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Morning Gold Fix: July 6, 2010
Courtesy of www.fmxconnect.com
On Friday, gold recovered slightly after a big drop at the end of last week, opening at $1199 per 100 troy ounces and closing at 1207.7. Gold has risen 1.70 today since opening at 1209.27.
Is Gold Spiraling Out of Control?
It is beginning to look like a big unwind in the markets. Perhaps ”rewind” is a more appropriate term.
I don’t often rely on technical analysis in my observations, but take note when my own short term opinion is lacking.
According to one technician we follow, GRI,: “ The drop under 122400 alerted for a bear turn and possible follow though down to the 1220-120560 zone.” Well, the guy was and is pretty good, so here we are… now what?
With regard to Gold appreciating during deflation. Generally speaking, it will sell-off if deflation is perceived as being under control. That being said, Gold competes with money as a store of value when deflation threatens to unravel into a default. Greece fallout would be a classic example of that. Gold is a reflection of fat tail risk, something we understand. So to recap our never ending quest to quantify gold’s reason for movement:
· Inflation: appreciates in terms of the inflated currency.
· Deflation: gold goes down.
· Default risk: Gold over performs relative to most assets, as it has no counterparty risk (referring of course to the actual metal).
We view the deflation genie as something that can be controlled, only because we know what we do not know, and we are biased gold longs in our personal accounts. For disclosure purposes: my PA is essentially 55% bonds 5 years or less: AA munis, TIPS, and corporates; and 35% gold equities, bullion and spreads. Equities include NGD, AU, and GDX (miners ETF). Bullion is in coins and bars. The rest is short S&P and long some Oil MLPs.
What will happen should be obvious to anyone with the ability to see from a politician’s point of view. The governments of the world must continue to put money into their economies. Why it hasn’t worked so far is a mystery. I call it the sticky carburetor. The fed has the pedal floored on its old POS 1970 Malibu but the carburetor is stuck. Either the stuck spring will break (deflationary default) or it will snap open and the car will lurch forward (inflation). This behavior will continue until someone fixes the damn fuel system. I was told to read up on Endogenous credit by a colleague who sat thru my car analogy, so I’m off.
For the rest of the week starting tomorrow, we’d like to go thru the mechanics, risk and opportunities of how the Comex/ OTC Arb works.
August gold was up 0.5 to $1207.9 per 100 troy ounces as of 7:06 AM EST, this morning. The September U.S. dollar index was down .267 to 84.595. July platinum was up 9.3 to $1508.5 per 50 troy ounces. Silver was up 11.1 cents to 17.830.
-Elizabeth Thawne
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coin sales over $600 to be reported to the IRS, via form 1099?
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=11843
yes, b/c precious metals, including ETFs, are considered collectibles and taxed as ordinary income.
I'll bet you could launch a court challenge of that, considering that the dollar itself is defined in the constitution as a weight of gold...it's legally money, not a commodity or collectible...
Kredit,
AND Silver also....................taxing money.
These Sorry bastards are going to tax the number of times we take a crap.
nothing to do with collectibles.
And to all the trolls, this is not a reason to stop buying gold.
are you saying that precious metals are not taxed as collectibles?
I don't think he knows what he's saying.
who doesn't?
did you read the article?
There’s a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal this section. Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.
Nice balance.
I'm afraid we're back in la-la-land again.
Gold is now acting counter to the dollar. The metal is, in other words, no longer being seen as 'money' - an alternative currency - but once again, perversely IMO, as a commodity or "risk asset". And you're quite right in noting that, now that the currency risks/threatened sovereign default risks have (temporarily) died down, gold will cease moving irrespective of the paper dollar.
This is of course the preferred state of affairs among the mainstream 'investing' idiotocracy...
You lost me on:
"The governments of the world must continue to put money into their economies. Why it hasn’t worked so far is a mystery."
It hasn't worked because they didn't put it in the economy, but threw it into the gaping bottomless pit of debt that will never be paid off. Even after all the insane money pumping, leverages are still too high.
A small chunk of money went to individuals, and there was some increase in economic activity, that is now done.
Good to hear you say that. I was a bit stumped at this comment myself.
The real question is what will happen re the deflation/inflation question. I don't see inflation as long as the dollars are being consumed in your "gaping bottomless pit". The money might have been better spent by sending every person over the age of 21 a $100K check! Eff the banks. Most of that money would have gone into the banks in the form of deposits anyhow, forcing banks back to the original banking model. Cost: about the same. Outcome: quite different. Contrarily, that would have been totally unpalatable politically. Eff the Congress as well.
How's that for a naive solution?
Rocky,
That's not as naive as you may think...............
Send money to the non saving class, I guarantee they will spend that shit, by dark thirty.
The Stimulus, was sent to the wrong group, IF your intent was to get it Going again, to which I say there were not, and are not trying to do.
To do so, would cause them to lose control, of the serfs.
While not realizing the tax revenues, would increase exponentially.Fine by me.....the worse this Admin keeps screwing up things, the greater the fall.
And fall they must.
There are those so enmeshed in the system that my idea (not a new one, of course) seems like the ravings of a toothless hillbilly. They chuckle and move on. Those folks can kiss my fuzzy butt.
In other words, the fuel mixture is too rich
"What will happen should be obvious to anyone with the ability to see from a politician’s point of view. The governments of the world must continue to put money into their economies. Why it hasn’t worked so far is a mystery."
The sticky carb is because very little has been aimed at private business job creation, especially small business.
I'm only a shade tree mechanic, but I think I just saved you the price of an engine overhaul.
Are we back in a full-blown Dash-4-Trash today?
Big selloff once gold dipped below $1200.
I'm looking at a chart right now that looks like a bar of gold was dropped from a plane. Anyone want to pick a good price to buy?
Now. It was $17 down.
I'd like to hear more opinions on this too. We're pretty much novices when it comes to gold and everything's so screwy lately that it's hard to get any sense of timing.
The "price" of gold is irrelevant. Buy at any price. Gold is not a commodity, by definition.
While the price is irrelevant, the number of ounces I can get with the FRNs we have available to buy is not. Just trying to maximize.
Ah, I see. Your original question was about timing, not affordability.
Save what you can and buy what you can afford. My personal choice: American Gold Eagles, in whatever denomination you can afford, although less than 1 ounce will have a larger premium over spot. Where and how to buy is a different topic.
1188ish. Gold has a terrible dreadful fan base at 1179. If it gets below that who can say it has tons of support levels and late comers will jumping on it like lemmings.
Sorry, newbie here, but can anyone recommend a real time bid/ask PMs website? Thanks
http://www.kitco.com/market/
We're gold-holders. We're used to this treatment: you can bet NONE of the selling is of physical metal. Real metal is not an "investment"; it's a savings vehicle designed to preserve purchasing power longer-term.
I'd say any time before the next sovereign blow-up is a good time to 'buy'...
Kred,
No,but you can be damn sure the dealers will have empty inventories, later today.
Makes perfect sense to sell gold what with swiss central bank buying (or Is it ruissia or saudi or china), record demand from investors and money perversion everywhere. Rinse wash repeat
gold is a trade, otherwise why would it sell-off? the time to buy gold was in 2008. it was a decent place to be during the first half of this year but nothing close to the apocalyptic musings you find in the goldbug communities. the market is pretty clear at this point: gold is out. i wouldn't even consider it until the $950 range.
Anyone have any idea why AUY (Yamana) is selling off? Mining all over the place; some up, some down...but volume remaining low....
Fuck is it ever getting hammered
Gold is down to 1253 in Canadian dollars, I must buy this dip
Ya, I hear ya ... I hope we are not getting drawn in by big fiat money.
Something is fishy that was quite the drop in a very "short" period of time. ;)~
1180 should be the bottom...
yeah, that reads funny... what needed to be inserted was to Keynesians it is a mystery.
This great thundering bugger of a 'rally' moves onward and onward...S&P now up 1.70%+
Precious metals are getting clobbered. Even REITs not exactly SOARING. What's rising?
What's rising? Take a look: http://finviz.com/futures_charts.ashx?t=ALL&p=m5
The GOLD chart is looking rather normal to me! Schizophrenic as usual.
http://www.kitco.com/charts/livegold.html
Everything with any intrinsic value - from grains to gold to platinum - is being sold. Anything, whether solvent or not, with speculative possibilities is being bought. Simple as that.
And therein lies a massive lesson about the so-called "markets".
http://mises.org/daily/4533
Ya Rocky: I used to be in that camp too.
But then I researched history. There was never a period in history when gold was successful utilized as tha basis for a monetary standard. Do you know of one? Don't get me wrong: I'm a supporter of GATA and I believe that gold is money. The Austrians have got most of it right IMHO. I just don't believe you can build a monetary system in top of it. I cobbled some words together on this topic here (save me some typing for my reply to your post): http://www.swarmusa.com/vb4/showthread.php/4-Welcome-Goldbugs?highlight=goldbugs
see Thread post: Many Gold Bugs have been out in force beating the "Sound Money -- Gold Standard" drum for gold backed currency... but just explain again how and why the GOLD STANDARD should be [re]considered?
I would be interested in you thoughts and input.
Of course you are right. I just like to swing the pendulum in the extreme now and then to remind me that there is a basic alternative to all fiat options. For a pure gold system to work we would have to be set civilization back 200 years or more. That ugly smiley faced guy, Trav, has the advanced concept that would work. Real bills would fix a lot of problems. In fact, anything real will work, be it a commodity, labor, patents, or other intellectual property (assuming we have a legal system to protect them). Gold as a base is a great idea, but as with a lot of good ideas, the Grand Powers will pollute and corrupt the mechanics of it.
The author is on crack.
Why in HELL would anyone want to base a monetary system atop an arbitrary standard that would have made South Africa the world's richest nation?? Gold is in terminal supply DECLINE now.
This notion of "backing" currency with one thing is what needs to die. Back paper with real goods of any kind, as well as with services, and let the market figure out the ratios between them.
That's what we've been doing since 1971 -- and it has failed.
you on crack too? We have been backing money with DEBT.
I very clearly said REAL bills.
Sorry. I misread your post. You are correct.
Those with the power to print more don't care. They will just print until no one takes it any more. Happens every time.
Funny how South Africa should have been the richest nation in the world, but they weren't, even under a worldwide gold standard nor under a worldwide gold exchange standard.
True wealth comes from production. Access to large supplies of new money can buy you things, but if you don't use those things as capital goods, your economy will just collapse, just like Spain, just like Rome, and soon enough, just like the US.
It will be interesting to see if gold can climb back up this mornings cliff. One shot with the right weapon in the wrong country in the Middle East and you would have to change the up scale of the chart by an order of magnitude.
It's stopped the drop................if it starts climbing, I will be ordering.
Time to D C Avg.............
Almost a month ago Slaughter House Of Morgan(JPM) Anal-lyst raised the gold price target to $1500 (AKA.GOLD SELL SIGNAL).Since the upgrade the yellow metal has shed $70.Hope ya'll were short after his upgrade.
To stay with the 1929-32 chart, the markets need to do a little rally now and then between down elevators.
Whats the point of going back on the gold standard if the banksters control 99% of the gold and will simply reset their closed money system and demand interest that doesnt exist... What we need is a system of interest free money (fiat or otherwise).
you hit the nail on the freakin head.
The banksters will demand gold interest compounded against a real-world supply that only they control. That's the point of banksters. The silver/gold US std was supposed to get away from that but it never did.
ONLY Real Bills can give us freedom. I could generate Bills for my time and expertise, or if I were a farmer, for my goods. Banks would serve only as clearinghouses for this. Gold would trade alongside coal or cattle or the hours of a dentist. ALL things. No interest, just reality.
Now there is one area we can completely agree upon: Real Bills.
Real Bills Doctrine and Free-Bankinghttp://thedailybell.com/374/Antal-Fekete-Real-Bills-Doctrine.html
A true gold standard forces the gold back into circulation (as anyone can demand redemption). Under a gold standard, the central banks would be forced to liquidate most of their gold to cover their note issuance, and further, the nations they serve would be cut off from the gravy train of free tax funds they currently gain from inflating the currency supply.
I love how people put out all these theoretical arguments about how a gold standard can't work, when it worked just fine for thousands of years. They don't seem to see that the current system, and any which concentrates the power of the press into a few hands, is going to be corrupt and any economy organized under such a system is destined for collapse.
Gold is trading on apocalypse. The DXY has declined significantly, perhaps they are printing.
The dollar cannot weaken for long before POG starts to inflate
Somebody knows more than we do, and we'll probably never find out what that is.
Oh, I suppose we'll read about it in a GATA release some months from now, far from the view of the general public.
Anything below $1190 and I'm buying. Last week I said the same and fully expected this. Might be lucky and it could drop to $1180
I posted this earlier
coin sales over $600 to be reported to the IRS, via form 1099?
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=11843
..The governments of the world must continue to put money into their economies. Why it hasn’t worked so far is a mystery.
...
only person w/ brain damage could say that..
worked what???
US congress gave trillions to WALL street buddies, but refused to extend unemployed benefits that cost only < 20bln per month..
everybody watches US consumer... how is it feels ?
I wanna ask ' hunny what ##ucking country are you from ?' 20 % unemployment, half of population makes less 20$ per hour..
just simple retarted
alex
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