Gold Up In 2008 , Where To In 2009 ?

[AlexLah]

I think part of the rush to sell back were a lot of peeps that bought a day earlier when the price was about 500 THB lower.

So the dealers just did not have enough rerserve cash might be a possibility?

I also find a bit strange that price is very similair to spotmarket is it just to make it easier, I guess so.

The whole debate about inflation and deflation is very interesting as when you see some report on prices of food items they seem to be rising due to different reasons, mentioned somewhere in an article on the marketoracle website. As CPI is not a real indicator in my opinion I just look at the price of stuff that we humans need that is food as a first thing. And I also checked the commodity exchange and confirmed for several items.

I will keep my gold a litlle bit longer as I feel this year the price will go gradually up due to uncertainties about general outlook of the economy.

[gregb]

The local news had a story of one guy who wanted to trade 1000 baht of gold bars. It took him 6 hours of waiting to do it, so there's 16 kg by just 1 person. At that rate you'd only need about 600 people to make that kind of volume.

But hang on, you have just said it, if one person trying to sell 16 kg of gold took SIX hours, where on earth were the other 600 people standing????

Was there a long queue for 150 days? Obviously not, as the lot was sold in one day. And why did only the one guy make the headlines. Methinks that all is not above board in these reports.

No. 6 hours is the length of time it took him to find someone to exchange his gold and then wait in the queue to sell. I'm sure the actual transaction only took a few minutes. My wife understood the specifics alot better than me. My Thai is what I would classify as "marginal". Something about he had to go to the central bank is the way it was translated to me, but I doubt that is the correct translation. Watching Thai news is still somewhat beyond my linguistic abilities unfortunately, except for broad generalizations. Anybody else out there watch this report and can give us the specifics?

Can't comment on the accuracy of the Thai news channels. But I can't see any reason to lie about something like this. Seems perfectly believable.

[flying]

oops

disregard

Edited January 31, 2009 by flying

[dageshi]

Things to bear in mind about gold. Gold is a hedge against the destruction of fiat currency, inflation is the symptom of a dying currency as is deflation because fiat currencies cannot survive deflation, politicians *always* devalue them in an attempt to escape deflation, precisely as is happening now with half the worlds currencies and what will likely happen with the USD *because it's the easiest way out*.

For that matter there are two potential scenario's for deflation.

1) the US dollar rises as does US treasuries, everything else including gold falls.

2) the US dollar rises as does US treasuries, gold sells off initially and then gold begins to appreciate.

To my mind we are following scenario 2, because enough people worldwide fear that all fiat currencies will be seriously debased, I believe this too.

Finally bear in mind that gold has risen every year for 9 straight years, every year a different reason was given for why gold was rising, first it was the declining dollar, then it was the commodities boom, now it is the likely destruction of fiat currency. The reason for the appreciation doesn't matter the fact that is has appreciated consistently should tell you it's own story. Now there will reach a point as there did with oil when it will appreciate no longer, but for that point to be reached people must be convinced that a stable financial system has re-emerged and that money will not be devalued. If anyone on this board thinks that's likely to happen this year then by all means go ahead and sell, personally I do not and know that had I kept my savings in sterling as opposed to gold I'd be a third poorer now than I actually am.

One last thing to note, last week gold did something it hasn't done in a very long time, it rallied at the same time as the US dollar. That was in spite of the ECB selling a boat load of gold. I expect we will retest $1000 in the next few months and I'm sure it will be breached.

[flying]

Anyone shorting Gold should turn it in today not the place to be

Silver is not too shabby either

Edited February 5, 2009 by flying

[Naam]

water on the mills of the goldbugs

Gold: The Sum of all fears

Safe Haven Demand Lifts Gold

Purchases of physical gold have jumped over the past six months as investors’

fears about the current financial crisis and the possible outcomes from government

efforts to support banks and economies have intensified. We detail the different

reasons why investors are increasingly drawn to this safe haven asset.

Investment demand to double: Gold price forecast lifted to US$1,000/oz

We estimate that investment demand will double in 2009 compared to 2007 and

based on simple regression modelling we estimate that this will drive gold to an

average $1,000/oz in 2009, from US$700/oz previously. We expect this safe haven

buying to decline in 2010 and forecast gold will average US$900/oz that year.

Silver and Platinum forecasts also raised

We believe that higher gold prices will lift silver and platinum in sympathy and we

have made large upgrades to our forecasts. We now see silver averaging

US$14.75/oz in 2009 and $12.80/oz in 2010. Platinum very rarely trades at a

discount to gold and when it does, the discounts are short lived. We have lifted our

platinum price forecasts for 2009 only and now see $1050 in 2010.

Equities read-through

Precious metals remain preferred investments in a commodity context and we

expect that gold and platinum equities could continue to outperform. Our preferred

precious metals equities include: Impala Platinum (IMP SJ), Barrick Gold (ABX

US), and Goldcorp (GG US).

Gold, one of the best performing assets of 2008, has held its ground in the early

days of 2009 despite adverse moves in three of the metal's strongest drivers.

The US dollar has strengthened, especially against European currencies;

Crude oil has fallen sharply; and

Inflation is falling quickly, both at a headline and a core level.

Normally we would have expected this set of circumstances to trigger steep

declines in the gold price, but the metal has remained firm in dollar terms and

strong in some other major currencies, especially the euro, sterling and

Australian dollar.

Financial risk is a key driver

Purchases of physical gold have jumped over the past six months as investors’

fears about the current financial crisis and the possible outcomes from

government efforts to support banks and economies have intensified. On the

back of investor risk perceptions and the potential implications for other asset

classes, we estimate that investment demand could double in 2009 compared to

2007. This investment demand drives our forecast upgrades outlined below.

Equities read-through

Gold and platinum equities historically allow for strong, high beta leverage to

the underlying commodities markets. In the current environment we generally

prefer good quality, low-cost precious metals companies for equity exposure.

Impala (IMP SJ) Impala is preferred in the platinum sector because of (1)

its superior operating track record, (2) its low on-mine operating cash costs,

and (3) its strong (net cash) balance sheet. We are encouraged by evidence of

a cautious corporate stance while maintaining a position to take advantage of

distressed asset prices if they occur. The 3rd party refining business of IMP

offers further defensiveness during periods of weak metal prices. While

Zimbabwe represents elevated political risk for IMP, we believe that that

market is applying c.50% discount to these assets - if the situation normalises

it represents a growth opportunity.

Barrick (ABX US): The company offers large liquidity, a diversified mine

portfolio, balanced political risk and longer-term growth potential. The

company also has the benefit of having its base metal exposure hedged in the

near-term. On the other hand the company still has a significant hedge book.

Goldcorp (GG US): The company is another large liquid gold equity with

longer-term growth and no hedge book, it also has a strong balance sheet.

The company’s share price has lagged its peers.

Gold Demand

Investor and speculative demand is boosting gold whereas jewellery buying,

historically the backbone of gold demand, fell in 2008 and looks set to fall

further in 2009 based on commentaries from jewellery retailers and fabricators

across many regions. Certainly, UBS's own sales in the first few weeks of 2009

have been extremely slow, with Indian demand especially soft.

One of the difficulties in analysing investment demand is that it is extremely

hard to measure. GFMS, whose historical data we use for supply and demand

analysis, attempts to measure individual elements of gold investment, but they

recognise that a comprehensive analysis of this area is impossible. That said,

almost all the elements of physical investment demand that the GFMS are able

to measure or infer increased sharply in the second half of 2008, but so-called

“paper gold”, i.e. investment in financial products linked to gold, fell. The

following data and charts are reproduced from GFMS’ Gold 2008 Update 2,

published in early January, and are the most up-do-date description of the gold

market. GFMS divide investment demand into three major categories:

Bar hoarding

GFMS are able to track bar hoarding in major Asian markets through surveys of

domestic sales, production and imports.

The growth in East Asia is attributed to three countries, China, Thailand and

Vietnam, with demand being driven by a mixture of domestic inflation

(Vietnam), speculation (Thailand) and concerns about falling asset markets and

slowing growth (China). Chinese bar hoarding of 70 tonnes in 2008 was

particularly strong in the second half of the year, double that of the first half. We

wonder also whether investors were attempting to protect themselves from

possible Chinese currency weakness: certainly the slowing of the fall in

USD/CNY removed one negative reason to buy gold.

Gold coins

Large purchases of coins are perhaps the ultimate sign of safe-haven gold

buying. Coins are small denomination, portable and less conspicuous than bars,

but they also command a steep premium to the gold price – often around 5% –

but at times in the second half of 2008 we heard reports of premiums of up to

10% being paid. GFMS estimate that in 2008 gold coin minting increased

40% y/y to a 21-year high and that most of the increase was concentrated in the

second half of the year. Coin demand was particularly strong in Western Europe

and the United States, something we can confirm from our own sales in Europe

and reports from counterparties and contacts in the US. Sustained coin shortages

were seen from September onwards, with the US mint and the South African

Rand Refinery both announcing that they had run out of coins.

Over the past two weeks we have noted another sharp increase in coin demand

from our European sales desks, associated with the renewed concerns about the

financial crisis, according to our clients.

Implied net investment

This is the category that sweeps up the other forms of gold investment that are

impossible to quantify, but includes: holdings in gold exchange traded funds

(ETFs); futures market investment and speculation; bar hoarding outside of the

Asian bar demand measured above; demand from structured products; and OTC

investment. One of the most prominent examples of implied net investment are

the positions held by investors and speculators in Comex gold futures, which we

monitor closely from Commitment of Traders data from the CFTC. The

following chart shows the positions from the COTR report since 2006.

Although this balancing total increased by 20% y/y, as we noted above, the

performance of physical investment demand was strongly positive, while that in

gold-linked products was negative. As the chart above shows, speculators cut

net long positions in Comex gold in the second half of the year, as plunging

broad asset markets and a stronger US dollar forced liquidation of gold as the

price fell. Commodity index investments also saw widespread disinvestment, as

we have noted regularly in our Metals Daily publication, and GFMS report that

holdings in other structured products fell as well.

Rationale for investing in gold

Investors do not buy gold for one single reason. Strong price performance brings

in momentum traders, while weakness of the US dollar or broader commodity

strength can trigger buying. But the recent buying of gold seems centred around

the following broad arguments:

Firstly, that there is a risk to savers of a collapse in the financial system due

to bank failures wiping out savings. This risk probably peaked in 2008 when

the financial crisis was fresher; governments had not yet made statements or

acted to prop up banks, and one large US investment bank – Lehman

Brothers – was allowed to fail. Government bank bailouts have become more

explicit over the past few months, with guarantees, capital injection (the socalled

creeping nationalisation used to describe the increasing stake in RBS

held by the UK government) or even full-scale nationalisation of institutions

(as in the UK, Iceland and Ireland).

Secondly, the cost of bank bailouts, both in capital injections and the

liabilities that governments are assuming (and will assume), compounded

with the cost of fiscal stimulus and the fall in tax revenues from slumping

economic activity, is worrying some commentators. The huge increase in

government debt and concerns about the roll-over of state liabilities has led

to concerns about currency and bond market crises in some markets, notably

the UK, over the past few weeks. There are also considerable concerns about

the US economy, as outlined by Former Fed Chairman Volcker, who

commented that: “there are also risks of undermining confidence in the

dollar, raising fears of future inflation." And the recent downgrades of

sovereign debt ratings in Spain and Portugal, together with negative watches

on other Mediterranean countries, have caused a sell-off of these countries’

bonds relative to Bunds and demonstrated that the eurozone is hardly

insulated from these concerns.

Thirdly, although inflation has fallen sharply and the near-term risk is firmly

biased towards deflation rather than inflation, many clients and

commentators are worried about an eventual surge in inflation. Whether as a

result of all the "printing of money" by central banks and treasuries, or due to

a conscious decision by governments to inflate their way out of their bulkedup

debt, many are looking through the current short-term period of deflation

and into a medium- to longer-term period of higher inflation. We have heard

some commentators compare major industrialised nations to countries with

genuine hyper-inflation, such as Zimbabwe.

Finally, there are a number of potential geopolitical flash points in the world,

any one of which could trigger a move higher in gold. A confrontation

between countries with a popular affinity for gold, such as India or Pakistan,

or a broader Middle East conflict threatening the supply of oil, could trigger

substantial gold buying, and while this is probably the least discussed reason

to buy gold – at least among the clients we have spoken to – it does trigger

some interest from some.

We argue that all of these elements are playing a role in the investment demand

for gold at present; whether we believe these arguments are well founded or not

does not matter. The current financial sector turmoil, having triggered renewed

interest in gold as a safe haven, is likely to keep investors looking at gold in the

near future.

UBS’s Senior Economic Adviser George Magnus has written extensively on

what he first termed a “Minsky moment”, and recently published another update

on the subject entitled “UBS Economic Insights by George: Financial instability,

and the final countdown?”, 19 January 2009. In this update, Magnus suggests

that:

“Although major banking system rescue packages were introduced last October,

they clearly didn't go far enough. We should not be surprised, since financial

history teaches us that governments rarely, if ever, resolve banking crises first

time round. A lack of political courage and / or of full awareness of the state of

solvency in the banking system are normally the main factors.

Financial stability, therefore, remains both a mirage, and a sine qua non for an

eventual recovery in financial markets and, later, in the economy. A succession

of recent events and or earnings announcements (Germany, Ireland, US and

UK) highlights the importance of another round of capital injections, loan

guarantee arrangements, and this time, attempts to formalise bad bank or bad

asset schemes. As we move into and through this stage, we are likely to see more

nationalisation and more separation of good from bad banks/assets.”

The capital requirements of the banks are likely to be substantial. As Magnus

goes onto say:

“UBS bank analysts think US and European banks require more than $400bn of

additional capital injections this year, a significant proportion of which would

be for US banks. A top-down estimate published in Economic Insights last year,

based on assumed loss and recovery rates for the universe of non-financial debt

outstanding in the US (7%, and 50% respectively), and net of capital already

raised, was that all financial entities needed about $1,000bn of additional

capital, of which roughly 40% is needed quickly. In any event, more capital is

needed and will most likely be forthcoming quite soon.”

“Broadly speaking, financial crises are protracted affairs. More often than not,

the aftermath of severe financial crises share three characteristics.

First, asset market collapses are deep and prolonged. Real housing price

declines average 35%stretched out over six years. Equity price collapses

average 55% over a downturn of about three and a half years.

Second, the aftermath of banking crises is associated with profound declines

in output and employment. The unemployment rate rises by an average of 7

percentage points over the down phase of the cycle, which lasts on average

over four years. Output falls (from peak to trough) an average of over 9

percent, although the duration of the downturn, averaging roughly two years,

is considerably shorter than for unemployment.

Third, the real value of government debt tends to explode, rising an average

of 86 percent in the major post–World War II episodes…the big drivers of

debt increases are the inevitable collapse in tax revenues that governments

suffer in the wake of deep and prolonged output contractions, as well as

often ambitious countercyclical fiscal policies aimed at mitigating the

downturn.”

We believe that the combination of further large-scale bail-outs of banks –

including nationalisations of more financial institutions – together with falling

asset prices, contracting economic activity, rising unemployment and surging

government debt will keep investors interested in gold.

We make no pronouncements on geopolitical risk other than to note that the US

remains involved in two wars; tension has recently increased between nucleararmed

neighbours India and Pakistan; the Middle East continues to harbour

numerous potential flashpoints; and the predictability of North Korea remains

low, to say the least. It is difficult to quantify the degree to which geopolitical

tension has triggered gold investment over the past year, but based on

conversations with our clients we believe it has played a minor but not nonexistent

role in the tremendous pick-up in gold investment.

Gold remains a minority investment

A lot has been made by commentators (including ourselves) about the inflows

into the gold ETFs. Yet the total value of the holdings in the eight ETFs that we

follow is only about US$36bn, almost insignificant compared to the US$3.8tn

held in US money market funds. Even taking into account GFMS’ estimates of

the total gold held in private investment hands (26,500 metric tonnes as of the

end of 2007) then this stock is worth “only” about US$750bn, thus small

compared to the market capitalisation of equity, bond and real estate holdings.

Of course, gold held in non- private investment form can be transformed or sold

to private investors. This happens each year as central banks sell some gold,

although only about 300-500t, and as jewellery and industrial scrap returns to

the market (the relationship between price and scrap supply is something we

discuss below). But to all intents and purposes, the availability of gold for

private investment is fairly stable and will grow only slowly barring a surprise

step-up in sales from central banks, something we consider unlikely.

But the small size of investment in gold demonstrates the potential for a shift of

money into gold. If gold were to become a more mainstream asset, if a few

percent of the cash held in money market funds and savings were re-directed

towards gold, then the impact on the gold price would be profound. Also there is

an argument that gold can become more desirable the higher the price, as the

more the price increases, the more newsworthy gold becomes and in this case –

since the investment is being driven mostly by fear – investors can be persuaded

that gold is demonstrating safe-haven characteristics, thus attracting further

investment flows.

Adding all the categories of investment together, GFMS come up with their

estimates of total gold demand over the past 18 months, together with their

forecast for the first half of 2009. Now, we do not necessarily agree with their

underlying assumptions – GFMS expect the US dollar to fall, for example, so

our forecasts will be somewhat different, but not by that much: as we noted in

Chart 1, gold is moving higher in an environment of dollar strength, and that

makes the move all the more powerful – and perhaps reverses the relationship

between dollar weakness and gold price strength, at least for as long as the

current safe-haven buying of gold lasts.

Investment demand to drive gold higher

As hard as it is to distinguish the separate the driving forces behind the surge in

gold investment over the past 12 months, it seems clear that the factors driving

this investment – with the exception of expectations for imminent US dollar

weakness – will continue and potentially intensify in the near future. The biggest

question facing the gold market, and one that has been the subject of passionate

internal debate at UBS, is: how long will this extraordinary period of safe-haven

demand last? After consultation with Larry Hatheway and Paul Donovan, Head

of Asset Allocation and Senior Global Economist at UBS, we have concluded

that 2009 – and especially the first half of this year – will see the fears about the

fallout from the financial crisis remaining elevated. Thereafter, we believe that

some concerns will ease, although the projected large increase in government

debt will likely keep investment stronger than during 2001-07.

In order attempt to forecast the gold price over the next few years, we have

made assumptions about the level of investment demand that we expect and then

adjusted the two other categories of our supply and demand model that are most

sensitive to moves in the gold price – jewellery demand and scrap – using some

simple regression modelling.

There is a reasonable relationship between changes in the dollar gold price and

changes in global jewellery demand, whereas the absolute level of scrap supply

is sensitive to the change in the gold price.

[flying]

We expect this safe haven

buying to decline in 2010 and forecast gold will average US$900/oz that year.

The biggest

question facing the gold market, and one that has been the subject of passionate

internal debate at UBS, is: how long will this extraordinary period of safe-haven

demand last?

These poor chaps are at odds with themselves First they know then they dont.

Everyone knows how long this period of safe-haven demand will last. It will last until it is safe to go elsewhere We need some jaws music about now

Edited February 6, 2009 by flying

[Naam]

We expect this safe haven buying to decline in 2010 and forecast gold will average US$900/oz that year.

The biggest question facing the gold market, and one that has been the subject of passionate internal debate at UBS, is: how long will this extraordinary period of safe-haven demand last?

These poor chaps are at odds with themselves First they know then they dont. Everyone knows how long this period of safe-haven demand will last. It will last until it is safe to go elsewhere We need some jaws music about now

i will tell theses poor chaps that in future they should specify exact dates and times for any forecasts, e.g "safe haven will last till march 27, 2010, 16.35hrs GMT" although all the goldbugs have much better information.

perhaps they are willing to issue a special goldbug edition:

"The Sky will be falling any time from now! Gold will be measured in micrograms! 17.5μg will buy a bakery, 22μg a butchery and for a fistful of Krügerrands one gets 2 aircraft carriers including a dozen IBMs and an arsenal of cruise missiles."

[flying]

i will tell theses poor chaps that in future they should specify exact dates and times for any forecasts, e.g "safe haven will last till march 27, 2010, 16.35hrs GMT" although all the goldbugs have much better information.

LOL it was a joke about redundancy

Hence all the smiley faces

You know the jaws music? The movie about the shark?

All the adverts were always saying..." Just when you thought it was safe to go in again"

Edited February 6, 2009 by flying

[JimsKnight]

We expect this safe haven

buying to decline in 2010 and forecast gold will average US$900/oz that year.

The biggest

question facing the gold market, and one that has been the subject of passionate

internal debate at UBS, is: how long will this extraordinary period of safe-haven

demand last?

These poor chaps are at odds with themselves First they know then they dont.

Everyone knows how long this period of safe-haven demand will last. It will last until it is safe to go elsewhere We need some jaws music about now

Well I think given the crazy state of the world gold will be a safe-haven for a lot longer than 2010. I can't see interest rates shooting up to the dizzy heights of yesteryear for a while and the chaos in the US financial sector isn't helping. When the US fixes it's house is probably going to be the starting point of gold being the stronghold.

Edited February 7, 2009 by JimsKnight

[gregb]

Well I think given the crazy state of the world gold will be a safe-haven for a lot longer than 2010. I can't see interest rates shooting up to the dizzy heights of yesteryear for a while and the chaos in the US financial sector isn't helping. When the US fixes it's house is probably going to be the starting point of gold being the stronghold.

Gold will oscillate up and down like all commodities for the indefinite future. That will allow arguments like this to continue adnauseum until we are all old and grey. If you take a long enough timespan however, you will be able to watch gold head solidly upward, reflecting the accelerating debasement of fiat currencies and the unrelenting collapse of the global economy. There is also the very real possibility, indeed probability, of a USD currency crisis which will have ramifications that none of us can predict. Energy depletion essentially guarantees that business as usual can't return, so if a global recovery starts to happen, it will be quickly slapped back down again. That is backed up by geology, not voodoo economics.

If you want a short term prediction, roll the dice or listen to your favorite financial analyst. They'll be equally correct.

Resource wars will eventually start, and you can't tell me gold won't be seen as a safe haven during that period. There may be a possibility of a few months during which gold is not a safe haven. Indeed, that already happened in 2008, and probably will happen again. If you are looking for a straight line for any investment you picked the wrong time to be alive on this planet.

Making a ridiculous statement like gold won't be a safe haven after 2010 is about as realistic as the ridiculous statement that buying gold will make you wealthy. Everyone is going to be poorer in the future. The wealth you have today is an illusion. It's just a question of how long it takes all of us to admit it. There could very well be a few months during 2010 where gold isn't the best place to be, just as it was in 2008 for a few months. This is totally unimportant. Gold will help you preserve more of your wealth than other asset classes, because it is a currency that does not depend on oil for its value.

[cloudhopper]

Another chart and comment:

http://4.bp.blogspot.com/_H2DePAZe2gA/SZII.../gold020609.png

[VegasVic]

We expect this safe haven

buying to decline in 2010 and forecast gold will average US$900/oz that year.

The biggest

question facing the gold market, and one that has been the subject of passionate

internal debate at UBS, is: how long will this extraordinary period of safe-haven

demand last?

These poor chaps are at odds with themselves First they know then they dont.

Everyone knows how long this period of safe-haven demand will last. It will last until it is safe to go elsewhere We need some jaws music about now

Well I think given the crazy state of the world gold will be a safe-haven for a lot longer than 2010. I can't see interest rates shooting up to the dizzy heights of yesteryear for a while and the chaos in the US financial sector isn't helping. When the US fixes it's house is probably going to be the starting point of gold being the stronghold.

Gold is only holding the $900 level because of the safe haven aspect, investors are temporarily parking their cash in gold, particulary in places like the U.K. , Europe and Australia where the curency is eroding vs. the U.S. Dollar. This is a temorary phenomenon that is near its peak I am not a T/A chartist but I have had 3 or 4 T/A guys tell me something about a megaphone formation and that gold is getting ready for a substantial drop. When you look back at the highs the POG set last March, one needs to put in perspective that those heights were only attained because of all the cheap leveraged money and the hedge funds manipulation of markets just like in the oil market! When you put it all in perspective it becomes easy to see that gold is the only bubble that has yet to burst, but the gold bubble will burst soon enough when those who are temporarily parking their cash in gold begin to cycle out of the shiny stuff and the hedge funds that have maintained large gold positions finally sell out as well. Goldbugs always have fantastic tales of the COMEX failing, massive hyperinflation, or the Dollar becoming worthless (of course when you ask them just what currency will gain vs. the Dollar they just have this blank look on their face), and they will quote you outrageous predictions of $1500 or $2000/ounce that they read in an article by schiff, sinclair or faber, but when it comes right down to it these poor fellows are pinning their hopes on a falling star just as those back in the early 1980's thought gold was going to stratasphereic levels only to find out that gold would be cut in half and become a dead investment for the next twenty years .

[flying]

I have had 3 or 4 T/A guys tell me something about a megaphone formation and that gold is getting ready for a substantial drop.

when those who are temporarily parking their cash in gold begin to cycle out of the shiny stuff

hahahahah Same thing you have said since October.

Tell me this when was the last time these 3 or 4 experts were in a market like the one we have today?

hahahah Oh horse of marble white take me on a magic flight

They have not a clue

Folks are not temping into gold they are exiting a dying market. Many are not looking at this as a money making gamble Vic they are looking at hopefully preserving a speck of what wealth they had. Cycle out & into what? Yes shorting I guess & maybe the small rally that is coming soon.

Good Luck to you

[VegasVic]

I have had 3 or 4 T/A guys tell me something about a megaphone formation and that gold is getting ready for a substantial drop.

when those who are temporarily parking their cash in gold begin to cycle out of the shiny stuff

hahahahah Same thing you have said since October.

Tell me this when was the last time these 3 or 4 experts were in a market like the one we have today?

hahahah Oh horse of marble white take me on a magic flight

They have not a clue

Folks are not temping into gold they are exiting a dying market. Many are not looking at this as a money making gamble Vic they are looking at hopefully preserving a speck of what wealth they had. Cycle out & into what? Yes shorting I guess & maybe the small rally that is coming soon.

Good Luck to you

Flying I could tell that you were headed over to the dark side a couple months ago by the content of your posts! Now that you are a fullfledged goldbug, I fear there is no coming back until you wake up and see the POG hitting the skids Take some advice and stop reading schiff, sinclair, faber et al, they will send you down the wrong path my friend! GLTY as well I feel that you will need it more than I.

[flying]

I fear there is no coming back until you wake up and see the POG hitting the skids Take some advice and stop reading schiff, sinclair, faber et al, they will send you down the wrong path my friend! GLTY as well I feel that you will need it more than I.

Sorry I forgot you usually are talking about paper gold.

Yes it will thrash about as usual. I do follow one person who has a very good record since 06. None you mentioned though as they have other motives too.

The person I tend to read does in fact say he expects a drop from Mid Feb on & then new higher lows in March then up.

But he like me does not sell or trade physical. He does quite well on shorts in other sectors though.

[12DrinkMore]

So far I haven't been interested in gold. But lately I am getting worried about the whole economic mess, so started a small bit of research.

After reading all the gold pundits trying to get me on the great gold train as an unstoppable, unbeatable and akin to stuffing my money into a formaldehyde bath, I read an article, which unfortunately I have lost the link to. Basically it stated that a huge percentage of the gold that is sold is bought by the Indians. Taking this a little further, what happens if, due to the global financial crisis, the amount of gold sold to India falls by 20% or 30%.

Surely this will result in too much gold in the market place and lead to a fall in price. Unless, of course, all the rest of the world, scared shitless that they are about to lose everything, start buying more and more gold.

The Indian argument for me has turned me away unless the price drops. After all, there is a humongous amount of gold sitting around doing absolutely nothing useful except pretending it is very valuable. If it all came out on the market tomorrow, where would the price be?

[churchill]

For those that said Gold was a useless commodity and asked what use would it be in a crisis - What currency is being used in Zimbabwe to buy goods now their currency is worthless ? Gold

http://www.guardian.co.uk/world/video/2009...starvation-food

Edited February 12, 2009 by churchill

[Naam]

For those that said Gold was a useless commodity and asked what use would it be in a crisis -

an invalid and baseless goldbug claim. who on Thaivisa said that pray tell?

[Naam]

So far I haven't been interested in gold. But lately I am getting worried about the whole economic mess, so started a small bit of research.

After reading all the gold pundits trying to get me on the great gold train as an unstoppable, unbeatable and akin to stuffing my money into a formaldehyde bath, I read an article, which unfortunately I have lost the link to. Basically it stated that a huge percentage of the gold that is sold is bought by the Indians. Taking this a little further, what happens if, due to the global financial crisis, the amount of gold sold to India falls by 20% or 30%.

Surely this will result in too much gold in the market place and lead to a fall in price. Unless, of course, all the rest of the world, scared shitless that they are about to lose everything, start buying more and more gold.

The Indian argument for me has turned me away unless the price drops. After all, there is a humongous amount of gold sitting around doing absolutely nothing useful except pretending it is very valuable. If it all came out on the market tomorrow, where would the price be?

India's share of gold purchases is indeed normally considerably high but the crisis started biting already.

quote (excerpts):

NEW DELHI (Reuters) - India's gold imports in January slumped to just five tonnes from 62 tonnes in the same month a year ago as a surge in prices saps demand in the world's largest consumer, a top industry official said on Tuesday.

"There is almost zero demand. From 62 tonnes gold imports in January last year, only five tonnes were brought from overseas in January 2008," Suresh Hundia, president of the Bombay Bullion Association, told Reuters.

http://in.reuters.com/article/businessNews...-31896320080212

[churchill]

For those that said Gold was a useless commodity and asked what use would it be in a crisis -

an invalid and baseless goldbug claim. who on Thaivisa said that pray tell?

You sir !

QUOTE (flying @ 2008-11-16 00:24:15)

At least Gold & Silver is & always will be money.

In recent days it seems I have read many articles of countries who feel the same way.

Many seem to be losing faith in Paper/Fiat Currency or at least hedging it with money.

"sure! i can vivivly imagine our wives paying for steaks at the butcher and a loaf of bread in a bakery with Krüger Rands or Maple Leaves. soon the bars in Pattaya will demand that the bar fines are settled in gold dust "

[Naam]

i made statement which only an ignorant or mischievous person can misinterprete and distort into "For those that said Gold was a useless commodity.."

[12DrinkMore]

For those that said Gold was a useless commodity and asked what use would it be in a crisis - What currency is being used in Zimbabwe to buy goods now their currency is worthless ? Gold

http://www.guardian.co.uk/world/video/2009...starvation-food

I believe there is a small amount of gold to be found in Wales :D

[AlexLah]

Just checked my goldreserves and asked where they wanna go, through the roof they said.

[AlexLah]

That was by the way a sad video doc.

[flying]

"sure! i can vivivly imagine our wives paying for steaks at the butcher and a loaf of bread in a bakery with Krüger Rands or Maple Leaves. soon the bars in Pattaya will demand that the bar fines are settled in gold dust "

i made statement which only an ignorant or mischievous person can misinterprete and distort into "For those that said Gold was a useless commodity.."

Yes I guess you did say your wife could buy something useful

[IMA_FARANG]

All you Goldbugs and Silver freaks always persume there will be someone to buy your Gold or Silver when the S##t really hits the fan. Why?

My Grandfather was the constable of a small farming town in Massachusetts in the 1930's. It was so bad the town had no money to pay his salary. They paid him with vegatables, fruit, and in rare cases meat (When it got really bad in 1933 and 1934 the farmers couldn't afford to feed their livestock, so they slaughtered them to trade for other foods). They dumped milk into the river, becuse they couldn't sell it at a price that paid for the costs of feed for their milkcows.

Hopefully, it won't be like that again, but if it comes down to that, how many calories are then in an ounce of Gold? How much nutrition does Silver have.

If the worst comes to the worst, what will your Gold be worth if there is no one to buy it?

You presume the economy will go on as before. Why?

Good luck, maybe you'll make a killing on Gold. Or maybe Gold will be your killer.

I believe that the prices of most items..especially housing and equities are 20 to 30 percent overvalued.

That includes commodities,as well as Silver and Gold.

The economy will stabilise when that 20 to 30 percent overvalue is gone...which means prices of many items need to be lowered by 20 to 30 percent to reach a rational level.

That can only be accomplished by a reduction in the standard of living of everyone. Everyone.

I hope I'm wrong. Are you willing to bet your life on Gold and Silver?

[flying]

All you Goldbugs and Silver freaks always persume there will be someone to buy your Gold or Silver when the S##t really hits the fan. Why?

My Grandfather was the constable of a small farming town in Massachusetts in the 1930's. It was so bad the town had no money to pay his salary. They paid him with vegatables, fruit, and in rare cases meat (When it got really bad in 1933 and 1934 the farmers couldn't afford to feed their livestock, so they slaughtered them to trade for other foods). They dumped milk into the river, becuse they couldn't sell it at a price that paid for the costs of feed for their milkcows.

Hopefully, it won't be like that again, but if it comes down to that, how many calories are then in an ounce of Gold? How much nutrition does Silver have.

If the worst comes to the worst, what will your Gold be worth if there is no one to buy it?

You presume the economy will go on as before. Why?

Good luck, maybe you'll make a killing on Gold. Or maybe Gold will be your killer.

I believe that the prices of most items..especially housing and equities are 20 to 30 percent overvalued.

That includes commodities,as well as Silver and Gold.

The economy will stabilise when that 20 to 30 percent overvalue is gone...which means prices of many items need to be lowered by 20 to 30 percent to reach a rational level.

That can only be accomplished by a reduction in the standard of living of everyone. Everyone.

I hope I'm wrong. Are you willing to bet your life on Gold and Silver?

Then there are those like you?

What in the world makes you think that everyone buying gold & silver does so to make a profit? Perhaps there are some of us just looking for a alternative to what we see as a crumbling state of affairs in our current currency.

Also what makes you think anyone is planning on selling? You give a example of 1933 & 34

Here are some from more recent times...

http://www.powerswitch.org.uk/portal/index...79&Itemid=2

Then of course you just saw the other one posted above.

What makes you so sure it would not come into use as a barter? Has it not for thousands of years?

I never think of eating silver or gold anymore than the lead I also store.

You say folks who buy some gold now as a hedge are counting on an economy as usual? No your wrong most are counting on the lack of an economy.

You speak of betting your life? I think if we look at your life & my life closely we would see it is you that is betting *your* life.

Good luck with your bet........You do have one eh?

[LivinLOS]

Did Vicky ever get his 600 USD buy in ???

Also what people seem to be missing in much of this is to look at gold purely in USD terms.. Go have a peep at gold charts in GBP, EUR, CAD, AUD, CHF, or any one of many currencies where its still making new highs. As a preserver of wealth in times of turmoil its proving its mettle (). Out up next to vegas condos and I know which ones the investment to hold !!

Currently I dont have a ounce of it thats cant be worn by the GF tho.

[FairwayJack]

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 .

I've considered buying gold but will go with oil futures instead. I'm concerned that we are seeing a panic run into gold just like when the world was scrambling to buy oil at 147 /barrel last year...now it's 36 / barrel. I'm buyng USO and DXO now and will just hold it longterm. Am thinking shorting gold thru DGZ but that would be quick in and out trades