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Good News: Gold Speculators Haven't Been This Gloomy In 13 Years
Gold sentiment may finally be getting bearish enough to support a durable bottom.
Gold bugs may finally be getting the good news they’ve been waiting for: gold Speculators haven’t been as pessimistic as they are now since 2002. True, the best news for gold bugs would be rising gold prices. However, to establish the conditions capable of supporting rising gold prices, investor sentiment towards the metal needs to first become exceedingly pessimistic. If that sounds backward to you, that’s how markets work.
For the read on sentiment, we are using the CFTC’s Commitment Of Traders (COT) Report. To refresh, the CFTC tracks the net positioning of various groups of traders in the futures market in the COT report. One such group is called Commercial Hedgers. As their name implies, their main function in the futures market is to hedge. On the other side of the ledger – and normally with a mirror image position – is the Non-Commercial Speculator group. These Speculators are typically funds engaged in, you guessed it, speculating.
Speculators’ positions tend to follow prices while Hedgers’ positions generally move in the opposite direction. During an extended price trend, Speculators may fare well as they will likely be positioned consistent with the trend. On the other hand, it is almost always the case that Speculators will be incorrectly positioned – and to an extreme – at major turning points in a market. And while the moniker may not be fair, it is for this reason that the Speculator group is most often considered “dumb money”.
One group that hopes that moniker carries some weight is the gold bug community. That’s because Non-Commercial Speculators in gold futures are the least net long that they have been in 13 years.
As the chart shows, as of December 1, Speculators have not been this close to going net short since late 2002 when the gold bull market was just getting started. On the other side, Commercial Hedgers have not been this close to net long since that same time. They are slightly less short than the last time we pointed out such an extreme, in early August. Following that reading, gold proceeded to rally about $100 over the next couple months.
Gold could not sustain those higher prices, however, and have since dropped below those summer lows. That outcome is consistent with the more contemporary behavior of this data as it seems to be more volatile and quicker in moving from one extreme to the other. This is quite likely owed to the rise in popularity of commodity-based ETF’s that access the futures markets. The result has been that the impact on prices of the extremes in positioning has been more abrupt and less durable than in the past.
Another challenge in applying this analysis is that it is difficult to correctly determine when an “extreme” in positioning will actually result in a price reversal. As is said regarding all sorts of market metrics, an extreme in COT positioning can always get more extreme. Thus, while the Speculators’ lowest net long position in 13 years should and likely will be a bullish factor at some point, it’s possible that that point won’t appear before even more pain occurs in the gold market and the positioning gets even more extreme.
It won’t take much more selling pressure to push Speculators into a net short position and Hedgers into a net long position for the first time since the onset of the gold bull market. And while markets don’t typically conform to a tidy narrative such as that marking the bottom for gold, it would certainly be a welcomed development for gold bugs.
At a minimum, as we said in the August post, what has mostly been a headwind for gold for the past decade or so is no longer the case. While it may not make an immediate impact, “dumb money” Speculators are now more pessimistic toward the metal than at any point since early in the bull market, 13 years ago. Gold bugs should be optimistic about such pessimism.
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Long gold.
Define "gloomy". Is that like holding onto something that can't be rehypothecated, duplicated, or printed by a corrupt government? Problem is everybody today is on a short time horizon. Everybody views PM's as an investment, instead of an alternative bet against the corrupt .gov.
Gold and silver won't rise until .gov falls. The panic and infantile foreign policy in Syria now tells me it's getting closer, but I can wait because I'd rather have something real than something old Yeller can debauch.
Not sure I agree with investor sentiment being the primary tell on it bottoming or not. We're talking about the world reserve currency in decliine so I think it's much larger than investor sentiment. Could stay low for many years.
Anyway, Buh gold if you hate the corruption and have time.
Gee, I’m not so glum.
The gold Rolex still works great, the other bling is still nifty, and all the underwater shiny in the world is still not rusting.
It's good that fraudulent paper keeps the price down for now.
Gold is for when SHTF. I sleep well at night.
The bear market can't be over. Gold isn't at $0 or negative yet.
I'm in for physical gold once 1 oz Eagles start going for $600 or under. Until then, my disposable income's going to ammo, grub, guns, tools, offgrid solar, arable land, etc..
Those are some good 'investments', Joe. Still, I like having some gold mixed in with my ammo, grub, guns, tools, solar, land etc. I sleep better knowing that if my ammo, guns grub etc. becomes the difference in surviving, that gold may 'buy' more of it.
“... 'dumb money' Speculators are now more pessimistic toward the metal than at any point since early in the bull market, 13 years ago. Gold bugs should be optimistic about such pessimism."
I beg to disagree...Reading the comments and up/down-votes here, you can tell there are still waaaay more optimistic 'Gold bugs' than pessimistic ones.
Don't hold your breath. Really. I'm more pessimistic about such optimistic forecast by someone sounding like an expert with charts. The truth is no one knows for sure and someone will always find angles to predict one way or another, hoping he will be right and that no one will notice if he's not.
Ive been doing all of the above for the last 5 years. And if it goes to $600odds are you will not be able to find the physical.
I think PB is a better plan for when the S Hits The F
Edit: AU/AG, PB, plus some arable land and a keen mind = diversified portfolio.
Fraudulent paper? You know you can buy that 'fraudulent paper' and take it to delivery?
Good. We don't need anymore "speculators". We need for every commodity, good or service to find its real worth. That can only be accomplished with honest debt-free money and laws to prevent third-party speculation. Oh, and those laws have to actually be enforced, too.
"Debt free money" = ZIRP forever.
If that won't completely obliterate the rationality of the relative price structure then nothing will.
Fuck off with your fake libertarian "interest is evil" retardation. Interest is merely the price of future money relative to the present. Pick up a book
Such colorful words, HXC... thanks for illuminating me. Interest is not evil... debt-based currency is. ZIRP has nothing to do with this... it is merely a symptom.
By the way, what's a "book"?
What do you mean by debt-based? Paper money is based on nothing, just printed by central planners at interest. It's not like dollars are shares of CDS's or something.
Lets just hope that .gov falling doesn't = bright burst of light followed by the electricity going off. Then Radiation, don't get me started on the Radiation.
According to JPM algos the propabilities to a crash within 5 years is from 100% I think gold and silver will continue to fall for the next couple of years since are the #1 enemies from this rigged ponzy scheme. But thats no reason to panic, that exactly what banks wants just hold and stop focusing on the "spot price" or "forecast" thats worthless.
The bottom will be marked by one thing - Gold Bug Capitulation!
I capitulated last week and ordered 15 more oz. as a Christmas prez to myself.
WhoHoo
It's not often that money goes on sale!
How about $900 gold, lets hope.
It's never been worth zero.
$25/oz would affectively be the same.
Stop valuing PM's in fiat.
If an acre of good farm land cost one ounce of gold, what difference does it make what dollar value someone says it's worth.
One dollar or $50,000, it's the same.
The farmland should be the standard, as it PRODUCES a product and revenue. Gold is the one that fluctuates tremendously becasue it produces nothing.
Land produces share-cropper taxes for the State. It is not owned, but rented from the state, at artibrary rents. Worse, land doesn't sink in horrible boating accidents.
As a silver bug who started just after the mayday smash, I'm at the point where fuck everyone, I'll be fine until the shit hits the fan and good after it hits the fan. All the slumbering assholes are good now, but won't be fine when the shit hits the fan.
Now that I have 10 sets of zombucks thrown into the lake, I think I just need 25 owls to throw into the lake to complete the bird sets then I'm done.
You realize that if SHTF, your stash of PM will be worth a LOT less than it is right now......
PMs are only of value in a LOCAL collapse, not a global collapse. A local collapse, meaning one country or a couple countries, then PMs are still trading well in the rest of the world. In a global collapse, then PMs will be selling for pennies on the dollar, along with all other "luxuries".
Of course you won't believe me. So, take a look at what happened to PMs in Oct 2008. A worldwide economic setback and did PMs rise like you would hope? Nope, they plummeted. Tell us, why was that?
Ok, I'll tell you why. Because everything is priced in the dollar. Dollar rises before its final death because the system around the dollar starts to experience liquidations so the dollar rises.
The dollar rose in 2008 when TSHTF as everyone ran to cash. The Fed saved it and we went on. But, the same thing is being duplicated again today except in 2008 it wasn't sovereign crisis at hand as we have today. Dollar is again rising due to liquidations for cash. Will we be 'saved' again?
If you can guarantee that the next phase on the other side of the dollar rising won't be either a default or a revaluation, then I'll buy your story. 'Till then, I'll buy pm's.
Thats not true at all. Value of PM-s has nothing to do with the scope of the crisis, local or global. It has actually much more to do with the nature of the crisis, in some "city under siege" scenario, where recourses are very limited and all that matters is staying alive in the moment and there is no trade except some limited barter, then gold and silver will have zero value. If you think that this type of scenario will be on the global scale, then you are right. But it is very unlikely, i think in a global economic meltdown there will still be recourses, peope will still have to work, produce, trade etc and people will need some form of money that they can trust and as history shows people usually fall back to gold and silver.
Gold is a luxury, and when people "just" have work to survive, the last thing they want is gold.
And no, history shows that people don't "fall back" on gold and silver. They fall back on USEFUL commodities. Sure, a few rich people and governemnt to government transactions will use gold and silver, but that the exception, not the rule.
Money is not a luxury it's a productive tool. Attempt to produce and trade using barter investing time and energy into solving the avalanche of double coincidence of wants problems and you'll understand how useful a tool money is.
People need not necessarily pick gold to use as money, but historically it's won out over all other contenders as producers' favorite due to its unique qualities rendering it especially suitable as money.
[Picture Homer Simpson]
mmmm...durable bottom
That's good news. time to buy more gold and miners
Get this through your thick skulls, in a global fiat ponzi this "price" manipulation can go on as long as the supply lines hold and the sheeple continue to accept "money" created out of nothing by some slick fuck in a suit and tie.
Add to that -
Gold Price + Charts + COMEX data sets + technical analysis = "You've got to be kidding me"
It will go on as long as people trust in paper gold sales. If/when even 10% start demanding physical delivery then things will change. People will just go on believing that a piece of paper saying 100 ounces is really 100 ounces.
Correct for ETF's hypothecating. Incorrect for COMEX. Every 1-2 months everyone who wants physical gets physical. Everyone who wants cash gets cash.
Gold Speculator = Paper Gold x Fucking Moron
Physical Gold Stacker = DEATH TO THE MONEYCHANGERS
Nope, we won't see a bottom until the weakest hands finally puke their guts up. Then we'll see the paper price firmly detach itself from the physical price.
I'm putting in GLD shorts in today. Im also buying DGLD for my IRA's.
I'm way ahead of you. DGLD been berry berry good to be...Meanwhile my physical just waits for 'liberation' from the paper travails.
What would the paper price be of, in that case? Who would trade an instrument not connected to anything and how would its price be determined?
COMEX futures price is linked to physical price every day. Arbitrage and the ability for either buyers or sellers to obtain physical settlement every 1-2 months keeps that link. Meanwhile physical supply matches physical demand every day in the spot market. In both COMEX paper trading, physical delivery noticing, and spot market fluctuations alike, the moment supply-demand imbalances emerge, prices adjust as necessary to restore balance. Nothing in this system where all imbalances are corrected by price changes is able to "detach."
The only gold-related thing that might break is ETFs get outed as not actually having gold reserves they've surreptitiously sold. In which case some of the former holders of ETF shares who mistakenly thought they owned physical and really did want to own physical would move into spot to buy.
In all cases, the price of gold gently rising is as dramatic as things will ever get. But we are expecting that to happen for fundamental reasons, anyway.
You might be correct were COMEX futures traded in a 1-1 relation to physical gold; they are not. There are approximately 300 ounces of paper gold to 1oz of physical. If even a small (probably less than 5%) number of traders were to attempt taking delivery of the physical metal, the COMEX would collapse. Or, more accurately, they would have to settle those traders in dollars (a fraud if ever there was one), rather than the actual metal, since they do not have it.
ETFs are an even bigger fraud, as you cannot even take delivery of phys., unless you have over a $100,000. There too, the funds would collapse if a few large fund holders attempted to take possession, as they also do not have the metal available for delivery.
No offense, but you don't understand how COMEX works. All COMEX contracts are paper. Some sellers may back their contracts with gold on their own accord, but none are required to. None are formally backed by any gold. COMEX eligible gold stocks are not backing.
Arbitrageurs maintain constant parity between COMEX contact prices and spot prices as well as constant parity between COMEX physical delivery notices issued and physical on-hand to settle. The spot market maintains constant parity between the supply of gold and demand for gold at the current price.
The second any of these gets out of balance by one tick, an arbitrageur simultaneously executes orders/delivery notices on COMEX and the spot market to correct the imbalance and prices budge accordingly. This is a continuous process ensuring no differences ever arise for more than an instant.
It is irrelevant if early in a contract lifetime more sellers of the contract intend to settle in cash than buyers do. Arbitrageurs remedy that right quick. As delivery notices trickle in during delivery month, arbitrageurs assume whichever positions are in imbalance then buy or sell that much physical in the spot market which is always kept at price parity with COMEX, so no "shortage" of physical can arise. A market price is by definition a clearing price meaning demand at that price matches supply at that price.
The reason for the rarity of COMEX delivery is most people who want to buy or sell physical just go directly to the spot market in the first place rather than pay the extra expenses of executing a COMEX contract. You perceive a bogeyman where none exists.
Price isn't about supply and demand or we'd all be rich by now. So what paper will do next, who knows.
Who gets gloomy when the price of insurance goes down? I think you're confusing people who own digi-ounces with real gold bugs.
... and acknowledging Turd Ferguson for scooping this last week.
For those of you that follow gold:
https://sasafuturestrading.wordpress.com/
Bye
Buying opportunity.
Umm Ill just leave this right here
Chilling message from menacing migrants who demand ‘open borders or die’ at checkpoint
http://www.express.co.uk/news/world/624648/Chilling-message-menacing-mig...
what does this mean for ag and/or (probably more importantly) au/ag ratio? (&/or by extension pb futures :D)
that depends on how far back you average to establish a baseline.....if you choose something in the 5-20 year range, you get about the same answer: silver is more undervalued than gold....about 80 cents to the dollar worth relative to the long term baseline. given that silver is also more volatile, it makes it a more interesting speculation right now (just be cautious with margin).
by the same measure (i.e. comparison to long term average pricing), both platinum and oil are closer to 60 cents to the gold dollar right now....thus even better bets than silver. of course, there are more fundamental factors at play with both of those commodities......
disclosure: i've been losing my shirt with long term holdings in all four commodities for quite awhile now....without margin, thankfully!
(edited - originally said uranium & oil instead of platinum & oil, but i mis-remembered my plots.)
thanks! I've been stacking physical ag not so much as investment but greece (bailin/nirp) insurance. if it goes up over the long run & my kids are able to sell it for a healthy profit after I've kicked my oxygen habit so much the better...
CNBC BUNCH OF HYPOCRITS - RUNNING GUN CONTROL PROPAGANDA AND THEN DELVE INTO VIOLENT SHOOTER GAMING ETC. WITH NO SHAME.
BUT, THAT"S OK, IT ISN"T REAL AND IT'S PROFITABLE.
Another Burying opportunity.
Speculator - CME whore that likes it dry without lube, no courtesy reach-a-round required.
Gold will go up as the mines go bust. No brainer. It's a short against central banks. The banks will confiscate by way of retaliation.
Mines account for less than 2% of world supply. Irrelevant.
BINGO
That's why I always laught when bugs talk about "shortages".
Sentiment will create shortages. (Lack of) trust. The moment people will see the Emperor has no clothes and they have been taken for a ride. There is nothing technical about that. Suddenly they will hold on to the only thing that will save them. This, while the sheeple will go after bankers, politicians and their families. Because the pensions and savings are gone and their sons are fighting a bankers war somewhere in the desert. We are not too far away from that moment.
the Emperor has no clothes
You're talking about gold..... You're right, since gold has few practical applications, industrial usage is only 12% of annual supply, and there's thousands of years of gold stockpiled, that means it's value is determined by SENTIMENT, and little else.
Anopheles always trying to ruin a goldbug's day. Sentiment doesn't determine gold's price. Sentiment drives the stock market - mostly. Paper contracts determine the price of gold - and that's all you ever need to know. Unfortunately I know you are not new here but I will respond saying gold does not need an industrial application to be money - nor do miners need to produce a significant percentage of total supply to be relevant to an analysis of gold's price.
Gold will always be worth a not insignificant something to someone. Calling it's value sentimental is never going to undo that. "Money is gold and nothing else."
Returns in the way of dividends also drive the stock market, and sentiment drives the broader market to a lesser degree. There are many stocks that are the exception, such as a few tech ones trading at 100 P/E
On the other hand, gold has no returns, and no utility, it just sits there. The majority of the price of gold is sentiment. And by sentiment, that includes desire and greed. There's little else holding it up.
Tell us, how is the "value" of gold "God given"? That's the funniest statement I've heard in a long time.
But yes, i agree with you that to some extent, the paper price does help determine the "value" of gold. And the vast majority of that paper IS linked to physical gold. Naked shorts are illegal. They do happen, but not nearly as common as the conspiracy theorists would have you believe. And COMEX (all of CME) accounts for only 20% to 25% of worldwide gold trading. So there's lots of other mechanisms to adjust gold pricing.
Also note that over 50% of the gold trade is OTC and never makes it to the "paper market", and that trade is reflected in daily gold fixes. People put WAY too much emphasis on the paper price and conspiracy theories.
Mine supply is hardly irrelevant. Most of the 'stock' will not move at current prices. Those who now hold gold know damn well why they hold it and would only sell in extremis.
The mines are the only entities that can supply new demand. Scrap gold is about empty. Notice that most of the 'cash 4 gold ' signs are gone. There is not enough still arround to keep those shops open.
Wow!!! I thought I had heard some stupid things in my life, but you, sir, are the winner. So I assume the remaining 98% comes out of where? Your ass?
Mines account for 100% of the world's supply. The stuff doesn't just materialize out of thin air, or is lying around waiting to be picked up. It has to be pulled out of the Earth, and it is getting increasingly expensive to do so. On average it costs somewhere around $1,300-$1,400 an ounce to pull the stuff out of the ground, refine it, and melt it into bars or coins.
In 2013 approximately 2,800 tonnes were mined worldwide, while some 3,900 tonnes were consumed. The shortfall, presumably, coming from scrap recycling and central bank vaults.
So, most miners will indeed be going broke in the next few years if prices stay where they are, because no one can stay in business very long by selling their product below their cost. The reason miners continue to do it is because they have no choice. They’ve invested billions in their mines and need to sell just to keep the lights on.
Sorry about the rant, but it’s greed, ignorance and stupidity that’s gotten the world into the sad state it’s in, so I can’t let nonsense, ignorant statements go unchallenged.
Another 20% down seems in the cards.
Via stronger dollar.
Yes, the dollar is killing gold as is the global slowdown. I just don't see the disposable income to buy up the shiny metal.
And the rest.
1. Gold hit USD 1,800 and 2/3rds off the top of a bubble is nothing special => USD 600.
2. Last buyers were Central Banks...so no cost of finance, probably no mark-to-market, and (even if you had the two previous) no shareholders to force management to sell a losing position.
Silver is at least further down the blown-out curve...but IMHO not finished until below well USD 10.
Watson
Sentiment does not make a bottom in any market, how ridiculous. Valuation does.
Gold and silver prices (valuation) are entirely based on sentiment.
Industrial demand for gold is only 12% of annual production and silver is 50% of annual production. Meaning that sentiment dictates the price, especially for gold.
gold & silver coin ACUTAL demand continues to soar.
i view GLD and SLV much like ACTUAL gun demand as it pertains to RGR & SWHC; they are both lagging of the fundemantal, underlying asset. gun sales have been on the rise since obama took office. RGR and SWHC stock charts should be reviewed over the last 3, 5, and 7 years; they lag the actual sales of guns barring MASSIVE spikes as we have seen lately. same rules apply IMO with gold and silver; people are concerned about 1. paper money and 2. global instability.
also, GLD & SLV are 1-way doors. when PMs who are underperforming realize stocks might go sideways for years and IF they would rather buy & hold SOMETHING rather than trade in & out of stock positions, thats when GLD and SLV can get going.
another thing; gold and silver are not subject to haircuts as-are bonds. they are safe asset classes you buy a little every month and sock it away & forget about it.
as if always said, gold & guns are how i viewed condoms in college; better to have them and not need it, then need them & not have it.
Coins are only a SMALL part of the overall gold and silver market. A few weeks of annual gold production.
Who's going to buy the remaining 50 weeks of global production? You?
Right. Stock shortages of particular brands of physical coins have only to do with minting operations. As far as the gold part of those gold coins, supply=demand to the tune of hundreds of tonnes every day in the spot market.
Those "hundreds of tonnes a day" is also the SAME gold going back and forth.....
Tell me, if 1oz and it changes hands 35,274 times thorugh an exchange, how much gold is that? 1 oz or one tonne?
Good point, there is a difference between market volume and depth.
London gold stocks are around 6,300 tonnes now down from 9,000 tonnes in 2011. Hundreds of tonnes change physical possession at the end of every day. Coin amounts I think are around 20 tonnes annually. Wouldn't make a dent.
The bigger question is WHY paper gold speculators should be setting the price anyway...thanks, GOVERNMENT!!!
Perhaps the better questions would be:
"Why aren't billionaire libertarians buying up the bullion, demanding deliveries that would break the bullion bank?"
"Why isn't China demanding bullion delivery, by the 100s of tons?"
Whats its value in trade with producers today? That would be the true price.
Historically gold has been priced the same as excellent quality weed. $350 oz in my neck of the woods…
Is weed illegal in your neck of the woods?
Only if the cop's a dick and decides not to dump it all out on the ground!
Around here in late Sept, weed is given away.
Crazy!!! I know people that pay $150 oz in the city!
thats good to know.. I have both.
comex. BS
When I was a kid my greaser Uncles and all their hoodlum friends wore huge Gold Italian Horns. Who’d of thought that today those chains would be worth more than the average American’s life savings?
A question that perhaps bears repeating:
How important is it for the health, sustainability and viability of the United States economy and its chief vehicles, namely: Treasury bonds, the $US dollar and projection of military power and intimidation, for the reserve currency of the world to remain uhampered and firmly in control...?
Then tell us why this story can co-exist on the same page with:
http://www.zerohedge.com/news/2015-12-08/gold-buying-surges-november-chi...
21 tonnes is only a bit over 3 days of gold production. What about production from the other 362 days?
I'm looking forward to the headline
"Good News: Gold Speculators Haven't Been This Gloomy In 15 Years", etc...LONG DEPRESSION!
" gold Speculators haven’t been as pessimistic as they are now since 2002"
But I view believers in P.M.'s (physical) as believers whom, like me have and continue to take advantage of these heavily discounted prices thanks to our favourite mark down specialist JP Morgan. Thanks JP, as a non speculator and physical accumulator, i thank you for working overtime to keep my precious cheap.
Gold causes Global Warming....government must confiscate it for your own good!
That means it is the best time to stock up, if you have a medium term or long term horizon. The fiat game is growing older every day, it can only last so long. If the IMF begins to recapitalise world banks in the next crisis, then gold will be worth it's weight in gold, as a new fiat floods planet earth.
https://twitter.com/carlosjii/status/674302148084113408
Something something cold dead hands
gold won't bottom until the central banks stop buying, and the central banks won't stop buying until they have enough to back their fiat currency according to the confidence level of the public, central banks are money vendors and any vendor knows he has to respect his customers needs. the less confidence the money user has in fiat, the more confidence he must have in gold the lower the price of the gold. it's kid simple.
the money they print in order to buy gold costs them nothing but it elevates the value of the fiat already in circulation. while that money gains value you the customer are less inclined to buy gold to hedge the fiats declining value. you sell they buy. in order to manipulate the price lower they sell paper gold against physical. kid simple two, you want to nail your cost basis to the low in the market. its only when they are done buying and the price goes up and the value and confidence in the fiat goes up that the money user lets go of the last bit of gold and then the price rises of course, because the supply is totally spent, the cbs have cornered the market, and the value is now increasing.
the lower the price the more you want to have it, the more of it they are trying to buy. kid simple three, at the end of the day you want more gold in your possession than the value of gold backing your fiat. this is why they confiscate gold. allowing you to own gold runs counter to the official policy of them owning all the gold in the world.
go long physical and short the paper and you are your own central banker
Price is going MUCH LOWER, down to just above the average cost of production. It is only just another commodity now, in absence of inflation and crisis, in spite of continuing hype.
Yup, smart money gets in now and stays in until zimbabweflation.
It can easily go below the cost of production. Annual production adds only 2% to existing stocks of gold.
Gold isn't like oil, grains, or iron, as it is never used. Almost all the oil produced this year WILL be USED UP. Gold? almost NONE of the new gold produced this year will be "used up". It just keep accumulating and accumulaing.
In the next 10 years, there's going to be ANOTHER 24,000 tonnes of "new" gold produced, and almost none used. How can you keep pumping the market full of product if none of it is ever "used"? Easy, you drop the price...
Gold gets "used up" by all the cult followers who buy it and in effect re-bury it, deluding themselves into believing that it is an "investment that preserves value".
Hahahahahahaha, this entire article is laughable. "the Speculator group is most often considered “dumb money”." - i think dumb money is more likely to be someone who has been long and buying more all the way down as the price almost halves
People sit on millions of dollars in a 401k that they can't touch, can't see, and can't use without paying taxes and penalties. They don't care because they are looking 30 years down the road. Unfortunately for them there is no way for them to know if they're 401k is going to be worth anything in 30 years because well...401ks have never existed before.
Gold on the other hand has a historical precedent of ONLY GOING UPrelative to fiat when you give it a 30 year time horizon. Actually it has a 5,000 year precedent of only going up.
China will detach the paper mythical price from the physical price, IMHO. So stack and be patient.
NEXT STOP $760
Good. You aren't supposed to "speculate" with gold. Defeats the purpose.
A couple thoughts on the price of gold and oil. What would happen to the price of oil if you wake up tomorrow morning and some entity has sunk a VLCC in the Strait of Hormuz? What will happen to the price of gold if you wake up tomorrow and headlines are reporting the failure of Douche Bank?
Durable bottom = anus that doesn't prolapse easily
"I hear you cry-EYE..."
Follow Warren Buffet formula :
Buy when cheap
If gold is cheap & cheaper
buy buy & more buy
Meanwhile in India , the diccks are hetting harder , marriage season has started , and ppl are very busy gifting gold to each other, without gold you are looked down upon as a dog