Is Gold The New DXY Levered Intraday Speculative Bet?
With the recent development of stocks no longer following every tick of the DXY, it appears the algos have been now reprogrammed to speculate much more aggressively in gold. As Zero Hedge first speculated over a month ago, the Fed's excess liquidity is no longer making its way into the broken stock market, and instead is reorienting toward smaller speculative markets such as gold. As the chart attached demonstrates, the inverse correlation from any dollar weakness is magnified in gold, while stocks continue drifting aimlessly. Then again this is merely an intraday observation. Look for the algos to be tweaked promptly as traditional correlations seek to get reestablished.
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on Mon, 11/30/2009 - 14:07
#146464
Don't forget the toxic CRE REITs; they pop on any hint of dollar weakness. If they are top holding in IYR, even better...
on Mon, 11/30/2009 - 14:28
#146500
Sorry Tyler, gold is being realized for what it is- real money. I know it's hard for you deflationistas to imagine any asset should be rising in this environment, but gold and silver will continue to depeg from the dollar.
on Mon, 11/30/2009 - 14:39
#146520
agreed. paper + promises = bread lines.
on Mon, 11/30/2009 - 15:03
#146568
Gold may be the last bubble for a long time,
and GS is not short gold...
http://www.jubileeprosperity.com/
on Mon, 11/30/2009 - 14:30
#146503
GLD and SLV are being used by sharks to crush rival sharks. Watch the ramp!
on Mon, 11/30/2009 - 14:42
#146527
My mistress of shininess, I will take physical possession of you.
on Mon, 11/30/2009 - 15:37
#146632
TMI
on Mon, 11/30/2009 - 14:45
#146532
Girl, you know it's true.
on Mon, 11/30/2009 - 21:06
#147076
BUHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA-HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA-HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA !!!
That's fucking FUNNY! Best laugh on ZH in weeks, EASILY!
on Mon, 11/30/2009 - 14:45
#146533
Real money. What a douchebag! Shame about the paper contracts driving the price.
on Mon, 11/30/2009 - 15:01
#146562
what planet do you live on? paper contracts are catching up with the real price of physical gold. there has been a huge premium in buying physical for years. paper is starting to finally get overwhelmed by demand. go try to buy some physical gold anywhere for the "paper price" and you'll be laughed at. Interestingly, India didn't go out and buy $7bill of GLD.
on Mon, 11/30/2009 - 15:17
#146584
I take you're being sarcastic...
There's not enough gold to settle even "paper gold". Do you see a bubble/scam right there? "Paper gold"? Printed paper at the cost of real gold? Only for idiots (oh, but it trades at a discount, must be a good deal). It will go down fast like the $200 "peak" oil did.
on Tue, 12/01/2009 - 03:47
#147424
You need to know this: There is a trustable shop in my town offering a discount on Krugerrands because they have so many. They also have enough Maples, and a lot of Austrian made gold bars. The premiums are reasonable, specially on Krugers (right now at $1257, spot on $1190). I am not in the US, though.
I do like gold and see a point in hoarding it (at the best cost), but the 'virtual' price is currently subject to the big market gamblers, and it could ride hi & lo.
on Mon, 11/30/2009 - 15:12
#146574
douchebag?
What, did you have a charisma bypass? Charming..
on Mon, 11/30/2009 - 15:13
#146585
"I know it's hard for you deflationistas to imagine any asset should be rising in this environment, but gold and silver will continue to depeg from the dollar"
Ummm--I'm a deflationist and that "is" the reason I buy Gold---
Ya see-- Gold "is" money and nothing does better in deflation--then money--
The best money--Gold--does the best--as everything else "deflates" against it--
on Mon, 11/30/2009 - 15:16
#146589
Real money?
The value of gold is simply a true measure of the health of the world financial system (all aspects)... nothing more, nothing less.
on Mon, 11/30/2009 - 15:27
#146611
Real money?
The value of gold is simply a true measure of the health of the world financial system (all aspects)... nothing more, nothing less.
Beg to differ--
Measure Gold against any asset--and i mean "all" of them--including all the indexes and tell me that they aren't deflating against Gold--
I can go to the coin shop and exchange that piece of Gold for paper money,as easy as you can extract it from an ATM--with a piece of plastic--
Sounds an awful lot--like money to me--
on Mon, 11/30/2009 - 15:31
#146617
Physical gold thru ordinary retail sources is running low these days. I scan the inventory daily at APMEX and they're pretty much tapped out of all the usual bullion like 1 oz bullion coins, including Canadian, American, and Austrian.
Last I checked they were out of 10z bars too. They do have some bullion coins like the American Buffalo at a big premium to spot. But, until just last week or so you could buy all of the above for a modest 3-5% premium to spot.
Platinum coins have disappeared lately, and the premium for silver to spot is up significantly.
I guess we're all cocoon-ing with our food, guns, and precious metals.
on Mon, 11/30/2009 - 15:33
#146622
Woohoo! End of day ramp up, here we come.
on Mon, 11/30/2009 - 15:48
#146648
What in the Sam hell are they doing with IYR stocks...
Some new, new Acronym Soup program being devised to buy all CRE @ 101?
on Mon, 11/30/2009 - 15:57
#146665
No shit! They went parabolic about 3:00. Must be the dollar. :-)
on Mon, 11/30/2009 - 16:05
#146687
That really reeked of EOM painting the tape.
on Mon, 11/30/2009 - 17:02
#146779
How to sound like a deluded (Golemesque) goldbug:
- "Gold is real money! It's the only real money because it's gold, everything else is just
paper, and you can't buy anything with paper. Consequently you will only be able to buy
groceries with gold come the rapture!" REPEAT x100
- "God has decreed that that the DOW/Gold ratio shall return to 1, it did it once therefore
it MUST AGAIN."
- "The gold price has been supressed, becuase GOLD, being GOLD is always infinitely valuable" AND "Gold must be supressed by the evil illuminati, lizard people because should it ever rise their control over societey would be nullified sommow"
- "GOLD IS REAL MONEY DAMMIT"
on Mon, 11/30/2009 - 19:46
#146999
Feel better, Larry? One of the things I am enjoying MOST is the reaction that the POG is instilling in the naifs.
on Mon, 11/30/2009 - 15:42
#146638
Gold is as much as an illusion as paper. It is dependent on people's belief as you can't eat it, use it for power or shelter or practically anything else that doesn't have a substitute. The differentiating factors are a more durable mythology and an illusion of scarcity. But just like with oil or diamonds, or any other commodity, for that matter, the general public is dependent on vested interests for quantity of supply. Capitalism is all about the mythology of the "free market" and the reality of the "greater fool" and cornering the market.
on Mon, 11/30/2009 - 16:03
#146678
OK then, which is more irrational, valuing: a) something that has been valued by humans for thousands of years and which requires no external enforcement mechanism, or b) something which requires legal tender laws backed by men with guns to enforce its value to humans?
on Tue, 12/01/2009 - 07:39
#147476
There are two basic points to my argument. First, since "money" is just a concept, a social agreement, any basis for money is subject to change for rational or irrational reasons. Second, it does not really matter what the medium of exchange is, what matters if how people use it, i.e., whether they honor the implicit agreement, in spirit as well as law and, of course, they manage the related complexities. Thus gold can be misused, manipulated and is subject to "management" problems, just like fiat paper. Gold has been misused and manipulated in the past and thus will be in the future. Any hope that gold is "THE ANSWER" is futile. Gold is just another momentum trade.
on Mon, 11/30/2009 - 20:30
#147035
Like any good gold is valued with respect to other things. If the biggest concern you and your neighbours have is your next meal not much is going to be worth trading for if it isn't food, you simply wouldn't have the luxury of thinking very far ahead. It has far more to do with practicality than it does with "belief".
If the historical value of gold is as a store of value then it stands to reason that it will continue to fill this role as long as people have the luxury of socking things away for later use/consumption. Regardless of its supposedly "illusory" scarcity (all signs actually point to this scarcity being understated) it has been, and for the forseeable future will be, a reliable store of value for the future. It outlasts both paper and governments.
on Tue, 12/01/2009 - 10:29
#147620
Except gold can be manipulated just like fiat money, witness the climb to $800 in the early 80's and the subsequent decline until recently. Governments and other institutions can play with gold just like with any other "money" (store of value/medium of exchange). Furthermore, any information we, the retail consumers, have about supply and demand is really from institutionally controlled sources which, almost by definition, need to be viewed with skepticism.
on Tue, 12/01/2009 - 02:33
#147376
Do you understand what makes something scarce? Because in all practicality gold can be divided almost infinitely and still retain its value. So the amount is not what is in question in terms fo scarcity, it is a question of its finite capacity.
The dollar does not need to be finite, you can put any number of digits on a piece of paper and call it that nominal value so its values are meaningless.
Also gold is almost indestructible, paper is not. It takes work to get gold because it can't be created like dollars, so the amount of energy it takes to produce 1 oz of gold is relative to time/labor. So when you trade gold you are trading labor because it is the product of labor. That isn't to say that dollars aren't also the product of someone creating the dollar bills but rather making the point that gold takes a quantifiable amount of labor to produce where as dollars in reality are infinitely small fractions of the actually labor used to produce them in terms of real cost. Many people have associated Ben Bernake or Alan Greenspan as wizards or playing God. And it is precisely because it is just like magic to create dollars that have no value and trade them for things of value.
It is truly maddning to read people like you call gold's allure an illusion because you wan't to some how justify why you would be so foolish to continue this epic wide spread denial. I am sure though it has more to do with not accepting all the money you make is worthless and thus you would be entirely broke if you ever had to admit it. But you know what, most people are already broke and underwater as it is anyway. How long do you think people will continue to believe in the value of the dollar when it no longer benifits them to do so because they are all in debt to nationalized banks.
on Tue, 12/01/2009 - 10:34
#147629
I am simply pointing out that value indeed is relative to the mental models of individuals. These models can and are rational and irrational and manipulated. Gold may in some cases be a better store of value and medium of exchange, but the selection of gold, as opposed to oil, platinum, food or land or paper, is a social decision. Get on board with the momentum but recognize that gold is no more monetary Holy Grail, than paper or any other commodity. And the wizards will simply change the rules of the game to continue to skim our labor hours.
on Mon, 11/30/2009 - 15:43
#146641
real demand for 1 oz eagle 1210 bid... still holding strong....
http://www.bulliondirect.com/nucleo/
on Mon, 11/30/2009 - 19:49
#147002
BDs delivery times are currently over 7 days longer than normal for 2009. Physical is tightening up.
on Mon, 11/30/2009 - 15:43
#146646
As Zero Hedge first speculated over a month ago, the Fed's excess liquidity is no longer making its way into the broken stock market, and instead is reorienting toward smaller speculative markets such as gold.
...as it must, as more and more players realize the goldbugs are correct about competitive currency debasement while recalling gold's role as genuine money. I must also point out, the relative size of the gold market should scare the crap out of everyone who isn't long gold.
on Mon, 11/30/2009 - 15:56
#146663
Tyler
I agree with you 100%.
Normally there is an inverse correlation between Gold/Silver versus DXY but something interesting happened today.From 0600 through to 1700 GMT , basically the UK/Europe trading day, the inverse correlation was reversed.
Silver and Gold both ramped up in a nice curve up and so did DXY. I'm not smart enough to figure what thats all about. But ive never seen that before for a 9 hour stretch. Could it be the fact that Dubai impact is greater for the Euro and so the Euro was weak today? Are the Euro land PM traders crapping themselves and moving more into PM's. I dunno.
on Mon, 11/30/2009 - 15:56
#146664
Gold is as much as an illusion as paper"
Maybe--but its kept that illusion for what now?
5000 or is it 6000 years?
Strange it could fool us all--for that long--
on Mon, 11/30/2009 - 16:05
#146688
metaphysically speaking its all an illusion--so why do we even bother?
on Tue, 12/01/2009 - 02:26
#147374
'cuz we are living / in a material world.
on Mon, 11/30/2009 - 16:03
#146677
Gold is money, but the question is whether GLD is gold.
on Mon, 11/30/2009 - 16:08
#146695
I agree 100%.
Normally there is an inverse correlation between Gold/Silver versus DXY but something interesting happened today.From 0600 through to 1700 GMT , basically the UK/Europe trading day, the inverse correlation was reversed.
Silver and Gold both ramped up in a nice curve up and so did DXY. I'm not smart enough to figure what thats all about. But ive never seen that before for a 9 hour stretch. Could it be the fact that Dubai impact is greater for the Euro and so the Euro was weak today? Are the Euro land PM traders crapping themselves and moving more into PM's. I dunno
on Mon, 11/30/2009 - 16:12
#146703
Is there any way we can find out who is actually actively pumping gold on this site. It seems like every forum is being hijacked by pumpers. On one of the forums not long ago, people were actually pumping comex websites on here. It's not really cool. And before everyone goes crazy, ask yourself, would zh allow life insurance salesman to sell on here without paying for advertising space?
on Mon, 11/30/2009 - 16:34
#146732
Come on, dude. I just ripped into goldbugs and silverfish last week. Variety is all part of the fun.
on Mon, 11/30/2009 - 16:17
#146713
Is there any way we can find out who is actually actively pumping gold on this site. It seems like every forum is being hijacked by pumpers. On one of the forums not long ago, people were actually pumping comex websites on here. It's not really cool. And before everyone goes crazy, ask yourself, would zh allow life insurance salesman to sell on here without paying for advertising space?
Sounds like someone who is either--or-
A--Short Gold-
B--Without Gold--
Both--bad positions--
on Mon, 11/30/2009 - 17:57
#146864
good article on gold and Dubai
http://www.goldalert.com/stories/Gold-Price-Path-to-3000-Cemented-on-Dub...
on Mon, 11/30/2009 - 18:13
#146887
"Nothing ever moves up in a straight line."
And I tend to agree with Tyler: gold could be overdue for a (severe?) correction. Too much speculation, too much easy money chasing returns. And Gold is really hot right now.
I can definitely see the price of gold move down below the US$ 1,000 mark and maybe much lower. If that happens, it would be a great buying opportunity. Why? Because, ultimately, I just don't see the US$ move anywhere but down.
And when the US$ goes down - and it will, unless you believe that fantasy of green shoots and QE saving the day - it will take down with it most of the world economy into either deflation or hyperinflation, or even deflation followed by inflation or stagflation. Either way, it is going to be very ugly. Like others have said here, deflation is good for gold because gold will lose value, but more slowly than most other assets and inflation is very good for gold, because it will retain its value and even increase it.
So: short-term correction (maybe even a crash) is perfectly possible. Long-term prospects, though, are phenomenal.
And, no, I don't have a "mystical" - or conspiracy-based - view of gold. It is an asset just like any other. Gold, though, does very well during times of crisis. And, since we are in a crisis (surprise!), it is an asset whose time has come.
Disclaimer: I am just a rank amateur, who pulled this little spiel out of too much coffee and not enough sleep. You have been warned...
on Mon, 11/30/2009 - 18:58
#146943
If gold is so worthless, then why won't the Fed allow you to trade in THEIR PAPER for an equivalent amount of THEIR GOLD?
on Mon, 11/30/2009 - 19:25
#146973
I marvel at the "gold's gonna crash" crowd. We've been hearing that shit like a drum beat for at least eight years. Moreover, the constant cries of a "crash", if you are very long on gold i.e, in it since $320, sound more like chicken little pissing and moaning about the sky falling.
on Mon, 11/30/2009 - 19:27
#146974
Can someone point out some good introductory reading on algorithmic trading--it's form, function, implications, etc. I'd say I'm fairly knowledgeable separately on market/trading and algorithms/computation, but have essentially no knowledge of how the two are married up. Thanks in advance.
on Mon, 11/30/2009 - 21:06
#147049
OK those with low IQ's, let me make it simple for you:
I would agree with others that you should stock up on useful items including food and self defense tools in the event of a disaster, but if you have a portfolio then precious metals are a relatively safe wealth preservation tool under the current economic environment (less growth/deflation, more downside than upside due to valuations, deficits & gov printing).
on Mon, 11/30/2009 - 21:37
#147095
Thanks, Apocalypse Now. That was good for a boost of at least a few I.Q. points!
http://madeinhead.org/anism/wp-content/uploads/2008/04/super-retard.JPG
http://www.demotivateus.com/posters/retards-getting-stronger-demotivatio...
http://members.optushome.com.au/rickclarke/retard.jpg
on Mon, 11/30/2009 - 23:42
#147247
Gold and the dollar moving up together is a visitation back to March 09 when the banks were going down hard and there was a race to "quality".
Gold moves up in REAL buying power versus industrial assets like oil,silver etc in a deflation. Why? because in an environment of deflating money supply(credit= money) gold is highly liquid in large denominations. You can carry the value of your house in a backpack. It's cross border and you can use in the jungles of Tanzania or trade it in no questions asked in a city. Gold and the senior currency get chronically strong in a deflation. the DXY is still no where near it's 2007 lows.
on Tue, 12/01/2009 - 02:37
#147384
12 years ago a poster by the name of "Another" expressed his thoughts on gold. These posts have been archived and I would suggest these posts require careful study. They may radically change your beliefs about gold and its relationship to oil and the US dollar.
http://www.usagold.com/goldtrail/archives/another1.html
on Tue, 12/01/2009 - 03:30
#147418
What's up with gold tonight? Is someone buying in Asia?