Gold Price - Where is it heading?

[explod]

Nick Radge - The Chartist - sees the POG down to seven hundred easy, even an eventual six hundred not outside the realm of possibility & he backs it up with EW theory. looks like I am not alone in my bearish outlook any more. but if you want to fight a rearguard battle, be my guest. only that this is not a correction any more, it's a rout.

the 20% increase by the way, is not impressive compared to just about any other commodities. yes I know, gold is the alternative currency to the fiat-currency. that'll be the day!

Not fighting any action, gold will go where gold goes. Nick (for whom many ramp on these forums) has no more idea than anyone else. You have still not addressed my question., ?

 

[amory]

Not fighting any action, gold will go where gold goes. Nick (for whom many ramp on these forums) has no more idea than anyone else. You have still not addressed my question., ?

what's the question, Explod?

the only reason I'm quoting Nick (or Twiggs or any other chartist) is because these guys back their predictions up with charts & T/A. more often than not, they will give an alternative direction & targets in case the first one fails. there I agree with you, altho I would not go so far as to say that they have no idea.

myself, develop a gut feeling towards certain stocks & commodities which does not let me down. as a writer, I tend to identify, to personalize if you like. I see them not just as charts & inanimate numbers, for me they take on human characteristics. when I declare my contempt for LGL, is one such example. I am not being facetious, I feel it!

other than that, I am not emotional & never allow myself to get involved in violent debate. now, if you would be kind enough to rephrase the question, I shall try to deal with it in a rational manner.

 

[Trembling Hand]

For the second time today, I would point out that gold is up 20% since this time last year and this is how it has behaved since 2001 and there is no reason to believe it will change that behaviour. In fact it has had a larger correction than this around 2006.

Yes but this is the thing that always stumps me. How in the hell do the GOLD BUGs make money on their love affair?? Most don't know how to trade Futures and certainly not long dated Fut options.

When you buy physical gold its looks to have a spread/Commission/storage/delivery around 5% to 10% and when you are actually holding it you are not likely to cash it in until it goes to the moon and conversely your not likely to take a 20% stop loss on it just like an antique or house. You just hold!!

So what does that leave?? Gold producers/explores. And they have been rubbish for the last 2 years!! Some disasters like your SBM. As far as I can see no one here has made money on gold for some time yet the love has not diminished. A shrink would have a field day in this thread!! :

 

[Aussiest]

there I agree with you, altho I would not go so far as to say that they have no idea.

Amory,

I don't know whether it's my imagination, but you've done nothing but be rude to people since you have gotten here.

There is a way to say things, so that it doesn't come across in the disrespectful manner that you seem to be exhibiting.

 

[Uncle Festivus]

Yes but this is the thing that always stumps me. How in the hell do the GOLD BUGs make money on their love affair?? Most don't know how to trade Futures and certainly not long dated Fut options.

Most? That would be an interesting set of data, where is it?

The conviction of the 'bugs' is only matched by the assumptions of the doubters I guess?

Looking at a chart of the Dow & Gold, you'd have to wonder how people made money from the Dow, most don't know how to?

 

[Trembling Hand]

Most? That would be an interesting set of data, where is it?

Purely an assumption as it seems the only people that play with the Futs or a linked CFD are traders (shortish term) not the fundamental gold to $3000 dollar players.

As always I'm probably wrong. But put your hand up if you trade a gold derivative over any period longer than front month?? I don't expect to hear from many.

The conviction of the 'bugs' is only matched by the assumptions of the doubters I guess?

I'm neither but I am intrigued with one sides love affair with their unfaithful partner.

 

[Uncle Festivus]

Purely an assumption as it seems the only people that play with the Futs or a linked CFD are traders (shortish term) not the fundamental gold to $3000 dollar players.

As always I'm probably wrong. But put your hand up if you trade a gold derivative over any period longer than front month?? I don't expect to hear from many.

I'm neither but I am intrigued with one sides love affair with their unfaithful partner.

You wouldn't let your bias get in the way of a trade on gold would you? You do trade gold?

We're not all gun toting survivalists hoping for the end of the world, just probably calculating that the world could be a very different place for a few years yet, and don't trust the clowns in charge of it generally to deliver us from salvation.

 

[explod]

Yes but this is the thing that always stumps me. How in the hell do the GOLD BUGs make money on their love affair?? :

Gold bugs such as myself are not traders. This point has been made several times in the last week or two.

I am an investor. If I purchased land in 2002 for $400,000 and today that land is worth $800,000 I would be very pleased with myself. Instead of land some of my money is in the physical metal and that is what it has done. Eight years ago I brought units in a commercial property at $1. each, today they are worth $3.50 and have been paying 10% interest along the way.

So before any of you get frustrated with some of us gold bugs consider the clear distinction between trader and investor. Both types are entitled to an equal place on these forums.

I also believe that in the next year or so there is going to be a huge adjustment in currency values and part of that will see a short but very high jump in the gold price. Just my take on how I read the future of markets.

 

[Trembling Hand]

You wouldn't let your bias get in the way of a trade on gold would you? You do trade gold?

No because when I trade I have stops that never get moved down. Unlike some of the gold bugs. and Yes I do trade gold. Both stocks from 03 till last year and Futs all the time.

We're not all gun toting survivalists hoping for the end of the world, just probably calculating that the world could be a very different place for a few years yet, and don't trust the clowns in charge of it generally to deliver us from salvation.

Yes Uncle I understand that. I just don't understand how you translate that into profit in the medium to yet to be played out longer term. Thats all You may be all singing the told you so song come this time next year or the year after (and I actually hope so) I just would like to see how the love is returned.

 

[cuttlefish]

So what does that leave?? Gold producers/explores. And they have been rubbish for the last 2 years!!

Not sure that I'd agree they've been rubbish for the last two years. Quite a lot of money was made on explorers and near producers from earrly/mid-07 up until around Feb-08. Since then its been rather painful though ...

I am pretty dissappointed at the extent of the selldown of gold stocks in light of the fact that the AUD gold price has continued to remain very strong compared to 12 months ago and the gold price has performed relatively well compared to some of the base metals for example (Zn, Ni etc.).

I think that for the selective there is some real value starting to emerge here and there, and that some of these stocks must be close to the end of the capitulation phase - though a fall in gold price to low $700's if it occurs could be the trigger for a final rout.

There are a few stocks trading at close to cash backing and well under net asset backing that have good projects and prospects. There are some that are in pretty good positive cashflow situations on theoretically very low forward PE's (2 or 3). There are also some that have been consistently progressing their projects and discoveries and adding value to their businesses while their market caps have fallen considerably and are well below the project NPV's. (I don't count SBM amongst them just yet though as I'm a bit wary of their operating costs and cashflow situation and the gwalia startup though if the gold price ran up over $1000 again they'd be good leverage to it).

 

[Trembling Hand]

Not sure that I'd agree they've been rubbish for the last two years. Quite a lot of money was made on explorers and near producers from earrly/mid-07 up until around Feb-08. Since then its been rather painful though ...

That was my point. That they have ran up but anyone that is in love with Gold reckons its going to go nuts and wouldn't of sold. They most likely have been in for the ride up and then all the way back.

I am pretty dissappointed at the extent of the selldown of gold stocks in light of the fact that the AUD gold price has continued to remain very strong compared to 12 months ago and the gold price has performed relatively well compared to some of the base metals for example (Zn, Ni etc.).

Yes I agree. But at least you express disappointment which is the norm in this game. Some here will only blame "manipulators" but never their "partners" for the gold/gold stocks under-performance. I am intrigued by their love for something that has actually not rewarded them as far as I can see. Am I missing something other than "I'm in for the long haul"? Where has the love come from?

 

[Kauri]

for those who follow the line that $US and Gold are linked... the $USIndex looks ominous... but is early days yet...
Cheers
...........Kauri

 

[cuttlefish]

Am I missing something other than "I'm in for the long haul"? Where has the love come from?

Why still optimistic - well so far I haven't seen much change in the fundamentals which is why I'm still optimistic I will see good returns out of the gold stocks I'm holding at the moment at some point. The gold price is still stronger than it was 12 months ago - particularly the AUD gold price. The US economy is still a basket case as far as I can tell and too many US dollars have been printed and will continue to be as far as I can tell. Gold supply is still diminishing across the world. Central bank sales seem to have slowed down. There is also the cultural element that is eminating from the middle eastern and asian countries, that have a traditional cultural link to gold, gaining more affluence, but these cultural trends can tend to spread beyond their origins and become a world wide trend.

The biggest reason is in the event of a USD/global currency related black swan sort of event I still see gold as having the potential to rise very sharply and significantly.

Thats at the macro level. At the individual stock level the stocks I've shifted my funds into now have strong cash positions, strong management and robust projects that can weather further gold price falls and they have been increasing the value of their projects through exploration and development success.

 

[Kauri]

Gold, Oil, softs, shares, Mountain Oysters, they all have one thing in common.. they are commodes that can be bought and sold... if they are trending up then buy, if they are trending down then sell, if the trade goes agin you then cut it and move on... to build a sentiment for any is dangerous... maybe try trading without looking to see what the instrument is... you'll possibly be surprised at how different the decisions you make will be without the unconcious sentimental bias attached... maybe.. I thunk..
Cheers
..........Kauri

 

[BentRod]

Stop moved to $822.

Gold showing strength after NFP, might get pinged on this one.

 

[noirua]

Gold showing strength after NFP, might get pinged on this one.

Gold usually always shows strength during Ramadan.

 

[explod]

I have been sceptical of some of the conspiracy theories, but on seeeing how the overnight gains, particularly silver were wiped out by the end of US trade my views are changing. I think a thread and submissions to our government on shorting is my next objective. The following from jsminsite:

Dear Friends:

As you can well imagine, I’ve been receiving many phone calls and emails during this recent downturn in the gold market. Because of my heavy workload, I can’t guarantee to respond to all your queries, however, I will attempt to address questions of general interest on the jsmineset website.

The entire minerals sector is presently under attack by organized short sellers who depend on demoralizing investors to achieve their profit goals. These are ruthless zealots who flaunt the law to achieve their devious objectives.

G to www.failstodeliver.com and enter the symbol of any US-traded company to see the activity of naked shorting based on figures from the Securities Exchange Commission.

As far as the gold market is concerned we are in the middle of “Operation Keep the Hill” in which every stop has been pulled out to paint a picture of improving business conditions and permanent, declining inflation because of supposedly lower long term energy and food prices.

The big six investment banks are forecasting a 3% improvement in consumer demand as sentiment improves due to the supposed drop in inflation. The improvement in share value of some financials - based on nothing but hype - is held up as proof that the credit problems are behind us regardless of Lehman being busted while Fannie and Freddie are hopeless hulks in dire need of camouflage.

The Federal Deposit Insurance Corporation (FDIC) is getting to a point where they need recapitalization, with 199 banks on the troubled list and probably a lot more to come.

The Securities Investor Protection Corporation (SIPC) is a joke capitalized at $1.5 billion yet they are still quoted as the guarantor of all security values at all brokerage firms.

Fundamental factors remain in a downward spiral while black boxes, spinners, the big six and all financial TV and radio stations blare out that “all is well.”

I have lived through these major manipulations before but this time it is happening in every market, with shareholders feeling the heat no matter what kind of equities they are in. In my opinion, when the dust finally settles the last people standing will be those in gold equities

In today’s news the following items are particularly newsworthy:

U.S. Must Buy Assets to Prevent `Tsunami,' Gross Says (Update3)

By Jody Shenn

Sept. 4 (Bloomberg) -- The U.S. government needs to start using more of its money to support markets to stem a burgeoning ``financial tsunami,'' according to Bill Gross, manager of the world's biggest bond fund.

Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities, Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in commentary posted on the firm's Web site today.

``Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami,'' Mr. Gross said. ``If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.''

More...

Lehman May Shift $32 Billion of Mortgage Assets to `Bad Bank'

By Yalman Onaran

Sept. 4 (Bloomberg) -- Lehman Brothers Holdings Inc. may shift about $32 billion of commercial mortgages and real estate to a new company that will be spun off in a move similar to the good-bank-bad-bank model used in the 1980s banking crisis, two people briefed on the discussions said.

The bad bank, nicknamed Spinco for now, would have about $8 billion of equity coming from Lehman, the people said, speaking on condition of anonymity because the plan is one of several under consideration. Spinco would borrow the remaining $24 billion from Lehman or outside investors. The New York-based bank would replace capital put into Spinco, whose shares would be owned by current Lehman shareholders.

More...

Respectfully,


Jim Sinclair

 

[explod]

Have also been pondering the demise of some very good aussie gold stocks with proven reserves about to produce being sold down heavily. The Aussie gold price is up and has changed little since March. Closed at $984.60

Big players are pushing the prices down. Good gold pits are in short supply and gold itself sees production down. You can be sure the big players behind this will be the large gold Companies ready to raid.

In any bull market the bull bucks violently at times to dislodge the weak. There has been a bit of a sell off due to currency perception/manipulation and general jawboning and reactions is to what is happening the other side of the planet.

Stay strong, bullion and its equities will be rewarded because they carry no debt and have tangible value.

 

[Trembling Hand]

I have been sceptical of some of the conspiracy theories, but on seeeing how the overnight gains, particularly silver were wiped out by the end of US trade my views are changing.

LOL.

Huge volume on the way up then absolutely no interest after that. Just fell back on no volume. Hardly an attack by short sellers.

Quite simply no buying interest.

 

[Trembling Hand]

I think a thread and submissions to our government on shorting is my next objective.

Maybe while you are at it you can get them to legislate to have only sunny days.