Wednesday, January 28, 2009

Gold set for an ‘uber-move’?

When will gold break through $1,000 an ounce?

The global economic slump has caused industrial precious metal prices to fall - but according to Dominic Frisby, gold will still be in demand over the next few years, and could be gearing up for an 'uber-move'.

Posted by damien @ 11:35 AM (2723 views)
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18 thoughts on “Gold set for an ‘uber-move’?

  • mark wadsworth says:

    It did – in March 2008.

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  • This sounds similar to the argument that there is pent up demand for housing that will cause prices to rocket.

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  • I just saw a Bloomberg headline on the TV – Gold Fever Sweeps Europe – not a great sign for further upward pressure unless it becomes the next bubble which I can’t dismiss totally, but don’t see happening.

    I also warn that there are some very big money players in the gold market and sudden moves (in both directions) are not uncommon, furthermore volatility is not historically correlated with asset price as it seems to be with most other assets, this can make it a stressful market to be involved in.

    Don’t get me wrong – I do not want to discourage anyone from making their own mind up!

    For me gold is only tradable very short term or very long term; the former to bet on about-to-break economic news, the latter as a hedge against inflation.

    When all around you are jumping from windows, keep your head.

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  • sold 2 rent 1 says:

    Gold is building for a breakout and when it does we should get 5-6 weeks of rises.
    My model says this should start in early April 2009

    World money supply has gone up 9 times from the 1980 peak in gold.
    When the gold mania starts later this autumn the printing presses could be at 30pc+, so the factor could reach 11 times by the time gold peaks around April 2010.

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  • sold 2 rent 1 says:

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  • mountain goat says:

    “But, historically, silver’s role as money was less as a store of wealth and more as a day-to-day medium of exchange. That role has now expired.”

    That’s exactly the foolish things they were saying about gold 8 years ago too. The deeper the depression the more important silver will become IMO.

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  • sold 2 rent 1 says:

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  • mountain goat says:

    S2R1 – the reason why people are not worried about the surge of money from the Fed is the following:

    “It seems to me that what we are seeing is simply the balance sheet consequences of the Fed’s decision to take the wholesale money market onto its own balance sheet. Banks (and other entities) that used to lend to one another, are now lending and borrowing through the intermediation of the Fed. This is so not just domestically but also internationally (the huge swap line), since foreign banks used to fund dollar asset holdings in the dollar money market.

    In this view, inflation seems much less likely. Why not? If the original wholesale money market borrowing and lending was not inflationary, then why should its substitute be inflationary? Indeed, the real question is whether the expansion of the Fed’s balance sheet is keeping pace with the contraction of money market credit more generally. If not, then the consequence may be deflationary. ” ref

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  • sold 2 rent 1 says:

    mountain goat,

    Spot on about Silver. The gold silver ratio fell to below 20 in the 1980 peak. So if gold rises to $4,000, silver should go to $200.
    $4,000 gold is conservative when you relate it to money supply growth. 1980 peak of $850 * 11 = $9350 (potential gold peak) and $460 (potential silver peak)

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  • sold 2 rent 1 says:

    Notice that the money supply graph has been falling from spring 2008. Why?

    Most money is non USD. So when the USD index rises the money supply line goes flatter, and when it falls is goes more vertical.
    You can see this from a flatter 2000 and 2005 years, and steeper 2002, 2003, 2006, 2007 years.

    So if the USD was to collapse the world money supply would get an extra lift from this.

    Could we really see world money supply go to 100 trillion in the next 18 months?

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  • sold 2 rent 1 says:

    mountain goat,

    I expect the deflation/inflation debate to rage on for another 9-12 months. The inflaion of food and energy that I envisage cannot happen without such huges fears of deflation.

    Change is getting faster and faster as we head into the Consciousness Singularity.
    Eventually all markets will be as wild as the silver market – which is the most volatile one I know.
    So anyone playing the silver market better have a pace maker fitted now.

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  • sold 2 rent 1 says:

    mg,

    “the reason why people are not worried about the surge of money”

    Martrin Armstong would say. “It is just not the time yet”

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  • mountain goat says:

    S2R1 can you post the link to the latest writing by Martin Armstrong again please? What I found interesting was that Armstrong extended his Economics Confidence Model for another 50 years or more in there. How do you think about that considering your other views today that we are at the end of a larger cycle?

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  • If the $ falls in value Gold will have no difficulty in going through $1000oz barrier, however isn’t Gold priced in Sterling we here should be more concerned with.

    IE is the GBP likely to loose more value than it has already, or has the printing press (quantitive easing) already been factored into the price of Gold ?

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  • sold 2 rent 1 says:

    mg,

    It’s just time – Martin Armstrong
    http://www.contrahour.com/ItsJustTimeMartinArmstrong.pdf

    His original 8.6 year PI cycle article in 1999 has the dates out to 2032
    http://www.contrahour.com/contrahour/2006/06/martin_armstron.html

    The important parts of this lastest article are:
    224 year political cycle
    37.33 monetary crisis cycle
    8.6 month internal cycle (37.33 weeks) (most important part)

    As we zoom into 2011.45 (13 June 2011) change will get faster and faster and eventually the model break down completely.
    By him revealing a more detailed analysis of the period between 2007.15 and 2011.45 he will pick up more and more fans.

    I would not be surprised if he revealed an 8.6 week cycle (or similar) that went from autumn 2010 to 2011.45.
    But this smaller cycle won’t be revealed until summer 2010

    He is revealing his ideas in sync with how our consciousness is evolving exponentially.

    He was obviously allowed to write and leak this document. Why?
    Probably for the same reason AJ is allowed to run a “conspiracy theory” radio show.

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  • mountain goat says:

    Thanks S2R1, it was the 8.6 year cycle on page 25 I was thinking of.

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  • This man Dominic Frisby, is an investor in Gold. If you hear his posts you will find that out.
    What these kind of people try to do, is try to create a wave where by others believe and follow them .
    And they make money by new fools following them.

    Very similar to Housing boom. Some people bought and they made money because of more fools following them.
    I will not be surprised if gold fell to $500 an ounce this man would be declared bankrupt.

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  • Silver is good until deflation kicks in, because its an industrial metal. Gold is great during deflation, because paper assets, deflating. and lower interest rates means that the zero yield of gold is not a handicapt, whilst it retains its value.

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