we're heading towards $850 and perhaps lower.

i'm a long standing precious metal bull and stick to that long term view. we will see new all time highs.

but before that get ready for $850 or lower. there's a lot of bullish mania here surrounding gold and you need to know the risks currently point to a LARGE DROP bigger than most here would care to entertain.

Are you actually going to give any substantive reason as to why the price should drop?

I won't be selling mine anytime soon. Especially now the pound is really taking a dive.

Yes, there is an element of the anti-CGNAO about it. Still, what's good for the goose...

How many times have I warned people about the volitilty of the commodity markets.

Just because the TA looks nailed on, the fundamentals can blow you away as a certain oil shorter on here found out recently.

Take this a polite warning.

My advice is hold onto your gold and buy more during corrections and you wont go wrong.

Absolutely agreed. 775.

Yes the fundamentals are sound. Just like you should load up on property now while you can get some good deals.

Yep.

yep, buy in the dips..or something like that...

If you're advocating selling Gold, then should you not also state what you intend to use as a store of wealth in the mean time?

THe TA says another dip this week to $907. After that difficult to predict. The fundementals at the moment I would say are for recession, this will depress the price for a few months. After that the effects of the dollar price will shine through and the talk will be of inflation.

The TA and fundementals at the moment say gold down. I will be buying again but not quite yet. The flip side is that I'm still not going to short as overall gold will go higher and TA is 70-80% correct at its very best (i.e. not mine).

Made a bit of money today on the dead cat bounce but the daily chart says further leg or two don over first couple of days next week.

Good luck!!!

1) Deleveraging will continue full steam ahead. That means some of the largest spec positions in gold being liquidated.

2) Lots of market participants have used this latest drop to reload including spec players and gold mining companies - not good.

3) Gold has recently shown a distinct inability to mount a rally without the support of equities, crude oil, or a falling dollar.

4) ALL asset valuations depend on two things - economic growth expectations and interest rates to discount that growth. both are heading the wrong way. the first lower, and the second higher.

5) gold is a tiny market. traffic is one way and liquidity often disappears completely. think what your downside is and take off $50.

6) the supply story in commodities is going to give way to a weakening demand story - decoupling of India and China is a myth.

that's plenty for now.

Did anyone listened to zapata george blake talking of oil shortages and a possible near term spike to $160 to $200 upwards.

In this event, gold does not go to $775.

Just move it into a stronger currency than GBP of course.

the message here is to imagine a price of $850 or $800. how does that make you feel? is that going to wipe you out? if so sell now...if not, do nothing.

Indeed.

The only caveat I would add is that the Euro/USD looks set to re-test 1.59, which if successful could see it have a go at 1.60/1.62 before turning down. That would tend to suggest the gold sell off may be a week or two coming through. Unless the hedgies need cash very urgently in which case it will come much sooner. My target top 3/4 weeks ago was 1020 with 850 likely support, and 775/730 possible. I see nothing to change that.

If a gold significant correction is going to wipe you out then you have made some terrible investment decisions.

Name one, just one, bank account in any fiat currency that pays a positive rate of interest in real terms.

Oops there isn't one.

Gold it is then.

My thoughts are of an absolute bottom of $850. For me that is wishful thinking.... Many will be suprised that a weakening of the Euro will not cause gold to collapse.

In fact, I actually see gold as a beneficiary of it.

If you are confident of a short-term downward move in the value of gold measured in dollars then, assuming that your transaction costs are less than the value shift, are you not increasing your wealth by converting it into dollars?

I see, so gold prices anywhere in the range 730 - 1020.



THANKS FOR THAT!

Surely gold doesn't pay a positive rate of interest in real terms.


You are relying on the value of gold appreciating just like all the BTL'ers


The point is that there are lots of voices saying 'buy gold' but spoon was trying to give a balance to this to stop people being sucked in to a 'one way bet' according to lots of people on this site.

GOLD 1600 DOLLARS BY THE END OF THE YEAR! END OF

I seem to recall you were bidding it to the moon as it went over $1000? Buy low/sell high. It's not difficult Narco.

I did inded. I recently bought 1 ounce at $1001. I then bought another one at $913 on the correction.

Gold was set for the moon if it wasn't for the buy out of Bear Stearns. We got a nice insight that evening into how the gold market would react to a major banking institution failure.

Maybe the timing wasn't the best but I'm not on margin and I have more gold.

Increasing how much per ounce for each mile it travelled ?

I sold 25% of mine at $1000 and i have stopped buying. However, if Financial Planner is right, ill be restocking below $800.

Gold is so volatile its any-body's guess.

the moon is 238857 miles from earth, so right now its 0.003899 dollars per mile. OK ill go to bed now.

Gold isn't going to $775 and I'm quite happy to eat humble pie on this prediction.

if it was this easy everyone would have shares in these 'golden' charts.
i just bought another 6 1oz krugerrs. like it or lump it,
theres no safer place for your cash that i can think of right now.

plus you get the biiter sweet feeling of taking it out of banking circulation so the f2ck wits cant use it for more debt to idiots that cant pay it back.
they prices me out of town. im glad to see it go up and down, even to 775 as long as i have it, and not them.

Mods

Can we move this thread to the metals section please? It clearly doesn't belong on the main forum. You know, a bit of continuity to save credibility....

the thread should stay, or this site is in danger of becoming....gasp....a house price BORE !!!

BUT,

NeoWave, I think it is, has predicted that the gold bull is over now.

I tried to find the reference on the BB where I saw it earlier today. I'll try again and if I find it I'll post it here.

Indeed it lowers the tone to talk of such base matters as

....money.

Don't want the hoi polloi to get an inkling, now, do we?

Irony is not a strong point on this forum, is it?

Not at this hour of the morning, apparently. Please accept my apology.

Sounds perfectly reasonable. I expected $800-850 by way of a correction. Not sure why you phrase it as if there is some kind of panic or something.

Gold is simple. Just buy physical and hold it. Don't trade. Anyone who risks being 'wiped out' by such a move has clearly been engaging in some insane trading that, in this current market, nobody would ever advise.

I invest in Gold for insurance, but no more than 15%, Gold is 100% secure even if it's price in Fiat fluctuates. Fiat currency can slip down the pan at any time, and today the risks are higher than they have ever been.

Investing in gold for profit will probably make you poor, I see it as an insurance policy only. I realised the power of gold when my great grandfather left me a handful of pre 1900 sovereigns, today they still have high value, in 100 years they will still have value.

I was thinking about it yesterday, the increase in M3, that seems to plague gold bugs, and it occurred to me. It's the borrowing that finance the commodity bubble.

That's M3, so it's basically raising because commodity prices are rising, and commodity prices are raising because M3 is rising, an unsustainable bubble.

The reason it have to be this way, is that it's the only thing to make money on in todays market.

First, many do in fact get carried away by hysteria. Many will have decided to bite the bullet and set new longs at $1000.

If you view gold as an option in your ASSET ALLOCATION strategy you're going to be ok. If you're TRADING gold, like I do, a $200 move can SHUT YOU DOWN.

Only the very experienced or very brave/rich should be trading gold.

I bought all my physical gold stock at between $455 and $620. . If it drops to $650 I will sell at a large profit and go away and sulk at what might have been.

i being a simpleton do not yet understand the the reasons for the correlation between Euro strength and the pog etc -would one of you enlightened souls please explain or provide a link where I and others might ? thanks

Thank you for a refreshing view of the other side of the fence.

1) Deleveraging will continue full steam ahead. That means some of the largest spec positions in gold being liquidated.
2) Lots of market participants have used this latest drop to reload including spec players and gold mining companies - not good.

A: There is a huge , concentrated short position in gold which will have to be unwound at some point. This is massively bullish for gold long term. Mining companies and bullion houses which are short are using price weakness to buy back short positions. This again is bullish.


3) Gold has recently shown a distinct inability to mount a rally without the support of equities, crude oil, or a falling dollar.

A: The Gold price is gererally assumed to be manipulated on a short term basis.


4) ALL asset valuations depend on two things - economic growth expectations and interest rates to discount that growth. both are heading the wrong way. the first lower, and the second higher.

A: Inflation adjusted most gold market commentators expect the gold price to reset at anywhere between $2500 and $7000.



5) gold is a tiny market. traffic is one way and liquidity often disappears completely. think what your downside is and take off $50.

A: Err.....not true.


6) the supply story in commodities is going to give way to a weakening demand story - decoupling of India and China is a myth.

A: Gold is less of a commodity (like say copper) and more of a monetary metal.


Gold holds no counterparty risk, and is below its long term trend price. Definately something to consider in these troubled times.

Good question. In very general terms gold and to some extent oil and other hard and soft commodities are used to hedge against falls in the value of the dollar. So when the US dollar, in particular, is falling it tends to drive money out of dollar assets into these other assets and vice-versa. Since the value of the dollar is measured relative to other currencies, a fall in the dollar is essentially a relative rise in the other major currencies (including glod). The main dollar index is a weighted index against the Euro, Yen, Swiss franc, Canadian dollar, sterling etc....The biggest component is the Euro at around 56%. So the main (but not only) driver is the Euro/Dollar exchange rate. It is also far easier watching one currency pair than half a dozen.

The Euro/Dollar exchange rate is thus a very general proxy for movements in the gold price, in direction and trend if not in scale. For instance, the rapid rise in gold earlier this month coincided with a move in the the Euro/USD rate from 1.50 to 1.59. The fall was accompanied by a big correction back to 1.5350, and then last week saw the Euro strengthen again along with gold. The Euro is now back just shy of this recent high. It will either turn down again (taking gold with it) or push on to new highs, again most likely taking gold with it.

http://www.dailyfx.com/charts/Chart.html?symbol=EUR/USD

http://stockcharts.com/h-sc/ui?s=$GOL...id=p65494800156

Clearly there are many other factors influencing USD, Euro, gold and oil, but in general terms they tend to move with this relative interplay.

What was the strength of the dollar like at the time you bought it though - don't forget to take that into account.


If gold hits $850 I might put 15% of my savings into it as a hedge. I saw the benefits of it recently but didn't want to buy into it when it was in the 900's and rocketing up because of the fact it was clearly in a bit of a bubble at that time ... but if it gets back into the lower half of the 800-900 range I'll see it as a good hedge.

The people who think gold is going to $700's are the same who believe oil is going to $70 or $80 due to the US going into recession.

Oil is THE key driver of the commodity market. On the international oil demand/ supply side, coupled with weakening USD means we're more likely to see $120 - $150 this year.

So yes, were a now seeing short term overbought conditions in gold but just watch this market explode again at some point this year. If you sell your physical position on this basis, good luck trying to get back in when it turns.

Agreed (no expert).
Anyone who bought gold as a store of value should start buying now.
If you are selling now because of small price drop, you shouldn't have joined in the first place because you don't have the nerve.

The fundamentals have not changed in the global economy.
eg Citibank is in deep trouble etc.etc. Credit Derivative Meltdown in Progress etc.etc.

Ive noticed that gold lease rates are negative. Could cause a larger drop in prices

http://www.kitco.com/charts/g_leaserates.html

That's where I'm at TBH, makes sense for me. As a partly pyhsical pension I just like/get the concept and even if what I've bought over past 2 years crashes (I reckon below $600/oz would wipe my 'profits' out), I'll still have a commodity in my hands to keep for decades. However, havn't bought much ( just a couple of uncirculated sovs for 110 quid each) whilst prices are at hovering $950 - $1000, just too dear IMHO. Decided to set myself a steady limit of circa 400 quid a month from here on in, but if the price goes mental, $1200+, I'll avoid.
Like to add that trading in any market is surely a full time occupation and even then 50% of the time folks make huge mistakes even when they're working for huge firms, supported by cutting edge info., supplied by an army of analysts at their beck and call/fingertips

this how gold be will in the future.....soooo expensive and bought up as the main global currency which uk people investing entire saving plans into gold would only receive 80 grams or so for £20,000 pounds.
(hopes)...