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Guest Post: Are You Tempted To Sell, Or Eager To Buy?
Submitted by Jeff Clark of Casey Research
Are You Tempted to Sell, or Eager to Buy?
It wasn't a fun week for gold. By the close on Friday, the metal was down 6.7% (based on London PM fix prices), the biggest weekly decline since September. It got downright irritating when the mainstream media seemingly rejoiced at gold's decline. Economist Nouriel Roubini poked fun at gold bugs in a Tweet. Über investor Dennis Gartman said he sold his holdings. CNBC ran an article proclaiming gold was no longer a safe-haven asset (talk about an overreaction).
While the worry may have been real, let's focus on facts. Have the reasons for gold's bull market changed in any material way such that we should consider exiting? Instead of me providing an answer, ask yourself some basic questions: Is the current support for the US dollar an honest indication of its health? Are the sovereign debt problems in Europe solved? How will the US repay its $15 trillion debt load without some level of currency dilution? Is there likely to be more money printing in the future, or less? Are real interest rates positive yet? Has gold really lost its safe haven status as a result of one bad week?
And one more: What is the mainstream media's record on forecasting precious metals prices?
Our take won't surprise you: not one fact relating to the trend for gold changed last week. We remain strongly bullish.
So why did gold, silver, and related stocks fall so hard?
The reasons outlined in this month's BIG GOLD are still in play (the MF Global fallout, a rising dollar, year-end tax-loss selling, and the need for cash and liquidity to meet margin calls or redemption requests). Last Wednesday's 3.5% fall took on a life of its own, selling begetting selling, fear adding to fear (especially the case with gold stocks). None of these reasons, however, have anything to do with the fundamental factors that ultimately drive this market. Once those issues shift, then we'll talk about exiting.
So, should we buy now? Is the bottom in?
Let's take a fresh look at gold's corrections and compare them to the recent one. I've updated the following chart to include the recent selloff.
[How do I calculate the data? I look for the periods in every annual gold chart that represent a distinct fall greater than 5%, then measure the highs and lows.]
(Click on image to enlarge)
Our recent drop equals 12.5%. This isn't to suggest that the correction is over, but it does show that we've already matched the average decline, which is also 12.5%. This comes on the heels of the 15.6% fall in September. You'll notice something else: We've now had three major corrections (greater than 5%) in one year, the first time that's happened in this bull market.
The worst-case scenario would be a drop that matched the biggest on record, 27.7%. From $1,795 – the recent interim peak price – that would take us to $1,295. That wouldn't be fun, but a fall to that level would not by any stretch signal the end of the bull market, nor a fall into unprofitability for our producers. And it would represent a true blood-in-the-streets buying opportunity. After all, that's exactly what happened in 2006 and again in 2008, and in both instances gold eventually powered much higher. The bears were wrong then, and they'll be wrong again this time, even if that extreme scenario were to come to pass.
Here's the updated picture for silver:
(Click on image to enlarge)
Silver's volatile nature really comes through in these data, which measure corrections of 10% or more. The recent decline tallies 18.4%. It, too, comes on the heels of a recent correction, a 35.2% tumble in September. The average of these declines is 20.3%, which would take our current correction to $28.22, close to last Thursday's price. Like gold, we've now had more corrections this year (four) than we've ever had in this bull market.
The worst plausible scenario we see for silver in the near term would be a fall to $16.32, matching 2008's 53.9% drop. But you'd have to be awfully bearish to think it will plummet that far.
These data should actually give you some comfort. We've been here before. We've seen worse before. And yet, in every instance, gold and silver eventually climbed higher. So, unless you really believe that Obama and Merkel have brought happy days back to the world economy, precious metals will resume their ascent, and probably sooner rather than later. And when they do, you may well never be able to buy at these prices again. Those who were too scared to buy at $560 in 2006 and $700 in 2008 missed out on what were some of the greatest buying opportunities of this bull market.
Either way, my advice is to spend a little more time watching the drivers for gold and a little less time worrying about the price. Until those things change, look for an entrance, not an exit.
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Are You Tempted to Sell, or Eager to Buy?
Er, tempted to wait and see, actually.
$1600, $1500 or $1200 I don't really care. Nothing i've seen these past months has convinced me the fundamentals that support buying aren't getting stronger. If it halfs in value by the time I die then fuck it, someone in my family will benefit if it doesn't line my coffin. Oterwise it will ALWAYS be worth something, unlike other assets.
keep on stakin
this evening i pulled the plug on gold stocks i have owned since 02. cant take the pain and will just add to my phys for the time being
Keynes' markets can stay irrational is hitting home
Great blog Tyler but you are nuts about gold. Safe haven status seems now just a cliche for most investments except for cold hard cash in your local currency.
Yea, I sold out almost all of my miners last week when the technicals became obviously bearish.
I learned from 2008 that no matter what the fundamentals say, the technicals can remain in control for a long time. That's why I've had a large reserve of since then.
Until Europe plays out, the dollar is going to keep getting stronger. That doesn't mean that I've sold out any of my physical. That stays put until the global monetary system is reformed. But miners are another story.
The crookery has certainly increased of late. I don't know, is that a fundamental reason????
yo tyler, read this.........
http://www.teribuhl.com/2011/12/21/analyst-says-jp-morgan-could-be-in-worse-shape-than-bank-of-america/
oops,... better take a closer look at WF - already showing 'san fran's' fault-line cracks in its basement - TIMBER!!!
jmo
Just for the record,Tyler did not submit or write the article.d.c ghost
Buy gold, it's on sale now!!!
-John
http://www.youtube.com/CarMarketer
The bubble is in treasuries with strong dollar recently. What is more absurd, Gold at 15% of M1 or treasuries for 10 years at 1.95% with horrendous fiscalsituation? Which money is the ugliest at this point? Slash debt first give some real yield on Treasuries and then we can discuss which money is the best, Gold is never measured in absolute, it is measured against something, at the moment the fight is still very unfair against the poor greenback which is still a Featherweight fighting against a heavy weight, the Hong Kong dollar or Yuan might a bit fairer fight against Gold, but the USD?
Nice one Whitey. Until the fiat gets backed by gold again, it's just fiat. Treasuries the mother of all bubbles. How can gold and treasuries be in a bubble at the same time? Answer.......they can't.
Sell Dollars for Gold or Silver? Oh YES!
What about relative values now? Gold at 1612 is very high in purchasingpower even after the selloff.
Take just about any price of a manufactured good and do some comparative shopping in present gold versus historical prices when gold was stable at 35.00/oz.
Are you sure that you would rather have some coins versus what the dollars will buy now? I do not know, nor do you.
Kate B. - the most action tonight - http://hedge.ly/gFWVSm
love her, see her in laurel canyon? smoking.
yup. i'm holding out for now. but if prices fall below $1,500/$25, i'll be buying like a mofo.
Silver hits $20 and I'll have that monster box I've always wanted. Pump the dollar up, Ponzi Claus!
trust me, it'll make you smile.
Those boxes stack nicely too.
You'll get it, buddy. Then let's hear what tune you sing when 1 year later it's no higher; then 2 years later it's no higher.
A bit of advice for you: Take the 10 year chart of the gold price, tape it to the wall and look at it from across the room.
What's the trend, elmo?
Here's what you don't understand: Forget inflation. Forget crisis hedging. Forget everything but this: Gold will keep going up in price as long as real Treasury yields remain negative.
And real Treasury yields will remain negative as long as Congress refuses to end the deficits and pay down the national debt. Which is NEVER going to happen. It really is that simple.
According to Griffin (The Creature from Jekyll Island), there's no way the Govt can stop spending even MORE FRNs -- it's a one-way ride!
"Either way, my advice is to spend a little more time watching the drivers for gold and a little less time worrying about the price. Until those things change, look for an entrance, not an exit."
Good advice for any new ZH readers (like me). I love my silver, but gold has been making me tingle for quite a while.
where are you rubbing it?! >_>;
Once I spread my Gold and Silver out on the floor and rolled around in it dressed in a scrooge mcduck costume.
Oh, you did not neither. Good idea, though.
Nouriel Roubini is a one-hit wonder that went south as soon as he showed up on the magazine cover with a groupie in each arm, and Dennis Gartman is wrong about gold at least 75% of the time. How often did you see Roubini's talking head when gold was breaching $1900? He was hiding behind the potted palms.
Note that JPM apparently stole 140,000 accounts at MF Global so they could scrooge the gold and silver to meet deliveries on Comex. This was gold and silver bars that belonged, not to MoFo Global, but to their clients who held warehouse receipts for specific serial numbers. In other words, they stole it and that means naked desperation.
All the scams and ruses and ploys work to kick the can down the road, until the central banks run out of road. That ain't far off, when you note that the federal govt borrowed and spent something like 10% of GDP to achieve 1.8% GDP growth. The marginal utility of debt is at the flatline.
Stupidity and the race for liquidity is a PM guy's best friend. Keep your powder dry folks-opportunity awaits.
Yeah it waits about 2 years down the road.
At this point, the name of the game is ACCUMULATE.
If you can get it cheaper, great, BUT GET IT!
Gold Is A Religion Masquerading As An Asset Class
http://www.businessinsider.com/gold-is-a-religion-2010-9#gold-has-been-p...
This is a fucking ridiculous piece, another MDB trying to tease us.
Here the definition of money.
Fungible, divisible, transportable, easily identifiable and not prone to tempering, the quantity of which can not expanded widely otherwise it can not store value. It can then be a unit of account, a mean of exchange and a store of value.
Under this definition, the USD is not money but only currency because the Fed has decided to monopolize the alchemist secret of making "Gold out of lead", or more precisely (fake) money out of computer key strokes. The very fact of printing the currency aggravates the currency only condition, versus the money condition which includes store of value on top of the attributes ofcurrency
.
How do you know gold's value?
Is it $200 or $2000?
How do you value your gold?
One can argue that because of Bernanke money printing, a tulip bulb should be as valuable as 12 acres of land (after all there is a limited supply of tulip bulbs – in particular if everyone starts hoarding tulip bulbs in vaults and under a mattress)
During the Dutch Golden Age (1600's) 12 acres (5 ha) of land was offered for a tulip bulb.
Tulip (Gold?) Price Index
http://chart.ly/uploads/oo26ju9.png
you have to differentiate between world wide market for gold/silver that existed for thousands of years,
and then a small market for tulips for some super rich lords with strange hobbies during a feudalistic time.
how dare you compare those two, lol?
Yes, a rembrandt picture might sell for 100 million $, but for who? 2 people in the world?
Gold and Silver is bought and sold by millions of people in all countries all over the world.
Gold is the most respected and proofed money that ever existed.
Gold is the most respected and proofed money that ever existed.
The cleanest too. You never hear of anyone wiping their ass with gold.
Actually there are stories about some people shitting gold. Wait that's just a story...
#GameOfThrones
One can't eat a tulip bulb .......... oh no wait ......... one can't eat a shark's tooth... yeah that's it one can't eat a sharks tooth.
Make a damned fine spoon out of a block of gold though.... and best of all it don't tarnish..
Ok but seriously, the dutch and their tulips?
You can call gold a religion if you wish but religion like all empires of human history come and go are born then corrupted then die or morph into some other form of mind control for the masses; gold and silver just are. They are even more timeless than diamonds for the masses, and have a natural function as money.
There are other things more valuable of course though value is often fleeting; for example at a precise moment in history a small piece of lead clad in copper offered to the breast of a king or tyrant - depending on your viewpoint - has the power to change the fate of empires and perhaps all of human history - try that with a F@#$ing Tulip bulb.
On that note anyone know where I can get some gold core full silver jacket hollow points?
It is funny you have mentioned the spoons.
During Napoleon III banquets, the most honored guests were given aluminum utensils, while the others regular guests were given gold (aluminum was extremely rare and more valuable than gold -- before the Hall-Héroult process was developed in the late 1880s, aluminum was extremely difficult to extract).
I did not know that.... I just prefer a gold spoon for heating up my smack again b/c of its tarnish resistance.... I tried Al but it made my nuts swell...
If they (the honored guest) only knew how low Al is on the noble metals list they may have been less impressed....
Gold is as ubiquitous as aluminum – it is everywhere (all dirt around you has some gold in it, even your hair). If someone develops a cheap gold extraction process, gold spoons could become less expensive than aluminum spoons once again. History doesn't repeat - it rhymes.
I admit it may be the narcotic haze talking but crustal abundance of nearly 90,000ppm Al vs 0.003PPM for Au hardly seems to be in the same league....
You are correct about History however; I'm sure Alchemist are hard at work with thier 40 gigawatt particle accelerators .....
Cult O'Reason is an ignorant troll: Aluminum production is 30 million tons per year, compared to 2,800 tonnes of gold. Aluminum occurs in the earth's crust at a rate of 82,000 parts per million, while gold occurs at the rate of less than 0.04 ppm.
Don't waste your time on people who have a love of argument with no taste for truth or facts at all.
Yes, you are correct.
I should never argue about politics or religion (Christianity, Judaism, Gold, Islam, Hinduism, Gold, Buddhism, and Gold -- did I mention Gold religion?).
He is correct to some extent. Every litre of sea water contains 13 billionths of a gram. Add that up and you get 20 million tonnes of gold floating in the ocean. Hard to get at though.
Crustal abundance is not a limiting factor, and it does not determine the value (extraction/production is).
If a new and cheap extraction process is developed, the annual production will go up (and price will go down).
For example, Carbon (the same carbon that Greens hate and it is ~18% of your body mass) is much less abundant in the crust than Aluminum (~0.5-2K ppm for C vs. ~80-85K ppm for Al), but C (coal or NG) is much cheaper than Al.
Try C2H5OH +2 H2O +C6H8O7 it might help get things into perspective.... works for me...
Can you give us the Lewis structure for the particular C6H8O7 that you had in mind?
If it's the one I am thinking of, I prefer it with a twist of this, and with just a dash of this.
+19 to you for noticing
Here is the perfect mixture:
http://www.freeclipartpictures.com/clipart/clip-art/pictures/lemon.jpg
You would, of course, also want to add some of the mineral dihydrogen oxide in the Ih phase.
I would STRONGLY advise against trying to use any I9, however.
Here's something to consider: If some nutjob is holding a gun to yer head, demanding a Toz of Ag to keep from pulling the trigger, how much value does the Ag have for you? There are NO ABSOLUTES, get over it.
That is very true all economic values are relative to the time of transaction.
Finally, a valid reason to dump mercury all over my head.
Hell you don't need a reason for that, Saturday nights at my house - Pizza and Mercury night the whole village is into it..... mad as hatters though....
Puullleeezzz, it is NOT dirt, it is soil, period, end of discussion. Dirt is what makes a ring around the bathtub, and is underyour fingernails. Get it straight.
Yeah, and IF someone could develop a cheap STUPIDITY extractor we could save the world right know, starting with...
Very funny Rakshas.
Against the monetary base, not very difficult, just use the different monetary regime of Gold Standard, Gold Exchange that came after or Bretton Woods. The formulas are all available. James Rickards has good data. You can also measure Gold against very stable demand supply commodities like processs tobacco which is extremely stable in price rise (the most stablesoft commodity is indeed processed tobacco). What has happened in history was bank first = fee to store Gold, then fractional lending and then while the whole banking system was built on this Gold foundation, this foundation was pulled from beneath the banking system. Freed from this relation since 1971, leverage went nuts. There is a good book called thegreat waveshowing prices of rye stablefor 300 years before 1913. You could take a few commodities assume 0.7% of inflation and check.
Kenneth Rogoff shows inflation was 0.5% per year between 1500 and1800, 0.7% between 1800 and 1913. And since 1913 5% on average... Gold is not an asset, Gold is money, the unit of account of the other thing, the store of value to buythe other things, the mean of exchange between the different things. As a result there is a relationship between Gold, the GDP of the world and the monetary base of the world. If the Gold reaches the monetary base there is no upside because it trades as if the world was back to Gold standard relationship, Gold can not logically have a price higher than what it had under a Gold standard formula of 100% back monetary base. Again James Rickard has intersting computations.
http://www.youtube.com/watch?v=d97x3q-lf48
What the value of a dollar when a select few can borrow unlimited amounts of it for almost nothing? Its not even worth the time arguing with someone that defines gold as an investment.
Lost of my friends are like that, and I keep reminding them I will only accept pre-65 silver coins for my eggs.
I'm curious- what's the going rate for eggs in pre-64's?
My guess is 18 for a merc, but that's just me.
Well, my eggs are definitely not-for-profit. Its amazing how much feed 5-8 hens can go through, and the price of a bag of feed has shot up 50% in the past year thanks to money printing. But sure, I'd do 18 eggs for a merc, though I prefer the Roos, they seem to have retained mass.
Interesting- I've been avoiding buying any of the roos, as they're too similar to the current zinc-wafers. Don't want any confusion as to when the metal shift was made (mainly when it comes to '65s, which I run across fairly often) I'm not confused about it, but I'd hate to ever have to have that argument when it counts.
Maybe I'll get a couple of tubes of those, though- as they're easier to find anyhow.
Thanks for the info- and don't be afraid to raise your prices if you have to. I've been seeing a lot of people get screwed lately because they just can't bear to face the inflation beast head-on, and are selling things at their "gut feeling" prices. Even though the silver coin should short-circuit that, it doesn't work if you can't buy feed with it yet.
Prometheus418
At this second, a dozen grade AAA LG, with a Merc, will buy that dozen, and give you about $0.50 back.
Hey, "Cult_of_Reason" cunt is spelled with an "n" not an "l". You may want to fix that typo.
Cult_of_Reason,
Dude,what you smokin?.
Your handle does not match your posts.
a tulip bulb should be as valuable as 12 acres of land (after all there is a limited supply of tulip bulbs – in particular if everyone starts hoarding tulip bulbs in vaults and under a mattress)
A Tulip bulb can be planted and regrow, and more produced.
Gold is in the ground,and very few have the abiility to gain acces to it.
Your (lack of)reasoning does not hold water.
yeah, I believe.
I was reading this ole Buddhist scripture; ancient, and it said, "Never refuse gold as a gift." and I went "Damn!" I'm on the right path.
Maybe because Gold offered you a promised land?
"Traditional religions believe in an afterlife, where those who believed are rewarded immensely. They also frequently expect apocalypse, and punishment for those who don't believe.
Gold fans believe in a coming collapse and huge rewards for those who had the foresight to own gold."
MDB stop the BS with this fake akias will you?
It doesn't matter, what gold fans believe in, but what they don't believe in anymore.
How illogical your sentence is.
Religion needs blind faith.
Like blind faith in your governments paper money etc..
You dont buy gold out of blind faith. It needs to be a strong commitment based on principles and understanding history.
Gold is distrust in governments!
Buying Gold is an active decision of a person who doesnt like to be a sheep for the government.
@Cult_of_Reason ... "Gold Is A Religion Masquerading As An Asset Class"
... which is exactly why Central Banks (World Wide) are BUYING it in 100's of tonnes of course !
I thought the slideshow was amusing & maybe contained a few grains of truth.
But more interesting is the link from the last slide to this:
http://www.businessinsider.com/jason-ruspini-gold-2010-6#-1
which makes a very good case for gold as an asset class, long (but not short) term inflation hedge, hedge against -ve real interest rates (slide 7) & recently (slide 3) as a 'fear gauge' or hedge. As opposed to a religion...
Consistency it seems is not business insider's strong point. I just hope I didn't buy gold too high for all this to play out in my favour (see Jan 80 outturn, slide 5). :s
Cult_of_Reason
If Gold is a masquerade as an asset, WHAT is your GO TO asset,the one thing beisdes food,shelter,water,and protection for you and your family coming out the other side?.
With ANY saleable assets?.
Who will be the one with the last laugh? The one holding the gold or the one left holding the fiat? XMAS sale bitchez!!
Well, the Glock 23 .40 cal is light, has fairly good capacity and never jams, but it doesn't have much of a safety. However, the HK Mark 23 is sturdier and packs a slightly bigger punch with the .45 ACP, plus it has an actual safety. Tough decision.
The good thing is, I'm eager to buy both.
Glocks are drop safe. No worries. Just don't pull the trigger unless you mean it.
alphabrew,
Glocks are drop safe
Yeah, from a 100' onto concrete, and still fire every round.
ACP
Dude you think a HK Mark 23 is sturdier than any Glock?(add H2o Cups) and your good to go for under $500.00 used.,while I agree it's formidable piece, it weighs a ton(compared to the 23),is large,bulky, and dip it into a bucket of wet concrete,plaster mud,sand,run over it with a one ton truck a few dozen times, and we'll see which one is still together, and firing. and see how she fires.
Not to mention the cost diff of that bitch.
Best round v.s. round tests are not even worrth remarking on.
Well said.
Nothing is better. Everything is worse. Even China's slowdown is unavoidably visible to all. Gold toppy? Not even close.
The same people that believe in "dollar cost averaging" into their shitty Fidelity 401k account believe that gold holders should panic, and piss their pants, the moment it drops from its all-time highs.
You can't tell these people anything. Most of them believe that printed money is the "investment" of a lifetime and that government is here to help them. There is no helping a fool, especially an arrogant one.
Just keep doing what you are doing ZHers. You don't have to explain yourselves to anybody.
Less than five years ago, when Fannie Mae stock was around $70, I heard a woman trader telling a friend that he should not have his life savings in FNMA stock, that there was no government guarantee, and that both the GSE's were loaded with bad mortgages.
The guy refused to listen, just got angry and almost shouted that the govenment stood behind Fannie and Freddie and his money was perfectly safe. Now that FNMA is trading for 19 cents, I often wonder what happened to that guy and his retirement portfolio.
Trusting the government is a horrible retirement plan.
His dog (of a portfolio) got run over by his karma.
Hardening of the categories (mental, that is!) is a terrible disease!
Mike in GA
China's SLOWDOWN is a crock, and they are still buying Gold & Silver as fast as they can get it, and at prices $200- $300.00 over our's.
Were I came from it's called disinformation.....................and they are masters at it.
Gold will hit well into the upper four digits at least.(Alf say's $4500.00, I say more if the EU collapses and contagion hits us, and it will.......................may take 2-3yrs to get there, but I can wait.
I am waiting for the EU to do whatever it's going to do.If they figure a way to prop it up for an extended period, then Gold is OFF to the races,if they go Down, fiat prices will also, but we are in backwardation in both metals now.
If a crash, PM's MAY drop, but I do not see the sheeple that are holders,dumping this time period.
IF it does drop,once below a 1K, you may , MAY get lucky and get some.
Doubt it.
If the stupids dump, I am going at least 80% IN.(Phyizz of course)
Gold being one of the few areas of actual investment as opposed to speculation is pricing in deflation. That's been the clear shift in the economic outlook ever since China and Europe's clear slowdown and the Fed's missed QE opportunity in the fall. Gold is all about maintaining the buying power of savings.
As to the alternatives like stocks? Everything else could blow up in a minute without ongoing Fed support. Fat fingers hang nervously over the sell button day and night. Big losses are being incurred for the wrong sort of bet (John Paulson, Barclay's, I'm looking your way). Investor money is in bonds, not risk assets but a round of printing will cause a stampede. But gold will preserve your buying power whether QE is forthcoming or not.
If the herd believes in fiat then you should clearly not believe in fiat. And I can assure you all, from my observations, that the herd still believes fully in fiat.
"Sanity is not statistical"
- 1984
ask yourself some basic questions: Is the current support for the US dollar an honest indication of its health? Are the sovereign debt problems in Europe solved? How will the US repay its $15 trillion debt load without some level of currency dilution? Is there likely to be more money printing in the future, or less? Are real interest rates positive yet?
********
Default risk-
That is what's been driving the gold price since 2001-
The long bond seen it and gold seen it at the same time-
You can't bullshit the long bond and you can't bullshit gold-
http://research.stlouisfed.org/fred2/series/DTP30A28
http://2.bp.blogspot.com/_nSTO-vZpSgc/RvP7CPQs-oI/AAAAAAAABVc/MfQtp1qT0b...
jimmyjames
Dead on dude.
Deflation is all you hear,unless your buying necessaries.Deflation is here for now to an extent, they will not be any Hyper deflation, because the printers will be at at 150%.
Wait till inflation hits,(pray we are lucky enough not to get Hyper inflation)and if their are any idiots on here that think it's not coming, and BIG, I feel for them of they are not well stocked.
The crash is four years old, and there's no end in sight. In fact, it looks worse ahead. So...it's probably wise to protect your wealth and buy any dip if you don't own metals. If you do you can be picky and hold here. Though, accumulating is probably a better idea. The talk about buying now or waiting sounds like people trying to time the market. Good luck.
The only downside risk is a stock crash/margin-call liquidation event. The fundamentals are rock solid, more than any asset class right now.
I think everyone got overly spooked by the drop last week. Bull markets climb a wall of worry. Gotta look at the fundamentals. Then it's all clear. I can say this from experience: trying to time a bottom leaves you on the sideline.
Gold shouldn't be viewed as a short-term speculative strategy. It's a hedge (not even a bet) on the erosion of the value of money over time. In a fiat world that bet is a sure thing. The only thing that varies is the rate of erosion. Since 2000 the rate has picked up and since the crisis it's accelerated even more. On a shortish time horizon there are 2 big potential bullish stimulants: more money printing and currency instability. Those are safe bets but timing is uncertain. That's why you need to be invested. Long term there's zero doubt about where it's headed. If you can apply a longer term strategy your wealth/savings/buying power will be safe while others will se theirs dwindle
My cost basis on gold is low and very low for silver. Ag would have to drop near $20 for me to buy more. Au would need to drop to the $1400-1500 level for me to buy more. Never bought Au above $1400.
For now I'm still waiting and watching.
My highest price for gold was $1395/oz. last February. That was for gold bullion now stored in a bank vault overseas. Before that I bought and still own quite a bit of SGOL which has full gold bullion backing stored in Switzerland. Premiums on SGOL are very small compared to the greater variation in PHYS, also fully backed by physical gold which is stored in Canada.. I learned about SGOL and PHYS from the Jim Rogers blog. Rogers pointed out the pitfalls of ETFs not fully backed by physical gold so be wary of them.
year end profit taking and perhaps liquidity issues nothing more
Been trying to buy physical for the past week and Kitco is all out
There are plenty of other bullion dealers out there dying to sell you some.
I bought a reasonable handful of silver philharmonics from Gainesville coins this week, delivery hasn't arrived yet, but they didn't indicate any lack of stock.
That being said, they were out of a lot of Au and Ag. Could have gotten Eagles or Pre-64s as usual, but I was just wanting some variety, and they looked attractive.
As you can guess from that, I'm another vote for BTFPMD.
Yep
Grabbed a 1 Kilo bar and 20 Phils as well. They are running low. Supposedly everything is in stock but they have a 7-10 business day wait before ship[ping. Which makes me wonder why bother offering UPS 3 day shipping if you have to wait 2 weeks to receive delivery.
I noticed Provident had a lot of out of stock items as well. Wanted a couple of the new Brittanias and had to buy from Apmex which I avoid religouly becuase of the high markups
gold should be ultra bid in 2012 once China/Asia goes into a fall blown currency/liquidity crisis. but the USD will also be bid
$1,295 isn't BLOOD IN THE STREETS. A couple years ago one could have missed S&P 666 by simply by taking a trip to the restroom at the wrong time- they certainly didn't have time to jump out any windows, drown their closing bell sorrows at the local watering hole, or celebrate an unscheduled bank holiday.
BLOOD IN THE STREETS is OWS begging Massa Ben to fire up the helicopter and bail out the evil banks [and their parents 401(k)s], BLOOD IN THE STREETS is comfortably triple digit Dow & Gold in the midst of a simultaneous full blown credit freeze, a buyer strike, and bank run.
I have my position, I dollar costed up on Friday because I had some otherwise worthless dollars lying around, but if there is BLOOD IN THE STREETS then I will be all over the gold bid like bubba on a white shoe banker in the big house, but $1295 isn't BLOOD IN THE STREETS.
So Gold is down a few benjamins off it's highs, still gaining YOY.
THE only way to take it way down is to crash the markets so asset managers will have to sell their best gainers (i.e. PM's) to stay solvent.
Then what does that do? It leaves them nothing to hyper-hypothecate. Think about having a real asset in your hand, and being your own banksta.
Up or down?
The big thing you have it, they dont.
Hopefully you can keep it.
The difference between paper and physical is being realized in that dealers are sitting on their hoards and it takes a premium over spot to pry it out of their hands. Reality makes itself known eventually.
Today I bought some estate jewlery: 4 beautiful 18 KT gold bracelets and a watch chain 100 grams. So the answer is, I'm buying. This is a fun way to hedge, and thanks to the situation, I can actually feel responsible when I do this! :-)
in some cultures 18kt is not even considered to be gold. buy the real stuff, the 24kt bracelets.
The stock market will correct hard at some point here. PMs will follow to a point as a source of cash for those getting creamed. THAT'S where the opportunity will lay. Don't sell, but keep buying as ES collapses under its own weight. Should be fun...
There was a lot of emotional damage inflicted on bulls. Another way of looking at also is that gold and silver have been beating to a strong support level, and it is now like a coiled spring. I don't think that the Dollar index will go up too much higher than 80 because of the Euro at 1.30. Zero Interest rate, Insolvent banks, debt ceiling, and real estate are good arguments for prices going up. Not least, who wants a down stock market on an election year (spill over)? As a caveat though, in a market with so much uncertainty (FED/Government/Manipulation) it is a bit of a gamble.
It is unbelievable the amount of gold central bankers had to dump to cause that fall just to give "value" to the money they are printing. They literally gave China, Russia etc such a generous x-mas gift. The transfer of gold just blows my mind. The Chinese are building the back bone of their future currency, and they got it wholesale from ours. That is an incredible act of desperation and disregard for their own people. Unelected bureaucrats selling their countries' assets which are doing more economic damage than a war. If you through all of them down a well, all that You would hear is me me me
I believe that on the long run the markets will impose themselves like a force of nature. Hopefully, I am still around to see that day.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/18_Jim_Rickards_-_This_Will_Send_the_Price_of_Gold_to_the_Moon.html
Merry x-mas expendables
I read an article recently describing how Ag will become the first element on the periodic table to become extinct.
From Jim Willie today.
http://news.goldseek.com/GoldenJackass/1324501200.php
Here's the most interesting silver story I've found recently:
Stanford researchers have developed a water-purifying filter that makes the process more than 80,000 times faster than existing filters. The key is coating the filter fabric – ordinary cotton – with nanotubes and silver nanowires, then electrifying it. The filter uses very little power, has no moving parts and could be used throughout the developing world.
http://news.stanford.edu/news/2010/august/nano-pure-water-083110.html
Well, NO element is ever going to go "extinct", but merely become more and more expensive as its production peak is passed. Many, many analysts of otherwise good repute have repeatedly made the same simplistic (and erroneous) mistake of dividing the total reported mineral reserves for a given metal (notably silver) by the annual production figure and then declaring that "at current rates of extraction, Metal X will be totally gone in Y years". However, this is a complete fallacy, and displays a profound ignorance of the subject of geology and mineral reserves.
What these analysts overlook, or more likely fail to understand, is that total mineral reserves do NOT represent some absolute, invariable amount, but are defined by a given price. In other words, total worldwide reserves of silver today might be, say, 300,000 tonnes --- at the current prevailing price. If that average prevailing price were to significantly rise, then the total reserves would AUTOMATICALLY increase, as formerly non-economic deposits would suddenly become "reserves" by definition. I need to repeat that important point again, because it is a critical one in any discussion of reserves: reported world reserves are NOT an absolute measure of the total that is potentially available in the earth's crust of any given mineral, but just that amount that could be economically mined at today's prices. Raise the price high enough, and the ENTIRE EARTH would be the "reserve" of any given mineral!
Quiet You! I don't believe in immutable laws of economics. Just on what Nobel price economists tell me?
We can always make more silver from other metals. No? you mean is an element? Well, don't we have a huge hole in the ground where we can get all that stuff? I think the hole is right next to the one for oil. Sorry, limited resources does not compute. I was told we could grow to infinity since we are smart enough to figure everything out on the way. Lucky thing we can take at the point of a gun from some Arab country. Stop calling me crazy. I heard it all in the news, so it MUST be true.
Damn we are screwed... :-(
Well, let's see ... I bought more gold at about $1560. Which means that as of now, I've made 3% on my investment in less than a week's time. On the year, my gold holdings have appreciated roughly 44% (from the year-opening value of $1120 on 3 January 2011). Nouriel Roubini, himself, can't change that inconvenient factoid. Neither can Paul Krugman ... nor anyone else who is a life-long gold bear.
As far as buying goes ... the only things I'm buying are commodities. Everying else is a hold and see.
BTW - When was the last time gold gained 44% in a single year??? I guess that's a strong argument in favor of a bear market for gold? Hahahahaha.
Platinum for the win. It is more compact.
Good one ....
PM's will be weak till year end. If you are a hedge fund manager it's hard not to invest in something that keeps going up time and time again. Gold and Silver will make a move up by March 2012.
BUYING PHYZZZ DAILY...
I start losing money when Gold falls to $ 650 an ounce and silver falls to $ 5.35. I guess some people got to the party a little late. I am over-stocked in squirrel stuffed rabbits, rat stuffed rabbits, rabbit stuffed cats. I am reducing the sales prices by 70%. Frozen, shipped over-night, freight is free for all orders over $ 200.00.
Wrap some varmint bacon around all that and you have a buyer.
Paper gold can go to zero or to a billion an ounce. Doesn't mean a thing. It's not real gold. Measuring the value of one fiction by another is delusional.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
I only Buy on down days..
and..
I will happily buy all the way down, until they stop selling it to me!
Buy Low, Sell High? or dont sell and use for backstop protection against the World that needs to roll ANOTHER! $10 Trillion in debt this year.. Oops!
As of December 1, 2011, the official debt of the United States government is $15.1 trillion ($15,088,441,787,408). This amounts to:
• $48,822 for every person living in the U.S.
• $128,371 for every household in the U.S.
• $320,927 for every U.S. household that pays more in federal taxes than they receive in benefits from the federal government
I used to buy only on down days, but it just got too damned expensive. The higher the price went the downer I got. Shit man, who can afford that strategy?
Any gold bug must look at a 5-year chart of AZO and kick themselves for not buying specialty retailers instead of hoarding barbaric rocks and wishing the "system implodes".
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=azo&inst...
And Jim Sinclair is going to kill himself... right?
Did you buy AZO 5 years ago, or at anytime?... of course you didn't.
Do us all a favor and STFU.
It's not a matter of wishing....the system has already imploded you just haven't noticed yet.
That said, Autozone's OK. And good for the people who made money with it. Same with Apple.
But your memory is selective. Blockbuster was a "specialty retailer" too.
Any paper bug must look at a 5-year chart of gold (or silver, or platinum) and kick themselves for not buying precious metals instead of hoarding the paper promises of wildly indebted governments and bankrupt entities, and blindly wishing that the status-quo house-of-cards financial system hangs together indefinitely.
How much more upside could gold have left? I figure around $2Kish/ounce the gobmit will start confiscating gold aka 1934. Doesn't anybody use bitcoin around here?
bitcoin worthless when govt can switch the net off, and shut the lights off...rather than taking a flyer on bitcoin, I'm stickin' with the magic pixie dust the guy down the street sold me...he says it'll make my car fly, no gas! It was cheap, too.
the banksters have been going long/short gold and silver for years now -- making a ton of cash to balance their books while manipulating the shit out of it - analogous to riding a roller coaster through a periodic defined timeline -- making easy-money -- hand-over-fist profits in a secular bull/bear market that trades on/off as an event driven drug addict for his/hers daily fix/rumor
aw c'mon don't down arrow me ya'll- bitcoin screws the central bankers out of their fees too.
As soon as I read,"lets take a fresh look at Golds correction",I knew the writer feeds unicorns fun,and rides them too.
I pesnonally would love to see the crew from JP Morgan Chase,and the Fed,and the PPT .TEAM lined up and asked if they are involved in preciuos metals MANIPULATIOM,and if they lied,their heads would explode like a watermellon getting run over by a Semi truck.
I think they would all explode....
Gold is a matter of perspective. Some people trade (day trade a PM is insanity in my mind..but hey..whatever) PMs on a regular basis. Nuts I say. Want to buy/sell PMs?....buy/sell the mineral rights to said PMs....you will make far more profit. With respect to gold and silver..physical and mineral rights only. Anything else is merely a promise from someone that they might pay up....I like to actually own something other than paper.
The problem with the gold market is it now has a fiat aspect..paper gold...the ETF. This is a price influencer and as more are issued it actually drags gold towards...well equity like qualities. This was never the intention of gold...nor should it be. The creation of Gold ETF actually degrades gold (I suspect on purpose) in an attempt to bring it in line with other paper 'bets'. Gold is THE standard...has been for 1000's of years. It is the bank and soveriegn nation back-up.
The paper trade of gold is indeed the whole of the problem. Gold is the flood insurance policy against the 100 yr failure of debt fiat paper. Selling gold for cash means one does not treat gold as an insurance. I think this is a mistake with the advent of 'paper gold'....why bother with paper gold?..it is merely another form of equity at this point.
I would buy if the price was low enough....it isn't even close at this point. Go below $1000 and I'll start looking.
"against the 100 year failure of debt fiat paper"
Timeline too long. The average dead fiat currency lasted just 19 years. If you add in the paper currencies that haven't quite gone to zero yet, the average fiat paper survival only rises to 28 years.
The unbacked FRN system has been around for 40 years. That's pushing your luck, like taking a 1947 Harley knucklehead with 300,000 miles on it, bored .40 over with no brakes, down the interstate at top speed.
You can always get your gold for free....
The ratio will provide for obtaining free gold....before this bull is over....at least that's what I'm betting
Become your own bank..."Stash n Stockpile Weapons of Stack Construction!"
Anybody who isn't buying physical gold right now is an idiot. This is the final push downward so the elite can purchase it at rock bottom prices. 2012 is the year the physical market rises and the paper fantasy collapses.
Read this now:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
FWIW dept:
the miner's or dirt diggers are all owned by the oligarchy families and know exactly what's in the ground and when to dig it up
they could care less if it stays buried for ten years [pirates of the burial vault's keys?] , more or less, and dig iron ore, copper, nickle, magnesium, alum,... eg. Rio Tinto; Vale & BHP Billiton, which all have done for many, many years
jmo
I buy stocks, they are backed by ponzi
I'm selling all my physical silver.
With the cash I'll either get back in at a lower price - $25ish (I've never once been unable to find silver - especially in Japan where everyone thinks it's junk) or buy more Japanese gold coins.
I cannot see any reason not to do this in the short-term.
Silver, I believe will be the all-time best long term hold for retiremenet in 20-25 years, but I'm talking about buying back in over the winter.
Shit yeah....that's the spirit.
I like the selling pressure provided by your type.
I'll take some more silver off the market when it goes to $25 Dinars
BigInJapan
If it's JUNK, why not buy it on the junk cheap and stockplie the hades out of it, or sell it overseas?.
NY Fed: Foreign Central Banks Borrowed $9.89 Billion in Latest Week By Michael S. Derby
New borrowings at the Federal Reserve‘s dollar swap facility continued to rise in the week ending on Wednesday. Total new borrowing for the week was $9.891 billion, led by $5.122 billion in borrowing from the European Central Bank and $4.769 billion in borrowing from the Bank of Japan. Total outstanding borrowing stood at $62.599 billion, compared to $54.335 billion the week before. Last week, borrowing jumped on a surge in drawings from the ECB.
http://blogs.wsj.com/economics/2011/12/22/ny-fed-foreign-central-banks-b...
Keep them printing presses rolling or we will nose dive into a worse depression.
I bought.
My purchase was a vote, not just buying to retain value.
This is not your father's precious metals bull market.
...or at least that's what I'm guessing...and what the older folk are alluding to. I wasn't old enough to participate in the late 70's/'80 pm bull....(not enough cash from the lemon-ade stand)
I think it's rather fun and exciting....watching people run around like the "Home Alone" kidlet getting chased by the crappy burglars. I was under the impression that a manipulated market...culminated with huge sovereign debts and derivative time bombs with a bubble building and enabling parasite central banking machine would be the best ingredients for the unwashed masses to wake the hell up and get some skin in the game....on the price pullbacks.
If you don't have debts....and you're prepped with guns and supplies....then what else is there besides enjoying your life, stashin' a little cash, and buying the dips. For the last ten years...the precious has protected my purchasing power. I'm expecting the years to come to do the same.
Embrace the volatility....and enjoy the show.
Become your own bank..."Stash n Stockpile Weapons of Stack Construction!"
The issue is not "what is the PM worth." The issue is what is the fiat paper worth. If you look at it that way, you keep enough fiat to get by on and p.ay routine bills, etc., but you buy PM with the rest, regardless of the "price." IMHO, the PM is always worth more than the fiat - that makes the decision on how much to buy simple. Buy whatever you can. Non-perishables, including hard but portable assets seem to me to be the way to go. I like RE, but the government can easily tax you our of your so called ownership. Guns, ammo, PM, and some foods - maybe a well stocked cave somewhere. that's all for now.
The "real world" of MF Global, Enron, Worldcom, Goldmans (and e.g it's dubious ABACUS 2007 "deal,") Madoff, Stanford, hell even way back to Dennis Levine of Drexel Burnham Lambert and even before then. That "real world" has been a REAL Fraud! Can't you see that? How many "One offs" do you need to see before you at least accept at the very least IT'S a Trend? Or even that the reality is such that these C...ts (that's you Corzine!) are taking full advantage to screw all you fuckers dry! If these jerk-offs need everybody to love fiat and hate gold to keep all this shit going then fuck 'em. Buy Pm's like a lunatic!
Does anyone produce some sort of corruption event index? I would love to see some sort of metric contrasted against all this data. Events measured would be things like MF Global, COMEX manipulations, war etc etc
For me, I got in PMs early enough not to be too late, so I am happy holding and buying on dips, selling nah. Do I give a shit if these are compared to fiat, NO or what the lamestream media spews, nah. You are right, what do they know, not much just part of the reeducation ponzi too. I am spending fiat to add to real physical commodities as I can bitchez. BTW, keep your stuffed cats, these are only good for target practice anyway, real or stuffed.