Gold Price - Where is it heading?

[Sean K]

Well here's gold v us dollar until 2008 not that the US FED funds rates has moved yet and gold certainly should be north of that red line. I suppose if the chinese central bank moves their lending rate by 300 to 400 basis points over the next 12 months that may effect the value of gold. Either that or they look like getting monstered by inflation anyway.

This is not investment advice

I'm still learning

GL

DYOR

So, if USD eventually goes back up, POG will decline?

In that case, the gold bulls are betting on the US continuing their policy of printing money and they're not going to get out of this situation. It's just down hill forever until gold becomes a real currency again where you can trade a gold coin for some mixed lollies...

So, if the US/world sorts itself out, and we keep using 'paper' as currency, gold might go down?

 

[GumbyLearner]

So, if USD eventually goes back up, POG will decline?

According to all the empirical data I have seen it should. Do note though the effect of the last week EURO/US has had on POG.

Jim Rogers recently said he was holding US dollars for now, but has said 5 - 10 years from now he will not.

Can't say for sure mate. Just know all the stuff I buy at the local mart is costing more every month and hasn't stopped going up for at least the last 6 years.

Agflation is upon all of us now

DYOR

 

[electronicmaster]

So we could be witnessing the real value of paper Gold and Silver here.

worthless cash

Time will tell

 

[GumbyLearner]

So, if USD eventually goes back up, POG will decline?

In that case, the gold bulls are betting on the US continuing their policy of printing money and they're not going to get out of this situation. It's just down hill forever until gold becomes a real currency again where you can trade a gold coin for some mixed lollies...

So, if the US/world sorts itself out, and we keep using 'paper' as currency, gold might go down?

Well, how many capital inflows do you think China will attract over the next year? How much of that will be QE steroids vs. real investments?
And if China have an attractive interest rate maybe the renimbi/yuan/kwai may be the currency to hold?

DISC: I still hold physical Au

 

[GumbyLearner]

So we could be witnessing the real value of paper Gold and Silver here.

worthless cash

Time will tell

You have raised an interesting and thought provoking point emaster. But really you should preface your argument as to who the 'we' actually are.

I think a lot of people in the banking fraternity, traders, media cannot be included in the 'we' you have mentioned earlier.

In my opinion, they cannot be included in the 'we' from a pure statistical sampling perspective because they live in what I would say is analogous to a cocoon. Meaning that almost everything that goes on around them that adversely effects the average punter involves them being either blind and/or deaf and/or slumbering to such occurrences. That's not to say there are not good banks, good traders/analysts or businesspeople. But a lot of bureaucrats and their friends in finance often lose touch. In that cocoon they don't have to pay their way directly at the cash register (generally speaking they probably hire others to do that for them) and cannot fully appreciate the concerns of the average person who has to pay their bills week-in-week out. Throughout history people in such positions of prominence have been unable to realize that a crisis could unfold and such crises have been unleashed and without due warning from their perspective. Depressions, Recessions, Australia 1950's Wool Boom/Bust, IMF/Asian Financial Crisis etc... Just ask the Bank of England and what they had to say to Her Majesty when Bank of Scotland/Northern Rock/Lloyds etc.. collapsed.

This one will not finish any different. But I certainly think 2011 will be a year of inflationary pressures rather than deflationary ones as Bernanke may disagree.

Anyway, I'm off to "bash a banker" in my cocoon.

 

[tothemax6]

What happened to make gold crash back then?

Is this time different and it just keeps going up for ever?

Leading up to 1980 there was high inflation. As a result people were piling into gold. Then Paul Volcker came along and said "F~!K YOU, inflation!!", and proceeded to smash it with epic interest rates. Holding gold when you can get 20% on cash and inflation is going to be terminated, is not a popular decision. Hence the gold price went down like a lead balloon.

However, there are several reasons why this situation is currently unlikely to unfold. Marc Faber's speech to the Mises Institute (multipart on youtube), details this quite well. The effects of high interest rates on the US would be ugly. It would cause immediate government default for one, and it would strangle credit growth in an economy that runs on credit expansion.

 

[GumbyLearner]

Leading up to 1980 there was high inflation.

There was also an Oil crisis in Iran that involved American hostages. A lot of that ****e had to do with the cold war. Today has nothing to do with hostages or Iran. THE REAL HOSTAGE IS YOU, IF YOU PAY WEEKLY/FORTNIGHTLY TAXES. Paying for other peoples ****-ups. If you're not willing to do so, then too bad! TAKE ONE FOR THE TEAM!

Here's a parody vid based on the Classic & brilliant Richard Pryor/John Candy movie Brewster's Millions

 

[Whiskers]

But I certainly think 2011 will be a year of inflationary pressures rather than deflationary ones as Bernanke may disagree.

Maybe slightly inflationary in the US as they lag recovery from the GFC, but I think you have to remember the rest of the world... where there has still been higher inflation and stronger GDP growth, which apart from the currency conversion of the weak USD, has kept the USD POG relatively strong.

I think World inflation and GDP will start to reflect slow consumption by the US and Europe and fall a bit this year taking gold with it and then a bit more as some countries like Aus, that have been favoured for better returns, start to also suffer from lower world consumption which cannot all be made up by Chindia internally, and some cash flows back to the strengthening USD.

It's the World picture that determines the inflationary flight to gold (OR NOT) more so than just the US.

 

[GumbyLearner]

Maybe slightly inflationary in the US as they lag recovery from the GFC, but I think you have to remember the rest of the world... where there has still been higher inflation and stronger GDP growth, which apart from the currency conversion of the weak USD, has kept the USD POG relatively strong.

I think World inflation and GDP will start to reflect slow consumption by the US

Oh you think the world will eat less?

Nah, I'm of the opinion they will definitely eat more.

Just my opinion

DYOR

GL

 

[Whiskers]

Oh you think the world will eat less?

Nah, I'm of the opinion they will definitely eat more.

Just my opinion

DYOR

GL

Yeah, I suppose they will continue to eat well and lead in the world obesity stakes as they continue to sink into anxiety and depression over the state of their economy as they ponder all the luxury goods and big houses they can't afford anymore.

 

[GumbyLearner]

Yeah, I suppose they will continue to eat well and lead in the world obesity stakes as they continue to sink into anxiety and depression over the state of their economy as they ponder all the luxury goods and big houses they can't afford anymore.

INFLATION 100%

 

[GumbyLearner]

 

[Uncle Festivus]

This is what I've been waiting for comrades - a classic 'risky' assets melt up before the day of reckoning. Dow up 109 because of?????

There are several factors aligning -

• loose money inflation chasing the yield ie equities at the moment;
• loose money inflation chasing commodities, especially the softs ie food
• climate events affecting food supply
• gold has had a good run
• goods inflation is rising, again, though typically has not been indicated correctly in official data for the obvious reasons
• ever present geo-political hot spots - which one is going to pop first?

If you found a rock & a hard place you would see Europe, the UK, China & the US huddled in the middle because they have to now confront both the payback of the stimulis debts and try to contain the inflation it is causing - glaring exhibit #1 - China.

Only problem is that they can't raise rates because they can barely pay for the principle let alone interest now! It's all in the Alfred data, but apparently Mr Market is back in negative news ignorance mode again - irrational exuberance?

And as every day passes it becomes one day closer to the day when the US, and the others in debt, must take drastic action to start paying it debts (& unfunded future liabilities, in the 10's of Trillions). But, they cannot as they are insolvent ie even if they had 100% personal & company tax they still could not pay back their debts!

I hope the POG falls substantially so I can make the 'final' load up while everybody is looking at the fireworks of the equity markets implode........

It's starting to get very interesting.......

PS does anybody know where I can buy bulk food?

 

[Logique]

Yeah I saw that 109 point rise in the Dow and thought..what?
This month the trend has changed for gold and silver, that's all I know. Uncle F., it sounds like you're on board the hypothesis of a reverse unwinding.

 

[Uncle Festivus]

Yeah I saw that 109 point rise in the Dow and thought..what?
This month the trend has changed for gold and silver, that's all I know. Uncle F., it sounds like you're on board the hypothesis of a reverse unwinding.

Yeah, gold is unloved by the trend/momentum/latest fad brigade. I think that everybody really knows what's going on but never say it out loud for fear of stampede for the (non gold) exits. There is just so much evidence out there saying that it's a (global financial system) melt up - the last to the party will get burned!

 

[nukz]

Support for gold was at 1323, not sure if it even hit 1322 but it came under quite heavy trading last night.

* Gold support at $1,323 an ounce, resistance at $1,351 an
ounce and 14-day RSI at 41.9.

* Platinum support at $1,794 an ounce, resistance at $1,836
and 14-day RSI at 63.8.

* Silver support at $26.35 an ounce, resistance at $27.80
and 14-day RSI at 44.7.


Also abit off topic but zerohedge was reporting that Russia has made a purchase of 100/150 tonnes of gold i forgot the exact number. I still think Russia is like the sleeping giant in the world at the moment all the attentions on China.

 

[electronicmaster]

CFTC Delays 60-Day Notification To Assist Manipulators

http://www.roadtoroota.com

http://www.roadtoroota.com/public/504.cfm

Bix Weir
Printer-Friendly Format

OPEN LETTER TO THE CFTC

January 25, 2011

Commodities Futures Trading Commission

3 Lafayette Center

1155 21st St. NW Washington, DC 50581

Re: CFTC Delays 60-Day Notification To Assist Manipulators

Commissioners:

On January 13, 2011 the CFTC held a hearing on the Implementation of Position Limits for the Dodd-Frank Act that was mandated by the US Congress to be implemented on January 17, 2011. This meeting was a continuation of the same meeting held in December on the same topic. As of today, January 25, 2011, Position Limits have NOT been implemented and thus the CFTC is currently in violation of the laws of the United States Congress. The reasoning behind the current delay? "There must be a 60 day notice period"...

SO WHERE IS IT? WHERE IS THE 60 DAY NOTIFICATION ANNOUNCEMENT? WHY WON'T YOU START THE CLOCK TICKING EVEN THOUGH YOU ARE IN VIOLATION OF THE LAW?

you can read the rest via the URL provided )

 

[explod]

Interesting move up in gold and silver in the last hour.

However the following article on the recent manfactured correction sums up some good points in my view:-

http://www.sprott.com/Docs/InvestorsDigest/2011/MPLID_012811_pg003Emb.pdf

 

[sinner]

Interesting move up in gold and silver in the last hour.

However the following article on the recent manfactured correction sums up some good points in my view:-

Having trouble deciding which chart is more interesting, decided to post them all.

Dow:Gold looking like it's at the top of a range


Gold bounced last night at technical support


Goldbugs were waiting bigtime for the 200MA


Gold juniors, NYSE and TSE (%performance)


(will post the ASX:XGD reaction to last night's action this arvo after the ASX close I guess)

 

[Logique]

Nice charting Sinner, thanks.

The post from InTheMoneyStocks on the 'Commodity Stocks Get Rocked' thread is interesting, explaining the negative effects on increasing interest rates in Asia. Thread at: https://www.aussiestockforums.com/forums/showthread.php?t=21690