Thursday, Oct 08, 2009

Citygroup say it could go to $1200

SKY: Gold Hits New Record High On Weak Dollar

"Gold prices have a hit a record high for the third day running" (personally, I think it will go well above $1200).

Posted by alan @ 04:24 PM (1290 views)
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18 Comments

1. little professor said...

Alternatively:


Market Oracle: Gold price to collapse to $600?

Investors never learn. Merely a year after the collapse in the financial system and the next speculative bubble is taking shape, this time in the form of gold.

Gold is now playing out exactly as oil did in its run to $147. Speculation and expectation grew until the mighty $100 mark fell. This breakout then hit the mainstream airwaves, with the usual segment of “How high can it go”.The internet was rife with retail speculators asking, “How do I trade oil?” whilst pension funds began to embrace the “once-risky” asset class.

As oil began its descent, all markets came down with it. The sad part is that markets did not learn and the exact same trade has recovered on the back of rosy assessments for economic recovery. The arguments for gold will be the same as the arguments for China de-coupling towards the July 08 peak. This theory proved to be false

From a technical perspective, gold has made a strong double-top formation over the last two years and now looks ripe for a recovery to the mean


Personally, I find the gold price bulls just as tiresome as Krusty, Lawzzz and all the rest of the house price bulls. Enough of the ramping already, please.

Thursday, October 8, 2009 05:22PM Report Comment
 

2. uncle tom said...

Agreed LP - and no-one seems to notice that of all the metal commodities, gold is one of the worst performers over the last three months..

Thursday, October 8, 2009 06:01PM Report Comment
 

3. inbreda said...

so UT what you're saying is that if gold is in a bubble there must be literally hundreds of mega huge bubbles in all the other commodities!

Wow. Bubbles on the brain

Thursday, October 8, 2009 06:37PM Report Comment
 

4. uncle tom said...

Inbreda,

I didn't use the word bubble..

All metal commodities are on a bit of a roll at the moment - whether this is speculative, or down to ever-growing demand from developing nations is not entirely clear - I suspect a bit of both..

.. I personally prefer to buy into the miners than the metals they mine - my BHP shares are up 36% over the last three months - as good as any of the investment grade metals. Gold is up 13.5%

Thursday, October 8, 2009 06:59PM Report Comment
 

5. hpwatcher said...

Uncle Tom,
you seem very prejudice against gold.

To me, it doesn't matter what it is, as long as it makes money.

Thursday, October 8, 2009 07:13PM Report Comment
 

6. sneaker said...

The usual mainstream B.S. commentary

the dollar is nowhere near its recent lows and yet they talk about "dollar weakness". in fact they should be talking about dollar strength.

gold is going up because gold is going up because all currencies are doomed

it's jack-all to do with just the dollar

Thursday, October 8, 2009 07:24PM Report Comment
 

7. mark said...

you know when it is a bubble about to pop when the public start talking about buying gold, i overheard someone the other day talking about buying gold, i can almost hear the bubbling exploding, once the public are involved the clever money has already left, game over for the mugs..

Thursday, October 8, 2009 07:32PM Report Comment
 

8. ianbe said...

But do any of the bubble talkers here have the guts to short gold?

I remember people on here talking about gold being in a bubble 2 or 3 years ago.

Of course it will eventually fall after a massive ramp up, but what will it peak at? $2000, $3000, or maybe $5000?

Thursday, October 8, 2009 08:45PM Report Comment
 

9. mdmick said...

Weird today.
The Freeview box found a channel named Russia Today just past CNN.
It had a story on talks which have been denied about, in some years from now, giving traders a choice as to which currency they may buy oil in.
That is a hot topic on this forum and I found it strange to be ahead of the news people on a story.

By the way [or BTW for you internet slang philes], I reached the RT channel because all other channels were on Cameron whose party, suddenly is jolly good, according to news channels rather than jolly bad like it used to be about a week ago.

Thursday, October 8, 2009 08:48PM Report Comment
 

10. uncle tom said...

To me, it doesn't matter what it is, as long as it makes money

And that is the problem with gold - it doesn't actually make money (unlike equities or bonds) - it earns nothing, and over time always averages back to a zero real profit.

You can only make money by catching it when it's on the rise, and selling before it falls again - and countless wise heads have failed the challenge of calling that correctly..

You can also make a theoretical argument that gold will lose value over time, as the amount mined is increasing the total amount on the planet (above ground) a little faster than the world's population is growing. Using that calculation, you can argue that it is actually devaluing by about 0.5% p.a. at the moment.

So, no, I don't play with gold..!

Thursday, October 8, 2009 08:52PM Report Comment
 

11. jack c said...

uncle tom said..."You can only make money by catching it when it's on the rise, and selling before it falls again - and countless wise heads have failed the challenge of calling that correctly.." - James Gordon Brown being one of them !

Thursday, October 8, 2009 09:08PM Report Comment
 

12. rumble said...

mdmick, lol btw fwiw.. russia today along with france 24 english must have the worst news readers on the planet - they have the news style inflections going on, but completely oblivious to the content.

Thursday, October 8, 2009 09:23PM Report Comment
 

13. mountain goat said...

Wall St gold analysts predictions not that optimistic.

Thursday, October 8, 2009 10:05PM Report Comment
 

14. general congreve said...

Sneaker @6 - Right on the (real) money my friend. I know I'd rather have gold than sterling right now. In fact I'm hedged roughly 45% gold, 5% silver and 50% sterling (cos I'm British and have to use the stuff on a daily basis). I feel my position should produce one of the three following results:

1) Worst case scenario, sterling, gold/silver collapse I make a loss of some degree. I don't see this duel collapse scenario as very likely. A sterling collapse perhaps, a gold/silver collapse? No. Sterling has been severely undermined and despite already devaluing significantly it's likely to go down further IMO. Gold on the other hand is no where near bubble levels, in inflation adjusted terms it is more than half the value of it's all time high. As for bubble psychology, only 2% of the public (in the UK at least) own investment gold (that means we're not counting some crappy Argos bracelet your Gran gave you for your 16th birthday girls), whereas 60%+ own shares, that's hardly bubble territory. Also, unlike the previous stock market and housing bubbles there has hardly been a peep about gold from the mainstream media during this crisis. Let alone recently, when it convincingly broke above $1000 and then broke out to new nominal highs of $1050, again this shows we're not in bubble territory with this one yet folks.

2) I maintain the value of my savings give or take a couple of grand, as sterling fluctuates up and down a bit and gold/silver react in the opposite direction to balance things out.

3) Western currencies continue to lose ground to gold, thanks to the devaluing powers of immense money printing and QE, my sterling takes a serious kicking, but my gold/silver reacts in the opposite direction, but not like for like, the upside is now geared as private investors, pension funds, central banks etc. start buying the stuff up by the bucket load as they rush to safety of metal over cr@ppy paper.

UT @2 - The other metals may have outperformed gold recently, but most of them are industrial metals, when the realisation hits that there is no recovery, demand for them will fall back. Over the medium term I believe gold has a better outlook because of it's monetary uses.

UT@4 - Miners do tend to out perform the metals they mine. My only concern is another serious financial crisis crippling financial markets and making peoples investments disappear up in smoke. You don't know who can trust right now, can you be guaranteed you'll get your money back in return for your share certificate if everything goes t1ts again? Personally I'll play it safe with the real metal, safe in my possession.

Of course all this may be largely irrelevant in a few months time, as it looks like the US is hell bent on attacking Iran on behalf of it's Zion-Fascist political masters in Israel, thereby setting the world on course for WW3.

Thursday, October 8, 2009 10:53PM Report Comment
 

15. Soldintime said...

Read the COT report - there is a huge short position builiding in the Gold market.

Thursday, October 8, 2009 10:55PM Report Comment
 

16. general congreve said...

MG @13 - Those good old Wall Street experts aye! Bearing in mind their complete inability to foresee the crash I wouldn't put much stock (no pun intended) in their future gold predictions myself. Especially as they are part of the same crew who want to see their 'money for nothing dollar ruse' carry on working for a few more years, which means gold must be suppressed at all costs.

Thursday, October 8, 2009 11:00PM Report Comment
 

17. estrader said...

UT,
“You can also make a theoretical argument that gold will lose value over time, as the amount mined is increasing the total amount on the planet (above ground) a little faster than the world's population is growing. Using that calculation, you can argue that it is actually devaluing by about 0.5% p.a. at the moment.”

Strange that you invest in companies that mine stuff out of the ground. According to your theory, the more they mine over time the less money they will make. So why invest in BHP?

“All metal commodities are on a bit of a roll at the moment - whether this is speculative, or down to ever-growing demand from developing nations is not entirely clear”
You don’t think BHP share price is also speculative?

Personally, I would rather invest directly into a commodity than the companies that get the stuff. Many of the greatest speculators in the last century agree with me:)
Commodity prices are driven purely by the supply and demand situation, even if a proportion of that is speculative, whereas company share prices are driven by the supply and demand situation as well as incompetent boards, stupid CEO’s, debt and a myriad of other things that don’t affect commodities.

Friday, October 9, 2009 08:32AM Report Comment
 

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