wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
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Make them big fat and ugly... see if that works.Markets these days, they've just go no respect for the pretty lines we like to draw!
Make them big fat and ugly... see if that works.:
(I suspect not)
Hi guys,
I am sure you know I was only kidding!
Well I`ve pulled back to the wider angle lens of a yearly chart and the bearish divergence on the MACD/Histogram suggests the retrace is near.
The price continues to rise while the histogram fails to make new highs (see note on chart).Chart is a daily.Also note the peak in July last year was 988.75 -- where we are now.
What's blowing the golden bubble?David Hirst
February 25, 2009
WHEN Lord Keynes made his celebrated comment about gold being the "the barbaric relic" he was referring to events as far back as Gutenberg.
With movable type, paper money became feasible. But the Gutenberg revolution also led to the spread of learning, the Renaissance and an explosion of world trade.
Gold became an unsatisfactory medium of exchange as the world entered the modern age. Cash, banknotes and cheques were far superior to gold, especially when backed by gold.
It is in the US where the great gold debate is centred.
America is a gold-loving nation. Gold could well be added to the "three Gs" that kept the Republicans in power in recent times: God, gays and guns.
Fear of fiat or paper money goes back to the Civil War, when the currency of the Confederacy was rendered worthless, and to the "wildcat banks" that printed their own money and were dubbed "wildcat" because only a wild cat could find them. Gold and silver were preferred.
Indeed, gold has been the best wealth protection scheme for much of the past 3000 years and might just be a better place to be than in currencies controlled by the cash-in-helicopter-loving Ben Bernanke or Timothy Geithner, the Treasury Secretary who didn't know about filing taxes.
As gold heads out the window and down the path, with great media attention after years of oblivion when the commodity was barely mentioned in polite society, there are whispers of a bubble.
Was not gold at $US1000 a year ago?
In the past decade, gold has risen steadily but not dramatically ”” showing nothing like the drama in the rise and fall of oil and with housing and the tech stocks.
Given world instability, this is hardly a bubble.
While gold has traded steadily upwards, we have descended from celebrating the BRIC nations ”” Brazil, Russia, India and China ”” to contemplating the terrors that lie in store for banks with stakes in the PIGS ”” Portugal, Italy, Greece and Spain.
Gold's worth is also determined by supply and demand and the desire of central banks to cap gold.
On the supply side, as shown by the latest figures from Australia ”” but also evident around the world, production is faltering. There are many reasons, but principally there isn't much of it in the ground and the easy stuff was dug up by the Romans.
But demand is also on the skids. India and the Middle East, the main users of gold for jewellery (practically gold's only use), are in severe doldrums.
Given all this, why are prices so high and why is the dreaded "B" word being used in connection with gold? Gold was high a year ago, but no one called it a bubble.
LA ladies aren't selling their gold rings, old cufflinks and gold plate (as reported in the Los Angeles Times) to take advantage of the gold price.
They are selling gold because they are broke.
The principal force driving gold is the transformation of the world economy. When gold last reached $1000 (for a day) those same people never dreamed of raiding their closets and drawers for old trinkets.
Fear is driving gold. But where?
Let us assume we are entering a hyper-inflationary period when truckloads of dollars will be required to buy an egg. Will the person with eggs part with them for gold or, assuming the egg holder is as desperate as the buyer, would they not be swapping the egg for bread? One can't eat the gold. If currencies collapse, barter might become the new means of exchange. Thus, rather than buying gold, we should be buying hens. Or geese. Preferably geese that can lay golden eggs.
The gold buff's best argument is that we should never have departed from the gold standard. But then we would never have had derivatives or hedge funds or any of the exotic schemes that allowed a small proportion of the world's population to enjoy a few decades of unrivalled wealth.
To miss that Ponzi scheme would have been tragic.
But remember the words of the man who saved us from the Great Depression, or is credited with doing so. By a so-called executive order, President Franklin D. Roosevelt declared on April 5, 1933, that:
"All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve Bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them."
Who is to say that such an order won't be issued in co-ordination by governments around the world some day?
Everyone that can should own some gold. But be wary of the Norman May approach of "gold, gold, gold".
The Devil doesn't hand out easy choices. He wouldn't be the Devil if he did.
David Hirst is a journalist, documentary maker, financial consultant and investor. His column, Planet
Wall Street, is syndicated by News Bites, a Melbourne-based sharemarket and business news publisher.
the latest central banks' figures show that china has a gold to foreign currency percentage of .9% and were looking to increase it.... Now what will that do to price?
Well the suspense is killing me BUT, the indicators are still indicating.
So even though the MA is still skewering seagulls (and notice it is trying to level out) the histogram (which indicates price momentum) has not made new highs and if I look closely I can see a wee decline there too.
It will come off eventually and then it`s a matter of how much.One more spike to begrudge maybe.
Hi guys, now that the main gap I mentioned earlier has been filled we will see whether the current price is justified by market demand (rebound) or was "smart money" selling into strength followed by not much left to hold us up (retrace).
We could still go to fill the 850 gap. Just over 100USD down from where we are right now.
850 will keep for later sinner.
Just had a bit of a kick... looks like a minor wave three surge on way back up again. Please Mr market, don't make me wrong.
A bit more of a tease :
3K an oz???
So the bottom line is that the little bit of good news out there comes from the mining camps of the world. In particular, the gold and silver miners. Hey, there’s no fever like gold fever. Right now, we are on the cusp of a great run-up in gold. I believe that there’s still time to get into some excellent stocks. The gold miners have room to grow. They should benefit from rising gold prices. And we might see higher dividends down the road.
Is there a caution? Always. Could gold prices tumble? Well, yes. That would hurt us. But for gold prices to tumble would take a lot of investor dishoarding. That is, people would have to hit the “sell” button en masse. And that would require some tectonic shifts in worldwide tax, fiscal and monetary policies by a host of socialist-leaning governments. For the moment, I think we’re safe from any counterrevolutionary antics like that. As Charles de Gaulle once noted, “People get the history that they deserve.”
Until we meet again,
Byron W. King
Feb. 26 (Bloomberg) -- Treasuries fell for a third day as the government sold $22 billion of seven-year notes in the last of three auctions this week as it issues an unprecedented amount of debt to spur the U.S. economy.
Declines were led by 10- and 30-year securities. President Barack Obama’s administration forecast a budget deficit of $1.75 trillion in the fiscal year ending Sept. 30. That’s 23 percent higher than a forecast by economists at primary dealer Goldman Sachs Group Inc., and equivalent to about 12 percent of the nation’s gross domestic product.
Possibility of Default
The U.S. is borrowing so much that it may have trouble paying the money back, said Jaemin Cheong, a bond trader in Seoul at Industrial Bank of Korea, the nation’s largest lender to small- and mid-sized companies.
“Yields are headed higher,” Cheong said in an interview. “More issuance will be needed to support the economy. The possibility of default is more and more as time passes.”
The government is depending on overseas investors to help fund its $787 billion economic plan. China is the largest overseas holder of Treasuries, with $696.2 billion, followed by Japan, with $578.3 billion.
Another retrace, another opportunity to add to positions. Although I think this gold bull is closer to it's end now than to it's beginning all those years ago? But what an end it will beChina’s top banking regulator said today the country will pay attention to safety, liquidity and profitability when deciding whether to buy more U.S. debt.
Weekly gold chart forming a large pennant, top is March 08 at US$1,000 and bottom Aug 06 at $640. Will have to break out within 20 weeks from here which is just about the time the new US admin takes the helm and causes one hell of a problem, or at lest the blame for it.
Posted back on 7th October,... the 20 weeks is here now. This thread is so quiet now that something must be in the wind. News over the weekend (confusion supreme) and gold strong on the start of trade today could cause the audience to tune in.
What is going to drive POG up? Inflation when we have deflation now or fear?
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