Gold Price - Where is it heading?

[explod]

I'm no expert on the US banking system, but I'm sure the larger, better-managed banks have large deposit bases to fall back on.

?

That is the problem in the US they dont'. The banks used to have gold holdings to back the currencies but US President Nixon in his wisdom removed that requirement. The US across the board is broke and with GDP less than interest repayments it is only a matter of when not if.

And Uncle is correct, a number of us have been clearly spelling out this unravelling for at least 12 months. It has been well spelt out by reputable qualified economists since 2002. A bit of research and reading stands one in good stead. I have read four books exactly on this subject that I obtained in 2006.

None of it to do with gloom and doom either, Just about being prepared

And dont' take our word for it, go back on this thread 18 months and have a good read forward to the end of 07. You will learn all that is needed to protect yourselves in an hour or so.

 

[refined silver]

Bear in mind that IndyMac specialises in low-doc mortgages, rendering it very exposed to the subprime fallout.

They specialise in Alt-A loans which are the next level up from sub-prime.

The important detail not picked up by newswires was that IndyMac supposedly have $38b in assets and $18b in (liabilities) deposits of less than $100k which FDIC will cover. The FDIC expect to have to cough up $4-8b. That means they expect the $38b in assets to fetch $10-14b or 30% of book value!

Wait til more banks have to start dropping certain assets on the balance sheet by 70% or more, and then bring back onto the balance sheets many other toxic assets currently held in SIVs.

Earlier this year an Indian guy (I forget his name) who is a/the world leader in teaching/creating/advising on OTC derivatives, and has written most of the textbooks on the subject etc, when asked what innings we were in of this credit bust, replied he thinks we are about half way through the national anthem.

 

[professor_frink]

Not sure how all that precludes me from being long or partaking in a bull market though - you have assumed too much. Who's to say the whole thing hasn't been one big reactionary bear market rally from the tech wreck based on exuberant money supply, which then leads us back to gold.

Now where did I say you wouldn't have been long at all? I don't recall assuming anything about how you invest or trade.

The person that didn't pay attention to the bearish case is still doing fine if they bought the index back when the bears first started talking about what is happening now.

Doing fine??? The 'mob' will show a negative return on their superannuation funds for the last year. The other 'mob' have been buying all the way down?? because 'the market always comes back/rises', just like Shane Oliver is currently advertising.

Yep doing fine. Like explod mentioned above, this story has been going since the start of the last bull run, which was what I said- "if they bought the index back when the bears first started talking about what is happening now". I made no mention of the fact that people long equities would be up for the past financial year. The people who ignored the bearish talk back in late 2002/early 2003 are still doing fine having stayed long equities.

The rot started in earnest in Feb 07. At least I gave you 12 months warning . And I give you another for free - Australian recession in 2009 I've got a plan at least, so far so good.....then a property bull?

12 months? early 2006 was a little more than 12 months before the markets actually turned! But if you want to claim it as great foresight to have warned people about the impending bear market nearly 2 years before our market actually topped, then go for it!

 

[explod]

But if you want to claim it as great foresight to have warned people about the impending bear market nearly 2 years before our market actually topped, then go for it!

Maybe a tad harsh Prof. I think what is meant is that for those wanting to know such things, the answers and predictions espoused were easily found from many sources and some of them at various times over the last year or two on this site, Uncle in particular has provided wise counsel.

No one I believe is wanting to point score, there is just the natural desire to try and inform each other by earnest discussion.

And I admired your contributions as well, for whatever I say is worth.

What I like about ASF is the combined mentorship and it is not slanted towards private pecuniary interest, and its free. (unless your tin man on r/e)

 

[MRC & Co]

When gold decouples, what price and timeframe to you put on it as a general guidelines to your investments/trading?

2000 within a year or two?

I think if the time comes that it does decouple (and I agree, it could), we will see a surge well and truly above all time highs. But for now, that is clearly not the case. It is still well within it's historical POO ratio, and FAR below it's all time highs adjusted for inflation, a time where it did not become a replacement for fiat currencies...........

 

[explod]

When gold decouples, what price and timeframe to you put on it as a general guidelines to your investments/trading?

For my own investing I have no time frame in mind and I have no way of knowing when the big spike will occur. I am happy that each year since 2002 gold has gone up consistently well and the up trend is well intact and strong.

I do hope (and believe I will know) that my research will tell me when the top is blowing off and that it is time to sell. It is my plan also, as someone else said earlier today, that I will then transfer into quality real estate, possibly some BHP and something like Woolworths perhaps. But one step at a time, we follow the market, it is the one that knows the real answers.

 

[Uncle Festivus]

But if you want to claim it as great foresight to have warned people about the impending bear market nearly 2 years before our market actually topped, then go for it!

I don't claim anything or want to brag about anything. I have put my views to the forum members for discussion and hopefully to help others. Not sure this sort of semantical noise actually benefits anyone?

 

[professor_frink]

Maybe a tad harsh Prof. I think what is meant is that for those wanting to know such things, the answers and predictions espoused were easily found from many sources and some of them at various times over the last year or two on this site, Uncle in particular has provided wise counsel.

No one I believe is wanting to point score, there is just the natural desire to try and inform each other by earnest discussion.

And I admired your contributions as well, for whatever I say is worth.

What I like about ASF is the combined mentorship and it is not slanted towards private pecuniary interest, and its free. (unless your tin man on r/e)

I don't claim anything or want to brag about anything. I have put my views to the forum members for discussion and hopefully to help others. Not sure this sort of semantical noise actually benefits anyone?

your right gents, I'll go back to the cave I was hiding in earlier this morning

 

[Temjin]

Oil is a commodity, gold is not. However the fears of war, rising oil and food have thier effect. They cost more, takes more dollars and the dollars are losing buying power as a result. Gold is the ultimate hedge.

All the looking under mats for golds steady and strong rise since 2002 is futile. The savvy are onto it as a hedge. Among my friinds we call it our insurance.

Don't get me wrong, I'm ultra bullish on gold until the US economy collapses or the enter a great depression era. However, one cannot deny the correlation still exist between oil and gold. They might be different from a consumer point of view, but the market probably doesn't view it that way. Though this is my opinion only.

As expected, POG is heading down on another short term correction. I'm so ready for this. hehe

 

[Sean K]

It is not too late to buy GOLD now. Instead of the usual seasonal weekness of summer, gold will have its parabolic run in July/August and continue thru to December. People are scared stiff of the banking run. In Gold we trust in this period of financial turmoil.

Still calling a parabolic run in July/August josjes?

GLD looks to have broken.

Wonder if this momentum can continue.

GLD correcting with the POO related gold correction. That support around 93 ish may correspond with 950 POG I think. Quite a bit of support there, expecting it to hold, pending any left field events. Interesting rise in volume during the last run.

 

[explod]

Don't get me wrong, I'm ultra bullish on gold until the US economy collapses or the enter a great depression era. However, one cannot deny the correlation still exist between oil and gold. They might be different from a consumer point of view, but the market probably doesn't view it that way. Though this is my opinion only.

As expected, POG is heading down on another short term correction. I'm so ready for this. hehe

Agreed. However it is what the spinners want the sheeple to believe. Central bankers in getting rid of the gold standard that used to support money now live in fear of currency capitulation. No need to look further than the headline on Kitko this morning "GOLD FUTURES FALL - TRACKING TUMBLE IN OIL"

Gold in fact is only about $US3.50 lower than this time yesterday but on a quick read of the headline the word "'TUMBLE" continues to lay the doubt.

The huge sell off of gold stocks on a value basis has been very much overdone. In the new high gold made back in March many new investors came on board. They are the first to be nervous and very effected by the headline spin from the financial industry and the media.

Since 2002, gold has been a fabulous investment but you will not hear James from Comsec of Oliver from AMP mentioning that.

 

[Trembling Hand]

The huge sell off of gold stocks on a value basis has been very much overdone. In the new high gold made back in March many new investors came on board. They are the first to be nervous and very effected by the headline spin from the financial industry and the media.

Since 2002, gold has been a fabulous investment but you will not hear James from Comsec of Oliver from AMP mentioning that.

LOL. Has it?? You guys have so much emotion energy tied up in this play for your mental health I hope it works out.

 

[Uncle Festivus]

LOL. Has it?? You guys have so much emotion energy tied up in this play for your mental health I hope it works out.

(nervous giggle....) actually I find it has done wonders for the mental health stamina in that it conditions you to take the semi annual plunges in your stride. The first few were the hardest .

A chart for the correlationist's to explain?

 

[GreatPig]

That support around 93 ish may correspond with 950 POG I think.

Another technical view of that chart. Maybe looking for a handle now?

GP

 

[Sean K]

Another technical view of that chart. Maybe looking for a handle now?

GP

Love cups with a handle GP!

 

[josjes]

Still calling a parabolic run in July/August josjes?



GLD correcting with the POO related gold correction. That support around 93 ish may correspond with 950 POG I think. Quite a bit of support there, expecting it to hold, pending any left field events. Interesting rise in volume during the last run.

yes, Kenna, parabolic move indeed. And just to back my words with action I went to Perth Mint this morning to load more physical gold at US$956/A$995 with end of year target US$1200.

Throw some more eggs to my face, I need it for my beauty mask treatment Kenna

I reiterate my position again, I am a long term holder, not a short term trader, so if I trip over my prediction by 10 bucks don't shoot in my foot Kenna

In fact let's see some action tonight and over the next week, see if $950 hold as the strong support as I predicted.

 

[Sean K]

yes, Kenna, parabolic move indeed. And just to back my words with action I went to Perth Mint this morning to load more physical gold at US$956/A$995 with end of year target US$1200.

Throw some more eggs to my face, I need it for my beauty mask treatment Kenna

I reiterate my position again, I am a long term holder, not a short term trader, so if I trip over my prediction by 10 bucks don't shoot in my foot Kenna

In fact let's see some action tonight and over the next week, see if $950 hold as the strong support as I predicted.

Well, keep making silling predictions so I can throw more eggs.

I'm sure you went to the Mint. You've backed your words with more words. Nice one.

 

[cuttlefish]

The Fannie/Freddie situation as well as various massive writedowns by banks are continuing to be met with denial and/or apathy by the US markets.

Were I a US resident with my $$$ tied up in USD based investments I would certainly have moved a significant portion of it into foreign currencies, oil and gold by now but this is not happening en masse as yet by the looks of it.

Part of the reason its able to be met with apathy is the feds continued bailing out of each situation as it comes to hand. The buck doesn't have to stop anywhere - they can keep printing them so its ok - where does the unravelling end - how long is the piece of string - who knows - but we're not at the end of it.

So the FDIC has plenty of money to cover depositors (the piddly < $100k ones anyway) in the event of bank failures. How long will this mantra last?

Its ok - the fed can keep printing it - but it becomes more worthless every time they do. The lightbulb will flash at some point in the minds of the consumers. When they realise their imported oil price is rising not due to increased demand and not because the chinese are buying it all and not due to hedge fund manipulation but because nobody wants to exchange their good oil for US confetti.

And at some stage the realisation will dawn ... there are a lot of US dollars out there and there's plenty more where they came from ... but there isn't much gold. And one has lasted as a store of value for thousands of years and it is the one that is in short supply.

Every step along the path takes us further into mainstream territory. We've gone from wall street bankers (Bear Sterns) to Freddie and Fannie the stable mate of mainstream mortgage lending. How much money does the FDIC have? How much will it need?

But thats not even the start of it ... not even close ... after more news coming through last night I've got an inkling of where the next icebergs will come from and I don't think its going to be pretty at all.

And the Fed will continue to hit the print button ... they have to now ... its already getting big enough that they have little choice in the matter.

 

[explod]

Part of the reason its able to be met with apathy is the feds continued bailing out of each situation as it comes to hand. The buck doesn't have to stop anywhere - they can keep printing them so its ok - where does the unravelling end - how long is the piece of string - who knows - but we're not at the end of it.


Its ok - the fed can keep printing it - but it becomes more worthless every time they do. The lightbulb will flash at some point in the minds of the consumers. When they realise their imported oil price is rising not due to increased demand and not because the chinese are buying it all and not due to hedge fund manipulation but because nobody wants to exchange their good oil for US confetti.

And at some stage the realisation will dawn ...

As history has shown this could be a fair way off yet.

And the printing presses, yep, as in Germany 1924 it took a wheelbarrow full of notes to buy a meat pie at the end of it all.

In spite of the recent Fed jawboning gold has remained firm after the climb of the last few weeks, in spite of the drop in oil. But notice the US dollar is weakening again and very close again to the all time low reached in March.

Consolidation here with the slight rise on todays market is a very healthy outlook.. IMHO

Good to be on the train.

 

[soso]

Just a shorter term EW perspective, 4H and 1H timeframes. To me it looks like we had a 5 wave impulse (visible on 4H chart) and now we are in the corrective phase most probabily an a-b-c where a and b are complete (visible on H1 where a=c) and c should unfold now. The closest target somewhere around 923.