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Realistbear

Gold Is Going South Now

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That trend line is almost vertical!!! what's the big news that triggered the big sell off?

I guess you broke it yourself (<660).

Honestly, I don't know. Possibly NYC traders waking up, realizing gold was below 660 over night.

Then they start hitting their buttons.

Hmmm, when do I hit mine??

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Look at this and choose 10s and 500 units (and tick "osc" for the volumes):

http://www.livecharts.co.uk/MarketCharts/gold.php

You can see the volumes going down were small, whereas

the support from around 1:30 on was much bigger volumes.

The supporting volumes are around 3-times bigger on average.

So, are only the smaller ones panicking?

Edited by goldfinger

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Look at this and choose 10s and 500 units (and tick "osc" for the volumes):

http://www.livecharts.co.uk/MarketCharts/gold.php

You can see the volumes going down were small, whereas

the support from around 1:30 on was much bigger volumes.

The supporting volumes are around 3-times bigger on average.

So, are only the smaller ones panicking?

Hmm, this might be a reason:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Dresdner Advises Aggressive `Underweight' in Stocks (Update2)

By Alexis Xydias

March 2 (Bloomberg) -- Investors should reduce stock holdings and buy government bonds because the current market sell-off is not over, said Dresdner Kleinwort, the top-ranked strategy team in the world.

....

``Timing has never been our strongpoint,'' Edwards wrote. ``But we believe `the great unwind' has now started.''

...

And this:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited by goldfinger

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Hmm, this might be a reason:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Dresdner Advises Aggressive `Underweight' in Stocks (Update2)

By Alexis Xydias

March 2 (Bloomberg) -- Investors should reduce stock holdings and buy government bonds because the current market sell-off is not over, said Dresdner Kleinwort, the top-ranked strategy team in the world.

....

``Timing has never been our strongpoint,'' Edwards wrote. ``But we believe `the great unwind' has now started.''

...

I did that last week by switching most of my pure stock mutual funds over to "balanced funds" that hold a large proportion of US bonds (Vanguard Wellington and Oakmark Equity Income). These will still drop but at half the speed due to a 50-60% weighting in value stocks and 40-50% in bonds. Dumped most of the rest after the Shanghai Shakeout without waiting for the bounce that has so far not materialised. Now about 80% cash and s-t government bonds and the rest in diversified international stocks. If it gets really bad might have to go 100% bonds-cash. :o

If the top ranked strategy team in the entire world suggest US bonds they might be more right than others. Its looking like the flight to safety as when the chips are down the US is probably better placed to weather a dramatic melt down that Great Crash 2 is generating.

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I did that last week by switching most of my pure stock mutual funds over to "balanced funds" that hold a large proportion of US bonds (Vanguard Wellington and Oakmark Equity Income). These will still drop but at half the speed due to a 50-60% weighting in value stocks and 40-50% in bonds. Dumped most of the rest after the Shanghai Shakeout without waiting for the bounce that has so far not materialised. Now about 80% cash and s-t government bonds and the rest in diversified international stocks. If it gets really bad might have to go 100% bonds-cash. :o

If the top ranked strategy team in the entire world suggest US bonds they might be more right than others. Its looking like the flight to safety as when the chips are down the US is probably better placed to weather a dramatic melt down that Great Crash 2 is generating.

Don't you think the USD could depreciate vs. EUR and make it a worse investment than EUR-bonds? I have no bonds now, but keep

cash only in EUR at the moment (not even GBP).

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Hi all. I think the fundamentals for gold remain strong because of rising demand for jewelry in developing countries like china and especially India (asuming they continue to develop after the recent market drop) and supply seems to be dropping with no large finds in recent times. I have a very humble amount of gold and although its plummeting as i wright (648.15) I'm hoping that once the sell of has stopped it will head north again with avengance.. Fingers crossed. Oh well, at least i don't own a house. :lol:

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I think you may be right Realistbear, Gold has paused arround $642 mark but is looking very unsteady on its feet.

I baught at £314 at the beginning of January so im still up, but for how much longer? We will see on monday.

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GOLD is going down hard now--below $600 Monday?

03/02/2007 12:51 641.30 -21.90

I hope it does go sub 600 - time to buy some more!

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It has indeed been a scary day :blink: I was taken aback the way it easily sliced through 655 (and triggered all my stop losses) and even more surprised the way it's carrying on down. Having said that, any loss in USD terms has been softened in GBP by the fx rate movement.

Wither now? Well I still feel gold has more chance of bouncing back faster than equities, but not quite sure when to dive back in.

Edited by ex-MEWer

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This is probably my fault. Every time I go out paragliding for the day and am unable to have a ticker going in front of me, Gold seems to plummet!

Never mind, I still own the same number of grams and I have some dry powder ready to get back in when it bottoms. :)

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I think you may be right Realistbear, Gold has paused arround $642 mark but is looking very unsteady on its feet.

I baught at £314 at the beginning of January so im still up, but for how much longer? We will see on monday.

I don't know, but a 100% profit might be a good time to sell.

I bought black gold last February at 1.41 and sold up after the Shanghai Shakeout for 4.88. The secret to success is to buy low AND sell high. Most people lose because they forget the second part or wait too long. BTLers do this and get burned in the crash.

If it starts to drop, whatever it is, set a limit and sell when it hits that limit. A lot of people lose a lot of money trying to guess where the top is and hang on for the last few percentage points and end up chasing it down.

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:lol:

So long as it's gold and not you, you'll be just fine... ;)

Well, so far so good, as she tentatively crawls away from $640. Could retest though...

Around $644 atm.

Market closed just as it was about to break below 640.

GOLD

03/02/2007

13:29

640.80

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GOLD is going down hard now--below $600 Monday?

03/02/2007 12:51 641.30 -21.90

I hope so, I will be buying again at 580 - 600.

If you believe in the 'great crash' theory, then as Marc Faber (who has good pedigree) has said 5-10% correction in gold is to be expected.

It is then - when 'helicopter' Ben tries decides to cut interest rates that Gold could go parabolic.

http://www.bloomberg.com/apps/news?pid=new...id=apUgsLGB4Co0

(Although he says commodities, he prefers gold as it is not reliant on growth in China etc.)

Edited by Leeds-Bozz

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Any of you clever bunnies know why Sterling is falling so fast?

The traders have been reading RB's posts here :) ?

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Any of you clever bunnies know why Sterling is falling so fast?

Merv can't hike with a SM crash on. Gordon's been rumbled. HPI-MEW is over and with it all that the miracle economy has represented. The currency traders have been consistent in saying that as long as there is HPI the pound will be bought. The bond market is pointing to massive credit tightening which is not directly related to IR and that will bring on Great Crash 2. Watch the US bond market--the crash there is impacting higher level bonds now which will strangle mortgage funding.

2nd Q of this year is when the real action to the downside begins IMO. All we have now is a slowing market.

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Merv can't hike with a SM crash on. Gordon's been rumbled. HPI-MEW is over and with it all that the miracle economy has represented. The currency traders have been consistent in saying that as long as there is HPI the pound will be bought. The bond market is pointing to massive credit tightening which is not directly related to IR and that will bring on Great Crash 2. Watch the US bond market--the crash there is impacting higher level bonds now which will strangle mortgage funding.

2nd Q of this year is when the real action to the downside begins IMO. All we have now is a slowing market.

Thanks, I knew I could rely on you RB. Certainly has been an interesting week! Cheers.

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Nice find on the Faber speech. Thanks for that. Faber's views on a short term drop dovetail nicely with itulip's ka-poom theory.

John Embry from Sprott Asset Management on cartel action (before the recent drop): http://www.sprott.com/pdf/investorsdigest/...mar_02_2007.pdf

Indeed, the current fall (in S/M as well as in Gold) is frighteningly in line with the predictions of the worst doomsayers.

Can I quote the dear departed cgnao (sp? for all those that remember) and say 'Protect Yourself - Buy Gold'/

Edited by Leeds-Bozz

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Phew! Gold seems to have stoped dropping. I diddnt make 100% (sadly) i may have confused my blog by switching from dollars to pounds.

Never mind atleast Gold has stoped for now and even gained a pound. I think next week will see a steady rise as cash tryes to find a home.

That old barbarous relic has life in it yet and for those who put cash under thair matresses can i just say, that at least in 5 years, i will have something to barter with whilst you will have something to wipe your bum with. thanks all, see you monday. :)

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Phew! Gold seems to have stoped dropping. I diddnt make 100% (sadly) i may have confused my blog by switching from dollars to pounds.

Never mind atleast Gold has stoped for now and even gained a pound. I think next week will see a steady rise as cash tryes to find a home.

That old barbarous relic has life in it yet and for those who put cash under thair matresses can i just say, that at least in 5 years, i will have something to barter with whilst you will have something to wipe your bum with. thanks all, see you monday. :)

There is a huge sell off going on in funds in the US--people may be raising cash to bail out other losses. Hit 639 near the close:

http://biz.yahoo.com/rb/070302/markets_precious.html?.v=4

Reuters
Gold, silver sink on fund sales
Friday March 2, 4:44 pm ET
By Frank Tang and Daniel Magnowski
NEW YORK/LONDON (Reuters) - The global flight from risk knocked gold and silver hard for a third straight day on Friday, with bullion falling below $640 an ounce for the first time in 1-1/2 months as funds and currency investors cashed out on precious metals to pay for losses in other markets....
YEN CARRY TRADE HURT
Carry trades, in which investors use low-yielding currencies like the yen as a cheap source of funds to buy higher-yielding currencies and assets, were largely to blame for Friday's sell-out in gold futures, analysts said.

Unfilled sell orders may spill over into Monday's open. IMO, this global meltdown could take everything down with it including commodities. Warren B is saying US bonds are the safe ground as far as he is concerned. Metals? Just one of the biggest asset bubbles. The carry trade is in its early stages and it has already had a huge impact on commodities as well as stocks. I don't think gold is immune from this monster.

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Unfilled sell orders may spill over into Monday's open. IMO, this global meltdown could take everything down with it including commodities. Warren B is saying US bonds are the safe ground as far as he is concerned. Metals? Just one of the biggest asset bubbles. The carry trade is in its early stages and it has already had a huge impact on commodities as well as stocks. I don't think gold is immune from this monster.

Huh? - in every report I've read gold is being sold to cover losses on equities - it isn't a choice - it isn't a comment on the fundementals breaking down

We will benefit from their losses...

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