Gold Price - Where is it heading?

:bite:

rederob said:

Well, well well....
I thought it was an oil rig, propping up gold!

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:bonk:

numbercruncher said:

Reason I dont like GOLD is that The gold is physically held at the London Vaults of HSBC Bank USA.

Part of the reason I love gold is that I have reservations about the stability of the entire US financial system, so having gold stored there would make me nervous!

My preference is for Physical Gold and Gold stocks.

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What specifically would you recommend on how to gain gold exposure? I own some gold stocks, but I think there will be a period when gold stocks will not rise as much as the price of gold - eventually, when things get bleaker. I don't trade contracts.....I don't know how.

grace said:

What specifically would you recommend on how to gain gold exposure? I own some gold stocks, but I think there will be a period when gold stocks will not rise as much as the price of gold - eventually, when things get bleaker. I don't trade contracts.....I don't know how.

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Grace.

If you wanted exposure in non stock related investments you should have a look at your choices here

http://www.perthmint.com.au/investment.aspx

You can have Physical stored, pick it up yourself or contracts.

I trade futures thus gain an exposure that way.

I agree that gold stocks won't perform as well as Physical in the near term.

Cheers

We go down to the ladies at Adelaide exchange jewellers , most cities would something similiar . Simple over the counter purchases , arrangements can be made etc..

ithatheekret said:

We go down to the ladies at Adelaide exchange jewellers , most cities would something similiar . Simple over the counter purchases , arrangements can be made etc..

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Now you tell me. Allways prefer the ladies. Mine from Johnson Matthey's on Collins, Melb. Been a long wait (with doubts at times) but pleased to have the physical now.

One other thing I like is that if there were to be a sudden spike it (physical)can be turned in to cash within an hour. Shares take four days for settlement. Still think the shares will do better once this thingo gains momentum.

Another milestone achieved:

rederob said:

Another milestone achieved:

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Yes Rederob its going and I cannot help showing that it continues uppitty uppity who knows now that it has broken this resistance.

I think the big stand would be prior to US$1000 IMHO

I knew something was up , the Swissie was looking for oil , POG hit the big 9 , might explain why Cables drinking rocket fuel , had a 196.24 alert on , set the dogs off the amount of times in beeped .

Fingers crossed for the FTSE ........ it's left the blindfold behind .

Love the way it just smashed though the 900 barrier...my portfolio at
all time highs and most Goldie's have hardly moved..still heaps of potential
upside for the Sp of most gold producers.

Im amazed at the amount of great gold speccys/near producers with falling SP's

Thats every short ever written another $50 under water since the last time posted on the subject, plus quite a few ones.

Also, have a look at all the newsletter writers posting immanent corrections that have been posted here during the last $100 of gold's ascent. If followed, every one of those writers would have kept you out these gains.

So_Cynical said:

Love the way it just smashed though the 900 barrier...my portfolio at
all time highs and most Goldie's have hardly moved..still heaps of potential
upside for the Sp of most gold producers.

Im amazed at the amount of great gold speccys/near producers with falling SP's

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Here's an article on the disconnect between seniors and juniors in PM mining shares. You're right, soon the juniors will play catch-up, the rubber band is pretty stretched.

"When will the Juniors Finally Begin to Rally?" by Boris Sobolev
http://news.goldseek.com/GoldSeek/1200318000.php

$905 bid $906

POG steaming hot alright!

MACD has just made new high. So I guess that makes it an official bull run heh!

Stockastic over 90.5, recent high too. Gotta break back soon... but how much?

explod said:

Nope, just part of the consolidation of the classis bull run for gold. Even in the holiday low trade the PPP are unable to hold it back, just watch from mid January.

Cash is burning and has lost the fight. Ask a US banker.

From my t/a, the uptick out of the pennant has not happened yet but looks like the upside will happen anytime soon.

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Just thought it worth revisiting our outlook from last month against where we are today.

This is not about being right. I just want everyone to know that this bull run in gold is just a reflection of the terrible financial mess that the world is in. The strongest and greatest empire to exist on the planet is going under. There will be some dreadful suffering.

Back to the point, the gold rise will not follow the normal charting patterns because what is happening now is different.

explod said:

Just thought it worth revisiting our outlook from last month against where we are today.

This is not about being right. I just want everyone to know that this bull run in gold is just a reflection of the terrible financial mess that the world is in. The strongest and greatest empire to exist on the planet is going under. There will be some dreadful suffering.

Back to the point, the gold rise will not follow the normal charting patterns because what is happening now is different.

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But it is very satisfying when you are and it makes you $ at the same time.

That's a real win/win

Nice call

explod said:

Just thought it worth revisiting our outlook from last month against where we are today.

This is not about being right. I just want everyone to know that this bull run in gold is just a reflection of the terrible financial mess that the world is in. The strongest and greatest empire to exist on the planet is going under. There will be some dreadful suffering.

Back to the point, the gold rise will not follow the normal charting patterns because what is happening now is different.

Click to expand...

Exactly. I've been saying the same thing.

There will be many people left on the platform who got off the train for while expecting it to stop for while, and it took off without them.

Re the financial mess, here is some humour that surfaced on Wall St in August, but is just as applicable now as we see the paper financial system start to unravel....


Constant Obligation Leveraged Originated Structured Oscillating Money
Bridged Asset Guarantees

Investment Dealers are excited to announce the newest structured
finance product - Constant Obligation Leveraged Originated Structured
Oscillating Money Bridged Asset Guarantees, or COLOSTOMY BAGS. Designed to accommodate the most sophisticated investment strategies, Colostomy Bags contain the equity tranches of Structured High Interest Taxable Derivatives, or ****, and are leveraged an infinite amount of times through the innovative use of derivatives.

"Its an actively managed, unlimited liability, open ended investment
with no maturity date, which pays LIBOR plus 5,000 and has no correlation to
traditional investments" said a spokesman for the Investment Dealer who
engineered the product. "It's based on a CDO structure, but it's
designed to default BEFORE the first coupon payment, which you'll agree has no correlation with stodgy traditional investments and is a perfect fit for
portable alpha scams, er, strategies." Following the default, each month
more leverage is added to the structure to pay for the coupon and the
Dealer's fees which are set at 80%. "We feel the fees are reasonable,
given the adrenaline rush you'll get each month attempting to mark these."

The Colostomy Bags carry a AAAA rating, based on the rating agencies
opinion that they are even safer than Treasuries. "You can't use
traditional credit analysis to value these babies, no sir-ree" said a spokesman for a rating agency. "Just like Icelandic Banks, we give them the highest
rating because you just know that the Fed will bail out all the hedgies who buy these things..remember like Long Term Capital? And the best part is, the
beauty of this structure is that the loss given default is NEGATIVE, so
by extension we feel that the CDS will trade through Treasuries."

Inhaling deeply on a fatty, he continued "We've been tinkering with
our model, which served us well for Enron and the Telecoms in '02, and our
stress testing shows that the probability of loss in the senior tranche
is close to zero." The model, constructed of a wishing well, Joseph Jett's
trading blotter, and drawings of Unicorns then collapsed in a heap.
"Well, back to the drawing board!" he cackled.

A real money investor, huddled on the windowsill outside his office,
said he remained optimistic about holding the Colostomy Bags but was a bit
concerned with the 95% decline in value on the first day they traded.
"We've taken a bit of a haircut on these but I'm waiting to see the first
servicer report, which should arrive in a few months. At first I was annoyed that the dealer who sold them to me refused to make a market in them, but that makes my job easier since I'm not tempted to sell."

We located a hedge fund manager at a due diligence meeting in the VIP
room at Score's. He said he was skeptical of the structure at first but was
dared into buying it by a fixed income salesman. "He said to me, 'what's wrong
with you, its quadruple A rated, just buy it, what are you a pussy?' He
also said it was going into 'an index', although he didn't say which one, but
I felt that I had to buy it. And that was good enough for me, bro'."

I have no idea who is the author, but its certainly making the rounds!

http://bigpicture.typepad.com/comments/2007/08/constant-obliga.html

refined silver said:

Gold up another $9, COT open interest near record levels.

The Commercial shorts also at near record levels and every single one is under water and bleeding badly and gettign worse. So much for the suposed "smart" and ïnfallible" Commercials.

When they have to cover then you'll see some fireworks.

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Flippin heck! Might be some covering starting. COTs were at record levels on Friday. (Even if the short covering does happen now its a long way from the end game, just another in the long series of battles)

time to start melting down the jewellery?

We all know that gold is perceived to be a hedge against inflation and dropping USD value.

I actually disagree with this rationale. I would invest in commodities that were actually consumed such as oil, copper, zinc etc - not gold which seems to be hoarded - but this is not the point of my argument.

Up until the sub-prime crisis hit, the main protagonists for gold were uber-bears such as Wayne or committed gold bugs like Rederob.

But perhaps sub-prime really did awake the fear of the masses. Look at the performance since Aug 07. Undoubtedly the valuation paradigm of gold has changed.

I think we will see 1500 USD gold in 6 months (assuming Credit Suisse is wrong of course).

markrmau said:

We all know that gold is perceived to be a hedge against inflation and dropping USD value.

I actually disagree with this rationale. I would invest in commodities that were actually consumed such as oil, copper, zinc etc - not gold which seems to be hoarded - but this is not the point of my argument.

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Then Silver is almost a perfect candidate for you. A commondity and also perceived as a hedge against inflation because of its "monetary" perception.



OHHHH, heheh , I was at this second hand store the other day and saw two tiny gold nuggets (one is in its natural form and other molded to a very small donut shape thingly). The larger one at 7.3 gram was valued at $280 but the smaller one at 2.4 gram (I think) was valued at only $90! I did a quick calculation and found out that I could make a profit of around $5-6 dollars if I brought the 2.4 gram one after premium. hahah

I guess prices of gold have risen too fast that street shops such as these have not priced their products in fast enough!