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Gold strategy in the current economy

12,323 posts in this topic

19 hours ago, sPinwheel said:

What has this got to do with gold strategy.

Quite a lot, depending on what you choose to believe or not believe.

If you believe that central banks have encumbered gold, and are therefore deliberately not revealing proper bar lists, then your strategy will clearly be to continue physical gold purchases. Eventually the game will end and people will realise that there is not enough physical to go around.

However, if you thought everything was fine and the central banks are 100% truthful and have completely unencumbered gold, then you might be more disposed to buy ETFs or gold shares. Or perhaps not buy so much gold at all.

All news from the gold market and the areas surrounding it can, in my view, potentially play into strategy.

Edited by Errol

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Stanley Druckenmillar is back on the gold bankwaggon. It surprised me he said he sold his gold position on Trump's election, but really he was just shorting it and then going back in at a lower price. Very clever fellow.

His bullish position on gold remains the most reasonable analysis of the yellow metal I've read. It's not going to 10000 dollars but it may well double in value over the next ten years, which is something that can't be said about UK house prices!

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This is the first of at least 2, probably 3 this year. The bond market has peaked, the market has reversed. Rising rates and QE are not mutually exclusive.

8 hours ago, GreenDevil said:

Perhaps we will have one last puke when the fed do their one annual rate hike?

 

Edited by warpig

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19 hours ago, thisisthisitmaybe said:

Stanley Druckenmillar is back on the gold bankwaggon. It surprised me he said he sold his gold position on Trump's election, but really he was just shorting it and then going back in at a lower price. Very clever fellow.

His bullish position on gold remains the most reasonable analysis of the yellow metal I've read. It's not going to 10000 dollars but it may well double in value over the next ten years, which is something that can't be said about UK house prices!

May not in terms of gold, but maybe against £... maybe. Post Brexit and all.

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Hilarious the way the massive rise in the middle chart (of the 3 above) coincides almost exactly with the closure of the gold window in August 1971.

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It's not a coincidence and if that chart isn't screaming monetary failure as support becomes resistance, I don't know what is... Commodities are going to become a lot cheaper at some point in the not too distant future, as clearly an increase in the money supply has pushed prices up. Will gold survive - Yes after a potential blip. Will gold flourish as the US lose their reserve currency status in 10 or so years - Yes. Will silver survive the monetary purge - Maybe.

23 minutes ago, Errol said:

Hilarious the way the massive rise in the middle chart (of the 3 above) coincides almost exactly with the closure of the gold window in August 1971.

 

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Sorry I've only just noticed your reply. I would say only a potential rate hike has been factored in, the market believes there's an 80% chance rates will rise, they won't put all their eggs in one basket. My money is on a rate hike and the markets moving accordingly, irrespective of where they're positioned today. You might find this chart interesting, the $CRB has broken down.

CRB-DAY-1.png

On 12/03/2017 at 4:12 AM, maverick73 said:

The market has factored in three hikes already, but mistimed the entry point which caused uncertainty in the price of commodities.

With ADP & NFP reports confirming a growing economy the almost dead cert is a base rate hike by the federal reserve. 

With regards to the price of spot gold, I'm unsure if it will fall towards the 1180 mark. It's seems steady around the 1200 support level and will begin to rise, once trumpet splurts another tweet :) 

 

Edited by warpig

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If the market has genuinely factored in the multiple rate rises then gold should ignore the news and continue to rise. Sadly, they will more than likely use the FOMC as an excuse to sell ludicrous amounts of gold paper into the market and take it through relevant technical levels.

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It's not an excuse, it's traders trying to make money. That's what they do for a living...

2 minutes ago, Errol said:

If the market has genuinely factored in the multiple rate rises then gold should ignore the news and continue to rise. Sadly, they will more than likely use the FOMC as an excuse to sell ludicrous amounts of gold paper into the market and take it through relevant technical levels.

 

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8 hours ago, Errol said:

If the market has genuinely factored in the multiple rate rises then gold should ignore the news and continue to rise.

Yep they did. The didn't factor in that there may not be four rises this year, hence gold up.

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The price action in the dollar is curious. Where did the prospect of a 4th rate rise come from? I didn't read that anywhere until AFTER the rate rise. Is this is a new trick to manage the strength of the dollar in an environment of rising rates?

On 15/03/2017 at 11:18 PM, GreenDevil said:

Yep they did. The didn't factor in that there may not be four rises this year, hence gold up.

 

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On 13/03/2017 at 9:03 AM, DiggerUK said:

My comments are tagged to this MoneyWeek article on bonds. Interesting article, interesting times..._

http://moneyweek.com/the-great-bond-market-massacre-of-2017/

This piece on bonds from the Beeb rhymes with MoneyWeeks', but it's a more rounded and thoughtful account in my opinion.

One thing about gold, over and above all of it's other benefits, is it's liquidity. And buyers are still buying, even though the bourses are booming. Very odd times..._

http://www.bbc.co.uk/news/business-39325794

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As Greenspan said:

“Fiat money, in extremis, is accepted by nobody. Gold is always accepted” 

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It looks like the weakness in $USDX and the small bounce in gold, is due to a bounce in $XEU after the "populist" Geert Wilder failed to win the Dutch General Election. Gold is looking weak considering $USDX has fallen from 101.60 --> 99.76 and is retesting support. If this was a genuine move in gold, it should have risen much more, which confirms this is merely a reaction to $USDX. My expectation is gold will fall below $1,200 in the next 2-3 weeks.

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I expect the first round of the French General Election in April to signal a reversal.

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Massive 100 Kilogram Gold Coin Worth $4.5 Million Stolen From German Museum

800%20%282%29_0.jpeg

moments ago local German press has reported that thieves broke into Berlin's Bode Museum and made off with a massive 100-kilogram (221-pound) gold coin worth millions.

http://www.zerohedge.com/news/2017-03-27/massive-100-kilogram-gold-coin-worth-45-million-stolen-german-museum

 

More on the theft from the BBC:

http://www.bbc.co.uk/news/world-europe-39409754

Edited by Errol

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