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Reuters: "gold Remains Vulnerable"

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http://investing.reuters.co.uk/news/articl...TS-PRECIOUS.xml

Gold steadies after dipping, but
remains vulnerable
Wed Aug 15, 2007 8:17 PM BST
Email This Article | Print This Article | RSS [-] Text [+] By Daniel Magnowski
LONDON (Reuters) - Gold steadied in afternoon trade in New York on Wednesday after slipping, but remained vulnerable because of a firmer dollar and renewed pressure from stock markets on worries over the implications of the U.S. subprime mortgage crisis.
Palladium fell to a five-month low and platinum declined to its lowest in more than two months before recovering.
Gold <XPT=> was quoted at $669.60/670.20 an ounce by 1451 EDT after falling as low as $662, against $668.30/668.90 late in New York on Tuesday. The metal has fallen nearly four percent since hitting an 11-week high on July 24.
"Gold is suffering at the hands of a stronger greenback as the currency benefits from safe haven flows," David Thurtell, metals analyst at BNP Paribas, said.
"
Central banks are likely to be sellers over the next month or so. Physical demand is also low," he said, adding any drop in the price of gold to its 50-day moving average of $661.73 could trigger more selling.
...../

There seems to be a sell signal flashing in the market.

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http://investing.reuters.co.uk/news/articl...TS-PRECIOUS.xml
Gold steadies after dipping, but
remains vulnerable
Wed Aug 15, 2007 8:17 PM BST
Email This Article | Print This Article | RSS [-] Text [+] By Daniel Magnowski
LONDON (Reuters) - Gold steadied in afternoon trade in New York on Wednesday after slipping, but remained vulnerable because of a firmer dollar and renewed pressure from stock markets on worries over the implications of the U.S. subprime mortgage crisis.
Palladium fell to a five-month low and platinum declined to its lowest in more than two months before recovering.
Gold <XPT=> was quoted at $669.60/670.20 an ounce by 1451 EDT after falling as low as $662, against $668.30/668.90 late in New York on Tuesday. The metal has fallen nearly four percent since hitting an 11-week high on July 24.
"Gold is suffering at the hands of a stronger greenback as the currency benefits from safe haven flows," David Thurtell, metals analyst at BNP Paribas, said.
"
Central banks are likely to be sellers over the next month or so. Physical demand is also low," he said, adding any drop in the price of gold to its 50-day moving average of $661.73 could trigger more selling.
...../

There seems to be a sell signal flashing in the market.

So it's going to get cheaper? Excellent! Time to get more :)

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So it's going to get cheaper? Excellent! Time to get more :)

I sold sovereigns in the very early 80's when gold peaked in the $800 range. Bottom line: if you don't time the peak it can take decades to return to the same price point. Falling markets are not all buying opportunties.

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sell signal my @rse!!

the reason CB's sell or leas gold is to prop up the failing balance sheets the poxy governments have created.

...if an administration had put policies in place to export goods and services to the world,rather than domestic consumption,then there would be no need to sell off the family silver.Just look at WHO is bolstering their gold reserves....yup,it's the guys who are producing stuff....whether it's poison-painted toys for our already brain-damaged kids or gas and oil to fuel our homes/transport.

it CAN be done in equilibrium,so each country shares...but this is not what the big boys want.

they want the see-saw effect so they can harvest the numpties.

...when a country can't make it's books balance,the currency has to devalue.It has to devalue against something,whether that be another currency(which the chinese don't want to happen),or a proven medium of exchange(which the debt-ridden western CB's don't want)

Edited by oracle

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I sold sovereigns in the very early 80's when gold peaked in the $800 range. Bottom line: if you don't time the peak it can take decades to return to the same price point. Falling markets are not all buying opportunties.

try buying some kruger's

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They have to talk gold down, because if enough people decide to buy it,

the rigged price will fail, and all hell will break loose.

Ooooh yes, so vulnerable, better get some nice government bonds.

:lol:

Edit:

Just to add i bought some gold today, and there is no stock for 3 weeks,

vulnerable my ass.

Edited by Dr Doom

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My main thought is that everything but paper cash is a bubble, even Gold. But that said, gold are not expensive, but I think it will go down hard in a credit contraction if the FED fail to expand faster than the contraction.

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if there is no demand for the physical stuff at this time of the year i would be worried about the price

i would also worry that in recent months the $ has been incredibly weak but gold has barely moved

it's all very well stating historic facts etc, but if people no longer value gold as a store of value then you are on a hiding to nothing

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So it's going to get cheaper? Excellent! Time to get more :)

Me too. The US fed will more than likely keep pumping the markets with liquidity as this crises unfolds over the next few few months. They are also likely to lower US interest rates at some point. Result: falling dollar - rising gold.

However, as realist bear points out, in the short term, gold could be vulnerable to the general malaise in the global financial markets (even many gold bulls will agree with that). If gold does fall though, it will be a good buying opportunity in my opinion. I can also see sterling having problems in the not too distant future.

On the other side of the coin though, gold could take it's long term contrary position to stocks in the short term. The long term bull would then gather momentum. At this point, I am not selling or buying gold. However, if the price fall to below $600 I will be very tempted to start buying again.

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Just wait for the FED to cut rates, then all hell will break lose.

I am not sure of that. I am waiting for everything to go down at the same time..

However I have looked at a chart

homedjia.gif

If you look at the chart, you see the increase in gold..

We are at different point in the cycle that are similar to mid 1930 on the first chart, it just moves slower on fiat money.

DJIA_History.png

Why did gold go in 1930, because speculators needed something to do? Or because of rumors of a gold ban?

Anyway, by reading the charts, the dow have a long way to go before gold move. 1982-2000 = 1920-1929 , 1929- mid 1930 = 2000-2007

Another way to view it is that 2002-2003 is like 1932, but then, we have not had the bank failures yet, I think history will repeat in a new way, and that 2002-2003 were like 32, but the FED managed to prevent system failure, to have it in the future instead.

Edited by carseller

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What is all this talk about gold going down when the markets go down or credit contracts?

The markets have gone down - gold has done nothing.

Credit is crunching already - gold has done nothing.

You can discuss all the way through until gold is on par with the DJIA. I have bought on Monday, and will buy in the future whenever I think I have some spare cash.

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What is all this talk about gold going down when the markets go down or credit contracts?

The markets have gone down - gold has done nothing.

Credit is crunching already - gold has done nothing.

You can discuss all the way through until gold is on par with the DJIA. I have bought on Monday, and will buy in the future whenever I think I have some spare cash.

I am really worried about you. You are putting all your eggs in one basket.

It's all nickel these days. They will need nickel to make the batteries for all the electric cars when oil runs out so get in now while it's cheap.

Nobody really wants gold. Nobody even wants to wear it anymore and it is strongly out of fashion. However, if I think gold is a really shocking investment maybe I should invest a bit in it as a hedge. Yes, I'll do that.

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if there is no demand for the physical stuff at this time of the year i would be worried about the price

i would also worry that in recent months the $ has been incredibly weak but gold has barely moved

it's all very well stating historic facts etc, but if people no longer value gold as a store of value then you are on a hiding to nothing

Good sensible points you make and always worth bearing in-mind, but I think the numbers of people who value gold as a store of value are on the increase, whereas people who see the dollar, Dow Jones, FTSE, hedge funds etc as a store of value are probably on the decrease.

I can only speak anecdotally for myself and a few other close pro-gold friends of mine in meat-space, who have been waiting for a drop in the market to buy a bit more gold. I feel from my experience that demand is still on the increase and I also get the same impression from searching around on the internet.

Edited by enrieb

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I am really worried about you. You are putting all your eggs in one basket.

You mean like anyone who over extended themselves on a mortgage in the last 3 or 4 years?? :lol:

Seriously though, GoldFinger seems like one of the more reasonable gold bugs here (username excepted :lol:)

I am sure he has considered all options and if we have a deflationary recession/depression, which is looking increasingly likely, is aware of the risks with gold and will change his position accordingly.

Edited by BubbleTurbo

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I am really worried about you. You are putting all your eggs in one basket.

It's all nickel these days. They will need nickel to make the batteries for all the electric cars when oil runs out so get in now while it's cheap.

Nobody really wants gold. Nobody even wants to wear it anymore and it is strongly out of fashion. However, if I think gold is a really shocking investment maybe I should invest a bit in it as a hedge. Yes, I'll do that.

I think nickel is a bubble.

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I am really worried about you. You are putting all your eggs in one basket.

It's all nickel these days. They will need nickel to make the batteries for all the electric cars when oil runs out so get in now while it's cheap.

Nobody really wants gold. Nobody even wants to wear it anymore and it is strongly out of fashion. However, if I think gold is a really shocking investment maybe I should invest a bit in it as a hedge. Yes, I'll do that.

I have no debt/mortgage. I have some physical gold. I have a little cash (need to save some more to be able to pay tax without selling gold). I have several pensions/assurances I contribute to. I have an income some would consider as recession proof. I sometimes think I am actually more diversified than I want to. I'll sell one of my assurances end of this month (at least that's my plan for now) to reduce my exposure to the bond market.

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While you lemmings out there are piling into worthless crap by listening to the spin and falsities put out by vested interest, the smart money is rushing into the only true store of value.

What, chickens? I have explained before why chickens are the only true store of value.

Personally I am more than capable of making investment decisions. And as for the VI crap, is that pdf part of it?

Now, while you have some time, go away and work out who buys most gold, when and why. While you are at it, work out what will happen to the gold price if there is no physical demand for it.

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What, chickens? I have explained before why chickens are the only true store of value.

Personally I am more than capable of making investment decisions. And as for the VI crap, is that pdf part of it?

Now, while you have some time, go away and work out who buys most gold, when and why. While you are at it, work out what will happen to the gold price if there is no physical demand for it.

A chicken forward is an egg, BTW. Anyway, why should physical demand for gold vanish? Because it is better to invest in the DOW or in MBSs? Because it is better to invest in shaky hedge funds or banks that are stuffed with toxic financial waste? Because it's better to invest in commodities that had a much better run than gold already?

I don't know for sure, but the chances for gold simply look the best. This credit/derivative crunch will propell gold to heights never imagined before.

Edited by Goldfinger

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A chicken forward is an egg, BTW. Anyway, why should physical demand for gold vanish? Because it is better to invest in the DOW or in MBSs? Because it is better to invest in shaky hedge funds or banks that are stuffed with toxic financial waste? Because it's better to invest in commodities that had a much better run than gold already?

I don't know for sure, but the chances for gold simply look the best. This credit/derivative crunch will propell gold to heights never imagined before.

Warren buffet is around 50/50 stocks and cash and don't seem to think cash are worthless.

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Biggest risk with the commodities market is that it suffers from the same contagion as the rest of the markets - the reliance on leverage, cheap debt , margin and borrowing to raise the price/keep the prices at current levels. Considering the volatility (and scale of falls elsewhere) you'd think there would be signs of distressed selling if this were the case. A look at the general chart indicates that the CRB index has easily brushed off the huge problems elsewhere (thus far).

http://quotes.ino.com/chart/?s=NYBOT_CR&v=d3

If central banks keep on pumping out fiat paper this is one place that it will go, it is the natural place for it to go (across the broad index, not necessarily gold)- especially when most/all other investment markets are looking dodgy.

Real and sustained falls in global demand for foodstuffs, energy, raw materials or a step-change in the ability of find/supply such items of course would be a completely different matter.

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