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Gold strategy in the current economy


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HOLA441

So how much is gold and silver rallying on some belief that Romney will revert to a gold standard of some sort... or is it because of what Bernanke said about this week about being prepared to do what is needed - printing - to keep the US economy going... or the Euro thing... or just because...

Or is this just some kind of sucker thing that will all be over by next Tuesday?

Answers on a postcard please.

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HOLA442

So how much is gold and silver rallying on some belief that Romney will revert to a gold standard of some sort... or is it because of what Bernanke said about this week about being prepared to do what is needed - printing - to keep the US economy going... or the Euro thing... or just because...

Or is this just some kind of sucker thing that will all be over by next Tuesday?

Answers on a postcard please.

Forget about gold. All you need to watch right now is silver. I believe that gold only rallied because of silver. I remember reading a post a couple of days ago saying that silver chart on kitco looks like a earthquake monitoring machine. Anyone wishing to short now is asking for a death wish. Yep, we could still have another shake-down but when would you actually cover? Only insider bankers or those will balls the size of a small planet could ever hope to make that trade and live to tell the tale.....

We will how much control they will have left by market close. Watch the $31 handle.

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HOLA443
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HOLA445
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HOLA446
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HOLA448

Gold and silver isn't rising because of Jackson Hole. If you look at the charts posted over the last month or so you'll see the consolidation has run it's course.

Everyone is gambling that Bernanke will announce QE3 at Jackson Hole next Friday. Long holiday weekend coming up in the US after that.

What if he disappoints?

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HOLA449

Within hours of news breaking that Paulson, and especially Soros, have been loading up on gold the price of gold and silver shot up. Even GLD has finally gone up after months when both physical and paper gold and silver has been range bound.

Then there is Jackson Hole next Friday.

In the past 72 hours there has been a flood of gold bullish blog articles on-line all claiming that this is now the big one upwards....but I notice that on some of the more saner silver and gold forums long-term PM investors are urging caution. Some are saying if Bernanke disappoints then PMs could tank and even go to new year lows.

It all seems a coin toss gamble dependent on Bernanke and QE3?

Do Soros and Paulson know what Bernanke is going to do or have they spent a week selling a portion of their gold for a tidy profit?

What consolidation has occurred to cause this rise other than the above?

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HOLA4410

I thought part of this move up was because Soros and Paulson had been buying (at the end of the last reporting period, don't know what they have done since)

There was a nice lady on one of the business channels last night doing a technical analysis of gold.

She said a major turning point was imminent. Either a break up to $1,850 or a drop to $1,530 then down to $1,140. She said in her opinion the drop was more likely and would be similar to what happened in 2008.

Peter Schiff laughed at her and asked if she had ever bought gold to which she replied no.

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HOLA4411

I thought part of this move up was because Soros and Paulson had been buying (at the end of the last reporting period, don't know what they have done since)

There was a nice lady on one of the business channels last night doing a technical analysis of gold.

She said a major turning point was imminent. Either a break up to $1,850 or a drop to $1,530 then down to $1,140. She said in her opinion the drop was more likely and would be similar to what happened in 2008.

Peter Schiff laughed at her and asked if she had ever bought gold to which she replied no.

The odd thing about the claims that Soros and Paulson buying in the last quarter is that the price of gold has been pretty much range bound for several months now.

You would assume that if they had been buying the amounts it is claimed they have been buying then we would have seen gold go up in the PAST 3 months?

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HOLA4413

I thought part of this move up was because Soros and Paulson had been buying (at the end of the last reporting period, don't know what they have done since)

There was a nice lady on one of the business channels last night doing a technical analysis of gold.

She said a major turning point was imminent. Either a break up to $1,850 or a drop to $1,530 then down to $1,140. She said in her opinion the drop was more likely and would be similar to what happened in 2008.

Peter Schiff laughed at her and asked if she had ever bought gold to which she replied no.

If is does drop to 1140, surely loads of people will just 'back up the truck' for physical? Long term (I'm talking 10-30 years) the western gvt debts of the USA and Europe are simply unpayable without default - isn't that the point?

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HOLA4414

If is does drop to 1140, surely loads of people will just 'back up the truck' for physical? Long term (I'm talking 10-30 years) the western gvt debts of the USA and Europe are simply unpayable without default - isn't that the point?

Why on earth would you even think it's going to drop back?

Inflation CAN'T be unwound, you might as well say if house prices drop back to £4k or bread to 18p a loaf.

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HOLA4416

Apparently the 'commercials', whoever they are, began to seriously increase their shorts of gold and silver in the last week with apparently a lot of the price up being pushed by retail investors.

That is what is being said on a few PM forums and would tie in the sudden spike in the price since the news of Soros buying.

I have no idea how people know who is buying or who is shorting but the info is interesting.

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HOLA4417

Apparently the 'commercials', whoever they are, began to seriously increase their shorts of gold and silver in the last week

Fairly standard behaviour. This sort of thing has been going on since 2000. We're due a drop after a good run up anyway.

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HOLA4418

Apparently the 'commercials', whoever they are, began to seriously increase their shorts of gold and silver in the last week with apparently a lot of the price up being pushed by retail investors.

That is what is being said on a few PM forums and would tie in the sudden spike in the price since the news of Soros buying.

I have no idea how people know who is buying or who is shorting but the info is interesting.

The latest Commitment of Traders (COT) report in the metals showed the commercials (i.e. JP Morgan and friends) piling on the shorts to create the big decline. Problem is, the buying pressure overwhelmed them late last week, and now their positions are underwater. For most other institutions, being that much underwater would precipitate a margin call, but being members of the 'too-big-to-fail' club and having an infinite line of credit from the US Fed, these guys can keep huge losses on their books indefinitely. So when will game come to an end? When investors (and governments) around the world buy every last ounce off the market so their paper leveraging will come to a grinding halt. Of course, this means bank holidays and SHTF, so not fun for everyone.

Edited by Fortune
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HOLA4419

The latest Commitment of Traders (COT) report in the metals showed the commercials (i.e. JP Morgan and friends) piling on the shorts to create the big decline. Problem is, the buying pressure overwhelmed them late last week, and now their positions are underwater. For most other institutions, being that much underwater would precipitate a margin call, but being members of the 'too-big-to-fail' club and having an infinite line of credit from the US Fed, these guys can keep huge losses on their books indefinitely. So when will game come to an end? When investors (and governments) around the world buy every last ounce off the market so their paper leveraging will come to a grinding halt. Of course, this means bank holidays and SHTF, so not fun for everyone.

Sounds like a pump and dump to sucker Joe Public then.

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HOLA4422

Is the price of gold linked to inflation? No.

Current inflation is mostly driven as a result of currency devaluation , therefore PM's are a reasonable hedge. I've certainly seen more growth in my PM's than in my interest bearing accounts.

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HOLA4423

Gold is a hedge against inflation

I think this thread has been here before (numerous times) when it was pointed out gold was a real terms loser during the high inflation 80s. The only thing about gold and inflation is the total lack of correlation. At one point last year gold was 25% up year on year. It is what -20% plus year on year now? Not really following inflation is it?

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HOLA4424

I think this thread has been here before (numerous times) when it was pointed out gold was a real terms loser during the high inflation 80s. The only thing about gold and inflation is the total lack of correlation. At one point last year gold was 25% up year on year. It is what -20% plus year on year now? Not really following inflation is it?

What is your protection against a forced devaluation which is instant inflation. Clearly only nutters are 100% PM's but everyone should have it as part of their portfolio.

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HOLA4425

What is your protection against a forced devaluation which is instant inflation. Clearly only nutters are 100% PM's but everyone should have it as part of their portfolio.

By forced devaluation, I take it you mean the currency dropping uncontrollably over a short period of time due to external market pressures (examples being the Asian Financial Crisis, Black Wednesday, the Russian crisis et al) I would point out that USD, GBP and JPY are not or no longer tied to a specific exchange rate mechanism, so there is no external pressure likely to cause an instant and large devaluation to occur without the governments consent. IHMO the three crises listed were primarily caused by said governments' determination to follow a set exchange rate. Regarding the alleged threat of hyperinflation (though I think such arguments absurd), I would point out that places such as Zimbabwe, Weimar Republic etc increased their inflation over a period of years before going exponential, so there would be plenty of time to act, not that it is going to happen.

Leaving that aside, if one currency devalues, logic (and the forex market) would dictate that another currency rises, so that would be one answer. Another would be to point out that gold was highly volatile during the 2008 crisis, so am not sure that would be a winner. Personally I fail to see the purpose of holding a non-yielding asset in their portfolio, but each to their own.

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