Gold

[Fortune]

So, to precis that for the thick ones at the back of the class (i.e. me!), would you say that this article suggests that around $1k/oz is about the 'right price' for gold for around 2008 and that people's PM funds are better spent on a few gold-related stocks -- junior miners and the like?

To be honest, the reason I posted this article is to kind of illuminate the processes involved into the supression of the gold price rather than what the 'correct' price of gold should be - although this is still very important to know. As Steve N said, if we were in a true free market the price of gold should be substantially higher than what the $1050 the writer estimated. However, its useful to know that we are on the right track of the bull run, so to speak. So for the newbies out there fretting - it isn't over yet

I just hope the price goes below $900 and stays there in the next few weeks so I can get me cash ready

EDIT: Typo 2.

Edited March 21, 2008 by Fortune

[Steve Netwriter]

Unless the "not normal" conditions last for a length of time, in which case, the conditions become - "normal".

Does this mean you would buy now?

I don't think the current state of the financial system can ever be described as in a normal state.

Fed bailouts and talk of bank collapses are not the sort of thing I'm used to living with.

Whether to buy now or wait a little longer is a VERY tricky thing to decide.

IMO buy gradually over days/weeks to avoid one large purchase at the wrong time.

I bought some at $930, and will probably buy more next week.

One thing is for sure. It's at a 10% discount at the moment, which isn't a bad price.

At least you know where it has been up to. Better than buying while it's making new ground.

Just my view.

[Fortune]

Gold chart:

http://stockcharts.com/def/servlet/Favorit...t?obj=ID2386283

Could be going lower next week - possible target of $830.

Edited March 22, 2008 by Fortune

[R K]

Gold chart:

http://stockcharts.com/def/servlet/Favorit...t?obj=ID2386283

Could be going lower next week - possible target of $830.

It may go straight down next week, but I doubt it. We could see 2/3 weeks retracement of this weeks falls, towards the prior resistance/support areas first. Possibly getting back as high as 950 or even 960/975 before another big sell off. I don't see this being over in days or weeks, rather months, but what do I know

There is also an outside possibility that since much of the buying on the way up was by leveraged funds (not physical demand, contrary to opinion), resulting in the very fast sell off (I said previously it would be so fast and hard it would make your nose bleed), that now we are into a fresh month/quarter they will start buying again having booked substantial profits, slowly bidding it back up again. I suspect we won't know this until later in the week/early April however. Daily macd and RSI support will show when this is happening. (except for those who don't believe in charts)

[Dispassion]

This thread's gone very quiet.

[doahh]

This thread's gone very quiet.

No link from the main forum any more; no-one knows it exists. Many may celebrate the end of the gold bugs but I think HPC may loose (or has aready lost) some if its top posters.

[salamander]

No link from the main forum any more; no-one knows it exists. Many may celebrate the end of the gold bugs but I think HPC may loose (or has aready lost) some if its top posters.

This gold thread may have met its demise but the gold bugs most certainly have not

[Zadkiel]

This gold thread may have met its demise but the gold bugs most certainly have not

Yup, I'm a 'golden one' and still around.

Looking for gold at around $ 850 oz before my next tranche of purchases. Doing it to lock in value for a house purchase deposit at some future date rather than necessarily speculating on gold price increases.

[silversliver]

for anyone thinking of buying gold - stop for a moment and do some research on SILVER - you'll never regret it. there's a growing band of people waking up to silver as an investment. I'm unashamedly bullish on silver for the following reasons:

AT THE MOMENT MOST SILVERBULLION DEALERS IN THE US HAVE LIMITED SUPPLIES, as US house-holders are buying it by the truck load.

1) demand has outstripped supply every year of the last 15 - and for at least 60 years on average.

2) most if not all government inventories are now depleted.

3) the list of industrial uses grows (including solar panels), now more than making up for the loss from photography, and also starting to be used in hospital bandages and surgical instruments because it kills MRSA.

4) silver is both a precious and a base metal, meaning it's an inflation hedge and necessary for industry.

5) in many industrial applications there is no alternative - eg mirrors.

6) although silver has gone up over the past few years, the rise has been so slow (relatively) over the past few decades because there was always more in government inventories as an artificial supply. now this has gone, the sky's the limit.

I'm sorry i don't know how high silver could go - the recent increase in mining is producing a little more silver than previously, but still not ebough to meet demand.

The market will also accept a price of silver many times its current price - eg if an industrial switch (or mirror etc) costs £2 to produce, with the silver accounting for 2p of that, if the price of silver times by 5 to 10p - noone would notice now paying £2.10 for the switch!

As for how to invest, i'd be split between an etf and holding bullion - there's a lot of concern that the etfs couldn't actually meet their silver committments due to a new short position.

like everyone i've said this to - do your own rsearch via google or anywhere else and the answer is inescapable. Good luck.

[right_freds_dead]

is currently $953 27th march 02:00

[Zadkiel]

As for how to invest, i'd be split between an etf and holding bullion - there's a lot of concern that the etfs couldn't actually meet their silver committments due to a new short position.

Are you not concerned with VAT on physical silver?

[Steve Netwriter]

There is no VAT when you buy silver from GoldMoney.

[Zadkiel]

There is no VAT when you buy silver from GoldMoney.

Thanks.

[carseller]

Here you can see the "extreme amount of money printing" the FED is doing: http://bp3.blogger.com/_nSTO-vZpSgc/R-tRE0...-2008-03-12.png

Did someone say hyperinflation?

[wren]

US dollar M3 inflation is in the high teens.

http://www.shadowstats.com/alternate_data

The T-bill just touched an interest rate of 0.6%!

[carseller]

US dollar M3 inflation is in the high teens.

http://www.shadowstats.com/alternate_data

The T-bill just touched an interest rate of 0.6%!

I don't think the M3 is relevant. compared to the monetary base that is dropping.

The t-bill have been at around 0,35 %, but it's a little better now. People simply don't trust the banks with the amount that's above the insured limit.

I think it's not bullish for gold that so many people are selling, not buying their gold, to cover their bills. It's a true boom of people selling their non necessities, it's deflationary.

[carseller]

Let me explain what I think is happening.

1. There is a mountain of debt that is threatening with a deflationary collapse, not only mortgages, but a ton of derivatives, the derivatives is like this: We hire some math geeks or quants, they come up with a money making formula, and it all works, for a while, but these systems don't work under volatility and stress. It's today's version of program trading, that many blamed the 1987 crash on.

2. The federal reserve needs to keep having debt expanding and ease conditions to avoid a collapse, this have been beneficial for gold.

3. It goes like this, the economy starts to shudder, gold stops increasing, and fiat stops expanding (like now), and things goes in reverse, unlike when expanding, the contraction goes in a much faster speed, and the FED provide a fix to the market to avoid this process that are like domino's falling. It works for a while, then things start to shudder again. Imagine a table full of dominoes placed on it that starts to shake. These dominoes are money as long as they stand, there is also a very small amount of cash on the table. I think the effect of the last fix are fading, and the FED is running out of ammo.

There is now a flight to quality in the markets. That quality is cash.

Edited March 27, 2008 by carseller

[wren]

I don't think the M3 is relevant. compared to the monetary base that is dropping.

The t-bill have been at around 0,35 %, but it's a little better now. People simply don't trust the banks with the amount that's above the insured limit.

I think it's not bullish for gold that so many people are selling, not buying their gold, to cover their bills. It's a true boom of people selling their non necessities, it's deflationary.

Well, I look forward to all the deflation in the retail prices of food, energy etc., if you think M3 inflation in the high teens is irrelevant.

Recently traders have been selling gold to cover margin calls and I would expect quite a bit more of that to go on considering all the financial instability. But the trend for the gold price is still upwards.

Let's see what the price of gold is in 18 months' time.

[wren]

There is now a flight to quality in the markets. That quality is cash.

The US dollar isn't very good quality cash, because real interest rates are negative. If real interest rates become positive to a decent degree it could make US dollar cash more attractive than gold. But we're nowhere near that yet, quite the contrary.

[crudeFool]

There is now a flight to quality in the markets. That quality is cash.

Hi Carseller.

Dollar cash quality???? More like worthless bits of paper.

"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"

- Kenneth J. Gerbino

I know which flight to quality I'd prefer...

Regards,

crude.

[carseller]

The US dollar isn't very good quality cash, because real interest rates are negative. If real interest rates become positive to a decent degree it could make US dollar cash more attractive than gold. But we're nowhere near that yet, quite the contrary.

I think the amount of dollars in circulation is what determine the value, and by now we should have had massive deflation if the market had run it's natural way. But the FED is interfering. I think we can still have deflation.

I think a lot of the increase in M3, is market to market, that is , investors are liquidating funds into cash, the M3 shows what is equal to everyone heading for the exits, and that shows up in the m3 statistics. In other words, those money that have inflated stocks, real estate and other asset classes "coming home".

Edited March 27, 2008 by carseller

[Errol]

There is now a flight to quality in the markets. That quality is cash.

And believe me, there is no better form of money than gold. Gold is money in its oldest and most successful form.

The only fiat currency worth holding is Swiss.

Edited March 27, 2008 by Errol

[narco]

I think the amount of dollars in circulation is what determine the value, and by now we should have had massive deflation if the market had run it's natural way. But the FED is interfering. I think we can still have deflation.

Do you think or do you know? Can we still have deflation or will we still have deflation? This language is all very wishy washy.

You need to think with real conviction which way we're heading as your financial future will depend on this.

[Guest muttley]

Do you think or do you know? Can we still have deflation or will we still have deflation? This language is all very wishy washy.

You need to think with real conviction which way we're heading as your financial future will depend on this.

What's so hard to understand about his post? He thinks we might have deflation, but he doesn't know we will have deflation. Note that this involves "thinking" rather than following a mantra and shoe-horning all evidence to fit your "real convictions".

[narco]

Note that this involves "thinking" rather than following a mantra and shoe-horning all evidence to fit your "real convictions".

I'm very open to all sides of the argument.

I regulary read Mish Shedlock's blog and articles from Gary North, Bob Pretcher and a range of deflationary advocates. On the other hand I also listen frequently to Peter Schiff, Jim Puplava, Jim Rogers, Ron Paul etc.

I look at reconstructed M3 and BOE M4 data. I look at currency and commodity markets and central bank actions.

All the information I see suggests we are heading down an inflationary path and I'll continue stand by that until something or someone changes my mind.