Friday, October 15, 2010

Potential scenarios for a correction

Gold, silver may buckle under pressure

Not everyone is overly bullish on the precious metals sector and with investor demand becoming an increasingly important and uncertain factor, confidence in the ability for gold and silver to sustain their rallies is starting to buckle under the pressure. “We remain skeptical concerning precious metals’ ability to rise indefinitely, and we expect a turning point to be reached sooner than the consensus in the market,” Nic Brown wrote in the Natixis Commodity Markets’ Fourth-Quarter Metals Review report.

Posted by mark @ 12:09 PM (1579 views)
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13 thoughts on “Potential scenarios for a correction

  • We remain skeptical concerning precious metals’ ability to rise indefinitely,

    Obviously it isn’t going to rise indefinitely, nothing does.

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  • HP yes they can, according to everyone houses can rise in price indefinitely

    lol

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  • Wheres the meat in this article ?

    It’s just commentary from a journalist who posts articles to fill a void called the Wall Street Journal.

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  • by and large, same as houses, they will rise indefinitely – because hte value of a fiat currency will always be progressively destroyed.

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  • Any thoughts General Congreve?

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  • HP yes they can, according to everyone houses can rise in price indefinitely

    < [email protected] > Yes, but it is ”different this time”. New paradigm. < /[email protected] >

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  • FWIW

    I think prices have shot up too fast in the last few months (Silver +25% in about 3 or 4 months priced in sterling ???). I would therefore expect a bit of a retracement.

    On the otherhand there does seem to be a huge amount of ‘potential’ bad news out there that would involve more bailing out and hence money printing.

    My gut feeling is they will go higher yet, but maybe a pull back first.

    Ths is based on gut feeling btw, not fundamental or technical analysis.

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  • general congreve says:

    @5 – In the short term I’m with STR2007 @7. The market has been in a two steps forward one step back formation for 10 years, so a pullback is likely. Plus I don’t want to see it go parabolic yet. Just a nice slowly increasing rate of appreciation over the next year or two to build a nice solid capital base, then BOOM, superspike, cash out some holdings to take profits (providing there’s a stable currency to cash into – seems a bit unlikely way things are going, but can only hope) then keep riding and cashing in progressively to lock in profits to the blow out top. Then buy massive house and travel indefinitely.

    The end game is still in site. The real bubbles are in bonds, property (in the UK) and equities and when any of these burst and the fear takes hold, a large portion of the money will likely flow into gold then, whether that’ll be the beginning of the end or just the next major leg up, who knows.

    All the factors remain the same, incredibly shaky fiat-based global financial system, gold historically underpriced – average price last 40 years = $1650. Price in dollars gained by dividing what the US claims to have in unaudited fort knox gold reserves relative to dollars printed approx. $8000! source Moneyweek.

    FFS, respected Moneyweek magazine are saying keep your gold, not just little old me. Ignore the noise from idiots who right articles like this, I could show you many times more investment company experts telling you the exact opposite. Read Moneyweek, zerohedge, marketoracle. Check out Max Keiser, Marc Faber, Gerald Celente, Peter Schiff on youtube. Educate yourselves. Or just keep having a laugh about GC the Goldbug at your own expense, your choice.

    BTW, I enjoy the banter, but really don’t want to be saying told you so in a year or two. I understand there was once a guy called Cgnao on here that was a gold bull years ago, and he had enough of being called wrong, also a guy called Dr Bubb, same story. Tell me, were they right or wrong?

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  • general congreve says:

    @8 – That was ‘write articles’, not right. Haven’t had my weetabix today. Really should check before posting!

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  • general congreve says:

    Christ, just read some of it to make sure I wasn’t being unfair to the author and to be sure I hadn’t missed something I didn’t already know:

    “Market consensus is for gold prices to average somewhere in the mid-$1,400s in 2011, but Brown expects prices to average $1,050 through 2011 as a whole.”

    If it gets back to anywhere near $1050 it’ll be the buying opportunity of the Millennia. Good luck getting physical bullion at that price if it does.

    I recommend you read the article comments, here’s a choice few:

    “Yea , like our problems have mysteriously disappeared and all of a sudden the economy and dollar are coming up roses….NOT….”

    “The only crack I can imagine is the crack these people are smoking…”

    “To my knowledge it is. Natixis also lost huge amounts in the subprime meltdown, having to be supported by the French Banque Populaire and Caisse d’Epargne who I believe are or were the main shareholders.
    Not a very creditble source of information, at least in my opinion.”

    “So PMs could fall as interest rates rise…. but then governments default on their debts, their currencies collapse, and people revert to PMs again.”

    Also happens, as many other comments testify, that this gold bear article coincides with Bernanke talking about printing more dollars today. So more dollars in the pipeline but gold took a fall at the same time today of about $10 and ounce? Someone trying to manipulate the market? Do you know that JPM have the biggest leverage short position in the futures market against gold at this time, EVER?

    Read and learn people, the PTB are trying to save themselves at your expense, protect yourselves.

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  • GC your message would translate better if you were a little more dispassionate in your advice. I say this in the context of begining to get a sense of what the gold thing is about – for the first time. I’ll try and say something about that another day.

    As for your Bernanke comment, the market has been front running his jawboning monetisation from a month ago. His message today was more nuanced and I sense somewhat disapointing to the markets.

    It is I suggest imperative for people to get their head round the limits to QE. The Fed cannot even if it wanted too trash the $ to pay off debts because long before that ever happened oil, and every other commodity, would rocket to unprecendented highs and serve to break the economy in 2. It would behove no-one to pursue this course.

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  • general congreve says:

    @11 – See what your saying Bellwether. Just a little difficult to be dispassionate about something you passionately believe in. Also, I tend to find that the mainstream financial press that believe in gold can be quite dry with their recommendation to buy it. While they are on the money, they rarely seem to convey the sense of urgency of the current situation.

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  • @11 – See what your saying Bellwether.

    I would say CG, avoid the serial posts – as they look like ranting and no one reads them.

    Precious metals are what they are and don’t need really help from anyone on this site.

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