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hpbear

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  1. Silver appears to be decoupling from gold, it is currently at 16.20, so it has hardly corrected within this consolidation. This behaviour is very encouraging and consistent with GF's very interesting charts. Silver may start performing better than gold in the next few months, exactly as it happened in early 2006. ETF gold holdings in recent years have been remarkably stable during regular sell-offs indicating that the majority of investors are not looking forward to trading gold, for short term profits.
  2. The house price inflation, caused by abnormally low interest rates, is a global social problem, not a matter of few speculators. Given the choice of fighting inflation or protecting overstretched borrowers, all central banks will choose the latter and cut rates at the expence of savers. This choice is the only politically acceptable. The level of debts everywhere are too high and can not be repayed, so the only solution is to debase currencies. Those of us who have invested in hard assets, like gold, are not surprised. The true house price crash is going to be against hard assets.
  3. Could this be the day that gold closes above the previous historic high (850$)? This would generate still more interest.
  4. Silver, has been so disappointing over the last 18 months. Now, is the moment of truth. Will it break through the previous high at around 14.90$? If so, perhaps, it will start performing better than gold. Or is a correction looming? November is traditionally, however, the best month for PM and with the ongoing credit crunch worries investment demand has really picked up. This rally starting from 649$ is unbelievable, has extended for 2.5 months.
  5. I have been following the gold market closely for 2 years. Gold normally rises in September and has a dip in October due to seasonal factors. November is normally the best month. One must remember that the majority of the demand for gold still arises from the jewellery industry, and investment demand is still a small component 10-15%. However, this October so far there was no correction. This indicates a sharp increase in investment demand. Some experienced traders, have gone short, at the 660 level based on COT reports, but COT reports gave the wrong signal on October 2005, and it is likely that they may have given the wrong signal again. I expect gold to rise to much higher levels next sping. The best time for investment was August. Gold is currently 120$ more than the 200DMA so some care is required. It is difficult to believe there will be no significant correction. For someone wishing to enter the market now, cost averaging may be the best option. For instance dividing the amount he wishes to invest (x) in 3 parts, invest x/3 now, x/3 if there is a correction to a lowel level and the final part at an even a smaller price, if attained. In the long run, this kind of investment will be successful, only when the purchase price becomes much smaller than the 200MDA. Patience will be required, although the 200DMA has recently started moving up faster 0.7$/day.
  6. 500 Euro level broken, that should spark more interest. I think we have decoupling between gold and $. In the past, this has triggered big rallies in gold.
  7. So the August bottom was 607$. Those who were waiting for gold to drop to 200MDA (currently 587$) appear to have made an error. The fact that the funds have started again investing in precious metals yesterday indicates in my opinion that we are unlikely to visit the 600$ area again. However, the fact that gold did not cross the 200MDA is very interesting in my opinion. This is indicative to the incredible strength of this bull market, after 20 years (1980-2000) of declining prices. I would have added new longs to my position, but I am already 75% invested.
  8. No August bottom yet. This is very interesting. At the moment there are two opposite points of view. 1) Gold must gradually decline for technical reasons towards the 200 MDA, currently at 574$, rising at a rate of 0.9$/day. This should be in line with previous historical precedent regarding phase 2 of this bull run. THis behaviour is expected after the first major leg for phase 2. 2) Gold price is about to start rising again in September due to seasonal factors. Will there be a substantial decline to 600$ or less? I believe that there many wealthy individuals disgusted with negative real interest rates, who are waiting in the sidelines, who would like to know the answer to this question.
  9. Also I can't see what else to invest in..... But i can't help feel that I missed the boat. boredwaiting, No you haven't missed the boat. In fact this is still an early, stage 2 , bull run. However, patience is required. I believe, we are currently in a new consolidation phase, which may be in the range 580-640, and may last 2-4 months, unless some serious geopolitical concern erupts ( I am not an expert, just a guess). From personal experience I discovered two possible errors: 1) Overcommit and be forced to liquidate at a lower price. Corrections, in particular for stocks, can be vicious. One must not be greedy. 2) Make purchases after a substantial run up. The second error, however, will eventually be forgiven in this roaring bull. I have made a ot of technical errors however, my investment, that was made below 560$, should be safe. I am about 55% invested, and would be prepared to commit further funds should the gold price drop below 600. Some people expressed concern that a 100% investment (cqnao) is unduly risky. That is not the case, however, if a person is already sitting on a substantial profit and is not bothered by 5-8% corrections, as we have recently seen.
  10. Do you have a link to the 200 MDA for Gold ? Red line under gold's technical picture on this link http://www.gold-eagle.com/editorials_05/grandich031406.html For a more extended period of time see also blue line under gold's weekly on this link http://www.gold-eagle.com/editorials_05/gnazzo030906.html I am sure there are better charts elsewhere, you only need to look at regular contributions in www.kitco.com or www.gold-eagle.com and you will find plenty of information. Stage 1- Price of gold increase with time (described by 200 MDA) is approximately linear Stage 2- Price of gold can be fitted to a parabola ( investment demand starts to become important)
  11. Gold is currently in early stage 2 bull run. This means that unless there is some central bank selling, it is unlikely to drop much below the 200 moving day average (200MDA). On January 1 2006, the 200MDA stood at 460$. Thus with gold attaining 575$, the difference was excessive and a (seasonal) correction was expected. The 200MDA is currently at 480$, increasing about 10$/month. This is the basic support price. If in stage 1, gold must soon go back to 200MDA. It must do so within the next 2 months, in order to drop below 500$. However we are in stage 2 (where gold is decoupled from dollar). This means that the gap, may not close quickly. For this reason, I doubt gold will drop below 520$. Some further correction is expected according to the COT report but I believe there is uncertaintly on short term price movements. Note that I am overinvested in gold (45%) (starting last September), so my opinion may be biased and my experience is limited. For someone wishing to invest in gold, I think there are 2 options. 1) Wait until the gap is reduced further (perhaps in April or May). 2) Invest now but be prepared to be patient and withstand some initial loss, if correction continues.
  12. The correction is seasonal. A peak is usually observed at the end of January. Gold is currently above its 200 day moving average which currently stands at 460$. For this reason, a correction reducing the gap was expected. The important thing to note, however, is that the 200 day moving average has recently started rising rapidly (at a current rate 10$/month) ever increasing. Many inestors are willing to pay a premium for gold since the increase has taken a parabolic form, implying that gold is excellent long term investment. At what point will gold meet its moving average? 520? 540? no one knows. I personally do not expect gold to fall below 520 because the secret is out know. As it was suggested by MarkG it is reasonable to expect a static picture until March. The correction is seasonal. A peak is usually observed at the end of January. Gold is currently above its 200 day moving average which currently stands at 460$. For this reason, a correction reducing the gap was expected. The important thing to note, however, is that the 200 day moving average has recently started rising rapidly (at a current rate 10$/month) ever increasing. Many inestors are willing to pay a premium for gold since the increase has taken a parabolic form, implying that gold is excellent long term investment. At what point will gold meet its moving average? 520? 540? no one knows. I personally do not expect gold to fall below 520 because the secret is out know. As it was suggested by MarkG it is reasonable to expect a static picture until March.
  13. I may be wrong but I doubt if there is much profit to be had by shorting gold at 550$, given the fact that gold jumped from 515$ to 530$ on the first day of the year. I bought 110 ounches at 555$ and could buy additional quantities if there is further reduction.
  14. Euro is also a fiat currency. Real interest rates are negative and have been so for quite some time. This is the reason why I converted to gold, 30% of my cash already. The Euro may appreciate this year considerably with respect to the dollar, however, keeping a Euro account does not at the moment provide any safety for inflation. The prospect of +ve real interest rates appears to be doubtful at the moment. First I do not believe that the inflation is 2.2%, (This is an indicator of some selected price increases, not monetary growth). Secondly, house prices are overblown in some countries, such as Ireland and South Europe. People are heavily indebted and the economy can not withstand the high interest rates required (for +ve real interest rates). The ECB does not care for savers, they only seem to care about GDP growth. I have lost confidence on the currency. Thus I am planning to continue investing on precious metals, on pullbacks. Others may share the same opinion, which explains the rapid recent devaluation of the Euro compared to gold.
  15. I am no expert trader. I have invested initially at 470$ thanks to this forum. Added substantially during breakout at 480, 490 and 500. Foolishly bought at peak 535$ just before pullback. Bull markets, however, forgive mistakes. I have invested 28% of available cash. This is probably satisfactory. although I would like to add more. I am planning to invest small amounts at regular intervals, and in pullbacks when they occur. In retrospect it would have been ideal to invest everything at the beginning. Who has the guts to do that? Investing in regular intervals, reduces the risk, since the gains from initial investments offset any potential loss in subsequent investments. We are currently in the 2nd phase of the bull market and the gold price has taken the form of a rising parabola. In this situation shorting (profit taking) is more dangerous although some sharp pullbacks are expected.
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