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Gold strategy in the current economy

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I'd be surprised if gold stays up at $1260 now that oil has bounced back towards $50 and about 8% off recent lows. It's always going to be a flight to safety in times of Market turmoil.

I would actually be pleased if I was wrong, as I am a buyer in Equities at the right price. Meanwhile equities seem to be liking this turnaround in other commodities (not gold) this morning. Which is not good for me.

Edited by crashmonitor

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i'm heavily into gold but i expect it to fall back for a few weeks, we will see huge gains as the central banks finally loose control as the markets enter their downwards cycle.

when it does fall back more i will stack some more.

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Oil fell 50+%. Gold?

Correlation? Come on!

I'm of the opinion that gold is a flight to safety in troubled times. Oil at below $50 is disruptive to Equity markets, Sovereign Debt rating etc.

Gold has gained in spite of a strong dollar, which was your correlation.

If I'm wrong I would be very pleased because I would rather like to see equities down and that usually means gold up.

Edited by crashmonitor

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Yes in recent months a rising $ meant falling G. So as $ kept rising AND G rose the correclation stopped and this was G positive.

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Pump and dump by a CB to sell gold to the goldbugs?

Back in Dec Martin Armstrong warned that if the SNB took heavy losses on the Euro they could begin selling gold and warned that if we see a pop in gold that it could be manipulation to sell off to the gold bulls.

He said that if the Swiss begin selling then other CBs would join in.

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............Martin Armstrong warned that if the SNB took heavy losses on the Euro they could begin selling gold and warned that if we see a pop in gold that it could be manipulation to sell off to the gold bulls. He said that if the Swiss begin selling then other CBs would join in.

That has to be the daftest suggestion in a while. Large sales push prices down, not up.

No, prices are rising because buyer demand is stronger than seller supply.

The catalyst for the price rise in the last few days is probably the panic caused in the forex markets caused by the Swiss change of policy. Their change of tack comes so soon after the court decision that did not 'red flag' those pushing for Draghis monetary policy.

Some europeans are still dancing around their handbags, and the music is getting a lot quieter.

The other item to watch closely is the low inflation and deflation in price indices. Again, the obvious seems to be missed by many looking on......low prices means lower demand. If that's the road to recovery, someone is using the wrong sat nav.

..._

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That has to be the daftest suggestion in a while. Large sales push prices down, not up.

No, prices are rising because buyer demand is stronger than seller supply.

..._

Digger, I believe you are thinking one-dimensionally. The gold 'price' is ruled by the futures, and "options on futures". This is where the margin exists, and as such a small amount of money down can move the price.

When a CB moves the price up, they might do it on the F&O markets, and sell spot. They then roll over this future-long position for a small cost, whilst pocketing the full proceeds of the gold sale. Over time, the futures (long) position can be wound down.

This strategy would be particularly effective if, say, the futures were bought at illiquid times, and the spot sold during heavy market activity.

Edited by weaker

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That has to be the daftest suggestion in a while. Large sales push prices down, not up.

No, prices are rising because buyer demand is stronger than seller supply.

The catalyst for the price rise in the last few days is probably the panic caused in the forex markets caused by the Swiss change of policy. Their change of tack comes so soon after the court decision that did not 'red flag' those pushing for Draghis monetary policy.

Some europeans are still dancing around their handbags, and the music is getting a lot quieter.

The other item to watch closely is the low inflation and deflation in price indices. Again, the obvious seems to be missed by many looking on......low prices means lower demand. If that's the road to recovery, someone is using the wrong sat nav.

..._

Below are Armstrong's actual thoughts on the matter. As you can read for yourself he states that it is possible that you will see gold manipulated up so that the central banks can sell their gold to the gold bulls.

Interesting blog post from Martin Armstrong on December 1st, 2014.

‘For now, brace yourself. It looks like a lot of fun and games for 2015 on the horizon. Now that the Swiss central bank CAN sell its gold reserves, look out. When you ask a question, you better know what the answer will be or you end up with the consequences. Swiss sales of gold are now quite possible. As governments need money desperately and it is resolved that we are headed into electronic money, gold will become a barbaric relic of the past to financially strapped central banks in Europe.

If the Swiss sell due to massive losses in the Euro, they may set off a competition in official sales. France will join – just watch. Socialists always sell tangible assets. If we see a pop in gold, it will be a manipulation to get the bulls revved up to sell to them one more time – thank you very much.’

http://armstrongeconomics.com/2014/12/01/gold-one-more-pop-or-collapse/

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....................The gold 'price' is ruled by the futures, and "options on futures". This is where the margin exists, and as such a small amount of money down can move the price.

When a CB moves the price up...................

The gold price is ultimately ruled by the price paid for delivery. Everything else is playing the odds game as if at a gambling table.

As to the strange claim that CB's are manipulating the price up..............

Buyers moving to buy is what moves prices up, this move to gold has all the signs of a fear reaction after what happened in Switzerland.

If Europe gets involved in large scale money expansion, it is equities that will benefit, and trend gold price down. Exactly the same as we saw happen in the end game with QE.

If the boom cracks, then gold will trend up. For now all options are open.

..._

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Germany repatriated 120 tonnes of its gold back to the Bundesbank’s vaults last year.

The German central bank has just revealed that it “stepped up” its bullion transfers during 2014, bringing 35 tonnes of its gold from Paris and another 85 tonnes from New York.

This is part of a scheme announced in 2013 to bring 674 tonnes, or half Germany’s total stocks, back to Frankfurt by the end of the decade. Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank, says: “Implementation of our new gold storage plan is proceeding smoothly. Operations are running very much according to schedule.”

http://www.theguardian.com/business/live/2015/jan/19/chinese-stock-market-fall-eurozone-qe-business-live

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Thanks, Errol ^^^^^^^^^^^^^^^

...ahhh. It's nice to be vindicated....

DiggerUK, on 29 Oct 2014 - 1:10 PM, said:snapback.png

Why,,,,? the Germans have dropped all repatriation plans. Please pay attention.

..._

​erm....just because Bloomberg says it ain't so, don't mean squat!

Quote

http://rt.com/op-edg...us-sovereignty/

In one of its recent reports Bloomberg claimed that Germany decided not to repatriate its gold reserves from the US, instead the Bundesbank issued an official statement that underscores it’s "trust" in its American partners. According to Bloomberg, Germany gave up after repatriating just 5 tons of gold

​...

This was a report from Bloomberg and it was a wrong report. It did not reflect the truth. It is very interesting that Bloomberg is publishing such a thing. Bloomberg got this thing deliberately wrong to con the German public.

​and..

Quote

Head Of German Gold Repatriation Initiative Responds To Bloomberg Story About Repatriation Halt

Summary: a "non-news" article with a wrong headline, strange interviewees, old news, and with a clearly apologetic ideological approach: the main purpose seems to be NOT to give space to the myriad of unanswered and extremely relevant questions BuBa and the Fed have been refusing to answer for decades.

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The gold price is ultimately ruled by the price paid for delivery. Everything else is playing the odds game as if at a gambling table.

As to the strange claim that CB's are manipulating the price up..............

Buyers moving to buy is what moves prices up, this move to gold has all the signs of a fear reaction after what happened in Switzerland.

If Europe gets involved in large scale money expansion, it is equities that will benefit, and trend gold price down. Exactly the same as we saw happen in the end game with QE.

If the boom cracks, then gold will trend up. For now all options are open.

..._

Now you have really put the cat among the pidgeons. The almost consistent negative basis/backwardation of gold over the last 18months proves that the 'price' of gold is not dictated by it's availability for delivery; that availability is simply a secondary effect which has an uplifting or depressing effect on the 'price'. It happens because people are willing to settle for ownership of paper gold.

in extremis....

http://fofoa.blogspot.de/2014_12_01_archive.html

"At first dollar hyper inflation will not be reflected in a rising price of gold on the current dollar paper gold market. It will be reflected in a corresponding lack of real gold relative to outstanding contracts! A physical gold shortage will happen "first", as the contract price system slowly defaults in an ever lower price. Next the paper markets will totally fail from non availability. That means a super low (discounted) bid price for contract gold. That's the same price the stock market players currently value your gold shares with.

Once the dollar gold contract system fails (and this will be happening during a full blown "hidden" price inflation), a physical gold market will develop,,,, whether officially (Euroland) or black market style.

The point is that during this dollar inflation, physical gold will be in almost no supply and its price will be 10X the paper price. No body, and I mean NO BODY is going to be cashing out of gold shares or any form of paper gold and doing an even swap! Every gold mine that operates using the dollar gold market to sell into,,,, does its financing with and is hedged leveraged with dollar based Bullion Banks ,,,,,, is going to see their stock ride the paper gold market to its end."

...

Also: The present paper gold market depends on new hikers entering the gold trail towards its end. They buy paper gold as some kind of stock market / investment hedge without knowing the big picture. In the past their actions would have worked their purpose. But not in this transition. A currency exchange storm is going to sink a lot of these paper boats and kill the very assets many wanted to protect. Buy the gold not the price!

Thanks FOA"

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Martin Armstrong on December 1st, 2014

‘For now, brace yourself. It looks like a lot of fun and games for 2015 on the horizon. Now that the Swiss central bank CAN sell its gold reserves, look out. When you ask a question, you better know what the answer will be or you end up with the consequences. Swiss sales of gold are now quite possible. As governments need money desperately and it is resolved that we are headed into electronic money, gold will become a barbaric relic of the past to financially strapped central banks in Europe.

If the Swiss sell due to massive losses in the Euro, they may set off a competition in official sales. France will join – just watch. Socialists always sell tangible assets. If we see a pop in gold, it will be a manipulation to get the bulls revved up to sell to them one more time – thank you very much.’

http://armstrongecon...op-or-collapse/

Wow. Armstrong is clueless on many levels here:

* The Swiss government doesn't need money 'desperately'

* The SNB has open shareholdings, with IIRC about 60% in private hands and the rest owned by the cantons. It's as far removed from the 'government' as any CB in the world

* The SNB is unlikely to sell gold - if they did, they risk encouraging another referendum relating to their gold holdings

* EU QE will raise the value of the EUR gilts held by the SNB, reducing nominal losses

* The SNB gold holding is (I would guess) small compared to their EUR holdings. Selling it won't make much difference

* And so on.

If these charlatan seers could actually predict the financial future with any certainty, they would be too busy frollicking with supermodels on their superyachts to waste their valuable time trying to peddle their financial advice / newsletters.

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Wow. Armstrong is clueless on many levels here:

[...]

If these charlatan seers could actually predict the financial future with any certainty, they would be too busy frollicking with supermodels on their superyachts to waste their valuable time trying to peddle their financial advice / newsletters.

As far as I know, he is a convicted fraudster who operated a Ponzi scheme in Japan. Funny how much credibility people give to him, in the past including Jim Puplava (Financial Sense).

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.

...ahhh. It's nice to be vindicated

The German Bundesbank issued a statement in June claiming they were no longer repatriating. Now they issue a statement that they have been repatriating since September .

One day the Swiss National Bank says it is pegging the value of the Swiss Franc. The next day...........I ask you, can you believe anything a central bank says anymore.

Anyway, the conspiracy queens all agreed that the German gold had disappeared..............and now they are claiming that central banks are secretly leasing/selling gold to manipulate the price of gold up.

I ask you, who can we believe anymore. Old Digger, that's who. Watch out, watch out, he's always about.

..._

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I see EU QE as great for gold. the instabilities of pouring more easy money petrol onto an out of hand malinvestment fire will only enhance volatility and bring lots of crisis.

Can't see Switzerland as the only fall-out. and certainly the UK won't allow a seriously strong sterling. will be lots of reactions, more loose money. all this while its bang on time for a stock market crash, 2015 being bang on time for the market to begin its downwards cycle.

certainly will be an extremely turbulent 10 years ahead, and fiat currency will be an easy central bank target.

it's more or less a world where everyone looses purchasing power, it will be about limiting losses rather than maximising gains.

With gold probably will have some purchasing power loss (same with all things over the next few years) But at least you know it's solid, it's security. and it's very hard to put a price on that.

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I wouldn't believe anybody. The only gold that is worth anything is gold in your hand - not in a vault, in a bank or in paper somewhere.

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Repatriating gold isn't easy. First of all you've got the issue of moving it (it's heavy, putting substaintial amounts on airlines isn't really possible). Then you have the issue of security. It's not exactly wise to telegraph the fact that you're going to be moving tonnes of valuable stuff around. Then of course it needs to be checked to make sure it's the original goods. I can imagine that moving even a relatively small amount of the stuff (10 tonnes or so) requires some major logistics. Moving several hundred tonnes would be a serious mission, and they would probably only announce it has been moved after the entire process is complete and the gold is safely transferred from one vault to another.

So it's hardly surprising that the movement of gold generates some intrigue. This doesn't mean anything questionable is going on though.

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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