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Gold Proves Sticky As Dollar Surges; Correlation Observations Between Gold And DXY, Silver And Oil

Tyler Durden's picture





 

Many people have expressed a concern that because gold and the dollar are closely correlated, the recent surge in the DXY will imminently cause a major crash in the price of gold, as gold is no longer seen as a risk haven to dollar devaluation. While that may ultimately be the case, a simple observation of gold and DXY price levels indicates that while the dollar has retraced losses stretching all the way back to August 2009, gold is merely at levels first seen in November (and again in December and January).

The preliminary conclusion is that gold has proven quite sticky at the top, even as the dollar has regained some of the investing public's confidence. One reason for this may be gold's slow start to the upside as the next chart demonstrates. Gold only commenced its nearly parabolic rise in September, a time when the dollar was already substantially weaker compared to its March highs: if appears it took quite a bit of time for gold investors to realize the potential ramifications associated with the dollar's weakness, and how to hedge appropriately.

The question now arises: is gold merely sticky for the same reason it was sticky in the ~$900 range, and as a result will see a substantial and sharp drop once the trendline in the dollar continues unbroken, or are prevailing $1000+ levels the new "normal" for gold in a world in which the weakness of the fiat system is increasingly put into question, and gold is not only a safe haven to the dollar, but is seen a safe haven not by both emerging market central banks and by all investors, to all fiat exposure? Needless to say, our belief is that the latter will ultimately be proven to be the case.

And while still discussing gold, we should also note that silver is once again, at least on a relative basis, when compared to gold, looking cheap. The ratio of gold to silver prices is now back to levels last seen in August. A long silver-short gold pair trade may be an interesting option for those who, like LTCM, believe in spread compression.

And in the context of compression pair trades, another exclusive commodity pair trade that may be applicable is the long oil - short gold trade. Then again, just like in Volkswagen squee\e, the tail ends on this trade seem quite painful, which is why investors looking at this trade should have sufficient capital for margin calls so as not to be stopped out should another Brian Hunter type emerge in the gold or oil markets, or should Goldman's prop desk (that's right, prop) go full tilt once again.

 


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Wed, 02/03/2010 - 22:30 | Link to Comment Gilgamesh
Gilgamesh's picture

Sprott gets final go-ahead for Physical Gold Trust (CEF clone).  ~$750M worth...

http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=97185&sn=Deta...

Could see a new high in EUR price soon.

Wed, 02/03/2010 - 23:33 | Link to Comment Anonymous
Thu, 02/04/2010 - 03:27 | Link to Comment harry tuttle
harry tuttle's picture

November, at $1045, still providing support. Techs like Neely started getting squishy on expected break last month.  Others citing imminent problems in paper.

Problem:  DXY is 83% Euro/Yen/Pound...all as worthless as the $$$.  Need to watch something else...oil?

http://areasonablelife.wordpress.com/

Thu, 02/04/2010 - 01:39 | Link to Comment Hansel
Hansel's picture

I thought my gold was sticky for other reasons... thanks for clearing this up TD.

Thu, 02/04/2010 - 02:29 | Link to Comment bluebare
bluebare's picture

LOL he says choking on a guacamole chip.

Wed, 02/03/2010 - 22:31 | Link to Comment Segestan
Segestan's picture

A global systemic cisis , fiat bankrutchy , central bank manipulation of market forces in a vein attempting to cover up , to steem defeat;  no chart is any indicator of this fact until the gig just wont work anymore. Got Gold?

Wed, 02/03/2010 - 23:51 | Link to Comment lawrence1
lawrence1's picture

Exactly, it´s about the systemic-fiat crisis and lack of faith in the blameworthy to do anything meaningful about their paper monster. And the Baltic Dry Index is down another 40% in ten weeks, suggesting that the whole world is impacted, that China may not be economic savior as is hoped.  

 

Thu, 02/04/2010 - 00:09 | Link to Comment Anonymous
Thu, 02/04/2010 - 00:44 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

The sad thing is that these Minsky moments or black swan events unravel so fast, that those who are caught playing the upside trend, will have only milliseconds to react.

Watch out. Play safe 

Thu, 02/04/2010 - 07:48 | Link to Comment Reven
Reven's picture

Yes, all fiat currencies always drop in value, some drop faster than others.  The dollar has been ahead of the curve in the past 10 years or so, but people are waking up to the fact that many other countries have problems of their own.  During the recession many countries had GDP contractions greater than the U.S.  Since gold is the ultimate form of money, it is the only thing that can measure the loss of faith in fiat worldwide.  The rest of the fiats are just in a collective race to the bottom.  Gold sits on the sidelines watching the race.

Wed, 02/03/2010 - 22:31 | Link to Comment MsCreant
MsCreant's picture

{Licking Chops} I have been waiting for this post!

Wed, 02/03/2010 - 22:36 | Link to Comment ShankyS
ShankyS's picture

Oil/natgas is another spread that is out of norm.

 

Silver also has had a tendancy to run past gold at tops as the unsophisticated investor with less money to buy the good stuff rushes in at the end in the ultimate suckers rally.

Wed, 02/03/2010 - 23:16 | Link to Comment Mad Max
Mad Max's picture

Silver also has had a tendancy to run past gold at tops as the unsophisticated investor with less money to buy the good stuff rushes in at the end in the ultimate suckers rally.

Although I understand the intuitive logic of this, I think it's based on a questionable assumption: that silver prices are driven by small retail investors, whether buying physical or buying silver because they are somehow priced out of gold (not likely with ETFs or similar paper investments).  I would expect to see dozens of coin stores in every city with long lines if retail investment were really this important to silver prices.  I suspect that silver prices are driven by:

-prop desks and other professional traders/investors

-large consumers of silver, e.g. film, electronics, and perhaps upstart battery companies

-market manipulation by the usual suspects (to the extent this differs from the first line)

Anyone have hard data on who/what controls pricing in the silver market?

Wed, 02/03/2010 - 23:58 | Link to Comment gookempucky
gookempucky's picture

  I would expect to see dozens of coin stores in every city with long lines if retail investment were really this important to silver prices.

MM the retail buyer is a small force in the silver market yet always in the shadows-My visits to a certain bullion dealer have revealed extremely strong hands in the buyers. Even though they are small in numbers they are buying large numbers of OZ's--I have seen the bullion bustub(which usually fills during the first week of the new month) holding 700-800 oz's of assorted rounds/bars that I had dug through for the orphaned Libertad's while coming back the next day only to find that someone had purchased the entire tub after I left- not to leave out the green monster boxe's which if you are not privy when they come in- you are SOL-mine is always there. Personally seeing 5000 oz leave within a 2 hour span should not be brushed aside.

Get it while you can

Thu, 02/04/2010 - 02:58 | Link to Comment merehuman
merehuman's picture

Our local w coast  coinshop been selling silver also. People are catching on.

Wed, 02/03/2010 - 23:59 | Link to Comment Chopshop
Chopshop's picture

JPM controls silver futures .. slv is (for all intensive purposes) phony and an exemplar of the 'silver is stupid sibling of', argument.

tremendous piece, TD.

Mad Max: silver is a perennial sibling confined to confirmation / divergence ratio analysis, where it best serves aggregate portfolio mgmt via quantifiable & macro metrics used in institutional TA and tactical allocations.

Thu, 02/04/2010 - 00:04 | Link to Comment Astute Investor
Astute Investor's picture

INTENT and purposes :)

Thu, 02/04/2010 - 07:10 | Link to Comment jeff montanye
jeff montanye's picture

intents

Thu, 02/04/2010 - 00:23 | Link to Comment Mad Max
Mad Max's picture

silver is a perennial sibling confined to confirmation / divergence ratio analysis, where it best serves aggregate portfolio mgmt via quantifiable & macro metrics used in institutional TA and tactical allocations.

That comment is a bit over my head, but I'll assume it basically means that the price and demand is driven by large scale traders/short-term investors who do not intend to take physical delivery and are not standing in line at the local coin store.  Is that an accurate take-away?

Wed, 02/03/2010 - 22:40 | Link to Comment Instant Karma
Instant Karma's picture

Actually gold trades like a currency alternative and silver like an industrial metal like copper. I'm in the opposite pairs trade: long gold short silver.

Wed, 02/03/2010 - 22:58 | Link to Comment Gilgamesh
Gilgamesh's picture

Ding.

While the ratio is 'overbought' as of today, it has a lot of room left in another commodities collapse.

http://beforeitsnews.com/story/15029/Baltic_Dry_Index_Collapses_Signal_F...

Wed, 02/03/2010 - 23:55 | Link to Comment lawrence1
lawrence1's picture

I´m puzzled....What indicates that silver trades like an industrial metal? Im not familiar with this view or data. 

Thu, 02/04/2010 - 05:19 | Link to Comment Reven
Reven's picture

Silver trades like an industrial metal because it is primarily an industrial metal.  Gold has very little industrial use and is rare (that's why it's the ultimate form of money).  Most gold demand is from jewelers and investors.

Thu, 02/04/2010 - 06:14 | Link to Comment Crime of the Century
Crime of the Century's picture

Above is all correct as you look at a current snapshot. However, if silver was merely an industrial metal, JPMorgan would have no reason or motivation to be massively short an amount more than available physical. This should tell you some things.

Thu, 02/04/2010 - 07:56 | Link to Comment Reven
Reven's picture

That may be, but central banks are not loading up on silver, they are primarily concerned with gold (why?).  Let the Bank of India start buying silver in equal proportion to gold, then I will be convinced silver is an important monetary unit.  The only thing supporting the value of silver is emerging market production and the global demand for that production.  If the shit hits the fan, what happens to global trade and production?  Look what happened to the price when it looked like global demand was falling off a cliff during the financial crisis.

Thu, 02/04/2010 - 09:31 | Link to Comment Anonymous
Thu, 02/04/2010 - 10:06 | Link to Comment Blindweb
Blindweb's picture

Gold has plenty of industrial uses, it's just too valueable to use it for them.  When silver is fully returned to its PM status it will be too expensive for its industrial uses too.

The silver/gold ratio going back towards 15:1 may lag some time behind the parabolic rise in gold though.

Wed, 02/03/2010 - 22:50 | Link to Comment Kissy Ass
Kissy Ass's picture

This writing style is unfamiliar. Who is the new Tyler?

Thu, 02/04/2010 - 02:18 | Link to Comment perchprism
perchprism's picture

 

Yeah, I noticed to instead of too, was used improperly not once, but twice.

Wed, 02/03/2010 - 22:55 | Link to Comment Ajaxromeo
Ajaxromeo's picture

Let's see. Maybe 1.6 to 2T in new debt in 2010 and maybe 700B worth of buyers . Same in 2011. Oh yeah, there's also those darn maturing bonds to deal with.

Dollar looks a little weak.

Think I'll get some gold so I won't starve.

 

 

Wed, 02/03/2010 - 23:06 | Link to Comment brown_hornet
brown_hornet's picture

Can't afford gold.

Have a little silver.

But I own a wheelbarrow, so I'll be able to send the wife bread shopping.

Wed, 02/03/2010 - 23:47 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

haha.  hey, between me an you, I think silver is the better long term buy.  The US has a tendancy to need gold; they tend to ignore silver.  Also, silver is both an industrial AND a currency.  Always has been, always will be ;)

Thu, 02/04/2010 - 00:06 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I'll take them all: Au, Ag, Pt and Pd.  Long as I have income coming in, I will just keep buying (physical), and hope to never sell.

Quietly give it away when I get old...

Thu, 02/04/2010 - 00:25 | Link to Comment Clinteastwood
Clinteastwood's picture

 

 I like your comment DoChen:

Subject:  The Indian With One Testicle

 

 

 

 

 

The Indian With One Testicle

There once was an Indian who had only one testicle

and whose given name was 'Onestone'. He hated that

name and asked everyone not to call him Onestone.

After years and years of torment, Onestone finally

cracked and said,' If anyone calls me Onestone

again I will kill them!'

The word got around and nobody called

him that any more.

Then one day a young woman named Blue Bird

forgot and said, 'Good morning, Onestone.'   He

jumped up, grabbed her and took her deep into

the forest where he made love to her all day and

all night. He made love to her all the next day,

until Blue Bird died from exhaustion.

The word got around that Onestone meant what

he promised he would do. Years went by and no

one dared call him by his given name until A woman

named Yellow Bird returned to the village after being

away. Yellow Bird , who wasBlue Bird's cousin, was

overjoyed when she saw Onestone. She hugged him

and said, 'Good to see you, Onestone.'

Onestone grabbed her, took her deep into the forest,

then he made love to her all day, made love to her all

night, made love to her all the next day, made love to

her all the next night, butYellow Bird wouldn't die!


 


 


 


 

Why ???


 


 


 


 

OH, come on... take a guess !!!


 


 


 


 

Think about it !!!


 


 


 


 

You're going to love this !!!


 


 


 


 

Everyone knows...


 

You can't kill Two Birds


 

with OneStone!!!

 

 

 

Wed, 02/03/2010 - 23:14 | Link to Comment Anonymous
Wed, 02/03/2010 - 23:17 | Link to Comment monopoly
monopoly's picture

I have physical gold and GDP but my favorite miners have been a mess for a long time. Maybe upcoming earnings will change that. Investors feel mining costs still too high.

The train wreck is getting closer. This will all end so badly.

Thu, 02/04/2010 - 06:18 | Link to Comment Crime of the Century
Crime of the Century's picture

And there my friend is your proof that gold is not anywhere near being a bubble.

Thu, 02/04/2010 - 14:08 | Link to Comment Gold...Bitches
Gold...Bitches's picture

you got it perfectly

Wed, 02/03/2010 - 23:20 | Link to Comment dumpster
dumpster's picture

gold real gold is settleing for a 25% percent cash premium  ,, for the large players ,, as the physical gold has dissappeared,, what you have is a gaming operation with paper

http://news.goldseek.com/GoldenJackass/1265248800.php

 

most have not a clue .. as they are fixated on pavlovians dog..

Wed, 02/03/2010 - 23:34 | Link to Comment Stuart
Stuart's picture

Bingo, on all points.   Paper gold is over promised for delivery in excess of 80x per John Rubino.   COMEX = CRIMEX. 

Thu, 02/04/2010 - 03:02 | Link to Comment merehuman
merehuman's picture

Dumpster.. Thank you, i always read willies articles. He gets interesting info and i like being ahead of the curve. Ready for all except a direct nuke. Am still happy despite all the bad news. Yea we are gonna suffer, some will die, any other way it would be boring!

Wed, 02/03/2010 - 23:39 | Link to Comment vfsv-fl
vfsv-fl's picture

The silver:gold ratio goes up & down with credit growth & contraction.

 

Did anybody notice gold:silver ratio popped from ~62 to ~67 with the recent market drop? Look for new silver:gold lows (or new highs in gold:silver) during the next market leg down.

 

This is not to say they both won't go up -- but gold should outperform.

 

 

Wed, 02/03/2010 - 23:42 | Link to Comment andy55
andy55's picture

Indeed, all the dollar bulls always assume that gold/silver prices will get crushed with a stock market scare/crash due to a spiking DXY.  It escapes me why they assume a 1:-1 correlation will hold with gold/silver prices, especially if/when the panic sets in (especially now that the Fed/UST has already cast their lot).  In fact, I'd venture to say that it's not unlikely that the dollar:PM correlation will be positive before the end of the next pres election cycle (fall 2012).

Wed, 02/03/2010 - 23:41 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

These charts are wonderful.  First chart: Resistance at $1111, then major support at $1080 (like I thought).

Second chart:!!! What can I say..Direct corralation between the two, and the doelarr flipped as the two converged!!!???  Amazing! 

Third: You know what I have to say..."Bye Bye Dubai" by GHWB; Buy Silver!!!

Fourth chart:  All comodities look spicey right now, especially with the doelarr game almost up.

Inflation BIG!  So go big, or go home!

Wed, 02/03/2010 - 23:43 | Link to Comment Anonymous
Wed, 02/03/2010 - 23:51 | Link to Comment Anonymous
Thu, 02/04/2010 - 06:25 | Link to Comment Crime of the Century
Crime of the Century's picture

+1   I think silver's day in the sun may be brief compared to gold, but when Au price discovery occurs, Ag will be the only one to poke it's head out publicly and say "Heeeere's money!"

Wed, 02/03/2010 - 23:54 | Link to Comment Anonymous
Thu, 02/04/2010 - 12:14 | Link to Comment boiow
boiow's picture

ignore the ' junk flags' . some people believe we are out of recession especially in the uk , what they don't realise is, its all bollocks.

Wed, 02/03/2010 - 23:54 | Link to Comment dumpster
dumpster's picture

what is this continual yapping about paper gold ,lol

fixated on a mouse that roars .. gold has come under the perview of the fiat people ,, the little people in paper machie suits and endless piles of shorts in paper .

 

use the proper terminology ,, paper paper paper ,,

 

gold is selling for 25% premium in some circles .. as the paper is 60 times more abundent than the real deal..

take the trash out back .. buy a little comfort .. jocky down to the nearest coin shop. or order from a reputable dealer.. gold ,, silver.. in hand .. my  very humble personal opinion

 

 

 

 

 

Thu, 02/04/2010 - 00:01 | Link to Comment estrader
estrader's picture

Gold will be 1000 or lower within 6 weeks.  The USD manipulation game is over.  Deflation is the theme the rest of the year and beyond.

Thu, 02/04/2010 - 00:07 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

too late.

Thu, 02/04/2010 - 01:45 | Link to Comment Master Bates
Master Bates's picture

While somebody flagged your post as junk because this site is full of those that are gold lovers, I wholeheartedly agree with the post.

1.  Deflation is the name of the game.

2.  Look at that descending triangle on the gold chart.  Resistance at 1080 has held twice, and it isn't going to hold the third time, especially with the lower peaks at resistance and the same bottom trendline.

Deflation is imminent.  Gold in descending triangle.  *makes bear noise*

Thu, 02/04/2010 - 02:01 | Link to Comment Shameful
Shameful's picture

God I hope so!  I look forward to a future when my Bernake Fun Buxs shoot up in value.  So where are we heading so I'll know it when I see it?  So we hitting it like the 90's or are we talking limitless upside on Bernake Fun Buxs? Will I be able to buy gold at $35 like 40 years ago, how about $10 a barrel of oil, 50k for a house?  You know it's a good thing Uncle Ben can make them for free and they are worth so much, he truly has found the philosopher's stone :)  But hey in all honesty hope you are right.  Many of us gold bugs are paid in gold and we aren't leveraged so we will be pleased as punch to see Fun Bux shoot to the moon!  I expect to see huge volatility in gold but I will be the first to admit fault (and thank all deities I can think of) if you are right and the dollar becomes an unstoppable titan.

Thu, 02/04/2010 - 02:16 | Link to Comment Master Bates
Master Bates's picture

I don't think that the dollar is awesome or anything, I just think that there's a vested interest in the world in keeping its value high.  That coupled with the liquidity mop up that's coming should help the deflation trade in the near term.
I also think that there will be a flight to dollar safety as the markets are correcting.

I'm probably bullish on gold longer term, but I wouldn't go long in it right now.

What I see happening is a near term correction in the S&P, and a mop up of excess liquidity via the end of MBS purchases, etc.
Then, when things start tanking badly, they're going to print some more, and spend some more, to try to reflate everything.  That will be gold's heyday.

Of course, I feel that the ultimate goal of the economy is either deflation, or inflation to try to get us to where money supply matches asset value.
I think that the more prudent and natural course is deflation, especially if we want the right asset values.  Then again, it is an election year and anything can happen, especially excess liquidity to prop things up to get us past November.

I just think that gold looks bad technically right now, and I think that deflation is coming in the next few months at least while the dollar has a run up to near it's highs.  I think that ultimately gold will do better in the inflation trade in the long term.  I just wouldn't go long now.

But hey, I could be wrong!

Thu, 02/04/2010 - 03:02 | Link to Comment Shameful
Shameful's picture

That's totally reasonable. I totally can see that there could be deflation in the short term, but I assumed you meant deflation in the long term. It's the long term deflation argument that I cannot understand because the fiat money is just a printing press or keystroke away.

Nominally I agree with you that the dollar will see strength just because things are shitty in a lot of places and the US is better at spin control and able to polish our turds a little better the most. Take the Greece vs. CA default for example. I would actually expect a level of somewhat price stability till a new crisis, like a new war front would really price bump oil in my humble opinion.

My issue with gold is I am not a paper holder and I buy when I have a large enough chunk of fun buxs to get in at what I consider to be a reasonable premium and shipping. But I've even held off and waited to purchase, like I was able to make a big buy on this dip down. And I bought knowing the technicals could run it down to 900, see it as a risk. If I buy at 1090 and it goes to 900 then yeah I timed it bad, if it goes up then I look better and as I and I assume many of us "gold bugs" are in for the duration we can forgive ourselves a trading error.

I cannot speak for all gold bugs, but I am not a professional trader so I fully expect to make bad market timing decisions. All I'm trying to do is preserve some wealth where Zimbabwe Ben can't get at it. So when I saw your arguments I assumed you are looking at a longer time horizon, I'm trying to get my money into longer term safety (or until after the dollar supernovas). Thank you for your explanation.

Thu, 02/04/2010 - 03:10 | Link to Comment merehuman
merehuman's picture

Master Bates,

technicals cannot be relied upon during times of extreme manipulation

And that is occuring in PAPER gold. Meanwhile shortgages are developing in gold and silver. Simply..you wont be able to get the real thing!!  Ted Butler has been on this like a hound on trail. Knows his work,  and is a good authority on the subject of PM manipulation.

I wish you well with that green paper.

Thu, 02/04/2010 - 05:09 | Link to Comment docj
docj's picture

Hey, look at that!  I think I'm in more-or-less complete agreement with MB!

Seriously MB, very reasonable.  I'm not a pro - I consider myself a certified dope when it comes to these things - but the one thing I've learned is that the market is never "wrong".  It may be insane, loony, unreasonable, but it's never "wrong".  So I look at it this way - if the PIIGS start to fall from the sky people are going to want to fly to what they percieve as "safety".  Again, doesn't have to be "safe", just has to be percieved as such.  And for the forseeable future, the One Eyed Man in the proverbial Land of the Fiat Blind is the once-mighty USD.  So DXY rips it up the chart and everything nominally valued in it takes it on the chin.  Some more, some less, but all loose some skin in the process.

So the 1080 support for (physical - the only thing to buy) Gold seems rather vulnerable.  The 990 (approximate 200-day SMA)?  Not so much - to me, anyway.

The key is to try to figure-out what's next - and there I'm left to only pull it out of my posterior.  Eventually I have to think the USD charade will be up and it will go the way of its bretheren into the fiatco dusbin of history - but what that means for PMs and other commodities?  I got nothing there.  My guess is that you're going to want PMs but you're also going to want lots of dry food, toilet paper, disposable razors, water purification tablets and a means to generate your own electricity without petrol-products (think, solar) because once we get to the point that the One Eyed Man tumbles to the ground it's Mad Max time for all of us, methinks.

And while I'm not at all certain about anything beyond the collapse of the PIIGS, what I am absolutely certain of is that this all ends poorly.

Cheers -

Thu, 02/04/2010 - 12:23 | Link to Comment boiow
boiow's picture

forget the charts. just buy the metal and join the family.

*makes metallic bull noise*

Thu, 02/04/2010 - 07:20 | Link to Comment jeff montanye
jeff montanye's picture

why did gold rise (and miners skyrocket) in the deflation of the early 1930's?

Thu, 02/04/2010 - 00:06 | Link to Comment Madcow
Madcow's picture

Imagine you're in Honolulu - and you get word from the USGS that a massive volcanic explosion is going to occur within the next 48 hours ...

You buy a ticket on the last flight off the island ... 

But when you get to their airport, you realize that 10,000 tickets have been sold, but there are only 100 real seats. 

Thu, 02/04/2010 - 00:09 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

+11

That is when people will cry.  Then they will cry, "Why have you foresaken me, BS Bernanke!"

Thu, 02/04/2010 - 00:13 | Link to Comment Chopshop
Chopshop's picture

one of the finest desciptions of the process i've had the pleasure of reading.  poetic, Madcow.

Thu, 02/04/2010 - 00:27 | Link to Comment Bolweevil
Bolweevil's picture

crazy bovine not so crazy

-ancient proverb

Thu, 02/04/2010 - 04:41 | Link to Comment dumpster
dumpster's picture

good analogy ,, musical chairs .. when the music stops best to be in a chair lol

Thu, 02/04/2010 - 09:57 | Link to Comment Anonymous
Thu, 02/04/2010 - 00:08 | Link to Comment Anonymous
Thu, 02/04/2010 - 00:19 | Link to Comment Hephasteus
Hephasteus's picture

See banks are playing their favorite game already.

I'm right.

No matter what they do or you do or anyone does. They just HAVE TO BE RIGHTand you just HAVE TO BE RESPONSIBLE FOR BEING WRONG.

http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.ht...

Thu, 02/04/2010 - 00:27 | Link to Comment Anonymous
Thu, 02/04/2010 - 00:40 | Link to Comment Anonymous
Thu, 02/04/2010 - 00:44 | Link to Comment Anonymous
Thu, 02/04/2010 - 01:41 | Link to Comment SilverIsKing
SilverIsKing's picture

Sorry for the major out of order here but wanted this in the top thread.  May deserve it's own thread although might have been covered here.

http://biggovernment.com/fgaffney/2010/02/03/shariah-finance-criminal-wr...

Thu, 02/04/2010 - 01:46 | Link to Comment Master Bates
Master Bates's picture

Gold descending triangle = OUCH!

Now flag my post as junk while you scream "gold bitchez!"

Actually, I haven't seen a lot of gold bitchez idiocy lately on here.  I wonder if those people bought at 1220 and now feel stupid...

Thu, 02/04/2010 - 01:58 | Link to Comment truont
truont's picture

Bates, we hear you loud and clear:  Gold sux.

So, what asset class do you recommend instead?

US Bonds?  US Dollars?  Loonie Bonds?  Oz Bonds?

BRIC stocks?  US or Foreign REITs?  US stocks?  China stocks?

Where is the place to be?

Thu, 02/04/2010 - 02:18 | Link to Comment Master Bates
Master Bates's picture

After the bounce to 1110 to 1115 on the S&P, I would short FAS if shares are available to short.  If not, go long FAZ, but duck in and out.

That'd be what I'd do.

Thu, 02/04/2010 - 02:21 | Link to Comment Master Bates
Master Bates's picture

Also, I'm not saying that gold will suck forever, but I do see a bigger drop coming in the near term than we have seen.  I do not believe that the 1080 support will hold the third time.

Thu, 02/04/2010 - 02:34 | Link to Comment merehuman
merehuman's picture

unemployed contractor with one good eye, saw the future and bought silver..  a few  oz that i will keep as my personal bank. I laugh to myself every time when they accept the annointed green paper.

I grow my own potatoes, but @ 10 lbs per dollar...oh yea! Green paper! HHahhaahha. I did the research, Ted Butler, Jim Willie, 1913 , the private fed, 9/11 etc. So gold and silver have been used and abused by governments.Undervalued to the extreme. Paper sales of gold seem to dictate market price while actual is being bought by all who can.

The manipulation has become obvious to dumshits like me. I passed a ged test at 16 so i am more than amazed at the ignorance shown by americans. If you are putting down owning gold or silver then you are under educated  in values and history as well as common sense.

I am a dumshit as i see it cause i know how little i know. Its forgivable cause i also tell the truth. Think!

Gold bitches  (for Chumbawa)

Thu, 02/04/2010 - 02:35 | Link to Comment Anonymous
Thu, 02/04/2010 - 03:41 | Link to Comment John McCloy
John McCloy's picture

Joe Terranova was buyer #1 at 1220. I remember him distinctly saying, " I know it sounds crazy to own gold at these levels but you must own gold. You must own these names it's going higher."

I never saw momentum taking gold anywhere past 1350. There will be a time for gold in the coming decade and all of those predicting $5,000 gold will be correct eventually but I believe we are still a good many years away from the shit hitting the fan. This should put people on notice that the only true currency in coming years will be gold/silver however we may all be dead by than. I do not care if countries start valuing currency in yellow cake plutonium but for the love of God it surely cannot be "The good word of Uncle Sam". And surely not when you have men like Booyah Bubbles Ben Bernanke printing hundreds  even while  he is sitting on the toilet.

Thu, 02/04/2010 - 14:07 | Link to Comment mojine
mojine's picture

Ben is printing them BY SITTING ON THE TOILET ! Figuratively, of course ...

Thu, 02/04/2010 - 02:23 | Link to Comment Seal
Seal's picture

I have crudely excerpted an important article about dollar strength Why Did the Fed Offer Dollars to the Rest of the World? Bryan Rich: In September and October of 2008, the Fed announced that it would be opening temporary currency swap lines with central banks around the world in fixed amounts through April of 2009. As that expiry date neared, the Fed extended the period to October, and then extended it again until February of this year. By providing these currency swaps with other central banks, the Fed helped to inject dollar liquidity into banks around the world. And it was well needed. The Implication for Currencies Most importantly for currencies, what these currency swaps did was increase the supply of U.S. dollars in the global markets — a negative drag on the value of the dollar. So with the Fed announcing that it will close its currency swap lines with foreign central banks by February 1, the unlimited access to dollars by foreign central banks has come to an end. This development is easily a positive for the dollar. http://marketclues.blogspot.com/2010_01_01_archive.html#9101407448542015145

Thu, 02/04/2010 - 02:57 | Link to Comment jimmyjames
jimmyjames's picture
by Master Bates
on Wed, 02/03/2010 - 23:45
#216813

 

While somebody flagged your post as junk because this site is full of those that are gold lovers, I wholeheartedly agree with the post.

1.  Deflation is the name of the game.

2.  Look at that descending triangle on the gold chart.  Resistance at 1080 has held twice, and it isn't going to hold the third time, especially with the lower peaks at resistance and the same bottom trendline.

Deflation is imminent.  Gold in descending triangle.  *makes bear noise

************************************

Deflation is the way forward for sure--

This is why you want gold--

Everything deflates against money in deflation--

Show me a time that it hasen't--

Thu, 02/04/2010 - 06:40 | Link to Comment Crime of the Century
Crime of the Century's picture

The most idiotic premise of all is the notion that "gold will go down - I can wait to get it while demonstrating my superior timing". This from oh so wise folks who didn't buy it at 6/7/8/$900.

Thu, 02/04/2010 - 08:37 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

some of the non-long posts re: gold are being junked by several viewers, but mostly it's just one junk designation per non-long gold post. it's really childish. i am long gold via dgl (sorry not physical guys, but i don't think i'm playing with fire yet). i'm imagining the guy who is sitting there clicking junk on any post about gold that seems anything less than triumphalist. it's pathetic. do you really need to bolster the confidence you have in your own position by designating any post that disagrees with you as junk? sad. i wish you had more confidence in your own hand

Thu, 02/04/2010 - 03:14 | Link to Comment Anonymous
Thu, 02/04/2010 - 03:57 | Link to Comment godfader
godfader's picture

I like how copper is behaving. It's crashing. Just like the EUR. Where are all those experts who suggested plowing money into ag's and metals oh and of course the safe haven of the EUR! Where are these idiots? Bye bye EUR. See you at 1.18.

Thu, 02/04/2010 - 04:28 | Link to Comment Anonymous
Thu, 02/04/2010 - 05:10 | Link to Comment dumpster
dumpster's picture

 gold in the basement

 silver in jars

 stubble on the chin

 Burma shave

Thu, 02/04/2010 - 11:08 | Link to Comment bugs_
bugs_'s picture

Tuna in the cupboard
Oatmeal in the drawer
Pickles in the closet
Toilet Paper

Thu, 02/04/2010 - 05:29 | Link to Comment JimboJammer
JimboJammer's picture

We  hold  Gold  and  Silver...  not  so  much  to  make  money..

But.....  to  Avoid  loosing  money..

Thu, 02/04/2010 - 08:22 | Link to Comment Instant Karma
Instant Karma's picture

There's clearly a lot of fluff in the commodity markets as fast money is highly involved. So as "risk" comes off, commodities sell off. The collapse of the Euro has a black swanish feeling to it, and may continue to cause pain to those short the US Dollar, or, trading the steepness of the yield curve. Not hard to imagine the 10 year falling back to 3% in a flight out of Europe.

Last time the system imploded (a year ago), gold sold off to about $700, Silver to $9, Palladium to $200, and Platinum to $800. I have what I want for physical now, am short silver on paper, and would look to declining PM prices as a dip to be bought.

I'm also short the US markets, which, in terms of correlations, is similar to being short gold or silver (as a hedge), or long the US Dollar. I am short silver via an ETF, and would like to be short copper but there's no liquid ETF to do this in the US.

Thu, 02/04/2010 - 09:32 | Link to Comment Anonymous
Thu, 02/04/2010 - 11:17 | Link to Comment trav7777
trav7777's picture

I guess what will happen now is the same as w/ the stockmarket.  The bots will push the market at the margins in either direction, with discount window backstop, and the insiders will distribute at the extremes.

Like at the recent SP top insiders were bailing left and right...so the bots will short GLD into oblivion while the elites systematically deplete COMEX of every ounce it has.  We're steamrolling into a morning announcement of bank holiday and dollar revaluation here.  Perhaps they are going to let a deflation/DXY spike run and give themselves the cover to do that.

If you hold physical and fear confiscation, might be a good time to buy a smelter and some molds.

Thu, 02/04/2010 - 12:15 | Link to Comment Grand Supercycle
Grand Supercycle's picture

 

DOW / SP500 downtrend on the daily chart continues.
The recent equities counter trend rally has finished and the March 2009 bear market rally is over.

The dollar, crude oil and copper charts have been giving bearish warnings for stocks for months.

DOW / SP500 downtrend commenced as forecast.

The USD rally I forecast several months ago is just getting going.

My indicators can identify trend changes before they occur.

They warned me of an impending market crash back in early *2007*

The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.

http://www.zerohedge.com/forum/market-outlook-0

Thu, 02/04/2010 - 12:34 | Link to Comment D.M. Ryan
D.M. Ryan's picture

Sorry to ruin the gold party, but the metal's been pummeled by more than $30/oz. Started at 9, ended at 10:20. As of the time of this post, spot gold is down to $1,065.80.

The stickiness, sad to say, has turned into an air pocket for now at least.

Thu, 02/04/2010 - 14:06 | Link to Comment i.knoknot
i.knoknot's picture

ironic timing on this article, eh?

hold tight though... the fear factor changes the rules and there is reason for fear ahead.

Thu, 02/04/2010 - 14:01 | Link to Comment Anonymous
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