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Gold strategy in the current economy


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HOLA441

That sounds like a revisionist point of view. You have to learn from your mistakes or you're bound to repeat them. You didn't sell your gold in 2011, so what makes you think you'll time the next or final high when it happens? Your investment horizon keeps slipping because you haven't been able to time the markets. If we all lived to be 150 years old then it wouldn't matter as much, but time is not on our side, so timing is everything.

Not by my definition it's not, it's more akin to a stopped clock. For as long as gold is primarily traded in dollars, you have to watch and understand the constituent currencies that make up the USDX, to understand how gold will behave. 

7 hours ago, d2thdr said:

Chart...fart what difference does it make? What is your time horizon that is what counts. Being wrong is different from not being right for now.

 

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15 hours ago, warpig said:

That sounds like a revisionist point of view. You have to learn from your mistakes or you're bound to repeat them. You didn't sell your gold in 2011, so what makes you think you'll time the next or final high when it happens? Your investment horizon keeps slipping because you haven't been able to time the markets. If we all lived to be 150 years old then it wouldn't matter as much, but time is not on our side, so timing is everything.

Not by my definition it's not, it's more akin to a stopped clock. For as long as gold is primarily traded in dollars, you have to watch and understand the constituent currencies that make up the USDX, to understand how gold will behave. 

 

I'm not looking at time frames, i trade on chart pattern, rather than reliance on so many varying charts. At the end on the day all commodities are scarce resources, and as such once the credit bomb explodes, it will drop like a lead ballon... unless a major war / natural disaster occurs.

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HOLA447

Where does the money go when the bond market blows up? I'd say into everything else, the bond market it colossal. The stock market doesn't appear to be running out of momentum or topping IMO.

2 minutes ago, GreenDevil said:

Buy low sell high on gold, look at the gaps on the dow, nas through 6000, the top is near, the big crash is coming....

 

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4 minutes ago, warpig said:

Where does the money go when the bond market blows up? I'd say into everything else, the bond market it colossal. The stock market doesn't appear to be running out of momentum or topping IMO.

 

Final push. Unless they cut rates, then we will be saved.

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9 hours ago, GreenDevil said:

Buy low sell high on gold, look at the gaps on the dow, nas through 6000, the top is near, the big crash is coming....

Out of interest what would you hold to get you through such an event that isn't a barbarous relic?   Personally I don't like the idea of digital stuff like BTC

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12 hours ago, giggler000 said:

Out of interest what would you hold to get you through such an event that isn't a barbarous relic?   Personally I don't like the idea of digital stuff like BTC

The Americans go on about lead being useful. I've got a load in my garden from an old roof that I've kept for this reason.

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HOLA4412

If you follow what James Grant of GIRO says- Gold is money mark 1.

If you follow other great investors, they call it insurance. An Insurance which they hold and hope they will be never be paid for, Interestingly they still hold gold in the boring physical form.

Warpig, Do you accept the thesis that gold trades inversely to the US dollar as expressed by the US 10 year treasury bill? US 10 year T bill has been in a 35 year bull market. The yield has fallen from 15% to 1.62%. Do you accept the 10 year is closer to the top than the bottom? If the earlier is correct, then Gold which is inversely correlated to dollar is more likely to be at the bottom than the top.

On this premise, does it matter if gold falls to $700 from here? For me, not at all. The reasons for holding gold have not changed, they have got better.

Another factor; as per Morgan Stanley- the gold and gold related investments constitute 0.25% of the total investment assets in the US. The US constitutes 24% of the global economy. Even an increase to 0.75% of investment into gold, will mean tripling of investment demand which would probably cause the prices to be affected substantially on the upside.

The feeling amongst the trader crowd is the war is between dollar and gold. I disagree. And the above thesis still proves- gold has to loose the war badly and still it will do well. The rally will still be explosive.

As per Another and his friend on USAGOLD, the war between dollar and gold was lost be the dollar in the 1980's. This is the war between dollar and the euro.

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HOLA4413

If you chart $UST10Y v $GOLD, broadly speaking they look inversely correlated. However, if you invert one of the indexes, the relationship is quite vague.

34328218966_c1d09b0c1a_b_d.jpg

Even if you look at a $UST10Y v $USD chart with one of the indexes inverted, you'll only see a broad correlation, although it's much closer than the chart above. So no I don't really accept that thesis, it's a 2-D model in a 3-D world. Having said that, do I think the bond bubble will burst? Yes I do. Do I think gold will be a benefactor? Yes eventually, but so will other markets. The complicating factor is the primary currency gold's traded in. It's a multi faceted beast and it can rise and fall for lots of reasons, one of which is it's the best horse in the glue factory.

The reason timing matters, is for those who are still adding to their position or are looking to take a position. Those that followed people like Eric Sprott or anyone else that comments on the Silver Doctors website since 2011, have simply supported their business model in a precious metals bear market. They claim the charts don't work and it's better to dollar cost average in because you can't time the markets. What a load of ********! It's better to buy low and sell high - end of. Never take advice from those who are selling their book or have a book to sell... Timing is everything because time and money is finite.

On 2017-4-29 at 9:06 AM, d2thdr said:

Warpig, Do you accept the thesis that gold trades inversely to the US dollar as expressed by the US 10 year treasury bill? US 10 year T bill has been in a 35 year bull market. The yield has fallen from 15% to 1.62%. Do you accept the 10 year is closer to the top than the bottom? If the earlier is correct, then Gold which is inversely correlated to dollar is more likely to be at the bottom than the top.

On this premise, does it matter if gold falls to $700 from here? For me, not at all. The reasons for holding gold have not changed, they have got better.

 

Edited by warpig
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HOLA4416

I expect dollar to rise and gold to fall in the short to medium term. Though I concede the point that dollar itself will act like a beta to the dollar denominated assets, its not a pure beta like gold is- if history is any proof of this.

Another point is- the crisis is ongoing. IMO 2008 was the final reckoning, this time we are awaiting the final denouement.

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On 06/05/2017 at 11:52 PM, GreenDevil said:

Those charts could indicate a cycle pullback and hold of the nextleg up in the next big bull run... Best not be short if 1190 holds.

exactly my thoughts. always two ways of looking at things.....

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On 2017-1-23 at 1:34 PM, p.p. said:

Reality bites.... The realisation that the USA has a narcissistic president more obsessed with himself than anything else (and a problem with 'facts') spells a change in USD strength to weakness. Maybe it's all part of his cunning plan

 

 

chickens coming home to roost

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12 hours ago, warpig said:

This is more about EU strength than dollar weakness. Despite what the chart looks like, USDX won't break down.

does donald trump consult these charts before he opens his mouth?

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HOLA4425

It's just noise. Whilst the US is in a rising rates environment and the Euro is on the precipice, the USDX can't break down. When the rest of the world is falling apart, the dollar will only rise as demand for USD increases.  A rising USD is the main role in the final act.

7 hours ago, p.p. said:

does donald trump consult these charts before he opens his mouth?

 

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