Gold Price - Where is it heading?

[ducati916]

d998


Have been stewing over the same type of view.

Come up with holding the physical in it's various forms only

If one of the main reasons for holding gold is inflation, then surely any margin the miners make is going to be wiped out by rising costs (juniors excepted)

The time to be getting into the major/mid cap miners is probably over and time to start accumalating the physical on major dips is here.

I only posted the article.
I actually disagree with many of his assertions & conclusions.

From my blog............
http://grantmacdonald.blog.co.nz/

The point that I have not previously mentioned is;

A second point, "social democracy with a fiat currency, all roads lead to inflation." is quite true, and of course dates back to the mid-1940's where structural reforms were enacted to expressly limit, or prevent, episides of unemployment and deflation seen in the 1930's, viz. The Employment Act of 1946, and later The Full Employment and Balanced Growth Act of 1978 were passed into Law.

Inflation, and the threat of inflation are therefore at the front of many investors thinking when looking at asset allocation. Gold it has been argued is a hedge against inflation, and by default, a depreciating currency. Inflation however would be more accurately defined as a reduction in purchasing power, and while that certainly includes a depreciating currency, this can in an environment of increasing productivity be misleading.

Therefore, the question still not answered, is Gold, a worthwhile investment, and at what price?

jog on
d998

 

[Spot]

Do you mean the stuff that jingles in your pockets or one of the various proxies, e.g. ETFs?

ALL -- you can buy/sell @ London Fix with Sydney dealers, who will store it for you for a small fee.

ASX -- GOLD is a ETF with $au pricing.

BUT the catch 22 imho is if POG does skyrocket, how will this effect the $au?

If the $au rose with it we could end up in the same situation as SA was in ie:
POG rising in $US values BUT Falling in $AU values.

 

[Spot]

d998

Was under the impression "inflation" is always caused by a increase in "money supply" -- overall rising prices are a reflection of this -- not the cause.

Of course there can be rising prices in selected areas due to demand/supply but this should be short term and balance out in other areas.

As the piece you posted pointed out - is money supply drying up? - you can check out the US M2 @ St. Louis. Fed and going by the data it has been in decline.

Hence the reason I stated I will only be buying Gold on any major declines and no miners.

 

[ducati916]

d998

Was under the impression "inflation" is always caused by a increase in "money supply" -- overall rising prices are a reflection of this -- not the cause.

Of course there can be rising prices in selected areas due to demand/supply but this should be short term and balance out in other areas.

As the piece you posted pointed out - is money supply drying up? - you can check out the US M2 @ St. Louis. Fed and going by the data it has been in decline.

Hence the reason I stated I will only be buying Gold on any major declines and no miners.

Spot

With regard to M3/M2 measures, you are correct that it is in decline.
This is of course due to the Fed selling securities, thus increasing the Yield, and removing liquidity from Reserve Banks.

Inflation is better defined as;
A reduction in purchasing power

From that definition, a much more comprehensive discussion on inflation can be facilitated.

jog on
d998

 

[Spot]

d998

If I can not use the info to trade with, it's immaterial.


By using: M2 -- notes -- 30/5y yield.
U have relatively uncorrupted leading data.

If I presume that inflation is price based:
Then I'm stuck with adjusted lagging data.

Even if the price data is correct, by the time I know about it the bird has flown.

 

[Kauri]

Interesting to see if this little abc plays out, 606 would be a good spot if it does.

 

[Sean K]

I think the fact it's tested $620 several times now and rebounded that it might climb higher from here. Not convinced, but more than a 50% er for me.

 

[Kauri]

I think the fact it's tested $620 several times now and rebounded that it might climb higher from here. Not convinced, but more than a 50% er for me.

Hi kennas
Is that on the kitco C charts?? On the spot OHLC charts I use 620 doesn't really show up. My bias is that AU is on the way up also,I am looking for confirmation and an entry opportunity if and when it happens.

 

[Sean K]

Hi kennas
Is that on the kitco C charts?? On the spot OHLC charts I use 620 doesn't really show up. My bias is that AU is on the way up also,I am looking for confirmation and an entry opportunity if and when it happens.

Yeah, Kitco. I'm just doing it in $US. Probably should be doing in AUD also.....

 

[Sean K]

Daily gold update:

I'm feeling more bullish today. Probably 60% on the bull indicator for gold to start new uptrend. Once again, gold tested $620 and went through $630 overnight, finishing in the high $620s. To spend this time consolidating above a key resistance level is very good imo.

My gold bull indicator is something like this atm:

$620 50% chance of renewing long term up trend.
$625 55%
$630 60%
$635 65%
$640 70%

I don't think I could give a rating higher than 70% chance for gold to continue going up, too many variables.

Under $620 then the odds of gold continuing sideways greatly increase. Under $600 and it's down.

I wonder if all this consideration is pointless???

 

[nizar]

I wonder if all this consideration is pointless???

I gave up trying to predict moves in gold a long time ago, especially short term ones. Long term i still think up. WHen it starts running, no1 knows.

At the latest, gold i suspect will run next year when the FED cuts rates. That means no more support for the USD, and gold should run.

I figured im just gonna wait until gold runs. When the May high is broken, ill consider getting some goldies. After all, its its gonna to the $000's, then we have plenty of time to get set.

 

[Sean K]

I gave up trying to predict moves in gold a long time ago, especially short term ones. Long term i still think up. WHen it starts running, no1 knows.

At the latest, gold i suspect will run next year when the FED cuts rates. That means no more support for the USD, and gold should run.

I figured im just gonna wait until gold runs. When the May high is broken, ill consider getting some goldies. After all, its its gonna to the $000's, then we have plenty of time to get set.

Yeah, I think there is time and it's important to be set, in order to load up Chicken's truck. I want to try and get in early though. I probably still have too much gold in the portfolio atm but like you I'm long term bull and am prepared for some short term pain for the long term gain.

Goldies I'm holding atm:
(note: some have sig copper, silver and maybe uranium, but should still be supported by gold appreciation)

AGS
AVO
BSG
CTO
GCR
IRN
KMN
LHG
NCM
PSV

Looking for an entry into: BDG, SGX, OGD, NEM,
Maybe EMP, AGC,

Will certainly be topping up on any great weakness.

 

[Sean K]

Time To Buy Gold, Gartman Says
FN Arena News - November 23 2006

By Rudi Filapek-Vandyck

Time to buy gold? US-based trading guru Dennis Gartman certainly thinks so. In his latest update of daily The Gartman Letter, Dennis highlights the small overnight rise in the spot bullion price was sufficient to push gold outside its "well defined consolidation pattern".

A bullish technical signal in combination with bullish fundamental signals make for a clear trading opportunity, Gartman suggests. He flags he will be adding to his already long position in the market.

Among the bullish signals mentioned in The Gartman Letter is a very strong demand from India as the marriage season begins in earnest. Gartman cites the World Gold Council reporting Indian jewellery demand in the third quarter was up 11.9% from a year ago. India 's gold imports were up 123% from a year ago in October, he adds.

Also, he believes the central banks are currently supporting the bullish picture as they have been selling more gold than usual recently and it has had a negligible impact on the spot price in the open market. In the past two weeks, three European central banks havesold 18.13 tonnes of gold, Gartman reports, adding that in order to meet the 400 tonnes allotted under the Washington Agreement, they normally only need to sell approximately 7.7 tonnes per week.

Gartman: "Normally, one might suggest that such sales would be depressive of gold, but instead, gold has taken these sales rather well, and has moved higher. We are reasonably impressed, and remain long of gold as a result."

 

[Dr Doom]

Yes. I agree with the last few posters with the long term direction of gold, the only way is up if only for the constant creation of excess liquidity. Just look at all the M&A activity going on - too much money sloshing around. This usually a sign that the markets have gone from the 'irrational' stage to the 'manic' stage ie buy at any cost or the (borrowed, carry traded, etc) money will burn a hole in your pocket.

As an observation of what some may call manipulation in the pog, if you look at the Kitco chart above closely you'll see a similar pattern when trading starts in the US - up until the start of US trade the pog is generally rising. US trade starts and any attempt to go higher is slowly but surely beaten back down.
How long can the lid be kept on the boiling pot?. I think it may be a matter of weeks, not months. If there was any so called link between gold and oil then it is fairly well being broken over the last few trading sessions. Another positive.

Also good to see someone nominate a list of stocks that they are holding.
I've got a few of them too. Anyone know of some promising penny dreadfuls?. The way BDG's going it might end up one . I am still holding in there though, a true believer, though my bank balance is poorer for it. When to top up?. Must be getting close?.

 

[fleathedog]

From Bloomberg:

Gold Rises for Second Day as Dollar Slump Boosts Metal's Appeal

By Christopher Donville

Nov. 22 (Bloomberg) -- Gold rose for a second day as a slumping dollar boosted the appeal of the metal as an alternative investment.

Gold, sold in dollars, generally moves in the opposite direction to the U.S. currency, which dropped today to a five- month low against the euro. The dollar fell on speculation the Federal Reserve will lower interest rates as the economy cools. Gold is up 21 percent this year, while the dollar has fallen 7.2 percent against six major currencies.

 

[Sean K]

$US looking shakey if it falls below $0.84 by that chart. Good.

 

[Sean K]

3 day Kitko chart again.

Has steadily risen the past 3 days after quite a bit of consolidation. Looks ripe to push though $630 tonight, with $US looking suspect.

Of course, anything can, and will, happen overnight in the US. But, it's just looking positive for gold to me right now, after a wine or two.

 

[wayneL]

With the slap down of the USD and lack of proportionate reaction to the upside on gold, has made me a bit bearish on the yellow metal.

I traded the move and it fizzled out badly.

Here is the blurb from my futures broker:

Bears stand their ground! Gold and Silver prices ended little changed from yesterday, after tests of weekly highs were made in today's session. December Gold closed up 30 cents at $629, off a range of $627 to $635, low to high. Gold rallied along with the Euro versus the US Dollar early in the session, but Gold was unable to hold on to the gains, despite the Euro remaining firm into the New York dealing close. The bears rejected prices above $630 today, which suggests that Gold is not ready to break out of its trading range of $615 to $635. Momentum on the daily charts is sideways/down, as it has been since 11/13, but December futures have been unable to break down and close below critical support levels of $620, $610, and $600. Resistance remains at $630 and $637 respectively. Gold is likely to remain within the bounds of the well-worn trading range of the past few weeks.

A crashing USD will drag gold up, kicking and screaming, but how does it look in OZ pesos? Anyone have a chart in Gold in AUD?

 

[Kauri]

Thanksgiving in the USA, long weekend?? Does that affect it at all??

 

[ducati916]

enzo

Direct comparison;

jog on
d998