Gold strategy in the current economy

[starclouds]

26 minutes ago, Errol said:

Going down to 1180 wouldn't be a problem. 

All other indicators are now looking very good for gold to have an amazing run soon.

What indicators? Gold is not moving on global instability and EM carnage and the USD is on a march higher and could have a long way to go. When is soon? Sure within 2 years but not within 2 months? Apart from a little corrective bounce due to being heavily oversold. 

[Errol]

Bearish readings are at record extremes across a range of indicators. This is very good news.

[starclouds]

23 minutes ago, Errol said:

Bearish readings are at record extremes across a range of indicators. This is very good news.

Have a look back through some of the predictions you link to such as this one

http://www.marketoracle.co.uk/Article59815.html

The rationale and reasoning are almost the opposite of the recent link:

https://www.clivemaund.com/gmu.php?art_id=68&date=2018-08-06

If gold is a momentum trade at the moment then the USD price can fall for months and months and no dome and bowl shaped graphs will prove otherwise. I hope this is not the case as it is not good for me and my investment in this area but my gut is gold will go below $1,000 usd, miners will go under and consolidation will take place in that sector. Then perhaps, if gold is to ever again have any value the speed of the reversal will be massive.

Gold is utterly despised but there are many reasons why big actors in the global monetry system. Surely this whole US approach to putting up trade barriers is a last gasp attempt to keep the USD as the 'defacto' global reserve currency as it is massively under threat? The USD to spike above 120 on the DXY, gold to be below $1,000 and a massive global crash.

 

 

 

[starclouds]

Going through 1,180 - 

I think it has never looked uglier for gold since this thread was started.

Gold is relentlessly sold, I have never seen it this bad for years. Bitcoin at least has buy-in on the trend down.

It is like someone is killing gold off so that there is no notion of it being a safe haven. 

[Errol]

Paper gold is being 'relentlessly sold'.

If it's physical, then who is on the other side of the trade? You have to sell to someone.

Edited August 15, 2018 by Errol

[starclouds]

11 minutes ago, Errol said:

Paper gold is being 'relentlessly sold'.

If it's physical, then who is on the other side of the trade? You have to sell to someone.

How and who are you going to sell gold to without the aid of the 'paper price'? All those, mainly US, websites about 'stacking' are on the same wave length as preppers. If the proverbial hits the fan you need a safe space with access to food and water and somewhere to grow food. No one is interested in bits of metal. I can't see any return to a gold standard ever - probably a new blockchain based global currency will emerge with a reset.

Some of my money is in gold and some in senior minors (funds) as a hedge for GBP decline and a global financial crash. It was probably a stupid move in the short to mid term. It looks like it is turning out that way. 

I was expecting a sharp decline if we had a global recession/crash but there is something unnerving about the speed of this decline at the moment without corresponding carnage elsewhere - gold could get absolutely crushed and it might take years to even nominally get any return. 

[Errol]

This is normal for what is happening - bearing in mind gold falls like this normally presage something very nasty elsewhere in the financial system or world in general. The same happened in 2008.

 

Gold And Silver: Similar To 2008

In 2008, gold was taken from $1020 to $700 and silver was pounded from $21 to  $7 during the period of time that Bear Stearns, Lehman and the U.S. financial system was collapsing.  The precious metals were behaving inversely to what would have been expected as the global financial system melted down.   Massive Central Bank intervention was at play.

http://investmentresearchdynamics.com/gold-and-silver-similar-to-2008/

Edited August 15, 2018 by Errol

[Errol]

26 minutes ago, starclouds said:

If the proverbial hits the fan you need a safe space with access to food and water and somewhere to grow food. No one is interested in bits of metal.

If you genuinely think this then I'm surprised you have any gold at all.

Remember that in extremis, gold is the only thing that will be wanted as payment. It's the perfect vehicle for seeing out a crisis and has been used by individuals and nations to guarantee survival for thousands of years.

[starclouds]

6 minutes ago, Errol said:

This is normal for what is happening - bearing in mind gold falls like this normally presage something very nasty elsewhere in the financial system or world in general. The same happened in 2008.

 

Gold And Silver: Similar To 2008

In 2008, gold was taken from $1020 to $700 and silver was pounded from $21 to  $7 during the period of time that Bear Stearns, Lehman and the U.S. financial system was collapsing.  The precious metals were behaving inversely to what would have been expected as the global financial system melted down.   Massive Central Bank intervention was at play.

http://investmentresearchdynamics.com/gold-and-silver-similar-to-2008/

 

crypto-currencies were not around in 2008. I think they will change the dynamics somewhat.

Also, I think the manipulation will be worse this time, everything is so artificial. If the global banking system relies on smashing paper gold down and keeping it down then how and why could it rise?

 

 

[starclouds]

7 minutes ago, Errol said:

If you genuinely think this then I'm surprised you have any gold at all.

Remember that in extremis, gold is the only thing that will be wanted as payment. It's the perfect vehicle for seeing out a crisis and has been used by individuals and nations to guarantee survival for thousands of years.

As an individual how are you going to buy food with physical gold!

I think a lot of thinking on gold is from hindsight. I am not so sure it is such a good store of wealth anymore. Is it better than anything else that has decent tangible value? Owning land would be better if you could afford it.

[Errol]

I don't see Crypto as the same or competing with gold. They are different things. In extremis, nobody will accept Crypto.

They can continue the price games as long as there is a 'global banking system' or until they run out of physical gold. Bear in mind Russia, China and India are buying hand over fist.

[Errol]

Just now, starclouds said:

As an individual how are you going to buy food with physical gold!

You don't. You use the increasingly worthless cash which you should always have on hand.

[nothernsoul]

Whats happening in turkey at the moment is a ruthless demonstration of the power of the dollar, and the superpower state with overwhelming military might that stands behind it.  So that is where the money is running to in anticipation of things getting worse. 

[Mossie]

1 hour ago, Errol said:

Paper gold is being 'relentlessly sold'.

If it's physical, then who is on the other side of the trade? You have to sell to someone.

Paper moves the 'real' gold price surely.   Paper/cash buying at higher prices, ETFs, CFDs must have been part of pushing prices up over the years?    Although I note for now there is a difference in spot prices and silver asking prices on ebay.

It was an article that maybe I read on this thread a couple of years ago, that made me rethink Gold.  Something about physical-gold investors 'wish for dark times' to be wealthier.   That it was the investment of pessimism.   

Yet I can see the insurance value in gold, but at these prices?  

Rising interest rates, US dollar strengthening.  £1 = $1.27.   I don't know much about these matters, but perhaps we'll get to a point of fewer buyers and more sellers?   And what something is worth is discovered by what people trade at.   I'm seeing Barclays and Lloyds Bank shares slide back quite a lot in recent weeks.  People selling at lower prices.

I don't have any gold except for a few bits and pieces.  Couple of rings, and couple of necklaces.  Maybe £1K altogether at these prices.   A while back, half-asleep, I  did see some economic depression show of old, and people used to cut a bit of gold from their gold-necklace-chains, in order to buy items.

[Errol]

 

[jiltedjen]

13 hours ago, Mossie said:

Paper moves the 'real' gold price surely.   Paper/cash buying at higher prices, ETFs, CFDs must have been part of pushing prices up over the years?    Although I note for now there is a difference in spot prices and silver asking prices on ebay.

It was an article that maybe I read on this thread a couple of years ago, that made me rethink Gold.  Something about physical-gold investors 'wish for dark times' to be wealthier.   That it was the investment of pessimism.   

Yet I can see the insurance value in gold, but at these prices?  

Rising interest rates, US dollar strengthening.  £1 = $1.27.   I don't know much about these matters, but perhaps we'll get to a point of fewer buyers and more sellers?   And what something is worth is discovered by what people trade at.   I'm seeing Barclays and Lloyds Bank shares slide back quite a lot in recent weeks.  People selling at lower prices.

I don't have any gold except for a few bits and pieces.  Couple of rings, and couple of necklaces.  Maybe £1K altogether at these prices.   A while back, half-asleep, I  did see some economic depression show of old, and people used to cut a bit of gold from their gold-necklace-chains, in order to buy items.

for me its insurance.

i want to buy a house, if interest rates shoot up it would cause houses to crash and the pound would crash anyway.

Having a few K in gold is handy, so if you end up losing the house then the conditions to cause that will of also caused a few K of gold to become tens of k of gold. So you end up in a similar situation regardless of what happens. UK economy in not really based on productivity, its based on sacred houses, house prices tank and there would be huge job losses in the public and private sector. (i work in manufacturing so not linked to houses, so im not taking up that particular book)

Fiat is only becoming more worthless day in and day out. I have mentally written off 30% of the value of the house im looking to buy as 'bubble froff', and planned accordingly with a 30% deposit, and having gold as insurance in the back-ground. But for a 5-10 year horizon thats not the end of the world. Fixed rates on a mortgage hammer it down (with over-payments) so fingers crossed ending up with some equity left after the next crisis.

Without the gold i wouldn't be prepared to take up an opportunity of a particular house. 

The gold is 'outside of the system' so you can make bat-poop mental decisions (like buying a house), and if that particular high risk bet does not pay off, then it does not matter, go bust. sod them. Besides looking at how the UK government has thrown everyone under the HPI bus, i can seen more leniency on house-owners come the next crisis, let alone the massive dropping of interest rates again back to 0% or lower. 

Equally for the same reasons i own gold i own bitcoin, bitcoin has the same qualities as gold but due to the open ledger you cant fake endless paper contracts to suppress the price. I dont bother with silver. 

[chronyx]

All PMs jumped up a bit this afternoon

[starclouds]

18 hours ago, Errol said:

 

 

I will watch later but picking up what you said above about how gold behaves during recent global market crashes it seems a bit pointless to treat it as a safe haven asset at all.

You could buy USD, YEN, CHF etc. before a crash, let it appreciate during the crash and then  buy gold? You can also buy loads of better stuff after a crash when everything has been discounted. Maybe you can make more money jumping into miners or 3 x funds linked to the rise of gold but if gold is not a safe haven during a crash then it seems to lose some of it's value - I guess what central bankers and those of similar ilk want. Due to market manipulation, naked paper shorting, gold loses it's shine at an important time. 

 

[starclouds]

1 hour ago, chronyx said:

All PMs jumped up a bit this afternoon

1,160 was tested overnight. I guess that is a line in a sand. I reckon gold will free-fall below $1,000 if that is breached.Still there momentum and sentiment is massively negative. By the end of the US session gold will probably be pushed into a decline on the day.

 

[Paul77]

7 minutes ago, starclouds said:

1,160 was tested overnight. I guess that is a line in a sand. I reckon gold will free-fall below $1,000 if that is breached.Still there momentum and sentiment is massively negative. By the end of the US session gold will probably be pushed into a decline on the day.

 

1160 was tested and strongly rejected, if we finish with a daily pinbar we may get a short squeeze. EURUSD is potentially reversing too (yesterday's pinbar off a 1.13 level)  which is good for PMs. Turkey's problems are fixed for now. I think short term signals are bullish for Gold and Silver.

[Slimline]

22 minutes ago, starclouds said:

1,160 was tested overnight. I guess that is a line in a sand. I reckon gold will free-fall below $1,000 if that is breached.Still there momentum and sentiment is massively negative. By the end of the US session gold will probably be pushed into a decline on the day.

 

Jesus, for someone invested in it the negativity is high

[starclouds]

1 hour ago, Slimline said:

Jesus, for someone invested in it the negativity is high

Coming true though - gold is already close to going into the red on USD terms for the day.

I have been in and out of gold and gold miners for 10 years. Not made anything much. Possibly slightly up. So I am not awfully bitter but it takes a long time to work out how to try and trade it. I have a 1/4 of a pension fund in it. I did best straight after the Brexit vote result which made up for some previous losses. 

[Will!]

Bloomberg:  Safe Havens, U.S. Rates and Physical Demand: Gold Myths Busted

[Noallegiance]

I love the smell of capitulation in the mornings...

[Errol]

Russia increased gold reserves by another 25 tonnes in July. Heading towards record levels now.