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Gold Up In 2008 , Where To In 2009 ?


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Looks as if Gold will be on of the few investments to be positive for 2008 , where will it be this time next year $1500 or $750 ?

Many seem to be on the gold bandwagon now , with a fair amount of guests on CNBC and other places recommending Gold as one of the few places they would feel comfortable investing , with a view that as and if the dollar declines gold will rise .

I feel that investors and advisors wanting to have a balanced portfolio for 2009 may well increase their holdings in gold and gold mining shares and that we could see quite a spike in the coming months .

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Looks as if Gold will be on of the few investments to be positive for 2008 , where will it be this time next year $1500 or $750 ?

Many seem to be on the gold bandwagon now , with a fair amount of guests on CNBC and other places recommending Gold as one of the few places they would feel comfortable investing , with a view that as and if the dollar declines gold will rise .

I feel that investors and advisors wanting to have a balanced portfolio for 2009 may well increase their holdings in gold and gold mining shares and that we could see quite a spike in the coming months .

No guess for where it will finish the year but I'll guess it trades for the majority of the year at lower levels than now. Expanding on your theme, are these outrageous claims or not?

http://www2.saxobank.com/en/market-news-an...tions-2009.aspx

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As long as people believe in TA i guess it is a self fulfilling prophecy. I think gold price does not change much in term of real goods. If you can buy oil now or a car now for a certain amount of gold you would be able to do that next year and ten years from now too with about the same amount of gold.

In other currencies however that oil or car can be 2 times even 10 times more expensive.

So even if it goes to 10.000 US$ per ounce the reason will mainly be inflation. So you are more rich in US$ but it does not have the same buying power of 10.000 US$ now.

When the future of the dollar/euro/pound/yen/ etc.. is shaky (like now!) gold is comparably saver. But if somehow they pull of a miracle and safe the dollar the price of gold will stay mainly horizontal, maybe even go down a little as confidence in a currency will get better.

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Looks as if Gold will be on of the few investments to be positive for 2008 , where will it be this time next year $1500 or $750 ?

Many seem to be on the gold bandwagon now , with a fair amount of guests on CNBC and other places recommending Gold as one of the few places they would feel comfortable investing , with a view that as and if the dollar declines gold will rise .

I feel that investors and advisors wanting to have a balanced portfolio for 2009 may well increase their holdings in gold and gold mining shares and that we could see quite a spike in the coming months .

:o Maybe it gets near March fig of $1034 but doubt it.

Gold has risen around 5.5% this year, smallest yearly rise since 2004.

The CRB Index has had approx $30 Trillion wiped out in global equity !!! This does'nt help. Also Silver is down 24% on year, Platinum down 38% and Palladium is down 50%.

However, I believe that you may be right about investors increasing their gold holdings.

I think it has the best chance of rising compared to most raw materials, if the price is driven by demand in the alternative investment sector.

With all the troubles in the middle east and with oil prices dropping, together with many of the major world economys in trouble, it may well mean that gold could be a good investment. Lets hope so.

Gold futures for February are up by approx 1.6% or just over $14 an ounce so lets hope gold can be a good bet in 2009.

Edited by khundon
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Here are the gold closings for the following years --

2000 -- $273.60

2001 -- $279.00

2002 -- $348.20

2003 -- $416.10

2004 -- $438.40

2005 -- $518.90

2006 -- $638.00

2007 -- $838.00

2008 -- $880.00

Dont know about investment but it does appear to be a safe haven

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approximate closings

1979 -- 510

1980 -- 600

1981 -- 390

1982 -- 440

1983 -- 380

1984 -- 310

1985 -- 325

1986 -- 395

1987 -- 485

1988 -- 410

1989 -- 399

1990 -- 393

1991 -- 353

1992 -- 333

1993 -- 392

1994 -- 383

1995 -- 387

1996 -- 369

1997 -- 290

1998 -- 288

1999 -- 290

Dont know about investment but it does appear to be a safe haven

during a period of 20 years a loss of 43% (inflation not even considered) can undoubtedly be called a "safe haven" :o

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during a period of 20 years a loss of 43% (inflation not even considered) can undoubtedly be called a "safe haven" :D

That was then this is now. :D:D All my money went to drugs & Pizza in 79 :D

Why not say you started when you showed 1979 & held till now?

I know many who wished their $$$ was there instead of anywhere else in 2008 :o

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http://arabianmoney.net/2008/12/31/new-gcc...t-include-gold/

Peter J. Cooper’s Weblog

December 31, 2008

New GCC single currency agreed, will it include gold?

Filed under: Gold & Silver, Inflation, Oil Prices, UAE Revaluation, UAE Stocks, US Bonds, US Dollar — peterjcooper @ 8:56 am

08-12-12-goldashxGulf Cooperation Council leaders yesterday concluded their 29th annual summit meeting in Muscat, Oman with a final approval for the creation of a single currency for the six-nation economic bloc, still targeted for 2010.

Saudi Arabia is the largest economy in the GCC and boasts substantial gold reserves. But whether gold will be included in the currency basket has not yet been decided.

Golden opportunity

GCC assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’.

The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons.

First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.

2009 deadline

The project is gathering pace, and no lesser figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009.

It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal. Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC.

Gulf countries are keen to break away from the link with the US dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies.

Edited by flying
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Looks as if Gold will be on of the few investments to be positive for 2008 , where will it be this time next year $1500 or $750 ?

That's a wide spread.

And it goes to show that nobody - nobody - can predict.

If you're serious, buy pieces of gold at a time and consider it a long term hedge and/or investment.

Many seem to be on the gold bandwagon now , with a fair amount of guests on CNBC and other places recommending Gold as one of the few places they would feel comfortable investing , with a view that as and if the dollar declines gold will rise .

Lots of sheep out there.

It's not rocket science.

When times are uncertain and tumultuous, people shift to gold.

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Looks as if Gold will be on of the few investments to be positive for 2008 , where will it be this time next year $1500 or $750 ?

Many seem to be on the gold bandwagon now , with a fair amount of guests on CNBC and other places recommending Gold as one of the few places they would feel comfortable investing , with a view that as and if the dollar declines gold will rise .

I feel that investors and advisors wanting to have a balanced portfolio for 2009 may well increase their holdings in gold and gold mining shares and that we could see quite a spike in the coming months .

No guess for where it will finish the year but I'll guess it trades for the majority of the year at lower levels than now. Expanding on your theme, are these outrageous claims or not?

http://www2.saxobank.com/en/market-news-an...tions-2009.aspx

Saxo say that the odds on their 10 predictions are 50/50 (evens bet) so a coin toss really.

Spend your money on wine and women you can waste the rest. :o

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http://arabianmoney.net/2008/12/31/new-gcc...t-include-gold/

Peter J. Cooper’s Weblog

Saudi Arabia is the largest economy in the GCC and boasts substantial gold reserves. But whether gold will be included in the currency basket has not yet been decided.

Golden opportunity

GCC assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’.

The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons.

First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.

2009 deadline

The project is gathering pace, and no lesser figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009.

It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal. Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC.

Gulf countries are keen to break away from the link with the US dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies.

the creation of a single currency for the GCC states was envisioned and discussed since the formation end of 1981. the fact is that this "single" currency exists already by pegging GCC currencies to the US-Dollar with minor adjustments of the "lesser" ones (e.g. Kuwaiti and Bahraini Dinar as well as Omani Riyal).

besides, there is no way that gold can play a significant role if it is not used as a FULL back-up of a currency and no country exists on this planet which holds enough gold to cover its domestic currency. once in a while fairy tales crop up that CHF is backed by gold. but as mentioned... it is a fairy tale only.

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My crystal ball:

USD will begin its descent into Weimar style hyperinflation around the end of Q3 2009. This will coincide with the bursting of the bond bubble. This will have the effect of briefly stimulating the global economy as people shift out of financial instruments into tangible assets, causing a rise in all commodities and especially oil back above $100 USD by the end of the year.

Au will experience a brief surge to around $950 somewhere around April, decline back down to the low $800's thereafter, and finish the year out at approximately $1700.

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the fact is that this "single" currency exists already by pegging GCC currencies to the US-Dollar with minor adjustments of the "lesser" ones (e.g. Kuwaiti and Bahraini Dinar as well as Omani Riyal).

You've completely missed the point Naam. Yes, the current situation is a pseudo single currency linked to a country in decline with no fiscal responsibility. The notion that the USD is store of value at all is the fairy tale.

What this will do, is create a currency for the Persian Gulf that is based on assets within the Persian Gulf, and not Bernacke's printing presses. If this takes hold and they start to price oil in the new currency, the flood of USD being dumped will be of biblical proportions. The resulting uncertainty will be extremely bullish for gold, even if they do not include gold as part of the new currency basket.

Only a fool would not pay extremely close attention to how this story develops. Keep in mind though, it is not a simple task at all to modify the world's commodities exchanges to price oil in something other than USD. It would be a multi year proposition in the best of circumstances.

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besides, there is no way that gold can play a significant role if it is not used as a FULL back-up of a currency and no country exists on this planet which holds enough gold to cover its domestic currency.

You forgot a very critical clause here. Let me rephrase for you:

no country exists on this planet which holds enough gold to cover its domestic currency AT THE CURRENT PRICE.

Once the price of gold rises, your argument falls flat.

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Gold is inverse to the strength of the USD and the USD is inverse to the strength of the stockmarket. If the stockmarket tanks in Q1, Q2 due to

falling earnings and lets say the S & P 500 goes to around 560 the panic will lead to a lot of USD being drawn back to the US which will lead to a very strong USD, and thereby weakness in Gold. This flush out in the stockmarket could mark the bottom and the following bull market would mean a drop in the dollar and renewed strength in gold (the scenario for Q3-Q4).

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Gold is inverse to the strength of the USD and the USD is inverse to the strength of the stockmarket. If the stockmarket tanks in Q1, Q2 due to

falling earnings and lets say the S & P 500 goes to around 560 the panic will lead to a lot of USD being drawn back to the US which will lead to a very strong USD, and thereby weakness in Gold. This flush out in the stockmarket could mark the bottom and the following bull market would mean a drop in the dollar and renewed strength in gold (the scenario for Q3-Q4).

:o the S&P500 going down another (went down -40% past year) -40% from now 930 to 560....which will cause dollars speeding back to Mommy in Washington and create a VERY STRONG DOLLAR... :D

You better explain that since in my opinion trust in the dollar will be soooo bloody low that it will sink through the floor, together with world wide stock markets.

And...a bull market in the second half of 2009 ? did your Dad give you a new crystal ball for Xmas ?

hmmm....or have you been drinking some very strong tea or something ? :D

LaoPo

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If the stockmarket goes down, a lot of Americans will pull their money back from overseas investments. You saw the same last time it tanked in October, November 08. This leads to a stronger dollar. If the stockmarket would go that low (560) it would of course go up again, maybe just in another bear market rally, or it could mark the end of the bear market and a more stable upswing could happen. If you take a look at the 2000 - 2003 bear market this was very similar. I do not have a crystal ball, I was just trying to show a scenario where gold would go down first with the stronger dollar and then up with the weaker dollar.

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besides, there is no way that gold can play a significant role if it is not used as a FULL back-up of a currency and no country exists on this planet which holds enough gold to cover its domestic currency.

You forgot a very critical clause here. Let me rephrase for you:

no country exists on this planet which holds enough gold to cover its domestic currency AT THE CURRENT PRICE.

Once the price of gold rises, your argument falls flat.

i like to discuss prevailing facts and not assumptions. therefore there's no need for me to rephrase. but reading goldbug fiction and adding my two Satangs is amusing me since 30 years :o

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Presently the Strong Dollar is due to the carry trades un-winding and deleveraging hence the move in the DX, but to have one particular bias towards an event at the moment imo is asking for trouble.

The world is in a race to 0% Zirp style, im amazed that the Euro zone has not followed but give credit too Germany that are not buying the Keneysian theory but as exports dry up due to the weaker currencies against the Euro i dont think they will have a choice and will likely follow suit

presently both forces and doing battle with each other Deflation vs Inflation, i personally dont see and signs of Inflation yet looking at the CPI and PPI data prices have indeed gone down in all asetts (except London cocoa, not sure what going on there)

yes the correct term of inflation is the increase of money supply, but that needs to get into the system and right now its not, banks are not lending the consumer is saving, debt repayment is what is happening and Bernanke and pals wont likely be able to stop that

Anyhow this debate on Gold as a hedge against Hyperflation is still to be proven imo.

Somehow the Hyperinflationists need to get consumers spending 1st i dont see no evidence to that at all gold only really comes as a trade once inflation kicks in

as a trade and asett against inflation gold is possibly a good hedge along with some commodities but as and when the time arrives the deflationary environment and wealth destruction is still present and will remain so untill the world consumer is ready and starts spending.

World wide the consumer is not spending and untill then dollars just sit in the banks, as nations debase theri currencies by the Zirp, they need to start getting spent only then can we expect to see potential commodities and precious metals move higher and economies start to gain strength, i think Gold at these levels is a bagholders price, and i expect the rug to pulled underneath the bag holders.

As the J6P has gone mental on owning Gold i guess with the likes of Peter Schiff pushing gold the people have taken notice (only thing is if you followed his advice on owing foreign stocks and bought gold when it was $1000+ you got you ass handed to ya!) like his world will de-couple thesis as well

so what i am trying to say is i think there is a price for gold but not at these levels against the back drop of the deflationary forces in the market, unless Gold becomes attractive then i dont think buying here is a sound investment based upoon the recent rally

when too many on one side of the trade it usually marks a reversal

if gold pulls back to say $650 or $700 then one could have grounds to have some exposure same as Oil if that makes a new low say somewhere around $28-30 then a possibly potenial buy for a least a rally. (you can but an ETF like USO for oil)

But i think many people are still not understanding the bigger picture and ned to be aware of certain circumstances and timing, untill this deflation cycle resolves itself i dont think Gold is a sound buy (well not at these levels anyhow)

however as hedge to that call past $940 weakens the Bearish call and the pattern of lower highs and lower lows is broken so unless many people think Armageddon is around the corner then i dont think its attractive, i see plenty other ways to trade in the market providing you look hard enough still nothing wrong with holding cash untill the deal is dealt and inflation takes place

Gold is likely to be a great hedge against an inflationary environment as are certain commodities as and when that period arrives who knows, but how long untill that happens??? get your timing wrong buying asetts and you can be in a whole world of pain

call bottoms and tops is difficult even so call safe investment can become dozzies

like buying high yield stocks on low P/E`s in Bear markets, only to find the 5% divi gets cut and the stock has still gone down 20% nice investment huh

Unless the world or fiat currencies are coming to an end soon, only then gold becomes attractive, but then so do Shotguns and tinned beans when you are fighting for survial :o

Anyone seen the Bond market recently??? might have a top in place?? as the action was implusive the past 2 days

Edited by Nouf
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Once faith is gone in the dollar as a reserve it is over. The dollar once was 'as good as gold' remember!

People like REAL stuff instead of paper, that is why they like shopping. With paper you can do what?. Once faith is gone it does not matter if it says 1 or 100 on the note. It goes back to its intrinsic value.

For 99.999% of the world real value means gold, silver, oil, wheat etc.

As a means of holding value it is easier to keep 1 gram of gold or silver in your pocket then a bail of wheat.

In the current situation where the dollar is the most risky currency, holding gold for instance is a way to preserve your current buying power.

If gold is 1.000.000 US$ per ounce, 800 euro per ounce or 50.000 baht per ounce you will be glad that you can take that ounce of gold, change it into 1.000.000 US$ and be able to buy the same as you can now with about 1000 US$.

Prepare for the worst, hope for the best.

I know it sounds far fetched, but what the FED is doing now is even beyond far fetched, and still it happens.

I prepare for a US$ collapse (worst), if it not happens (hope) even better. The gold i use to feed myself (worst), or keep it for later (hope).

If you have 100.000 US$ on the bank, i think you are only hoping and not preparing. Preparing can also be done without gold of course. Buy essentials to at least have a head start (worst), or storage for a stormy day you won't want to do shopping (hope).

Preparing does not have to diminish your saving or way of live, it is just preparing. The same you would buy candles when you live in an area with many power outages.

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Today was an example that show that gold can be seen as a currency and not so much as a commodity like oil.

The dollar got stronger today. You can see the difference in prices in the following graphs.

So is gold DOWN:

post-7665-1231179143.png

or UP?

post-7665-1231179172.png

From my viewpoint it went up as i think the euro is a more stable currency then the US dollar.

Edited by Khun Jean
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Nouf & Khun Jean those were both very good level headed posts.

Nice to see!

Flying are you still grasping at straws? :D Gold made its run at $900 while the traders and hedge funds were on vacation, gold is back down to $850/ounce already today now that the boys are back in town. The only reason that gold popped back up above $800/ounce during December was due to the drastic action by the FED and then the Israeli incursion into Gaza! The Dollar has already started to bounce back from the FEDs action in early December and the Dollar will continue to strengthen throughout January and likely right through March-April, because of the upcoming rate cuts by the ECB and BOE and the push by the BOJ to get the Dollar to over the 100 Yen mark by March :D There will be a ceasefire between the Israelis and Hammas before the week is out and after the announcement gold will be back down in the $700's!!! As the Dollar continues to strengthen over the next 60-90 days I would expect that the POG will gradually erode down in to the $600's and set a new 52 week low. This whole hyperinflation fairytale that Faber, Schiff, Sinclair and Rogers propogate is pure fantasy :o The worlds economies will be fighting deflation well into 2010, I actually wish that I was wrong about this, but inflation will not be back until late 2010 at the earliest :D

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Nouf & Khun Jean those were both very good level headed posts.

Nice to see!

Flying are you still grasping at straws? :D would expect that the POG will gradually erode down in to the $600's and set a new 52 week low.

Hey Happy New Year

Whadda Ya Mean? Nouf wasn't pro gold & I said he had a good post.

Also on the flip side you have been telling me about this 600 dollar gold since early October remember?

If I had waited on you I would be in the dog house now :o

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during a period of 20 years a loss of 43% (inflation not even considered) can undoubtedly be called a "safe haven" :D

That was then this is now. :D:D All my money went to drugs & Pizza in 79 :D

Why not say you started when you showed 1979 & held till now?

I know many who wished their $$$ was there instead of anywhere else in 2008 :o

you picked out arbitrarily a time period to make an assumption ("safe haven") Flying. i did the same to prove that assumptions are not facts.

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during a period of 20 years a loss of 43% (inflation not even considered) can undoubtedly be called a "safe haven" :D

That was then this is now. :D:D All my money went to drugs & Pizza in 79 :wai:

Why not say you started when you showed 1979 & held till now?

I know many who wished their $$ was there instead of anywhere else in 2008 :o

you picked out arbitrarily a time period to make an assumption ("safe haven") Flying. i did the same to prove that assumptions are not facts.

Yes but mine is based in the present :D

Happy New Year Naam

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Nouf & Khun Jean those were both very good level headed posts.

Nice to see!

Flying are you still grasping at straws? :D would expect that the POG will gradually erode down in to the $600's and set a new 52 week low.

Hey Happy New Year

Whadda Ya Mean? Nouf wasn't pro gold & I said he had a good post.

Also on the flip side you have been telling me about this 600 dollar gold since early October remember?

If I had waited on you I would be in the dog house now :o

Incorrect flyng :D I have been telling you and everyone else that gold would tumble back to the $600's since March when it was over $1000/ounce, and in October I was proved correct. Now I am telling you that gold will set a new 52 week low in the next 90 days :D Enjoy the new year my friend!

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