Friday, June 28, 2013

Is gold heading to $1043, $600 or even $425?

Citi: Are Gold And Silver Finding A Bottom?

Ignore the conclusions of this article, draw a line from 1970 to the bottom in the year 2000, and you get a projected bottom for gold of $600. Alternatively, the line from the 1975 and 2000 bottoms show a target of circa $450. If Armstrong's target for Sterling devaluation is right, we could see £575 gold in Sterling. For breakout, we have resistance from the 1980 and 2011 high, up above $1800. Even with these targets holding, the multi decade bull market in gold remains intact, but the gold bulls have not warned people that the gold bull may not co-incide with your personal plans, i.e. need for a home, need to raise a family, set up a business, etc. Gold is going to infinity, like Ron Paul says, but maybe not within your practical timescales.

Posted by libertas @ 02:10 PM (3940 views)
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19 thoughts on “Is gold heading to $1043, $600 or even $425?

  • Here is the chart I referred to:

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  • Carney will be an interesting addition. I think he will QE more than anyone expects – in the search for that elusive recovery.

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  • I am taking this rare opportunity to buy some more silver to add to my retirement fund (30 years time), I hoping that the silver stash holds it’s purchasing power then I can take some well deserved holidays.

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  • if it goes to 500-600 i will buy loads, got the trucks ready

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  • Like so with Silver – It will be a silver retirement 🙂

    I guess that is the beauty of having a relatively small long holding – you don’t worry about small market flucutations as long as the fundamentals are unchanged.

    I feel a bit sorry for all those that put all of their wealth into the shiny stuff. It is just the same as proeprty speculation, but less damaging to others.

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  • HPWatcher, he raised rates in Canada, and has sounded more hawkish in his comments.

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  • Even if rates rise, the issue is arbitrage. Our rates relative to others, and also credit worthyness.

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  • According to the General Gold could not fall when real interest rates are negative…. but it did. Calls for $2,000 plus even $5 or $10k abounded when we were at $18 – 1900 . Funny how calls for Armageddon and price collapses are starting to come out of the woodwork. Only goes to show that when its obvious its obviously wrong :).

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  • In fairness, techie, real interest rates may still be negative, but it seems that it was the expectation that they soon wouldn’t be that has caused gold to fall. These things get priced in pretty quickly, but I suspect you know far more about that than I do.

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  • Costs vary slightly from mine to mine. I read somewhere the cost of getting gold out of the ground was about $1230 an oz. Dropping another $100 dollars you are not covering capital, just marginal cost. I guess at $1130 you sack the workers, close the mine and go home.

    Peter Schiff has some interesting things to say about Gold prices. Worth a look…..

    Then of course you could look at market (paper) prices vs physical prices:
    http://www.realpriceofgold.com/

    I also read there were about $223trln of world assets at the end of 2012. Of these $1.1trln was gold. That’s just 0.5%.

    It’s an absorbing subject if you want to spend the time in study.

    However, I’m hoping for a sunny w/end!

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  • I think that everyone should be celebrating this buying opportunity, the Chinese and Indians certainly are.

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  • HPWatcher, he raised rates in Canada, and has sounded more hawkish in his comments.

    Um he also provided a MASSIVE amount of liquidity – and now inflation in Canada is far worse than the US – according to someone I know who lives in the US and visits Canada frequently.

    According to the General Gold could not fall when real interest rates are negative…. but it did. Calls for $2,000 plus even $5 or $10k abounded when we were at $18 – 1900 . Funny how calls for Armageddon and price collapses are starting to come out of the woodwork. Only goes to show that when its obvious its obviously wrong :).

    True, but to be fair to GC gold has dropped in anticipation of raising rates.

    Yes, there are always those folks who predict 5k gold at $1,700 and $500 or even $0 when gold is at $1,200.

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  • reticent @ 11. The market generally discounts first and then the fundementals play catch up. This is why the first move down from $1900 was met with alot of head scratching and a degree of disbelief. Then there is an “aha” thats why its fallen moment – just in time for the counter swing in the opposite direction!

    I still think $1200 (actually in fairness thats my second bite) is a pretty good level. We bounced off the 1185 today and closed at 1230 ish. Stops moved to MBG, profits taken on a small proportion of the position per normal Money Management.

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  • @techieman – now what was it you told us in the past about picking bottoms? or was it bottom picking?

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  • ….. it gives you dirty fingers… :). Which is why you have to have some evidence and if it goes your way move the stops to beven relatively quickly.

    Have a good weekend JC.

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