Gold Price - Where is it heading?

Uncle Festivus · 31 January 2009

It would be amusing except it means the worst of fears are materialising - watching the CB's 'transfer', via gold sales/leasing, their only form of real 'wealth value' to the early adopters of the realisation that global fiat money systems are close to failing?

I believe gold’s clear break from its typical linkage to the dollar is revealing a recognition by the market that the fiat dollar-based monetary system that has been in place since 1980 has collapsed, and it has collapsed for the same reason that the US credit markets collapsed (i.e. - enormous imbalances resulting from too much money printing by the Fed). Thus, we’re now seeing a general investor fear of debasement of all fiat currencies globally (i.e. a fear of future inflation and the loss of purchasing power).

For example, the British (and others holding pounds) see the pound sterling collapsing much like Iceland saw its currency collapse, but they know the dollar has its own problems, as does the euro (although I would argue the euro has fewer problems than the dollar or pound at the moment, even though I know others might disagree).

Thus those who hold pounds exchange them for gold. The same goes for those who hold euros and those who hold dollars. This is what's increasingly happening on a global basis, and it’s this demand that's being reflected in the across the broad rally in gold in all these fiat currencies.

http://www.minyanville.com/articles/gold-spx-SP500-xau-gfi-mining/index/a/20881/p/1

The other important point is that generally gold equities are still in oversold territory. Think NCM, think $100 per share? Prepare for phase 3 - the manic scramble?

Uncle Festivus · 31 January 2009

......thank you Aussie dollar.....$1450.....leverage to profit margins exploding?

nunthewiser · 31 January 2009

Holds pyhsical gold, holds gold stocks ...... but i suspect we heading for a bit of a dip shortly...before continuing north

i could be wrong , not a short term trader on gold so it doesent really mean much to me

just pointing out what i can see from here

gresim25 · 31 January 2009

good thing I loaded up on OGC on friday i just glanced at the kitco gold chart on friday and had a feeling it was about to break past 900 which atm was hovering about...will probably consider buying SGX around $5ish on monday too if I am not too late

Greg

amory · 31 January 2009

so maybe its not weakness in the USDollar one needs to lie in waiting for ... weakness in the Treasuries might just be the straw in the wind that's needed to turn the tide. it never did make much sense ... when the dollar was supposed to be weak, but the "flight into securities" was into the 10-year bond & suchlike. which of course, are based on none other than that selfsame dollar!

maybe Gold knows what its doing, after all.

amory · 4 February 2009

... but today Gold is down & so is the Dollar and Bonds! that recent spurt beyond 900 must have been too much of an effort. or does it mean that the market is regaining confidence? the DowJones is trying to hint along those lines.

actually, none of the very recent moves have been of significant proportion. too early to read too much into any of them.

and the eternal question: gold-stocks LGL & such ... up with the Dow or down with the Pog? one can never be sure.

metric · 4 February 2009

after the 9th of feb gold may well explode....

an accurate predictor of market crashes has quoted that date, months in advance as a major market upheaval.......USA time.

interesting to see a run on gold leading up to that date....so says perth mint. huge bulk orders from all over the world....

.

amory · 4 February 2009

"explode"...that's a big word, Metric! for such a thing to happen, there is one essential requirement ... collapse of the USDollar. not saying it can't happen, the dollar is not looking too dapper as we speak ... but neither is there any sign so far, that it WILL happen. you've got to remember that the new administration under Obama is as committed to a stable dollar, as the previous one was. at least, that is the impression at this early stage. anyway, that's what one needs to be watching for.

Sean K · 4 February 2009

metric said:
after the 9th of feb gold may well explode....

an accurate predictor of market crashes has quoted that date, months in advance as a major market upheaval.......USA time.

interesting to see a run on gold leading up to that date....so says perth mint. huge bulk orders from all over the world....

.

Who's the predictor and which crashes did he forecast?

And which one's did he forecast that didn't happen?

explod · 4 February 2009

amory;394042 you've got to remember that the new administration under Obama is as committed to a stable dollar said:
"impression" be cautious of making decisions on impressions. The US dollar is backed only by debt that the US GDP cannot even service let alone pay back.

Yes I also believe that one morning soon we will wake to see that gold has has gone the plural of my forum name.

amory · 5 February 2009

the following is out of today's BigTrends:

"In striking fashion, bonds have been selling off of late, telling us the appetite for risk may be returning. What am I talking about? Equities are riskier than bonds, and if yields are rising then players see the returns of stocks being much more attractive...at least for the time being."

Bonds up (yields down) means Flight into Security.
Price of Gold up, same meaning. also Flight into Sec.

today is not a clear picture at all. Gold up, but so is the USDollar!
and Bonds - like the man says - have been selling off of late. today too!

looking forward to a decisive breakout ... led by the Dow. but wouldn't care to predict its direction.
the fact that it is struggling at this very moment to stay near the 8000 level, does not make it any easier. will the Pog be able to anticipate such breakout?

metric · 5 February 2009

september 15.......

october 6......

all months in advance.....

there are others....i will find em and post em. yes there is evidence he stated these dates. why do you think a web forum, dedicated to his work, popped up with 450 members in a couple of months...

also he has a pay site ($720 us) he has many subscribers.....

here are some successfull stock tips r has made..(us market)

a 3 page thread of them....! hahaha. http://www.wiredpirate.com/forum/viewtopic.php?f=74&t=165

.

Uncle Festivus · 5 February 2009

It is yet to be established if the creditor nations ie the ones who will be putting up the cash to fund the credit priming, will in fact continue to do so?

Just as companies go to the market cap in hand for shareholders funds, so to do the debt riddled governments of the world, yet what do they offer in return?
A discount on the prevailing price? Not if the assets of the company are negative already!
A superior rate of return? Would you like 0% or 0.25%!
Security? Backed by the US or British government, who already own an accumulating pile of toxic debt sludge!

The capitulating straw will be the inability of these governments to procure credit on the global market, leaving only one last option - currency debasement via money printing!

Ditto for AU, only worse, so Aussie dollar to tank as well? Think of a $US gold price and double it?

explod · 5 February 2009

Since October the lows have been getting exponentially higher for gold.

The strength in the US dollar has a lot to do with uncertainty now in my view. People are very worried about where to park cash.

Talk in the US this morning is that $4 trillion bailout is needed. A good cartoon (yesterdays H/sun) of krudd insulating ceilings with dollars would be funny if not so serious.

What are the banks telling Governments that they are not telling us. Never thought I would have fear in my belly like it is now. Only thing that consoles me is, we live in Australia and we are in it together. Could meet you one day down the road digging yams perhaps.

nick2fish · 5 February 2009

I'll teach you how to barbarque a snake, if I see you Explod, skin on of course to keep the flavour and juices in there.
I'll be camped out not far from Tropicana

imagineer · 5 February 2009

At least the Qld gold fields should unleash some gold since it has the best wash in 30 years anyone prospect / detect??
May be a good way to spend the Krudd doh. Camp up in the area that needs the business and find some real stuff.
Just Imagineering
Neil

Buy Silver!!

explod · 5 February 2009

imagineer said:
At least the Qld gold fields should unleash some gold since it has the best wash in 30 years anyone prospect / detect??
May be a good way to spend the Krudd doh. Camp up in the area that needs the business and find some real stuff.
Just Imagineering
Neil

Buy Silver!!

43 years ago I was working for a drover, moving cattle from the gulf country down to Richmond. Few trees, but a good camping spot about 150 km north beside a hot bore. Jumped in the tank to wash the vermin off too. We would survive gold or no gold.

Page · 5 February 2009

The rising gold prices have put a question market in front of all the experts and businessperson why it is rising and until what price we are going to see this precious metal. Experts from AVAFX and other brokers are also unable tp predict were this precious metal moving.

Whiskers · 5 February 2009

metric said:
after the 9th of feb gold may well explode.....

9th Feb, eh!

I've got the POG starting leg iii of a mojor leg 3 up soon.

It also suits my view that the AUD has a bit more to fall, I think to 61 or slightly below should pull it up... a major leg 2, with the turnaround from about 61ish the start of a major leg 3 up... in time for a recovery with the 'explode' in gold price.

How low for the AUD are you thinking Uncle Festivus?

There seems to be a fair corelation with the AUD and Gold atm and with China in relatively good shape to boost domestic consumption to dampen any recession like Aus, I'm thinking, assuming the worst being over for metal prices, renewed demand for the AUD, 60/61 should pull it up before heading north again.

PS: Just noticed Mineweb reporting China surpassed SA for the second year as the Worlds biggest gold producer.

Just out of curiosity who knows how much the Chinese gov benifits from gold royalties and direct interest in gold projects?

doctorj · 5 February 2009

This image/text from Uncle Sachs.

Goldman said:
We believe that these elements of financial and sovereign risk will likely remain a feature of the market over the near term, after which the gold price will likely trade back closer to the fair value currency basket. As a result, we are raising our 3-month ahead gold price forecast to $1000/toz from $700/toz, our 6-month forecast to $950/toz from $785/toz, and our 12- month forecast to $825/toz from $795/toz. Clearly, if financial risks as measured by the CDS spreads remain high, gold prices could remain higher for longer, presenting upside risk to our forecasts.

Interestingly they are still bearing in the long term. Whatever that means.

Gold Price - Where is it heading?

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