Gold strategy in the current economy

[Take Me Back To London!]

I notice that Hatton Garden Metals jacked their premium for krug's from 3% to 7% http://www.hattongardenmetals.com/buy-gold.aspx and now cost more than at CID. http://www.coininvestdirect.com/en/gold_coins/

I am not 100% sure though, but talking to them a while back when the market was volatile I got the impression that they did not hedge their gold stock and thus they would not be able to track prices to the downside without taking a loss.

Also to add, there has been a huge increase in buying over the last few days, stocks are going to be getting low, they can up their buying premiums to get sellers to sell to them and this gets passed onto buyers.

Edited September 25, 2011 by Take Me Back To London!

[Take Me Back To London!]

Celente has just exited from the Swiss Franc (for obvious reasons). With national currencies not an option any more, silver is a reasonable choice.

That was an excellent interview on King World News.

[Errol]

At the LBMA Precious Metals Conference (conference link) in Montreal this week, one of the presenters suggested: "The US should make a two-sided gold market at $20,000 per ounce."

[Mr 0.01%]

Yes.

If the man on the street thinks about gold at all, that is the way their thinking goes.

I guess I classify as 'the man on the street' but I'm thinking about moving a portion of my savings into gold, not so much as a way of making a direct profit but more as a hedge against further devaluation of the £ and effects of inflation, esp if QE2 is just around the corner and the EU are about magic 2 trillion out of thin air...

[_w_]

I notice that Hatton Garden Metals jacked their premium for krug's from 3% to 7% http://www.hattongar...m/buy-gold.aspx and now cost more than at CID. http://www.coininves.../en/gold_coins/

IIUC dealers base their selling price on the local physical fix price which tends to be set in the morning. I think it is due to their hedging strategy. At the same time their web pages display the electronic market price and calculate the premium on that basis. So if you have a very big fall between two fixes it will look like the premium is going up a lot until the next fix.

Inversely when there is a very sudden rise in the market you can buy at the previous fixe's price (if the dealer allows it) which can save you a few bob.

[_w_]

I have been following this chap Clive Maund for a year and he has been pretty good at spotting the ups and downs in gold and silver. I am no expert on either but I found it interesting when, this time last week, he wrote that both gold and silver were about to crash big time.

Those of you who are gld fans may already know of his stuff - http://www.clivemaund.com/ - has a couple of update articles on gold & silver.

I'm not attracted to technical analysis but his recent calls as shown on the site were excellent. I've read the report on oil and oil shares and he was spot on too. Well worth keeping an eye on.

Has anyone read that book?

According to "Technical Analysis of Stock Trends", the bible of TA by Edwards & Magee, the broadening formation "may be said to said to suggest a market lacking in intelligent sponsorship and out of control - a situation, usually, in which the "public" is excitedly committed and which is being whipped around by wild rumors."

[The Masked Tulip]

I'm not attracted to technical analysis but his recent calls as shown on the site were excellent. I've read the report on oil and oil shares and he was spot on too. Well worth keeping an eye on.

Has anyone read that book?

Not read the book, but wish I had come across CM earlier Well worth keeping an eye on.

[_w_]

I have done nothing but think of that in the last few weeks, seriously.

Those margin hikes are close to insignificant compared to other actions taken by the CBs and numerous other actors. The aim IMO is to take down commodities and create a deflation scare, temporarily. Gold and silver are only a small part of the action in this instance IMO (again). The whole spectrum of currencies / stocks / commodities is affected and I don't think gold/silver are the target (who cares? Copper fell by more than gold and is much more important to the world economy.) Oh, and I'm pretty sure China is in on the action (and it would be in its best interest to help commodities become cheaper and the dollar and its cr*p treasury paper to rise wouldn't you think?), a lot of the deflation scare data comes from there.

If my premise is correct they are not waiting much before making their move. It could be an oppostunistic one off but I don't think so.

http://www.bloomberg.com/news/2011-09-25/mongolia-wants-to-raise-stake-in-oyu-tolgoi-to-50-minister-zorigt-says.html

Mongolia Wants to Raise Stake in Rio Tinto’s Oyu Tolgoi Copper Mine to 50%

Mongolia wants to bring forward the raising of its stake in the Oyu Tolgoi copper project that’s being developed by Rio Tinto Group and Ivanhoe Mines Ltd. to 50 percent from 34 percent, according to the minerals minister. “We have sent the proposal to Ivanhoe to renegotiate the timeframe for us to increase the government stake,” Dashdorj Zorigt told reporters at Oyu Tolgoi yesterday. Such an increase is permitted after only 30 years, according to a summary of the $16 billion project agreement from London-based Rio Tinto.

Countries across Asia, Africa and Latin American are seeking greater control of the mineral and energy resources on their territories as rising commodities demand boosts prices. So-called resource nationalism is the biggest business risk to global mining companies, Ernst & Young LLP said last month.

“Alarm bells would ring, that if they change the rules here, are they going to change it again, are they going to take more than 50 percent,” Gavin Wendt, founder and director of Mine Life Pty in Sydney, said by phone. “Rio and Ivanhoe obviously won’t be happy.”

The project, 66 percent owned by Ivanhoe Mines, is half way through completion and will be one of the world’s five-biggest copper mines, according to Rio, which controls Oyu Tolgoi’s management. Ivanhoe, 48.5-percent owned by Rio, spent more than six years negotiating with Mongolia before reaching an agreement in October 2009 to develop the site, which may open in 2013.

[Errol]

Looking better today - with another large fall. I wonder if we can get to $1400? Silver on sale as well. heh heh.

Should be fun this week!

[Realistbear]

GOLD 09/26/2011 02:47 1551.00 -106.20

Looking beter today if you shorted. With a triple digit loss this early in the session this may be a convenient moment to sell if you got in in 2010. I still believe gold will be a bitter dissappointment to any who got in during the run up in 2010.

The market is scared and fear is causing people to sell off anything that has had a sharp run up in price over the last 3 or 4 years. Even bonds are sluggish and the short terms are losing money as well as medium to longs which suggests people are just dumping everything for cash.

Any on here selling yet? I should have dumped my silver $ coins when gnerics were gettng $40 a pop. Heading for a 50% fall from the peak.

Edit:

GOLD 09/26/2011 02:52 1537.20 1538.20 -120.00

Edited September 26, 2011 by Realistbear

[neil324]

200ma at 1520 looks like support.

Anyone buying in and what price?

[Realistbear]

Looks like support has kicked in as gold is back from a triple digit loss. Roller coaster time folks.

[CleverBear]

Looks like support has kicked in as gold is back from a triple digit loss. Roller coaster time folks.

Anyone who knows anything about gold knows that it goes up because it goes up. Once this stops then it is prone to very sharp corrections. I think gold is still in a bubble.

[quibble]

Looking beter today if you shorted. With a triple digit loss this early in the session this may be a convenient moment to sell if you got in in 2010. I still believe gold will be a bitter dissappointment to any who got in during the run up in 2010.

You believed that gold would be a bitter disappointment to anyone that got in in 2006.

You believed that gold would be a bitter disappointment to anyone that got in in 2007.

You believed that gold would be a bitter disappointment to anyone that got in in 2008.

You believed that gold would be a bitter disappointment to anyone that got in in 2009.

Come on, RB you even believe in Intelligent Design!

[warpig]

Wow, they must be absolutely desperate. You have probably already missed the bottom...

[_w_]

My twopence on what happened.

I watched the Asian markets last night and everything was honky dory for the first hour of trading, stocks, euro and commodities mildly up.

Then as all commodities stayed up platinum started falling, slowly at first and then faster until about an hour later it was 8.5% down. At that stage all commodities started falling, slowly at first and then again faster until this morning's complete pandemonium with silver down 16% and gold down $100.

Now everything is back to where it was yesterday, just a tad below last night's levels.

Quite an incredible sight for me, it looks to me like this was the gold-platinum arbitrage unwinding on a large scale and spooking the markets into selling off.

I still expect PMs and commodities to keep falling but this particular episode was just bizarre.

Edited September 26, 2011 by _w_

[Guest_FaFa!_*]

http://www.jsmineset.com/2011/09/23/market-violence-will-create-large-bear-trap/

Market situations like this will be found to have held and created bear traps in several instances of similar pattern action over the past 30 years WITHOUT having continued further down to first major support. The current corrective pattern over the past 23 trading days strongly implies that the move below $1690 would continue on down to the core at $1665 at minimum as first bottom, and in the extreme to $1615, but not below $1584. This will happen prior to exhaustion and a return to the full bull trend.

Starting to sweat yet, Jim?

Gold isn't money guys, if it was it should be going to the moon, not standing still compared to July.

[Georgia O'Keeffe]

http://www.jsmineset.com/2011/09/23/market-violence-will-create-large-bear-trap/

Starting to sweat yet, Jim?

Gold isn't money guys, if it was it should be going to the moon, not standing still compared to July.

whether it goes up or down, the gold/silver is different mantra ignores the risk which the last few weeks has proven exists.

Firstly waiting for positive rates as if that will signal the top is false, Metals will likely spank long before there are actual positive rates much as they took off 8 years before there were negative rates, but fundamntally Metals/Commodities are at risk should a recession happen (which is constantly dismissed) a recession does 2 things, firstly it can make interest positive at Zirp, secondly it destroys money (credit money) that metals are partly valued in. A recession or even fear of will create a bull market in cash/credit money (as there is less of it) (until the sov state technically defaults)

Edited September 26, 2011 by Tamara De Lempicka

[Seydel]

Anyone else see Marc Faber on CNBC earlier?

"The Fed is a criminal organisation," is what he said.

I hope a video appears of his remarks just to see the presenters squirm again.

[Number79]

My twopence on what happened.

I watched the Asian markets last night and everything was honky dory for the first hour of trading, stocks, euro and commodities mildly up.

Then as all commodities stayed up platinum started falling, slowly at first and then faster until about an hour later it was 8.5% down. At that stage all commodities started falling, slowly at first and then again faster until this morning's complete pandemonium with silver down 16% and gold down $100.

Now everything is back to where it was yesterday, just a tad below last night's levels.

Quite an incredible sight for me, it looks to me like this was the gold-platinum arbitrage unwinding on a large scale and spooking the markets into selling off.

I still expect PMs and commodities to keep falling but this particular episode was just bizarre.

Plat well below gold and silver is doing what it does best as a canary.

Looks like crash and panic time again.

[warpig]

Shanghai Gold Exchange Hikes Silver Margin By 20%

Still not convinced?

My twopence on what happened.

I watched the Asian markets last night and everything was honky dory for the first hour of trading, stocks, euro and commodities mildly up.

Then as all commodities stayed up platinum started falling, slowly at first and then faster until about an hour later it was 8.5% down. At that stage all commodities started falling, slowly at first and then again faster until this morning's complete pandemonium with silver down 16% and gold down $100.

Now everything is back to where it was yesterday, just a tad below last night's levels.

Quite an incredible sight for me, it looks to me like this was the gold-platinum arbitrage unwinding on a large scale and spooking the markets into selling off.

I still expect PMs and commodities to keep falling but this particular episode was just bizarre.

[_w_]

Shanghai Gold Exchange Hikes Silver Margin By 20%

Still not convinced?

I'm confused (and a bit knackered). Convinced by what?

[warpig]

Look how they've 'managed' the price so unnecessarily... They smashed an already smashed market, what was the point, unless it was to drive the price down? Look at what's happened to silver and copper, this is not a level playing field, they are trying to herd people away from commodities. The irony is all they are doing is giving our resources to the Chinese at rock bottom prices.

I'm confused (and a bit knackered). Convinced by what?

[Democorruptcy]

Look how they've 'managed' the price so unnecessarily... They smashed an already smashed market, what was the point, unless it was to drive the price down? Look at what's happened to silver and copper, this is not a level playing field, they are trying to herd people away from commodities. The irony is all they are doing is giving our resources to the Chinese at rock bottom prices.

It seems like they are trying to bring commodities down so then they can say "look there is no inflation so we can print lots of money". The only problem is that when such as the oil price drops the drop isn't passed on at the pumps. The oil price was already down 15% since April but petrol is more expensive. All they are doing is allowing the oil companies to trouser more profit from us.

[guitarman001]

Wow, so for once I made the RIGHT move by selling a couple of weeks back! Wonder when it will turn around..