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Guest Post: Carpe Aurum (Seize the Gold)
Submitted by Toby Connor of GoldScents
Carpe Aurum (Seize the Gold)
Just like the stock market, gold runs in cycles (all markets do because the humans that trade these markets go through periods of optimism and periods of pessimism).
For the purposes of this discussion we will concentrate on the intermediate and daily cycle, after a quick explanation of the two larger degree cycles.
At this point all one needs to know is that gold's 8 year cycle bottomed in `08 and isn't due to bottom again until 2016.
The yearly cycle bottomed in February, and no yearly cycle except the one at the 8 year cycle low has ever moved below a prior yearly cycle low since the secular bull started in 2001.
That means in order for gold to move below $1044 we would have to entertain the fact that the current 8 year cycle has already topped in only two years. That would also mean the secular bull has likely topped.
I just don't buy that, as no secular bull in history has ever topped before reaching the bubble stage and gold is clearly a long way from that. So all this nonsense about gold falling back below $1000 is just that - nonsense. The odds of a move back to $1000 anytime during the remainder of this bull market are probably less than 1%. I don't know about you, but I make it a rule to never bet on something with odds of success at only 1%.
Now let's move in and take a look at the next larger cycle, the intermediate cycle. This cycle has averaged 18 weeks since the secular bull began in 2001, but has lengthened to 23 weeks after the global debt problems began in `07.
My guess is that the Fed's extreme monetary policy is acting to stretch golds intermediate cycle slightly. As you can see from the chart, gold is now about to enter the 24th week of the current intermediate cycle. This of course means it's becoming extremely dangerous to sell gold. On the contrary, this is the time where savvy investors want to be looking to add to positions. Remember, this is a secular bull market after all, and you only get this kind of opportunity about every 5 to 6 months.
You certainly don't want to blow it now as you will have to wait another half year before it comes again, and since this is a bull market the next opportunity is going to come at higher prices. For all you traders who claim that you are going to back up the truck when gold experiences a pullback, well you are getting your pullback right now. The question is, will you follow your own advice?
Now let's look at the smaller daily cycle and see if we can pinpoint a closer time frame for when we should be looking for the final bottom of this intermediate cycle.
On average the daily cycle tends to run about 20 days. However, it's not completely out of the question to see a cycle run as long as 30 days occasionally.
I will also note that we usually see a failed daily cycle as gold moves into a final intermediate cycle low. With that in mind here is where I think we are in the current daily cycle which, by the way, does appear to be a failed and left translated cycle as it was unable to break to new highs.
It appears we are now on day 16 of this cycle. Since we know that the average duration trough to trough for a daily cycle is 20-30 days, we can extrapolate a reasonable timing band for a final bottom somewhere in the next one to two weeks.
Here's what to look for. First off, I think gold will need to retrace at least 50% of the intermediate rally. That would come in around $1155.
Next, I would like to see sentiment turn extremely bearish. We are already well on our way to that happening as public sentiment is now nearing the same levels we saw at the February intermediate cycle bottom.
About this time we will see the conspiracy theorists start blaming a mysterious gold cartel for what in reality is just a normal correction within an ongoing bull market, and one that happens like clockwork about every 20 weeks.
So the bottom line is we are on the verge of getting one of the best buying opportunities we ever get in a bull market sometime in the next week or two. The question you have to ask yourself is, will you take it or will you let the "technicals" talk you into missing another fleeting chance to accumulate at bargain prices in the only secular bull market left? Let's face it, at intermediate cycle bottoms the technicals are not going to look like a bottom. Instead, they are going to look like the bull is broken.
Only those people who can think like a value investor and keep the big picture firmly in mind are able to buy into an intermediate cycle bottom. You have to make a decision. Are you going to seize the opportunity or are you going to let the bull trick you into losing your position?
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Gold!!
Was that in response to my comments from the Paulson thread ? If so; very educated, intelligent and sophisticated response.
EDIT: Oh I see you removed the Bastardz from the original comment that was "Gold; Bastardz" and to which this comment was a response.
Yes, CB. We all wait with baited breath to respond to your posts on other threads. Jeez. Get a life.
lmao
very good post.
what i would watch for is IMF tricks in the coming few mths, with possible capital raising issues. i.e gold sales
one of the best trades of 2008 was gold calls and puts on high yeilders
Yeah, wonderful. Is this one of those sell side analysts who is never right?
"The chance of gold falling below 1044 is zero?" Has this clown never heard of deleveraging?
If I sold now, I would lose my position--it's a bull market, you know...
+10. Nice reference - Reminiscences of a Stock Operator - 1922 or 1923. Still one of the best books on how the market works, in my opinion. Thats what it boils down to - hold your position in a bull market, and own the market leaders. Easy to say, hard to do.
Thats what it boils down to - hold your position in a bull market, and own the market leaders. Easy to say, hard to do.
It's not hard at all when the fundamentals are so glaringly obvious. What could be more obvious than owning gold during a reserve currency shift?
If China used an anonymous dealer to buy 1000 tons in the Comex for delivery at say here $1185, what would happen? How much paper gold would be executed, but what would also happen when they stood for delivery?
It would break everything I assume. I also assume that China wants Gold as cheaply as possible, so they won't do it.
Well gold is only going to go up anyway, right? Why don't they just buy the gold at 1200 now, and sell it when it gets to 2000, 5000, or 25000, like so many suggest the price is going to go to?
Maybe it isn't going to hit 2000.
China can mine gold way cheaper than $1000. It's a profitable enterprise, pay mine slaves in yuan, sell at world market prices, rinse and repeat.
Except they are buying all gold produced in China. They ain't selling it.
I think the buying opportunity was exactly today on the daily trend line extending from the 2008 low. But that could be proven wrong tomorrow.
Might fake below the trendline, just to scare everybody who's watching that. Stewart Thompson posts some fun stuff every Tuesday on www.321gold.com. Jist of it though, is, buy all weakness and sell into strength. In my experience, this is a great strategy when dealing with gold and gold stocks - very emotional market, but still a bull, and still hasn't had the big blowoff (think Bre-Ex back in the 90s for a reference).
The other charts that I've seen have a trendline on the bottom at 1155, assuming that the trendline there doesn't break. I was floored when I saw that the 50% fib is there from the recent move.
We still need to see a fib retracement from the 2009-present move up though. That's 600 dollars in a relatively short amount of time...
I have a 50% fib target off of that move in the low 900s, but we could still see 1300 first. I think that 1300 is the absolute top before a serious correction happens. A correction might already be in the works. Things have to retrace once in a while, and gold hasn't really had a healthy correction for a while.
JB,
Someone has stolen your ZH identity or there is hope for you yet. Anyways almost spot on! (latter not referring to Russian gold coins).
These postings do not appear to be the same writer.
Same identity, but different sentence structure, different articulation, entirely different "demeanor".
Link for those "charts that I've seen"? Please share that info.
Technicals will eat your lunch. BTW: Do you own any actual metal?
Technicals will eat your lunch. BTW: Do you own any actual metal?
30- and 40-something traders, who've known nothing but technicals and the "Don't Bet Against The Fed" paradigm, are gonna get crushed by the paradigm shift. They don't see it, it's like it's invisible to them; I sort of feel sorry for them, but then again I really don't because they are some of the most arrogant know-it-all fucks here at ZH.
Here is a visual representation of the paradigm that has ended and that will result in the destruction of the reserve currency and the empire through QE X.0:
http://research.stlouisfed.org/fred2/series/DGS10
That chart is all anyone needs to know. The 30 year reign of the regime of constantly-lowering interest rates, the constantly-juiced economy, and the resultant constant increase in debt, has ended. That is the paradigm that is ending right now, and 30- and 40-somethings seem completely oblivious to it and to what it means. The debt will be defaulted. Sovereign debt is no exception, it will be defaulted by printing.
The debt will be defaulted. Sovereign debt is no exception, it will be defaulted by printing.
PragCap takes a different position. The comments started flying too.
<<><><><><><><>><><><<><><>><><<><><><><<><>
THE MESSAGE IS GETTING OUT – UNCLE SAM ISN’T GOING BROKE….http://pragcap.com/the-message-is-getting-out-uncle-sam-isnt-going-broke
How about a depression AND a war? Neither of which is paid from public tax collections.
Therefore, it can NEVER happen? I guess we shall see how that works out.
Yeah. OK. Whatever....
I just can't buy into this bottomless goblet of no-cost high living.
spek,
Tell me how the sovereign debt is resolved in the face of a self-reinforcing deflation. Shall I remind you how the self-reinforcing deflation was resolved last time around? Do you remember the 70% debasement of the dollar in 1933? That was a default. How about Nixon's end to international convertibility in 1971? That was another default. So shall it be again.
The message IS getting out, but not the one you want.
I added to my position yesterday. Just a nibble. I'm going to wait for a bounce off the intermediate low (ca. $1155) before buying more.
but the people on tv tell me i should buy stocks bonds and shamwow
j/k
you had me at extrapolate ! that and gold is awesome
Good post, reminding us we are in an unbreakably mathematically-defined bull market. That's why we hold gold.
With everyone screaming at us to sell gold stocks NOW, where were these sell-screamers two weeks ago when they could have done some good? The problem with chartists, wave-readers, market technicians, tea-leaf futurists and magicians is that they discount or ignore macro-economic game-changing (and sentiment-changing!) events, a number of which are imminent.
I DON'T believe in a bank-led conspiracy to get investors to dump their positions. I just believe in the long-term MATH, though I'm not averse to trading in and out when there is an opportunity...
We just don't know the exact timing, but this is likely too close to the bottom, and with too great a degree of risk, to sell now...
Risk is disproportionately on the upside here...
I generally agree with your statement about conspiracy, and I think its a little overdone, but still, if you were in JPM's shoes and could materially influence the market with your buying and selling activity (its a small market after all) wouldn't you use that? I have noticed a correlation (not necessarily causation) between commercial COT short positions relative to long positions and it seems that when the commercials are short-long about 3-1 you can count on a big break in the gold price. Right now their 2-1 short-to-long which has normally been bullish.
I was saying to sell gold two weeks ago, actually. Nobody listened to me. Plenty of good might have been done, but all I saw was "gold to 25000" posts when it was at 1265.
Deflation is not a "macroeconomic changing event" that is bullish for gold.
That long term chart has one hell of a rising wedge forming. All it takes is drawing two trendlines.
I disagree with you that the risk is disproportionately on the upside.
There's actually evidence that JB is legion. See the comments for Madhedgefundtrader's article "The Ultra Bull Argument for Gold". In response to one of my posts, in which I remark that JB contradicts himself in two separate posts, post 477284 deftly points out that this happened because JB is not a single person. Thanks, and a tip of the Hatlo hat to Rockyracoon. You see, I have a tin-ear for detecting differences of style, but this seems to settle the matter.
JB ALWAYS wants you to sell your gold. ALWAYS AND FOREVER.
Because he's a liar and a little snitch of a man. He sees that gold is honesty, and he hates it for that reason. It reflects his lie right back at him, and shows him for the fool he is.
Gold investors know the trend is unbroken, and remain in the black, while tards claim to trade on super leverage and claim paper profits until there is a banking holiday or other market interruption and they can't get out, and they lose everything.
"Because gold is honest money, it is disliked by dishonest men."
(Ron Paul)
Yes, I have noticed the differences in style between the various trolls who post under the handle "JohnnyBravo". If this fact, of multiple people using one handle here to post gold-hating propaganda, is not obvious evidence of the malicious and coordinated nature of the anti-gold forces and their insidious campaign to spread anti-gold, pro-establishment lies and misinformation, I don't know what would be.
Well put. I suggest just ignoring the JBs, Nadler and their ilk because they are anti-gold for whatever reasons, dishonest... and not too bright to boot.
Sad to say that I can't take all the credit for noticing the JB multiple-personality. I noticed it a long time ago in another article. Someone noted that "he" posted multiple responses to one article at various locations in the comments section in a record amount of time! It would almost be physically impossible to do so. Ooops! on that recording of the time to the second on comments. From that time on I was attuned to the tone, grammar, and structure of "his" comments. They vary greatly. We were being gang-banged with out even a kiss.
Johnny, I don't know if you did or didn't say sell 2 weeks ago. The problem is you take every opportunity to tell people who buy gold how retarded they are so why would they listen to you?
The better position to take is goldbugs have been right for 10 years maybe I should throw a little cash at it just in case.
Only a fool never changes their mind.
When one has multiple minds at work the fool theory doesn't apply. It is set in stone.
Kreditanstalt said:
The bull is unbreakable, mathemetically, because
From here: FOFOA: Gold: The Ultimate Wealth Consolidator
The FOA quote from this post explains this mechanism further, and this is worth the time it takes to read, so please persevere:
Paper gold has been the mechanism providing liquidity to the $IMF Bretton Woods regime since sometime in the '80s. Gold must continue to appreciate in order for this liquidity to be maintained, or it's game over.
Mathematically unbreakable, indeed. Until it breaks.
Actually, I meant we are in an unbreakable bull market in gold...
Actually, I have just demonstrated why...
I DON'T believe in a bank-led conspiracy
Maybe or maybe not. Can you explain the lob-sided short positions held by just a few financial institutions?
Some gold stocks are groping for a bottom here, Yamana under 10, Goldcorp close to 40, Kinross under 17.
Price has nothing to do with tops and bottoms. Stochastics and MACD both do, however.
On that note: JB, you still think the DXY is gonna bounce on 82? If so: Dead cat or bottom?
Check it out here, Mr. Bravo!
Mr. Spitzer, I tend to agree with you, but I'm getting a lot of argument from the herd. Time to be a true contrarian, maybe?
AUY @ $9.28...EPS $0.27, only 50% institution-owned...excellent management
WDO (Toronto) @ the ridiculous low of C$2.33! EPS $0.28...John Embry's #1 too... P/E 8.79
Hecla Silver @ $4.64...EPS $0.27, another bargain when compared to just about any consumer-exposed S&P stock.
Buy-and-hold time. The longer this low-volume selloff continues, the better the upside gets. And, I ask you, have the economic fundamentals improved suddenly over the last month or so?
FWIW I agree on AUY and HL, I own them both buy-and-hold and add on dips. They are accumulations not trades.
"The odds of a move back to $1000 anytime during the remainder of this bull market are probably less than 1%. I don't know about you, but I make it a rule to never bet on something with odds of success at only 1%."
pfft! certainty! based on what?
look at the chart and tell me when india will make another major purchase.
thanks for the work though, i'll put it in my quiver.
India never made that purchase, at least I doubt there was any delivery: it was all a game of show and tell. You have heard of the IMF before haven't you? They showed India a picture of gold, and told them they could keep it wherever the IMF brand appeared.
I'd watch the inventories of PHYS if I were you. When there is an entity making large purchases of actual physical gold and silver, it's going to be originating from guys like Mr.Sprott.
CPC has a trillion or so to spare as well, I believe. Any strength in the USD is going to be quite a temptation to them, and they are pulling your 'deflation' strings now in anticipation. Indeed, technically I think they pull all the US' strings these days. Don't worry, it's all done by magic so you won't feel it as your legs are cut out from under you. Just tap those ruby red heels you're wearing together three times and chant, "There's no place like the USD, There's no place like the USD, There's no place like the USD".
Regards
I'd watch the inventories of PHYS if I were you. When there is an entity making large purchases of actual physical gold and silver, it's going to be originating from guys like Mr.Sprott.
okay, i will. the chart will tell us in advance when they are going to do that, right? pardon my lack of ta skillz. when does the chart say that some entity, who the fuck cares who it is, will make a major purchase and shoot the price higher?
i'll put my ruby red heels on when i always put them on. fridays!
<Sigh> Toby, you love your charts too much. I hope everyone plays nicely for you. 'Conspiracy theorists', right... until they're not. GATA awaits a lavish apology for all their work, which you and your ilk now take for granted or credit for 'knowing it all along'. Matt Taibbi called; he wants to send the tinfoil hat you made for him back. Oh, and JPM called too; they want to hire you for some online trolling. There's a bonus in it if you can discredit A. Maguire; you get to lunch with Paul Van Eeden and Tokyo Rose.
Regards
A-fucking-men! We conspiracy theorists are just plain kooky. Tob's got his head too far buried in his charts to see the reality of The Evil Empire.
That said, I enjoyed this post very much and the analysis is spot on. I would be very surprised, however, to see gold make it to 1155. Maybe 1170-75. 1155 is a stretch. The cycles seem accurate, though. Anyone with the nuts to put $ where their mouth is should begin accumulating October calls on any additional weakness between now and the end of the month.
I really appreciate GATA's work, and think there's a reasonable case to be made for the manipulation of the gold price. However, given that, the gold price chart is still a completely technically valid bull chart - manipulation or no. Toby Connor's been one of the better predictors of gold price movement. Adam Hamilton's another. Both rely on the charts and technicals (and the underlying fundamental case) and don't try to factor manipulation in. In the end, does it matter what the cause of the price movement is, as long as you're on the right side of it?
Technicals and charts are relevant because computers trade using them. 70% of market volume is executed by computers.
If (at least) 70% of traders are using a strategy, it becomes legit.
With absolutely everyone TERRIFIED of the slightest inkling of RISK - FLOODING into the purgatory of 2% bond-land and heedless of currency fundamentals, are there any real red-blooded risk-takers out there anymore?
With any luck we can make 3 or 4% on a trade, which more than makes up for any amount of dividend, interest or other fixed income...
Time for JEOPARDY...
Alex, I'll take Taxi Cab Recommendations and Glenn Beck Commercials for $300.
Answer: Gold.
Question: What do traders sell when the stock market crashes and margin calls are made?
Dollars now, but keep the gold you have (if you can), buy more later. DEFLATION is our immediate future.
Double Jeopardy...
Alex, I'll take Orchestrated Financial Meme's and Doublethink for $1200.
Ans. Deflation
Question:"And ain't we got half the fools on our side? And ain't that a big enough majority in any town?" -Samuel Clemens.
Debt is money. War is peace. Deflation is our immediate future, yet I will continue to pay more for fuel/food. Freedom is Slavery. Ignorance is Strength.
FWIW QuantumCat: I didnae junk you. I thought it was worth an 'in grin'.
Long term charts are more appropriately presented in log or semi-log scale IMHO. Gold has not had anything approaching the parabolic advance it may well have.
2009 was the first year that was an "outside year" from the 1980 trading range.
Oh, maybe you missed what happened 2H 2008?
So don't get hung up on the fact that gold drops below $1040 or rises above $1200.. What are you buying for, investment? There is currently a minimum of minimum 5% premium on physical, unless you can afford to take a Comex delivery. Then you have all that hassle of "What to do with this big honkin' bar of gold".
A rational person would have been buying gold into that panic like crazy, and yet the prices were droppingon the market. Dropping. While for the consumer premiums have gone up and stayed up for possessing physical. (Hopefully not Russian .999 :D)
You buy and hold gold as an insurance policy, not an investment. Same as lead and vegetable seed. Their primary utility is that they are utile.
Can you see anyone here liguidating their gold if it hits $5000? $10,000? No. Because it would mean that the TSHTF and that TPTB have lost control of their schemes.
Excellent summary of a point I've tried to make several times in the past. My previous comments about the bull market in gold notwithstanding, the real reason wealthy people accumulate gold is because its a constant store of value. Trading it would be like trading your life insurance policy based on your current health.
I'll probably never sell any physical. That's what the stocks are for.
Gold is just another asset that is manipulated and not in your favor.
Brilliant argument; when are you going to get your GED?
Gold is a safe bet, it has steadily been growing since '01, plus its an asset, would have been great, if i bought it back in '02, then again i was a kid .
I'm a little confused. Who actually creates these posts? Toby Connor or Gary Savage? I was under the impression that it was Gary. If so, why does Mr. Connor not acknowledge this?
Go to http://www.smartmoneytracker.blogspot.com/
Every post by Gary there is the exact same as the ones posted by Toby at GoldScents. It even has the same disclaimer on the side but slightly altered:
vs.
also, he changed domains earlier this year. Posts prior to March 2010 are at:
http://garyscommonsense.blogspot.com/
Asked and answered already by Gary:
I was pretty sure he was the one that actually makes these posts. Looks like I was correct.
Who the heck is this Connor? Another idiot. And what does he see "after" the bull market? Actually nobody except FOFOA has a vision on that.
Carpe Scrotum!
Mandatory reporting of gold sales over $600 in ObamaCare bill:
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=11843
Obama is so clever.
Interesting that you should bring that up. Here is an important note on that $600 reporting. The whole article is worth a read.
http://www.marketwatch.com/story/why-the-self-employed-might-owe-officem...
Sometimes the simpler the better.
http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-and-weekly-charts-silver.html
It's a good article. Ignore the deflation claims, the false selling of Gold in the market, the Paulson rumors and sit back, relax, and enjoy the ride. We are about to go up.
Ignore the deflation claims, the false selling of Gold in the market, the Paulson rumors and sit back, relax, and enjoy the ride. We are about to go up.
Typical.
You believe on Wednesday the exact same thing as Monday, no matter what happens on Tuesday.
You should try paying attention to opinions that conflict with yours. You'll find the world isn't so small, and maybe you'll learn something that your tunnel vision previously prevented.
Ironic, coming from you . . .
I know there are gold enthusiasts about, but I confess that it has never been clear to me how anyone would pay for a tank of gas with gold. The credit card infrastructure isn't there. Pay at the pump has no mechanism for paying with gold. How could it ever?
If the theory is a currency redefinition takes place that bases the dollars on the credit card on gold . . . then . . . why? How? If currency redefinition were necessary would it not take place via New Dollars, which are simply 100 of the old ones, with gold remaining irrelevant to the definition? That would clearly be the easiest thing to do worldwide, and it would follow all the many precedents -- all of which followed precedents before them.
Don't mistake my point here. I am not saying New Dollars "work". I'm saying that's what the choice will be by the central banks. They will redefine their currency in a purely mathematical way because that's what the infrastructure is set up to use. And so gold remains irrelevant to the process.
If it's the total societal breakdown scenario in play for how gold is to be money, where there is no gasoline to buy with either a CC or gold, then everyone is dead because of no food transport and again, gold doesn't substitute.
So just how does this work? What is the scenario where gold becomes money?
"What is the scenario where gold becomes money?"
Ans. Gold never stopped being money. eg. In Vietnam all real estate purchases must be in gold.
"Pay at the pump has no mechanism for paying with gold. How could it ever?"
Ans. Your grandfather probably asked a similair question about heating food without fire the first time he saw a microwave oven.
" If currency redefinition were necessary would it not take place via New Dollars, which are simply 100 of the old ones, with gold remaining irrelevant to the definition? That would clearly be the easiest thing to do worldwide."
Ans. It would also mean the New Dollahs were just as inherently worthless as their predecessors. (100 x 0 still equals 0)
"And if it's the total societal breakdown scenario in play, where there is no gasoline to buy with either a CC or gold, then everyone is dead because of no food transport and again, gold doesn't substitute."
Ans. True. But hopefully you were smart and when you divested your FIAT you picked up some arable land along with your gold. Those like you might be able to work out some sort of convenient medium of exchange in case you needed eggs and your friend raised chickens but the beans you harvest give him bad gas.
Beginning to see how this works?
I admire your efforts to explain things but I suspect many of those "you cant eat gold types" are not really serious about understanding.
When Dorthy Parker was challenged to say something witty about horticulture at a party, she immediately quipped,
"You can lead a whore to culture but you cant make her think."
Crash, I'm not nearly as smart as everyone else here, but these are my thoughts. There are other commodities besides gold. In other times; salt, sugar, coffee and alcohol served as commodities. I trust in gold and silver, but also have a fair quantity of the aforementioned commodities. In addition to weapons, ammo, food and a water source...
Here's someone who never heard of goldmoney.com
You can already make purchases with gold by card.
Trust fiat currency at your own peril. Those who trust fiat have had a 100% rate of betrayal by the issuing authority. The trick is dying before they betray you.
I usually ignore "you can't eat gold" comments, as I will this one. There are enough folks who actually get it to discuss the issues with. I hope that you will do some reading on the issues so that you can join in -- whether you actually agree with anyone or not. Being informed is the key.
I believe the most expedient way would be to sell the gold and use the cash to buy the gasoline. Or the gasoline station.
Here's a hint-- try talking to the immigrant owner/operator of said gas station. You might be surprised at how many ethnic groups view gold as money...
Try fitting this to the gold prices over the last 3 years:
ln(p(t))=A + B(tc - t)b (1 + C cos(w ln(tc - t) + phi)
b=beta, the greek letter, w=omega, phi=the greek letter
b is an exponent, c is a subscript
You are trying to get tc , the highest probability time that the market reaches its peak, which will tell you when the bubble will end. Note, if you find w to be less than 5, discard this analysis.
dupe
A $60 trillion global economy, an IRR of 5%, 125,000 tons of gold and the collapse of the dollar as the unit of account implies a dollar valuation of about 1/300,000 of an ounce. Neither the actual price nor the elemental composition of the unit of account is as important as its quality as money, a stable store of value. A quality that is imminently poised to desert the US dollar, reprieved only temporarily by the Euro's death throes.
all this talk about timing gold seems to miss the point of owning gold in the first place, protection in case of inflation. Just average and keep 20% of your assets in gold and forget about the price. If gold does go to 25000 you are rich. If gold goest to 200 you still have 75% of your wealth intact, presumably. Speculate on women, wine and lottery tickets if you will, but gold is for socking away in the safety deposit vault. That's what its for.
If gold goest to 200 you still have 75% of your wealth intact
I respectfully disagree. If gold goes to $200, $400, $600 or $800, it is highly likely that the rest of your portfolio was utterly decimated. Cash - not gold - would have saved your ass under such conditions.
Under normal circumstances, it is reasonable to stash gold away, ignore prices to some degree, and forget about it for 10-20 years. But these are highly abnormal circumstances that we're currently confronted with, and its perfectly reasonable that cash - the one thing that everyone seems to be afraid of - is the place to be, at least until the clouds lighten.
Good. So a 50/50 allocation to gold/cash would be a great strategy.
nice one, rocky.
I ran the charts on gold vs. all the major currencies at five, ten and twenty year intervals and guess what, I can find no currency that over any interval of time increased its purchasing power in terms of gold. Basicaly, whatever currency you hold is guaranteed to depreciate relative to gold. Just buying gold and waiting is a sound strategy and you always have the option to come back into the currency if you need it to do something else.
I see your point but being in cash is not a strategy, its a tactic.
Some (in)famous guy said, "I've spent most of money on women and booze; the rest of it I wasted."
Maybe we don't win (but we weren't going to anyway), however, physical metals are the best way to say "Fuck you" to TPTB.
This article is pure rubbish. It sounds like a used car commercial, where the deal gets worse the longer you wait.
Above all, the author of this article goads and taunts the reader with a false sense of urgency. Apparently, this is a once in a lifetime opportunity for the reader to put his wallet where his gold convictions are. Are you a real gold bull, or are you just talk? Back up your truck and prove it, because today's prices won't be available tomorrow - the cyclical gods will make sure of it!
Bullshit.
The best advice - right now - regarding gold would be the exact opposite of what this article leads one to believe. Rather than rushing into a dubious cycle to prove one's gold convictions, one should simply wait for better and clearer data.
In this uncertain environment, I would be willing to loose a few bucks of upside gains as insurance against a potential deflationary buzzsaw across my neck. Deflation is a very real threat, despite the perma-inflation idiots roaming this site.
I need clarity more than I need to prove myself; the moment that I increase my positions to prove something is the moment that I loose objectivity. Additionally, clinging to cyclical data points in this unprecedented market has proved catastrophic many times over. Quite simply, charts work - until they don't.
I heard the same argument in 2003, 2004, 2005, 2006......
I never believed strait lines (boundaries) on charts.
By looking at the big picture ,which I always do,you can easilly see that a fair value in november 2010 would be 1200.
I m sorry to say that the correction (in the same time) might end in a three digit number before rapid new highs.
Don't be scared
Why does Russia buy gold in the open market, when they are a miner and seller of their own?
Sometimes the rewards from price support far outweigh the risks.
China, another miner-producer nation, seems to be more content on simply mining, and letting the markets speculate (with poor accuracy) of their supposed open market buying. It makes just about as much sense as buying iPhones from Ebay instead of building them at Foxconn's chinese slaveyards.
China can't afford to buy gold on the open market since the Dollar/Yuan relationship is so precarious. Open buying by China would skew the price too much. Letting (encouraging) their citizens make the purchases for them, and keeping what they mine, is the best course.
You say, "The odds of a move back to $1000....are probably less than 1%
I dunno... I reckon when people start saying this sort of thing its a good bet that $1000 is exactly where we're going.
I think this is way too conservative. 50,000 $ gold is not far away. Even that may be too low in a few years. My advise is: grow food, cattle, mine precious metals, diamonds (easy to carry), buy guns, ammunition, knives, antibiotis. The ONLY stocks to buy are armed security companies. The rest, as with paper money, only good for bowl service. Good day and good luck.
You don't hear much from GG on days like today...
...and too much from Johnny Bravo?
i agree with 50000 gold except i think fannie and freedie go bankrupt all soverign debt goes .......they destroy alot if not all our "federal reserve notes" that new 100 dollar bill being released has gold numbers and doesn't have " federal reserve note" on it. Gold backed treasuries are a coming. I think everyone could get free houses out of this. no wonder paulson is calling for a housing "boom" in 2011. house prices will fall to their 1997 levels. The banks are also buying the treasuries now. Thats their new money. Out with the old in with the new. anyway you slice it the dollar is taking a little beating any estimate can't be done on gold price u don't know what numbers they'll use or anything. I think they will credit all bank accounts and brokerage accounts as well with a 1 for 1 but your looking at a major devaluation compared to gold. this could go down any day in the next 6 months........
"as no secular bull in history has ever topped before reaching the bubble stage"
The writer is highly misinformed. There are dozens of instances of markets that corrected by 30, 40 and 50% without ever reaching any of the popular "bubble stage characteristics".
It is naive to think gold (or any other market) can't drop 50% without first going into a parabolic blow-off top formation.
Here is what Ferdi Lips wrote in his book Gold Wars; in the book's "Part IV: Gold Rush and the Gold War": "It is estimated that the 'paper gold' market in 1999 is many times larger than the actual physical market. Estimates range from a minimum of 90 to an excess of 100 paper-ounce contracts being written for every ounce of physical gold that changes hands.
In case you wonder who Ferdi Lips is....Mr. Lips was Managing Director for Rothchilds in Zyrich....
he wrote this in 2001 - the 100 times leverage of paper against one ounce was in 1999....WOW
anyone cares to guess what should be the number now???? no wonder jeffrey christian said at CFTC the gold market is a fractional market leveraged and this is a well known fact among players....
i suppose the game lasted this long because all the big players were in, and the central banks sold most of their gold....now there is no more to sell.....and there is demand since sharks smell blood....
i dont know....game over....thats for sure....i give up....nothing to say...you got to be stupid if you dont get it now....
Judas Priest - I own no Gold or Gold stocks but you see when it went below $300/ounce in Feb 2000 (yes I have blanked it out even in the subconscious ) I quit the stocks and the Physical. Who cares -If it went to $900/Ounce and I STILL OWNED IT all, I would be Retired with a Pubescent Blonde and living on a Beneteau Yatch in the South Pacific.
Name me another that has appreciated as has Gold - Judas priest get over it, It is an enduring store of wealth,it has no peer It fluctuates and it gets manipulated but it endures.
If I had brought the S&P in 2000 with the proceeds of my chicken shit decision to Liquidate all I would be as poor as I am today and inflation would see me poorer.
Wake the fuck up and look from the mountain down to my miserable valley
http://66.38.218.33/scripts/hist_charts/yearly_graphs.plx
Painful memories lived every day since 2002 - Learn from it
I believe this was the chart you were looking for:
http://www.kitco.com/charts/popup/au3650nyb_.html
Looking at the chart, it's a matter of opinion as to whether we've already seen the bubble stage.
XAUUSD / XAUEUR / XAUAUD bearish warnings issued since July 1 continue . . .
http://stockmarket618.wordpress.com/about
Not saying we've seen the top but what you need to realize is that when the top actually is in place, you're going to still have a zillion reasons for why it isn't. 90% of those people who ride it to the top will be giving back a huge chunk on the return trip.
Losses are not realized unless you sell, and you then only lose a few fiat dollars.
Presuming one owns physical gold/silver, who is selling?
The "precious" idiotic crowd yet again.
I need a little advice from you the fine folks ZeroHedge, as I'm filling an application for a new Job I interviewed for today .
one of the questions is "what is your desired pay?" so I entered a nice round number, and the next is "what is your desired currency?"
some possible options are: AUD, CND, USD, ZWD, XAU, XAG, XPT and XDR.
It's all very confusing, can anyone enlighten me as to which curreny I should choose?
btw, whats the difference between USD, USN, and USS ? and what the hell is a "Dong" ?
Aether