Gold Price - Where is it heading?

[barrett]

That reminds me, Soros put on a long gold, short oil spread trade in July at $138 just after the oil peak. Just looking at UF's chart, that would have still worked out pretty well even through all this.

 

[explod]

I get this feeling the US dollar is being manipulated (hence the U.S imports alot of its goods) which in turn can affect the price of gold....... Thats the only reason i can think of for gold to drop this much in such a short term (and i dont believe selling gold to cover margin calls is the answer).

I agree, so does Jim Sinclair:-

D

ear Jeroen,

The most difficult concept for the professional public to understand is that hyperinflation can exist along with a totally disastrous economic environment. Hyperinflation falls flat because it fails to take into account the infinite velocity of money that a Weimar creates during a depression economy as a product of throwing monetary discipline at the wall.

When you pay people three times a day to keep up with prices, consider the mammoth daily increases in all private and business transactions in terms of the total number of currency units. What happens to the velocity of money? The turnover increases with the rate of inflation until both are hyper creating an unstoppable spiral.

Few understand that monetary inflation proceeds and sustains price inflation. For this reason world business in a rat hole with credit still jammed up will lead to hyperinflation in 2009-2010.

If world business is perceived to have bottomed and credit flows are re-established, this will bring hyperinflation in 24 hours.

We have heard both Russia and China chime in today on their clear perception of the pre-election falsely valued US dollar and government interference in not only gold but energy and food.

The PPT is working overtime on those index spreads but they only have a short time (13 to 88 days) before they have to throw it into what is most likely inexperienced hands.

Yes, a planetary Weimar is on the menu. Russia, the Middle East and China may just be the top survivors. Africa might just come into its own in such a scenario due to the amount of raw material and gold resources they have.

Respectfully,
Jim

 

[chops_a_must]

Not sure if it matters what turkey is in charge of the financial largesse purse strings as these are not normal cycles or times.


It's all relative, you just have to know which store of wealth you are comparing to? Perhaps preservation of capital?

You left some important choices out there...

Inflation, deflation, people are missing the point here. If that much capital has been destroyed, it's really irrelevant what the economic conditions are, because if no-one can buy, the price isn't going to do anything.

 

[Uncle Festivus]

You left some important choices out there...

Inflation, deflation, people are missing the point here. If that much capital has been destroyed, it's really irrelevant what the economic conditions are, because if no-one can buy, the price isn't going to do anything.

If the plan works we get inflation, if it doesn't we/they get currency wipeout? Deflation a sideshow act?

But for those who still have money, where do they put it, assuming they can even get their hands on physical cash?

Let's get inside the head of an (still rich?) American - I've just sold all my foreign shares/assets, brought the proceeds back to the USA by buying dollars, and am looking to put it......T-Bonds (negative return)?.......real estate (negative return)?.....in a bank (negative return)? Which bank? How much does the government guarantee my deposit? Which bank will fold next?

When they realise even government treasuries/bonds are not that safe either, what have you got left - it a war of asset attrition & currency vaporisation - possibly the end of the worlds default currency?

PS up till recently, the net interest on the USA's investments abroad have comfortably covered their interest expense, despite what even some gold bugs would have you believe. But, if this repatriation of funds (if it is that, not official meddling?) as shown by the rise in the US DX is genuine and consistent then they can say goodbye to one of their key weapons in the overall debt equation - interest in say Oz at 6% back to US interest of 1.75% - so that their debt becomes a very real problem afterall?

 

[Whiskers]

I forgot to mention the reason I think we'll get a stumpy revised wave 5 is because what was going to be wave 5 exceeded my estimate and made my original wave 3 the shortest, cos the USDX has gapped up from 84.5 to 85... but it should fall back sharply soon and turn the POG around (I hope).

I think you're on the right track with where the money flows uncle.

The monthly USDX seems to suggest a turnaround is immement.

Interesting that the gap up yesterday didn't carry through and stopped short of where I think the wave ii is and came back to the bollinger band.

The EUR/USD seems to have wave B covering slightly more than equal wave A in the correction on the daily to make wave iv on the monthly , supporting the notion of a turnaround.

Of interest also the AUD/USD gapped down from .77 quite a bit also supporting a decline of the USD and the AUD back to .77ish.

The logical interpretation of a falling USD as in the carry trade redemptions largely unwound and cash looking for better returns as uncle mentions, should to at least some extent be rising gold... shouldn't it!?

 

[cuttlefish]

Well if the US stock futures tonight are anything to go by the fear elevator might be taking a ride to the next floor. Be interesting to see what, if any, impact it has on the gold price and the USD.

 

[chops_a_must]

Quite a nice rebound.

Covered and looking long.

 

[explod]

Quite a nice rebound.

Covered and looking long.

One can never be certain but thought it would. The $US700 was an area of considerable resistance for about 12 months from the middle of 2006 and appears now as good support going forward.

As gold has again shown its hand against falling stock prices overnight, next week will be interesting.

 

[arco]

We now need to see if the action can penetrate the cloud or if it will be repelled. On higher time frames the cloud is still a distant blur.

arco

 

[Uncle Festivus]

Quite a nice rebound.

Covered and looking long.

Say what, did the wind change direction Chopster .

So we have both gold & the US DX going in the same direction - which is the real deal? US interest rates at 1% next week?

Passed resistance at $730 now $735, with a thrust to $750 for good measure.

Aussie gold at $1180!

$50 daily flip flops now makes for making some serious money if you 'guess' the right entries/exits?

What will happen to gold shares when the markets are closed with limit downs in effect?

But it all seems a bit sureal when whole countries are declaring banktruptcy and the very real possibility of millions of people starving.

http://www.marketwatch.com/news/sto...x?guid={A02D915A-E3DB-4E24-AAC7-E5F8EA18DA75}

Pakistan, radical muslims & nuclear weapons are not a safe combination!
Failed states with nukes - Russia is on the brink again!
Humans cursed propensity for greed & ideology, money & religion.
Consumerism at the expense of the environment.....I'd better stop there......meditate & stock up on seeds.....?

 

[nick2fish]

I prudently (or so I thought ) took a rather large position in a gold miner as a natural hedge against the upcoming financial storm that we are now in. Great how the best laid plans can backfire
And when you read this thread and articles like this one below I am left scratching my head

Extract from Pure Speculation The Australian Buiness Online

Gold still gleaming
OUR swooning over thermal coal does not mean any lessening of enthusiasm for gold at Pure Speculation. Yes, yes, we know gold's growth in value has not kept pace with other asset classes, the return on it at times is lousy -- and there are many other arguments against the yellow metal.

But who knows how many of those other asset classes will be worth anything when we enter the financial equivalent of a nuclear winter?

Last week we reported that the US Mint had suspended sales of the buffalo gold coins because demand had cleaned out all the stock. Well, now we read that Jeremy Charles, chairman of the London Bullion Market Association, is saying he has never seen in 33 years the demand for physical gold as great as it is right now. "The gold refineries cannot produce enough bars," he is reported as saying.

The association says it found wealthy investors paying $US25 an ounce over the spot price to get to the head of the queue. The Austrian Mint, meanwhile, is working at weekends to boost gold coin production due to heavy demand.

One commentator made an interesting point. The attraction was not so much the potential future value of the gold but the fact that it was a physical asset.

People are losing their trust in paper. There's so much bad paper around.

 

[IFocus]

I believe 400 jobs are getting chopped at Telfer due to falling gold price

 

[Ageo]

The association says it found wealthy investors paying $US25 an ounce over the spot price to get to the head of the queue. . [/I]

And the rest, 2 weeks ago you couldnt get it for less than $100 p/o over the spot. I agree thow that theres to much paper going around

 

[explod]

And the rest, 2 weeks ago you couldnt get it for less than $100 p/o over the spot. I agree thow that theres to much paper going around

Spot on and its not working. Gold is and has always been the backstop to real money. The play money has had a little rally but we will see how long it keeps going. The following excerpt from the Privateer's weekly gold report (I have no connection but if you are serious it is excellent)
is food for thought / if you think about it:-

We are, of course, witnessing the unravelling of the entire post-1973 fiat credit money structure. Governments and central banks are pushing on a string with unimaginable vehemence, as witness the literally $US TRILLIONS they have force-fed into the system and markets. But not only is this not doing any good, it is working entirely contrary to their intended purpose. The money is being used to retire debt. And, since the entire system is "underpinned" by debt, the entire system is having its foundations pulled out from under it much faster than the "authorities" can pump it up.

What we are waiting for now is very simple. At some point, the present upside rampage of the US Dollar will come to an end as the demand for it to go on deleveraging dwindles and then dies. At that point, the present hugely artificial demand for US Dollars will literally vanish into thin air, leaving the Dollar suspended in mid air without a parachute. As "Bugs Bunny" once said, after landing like a snowflake after plummeting from miles high without a parachute - "you can do anything in a cartoon!"

So you can, but this is real life.

 

[GreatPig]

There's so much bad paper around

Makes you wonder why the mints are so keen to take all that bad paper in exchange for their good gold.

GP

 

[Uncle Festivus]

I believe 400 jobs are getting chopped at Telfer due to falling gold price

Falling??? Better check your sources for both rumours?

 

[explod]

Makes you wonder why the mints are so keen to take all that bad paper in exchange for their good gold.

GP

Many pundits have been saying for some years that they are taking paper for gold that does not exist. When delivery time comes round they keep updating the paper contracts.

These pundits, so called doom and gloom sayers have been proven correct on the financial mess, why not on their take of gold contracts.

It is another reason why many of us keep harping that the only safe investment is to hold physical gold in your own safe keeping.

 

[Ageo]

Many pundits have been saying for some years that they are taking paper for gold that does not exist. When delivery time comes round they keep updating the paper contracts.

These pundits, so called doom and gloom sayers have been proven correct on the financial mess, why not on their take of gold contracts.

It is another reason why many of us keep harping that the only safe investment is to hold physical gold in your own safe keeping.

hehe interesting you mention this.......

i suggest you read this article which explains the US dollar and the gold price (very interesting indeed and agree's with price manipulation)

http://www.financialsense.com/fsu/editorials/willie/2008/1023.html

Then watch this video but skip to 11min as they have John Embry which basically also states the central banks and bullion bankers are manipulating the gold paper market but he also believes when the time comes for people to take their gold after the lease is up there wont be enough to give (similar to a bank run). And then he believes the price of gold with then switch to track the physical price (which should be higher as demand increase and their is shortages of bullion).

http://watch.bnn.ca/tuesday/#clip104603


In a nutshell this sums up everything about paper (as long as its in existence it can and will always be manipulated).

 

[kransky]

i suggest you read this article which explains the US dollar and the gold price (very interesting indeed and agree's with price manipulation)

http://www.financialsense.com/fsu/editorials/willie/2008/1023.html

great link!

 

[IFocus]

Falling??? Better check your sources for both rumours?

NEWCREST Mining plans to slash 400 jobs from its huge Telfer gold mine in Western Australia by the end of the year in an effort to cut costs.

http://www.theaustralian.news.com.au/business/story/0,28124,24542950-36418,00.html


Actually the current rumours running through WA are really nasty.........
.