Australian (ASX) Stock Market Forum

Gold Price - Where is it heading?

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Uncle Festivus said:
Just when you think it couldn't get any worse - derivatives contagion! Although most informed people already knew this, just a matter of timing then?

Derivatives the new 'ticking bomb'
Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen

http://www.marketwatch.com/news/sto...796-4D0D-AC9E-D9124B59D436}&dist=MostReadHome

Could we have just 1% of world GDP exit into gold please?
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Yep, the $US index continues to weaken at an hour when it is usually ramped up.

1% pwhew Uncle, my old heart could not take it, we will see what pans out, 996.4 as we speak
 
explod said:
Yep, the $US index continues to weaken at an hour when it is usually ramped up.

1% pwhew Uncle, my old heart could not take it, we will see what pans out, 996.4 as we speak
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Looks like Wall St will take a beating tonight on more news of big write downs, just hope the gold equities hang in there. POG giving it a real go at 1k, 997.7 top so far!
 
Uncle Festivus said:
Looks like Wall St will take a beating tonight on more news of big write downs, just hope the gold equities hang in there. POG giving it a real go at 1k, 997.7 top so far!
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Dont' worry about the gold gold equities, be pleased we are on board. In 1980 many of them went up 100 times, from starting base, at the peak. History never repeats exactly the same but do you think the financial mess is worse than 1980. Sure do.
 
After all who would want to own worthless pieces of paper created out of thin Air when you can have real Money, the yellow stuffs still cheap compared to the USD, just imagine when everyone wants some :eek:
 
Yeh, this is looking too good to be true!!!

I laughed when 2000 was first spoken of, now I see it as a possibility and not an exteme outlier either.

Think, high inflation, Fed 200bil package (inflation), rate cut (good for gold equities and hopefully a short-term bounce before equities take another pummeling!), which injects more $$ leading to higher inflation........and this all in the next week? Can this be true?

Anyone starting to think this trend looks a hell of a lot like the recent gold chart?

This is about the surest bet I can think of for quiet some time.

Now it just has to catch fire and really set the POG alight!
 
For those concerned about their mid tier producers and smaller explorers I notice the Hui Index at an all time high. This had a considerable correction a few days ago and normally takes some consolidation to recover. The US market is finally recognising gold stocks as value. Like sheep our market will soon follow.
 

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explod said:
For those concerned about their mid tier producers and smaller explorers I notice the Hui Index at an all time high. This had a considerable correction a few days ago and normally takes some consolidation to recover. The US market is finally recognising gold stocks as value. Like sheep our market will soon follow.
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Yes, should be a good day all round, NEM up nearly 5% in the US. Bought some BDG & TAM yesterday, looking like breakout stories, let's see :D.

I normally post snippets of articles but this one was full of 'I told you so' stories. Gordon Brown and Goldman Sachs - thank you very much!:D.

Gold has broken through the psychological barrier of $1,000 an ounce for the first time, propelled by fears of inflation and a worldwide banking crisis.
Hedge funds punched the metal higher in a final frenzy of buying as the dollar buckled on global markets, falling to record lows against the euro and Swiss franc.

The latest flight to gold follows the US Federal Reserve's dramatic measures this week to rescue the US mortgage industry, a move seen as evidence that Washington will inflate the money supply to stave off a recession.
Peter Hambro, chairman of Peter Hambro Mining, said gold is regaining its historic role as the ultimate store of value as mainstream investors lose confidence in the entire range of paper currencies.

"When the Federal Reserve starts taking 'bus tickets' as collateral as they did this week, people are bound to see this as inflationary. But the problem is not just the dollar. We're living through a period of competitive devaluations across the world. Everybody is trying to stimulate their economy by driving down their own currencies," he said.

The euro has until now been the automatic default currency for funds seeking an alternative to the dollar, but Mr Hambro said the deep split emerging between the North and South of the euro-zone has raised concerns about the long-term viability of monetary union.

Gold closed at $995.40 on the London PM Fix after falling back. Adjusted for inflation, it is still far below the $850 peak reached in 1980 at the height of the second oil crisis and the Carter malaise. That spike would be near $2,500 in today's terms.

The metal's 30pc surge since late November has caught many bullion experts off guard.

Goldman Sachs has been "short" since $810 an ounce, leaving it nursing hefty losses on a bet still billed as one of its 'top ten' trades for the year.

Gold normally loses momentum after the India's Diwali festival in the late Autumn, and tends to fall hard in February and March. This year it has defied all normal patterns, responding instead to the Fed's emergency rates and the escalating turmoil in the credit system.

"People are worried that Ben Bernanke will flood the economy with cash and set off a massive inflation to avoid a banking crisis," said Ross Norman, director of the bullion.desk.com.

Mr Norman said a powerful new force had entered the gold market with the advent of commodity index funds (worth $200bn) and the exchange traded funds that allow ordinary people to invest easily in metals for the first time.
"This is not a bubble. It isn't hot fast money. It is slow, glacial money from pension funds and institutions pushing up prices because they want a hard asset. Gold may fall back for a few weeks as people get used to this new big figure but any sell-off will be met by strong hard buying. We think it will reach $1,250 this year," he said.

Gold has now quadrupled since Gordon Brown ordered the Bank of England to sell off half of Britain's gold reserves, deeming bullion to be a low-yielding 'relic'. The first fire-sale auction fetched $254 an ounce. The sales have now cost taxpayers over £4.5bn, even after adjusting for offsetting gains on bonds.
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Gold Hits Record $1,000 an Ounce

By MAE ANDERSON and LAUREN SHEPHERD – 2 hours ago

NEW YORK (AP) ”” Bargain-hunting at the local jewelry store just got harder.

Gold, which has soared to record levels in the past year, hit a new milestone Thursday, rising to $1,000 an ounce for the first time in futures trading ”” a boon for investors, but a deterrent to consumers shopping for jewelry.

Michelle Findlay, a manager at a toll operator company in New York, said she has stopped buying pure gold pieces. Her latest buy was a silver bracelet plated in 18-karat gold.

"I noticed lately the price has been going up," she said, while browsing at Gold Panel jewelry store on 34th Street in New York. "I'll wait, definitely, for the prices to go down" before buying another gold item, she said.

The price of gold has jumped nearly 20 percent since the start of the year after rising nearly 32 percent in 2007. The huge advance is mainly the result of a weaker dollar and record-high crude oil prices. The dollar fell below 100 yen Thursday for the first time in 12 years and hit another new low against the euro, while oil traded above $110 a barrel Thursday.

Lower interest rates ”” and the prospect of more cuts ”” bringing the dollar's value down makes dollar-based commodities like gold cheaper for foreign buyers. The weak currency has also made gold more attractive because the metal is a hedge against inflation.

"Interest rates are low and that doesn't help our dollar," said Scott Meyers, senior trading analyst with Pioneer Futures, a division of MF Global.

After topping $1,001 on the New York Mercantile Exchange, gold for April delivery fell back to settle at $993.80 an ounce on Thursday. Analysts say gold could still go higher, especially if the Federal Reserve cuts interest rates again next week as expected.

When gold becomes more expensive on futures markets, it doesn't immediately translate into higher prices for jewelry. But in the long term, the price tags on gold rings, bracelets and necklaces do go up. Exactly when the increases from this latest jump will show up on price tags depends at least in part on a retailer's size.

Big retailers like Tiffany & Co. and those that sell jewelry to large department stores order products up to a year in advance and keep more in stock. Those stores likely didn't pay as much for the jewelry when they ordered it, so they wouldn't need to raise prices as quickly to offset costs.

Instead, since some of those larger stores are already buying merchandise for the 2008 Christmas holiday season, consumers may see higher prices toward the end of the year.

Tiffany spokesman Mark L. Aaron said that while there is not a direct correlation between the rising price of gold and the cost of its gold jewelry ”” the labor that goes into a piece is an important factor ”” Tiffany does adjust prices based on the cost of precious metals. If gold keeps rising, a price increase this year would be a "fair assumption," he said.

Independent jewelry stores, meanwhile, order products closer to when they appear on the shelves. Patrick J. Murphy, owner of Murphy Jewelry in Pottsville, Pa., said he doesn't raise the price of gold jewelry he has in stock but he must when he reorders pieces.

For example, an 18-inch gold chain in stock has a retail price of $189.95, but if he reordered the chain at the same length, weight and style, it would be priced at $346.

"That's been our challenge," he said.

When the makers of branded jewelry and accessories raise their prices, he has to pass the increase on to customers. He cited a recent price increase by Rolex as one example.

Patti Warshauer, owner of Main Street Goldworks in Half Moon Bay, Calif., said consumers are buying less, but it's not the price of gold that's getting to them ”” it is all the other financial pressures they're contending with.

"Discretionary income is much more affected by the price of other things, gas and things like that," she said. "They're still buying gold if they need it, if it's what they like."

Browsing jewelry stores in New York's diamond district, Kathleen Pierri, from Smithtown, N.Y., said the rising price of gold might make her buy less, but "if you really like it, you'll buy it," she said.

"Jewelry is a feel-good item, you're going to buy it if you need it," Pierri said.

Helen Antalg, a jewelry appraiser from Australia, said she was on watch for a good deal during a vacation in New York. "I'm looking to see if there's anything that catches my eye and at a good price," she said.

"I'm tending to go to the pawnbrokers as opposed to the retail side of things" in order to get better deals, she said, but added that she hasn't changed her jewelry-buying habits due to rising prices.

With prices rising, selling those not-so-beloved Valentine's Day presents or family heirlooms might sound like a good way to make a few extra bucks. Dave Adelman, who owns two pawn shops in Atlanta, said he's seen an increase in the number of people coming in to sell their gold. But he said he can't be sure whether that can be pegged to gold prices rising or other economic factors.

"When they come in, we don't know whether they're doing it based on the gold price or because of need," he said.

Whether consumers are buying gold or selling it, Murphy, a jeweler for 30 years, said he's amazed the price has jumped so high. He remembers when gold was just $35 an ounce.

"I didn't think we would ever be talking about $1,000 an ounce," he said. "It's crazy."
 
Dollar Sinks, Gold Surges in Europe

3 hours ago

LONDON (AP) ”” The U.S. dollar sank against other major currencies in European trading Thursday, dipping below 100 yen for the first time in 12 years and the euro soared above $1.56, while Swiss franc slipped to a record low just above parity. Gold rose, touching $1000 per ounce in New York.

By late morning in Europe, the euro traded at $1.5580, up from $1.5526 late Wednesday in New York. The euro traded as high as $1.5625 earlier in the day. Later, in midday trading in New York, the euro fetched $1.5596.

The dollar fell as low as 99.75 Japanese yen before recovering slightly to 100.52 yen, down from 102.04 on Wednesday.

Other dollar rates in Europe, compared with late Wednesday, included 1.0111 Swiss francs, down from 1.0182. Earlier, the dollar fell to a record low of 1.0043 francs.

The dollar also slipped to 0.9828 Canadian dollars from 1.0096.

The British pound was quoted at $2.0304, up from $2.0243.

Later, in New York midday trading, the dollar bought 100.61 yen and 1.0109 Swiss francs, while the pound was worth $2.0318.

Gold traded in London at $993.60 per troy ounce, up from $979.50 late Wednesday. In Zurich, gold traded at $990.90 bid per troy ounce, up from $976.35.

Silver opened in London at $20.52, up from $20.00.
 
Morning all.

Well $1000 is nearly done and dusted. Should head to $1025 ish before another consolidation period.....then the next leg up!!!:dance:

The gold juniors should start to warm up soon.
When the block heads in charge of various funds work out where gold is going ALL gold stocks imo will go mental.

:guitar:

Just my opinion tho....I am surprised its not started already for the juniors.:bonk:
 
Gold has been the lead item on international CNN the past few hours.

Overtaking the stupid US election circus.

Does that mean it's a time to buy, or sell?

:cautious:
 
kennas said:
Gold has been the lead item on international CNN the past few hours.

Overtaking the stupid US election circus.

Does that mean it's a time to buy, or sell?

:cautious:
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Gold just need that sort of exposure from the media to start the manic phase.

Public sentiment is indeed increasing, but still no where near the stage where taxi drivers are advising you to buy gold.

must...buy....more...:D
 
Uncle Festivus said:
Yes, but when the time is right it will be a great pairs trade - long gold, short AUD :D.
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Absolutely!

And as I stated a while back, I dont see too much more room for IR hikes. Time lags, recent rises, slowing growth, cost-push inflation. Funny its just now that "economists" in the news are starting to question further rate rises.

RBA would have to be MENTAL to rise rates much more. As I also said, I will have a talk to a mate who works for the company which gives them advice on underlying trends and see his sentiments on where things are heading, in relation to IRs.

Interest Rate Parity (IRP) is the name of the game at the moment!
 
MRC & Co said:
But POG in AUD is what will restrict us in comparison.
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Not to me. :D Borrow USD with AUD, buy GOLD with USD. Keep AUD cash. Don't give a beep about the exchange rate.

Ok...except the open profits in USD, which are indeed deteriorating as US dollars continue to fall.
 
MRC & Co said:
Absolutely!

And as I stated a while back, I dont see too much more room for IR hikes.
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Agree. But the RBA and Fed only deal with the short end of the interest rate curve. The market sets it long term. With credit derivatives exploding everywhere, long term rates are heading up - in the US also. As the central banks cut rates at the short end to try to free up supposedly illiquid banks, the market is not buying long dated bonds, hence driving their price down and interest rate up.

Recent municipal bond auctions in the states went at 18-20%!!!!!!!!! It hasn't yet worked all the way thru to US treasuries yet, but its just starting.

In other words, CBs will stop raising short term interest rate, but the market will raising long term rates which is what affects most of us.

The flight from paper, will continue to push up gold.
 

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