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Gold strategy in the current economy


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HOLA441

It is about 90 bucks short of 2000 isn't it so, hmm, looks likely to break the 2000 within 48 hours... but the markets do appear to like to crash stuff around round figures... perhaps 2000 will be too tempting a figure for the powers that be... whoever they are....

Fascinating watching it all.

It's vertical now, I think it's anyone's guess. I wonder if speculatosr have not taken over as far as momentum goes, these moves look too violent to come from big players.

Very amateurish.

:)

Edited by _w_
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HOLA442

Given this thread is called 'Gold strategy in the current economy' I was wondering whether the bulls might share some of their strategy. I'd be interested in hearing:

1. What their target prices are, if any

2. If you don't have a target price, is that because you think fiat will collapse and that gold will be the only acceptable form of money? In this case could you explain how you think society will be functioning. If society has collapsed (likely IMHO if fiat collapses) and the supermarkets have been raided and gangs of chavs roam the streets a la the recent riots, why do you think anyone is going to be interested in swapping your gold (which they don't need) for food, heat, water etc etc (which they do)

3. Can you explain the price action of gold in the last few days? I was particularly interested to see it go to $1900 in the context of not much else happening in the market. I always assumed that if we were to see gold go parabolic, we'd see a general collapse in the system. This has not happened yet.

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HOLA443

Huh?

I don't need charts to support my arguments. And I told you where to find some if you like pictures.

I am just enjoying the show.

Eh? without charts then you are just noise.

You do need charts to support your opinion, not least because no one knows you and has never seen you make a call.

I dont need to look at a site for charts, I have my own and can produce my own. That was the point - come back when you can make your own charts - by then we will know that you know enough to have an opinion.

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HOLA444

1/. - I would suggest $5,000/t.oz is perfectly reasonable. I suspect it will possibly go to $8K. It could go a lot higher...

3/. - This seems to be the reason why:

Screen%20shot%202011-08-22%20at%201.51.50%20PM.png

Given this thread is called 'Gold strategy in the current economy' I was wondering whether the bulls might share some of their strategy. I'd be interested in hearing:

1. What their target prices are, if any

2. If you don't have a target price, is that because you think fiat will collapse and that gold will be the only acceptable form of money? In this case could you explain how you think society will be functioning. If society has collapsed (likely IMHO if fiat collapses) and the supermarkets have been raided and gangs of chavs roam the streets a la the recent riots, why do you think anyone is going to be interested in swapping your gold (which they don't need) for food, heat, water etc etc (which they do)

3. Can you explain the price action of gold in the last few days? I was particularly interested to see it go to $1900 in the context of not much else happening in the market. I always assumed that if we were to see gold go parabolic, we'd see a general collapse in the system. This has not happened yet.

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HOLA445
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HOLA446
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HOLA447

Utah Rep Leads 11 US States to Recognize Gold as Money

With gold surging to a new all-time high up over $40 in early trading and nearing the $1,900 level, King World News interviewed the man who spearheaded the Utah Legal Tender Act, which recognizes gold and silver as legal tender in the state of Utah. This has gained worldwide attention, including days ago an interview with state run China TV. When asked about the interview with China TV Ivory stated, “They were curious as to why? Curious what we thought the impact would be with respect to the federal government?

Obviously on the why we explained to them the very simple example, a silver dollar in 1960 would buy approximately five gallons of gas. Well, that dollar today won’t buy you one fourth of a gallon of gas, but the silver will nearly fill your tank.”

“Then with respect to the federal government, we have about eleven states now that are looking at running the same legislation. And to the extent that we get the states standing in unison, that sends a very strong political message to Washington that the guardians of the liberty of the people in the states are not going to tolerate any longer the unchecked devaluation of our earnings and savings.”

“You know Eric, like everybody else we saw the things that are going on and we wanted to preserve the purchasing power of the earnings and savings of our people of Utah. So the Utah Legal Tender Act recognizes gold and silver, federal government issued coins as legal tender in Utah.”

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/8/22_Ken_Ivory_files/Ken%20Ivory%208%3A22%3A2011.mp3

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HOLA448
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HOLA449

It's like a lot of alternative media sites, they're a good at getting information out in to the wild, you have to do your own research from there.

Are they going nuts? I don't dare read ZH anymore, I end up feeling overdosed when I read them.

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HOLA4410

Eh? without charts then you are just noise.

You do need charts to support your opinion, not least because no one knows you and has never seen you make a call.

I dont need to look at a site for charts, I have my own and can produce my own. That was the point - come back when you can make your own charts - by then we will know that you know enough to have an opinion.

I haven't made a call on what will happen next. I told you, I am enjoying the show.

Do you have a rule that everyone who posts here must make a price prediction?

I am here because it is interesting to see if some fiat currencies are going to be hyper inflated out of existence. Good luck on your trading.

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HOLA4411
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HOLA4412

Assuming this is a full-blown correction (which it may well not be), how far do you guys think it could pull back?

Using silver's correction as a realistic 'maybe', it pulled back roughly half way to the August 2010 price, which is the most recent flattish period in both gold and silver (the 6 months to aug '10). So on that basis gold could go back to 1550-1600 ish.

Seems less likely now compared to when silver corrected given the change in sentiment/context over fiat and the world economy, but food for thought.

My hunch is that the correction could last as long as the rally in equities, which could be 1-2 months imho based on similar rally periods in near history.

But wtfdik!

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HOLA4413
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HOLA4414

Assuming this is a full-blown correction (which it may well not be), how far do you guys think it could pull back?

Using silver's correction as a realistic 'maybe', it pulled back roughly half way to the August 2010 price, which is the most recent flattish period in both gold and silver (the 6 months to aug '10). So on that basis gold could go back to 1550-1600 ish.

Seems less likely now compared to when silver corrected given the change in sentiment/context over fiat and the world economy, but food for thought.

My hunch is that the correction could last as long as the rally in equities, which could be 1-2 months imho based on similar rally periods in near history.

But wtfdik!

Gold and silver are very dissimilar markets. Silver is much smaller and thus more prone to speculative influences. Also, central banks don't accumulate silver AFAIK e.g. there is no monetary component whatsoever.

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HOLA4416

Given that it is commonly argued that the reason gold is skyrocketing is due to the USD going to hell in a handbasket, could anyone explain why both it and gold are selling off today?

its technically overbought, hugely, on a number of indicators. Even with bullish fundamentals, these technicals will overwhelm it now and then. (imho)

But I'm biased and want to buy in :D

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HOLA4417

Given this thread is called 'Gold strategy in the current economy' I was wondering whether the bulls might share some of their strategy. I'd be interested in hearing:

1. What their target prices are, if any

2. If you don't have a target price, is that because you think fiat will collapse and that gold will be the only acceptable form of money? In this case could you explain how you think society will be functioning. If society has collapsed (likely IMHO if fiat collapses) and the supermarkets have been raided and gangs of chavs roam the streets a la the recent riots, why do you think anyone is going to be interested in swapping your gold (which they don't need) for food, heat, water etc etc (which they do)

3. Can you explain the price action of gold in the last few days? I was particularly interested to see it go to $1900 in the context of not much else happening in the market. I always assumed that if we were to see gold go parabolic, we'd see a general collapse in the system. This has not happened yet.

Here's my twopence.

First of all I don't understand gold. I've been trying to learn as much as I could for the past two years and AFAIK gold is NOT money by any rational definition. Having said that, I note that gold often behaves like money on the markets, e.g. some big actors are treating it as such, central banks buy it and use it as reserve (money derivative?). It also trades as a commodity sometimes.

Based on this complete confusion my investment thesis is as follows:

- Gold may be money now but it is unlikely

- Gold may become money someday, the most likelty scenario IMO is as one component backing an international currency.

- Gold would be handy in a very unlikely tfh scenario, once ken has finished eating everyone or you've managed to escape from his basement and a rule of law is re- established.

- Gold is something tangible that can protect against currency debasement although IMO other assets such as oil and related company shares would perform that task better.

- Gold often acts as a nice hedge for shares positions that I hold.

I've handled these apparent contradictions as follows:

- I've invested about 5% of my savings in physical gold. I expect I will keep it for ever and hand it down to my kid.

- Another 5% in mining stocks

That gives me 10% of savings to perform tfh / inflation protection / monetary change roles. Although I'd love to move up to 50% or so I can't bring myself to move any higher until I properly understand gold.

On top of that I enjoy engaging in speculation on a small scale and gold provides the clearest uptrend I've ever experienced so I dabble in futures and options once in a while (most of the time actually).

Finally, I sometimes use gold to hedge stocks I own in SHTF moments such as the last couple of weeks.

<Edit: typos, clarity, etc.>

Edited by _w_
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HOLA4418

It is still activily traded and subject to normal trading conditions. Many may see it as overbought and decide to take profit, if enough do so the price will drop until it is seen as a bargain again. What is probably going to happen imo, is Ben will announce some more QE in one form or another, traders will go hooray, everything is back to normal, get out of safe havens like gold, and back into the stock market. Risk will be back on the table. Meanwhile the pog will correct, maybe to 1650 ish, the stock market will take off for a few weeks. China et al will rub their hands together and buy more gold, new shocking economic figures will be released and gold will take its next step up the ladder. Probably to $2500 before it all happens again. (Note, one of these times it won't happen like that and gold will really go parabolic)

Given that it is commonly argued that the reason gold is skyrocketing is due to the USD going to hell in a handbasket, could anyone explain why both it and gold are selling off today?

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HOLA4419

Given that it is commonly argued that the reason gold is skyrocketing is due to the USD going to hell in a handbasket, could anyone explain why both it and gold are selling off today?

I believe gold anticipated that dollar move yesterday and got ahead of itself. Since Asia failed to keep the momentum going last night this tiny correction does make sense I think.

Edited by _w_
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HOLA4420

The BAC CDS chart I posted above insinuates we are close to another 2009 banking crash, in fact very close. I personally think it would be a mistake to assume the markets will sell off gold this time, I suspect they will sell off everything but gold, as it's possibly the only thing on their books that is appreciating in value. QE3 is just around the corner and with it gold will be $2,500 within six months...

The only reason silver sold off as it did a few months ago, was due to the repetitive/excessive CME's margin hikes, I doubt whether they would be able to do the same with gold, albeit, margin hikes along the way are par for the course.

Assuming this is a full-blown correction (which it may well not be), how far do you guys think it could pull back?

Using silver's correction as a realistic 'maybe', it pulled back roughly half way to the August 2010 price, which is the most recent flattish period in both gold and silver (the 6 months to aug '10). So on that basis gold could go back to 1550-1600 ish.

Seems less likely now compared to when silver corrected given the change in sentiment/context over fiat and the world economy, but food for thought.

My hunch is that the correction could last as long as the rally in equities, which could be 1-2 months imho based on similar rally periods in near history.

But wtfdik!

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HOLA4421

More QE will cause gold to soar not dip.

What is probably going to happen imo, is Ben will announce some more QE in one form or another, traders will go hooray, everything is back to normal, get out of safe havens like gold, and back into the stock market.

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HOLA4422

The BAC CDS chart I posted above insinuates we are close to another 2009 banking crash, in fact very close. I personally think it would be a mistake to assume the markets will sell off gold this time, I suspect they will sell off everything but gold, as it's possibly the only thing on their books that is appreciating in value. QE3 is just around the corner and with it gold will be $2,500 within six months...

The only reason silver sold off as it did a few months ago, was due to the repetitive/excessive CME's margin hikes, I doubt whether they would be able to do the same with gold, albeit, margin hikes along the way are par for the course.

The problem I see is that the central banks could move the market significantly by dumping a large amount at once in an attempt to restore confidence in fiat.

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HOLA4423
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HOLA4424
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HOLA4425

The problem is, the Western central banks are in direct competition with the Eastern central banks for gold. I'd suggest hell will freeze over before the BOE sells our gold to China, it just won't happen, they are net buyers for a reason...

No. And it won't work either. But then neither does QE. Won't stop them trying. Plus they have a ready store to get hold of to replace it with.

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