Gold Price - Where is it heading?

[numbercruncher]

I keep pushing *refresh* waiting for 900aud to tick over

 

[michael_selway]

With the surge in gold to aroung US$840 tonight it is worth having a look at the historic closing prices going back to 1980. Yes just $10 more dollars to an all time high closing price. The ensuing days and weeks ahead will be interesting indeed. The drop in the dollar this evening would indicate that all is very unwell with largest financial systems. Problem is there is too much money and not enough tangible backing.

Chart is coutesy "The Privateer" newsletter

Do you reckon there will be a pull back when it hits the all time nominal high?

thx

MS

 

[Temjin]

Paul Van Eeden discusses the case for gold, and against pretty much everything else, even commodities & China, due to US M3 money supply explosion, & global money supply inflation generally.

http://www.kereport.com/audio/1103-02.mp3
http://www.kereport.com/audio/1103-03.mp3

Just finish hearing it. He didn't really say anything about gold at all.

He just emphasis the same story (which i believe is VERY TRUE as well as number of other independent analyst) that the equity boom we've been having is due to the massive injection of cash/credit and thereby, inflating the prices.

For those who don't want to bother hearing these, here is a brief summary on his part that he does not agree with popular suggestions that China (as well as world economy) will not be seriously affected by expected US downturn.

- US economy is $13 trillion dollars
- Europe economy is $13 trillion dollars
- China economy is only $2-3 trillion dollars

- Growth in China from 2001 to 2006 is roughly 10% p.a.
- Export per GPA in China accounts for approximately 31% over the same period.
- Rate of growth in export in China is around 24% over the same period.
- 24% x 31% = 7.44% of growth in China is attributed from exporting. This leaves only roughly 10% - 7.44% = 2.56% from other sources like domestic growth.
- Using even more new date, he concluded that China's export now attributes to 8+% out of 10% of their annual growth, this leave even less from their domestic.
- Concludes that China is EXTREMELY sensitive to export and demand from the rest of the world. US consumers is one of their largest customers as well.
- This automatically translates to less demand on commondities for industrial and construction uses. And probably translates to less demand on Aussie miners as well = bad news for us.



Ohhh, is the interviewer guy real about his IQ is close to 200? lol

 

[explod]

I keep pushing *refresh* waiting for 900aud to tick over

Yeh me too, only a dollar sixty to go. Maybe a good sleep will do the trick.

Brought some gold bars 18 months ago and only just getting back to parity, so it better go a bit higher soon. Coulda been in BHP and more than doubled it. Its called dervisification I understand.

 

[Kauri]

A tad early to be drawing any conclusions but is she having "the correction we had to have"??
Cheers
.........Kauri

 

[explod]

A tad early to be drawing any conclusions but is she having "the correction we had to have"??
Cheers
.........Kauri

Well at least now we are due for some consolidation. The dow falling will certainly have its effects across the board. The liquidation from shares initially goes into US dollars and this is reflected by the reverse hammer on the daily US dollar index:-

 

[explod]

Gold dropped a bit over the day and we should expect some correction after the big run up of the last couple of weeks. The last time it was at these levels it peaked up into the US$900s in 1980 to all time record highs. So here we are, consolidating in record territory. The next upmove will capture attention of the general investment community. So if you are thinking of gold investment, it could be a good time to catch the train.

I am not qualified to give advice and I have been wrong many times in the past.

[quote}

Gold settles at record high
Investors seek safe haven as the dollar falls on a report that China may diversify its exchange reserves, but one analyst sees rally fading.
By Ben Rooney, CNNMoney.com staff writer
November 7 2007: 3:27 PM EST


NEW YORK (CNNMoney.com) -- Gold settled at a record high of $833.50 an ounce in New York trading Wednesday as the dollar's decline and oil's record surge caused inflation-wary investors to seek stability in precious metals.

The previous high was $825.50, set Jan. 21, 1980, or $2,128.09, adjusted for inflation, according to the Minneapolis Fed Calculator.

Trading in gold offers investors a hedge against stock market volatility because it is a store of value, compared to stocks, which are subject to a variety of unpredictable economic factors.

The euro hit a fresh record against the dollar, rising to $1.4729 before retreating. The dollar was dragged down by a report that a Chinese political figure said that Beijing should favor the euro, not the dollar, in diversifying its exchange reserves valued at $1.43 trillion.

Meanwhile, oil hit a new intraday record at $98.62 a barrel early Wednesday ahead of the government's weekly inventory report that was expected to show a 1.6-million barrel drop in crude stockpiles. Oil's drive to the $100-a-barrel mark slowed when it turned out that inventories were down slightly less than expected. Still, oil has surged more than 20 percent in the past month.

In addition to the dollar's decline and oil's rally, the ongoing fallout of the credit crisis has investors flocking to the relative safety of gold.

 

[explod]

I keep pushing *refresh* waiting for 900aud to tick over

Well numbercruncher, your pain has been relieved, in fact have a rest and stop pushing, you have AUD gold at $905 this morning. I think that's $100 in the last month or so. May be wrong about any correction, we have tremendous momentum now.

 

[Kauri]

Talk of a few margin calls especially on the US Tech stocks.... I wonder if that may have a flow-on sell-off effect on commodities/gold??
Mind you at the same time in the opposite vien..

A few items highlighting geopolitical risk are on the wires, only adding to the market nervousness and choppiness. AFP and ABC news reports that the FBI is warning of potential Al-Qaida attacks on US shopping malls in Los Angeles or Chicago though the threats "may not be credible" and are similar to alerts issued over the last five years, each year at holiday time.
Also noted are the reports from the UK Times earlier today that the US fears and Israeli strike against Iran after the news this week that Iran has 3,000 working uranium-enriching centrifuges. A further report from AP says that the US has up-to-date attack plans for Iran although no strike appears imminent.

Cheers
.........Kauri

 

[explod]

Gold’s Infallible Indicator – Six Months Later


Exactly six months ago I wrote about an indicator that has predicted with 100% accuracy when the price of gold was about to rise. The entire article can be read here: http://www.kitco.com/commentary/old/Turk/turk_may072007.htm

Over the years, this indicator has been one of my favorites. It has been so good that I call it “gold’s infallible indicator”. True to form, this indicator is still scoring 100%.

The indicator is very simple. It is based on articles about gold in The Economist magazine. As I wrote six months ago: “The Economist rarely writes about gold, but when it does, start buying. It has an uncanny knack for publishing unswervingly bearish articles on gold just before the price heads higher.”

The last article about gold by The Economist appeared on April 8th, when gold was trading at $674.20. As of yesterday’s close, gold has risen 21.7% so far – I say “so far” for a reason. Gold’s uptrend remains intact, and no one knows when this uptrend will end. So further gains in gold are entirely possible. Here is this indicator’s record.

Date Article is Published
Gold Price
On Date of Publication
Low Gold Price After Date of Publication
% Decline to Low Price
After Date of
Publication
Subsequent High in the Gold Price
Date of Subsequent High in the Gold Price
% Gain from Publication Price to High Price

23 Jan 1993
$328.60
$326.30
0.7%
$407.00
30 Jul 1993
23.9%

11 Sep 2003
$379.70
$369.20
2.8%
$426.40
9 Jan 2004
12.3%

1 Dec 2005
$502.50
$493.00
1.9%
$719.80
11 May 2007
43.2%

8 Apr 2007
$674.20
$641.70
4.8%
$820.80
(so far)
6 Nov 2007
(so far)
21.7%


I happen to believe that The Economist publishes some high quality material. So why is it always wrong about gold? As I note in my article six months ago: “While The Economist pretends to offer serious analysis of gold, in reality it doesn’t. It has another objective – anti-gold propaganda.” To be blunt, The Economist is a tool of the gold cartel, the activities of which are well documented by the Gold-Anti Trust Action Committee. GATA’s research is available for free at www.GATA.org

The gold cartel has one primary objective – to make the dollar look worthy of being the world’s reserve currency. We all of course know that the dollar is not worthy of that esteemed title, but that doesn’t stop the gold cartel.

One way they pursue their objective is to intervene in the gold market to keep its price low. Gold and the dollar are major competitors; they compete for holders. A low gold price makes people believe that all is well with the dollar. But the gold cartel also uses other means to pursue its nefarious goal, one of which is disinformation.

The gold cartel knows as well as you and I that not only is gold money, it is the most powerful money of all because its value is not based upon someone’s promise. Gold has no counter-party risk. So it is only with reluctance that the gold cartel dishoards metal from central bank vaults. They know that once that gold is sold into the market, they are unlikely to ever get it back at current prices. It is therefore less costly for them to just disparage gold. By doing so, they hope to keep you from buying it, thereby lessening its demand.

So from time to time, the gold cartel enlists anti-gold publications that favor fractional reserve banking, fiat national currency, and managed money through the central banking elite. The Economist is all of those, with the result that it sits at the top of the gold cartel’s list of friendly rags. When the gold cartel is losing control, they invariably turn to The Economist, which then dutifully spins out some disparaging piece on gold, but to no avail. Eventually the market always overwhelms government price controls. It is an unalterable reality that price controls always fail eventually, even government price controls on gold.

So my conclusion is the same as the one I wrote about six months ago. “When reading about gold in The Economist, do it with a jaundiced eye, understanding that its foremost objective is to disparage gold. More importantly, when this infallible indicator flashes a buy signal, start buying.”

****

by James Turk
Copyright © 2007 by James Turk. All rights reserved.

James Turk is the Founder & Chairman of GoldMoney.com http://goldmoney.com/. He is the co-author of The Coming Collapse of the Dollar www.dollarcollapse.com.

 

[imitrust]

If you use pricing methodologies based on the amount of debt issued by the US Federal Reserve (and others) tied to their gold stock then gold should be in the high $2,000's per oz. If anything, it is maintained artifically low so everyone doesn't freak the hell out.

 

[explod]

If you use pricing methodologies based on the amount of debt issued by the US Federal Reserve (and others) tied to their gold stock then gold should be in the high $2,000's per oz. If anything, it is maintained artifically low so everyone doesn't freak the hell out.

Good point. Everyone is starting to freak out over the sub-prime debt issue anyway so a bit more freaking out probably wont' matter too much soon.

 

[ithatheekret]

I've had moving price on gold for a few years now , but rarely talk about the topic now , due mainly to the derogatory comments that flew my way once , when I said it would smash the $400 barrier with ease . My top then was $650 , it has since risen to $940 , but if things in the Us slow down any faster , that could easily be surpassed . None of my factors have included hostilities .

PS .... not really a gold bug , but it has always been an alternate store of wealth .

Admitting nonapologetically that I am a capitalist pig and believe that money makes the world go round and capital gains tax should be abolished for traders .

 

[explod]

I've had moving price on gold for a few years now , but rarely talk about the topic now , due mainly to the derogatory comments that flew my way once , when I said it would smash the $400 barrier with ease . My top then was $650 , it has since risen to $940 , but if things in the Us slow down any faster , that could easily be surpassed . None of my factors have included hostilities .

PS .... not really a gold bug , but it has always been an alternate store of wealth .

Admitting nonapologetically that I am a capitalist pig and believe that money makes the world go round and capital gains tax should be abolished for traders .

Yes because the banking cartels have great fear of gold destroying thier fiat currency institutional spin doctors put people off. So naturally there is scepticism even on this forum. However as the current economic crisis is playing out that is changing. So it is good to have you back on board.

I was going over some old notes that I keep on gold and for the gold bug faithful found one that is very apt for us to think about at the moment. Tried to reconnect with the link but too far back. However I think it so good I will retype some of the salient points. Dont think my scanner is good enough to do it that way.

It is from Derek K. Van Artsdalen and dated 24/7/2004 via Kitco.

It opens by discussing the nervousness as the bull run gets fully underway and how followers wonder if it is going to turn down and if they should liquidate positions, ie. ..."is the bull run over for gold"...

So Artsdalen did a study of the previous bull run (from 1977 to 1980) and here is what he found:-


"Out of a total of about 655 trading days from the low in mid-77 to the peak in January 80, there were 370 trading days in which the London PM fix was higher than the previous day's fix and there were 285 trading days in which the price fix was lower than the previous days fix. In other words, even during the greates modern-day bull market for gold has ever experienced, nearly 44% of the time, it was trading lower from the previous day's fix price!!! That traders witnessed a lowering of the price of an ounce of gold from the previous day's trading!!!

Additionally, there were five months during that 31-month run-up in which the average price of gold was actually lower than the previous month's average. No doubt people were wondering at that time, "is the bull market over?'. Even as late as August 23, 1979 the price of gold was only $310.05 - almost exactly where it is today! But only 20 weeks later, the price of gold had skyrocketed to its peak of about $875 per ounce -- a 180% increase in fewer than 5 months!!! Think how tempting it would have been to sell out when gold hit, say $400..." "...,only to watch with regret and frustration as it continued exploding upward past $500, past $600, past $700, and, fianlly, past $800 per ounce!!! The lesson is this, it is in the latter stages of bull markets where most of the money is made..."

Getting to too many words, continue next post.........
"

 

[explod]

The next para, reinforces the last with another example but concludes "...that at the peak gold in the last 3 weeks shot up 70% to $875!!!

He goes on "The point is, though that even in the bst of bull markets, nearly half the trading days will be "down" days."

Again I pass two paras......to:-

"That's right: in the most power packed bull run ever witnessed in the gold market, gold managed new highs only 20 days out of each 100!"

[end quote]

Now to put that into some context today I like to look back at the chart for that time period and it will be seen that compared to today our uptrend is nowhere near as steep yet as it got prior to the peak. This time we are gradually going up and consolidating as we do.

I will let you consider by this comparison as to where to from here. I know I will be hanging on for some time yet.

Chart coutesy of the "Privateer Newsletter"

 

[Uncle Festivus]

Marc Faber - Gold rules

In my opinion, the world's new currency with the qualities of being a 'unit of account' and 'store of value' will be gold and to a lesser extent other precious metals.

http://www.ameinfo.com/137536.html

 

[explod]

Further to my last post, our situation today is very similar to that shown in the lead up to the chart posted above by the one previous and shown here. In fact August 78 looks very similar to where we are at now. If that were to be the case then we are only about 30% up the hill and we may see a 250 to 300% rise over the next year or so.

Interesting. that seems to match what many are saying, that the inflation adjusted figure from 1980 to today should be US$2,500 gold. So if these currency weaknesses see gold go to true value who knows.

We will see what pans out.

Chart, courtresy "The Privateer Newsletter"

 

[Whiskers]

The carry-trade is still hurting and hedge funds need to sell gold and silver, apparently!

NEW YORK (MarketWatch) -- Gold futures fell sharply early Friday, after surging to a record closing high in the previous session, as traders rushed to lock in gains.

Gold for December delivery fell $6.30 at $831.20 an ounce on the New York Mercantile Exchange. Gold finished at a record closing high of $837.50 on Thursday, topping Wednesday's record by $4.

"With the breakdown of DJIA [Dow Jones Industrial Average] and in particular the collapse of the Nasdaq [on Thursday], hedge funds involved in carry-trade loans are hurting," said Ned Schmidt, editor of the Value View Gold Report.

"On Friday, before a three-day weekend, the funds will be forced to rebalance their risk levels," said Schmidt in emailed comments. "With equity already being sold, they will turn to selling gold and silver."

There could be a $20 to $40 drop in gold prices on Friday "as funds attempt to lighten their risk, read as gold," he said. "Buyers should sit on their money and watch."
http://www.marketwatch.com/news/sto...E11-976D-47C9-A160-71219BF5E4E5}&siteid=yhoof

 

[explod]

The carry-trade is still hurting and hedge funds need to sell gold and silver, apparently!

Just the spin of the plunge protection team. In fact I would doubt the carry trade would have any bullion left after there first sell off and they would have been too pre occupied to buy back in. Of course in early trade there was an attempted sell down followed by the announcement. The supression tactics no longer seem to work.

The other interesting aspect is that Wall Street is now down 2 nights in a row and still gold holds firm. Yep, gold has decoupled and is showing very bullish signs. I had thought there would have been a correction this week myself, and you all know by now how biased I am.

 

[Kauri]

Amazing...or ironic?? the PPT (consisting I assume of Wall St's big firm names), who are supposedly charged with carrying out this nefarious act of interferring with the natural flow of the markets, are also the ones whose heads are rolling for causing the plunge in the first place.... God must exist and he has a wicked sense of humour..
Cheers
........Kauri