are bleeding profusively!!!'

Is there any real evidence that banks are really net short large amounts of gold? or is this just a gold-bug rumor that gets repeated so often people assume its true?

[flying]

"NEW YORK, Oct 4 (Reuters) - The U.S. Mint said on Monday it will resume offering the popular one-ounce American Eagle silver proof coins, highlighting strong investment demand for the white metal.

The silver coins, to be sold at $45.95 each..."

do these coins have a collector's value too? or are the buyers just brain-amputated?

Well I have been getting emails about the premium going up from the mint on silver. (Didn't I forward that to you?)

But now it seems the Canadian mint will be following in their footsteps.

By the way...Silver broke $23 here today.

Edited October 6, 2010 by flying

[flying]

Silver/Gold Ration 58/1

[Naam]

"NEW YORK, Oct 4 (Reuters) - The U.S. Mint said on Monday it will resume offering the popular one-ounce American Eagle silver proof coins, highlighting strong investment demand for the white metal.

The silver coins, to be sold at $45.95 each..."

do these coins have a collector's value too? or are the buyers just brain-amputated?

Well I have been getting emails about the premium going up from the mint on silver. (Didn't I forward that to you?)

But now it seems the Canadian mint will be following in their footsteps.

By the way...Silver broke $23 here today.

that does not answer my question "collector's value or brain-amputated?"

[Naam]

'I would also like to point out that the massive short positions are killing the banks. I would guess that their average short price position on gold is around $ 500.00

per oz and the total number of tonnes short must be greater than 18,000-20,000 tonnes.(Otc levels, LBMA and Comex)

In silver the average short position price is probably around $7.00 and the collective short position is north of 1 billion oz. The major banks are bleeding profusively!!!'

Is there any real evidence that banks are really net short large amounts of gold? or is this just a gold-bug rumor that gets repeated so often people assume its true?

looking at the alleged short figures and the present price of gold logical thinking says "impossible". but then... logical thinking would have failed in the case of Lehman two years ago.