Where Is Gold Going In This Market

[churchill]

Cosider the following as gold is falling at present

http://www.marketoracle.co.uk/Article6826.html

Quote:

GOLD & SILVER AWAIT THEIR EXALTED STATUS

We are witnessing the disintegration cited in my recent forecasts. It is a systemic failure, marred by lost confidence and trust in the entire financial system. Expect foreigners soon to pull the rug from under the American syndicates in control. Several key meetings have already concluded, totally unreported in the US press, which occurred in Berlin Germany. Consider it the Anti-G7 Meeting. Implications are profound, and involved the Shanghai Coop Org tangentially, since its member nations possess so much new commodity supply. Consider it the Anti-NATO group. An important and powerful alternative financial system is soon to spring into action, including high-level bilateral barter. Those who expect the current US Regime to continue their financial terror are in for a big surprise.

Expect defaults in the COMEX with gold & silver, whose prices for paper vastly diverge from physical, to the anger of foreigners watching. They hold massive precious metals assets. Disparities now contribute to powerful forces, sure to break the current system. Grand systemic changes come. THE RESULT WILL BE A BREATH-TAKING DISCONTINUITY EVENT.

Ironically, the more inner anguish felt on the falling gold & silver prices, the closer we are to a new financial framework, with the US Dollar relegated to a Third World role. A REPLACEMENT GLOBAL RESERVE CURRENCY HAS ALREADY BEEN DECIDED UPON. Its launch awaits the proper moment. The Americans are last to know, as usual. The US leaders are under the illusion of being in control!

and

http://goldismoney.info/forums/showpost.ph...postcount=21071 - see below

It is rumored that a great trader once said, "If I could only see past the tip of my nose.....with both hands."

The question, here, is whether we are in a true deflationary environment or whether we are in a market panic created by fear of the deflation in the financial sector. The real answer at this point is hard to know for sure since both situations look the same in terms of market selling, though we are getting close to the time when the answer will be obvious.

Back in 05 and 06 when I worked on the LT fractal expectations into the 4th quarter of 2008, that work was based on this being a "panic", but I still had my targets in the Dow down to below 7000 for a new low since 2000.......with a sharp drop for Gold and the PM stocks into this deflation scare bottom. I was using the Gold chart from the 70's to work off of, and in the 70's at this point Gold dropped down to re-test the "historic highs" so 740 would fit pretty nicely. I was also working off the Dow chart of the 70's for the expected low below 7,000.

A "deflationary environment" and a "deflationary panic" are similar in that the market will drop with investors tossing everything out the window. This is because in both cases the "investor psychology" is exactly the same. The two are different in that in a "deflationary environment" we have an environment that will not change for a long time, like many years to a decade. In a "deflationary panic" we have investors who are not processing true reality of the situtation short-term so they are throwing everything out in a shorter-term cycle at odds with the real fundamentals of the market.

Now, I know that the many will read this to this point and say, "Aha! GR, we are in a real deflationary environment because look at all the bad debt out there- look at the derivative problems- look at the funny nose on Bennie's face." Well, when we are talking about a long-term "environment"- we are talking abot the rocks and trees and air around you- not something that can change rapidly in the short run, then change back. If you look at any true deflationary environment, you are talking about currency deflation. The environment might start with massive debt, but the currency is strong and at new highs from the get-go and as the market starts to sharply tank the currency just keeps going higher....and as the market continues to tank, the currency just keeps on going higher and higher.......as everybody sells everything to get their hands on dollars to pay their bills, etc. That is NOT what we have here. The "true market top" in the Dow was in 2000. Shortly thereafter, the Dollar started to plunge, falling from around 120 down to around 72. The new high in the Dow was a "false high", not coming from increased buying power of the Dow, but of a lower buying power based on a devalued currency. (See the chart of the Dow in the 1970's for the same situation.) Thus, the chart of the Dow:Gold shows no new top after 2000, but a continually falling chart graph. The recent run higher in the US Dollar is but a blip for about 10 points from about 72 to about 82 (as also seen in the 70's scenario.) In fact, even most of the Dollar blip upward came BEFORE the real panic in selling in the markets- not simultaneous with the selling panic. There was a reported CB intervention in the Dollar that created the bulk of it. If we had a true deflationary environment unfolding, I'd expect the Dollar to be rocketing back toward new highs, but no, the Dollar is in a gazillion year downtrend at this time........only a short-term chart distortion caused by an intervention to create doubt and slow things down. The Fed has already announced the Dollar inflation to come in massive terms, including changing laws to make it happen.

With a "panic" markets will usually not complete until the "cyles" are complete as so many traders look to the cycles to trade, and as so many traders have investors on the run in a blind momentum panic move. It seems to me that the momentum bottom for the historic down cycles in the markets comes in the 3rd week of October- usually between the 18th and 25th...on a Monday into a Tuesday. The truth is that investors once in a panic just get scared and start selling as the whole thing steam rolls downward, creating margin calls for many others. The pressure from the margin calls prevents those who might be looking at the real fundamentals at hand from holding investments they think will do well into the future, as they are forced to sell what they can sell to stay solvent. Such is the investing life of today with margin.

In the background of this deflation scare, the Fed has announced the largest Dollar inflation in the history of the galaxy. In the background of this deflation scare, the Fed and Treasury has gotten a Bill passed that guarantees they can create the largest Dollar inflation ever in the Galaxy. In that same background the Treasury has take massive debt that was marking the insolvency of financial institutions onto its books. This WAS an issue of insolvency versus the idea of lack of liquidity, but that is changing rapidly as the Govy takes the bad assets on its books and as the Govy takes partial ownership in the offending financial sector. Once it has done that, then you must realize that the govy is backed by the full printing ability of the Federal Reserve. A Central Bank can print all it wants so it cannot go bankrupt. Since the Central Bank will print whatever it needs to to back the govy.........do you really want to invest in the US Dollar under this scenario? The Fed and Treasury want the Dollar lower, and they will get it in the long run. They now have complete power to print and to monetize anything they want.

Back around USD 73 or 74 when some of us would note that the Dollar rise is just going to be a blip, some short-term traders got all excited when the dollar started to break above that level. Our answer was "So what?" It is only a "Blip." It is still only a blip becausw we were citing LT charts for the Dollar- something many short-term traders cannot fathom- anything over X number of months. Yet, the USD still sits on a cliff.

During a panic anyone but a short-term trader must step back and take a look at what the real environment is for the next few years. Is that environment likely to be one of Dollar inflatioin or one of Dollar deflation? The Dollar trend LT and IT is down. The charts of the Fed's balance sheet has exploded upward as the Fed has recently gotten approval to print to the Heavens. That is the basics of the fundamentals for the Dollar going forward. I don't know about you, but with the Fed and Treasury doing what they are doing, my expectations are that this will end up being the "deflation scare" I'd suggested a couple of years, ago, into this time frame. If that it true do the "Dollar Inflation" being the correct expectation, then I also expect Gold, Silver, and the PM stocks to continue to track the movements of the stagflationary 70's.......including the Dow, BTW. Thus, over the next 4 to 6 years, I'd expect Gold to run up to 3,000 or 5,000, or 8,000 or even 50,000- depending on the Dollar inflation that is starting anew after a short break. In the 70's the one PM stock index I recently found with data from the 70's showed this same sharp retracement in that PM stock index at this juncture, but after it was over that PM stock index moved up to around 17 times the previous high when the PM parabola took effect. (These are historical facts.) After this little blipin the Dollar in the 70's chart, the Dollar completely fell off the cliff. Gold ran back to new highs- probably to 1250 to around 1500. After the Dow plunged, then global competitive currency devaluations took over giving some support to the USD on the chart. Somewhere there after, Gold continued up into the parabola.

So, you tell me- What is the Fed going to do in terms of the Dollar? If they are going to ramp up the printing, then I want to be long the PM complex across the board. If they are not going to ramp up Dollar printing, then I want to be in Gold, Dollars, and Bonds. Personally, I think that second option is completely laughable so I was buying PM stocks today.....looking for great bargains into next week......then possibly into the retest of final bottom in about 30 days. Personally, I think it will fall under the guise of a re-test.

Edited October 17, 2008 by churchill

[ace]

Ok - Articles like these are part of the reason I dumped my gold last week. The goldbugs are out in force (or should I say sat in their bunkers, with shotgun, bottled water and a pile of gold bars). But outside of the sky is falling crowd there doesn't seem to be much support for gold. The $ appreciation has blind-sided gold. Without the $ driver gold is being sucked under by the great commodity de-leveraging. Seasonal demand is marked down (Joe Public in India, China) due to recession. A surprise there would strengthen price. Next years impending major bankruptcies also could spike Gold up. So the direction is down.

[Doalittle]

simple no bulls""" $ up Gold down $ down Gold up.

[lannarebirth]

Cosider the following as gold is falling at present

http://www.marketoracle.co.uk/Article6826.html

During a panic anyone but a short-term trader must step back and take a look at what the real environment is for the next few years. Is that environment likely to be one of Dollar inflatioin or one of Dollar deflation? The Dollar trend LT and IT is down.

I have no comments on the rest of the article, but the author states the $USD is in a LT and IT downtrend. That's not exactly true. It is true the $USD is in a lomg term downtrend, but it is in an intermediate term uptrend. It's IT uptrend is getting extended and one would expect it to retrace soon. It has broken to the upside, out of what are generally bullish chart patterns, and those patterns project higher prices at some point in time. Doesn't always happen though.

[lannarebirth]

simple no bulls""" $ up Gold down $ down Gold up.

It's not quite that simple anymore. There are a whole lot of Europeans with some high valued currencies that need protection. They may be a driver in Gold in the future. Remains to be seen.

Edited October 17, 2008 by lannarebirth

[Naam]

the simple explanation is: Gold has NO intrinsic value (as the goldbugs claim). actually nothing exists which has intrinsic value if there is no demand. stranded on an uninhabitated island the demand for Gold is ZERO. on this island the art of hunting and fishing as well as the knowledge of a source with drinkable water is a zillion times superior in intrinsic values than tons of Gold

[JimsKnight]

Ok - Articles like these are part of the reason I dumped my gold last week. The goldbugs are out in force (or should I say sat in their bunkers, with shotgun, bottled water and a pile of gold bars). But outside of the sky is falling crowd there doesn't seem to be much support for gold. The $ appreciation has blind-sided gold. Without the $ driver gold is being sucked under by the great commodity de-leveraging. Seasonal demand is marked down (Joe Public in India, China) due to recession. A surprise there would strengthen price. Next years impending major bankruptcies also could spike Gold up. So the direction is down.

Heh, <starts dancing around with flowers in the hair>. Well I'm out of the bunker now

But seriously I can't wait for gold to come on down! Drop baby drop, I bought 1 oz of gold for the helluv it and can't wait to grab some more.

Cause you know what? It's all part of the cycle, you just gotta time it right

What goes down, must go up

[britmaveric]

Platinum/Gold/Silver is on its way down. It's had its run.

[cmsally]

Ok - Articles like these are part of the reason I dumped my gold last week. The goldbugs are out in force (or should I say sat in their bunkers, with shotgun, bottled water and a pile of gold bars). But outside of the sky is falling crowd there doesn't seem to be much support for gold. The $ appreciation has blind-sided gold. Without the $ driver gold is being sucked under by the great commodity de-leveraging. Seasonal demand is marked down (Joe Public in India, China) due to recession. A surprise there would strengthen price. Next years impending major bankruptcies also could spike Gold up. So the direction is down.

Heh, <starts dancing around with flowers in the hair>. Well I'm out of the bunker now

But seriously I can't wait for gold to come on down! Drop baby drop, I bought 1 oz of gold for the helluv it and can't wait to grab some more.

Cause you know what? It's all part of the cycle, you just gotta time it right

What goes down, must go up

Seems that one other person follows my theory; which is the "what goes up, must go down theory, and vice versa"

[flying]

What does the chart readers here think is a good buy spot for gold?

Is support at or around 650-700? Technically speaking

[VegasVic]

What does the chart readers here think is a good buy spot for gold?

Is support at or around 650-700? Technically speaking

Yes, there should be strong support in the $640-$670 level, once that level falls then a good "buy spot" for gold would be in the upper $300's (wait for about $365-$370 if possible). Then hold on tight to that gold and wait for about ten years and the next great gold run should begin

[flying]

What does the chart readers here think is a good buy spot for gold?

Is support at or around 650-700? Technically speaking

Yes, there should be strong support in the $640-$670 level, once that level falls then a good "buy spot" for gold would be in the upper $300's (wait for about $365-$370 if possible). Then hold on tight to that gold and wait for about ten years and the next great gold run should begin

you really think it will be that long before gold is sought?

Also when I look at 5 years back I dont see the 365-370 reasoning?

I see support at 570's low 600's in mid 2006-2007 & then 420's in 2005-2006

[VegasVic]

What does the chart readers here think is a good buy spot for gold?

Is support at or around 650-700? Technically speaking

Yes, there should be strong support in the $640-$670 level, once that level falls then a good "buy spot" for gold would be in the upper $300's (wait for about $365-$370 if possible). Then hold on tight to that gold and wait for about ten years and the next great gold run should begin

you really think it will be that long before gold is sought?

Also when I look at 5 years back I dont see the 365-370 reasoning?

I see support at 570's low 600's in mid 2006-2007 & then 420's in 2005-2006

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

[flying]

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

Ok thanks Vic

Now that I look back to a 95 till present chart I see a different story.

hmmm

Man since 2001 Gold has had a nice little run hasn't it?

Fear is very good to gold isnt it?

I have to wonder why a bit though. In these days of cooked books & faulty govt.

I would have thought gold a nice solid investment. At least it is tangible & real in that sense. But again value is what everyone agrees on I guess.

[churchill]

Cannot say I understand Gold Lease Rates but an article about Libor and lease rates that might be of interest to some

http://seekingalpha.com/article/100677-mis...gold-could-rise

[Naam]

Platinum/Gold/Silver is on its way down. It's had its run.

On their way down, or on a pull back, your guess is as good as anyones. But many are taking this opportunity to load up on the physical, that is, if they could find any. Thats a whole lot of N/A's!!

anybody who buys precious metal coins which (especially nowadays) have a huge bid/ask spread should rather think of working as a street vendor selling som tam and a variety of noodle soups

[Naam]

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

Ok thanks Vic

Now that I look back to a 95 till present chart I see a different story.

hmmm

Man since 2001 Gold has had a nice little run hasn't it?

Fear is very good to gold isnt it?

I have to wonder why a bit though. In these days of cooked books & faulty govt.

I would have thought gold a nice solid investment. At least it is tangible & real in that sense. But again value is what everyone agrees on I guess.

that is correct. but a good part of that run is caused by the depreciation of the US-Dollar. and that goes for any commodity denominated and traded in USD.

[LaoPo]

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

Ok thanks Vic

Now that I look back to a 95 till present chart I see a different story.

hmmm

Man since 2001 Gold has had a nice little run hasn't it?

Fear is very good to gold isnt it?

I have to wonder why a bit though. In these days of cooked books & faulty govt.

I would have thought gold a nice solid investment. At least it is tangible & real in that sense. But again value is what everyone agrees on I guess.

that is correct. but a good part of that run is caused by the depreciation of the US-Dollar. and that goes for any commodity denominated and traded in USD.

Exactly and logical too that Gold is heading down, now the Greenback is up.

But...one of the most remarkable Congressmen in the US, 14th district of Texas, Congressman Dr. Ron Paul ® says he believes the FED is not only manipulating the US $ but Gold as well. He claims that it's easier to get hold of secrets from the CIA rather then information from the FED:

http://nl.youtube.com/watch?v=USSAEQl0XMM

So, now we know it all; in other words.....if Gold would hit $ 2,000 the dollar would have had it's days of glory.....

LaoPo

[lannarebirth]

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

Ok thanks Vic

Now that I look back to a 95 till present chart I see a different story.

hmmm

Man since 2001 Gold has had a nice little run hasn't it?

Fear is very good to gold isnt it?

I have to wonder why a bit though. In these days of cooked books & faulty govt.

I would have thought gold a nice solid investment. At least it is tangible & real in that sense. But again value is what everyone agrees on I guess.

that is correct. but a good part of that run is caused by the depreciation of the US-Dollar. and that goes for any commodity denominated and traded in USD.

Exactly and logical too that Gold is heading down, now the Greenback is up.

But...one of the most remarkable Congressmen in the US, 14th district of Texas, Congressman Dr. Ron Paul ® says he believes the FED is not only manipulating the US $ but Gold as well. He claims that it's easier to get hold of secrets from the CIA rather then information from the FED:

http://nl.youtube.com/watch?v=USSAEQl0XMM

So, now we know it all; in other words.....if Gold would hit $ 2,000 the dollar would have had it's days of glory.....

LaoPo

I could be very wrong Lao Po, but I think the next time Gold makes a run it will be Europeans buying it. Many just can't bring themselves to buy dollars. It's worthless, as everyone knows.

Interesting to note, commodities and $USD running in same direction today. Don't see that often.

Edited October 20, 2008 by lannarebirth

[flying]

Just look back 6 years and you will see mid $300's or look back 7 years and you will see sub $300. Thats why I told you to not buy gold immediately when it drops below $400/ounce, rather wait until it hits $365 or so because if it drops lower then it will be easier to average down!

Ok thanks Vic

Now that I look back to a 95 till present chart I see a different story.

hmmm

Man since 2001 Gold has had a nice little run hasn't it?

Fear is very good to gold isnt it?

I have to wonder why a bit though. In these days of cooked books & faulty govt.

I would have thought gold a nice solid investment. At least it is tangible & real in that sense. But again value is what everyone agrees on I guess.

that is correct. but a good part of that run is caused by the depreciation of the US-Dollar. and that goes for any commodity denominated and traded in USD.

Yes & that is what confuses me. With all we know & see that is happening with the USD would it not suggest more depreciation? They have printed a ton of additional USD. That is not to say we have 2 nickels instead of the dime we had.

[LaoPo]

I could be very wrong Lao Po, but I think the next time Gold makes a run it will be Europeans buying it. Many just can't bring themselves to buy dollars. It's worthless, as everyone knows.

Interesting to note, commodities and $USD running in same direction today. Don't see that often.

I don't know Lannarebirth...I don't know; Europeans in general do not possess this gold obsession-feeling the people from the Middle- to Far East have.

About commodities and US$ heading the same direction; maybe some confidence returned because of the declining Libor rates ?

LaoPo

[flying]

http://news.cnet.com/8301-13578_3-10069856-38.html

No Gold Coins available

[cloudhopper]

I wonder how Icelanders who have gold are doing these days? A lot better than most I imagine....

[OlRedEyes]

I wonder how Icelanders who have gold are doing these days? A lot better than most I imagine....

Exactly.

Seeing the woods from the trees comes to mind. Acting on very short term fluctuations in a major bear market that's just started is suicide, unless you're shorting. A quietish week and everyone turns into a buyer, quite funny if it wasn't so shortsighted. The last decade has made people forget that we are not supermen, that can wriggle our way out of disaster in a few short weeks. Everybody is straining at the leash to lose their money..... since the first day of the crash.

Edited October 21, 2008 by OlRedEyes

[flying]

I wonder how Icelanders who have gold are doing these days? A lot better than most I imagine....

Exactly.

Seeing the woods from the trees comes to mind. Acting on very short term fluctuations in a major bear market that's just started is suicide, unless you're shorting. A quietish week and everyone turns into a buyer, quite funny if it wasn't so shortsighted. The last decade has made people forget that we are not supermen, that can wriggle our way out of disaster in a few short weeks. Everybody is straining at the leash to lose their money..... since the first day of the crash.

Excuse me but I do not understand either post. It is genuine or sarcasm? I am just curious.

Cloudhopper

I personally would guess the Icelander with gold would be doing very well if like most he physically held it & now could sell & get cash. Where all others who trusted paper in a bank are lost? True? Is that what you meant?

OlRedEyes

How do you mean? Do you mean good idea buying gold now or bad?

I know its a bear market but now I see a slight pull back in Gold but not sure how far it will drop. Again just curious

Thanks

[cloudhopper]

Cloudhopper

I personally would guess the Icelander with gold would be doing very well if like most he physically held it & now could sell & get cash. Where all others who trusted paper in a bank are lost? True? Is that what you meant?

Yes.

[colibra]

I would expect gold would be crashing now that many have invested in it and as this seems to be one of the last area of finacial wealth that hasn't been looted yet.

[cloudhopper]

I would expect gold would be crashing now that many have invested in it and as this seems to be one of the last area of finacial wealth that hasn't been looted yet.

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."

- President F.D. Roosevelt, 1933

[churchill]

Nice Video from the FT -

http://www.ft.com/cms/93ece7c0-07af-11dd-a...mp;fromSearch=n

[VegasVic]

The answer to the topic of this thread is DOWN!!! Gold is at around $770/ounce and headed south All you goldbugs out there have had your perfect storm and Gold is headed lower, you had better sell now or be prepared to take some substantail losses as Oil heads below $50/bbl Remember it was Vic who told you to short Oil in the upper $130's and to short Gold when it was around $1000/ounce, and at the same time I told you all to get long the Dollar, in hindsight it sure looks like very sage advice