This page has been archived and commenting is disabled.
Gold Should be at $1800 Based on the Fed Balance Sheet Alone
Many analysts believe that the precious metal is DEAD due to its having fallen from a record high of $1900 per ounce to roughly $1200 per ounce today (a 36% drop).
However, this price movement, while dramatic, is quite inline with how commodities trade. Gold has already posted one drop of 28% (in 2008) during its bull market, before more than doubling in price. This latest drop is not much larger.
Moreover, a 36% drop in prices is nothing in comparison to what happened during that last great bull market in Gold back in the 1970s. At that time, Gold staged a collapse of nearly 50%. But after this collapse, it began its next leg up, exploding 750% higher from August ’76 to January 1980.
With that in mind, I believe the next leg up in Gold could very well be the BIG one. Indeed, based on the US Federal Reserve’s money printing alone Gold should be at $1800 per ounce today.
Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.
Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver. However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.
Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today (see below).
For a FREE report outlining how to buy Gold at $273, swing by:
http://phoenixcapitalmarketing.com/goldmountain.html
Best Regards
Graham Summers
- advertisements -
Dr Paul Craig Roberts: Hows And Whys Of Gold Price Manipulation
The story about Gold manipulation goes viral now and Gold is at the very important breaking out point now. The markets can not be manipulated forever, particularly when physical supply is going to China these days. http://sufiy.blogspot.co.uk/2014/01/dr-paul-craig-roberts-hows-and-whys-... There Is No German Gold Left At The New York FED GLD, MUX, TNR.v, GDX
What gold?
http://www.youtube.com/watch?v=p0rGaWcRiNo
Its over, gold is finished, you may as well sell me some leap calls in it as surely they will expire worthless
I have been too humbled by the fall in the paper price of gold (and hence my dismal net worth in related investments) to be too cheerful about Gold taking off into the stratosphere - if it does, I'have to see it to believe it.
Everythign else is just witchery:
Macbeth Witches:
"Double, double toil and trouble; Fire burn, and caldron bubble."...
Fed Reserve Witches (Ben and Janet):
"Print Double, Print Double and make Gold shudder; Central Planning Works and Global Economies bubble."
Simple math - Printed paper divided by physical gold..........
Let's have a panic selloff toward, if not below, the 1000 level accompanied by run-for-the-hills headlines, or, a breakout of a long-term downtrend line?
lol 1800, more like 180000!
Unrelated charts, Fed Balance at 1.8 trillion has no connection to $1800 Gold.
Graham Summers = Fucktard
$1,800+Fear Factor = $4,500.
only 3 comments.
another nail in the gold coffin.
the barbaric is dead
PM'S are going up in the short-mid term, me thinks..
http://zysites.com/silververitas/
Godisanhfbotisafedbot
"we don't know about supplies"...that's the problem. Simply "ascertaining" unlimited demand does not make it so.
Since all prices are set in the future...both literally and figuratively...you have to cognizant of leverage.
So "the Fed bails out leverage" in 2008...this causes...quite predictably in my view...even greater speculations.
But the impact on lending and the economy was NEGATIVE.
Now not one but TWO "punch bowls" are being taken away. First the Fed is saying "no more stimulus" (taper) but more importantly it is also saying "you go with the recovery you have. not the one you'd like to have."
so far it's not just gold but EVERY commodity that has been taken to the woodshed as a result. I find it rather "outlying" that the interest rate spread would become as wide as it has.
And this conditional reality has now shown up on various Banks' balance sheets. (JPMorgan, Goldman Sachs and now DB in the form of dramatic hits to fixed income trading.) This is what an economy that turns to cash and "bitcoin" looks like folks.
Even Royal Dutch Shell has taken a huge hit.
Silver was in a bubble.. because it reached a whopping $49.
That was exuberance- I knew it went up too fast, but the price was not in bubble territory, and it took the May 1st driveby, and nearly a million contracts a day for about a week, to pull it down from that 'bubble'.
Most pundits seem to back-hand gold and silver at least once in every article.
1 dot.
That 600 gap is all in bitcoins. You gold fetishistas should be calling for a ban to bitcoin and all other crapcoins like it.
What good would that do us? One would think the result would be more people investing in gold and driving the price up. We want to buy low. We are investors rather unlike bitcoin speculators.
PS: God is the electricity, without which your hft bot will die.