Gold Price - Where is it heading?

[Trembling Hand]

And of course we have good old greed; Everyone can smell a bargain.

LOL its smelling like something else to me...........:flush:

 

[explod]

LOL its smelling like something else to me...........:flush:

Please do enlighten us further.

Do you have some gold down there t/h., can I throw a line or is it too deep?

 

[Trembling Hand]

Please do enlighten us further.

My point is that here we are standing on the edge of a complete and utter mess. I mean this is exactly what the Gold Bugs have been banging on about for years BUT...................


What is gold doing. Certainly not rewarding the gold bugs. its a dog.

 

[explod]

My point is that here we are standing on the edge of a complete and utter mess. I mean this is exactly what the Gold Bugs have been banging on about for years BUT...................


What is gold doing. Certainly not rewarding the gold bugs. its a dog.

My gold bullion went up $47 per ounce australian last night

I dont get the drift? Sure its due to currency fluctuations and all manner of other things, but better than having bank shares going down. And this is no gloat, just simple investing from my corner and take on it all.

 

[Trembling Hand]

Yeah, up 5% after down 30% good one . What's it gunna take to get to the $2000-$3000 target if it hasn't sparked interest with the current :fan . I mean really this is what the bugs have been waiting for is it not? They would have to be feeling a little disappointed that golds not tickling $1500 by now?

 

[cuttlefish]

AUD gold price has held up better than most equities this year so I can see where explod is coming from - I wish I'd gone for physical gold instead of holding onto a lot of my gold stocks.

The US has lost the plot completely now - I can't see the USD charade continuing for too much longer. The Merrill thing seems completely nuts but it all seems pretty crazy and the printing machine is overheating big time with sparks flying out of it. Short term gold price volatility for sure - possibly down further as it gets pushed around - but when the music stops for the USD there's not a lot of gold chairs.

 

[explod]

Yeah, up 5% after down 30% good one . What's it gunna take to get to the $2000-$3000 target if it hasn't sparked interest with the current :fan . I mean really this is what the bugs have been waiting for is it not? They would have to be feeling a little disappointed that golds not tickling $1500 by now?

Have you actually bothered to read this thread or to study the historic long term fundamentals of gold. I stick very much to this and one other thread, I rarely drop into others and spout off on something that I know little about. I have made very good money, and continue to on trading gold stocks and accumulating physical since 2004. I try to know as much as I can about one item, the one I think is the best in a particular time frame and stay with it. I have been known to trade in and out of oil stocks but I think at times that is fairly straight forward also.

If you go back and check movements of gold against of the US fed and its dollar and so many other facets you may be surprised at what could be in store. If the fed drop thier wholesale rate in the next days just whatch gold a few days later. I will back gold to reach 1200 by the end of the year in this new climate. Small changes in the gold price have exponential effects on the bottom line of gold producers like LGL and NCM. Do some research and check it out Pal. And you will be welcome to share in the good news amidst the bad.

 

[Trembling Hand]

Oh god!!

Gold bugs are always making money aren't they??

When will one say what Cuttlefish freely does. That the obvious truth, Golds/silver has been a dog for some time and as the **** hits the fan, as per the bugs prediction, golds gone backwards.

And yes dude I know a bit about the movements in the gold market. Just because I disagree with your emotional commitment or point out the painful to you that don't mean I don't know where gold has been and where its currently sitting. And that is at a disappointing level considering its was going to be the one "safe" trade in all this mess.

 

[cuttlefish]

Physical gold hasn't been a dog though. If an Australian based investor moved from equities to gold mid 07 they would be well ahead now. Even from Jan 08 a swap out of gold equities to physical gold would have had an investor well ahead of equities and not really down much compared to the market.

I expected gold stocks to come down with the market but also thought they would decouple to some extent and hold up better than the overall market given the strenght of the gold price - that hasn't proven to be the case and in hindsight I wish I'd moved more to cash and more to physical. (I did move some to cash and some into oil and coal for periods of time as well). Because wealth protection was a goal and systemic risk also present I wasn't keen on holding too much cash (and property wasn't a logical candidate either) so really it was gold equities or physical gold.

I'm still comfortable though that a lot of the gold equities are representing value and that the fundamentals for gold still point to good rises down the track.

 

[Uncle Festivus]

Oh god!!

Gold bugs are always making money aren't they??

When will one say what Cuttlefish freely does. That the obvious truth, Golds/silver has been a dog for some time and as the **** hits the fan, as per the bugs prediction, golds gone backwards.

And yes dude I know a bit about the movements in the gold market. Just because I disagree with your emotional commitment or point out the painful to you that don't mean I don't know where gold has been and where its currently sitting. And that is at a disappointing level considering its was going to be the one "safe" trade in all this mess.

As I have allude to in a previous post, a line has been drawn, so it's not what has transpired, but what is to come which will be the true test for gold advocates - there is no blood in the streets yet. If indeed the global financial system does resolve this mess through the interventionist measures then gold will be a relic, like the gold standard.

While the world decides, I remain in cash, gold and food production. The gold secular trend has not been broken? It has to decouple to be a currency in it's own right yet, not a commodity, and be free of intervention in it's counter trade currency ie the $USD.

When even cash is under threat, the alternatives (to gold) are dwindling by the day. What are the alternatives?

 

[refined silver]

My point is that here we are standing on the edge of a complete and utter mess. I mean this is exactly what the Gold Bugs have been banging on about for years BUT...................

What is gold doing. Certainly not rewarding the gold bugs. its a dog.

Hi TH,

If the bugs were right about the mess we're in now, and like you say, we're really just on the edge of it, we haven't seen it all yet by a long shot, if they've been right so far, when many others were optimists and were wrong, what makes you think they won't be right in the end?

When I just got on board very early 02, (gold was $270 when I entered) my thoughts on gold (and silver), were that it was the going to enter a similar cycle to the 70s (for some similar and some diff reasons) and possibly with a different ending also but thats a long story. Based on this ,what did I expect?

1. A multiyear bull at least 10 years, and most likely 15/16 in duration.

2. A lot of volatility, with gold capable of losing up to 50% (it dropped from $200 to $100 in the 70s after being up from $35.) and going sidewards or down for up to 2 years at a time (as in 74-76).

3. Take out the old high of $800, then $1500, then later another advance into mid to high 4 figures.

4. To ride a decadal cycle, from bottom to top, eg 70s commods/gold/oil, 80s Japan, stocks, 90s techs etc, can make someone very wealthy. Its not easy, very few people do it. I'd need to be prepared for gut wrenching drops without getting shaken out. It meant zero margin. I trade a portion but keep a large core position fully invested.

Yes gold and gold shares are way down now from highs, so are my holdings, but I am up multiple times from my entry point in 02, and see now as like just before the rise in 77-78.

Its not a 5min trading proposition. Its very different from your approach, but if it goes right, it'll be very rewarding, and though this correction is much steeper than I expected, its still consistent with what I expected in 02.

Don't know if this helps you understand some peoples position a bit better??

 

[barrett]

Looks like oil found at least short term support from the downtrend channel at 91.5...

QM daily

 

[Kauri]

Gold... or high country oysters.. who cares... if it trends... and sets up... trade it... after all... does a chart of gold look any different to a chart of high country oysters???

Cheers
............Kauri

 

[Whiskers]

Why do you think gold will hold around these levels.

The US dollar has been rising against weakeness elsewhere, particularly caused by the Euro. The Euro has a problem in that it is made up of many economies that are all very differrent. It is more of a controlled instrument than a currency with a value that can be properly measured.

The recent US dollar strength has not changed any of the underlying financial problems which are being more clearly realised. Late last week Wall Street were starting to talk about "flights to safety" (wow) they were referring to the US dollar but they recognise what's on. The only flight to safety in the shorter term will be gold, the fact that it is going up when Lehman is going down will not be lost on a lot of the sheeple. And of course we have good old greed; Everyone can smell a bargain.

Basically because apart from all the other issues facing the economy and markets, there is a bit of a cash crisis.

It seems to me that consumers and corporations alike are a bit short of spare/surplus cash... and even 'necessary' available cash for normal daily operations, which may help to explain the relatively low demand for commodities including gold and the current scurring around in the currencies seems to reflect people trying to maintain the best value they can in cash in the short term.

While gold bullion may still a good store of wealth... people and corporations need cash for their day to day needs. Until those day to day requirements for cash stabalises and relaxes, there will be less available cash to 'invest' in longer term holdings.

Of course when the cash crisis settles and business gets back to relative normality I would expect to see demand considerable outstrip supply.

 

[Kauri]

a bit high for a fractaling 4th of a 5th butt who nose...

Cheers
........Kauri

 

[Whiskers]

a bit high for a fractaling 4th of a 5th butt who nose...

Cheers
........Kauri

If it holds above the 2006 high of 730, I think there is gonna be some really good profits to be had longer term in selected gold stocks at current prices.

Another point that nobody has been talking about lately is central bank activity.

 

[explod]

If it holds above the 2006 high of 730, I think there is gonna be some really good profits to be had longer term in selected gold stocks at current prices.

Another point that nobody has been talking about lately is central bank activity.

Not only central banks, the whole industry hates gold:-

Sep 16 2008 10:57AM

Why Wall Street Hates Gold and Silver??

(Excerpted from Chapter 12 of How to Prosper During the Coming Bad Years in the 21st Century.)

Wall Street ignored gold and silver during most of the 1970’s hyper-profitable bull market. They were either outright hostile, or acted as though the metals didn’t even exist. I got no respect, even though the first edition of my book sold 2.6-million copies and was near or at the top of The New York Times best-seller list in both hard and soft cover for two years, and I was all over the media; Wall street Week, Oprah twice, Regis and Kathy Lee three times, etc, etc. They were usually hostile also. Wall Street paid little attention to gold until it reached about $650, far too late for them to have much of a chance for their clients to make money.

Why the hostility? Partly because they believed their own rhetoric! Historically, because rising gold always means falling stocks or a troubled world, and they made most of their commissions in the stock market, they had to remain bullish on stocks, and bearish on gold. Their bullish stock-market recommendation was necessary because investors wouldn’t buy stocks if their advisors were dubious about the market’s future. They sneered at the inflation fears of us gold and silver fans, and derisively called gold investors “gold bugs.” Most of the young whippersnappers who now control Wall Street were in diapers 25 to 30 years ago during the last gold bull market so they haven’t experienced rising gold and inflation. Consequently, another gold bull market is inconceivable to them.

Studying Psycho-ceramics

One of the funniest things that ever happened to me illustrates the skepticism of mainstream media types regarding gold and silver. In 1978 I was on a national promotion tour for the first edition of my book when I found myself in Detroit, rushing to a TV station for a scheduled interview on a big morning show. I barely got there in time when the host turned to the camera and said, “Today we’re going to study psycho-ceramics, and with us today is a crackpot from California.” And the interview went downhill from there; with his biggest argument being that silver was an impractical investment for most people, unless you were very rich.

One year later I found myself in the same studio, same host, promoting the mass paperback of my book. But this time, when the light went on, he said, “Today we have with us one of America’s most brilliant financial advisors,” and the interview was terrific from then.

After the show, I reminded him of what he had said before, and asked him what had changed his mind. He very sheepishly said, “I read your book and bought silver from a local coin dealer, and tripled my money since you were here last.” So the media is not always infallible, even though they are usually wrong.

The full article is worth a read, by Howard Ruff on Kitco

 

[refined silver]

After the Fed tried to play tough with Lehman, they caved in today moneying up $90b for AIG. WaMu and a few others will be next.

Unnoticed amongst the drama was the TIC report which came out yesterday.

It was -$74b!!!!!

http://www.ustreas.gov/press/releases/hp1138.htm

Treasury International Capital (TIC) Data for July

Treasury International Capital (TIC) data for July 2008 are released today and posted on the U.S. Treasury website (www.treas.gov/tic). The next release, which will report on data for August, is scheduled for October 16, 2008.

Net foreign purchases of long-term securities were $6.1 billion.

Net foreign purchases of long-term U.S. securities were negative $25.6 billion. Of this, net purchases by private foreign investors were negative $20.7 billion, and net purchases by foreign official institutions were negative $4.9 billion.
U.S. residents sold a net $31.7 billion of long-term foreign securities.
Net foreign acquisition of long-term securities, taking into account adjustments, is estimated to have been negative $8.2 billion.

Foreign holdings of dollar-denominated short-term U.S. securities, including Treasury bills, and other custody liabilities decreased $8.4 billion. Foreign holdings of Treasury bills decreased $4.4 billion.

Banks’ own net dollar-denominated liabilities to foreign residents declined $58.1 billion.

Monthly net TIC flows were negative $74.8 billion. Of this, net foreign private flows were negative $92.9 billion, and net foreign official flows were $18.2 billion.

The TIC is supposed to balance the Current Account. Hence if you run a $64b curent account deficit, you need a +$60b TIC to balance, which somehow the US has managed to keep doing, by having foreigners keep buying equities, bonds, even real estate in the US.

Instead of not getting $60b inflows, they got $74b outflows!! Check out the far right column in the link.

Thats not good news for the USD!

 

[Ageo]

Just curious how many people here trade gold physical?

I have found the physical market to be in a real good position as the US Spot is at the lower price end over the last 12months and the AUD Spot is still easily sitting comfortably between the 900-1000 range (thanks to our weakening dollar).

Even when the US price tanks the AUD holds up nicely or takes a softer fall.

If you trade physical you would know what im talking about.

 

[cuttlefish]

Gold... or high country oysters.. who cares... if it trends... and sets up... trade it... after all... does a chart of gold look any different to a chart of high country oysters???

Cheers
............Kauri

Good point - though high country oysters tend to get a bit whiffy after sitting in a bank vault for a week or two.