Gold [Archive] - Page 20 - Sharetrader Forum

biker

21-05-2013, 10:06 AM

Hedge funds betting against gold
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May 20, 2013 - 10:08AM
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Hedge funds are betting that a 12-year price rise in gold is over. Photo: Phil Carrick
Hedge-fund managers are making the biggest ever bet against gold as billionaire George Soros sold holdings last quarter and Goldman Sachs Group predicted more declines after the longest slump in four years.

Gold for immediate delivery lost as much as 1.5 per cent to $US1,338 an ounce, the lowest price since April 18, and traded at $US1,348 in Singapore this morning.

It's had a 12- year run, but the whole fear-mongering that the world is going to end is just not working. So, I think that any last vestige of an investment thesis for gold has been stripped

Prices are down for the eighth straight session, the longest slump since March 2009.

Gold mining companies listed on the Australian Securities Exchange make up seven of the ten worst performers this morning. Kingsgate Consolidated is down 7.6 per cent, Perseus Mining down 7.4 per cent and Silver Lake Resources 6.6 per cent. Evolution Mining, Alacer Gold, Medua Mining and Troy Resource are also down at least per cent.

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Gold has tumbled 20 per cent this year, falling into a bear market last month, as some investors lost faith in the metal as a store of value and equities rallied on confidence that the US economy was improving.

The Soros and Goldman Sachs funds and other large speculators held 74,432 so-called short contracts on May 14, U.S. Commodity Futures Trading Commission data show.

That's the highest since the data begins in June 2006 and compares with 67,374 a week earlier.

The net-long position dropped 20 per cent to 39,216 futures and options, the lowest since July 2007.

Gold prices that surged sixfold in the past 12 years fell 19 per cent in 2013, including a seven-session slump through May 17 that was the longest since March 2009.

"Gold has faced disappointment after disappointment," said John Stephenson, a senior vice president and fund manager at First Asset Investment Management in Toronto.

"It's had a 12- year run, but the whole fear-mongering that the world is going to end is just not working. So, I think that any last vestige of an investment thesis for gold has been stripped."

Prices Slump

Gold futures prices slumped as Federal Reserve regional bank presidents including Richard Fisher of Dallas and Charles Plosser of Philadelphia called for a reduction of US monetary stimulus.

Gold's slump "has been faster than we expected," Goldman analysts led by Jeffrey Currie wrote in a May 14 report.

A further drop in exchange traded products holdings would "continue to precipitate this decline," said the analysts, who forecast prices at $US1,390 in 12 months.

The metal will get "crushed" and trade at $US1,100 in a year and below $US1,000 in five years as inflation fails to accelerate, Ric Deverell, the head of commodities research at Credit Suisse Group said in London on May 16.

Bloomberg

Read more: http://www.theage.com.au/business/markets/hedge-funds-betting-against-gold-20130520-2jvi1.html#ixzz2TsCLLtwR

Daytr

21-05-2013, 11:20 AM

It was the shorts that got crushed last night. Seems like Moody's commenting on a possible downgrade of the US was the catalyst. A lot of Bank analysts credibility on the line with their calls on gold especially the likes of Credit Suisse. What if the US is downgraded? Sovereign debt levels actually do mean something. What it means is US debt gets more expensive & interest costs go up & it could be the catalyst for a blow up in the Bond market if they aren't careful. Not saying that will happen, however some very smart people such as the likes of Kyle Bass have been calling for. The news of a possible downgrade will gather momentum & it will see a top out in the dollar &Y leaves the Fed in a hell of a quandary about what they do in regards QE. Watch out US stocks if this story grows legs.

Skol

21-05-2013, 12:06 PM

I've watched the goldbugs catching the falling knife, many are on the road to ruin, but takes all kinds I suppose. Gold is headed much further south, Zerohedge and KWN still wheeling out the usual goldbug jargon- takedown, smashed, short squeeze, massive global debt, central bank buying, coming collapse, parabolic money supply etc.etc, all the usual BS to hoodwink the suckers into buying more gold.

Fact is the goldbugs are the biggest losers on Earth atm and will be for the forseeable future, but I always encourage them to 'back the truck up'.

Nothing goes down in a straight line, there's a lot of newbies out there who are gonna find out what a real bear market is like, many already have, squealing about huge losses, but the fun hasn't even started yet.

Daytr

21-05-2013, 12:33 PM

That's all very true Skol, however & I am no gold bug & I can't stand KWN or the conspiracy theorists. However you seem to ignore the massive sovereign debt issues & printing of money. Could perhaps this latest rally in US equities be the final harrah before a mighty crash. People think they are so smart & ignore fundamentals or basic economic theory such as want printing money does & that is devalue the currency that is being printed. There are so many issues & the only thing that has driven US equity markets higher is a zero interest rate policy not economics or fundamentals. Its chasing yield & not wanting to miss out. Miss out on what? A share market that is ridiculously over valued being propped up by a government that is basically insolvent. The Fed has had little choice as the policy makers have no interest in resolving the real issues in front of them. Greed breeds contempt & that will be there downfall.

elZorro

21-05-2013, 12:40 PM

Thanks for joining the dots on the reason for the flight to gold overnight Daytr: Moody's are rattling the sabre.

http://www.businessweek.com/news/2013-05-19/gold-drops-on-record-bear-bets-as-silver-slumps-to-32-month-low

It doesn't take much to change a lot of sentiment, just a few well chosen words. Billions of dollars of ETF gold was bought in a very short time because of these words. Shorts were hurriedly undone. What would happen in a real crisis?

BIRMANBOY

21-05-2013, 01:03 PM

No Goldbug huh? Funny... sound like one, speak like one and think like one. Still denial is comforting so I can understand. Its the same old..same old..believers have been trotting out all these reasons and causes for gold forever. Its an investment that feeds on all the things you mentioned and all of the deluded have to keep believing. To stop believing is an admission of making a mistake and as we know...goldbugs never make mistakes..its always just a temporary glitch and soon the world will wake up to the rightfull position that gold has been denied. Fiddling while Rome burns. Gravity will not be denied and Gold, just like every other commodity or currency will find its own level. This level has to be ultimately based on use which means its going to keep sinking gradually as people come to their senses. There will always be a hard core base of enthusiasts but losing value has the tendancy to shake up the old fundamental belief system. Look out below.
That's all very true Skol, however & I am no gold bug & I can't stand KWN or the conspiracy theorists. However you seem to ignore the massive sovereign debt issues & printing of money. Could perhaps this latest rally in US equities be the final harrah before a mighty crash. People think they are so smart & ignore fundamentals or basic economic theory such as want printing money does & that is devalue the currency that is being printed. There are so many issues & the only thing that has driven US equity markets higher is a zero interest rate policy not economics or fundamentals. Its chasing yield & not wanting to miss out. Miss out on what? A share market that is ridiculously over valued being propped up by a government that is basically insolvent. The Fed has had little choice as the policy makers have no interest in resolving the real issues in front of them. Greed breeds contempt & that will be there downfall.

Daytr

21-05-2013, 01:05 PM

Daytr

21-05-2013, 02:37 PM

I just posted this on the HC in Aus, but thought may as well post here to see what other's thoughts are.

So what are the implications if the US is downgraded?

They are pretty far reaching as I see it & possibly could cause turmoil.

* price of debt goes up so interest cost to service massive sovereign debt goes up making it more unsustainable.
* creates dilemma for the Fed as their debt isn't as attractive so do they carry on with QE program?
* could cause the bond market crisis many such as the brilliant Kyle Bass has been calling for.
* if QE is withdrawn, what happens to the US equity market that has been fuelled by QE. Watch out below!
* the USD weakens & dramatically.

IMO this story of the US sovereign debt & their credit standing is not going away. Credit agencies are trying to be on the front foot to gain some semblance of credibility back after what happened in 2008.

A bond market collapse is in no one's best interest well unless you have bet that way of course, but for the wealth & health of the globe I hope its an orderly weakening of price rather than a crisis.

Either way the POG is a lot higher & those who have ignored economics 101 re money printing will pay the price IMO.

Daytr

21-05-2013, 03:17 PM

Birmanboy, are you denying there is a massive sovereign debt issue in the largest economies in the world & that they are printing money like no tomorrow to try & dilute their problem? This is the main reason I am bullish gold. There are others, such as the Chinese appetite for gold etc, but the main reason is simply that. So unless you think that's not a problem, keep your head in the sand. I personally do not own gold, I invest in those who produce gold & I will leave it to the likes of the growing middle class of the BRIC economies & their central banks to buy gold hopefully from the mines I have invested in. So no conspiracy theories, just facts that I have a view on. But you keep your disparaging views & as I suggested the first time it says far more about you than me. Its fine to have a different view but don't just throw mud, have some foundation for your argument & you might actually gain some respect.

Skol

21-05-2013, 04:09 PM

The possibility of the US being downgraded has massive implications for the mountain of US debt (is mountain the right word, perhaps I should use, galaxy or universe, as mountain doesn't appear quite big enough ;-) ) on the cost of debt servicing & a possible US bond meltdown, which wouldn't be good for anyone. I hope any repricing of US debt is fairly orderly.

We've heard all that before Daytr, but the fact is that gold is a chunk of metal that produces nothing-zero. If you buy shares in a company you have something that
people need, and in the event of a crash that goldbugs having been predicting for years that will never happen, you need food, shelter, medicine, cigarettes, toilet paper, alcohol etc. You only need gold if you live in North Korea or Iran, portable wealth.

I've lived through a bond crash, most people didn't even know it was happening, it was more a case of opportunity cost. I also remember an era of 25% mortgage rates, very tough if you owned a house but the compensation was that property prices spiked higher accordingly, everything boomed, it was a wonderful few years until I predicted the 1987 crash and sold most of my shares at the end of 86. People lost Schiffloads, a lawyer at the firm I was using at the time shot himself in his backyard. Debt isn't a big deal, debt is necessary for the normal functioning of society, in 1986 people had debt you wouldn't believe, much more than before the GFC I'm sure, suckers mortgaged their houses to buy shares, farmers borrowed in Swiss Francs only to lose everything when the NZ dollar imploded.

I'm a bubble fan, I love watching them and trying to predict their fateful end, if you check the Silver-higher or lower in 2012 thread, you'll see I predicted the exact end of the silver mania - to the day! My mother gave me a few kgs of silver to dispose of, I got absolute top dollar for it.

I predicted the end of the peak oil idiocy, I got in to the debate at about $100 oil and it crashed at $147, I predicted the end of gold mania, got in at $1100 and said it was outrageously overpriced, however in bubbles, people get suckered in and get on board, but often come to sticky financial ends. Manias always end badly.

I'm not a young man, I've seen plenty of suckers impoverished in lots of bubbles, and there'll be lots more. When the PM bear finally renders the goldbugs insolvent, that will be the end of precious metals for the next 20 years until a new generation comes along with a new explanation. It's never 'different this time'.

Good fun to watch though.

BIRMANBOY

21-05-2013, 04:20 PM

Spare me your "hard done by" comments please....tried and true positioning ploy just trying to deflect from the real issue of gold and all of its byproducts going down the toilet. If you cant take the heat or the different views then stop posting. Respect from a goldbug...LOL ...That sort of validation is not on my list of required attributes.
Birmanboy, are you denying there is a massive sovereign debt issue in the largest economies in the world & that they are printing money like no tomorrow to try & dilute their problem? This is the main reason I am bullish gold. There are others, such as the Chinese appetite for gold etc, but the main reason is simply that. So unless you think that's not a problem, keep your head in the sand. I personally do not own gold, I invest in those who produce gold & I will leave it to the likes of the growing middle class of the BRIC economies & their central banks to buy gold hopefully from the mines I have invested in. So no conspiracy theories, just facts that I have a view on. But you keep your disparaging views & as I suggested the first time it says far more about you than me. Its fine to have a different view but don't just throw mud, have some foundation for your argument & you might actually gain some respect.

Daytr

21-05-2013, 05:02 PM

Birmanboy, you are obviously a very angry person. I don't feel hard down by at all I just don't resort to name calling etc. Just because I am bullish & have given the reasons why I am bullish doesn't make me a gold bug. I was bearish gold when it spiked through to $1920 & called it a bubble to all my clients, however like all traders I select when to be bullish & when to be bearish & now I am bullish. I notice you again ignore the question re the massive sovereign debt issue the major economies of the world are facing & the impact of printing money.

Skol, you may think it has no value, the great Warren Buffett may think it has no value, however a lot of people see it as money or the only true hard currency. I see it as a currency with no boarders or any government printing press, although 2700 tons is produced annually. Again I hear no basis for your stance on gold other than its in a bubble & no acknowledgement of the massive sovereign debt issue that the US, Japan & Europe are facing or what effect printing money will have on their currencies or withdrawal of QE will have on equity markets. You say you can read market bubbles, I think you are swept up in one in the US equity market, being pumped up by QE. Anyway Skol, I appreciate your views & it wouldn't be a market without differing ones. Cheers Daytr

Skol

21-05-2013, 05:38 PM

Daytr,

Berkshire Hathaway shares :
Last 1 year +41%
Gold -12%
Silver -20%

Last 2 years +43%
Gold -9%
Silver -37%

Silver predicts the way ahead for gold.

Snow Leopard

21-05-2013, 05:48 PM

Daytr

21-05-2013, 05:49 PM

Skol, I did say Warren Buffet was great & I meant it. Can't think of a better investment over the last 20-30 years than BH shares, just phenomenal. QE? US possible downgrade? Anyway we can both keep banging on. Certainly be interesting to see what happens to POG tonight. I would imagine there are quite a few stops just above $1400 so if they are triggered could see another shot higher. Have to see them triggered first though...

BIRMANBOY

21-05-2013, 05:56 PM

HAH ..how you get "angry" out of my post just confirms the serious lack of judgement exibited.....but again a good diversionary tactic. Bit defensive are we...Goldbug is now to be referred to as "name calling". Your repeated reference to " massive sovereign debt issue the major economies of the world are facing & the impact of printing money." is just a red herring trotted out to blame the rise of Gold on something other than the real cause...which is speculation and pumping by assorted market manipulators. All designed to drag in the poor old suckers. God...how many times can you ignore the obvious.....oh..let me answer that...forever..its terminal denial and its just so tiresome to keep seeing. How about something original for a change.
Birmanboy, you are obviously a very angry person. I don't feel hard down by at all I just don't resort to name calling etc. Just because I am bullish & have given the reasons why I am bullish doesn't make me a gold bug. I was bearish gold when it spiked through to $1920 & called it a bubble to all my clients, however like all traders I select when to be bullish & when to be bearish & now I am bullish. I notice you again ignore the question re the massive sovereign debt issue the major economies of the world are facing & the impact of printing money.

Skol, you may think it has no value, the great Warren Buffett may think it has no value, however a lot of people see it as money or the only true hard currency. I see it as a currency with no boarders or any government printing press, although 2700 tons is produced annually. Again I hear no basis for your stance on gold other than its in a bubble & no acknowledgement of the massive sovereign debt issue that the US, Japan & Europe are facing or what effect printing money will have on their currencies or withdrawal of QE will have on equity markets. You say you can read market bubbles, I think you are swept up in one in the US equity market, being pumped up by QE. Anyway Skol, I appreciate your views & it wouldn't be a market without differing ones. Cheers Daytr

BIRMANBOY

21-05-2013, 06:12 PM

PT..you just dont get it.....its not just a tradeable instrument..its a religion. An old time, praise the Lord, bang the pulpit, get down on your knees sinner and repent..religion. Give it the respect it deserves or be forever cast into the fires of the dammed. ...(So help me God)
In my ignorance I fail to understand why you can not just buy it if it is in an uptrend and sell it when it is not. It's just stuff after all.

Best Wishes
Paper Tiger

Disc: Once had a 9 carat gold wedding ring but after 25 years now have a silver one.

Daytr

21-05-2013, 06:12 PM

Birmanboy, you would be a great candidate for being a goldbug, you refer to market manipulators, hmmm where I have I heard that before oh, yes by the goldbugs. Massive sovereign debt is a red herring, wow I've never heard it called that before, really I never have. So it doesn't exist or just isn't a problem? If the US gets downgraded & I am only saying if, then it will have ramifications for the USD & US debt pricing. This is a story imo that will only get bigger in the coming months.

Skol

21-05-2013, 06:20 PM

Daytr,

I've had a look at your posts on HC, it's shameless goldbug scaremongering, but WTF, let the PM fans 'back the truck up'. More entertainment.............

When gold and silver plumb new unheard of depths I'm not sure you'll be so welcome, but I'll always be here for the debate if it makes you feel better.

elZorro

21-05-2013, 06:26 PM

In my ignorance I fail to understand why you can not just buy it if it is in an uptrend and sell it when it is not. It's just stuff after all.

Best Wishes
Paper Tiger

Disc: Once had a 9 carat gold wedding ring but after 25 years now have a silver one.

PT, you have my utmost respect of course. I don't have any gold holdings, just an interest in a couple of small explorers. But this thread is worth looking at, because the economies of the world, in particular the US, are reflected in the behaviour of the gold price. When traders get scared, gold goes up. Often dramatically, like last night. If anyone knew for certain what gold was going to do over the next few years, they couldn't help but do well from the information. It's also a sort of a proxy for learning about economics. Some will choose not to delve too deeply (not you, I hasten to add) and will regale us with the same homilies and pub talk, ad infinitum. That's OK too. :)

BIRMANBOY

21-05-2013, 06:30 PM

How many times do I have to repeat myself....well obviously way more than one could hope for. Terminally, day in day out. How completely and utterly boring for myself and my guess is anyone else reading this thread. Believe what you want. Ignore the reality of the cause of the huge rise and blame whatever you want..its self delusion as far as I'm concerned. However you are allowed to believe what you want. Lets just focus on the one undeniable fact. Its causing a lot of people to lose a lot of money. End of story. End of the "golden weather".. lets move onto an investment that is less volatile and doesnt cause so much damage. You can buy it or invest in its miners or whatever as much as you like but selling it as an "investment" is just reprehensible.
Birmanboy, you would be a great candidate for being a goldbug, you refer to market manipulators, hmmm where I have I heard that before oh, yes by the goldbugs. Massive sovereign debt is a red herring, wow I've never heard it called that before, really I never have. So it doesn't exist or just isn't a problem? If the US gets downgraded & I am only saying if, then it will have ramifications for the USD & US debt pricing. This is a story imo that will only get bigger in the coming months.

Daytr

21-05-2013, 06:46 PM

Suggest you get out of the kitchen the Birmanboy. Yep its volatile as hell, always has been always will be. Gold can be a cruel mistress & silver is its even meaner sister. People lose a lot of money & others make a lot, its all part of the equation. Reprehensible huh, wow there you go again. Investing in mining including gold mining is exactly that an investment. Some of my gold stocks even pay dividends.

Anyway night all, be interesting to see where we end up tomorrow, well for me at least it will be interesting... haha

BIRMANBOY

21-05-2013, 06:48 PM

Oh EZ get your nose out of his butt...its so unbecoming.
PT, you have my utmost respect of course. I don't have any gold holdings, just an interest in a couple of small explorers. But this thread is worth looking at, because the economies of the world, in particular the US, are reflected in the behaviour of the gold price. When traders get scared, gold goes up. Often dramatically, like last night. If anyone knew for certain what gold was going to do over the next few years, they couldn't help but do well from the information. It's also a sort of a proxy for learning about economics. Some will choose not to delve too deeply (not you, I hasten to add) and will regale us with the same homilies and pub talk, ad infinitum. That's OK too. :)

BIRMANBOY

21-05-2013, 07:00 PM

SO people "lose a lot of money" somehow that doesnt fit into most peoples idea of what investing should look like. Avast there all you manly pirates... invest with me Daytr and lets see whatya made of. Ya might make money or not but sure as hell you'll get some hair on ya chest
Suggest you get out of the kitchen the Birmanboy. Yep its volatile as hell, always has been always will be. Gold can be a cruel mistress & silver is its even meaner sister. People lose a lot of money & others make a lot, its all part of the equation. Reprehensible huh, wow there you go again. Investing in mining including gold mining is exactly that an investment. Some of my gold stocks even pay dividends.

Anyway night all, be interesting to see where we end up tomorrow, well for me at least it will be interesting... haha

Daytr

21-05-2013, 07:28 PM

You can misconstrue what I say all you like Birmanboy. I wasn't referring to my fund although no investment is risk free. Suggest you stick to your yield plays a game of diminishing returns I might add. I would certainly prefer you don't paraphrase & misquote me. I came here to log out for the evening & now I shall.

Daytr

21-05-2013, 09:40 PM

Karlos, I find that a very strange question re my ethnic origin & really not sure why it would make any difference.
But if you must know I am a European Kiwi who grew up in the Hawke's Bay & Bay of Islands & have been working overseas for 20 years in London & Sydney. Funny I like Jim Beam also. I have been completely open what my position is & I have returned to NZ for family & lifestyle & am looking to start a Resources fund that has a focus on gold juniors but also other mining stocks such as iron ore, copper etc. So if that's an agenda, there it is. Last post for today I promise. :-)

elZorro

22-05-2013, 07:11 AM

They got the wrong guy..

Skol

22-05-2013, 07:40 AM

Gold - the dog of 2013.
----------------------------

An ounce of gold, often represented by a single American Eagle coin, is a fairly easy thing to visualize. Even a 400 ounce gold bar, like the ones held at Fort Knox, is a fairly fathomable concept. But when you try to get your head around just how much of the metal an ETF like the SPRD Gold Shares (GLD) owns, it can get a little daunting. And the same is true when you try to track how much they've had to sell as the price of gold slips to a 2-1/2 year low.

"300 tons," says Tom Lydon, the editor of ETF Trends, in the attached video, calling the disposal of over 600,000 pounds of gold so far this year "amazing" and "incredible."

This, of course, as the largest metal-tracking fund has gone from briefly being the biggest ETF, to being a top-5 player after being cut in half to approximately $46 billion in value today, holding just over 1,000 tons of gold in its vaults.

While gold is clearly out of favor forcing the hand of holders to sell into weakness, Lydon says it won't always be that way.

"Central banks maybe aren't as concerned," he lists as one reason why gold is down. "I think the average investor, with stocks and bonds doing so well, I think they say, 'hey, I don't need to hedge, so that gold position I had, I'm going to put that into stocks for now.'"

It's a reality, a trend, a self-perpetuating sell-off that seems to have no bottom in sight, as the darling of last decade turns into the dog of 2013.

"It's been tough enough to beat the S&P this year, and if you've had money in gold, that has hurt you," Lydon says.

------------------------------
Goldbugs rubbish Ben Bernanke, a man of vast qualifications and experience, they also rubbish the Fed as a bunch of incompetent idiots who don't know what they're doing but actually it's the other way around.

The goldbugs are a motley collection of enthusiastic amateurs enamoured with morons like Peter Schiff, Mike Maloney and whose reading material consists of KWN and Zerohedge.
A while back a poster on HC posted 'we are all economists here". That statement just about says it all. lol
The goldbug vitriol becomes more and more desperate as time marches on and the 'great crash' hasn't happened. All you have to do is look at who's making money and who isn't. Quite simple.

Huang Chung

22-05-2013, 08:42 AM

Well done on your call on gold Skol.

I've been fortunate in that I sold my gold stocks a little while ago. My most recent holdings were in SLR, BDR and SAR....all badly smashed (especially SLR and SAR).

Rush of blood yesterday had me dip my toe back in the water with a small parcel of Regis shares. Not as beaten up as the others, and probably won't recover as well either, but with a low cost base and plenty of gold in the ground, RRL should continue to weather the storm.

I'm guessing gold might stage a bit of a recovery here, as it did seem to fall too far, too fast, but who would really know.

Anyhow, it's good to have a bit of skin back in the game, for a punt if nothing else.

Skol

22-05-2013, 09:13 AM

HC,

Good to hear from you, hope all's well. Take it easy with those goldies, could be a down day HUI -2.75%, GDX -2.5%, GDXJ -3.9%, SIL -1.63%.

Huang Chung

22-05-2013, 09:21 AM

Don't worry Skol, I'm not game to really dive in deep. Even my RRL purchase was a half size parcel (ps...I actually bought it Monday, not yesterday, at $3.63). So far so good, but fortunes can turn on a dime, as you know.

Avatar of a 747-800 Skol....have you been on one yet?

Skol

22-05-2013, 10:10 AM

Avatar of a 747-800 Skol....have you been on one yet?

No unfortunately HC, but on 747-200 and 747-400 for 32 years this month. Might be a world record.

Huang Chung

22-05-2013, 10:27 AM

If you don't mind me asking, in the cockpit, down the back end or wielding a spanner?

Skol

22-05-2013, 10:41 AM

If you don't mind me asking, in the cockpit, down the back end or wielding a spanner?

Up front, 20,000+ hours on 74's.

Huang Chung

22-05-2013, 11:03 AM

Way to go Skol!

Serious question...wouldn't it be more fun flying something like a 737 around on short hops, where you actually get to do a bit more real flying?

Skol

22-05-2013, 11:13 AM

Way to go Skol!

Serious question...wouldn't it be more fun flying something like a 737 around on short hops, where you actually get to do a bit more real flying?

Always been long-haul, DC8's, DC10's, don't mind working all night but getting up early in the morning and doing 6 sectors doesn't do much for me, and most of the time you end up back at the same place. Prefer to overnite in a big city than some provincial place, avoiding airport traffic 4 days a week, that's how I got into shares, financial matters, bubble watching, the gold debate, etc, plenty of time in big cities to read the FT, NY Times, Frankfurter Allgemeine, HNL Star-Advertiser, SFO Examiner, WSJ ,etc. Better restaurants too. lol

Hoping I was gonna go the -8, but don't think so.

Daytr

22-05-2013, 12:09 PM

HC, I know the guys at Regis very well, a great management team who delivered with Equigold & now Regis & they have an ex Hill 50 man on the board as well, a Kiwi I might add! Not sure if we have seen the bottom yet in regards POG, although the $1320 area should now act as support. I still think we may see $1250ish. What I have noticed is generally what I would deem the better junior & mid tier gold producers seem to have bottomed at least for now anyway & some are on the rise if only slightly. The ones with not so low cost are still vulnerable in my book. Good luck!

Daytr

22-05-2013, 12:14 PM

So what did I miss from karlos? haha Sorry I shouldn't ask don't want anyone else to get in trouble.

Disappointing night for gold with stops above $1400 not even attempted, lets see where Asia takes it in a few hours. I bet I know where Skol thinks they will take it. haha

Daytr

22-05-2013, 01:19 PM

Not sure if many of you saw this, however some hedge funds although maybe leaving or shorting gold are loading up on call options on miners & Soros on junior miners. Admittedly $25M is not a lot for Soros, although it is a stack of call options in what would be very low priced shares.

http://bullmarketthinking.com/gold-bug-hedge-funds-collectively-report-over-183mm-in-new-call-option-positions-on-miners/

Skol

22-05-2013, 02:05 PM

What will ultimately be the goldbugs undoing is their doggedness, their belief in a great crash, manipulation, and Fed incompetence, it's a religion, a cult even, that will see diehard goldbugs ride it all the way to the very bottom, determined to prove that they're right and everyone else is wrong. Most goldbugs will be overweight too, because gold is going to $2000, $4000, $10,000, $50,000 and one dude reckons $1m/oz, a classic get-rich-quick-scheme.

You'd think a $550 correction would cure them, a few have flaked off, reeling from losses on their 'goldies', many having followed the flawed gold purchases by the central banks who are licking their wounds as well.

Daytr

22-05-2013, 02:22 PM

Agree, Skol, Goldbugs that have an unhealthy relationship with gold. That's why I got out of gold stocks when it was shooting for the stratosphere of $1920. Its just my personal view is its about time to get back in, partially at least as I agree it could still go lower yet, however it will be interesting if $1320 holds for a 3rd time, may or may not. One thing I find ironic is that you seem as strong a conviction or the equivalent of a gold atheist as the gold bugs are religious about it. I admit I find gold fascinating as it brings out an incredible amount of passion from both gold bulls & bears. To me its just an asset that probably should have little or no value, however a lot & I mean a lot of the world think otherwise & the CBs of Japan, Europe & the US are doing their best to devalue their own currencies. Incidently deliberately devaluing your currency was once a treasonable offence...

slimwin

22-05-2013, 02:30 PM

Skol, why don't you see if you can get a job for Cargolux? B747-8F's so no self loading freight (passengers) which makes life easier. An extensive list of destinations you never wanted to go to plus some good overnights. I was a flying spanner for them for a few years and we had quite a few expats living the dream. They used to come through AKL twice a week but I think thats over for now. I remember one of our FO's saying he looked at a job at AIR but their captains salary is only the same as CV FO's.

You'd have to learn how to make your own coffee though!

Skol

22-05-2013, 02:35 PM

slimwin

22-05-2013, 02:37 PM

Fair enough too. Enjoy that time!

Daytr

22-05-2013, 03:00 PM

1969 wow! That was the year I was born! haha. Nice one Skol, you have obviously lived a colourful life!

Skol

22-05-2013, 03:14 PM

4535

Abemama, 1971, long before the great gold debate. lol

Daytr

22-05-2013, 03:19 PM

Wow! Very cool!

Skol

22-05-2013, 04:58 PM

http://www.cnbc.com/id/100756275

Just what I reckon, the goldbugs have got it all wrong, there will be no hyperinflation, Zimbabwe or Weimar republic.

Huang Chung

22-05-2013, 05:53 PM

Thanks for the info Daytr.

Skol....I'll catch you on Flightradar24.com. You'll have to wave though, so I'll know it's you :-)

Daytr

22-05-2013, 09:32 PM

Hi Skol, that piece by cnbc is absolute rubbish. 'Bank reserves are in effect embryonic money that hasn't been born yet. The bank can give birth to new money based on those reserves, using the fractional reserve system to create money and lend it out. But until those loans have been made and the new money born, reserves are just potential money sitting in the central bank's womb. ' Have you ever heard of any rubbish like that. Embryonic money, give me a break. That's right up there with some of the gold bug rubbish that's spouted. There has been rampant inflation for the about 10 years give or take when the oil price went through the roof & with it copper & health insurance costs etc. Somehow this doesn't translate to official inflation! Now as oil & the like are coming off we are likely to enter a period of deflation but perhaps the only thing countering that is QE, printing money to offset the deflation in commodities & the like. I'm not sure if we see hyper inflation, we might, but what we are & will carry on seeing is devaluing of currencies that are being impacted by QE which is the same in my book. Devaluing purchasing power has the same effect as inflation so in effect that's exactly what it is.

Halebop

22-05-2013, 11:48 PM

Assume QE causes high inflation. New Zealand so far has avoided QE. So if QE causes inflation and NZ doesn't do QE - the NZ$ Price of Gold might not generate a lot of excitement.

The problem with CPI is that nobody buys an average baskest of goods. I'd like to see representative samples to reflect different stages of life and economic situations (Like CPI for the under-employed, Young Adult, Young Family, Middle Aged Family, Retirees etc). I'm sure political operators could find lots of reactive material in such a toolset as well. In any case liberalised trade has mitigated a lot of inflation over the last 20 years (High health insurance and milk etc inflation has been offset by gadgets and clothes etc deflating).

Where I do think QE (with some help from demographics) has created inflation is investments - bonds, property, shares... ehem, maybe even gold. The extra liquidity isn't necessarily being consumed but it has to be invested somewhere ...and somewhere has gone up. Instead of CPI, if we contrived a purchasing power index for retirees it would have to be impacted by lower yields on one hand but higher capital values on the other. Too bad if you nervously sat on cash through the GFC and now want to switch to income in retirement...

Now if Bill Gross is right and the very long Bond bull market is done, we will see rising interest rates. This would likely lead to a solid correction on asset price valuations (I think this or next year). ...and still CPI may well be below 3%.

Skol

23-05-2013, 07:26 AM

Daytr

"There has been rampant inflation for the about 10 years give or take when the oil price went through the roof & with it copper & health insurance costs etc. Somehow this doesn't translate to official inflation!"

You have been reading KWN and Zerohedge, they perpetrate the nonsense that the official figures are incorrect, you are a conspiracy theorist after all.
Gold down $50, looks like this could be the beginning of round 2.

Skol

23-05-2013, 07:45 AM

Thanks for the info Daytr.

Skol....I'll catch you on Flightradar24.com. You'll have to wave though, so I'll know it's you :-)

HC
I'll have a look at it, working in a couple of days.

Skol

23-05-2013, 09:01 AM

SKOL I try to keep up with your trumpeting ( which has been dribbling on for about 4 years).
In that time you have been beating a drum about the gold price is going to crash.
You seem very quick to pat yourself on the back if gold moves down but since you have been scorning gold it is up 45% and has been up as high as 90%.

SURELY YOUR DRUM MUST BE WEARING OUT BY NOW.

Aaaah, no, I got into the debate when gold was $1100, so it's up 22%, not 45%.
Gold has been a suckers bubble, now deflating, and in fact it crashed about a month ago, but the crash isn't over yet, last time there was a major gold crash it declined for 20 years, probably going to be the same this time.

I have been warning for years about the danger of over-allocation to a useless yellow metal, and this is the consequence for one institution. I remember when they bought.

http://online.wsj.com/article/SB10001424127887323463704578497230480765680.html?m od=trending_now_5

US$300,000,000 - ouch. Such idiots should get the sack!

BIRMANBOY

23-05-2013, 09:04 AM

He can recover it with the skin being shed by all the countless suckers who bought on the way up to $2000:scared:
SKOL I try to keep up with your trumpeting ( which has been dribbling on for about 4 years).
In that time you have been beating a drum about the gold price is going to crash.
You seem very quick to pat yourself on the back if gold moves down but since you have been scorning gold it is up 45% and has been up as high as 90%.

SURELY YOUR DRUM MUST BE WEARING OUT BY NOW.

Daytr

23-05-2013, 12:53 PM

Morning all. Skol, I never read KWN or Zerohedge. Not saying its a conspiracy I just don't believe the numbers accurately reflect the real cost of living. Just go shopping as one guy on HC said, or as I like to say, look back at your power bill. Halebop, in regards the cost of gadgets i.e. technology agree they come down in price as they are refined or become 'dated', however what is not included is replacement cost. i.e. previously people didn't need to update their phone or laptop, tv every couple of years & this adds to the cost of living, but its not taken into account. Same could be said for cars to a lesser extent. Things are becoming more 'disposable'. What's your thoughts on that Halebop? Maybe its just what I consume has gone up dramatically in the last 10 years, but I don't think so. Anyone else dispute their cost of living has gone up at least twice what the official figures say? I recon inflation is running north of 5% pa & I think that's conservative.

Halebop

23-05-2013, 07:52 PM

Halebop, in regards the cost of gadgets i.e. technology agree they come down in price as they are refined or become 'dated', however what is not included is replacement cost. i.e. previously people didn't need to update their phone or laptop, tv every couple of years & this adds to the cost of living, but its not taken into account. Same could be said for cars to a lesser extent. Things are becoming more 'disposable'. What's your thoughts on that Halebop? Maybe its just what I consume has gone up dramatically in the last 10 years, but I don't think so. Anyone else dispute their cost of living has gone up at least twice what the official figures say? I recon inflation is running north of 5% pa & I think that's conservative.

Would certainly agree that many companies have got better at building redundency into their product cycles.

My Dad now owns a flat screen TV. His first colour TV about 40 years ago was a Sanyo in a giant wooden box. It was only a few hundred dollars but both in his mind and I suspect in real disposable income terms it was the most expensive TV he ever purchased. 20+ years later he bought a larger CRT screen for $2,500. The more recent Samsung LCD screen was sub $1,000. If he gets 10 years out of it (and his buying history says he will probably die before he buys his next TV) then it hasn't got more expensive. Maybe the real difference re "disposable" is demographics and the power of marketing?

In the inflation context I think consumption is a key trigger but it doesn't really matter why someone consumes. If I have $50,000 to spend then it's my choice to replace my smart phone every year or not or buy cheese instead and the index doesn't care why I choose to do either. For me the problem is the smart phone/TV etc portions of the index reflects some concept of average and not what everyone is individually doing. I have a 2nd hand Galaxy S1 gifted to me so neither smart phone replacement cycles nor smart phone inflation/deflation registers high on my consciousness yet a portion of the CPI numbers that I do subconsciously build into my financial decisions will reflect the many people who do buy them more regularly.

Anyone buying a house in Auckland would certainly understand where inflation is higher than 5% though!

Skol

24-05-2013, 02:17 PM

Daytr,

If you are a well-informed ex-bankster then I would have thought that Japanese shares were the way to go, a contrarian play I've been accumulating for 17 years that is like my own personal printing press atm, instead you are trying to cajole punters into an asset allocation that has had the mother of all runs, gold and silver. It's all over there buddy, there's too many walking wounded. I've spent a lot of time in Japan and wouldn't be at all surprised to see it eclipse China to become the second biggest economy in the world again.

JBmurc

25-05-2013, 10:23 AM

Aaaah, no, I got into the debate when gold was $1100, so it's up 22%, not 45%.
Gold has been a suckers bubble, now deflating, and in fact it crashed about a month ago, but the crash isn't over yet, last time there was a major gold crash it declined for 20 years, probably going to be the same this time.

I have been warning for years about the danger of over-allocation to a useless yellow metal, and this is the consequence for one institution. I remember when they bought.

http://online.wsj.com/article/SB10001424127887323463704578497230480765680.html?m od=trending_now_5

US$300,000,000 - ouch. Such idiots should get the sack!

I'm sure we were debating Gold pre- $1000oz ....I've been bullish since $600-700oz....If it wasn't you might have been someone else ...always laugh at the guys that gave me a hard time on OIL going past $40bbl they said it was a bubble ...the world couldn't survive with it so high ....now the fact is if oil even got close to those old highs half of the world producers would be out of business ....the same is happening to the Precious metals producers.... discovery Grades are reducing costs are rising ....but populations of new buyers are rising in the east the last boom bust of silver/gold was driven by only the western world ...

Skol

25-05-2013, 12:23 PM

JB,
Too much KWN-the transfer of gold from West to East is a myth perpetrated by by the goldbug press. There has been some buying but it's mostly by a bunch of unsophisticated older chinese women referred to as 'aunties', get on board with them if you so desire.
=================
On Sunday afternoon, a microblogger in Beijing logged into Sina Weibo, China’s leading social media platform, to gossip about the “auntie” next door. It’s a broad term of respect for an older woman, and his followers understood precisely what he meant when he tweeted, “The auntie next door used all of her retirement savings to buy gold. When asked what she’d do if prices keep dropping, she replied that if everyone kept buying gold, the price wouldn’t drop.
=================

There's also this from today's USA Today.

===========================

http://www.usatoday.com/story/money/columnist/waggoner/2013/05/23/gold-investing-waggoner/2355939/

Skol

26-05-2013, 09:57 AM

The Texas Chainsaw Massacre - from Investing Decoded.

May

25
Losses in a worthless asset
Anybody from the State of Texas will most likely be able to tell you the story surrounding the horrible Battle of the Alamo. It was a horrible day for Texas, as all of the Alamo's defenders died to General Santa Ana. This battle was so gruesome, that kids still learn about it in history classes today.

Another bloodbath is taking place in Texas today, although (fortunately) this bloodbath is only on paper. Sadly enough, those involved don't even see the massacre happening and are more than willing to let it continue.

This modern day massacre is the losses taking hold in the University of Texas' Endowment.

As reported in this weeks Wall Street Journal, "Gold's slump has saddled the second-largest U.S. college endowment with more than $300 million in paper losses." The WSJ continues, "The organization holds about $1.1 billion of gold-related investments, down from about $1.4 billion before gold began heading south last October."

$1.1 billion invested in Gold.

Why would an organization pile so much money into an asset with no intrinsic value?

Bruce Zimmerman, the endowment's CEO explains, "Gold is a hedge, and it still fills that role."

I would love to analyze the hard numbers that Mr. Zimmerman has, because Gold certainly does not look like a hedge to me.

Investors buying gold often do so because of 3 principal reasons. The first reason is because of inflation. The second reason is because of the Federal Reserve and it's aggressive polity of monetary easing. The third reason is that it's a hedge on the stock market (IE, at the next recession, gold will increase/retain it's value while stocks decline).

All 3 of these reasons are fundamentally flawed, as I will explain below.

Inflation does have an impact on gold, but only to a certain degree... Given the monumental run in the price of gold, any future inflation is already priced into the metal, meaning investors buying the metal today will experience negative real returns in the future.

To reach this conclusion about inflation, I analyzed the price action in Gold from 12/1/04 to 4/1/13 , relative to the Consumer Price Index (CPI).

Between 12/1/04 and 4/1/13 (the last reported level of the CPI), the CPI increased 22.19%. During this same period gold increased almost 200% (197% to be precise, when using the GLD ETF). Investors in gold as an inflation hedge would have to see the CPI go up to 565.19, which would be an 143% increase from current levels.

This is not going to happen.

Inflation is not going to go up 143%.

And even if it where to happen, in theory, gold would be flat, as the current price already prices in 143% inflation.

Moving on, the second principal reason investors are buying gold is because of the Federal Reserve and their Bond Buying.

This reason is the most absurd of the 3, as the Fed's monetary easing has no realistic link to the price of gold.

Back in the days of the gold standard, for every dollar printed, The Fed was forced to buy an equal amount of gold. This is no longer the case. But even without a gold standard, Gold investors claim that The Fed's money printing will cause runaway inflation (as there will be more money in the economy and more demand for a finite supply of commodities, which will increase in value). This notion is false, as The Fed is printing money, going out and buying treasury bonds and the money is sitting in the Treasury's safe and/or repaying maturing bonds.

Only if the Government where to go out and increase it's spending would runaway inflation take place. This is certainly not happening with out do-nothing congress. Therefore, The Fed is printing money and it's hanging around doing nothing, and not causing inflation.

Finally, the 3rd principal for investing in Gold is that it's a hedge on a decline in the Stock Market. To this, I point to the results of gold since 2004. From 12/1/04 to date, the S&P 500 was up 61.7% (when adjusted to include dividends). Over this same period, Gold was up 196%. How is this a hedge? If Gold really was a hedge to declining equity prices, we most certainly not see it outpace the stock market in this fashion.

Gold continues to be in a classic speculative bubble and anyone who claims to tell you when it will end probably doesn't know what they're talking about. That's why I simply steer clear of the worthless precious metal and don't bother betting against it.

But, if you're the University of Texas, you can continue to believe that "gold is an investment that likely will benefit if inflation ever picks up, or if financial markets turn unhealthy as investors chase stocks and risky bonds, something generally called "asset inflation," as seen in the U.S. housing bubble."

Daytr

26-05-2013, 08:56 PM

Hey Skol, the PE of the NIKKEI is running at around 29 if you don't think that's a problem or a bubble then by all means you should keep investing in the Japanese share market. Japan is rolling the dice that they can reinvigorate their economy & perhaps they will to some extent, however the mountain of sovereign debt is already unsustainable & getting worse & if they do get some growth or even worse inflation & they have to raise interest rates the interest bill escalates & massively. The percentage of tax take that goes to paying interest alone on Gov. debt is already substantial & higher interest rates will only make that worse. You talk about the 'aunties' being the gold buyers is China, well its the Moms & Dads of Japan that have been buying JGBs & as they age they become sellers to fund their retirement. The Japanese Government will need to look to new buyers for their debt & they wont be willing to be paid the ridiculously low interest rate that Mr & Mrs Wantanabe has in the past. I worked for a major Japanese corporation for the best part of 10 years (based in Australia) so I have a fair background in how the Japanese tick etc. By no means am I suggesting anyone over allocate their portfolio into gold equities & I wouldn't suggest anyone do that in any market. When I was working for the Japanese I always thought their best chance was their proximity to China & that the certainly helped, but the Chinese certainly have no love for the Japanese. As for Japan regaining their No2 ranking I would pick countries like India, Brazil & perhaps Russia are more likely to eclipse Japan in regards size of economy than Japan regaining No 2. But that's just my view & yours obviously differs substantially.

Skol

27-05-2013, 08:09 AM

JBmurc

27-05-2013, 10:42 AM

India, Brazil & Russia outsize Japan, you gotta be joking, right? Mind you I'd sooner bet on those countries that put my faith in metal that you hope someone will pay more for than you did.

Russia is still in the dark ages recovering from 80 years of communism, a dictatorship rent with corruption, India is a country where everyone desires a public service job, a job for life, where protectionism and bureaucracy are the order of the day.

South America? Never been there but plenty have done their dough down South, a bit like Africa, boomtimes are just around the corner while waiting to get over the latest socialist revolution.

The 'great crash' isn't gonna happen, and the 'money printing' referred to is not money printing at all it's swapping reserves and bonds to bring down the cost of borrowing without increasing the assets on the balance sheet.

I still keep reading letters and posts that gold can't drop much further because it will be less than the cost of extraction. To illustrate how absurd this theory is you could equate it it to the cost of new car cannot drop any further because it will be less than the cost of production = the assembly line shuts down. Right?

well of course it does... look at "Ford Australia" or Aus mitz ....costs can only out way profit's for only so long ...GM . Ford would have collapsed had it not been bailed out from tax players..

the Fed made Americans a promise: In pursuit of that goal of economic recovery, it will keep buying bonds -- as many as necessary, for as long as necessary, to ensure that the federal funds rate (the rate at which the Fed loans money to banks) is at essentially zero percent
--so the FED creates 80 billion per month ...to buy debt bonds ......this adds to US treasury debt heading towards 20 trillion ...by 2020 it will be near 25 trillion ..... swapping reserves for bonds ?? hey skol I'll swap you endless JBMURC Bonds 2% return for the next 30yrs for your NZD's LOL

skid

27-05-2013, 11:28 AM

Id be very careful with the Japanese share market.
Right now it is ticking along with all that newly printed money.So far it has decreased the value of the yen[making your investments worth less] but the Yen is NOT the international currency. Its a dangerous game and your investments could easily crash and burn along with your crystal ball.
Every one knows about China,but theres talk that ,not just yet,but INDIA is the one to keep your eye on.....and I wouldnt be so quick to discount BRAZIL

JBmurc

27-05-2013, 02:45 PM

Skol

27-05-2013, 03:23 PM

Jewellery demand in China is now 185 tonnes in the first quarter. If we extrapolate for the full year we can easily see 740 tonnes. With Indian demand clearly in excess of 1000 tonnes, together these two nations brings in 1740 tonnes out of 2200 tonnes produced by all mining operations globally ex China ex Russia or roughly 80% of global production."

Good luck with your extrapolations, that's what the suckers did before the 1981 gold crash, I witnessed the entire debacle and subsequent bankruptcies and ruination.

Suckers were reading in advance what the price might be, drawing lines up the chart.

"It's gone up $50 this week, so it must go up $60 next week." lol

Nothing goes straight up (N225), the same as nothing goes straight down. (gold & silver)

digger

28-05-2013, 09:07 AM

14

6

7

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Print /
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Click here to find out more!

Commercial participants in the gold market, also known as “smart money” given that they work in the industry as opposed to being speculative trend followers, are the most bullish on gold in nearly five years.

As prices declined over the last few months, commercials - those involved in the production, processing or merchandising of a commodity - have been busy buying futures contracts and covering short positions, according to data from the Commodity Futures Trading Commission.

More Related to this Story
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Full Report

Commitments of traders data suggests gold will rise

Their position rose from a low of a net short 269,270 contracts in October 2012 to the present net short position of 84,122, notes a report from Euro Pacific Canada today. This means commericials initiated new long positions, and covered previous shorts, resulting in an increase in their total net position by just over 185,000 contracts.

It’s a different case for the other two groups that the CFTC tracks in the commodity futures markets.

Large traders, mostly made up of hedge funds that are often trend followers, are currently net long 83,726 contracts - the most bearish reading since the October 2008 bottom. The group tends to be the most bearish at market bottoms and the most bullish at market tops, suggests Euro Pacific Canada analyst Dima Kash.

The third group, small traders, are those that control a very small portion of open interest in futures contracts, but their actions tend to help gauge retail sentiment nonetheless. Historically, they have been on the wrong side of the gold market at key inflection points, according to Mr. Kash. The group this month had a net short position of 1,704 contracts, an extremely bearish reading not seen since February 2001 when the gold market was about to begin its decade-long bull-market run.

Mr. Kash’s conclusion? “The current dynamics between the three groups signal that a significant intermediate-term bottom is forming in the gold market. This does not necessarily mean that prices cannot head lower, but it does mean that prices are attracting commercial buying interest – the smart money – at levels not seen since the financial crisis when gold declined from about $1,000 an ounce and hit a critical low at about $700 an ounce,” he said.

He thinks the key for investors now is to look for signs of a bottom, and technicals point to some important clues.

Click here to see Mr. Kash’s full report, which Euro Pacific has given us permission to republish in its entirety. It provides some interesting charts on the three group’s positioning in the futures market, as well as his

what are the thoughts on this???

JBmurc

28-05-2013, 10:17 PM

-the Fed Chairman before Greenspan, said in 2009: “Gold is my enemy. I am always watching what gold is doing.”

-George Soros, the consummate political insider investor, bought $25m of call options of the North American GDXJ Junior Gold Miners Index in Q1 2013. He also increased his GDX shares by 30% to $100m, but reduced his shares in GLD by 20% to $82m.

-In the roaring 20’s, before the crash of 1929, share prices were frequently moved up and down by “pools” of brokers, investors, and finance houses, and these machinations were openly discussed in the newspapers. Is this ok? It’s a free market, so you can do anything that’s rational and makes a profit, right?
Well after the crash it didn’t seem like such a good idea. In the US it was outlawed in 1933 and 1934 by the Glass-Steagall Act and by the establishment of the Securities and Exchange Commission (SEC) to oversee “fair trading” in the markets. But the Glass-Steagall Act was repealed in 1999, and the SEC is a toothless tiger when it comes to precious metals (it has been investigating manipulation for several years, but oddly enough cannot bring itself to any conclusion).

http://www.321gold.com/editorials/evans/evans052713.pdf

Skol

29-05-2013, 08:00 AM

Not to worry JB, paranoia's a common thread amongst goldbugs, they always feel as if they're up against it and the system's screwing them, the real story though is that gold and silver are largely irrelevant in today's markets. Why would you own a chunk of gold or silver when you could buy a gold ETF if you felt that way?

All the gold indexes down again last night, another bad day coming up for the XGD.

Last 12 months:

S&P500 +22%
HSI +21%
N225 +68%
DAX +30%
FTSE 100 +26%
XJO +25%
------------
Gold -11%
Silver -20%
HUI -39%
GDX -39%
GDXJ -44%
XGD -43%

Goldbugs will catch on one day. In the meantime all looks to be going OK with the US economy, consumer confidence is up, house prices are motoring away, hotel room prices are increasing at about 7%pa on the West Coast, tourism's booming. It's all hunky dory.

skid

29-05-2013, 10:14 AM

Goldbugs will catch on one day. In the meantime all looks to be going OK with the US economy, consumer confidence is up, house prices are motoring away, hotel room prices are increasing at about 7%pa on the West Coast, tourism's booming. It's all hunky dory.[/QUOTE]

I think I may have read a quote very similar to that from 1929--LOL

skid

29-05-2013, 10:24 AM

All comes in cycles eh Skol? We looking for 40,000 N225 again?

http://www.kitco.com/reports/KitcoNews20130528DeC_focus2.html

I think they have a good point in this article--people are reluctant to jump in to Gold ATM because they fear that another sell off could come--but if another fear comes along that is greater than that[sharemarket?] then things could change substantially.
Of course everything seems pie in the sky and being paranoid........until it happens

Daytr

29-05-2013, 02:32 PM

Skol, if I truly believed the financial institutions & CBs of the West were conspiring against gold then I would have stayed well away long ago as they have far more ammo than the gold bugs or the mums & dads etc. Its because I don't believe that, that I think the market will see sense & realize that the debt burden particularly in Japan is a real problem, let alone the US & Europe. I believe the market see gold as something that is bought & sold valued in currency which the CBs are willingly trying to devalue & the banks & hedgies will go long or short when they view it profitable to do so. My view is that we aren't far from that point & the massive spec short position will at some point need to be covered. What will spark that is any number of global sovereign debt issues around the world or a highly inflated Japanese stock market or it could be some thing geopolitical.

Skol

29-05-2013, 02:50 PM

Daytr,

I've heard all that before - for years. "the massive short position". What massive short position? Global sovereign debt? Debt, schmet, if the 'big one' was gonna happen it would've happened by now, for sure.

Gold is a fad whose time has past, an anachronism, there's a gold boom every generation as the newbies latch on to some drama which has, or is going to take place that will send gold to the moon.

The GFC's over.

Daytr

29-05-2013, 03:44 PM

Skol, The massive short position is on Comex it's been publicized widely & has reached a record size, but no doubt you think that is another conspiracy dreamt up by the gold bugs. 'Debt, schmet' its that sort of thinking that let the debt in most of the major economies of the world get out of hand. I take my hat off to you though Skol, you have put it out there, the end of gold & it's thousands of year's of history. But hey you know when to call it, apparently its now, not in the next year or hundred years. Thousands of years of man's link to gold has finished. LOL

Skol

29-05-2013, 09:06 PM

Daytr,

"thousands of years of man's links to gold has finished". LOL (real goldbug jargon)

Here's something you might find interesting about what a great long term punt gold is, I've put it here before.

----------------------

In his book Basic Economics, Thomas Sowell argued that, in the long-term, gold's high volatility when compared to stocks and bonds, means that gold does not hold its value compared to stocks and bonds:
To take an extreme example [of price volatility], while a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.

-----------------------------------
Sounds like a great deal.

elZorro

29-05-2013, 09:18 PM

Interesting choice of timeline again, gold was fixed for quite a bit of it, Skol.

Here is the chart of Comex gold shorts daytr was referring to I think.

http://www.zerohedge.com/news/2013-05-24/forget-prayer-its-lamb-slaughter-time-rational-mans-response-all-time-high-gold-shor

Now where is the bubble?

Skol

29-05-2013, 09:26 PM

elZorro

29-05-2013, 10:34 PM

EZ,

Zerohedge, KWN. lol

"even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure..."

Well let's see shall we, how long do you reckon before the "massive short position" dudes get shafted? I've heard that for years, and I mean YEARS.

It's all too subtle for me, but these shorts make it harder for gold to fall, somehow.

http://www.fastmarkets.com/bullion-desk-news/05282013usgold

Any meltdown, anywhere in the world, will sort out the shorters.

Skol

30-05-2013, 07:29 AM

Bank of America slashes silver forecast by 25%, gold will follow silver - downwards.

http://www.cnbc.com/id/100768976

Skol

30-05-2013, 07:23 PM

Still beating on the same drum SKOL.
If you stop beating your drum for one minute you might notice that gold is not tumbling in value like you keep saying.

Like I said, nothing goes down in a straight line.

I'd just love $1 for every post I've seen in the last few years that said 'the shorters are gonna get burnt". I'm still waiting, it's the goldbugs that are bangin' on about the same old, same old.

It's so tedious that the goldbugs oughta produce a dictionary of goldbug jargon.

I'll start it off:
------

The bankster ruling elite of the fractional reserve banking system, assisted by the Rothschilds, the global massive shorts and the colossal global debt burden, are gonna see gold go the moon following the confiscation of the physical by helicopter Ben and the govnuts.
-------

Hahahaha, your turn.

JBmurc

30-05-2013, 07:30 PM

Bank of America slashes silver forecast by 25%, gold will follow silver - downwards.

http://www.cnbc.com/id/100768976

yes and at the end of the article ---

Widmer added that he was more bullish on gold over the long-term.

"In our view, the gold bull market is pausing. However, we believe the structural rally is not broken, and we see several scenarios that could push prices higher again," he said.

"To pick just one, more affluent emerging markets could increase metal purchases to such an extent that gold could trade at $2,000 per ounce by 2016, even if investors bought only a third of the gold they purchased in 2012."

------GOLD 1406 ------- broken the barriers onwards an upwards

Skol

30-05-2013, 08:28 PM

4563
[QUOTE=Skol;409887]Like I said, nothing goes down in a straight line.
I'd just love $1 for every post I've seen in the last few years that said 'the shorters are gonna get burnt". I'm still waiting, it's the goldbugs that are bangin' on about the same old, same old.

Are you a little bit simple SKOL, the shorters of gold have had their heads knock off 5 out of the last 6 years. You must have tunnel vision.

I'm not the simple one, the party's over buddy, well and truly, and if you're over-allocated to gold (or especially silver) there might be a few lean years coming up.

elZorro

31-05-2013, 07:00 AM

Maybe, Skol, but on a more recent scale gold hasn't been moving any lower, appeared to consolidate. The shorts are starting to be unwound.

http://www.proactiveinvestors.co.uk/companies/market_reports/57482/gold-through-us1400-as-dollar-retreats-0000.html

Skol

01-06-2013, 10:08 AM

EZ,

Gold's been 'smashed' to use goldbug parlance. This has to be someone's fault, I'll surf the internet shortly and find out who's responsible for this dastardly crime. It'll be the banksters, the Fed, Bernanke, the Rothschilds, Goldmans or JP Morgan. I'll let you know what the goldbugs say.

What happened to the short covering that was gonna be a rip your face off job, sending gold to the next solar system?

Skol

01-06-2013, 10:39 AM

Yep, Dow down, neither here nor there to me, I've been dollar-cost-averaging shares for about 30 years, real companies, real people producing real things, not a chunk of metal you bury underground and hope some sucker will come along and pay you more for it than you did.

hahaha

EZ,
2 goldbug theories, a 'smackdown' (bit of goldbug jargon there) from the US, and another says it's the hedge funds fault.

You notice the shortage of charts put up by goldbugs these days? That's because they look so bad and are portending much worse to come, like gold $1,000.

elZorro

01-06-2013, 02:25 PM

Well I was hoping gold would stay around $1420 over the weekend, but the US$ recovered a bit and that seemed to be the difference. But it did break well past $1400 for quite a few hours, which for struggling gold producers, gives them some hope of a profit in the months ahead. It's only a 2% drop to $1390, not the end of the world as a longer-term investment. But the top part of the gold price is all that a producer sees, that's their profit margin. It's not usually a very big margin. At $1000 an ounce, many thousands of miners and the suppliers that rely on them, would be out of work worldwide.

Skol

01-06-2013, 03:38 PM

There's a rumour in the Bangkok Post that Italy will soon sell gold, which, if it's true won't do much for the gold price.

I see KWN are predicting a worldwide debt-fuelled collapse and that Japan will not survive. I've seen it all before at KWN, every 2 weeks.

Some companies have already put gold mines on care and maintenance, and I doubt they'd do that if they thought the current gold price was a temporary abberation.

Dej

01-06-2013, 06:21 PM

Some companies have already put gold mines on care and maintenance, and I doubt they'd do that if they thought the current gold price was a temporary abberation.

Excuse my ignorance, but what does "put gold mines on care and maintenance" mean?

Skol

01-06-2013, 06:34 PM

Excuse my ignorance, but what does "put gold mines on care and maintenance" mean?

Basically shutting them down, not abandoning them.

http://en.wikipedia.org/wiki/Care_and_maintenance

Dej

01-06-2013, 07:02 PM

Basically shutting them down, not abandoning them.

http://en.wikipedia.org/wiki/Care_and_maintenance

Cheers! Yeah that doesnt look like a good sign!

JBmurc

01-06-2013, 08:21 PM

Dej

02-06-2013, 12:37 AM

Yes a closed minesite where there is potential to recommence operations once the costs to sales margin decreases enough to see the company make a healthy profit from mining.....happens all the time in many different sectors .....shows just how much costs have risen in the last decade..where at the start of the decade miners were profitable at sub $500oz ,,also grades of metals mined are decreasing...lower the price higher the grades must be.....fact is GOLD will pass $2000-$5000 etc it's all a matter of time

Is sorta basic economic supply and demand curves but it also depends on the value people place on gold, sure it has many uses but silver has a lot more uses in industry in comparison to gold? Sorry new to this thread... just adding my two cents :)

Skol

02-06-2013, 10:10 AM

Daryl Guppy predicts lower gold and silver.

http://www.cnbc.com/id/100752478

and Nouriel Roubini says:

http://www.project-syndicate.org/commentary/the-end-of-the-gold-bubble-by-nouriel-roubini

Skol

03-06-2013, 11:23 AM

In North Korea the Yuan and USD reign supreme, no mention of gold or silver here.

http://www.reuters.com/article/2013/06/02/us-korea-north-money-idUSBRE9510E720130602

Huang Chung

03-06-2013, 02:39 PM

Gold stocks seem to be doing OK today, which is not what I expected given the drop in the POG and the lead from the US.

RRL up 10.5c to $4.16, so I'm happy with that given gold is supposed to be in the toilet.

elZorro

03-06-2013, 04:48 PM

Equedia has some good background HC.

http://www.equedia.com/?p=50921&utm_source=June+6%2C+2013&utm_campaign=June+2%2C+2013&utm_medium=email

Huang Chung

03-06-2013, 05:32 PM

Thanks ElZorro, I'll have a look.

Skol

04-06-2013, 12:06 PM

digger

04-06-2013, 04:27 PM

I know you guys like a laugh, so here's a blog from 2009, predicting among other loony forecasts that the USA will totally collapse in 2009. Gullible goldbugs actually believed this crap, now they're paying the price.

http://www.henrymakow.com/dear_friends_and_family.html

From some of the reading I have done the US economic system was indeed in big trouble in 2009.Only the printing presses making more dollars saved the bacon.

Skol

04-06-2013, 07:48 PM

N225 up 271.
2 years of stock gains on the way.
http://www.cnbc.com/id/100785848

Stranger_Danger

04-06-2013, 08:41 PM

Roubini is bullish?

Holy sh**, that is a very, very bad omen.

JBmurc

04-06-2013, 09:17 PM

Roubini is bullish?

Holy sh**, that is a very, very bad omen.

Yeah last I heard from Roubini he was extreme bearish on stock markets....think it was round two years ago LOL ...so completely wrong now changing his tune ....

peat

04-06-2013, 10:51 PM

roubini is with Skol according to his twitter feed

http://www.project-syndicate.org/commentary/the-end-of-the-gold-bubble-by-nouriel-roubini

Aaron

05-06-2013, 10:37 AM

Roubini puts up a good arguement

Skol

05-06-2013, 02:18 PM

elZorro

06-06-2013, 07:52 AM

http://blogs.wsj.com/marketbeat/2012/02/07/hold-the-presses-dr-doom-is-turning-bullish/

Roubini turned bullish on stocks in Feb 2012, since that time S&P is up 21%, predicted S&P to end 2012 at 1300, it actually ended at 1409, an error of 8.3%.

He's predicting 2 more years of gains and $1,000 gold.

But Roubini ignored the cost of extracting gold, he only assumed the price will fall as countries sell their holdings. And he also said the underlying reason for the gold downtrend is that the world economies (previously based on cheap energy) will fix themselves in the years to come. Except he didn't say how that will happen.

Skol

06-06-2013, 08:01 AM

What has the cost of extracting gold got to do with the price?

skid

06-06-2013, 09:11 AM

Theres talk now that alot of people invested in the Share market are getting a bit antsie about what will happen when the printing presses slow or halt[they cant go on forever folks] Up to now ,this has ,for a large part, been supporting the market .This could cause a big readjustment.
Doesnt necessarily mean Gold will benefit ,but its something to ponder

JBmurc

06-06-2013, 09:28 AM

JBmurc

06-06-2013, 12:05 PM

With the move low in AUD/USD AUD gold is now only $30 from $1500 which is still a great price for producers with tight cost controls

And many reporting profits/operating in USD but listed on the ASX

Skol

06-06-2013, 04:54 PM

ASX 100 down about .5%, XGD down 4.5% today, a real slash and burn.

elZorro

07-06-2013, 07:21 AM

ASX 100 down about .5%, XGD down 4.5% today, a real slash and burn.

US$ basket is crashing too, strange that the NZ$ has done the same yesterday. As expected though, US$PoG has climbed to $1420.

Skol

07-06-2013, 04:00 PM

Another massacre on the XGD, down 5%, will it never end? Probably not, it's only a few points above a support level that will see it the lowest since 2005.

It has just dropped below 2716, the low on 28/10/2008, it's now the lowest since August 31 2005.

We can expect more downside, the punters who bought recently at the 'bottom' are gonna get a lesson in what a real bear market is like.

Skol

08-06-2013, 08:07 AM

A 'smackdown' for silver, a big one. Daryl Guppy says where silver goes, gold will follow.

skid

08-06-2013, 09:42 AM

http://www.kitco.com/news/video/show/on-the-spot/329/2013-06-07/Roubini-Doesnt-Understand-Gold---James-Rickards

Skol

08-06-2013, 10:07 AM

http://www.kitco.com/news/video/show/on-the-spot/329/2013-06-07/Roubini-Doesnt-Understand-Gold---James-Rickards

Rickards doesn't understand gold either, he's been predicting $4,000 - $11,000 gold for years. lol

More falls coming up for gold equities next week.

HUI -4.26%
GDX -4.32%
GDXJ -5.76%
XAU -3.9%

Rickards says the implied price of gold today is $7,000 an ounce. Another goldbug in la la land.

skid

09-06-2013, 09:37 AM

Its not about understanding gold--Its about understanding the economy--Do they actually think the money printing will[can]go on forever?

Skol

09-06-2013, 11:31 AM

Which way for gold from here?

Downwards.

http://www.marketoracle.co.uk/Article40820.html

Some deluded goldbugs on other websites are 'backin' the truck up', still complaining about the Fed, manipulation, the 'Friday night smackdown', why gold isn't $50,000, ad infinitum.

Skol

10-06-2013, 08:04 AM

http://www.emirates247.com/business/gold-price-fails-to-hold-1-400-it-isn-t-looking-good-for-the-bulls-2013-06-09-1.509647

------------------------
In addition to that, with the recent rumours about a scale-back of the US QE3 programme, analysts fear that gold could, in theory, retreat to closer to levels before the QE1 programme was unveiled.

That would mean an approximately 50 per cent retreat from the current levels, which seems a little nerve-wracking, considering the amount of physical buying going on at these levels.
----------------------

A 50% retreat, that would certainly be a little nerve-wracking for goldbugs, but as I've said all along the value of gold is about $700. If it happens there's going to be a lot of poverty-stricken Indians and Chinese, and gold will probably migrate back to the West.

Skol

10-06-2013, 09:07 PM

Gold looks to be resuming its downward trend, N225 up 5%.

Skol

11-06-2013, 08:17 AM

There's a connection - precious metals and cranks.

http://www.bloomberg.com/news/2013-06-10/alex-jones-sells-gold-on-sirius-with-bombing-conspiracies.html

Daytr

11-06-2013, 02:37 PM

Skol

11-06-2013, 05:46 PM

Hey Skol, looks like the Chinese don't follow your view on gold & they continue to liberalize their gold market.
Over time this could be massive for gold. The transfer of wealth from West to East continues...

http://www.bloomberg.com/news/2013-06-10/china-approves-gold-backed-etps-as-domestic-buyers-chase-bullion.html

When I was debating the peak oilers when oil was $140 a barrel they used to tell me that the Chinese were buying up all the oil companies they could lay their hands on and that the Chinese were "very smart people" buying at that price.

Did you read about the Chinese Aunty that was buying lots of gold? The neighbour asked her why she was using her retirement savings to buy gold and what would happen if the price went down.The aunty told the neighbour that if everyone bought gold the price would only go up.
True!

Daytr

11-06-2013, 06:01 PM

Ha ha very good Skol.

Skol

11-06-2013, 08:39 PM

Down she goes, XGD down another 2.8%.

Daytr

12-06-2013, 10:07 AM

Down she goes, XGD down another 2.8%.

My portfolio is up around 12% since hitting the lows about a month ago. Admittedly it was down about 30%, however I am pretty happy where it stands especially with the AUD off considerably.

Daytr

12-06-2013, 10:15 AM

Aussie gold charts below. Aussie miners definitely getting a helping hand by the depreciating AUD.

http://www.goldmadesimple.com/images/charts/own/20130412-20130611_AUD_Gold.gif
http://www.goldmadesimple.com/images/charts/own/20121211-20130611_AUD_Gold.gif

Skol

12-06-2013, 10:27 AM

Not looking good for the miners, or for gold for that matter.

http://www.reuters.com/article/2013/06/10/gold-writedowns-idUSL5N0EL0QN20130610

Daytr

12-06-2013, 10:38 AM

bear

12-06-2013, 11:02 AM

Yep I would touch many of the majors with a barge pole. They get too fat & lazy & tend to think bigger is better at any cost. Rio, BHP, Newcrest, Barrack, you name it amongst the big boys, stuff up after stuff up. That's why I stick to juniors & mid tiers where I know they have a lean, mean management team. Think Newcrest are a possible takeover target at current S/P with circa 80M ounces of reserves from memory.

i agree re the big boys - over inflated and don't control costs ... my preferences would be NST and SLR ... though that said these two could be set to re-test the low levels from a few weeks back

resources looking weak all round

bear

Skol

12-06-2013, 05:20 PM

Just out from Bloomberg, gold 'expert', John Paulson's gold fund is down 54% since the beginning of the year.

He must have been reading KWN and all that other Schiff.

According to Bloomberg, Paulson's been 'backin' the truck up'.

Watch this space.

http://au.businessinsider.com/paulsons-gold-fund-down-54-ytd-2013-6

elZorro

13-06-2013, 08:00 PM

Skol, Marketclub have this video (http://www.youtube.com/watch?v=Cp5U0kMFhAE)on the gold price, and they expect that based on pure technical analysis, gold will drop down from the pennant formation, to a price somewhere in the region of $1150 to $1259 an ounce, sometime soon.

The US$ basket continues to drop, however. Market jitters over the QE continuing at the current pace, and if money comes out of shares, where will it go? Into property? Bonds? or Gold?

INO had this interview, more positive for gold longer term, and a nice simple analysis.

http://www.ino.com/blog/2013/06/physical-gold-and-paper-gold-battling-for-supremacy/

Skol

17-06-2013, 11:43 AM

Just keeps getting worse for OGC and NCM.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10890949

Valuegrowth

17-06-2013, 08:19 PM

JBmurc

17-06-2013, 08:44 PM

If investment demand continues to decline and gold ETF holders continue to sell, I believe a gold price below $1,000/oz .Gold will eventually return to its true cost of production.

In addition we have to accept no currency, stock or any commodity will go straight up and down. We had great rally for gold during last 10 years and gold cycle has reversed to bear territory now. There can be dead cat bounce for gold time to time and intelligent players will make use of this opportunity to sell their gold positions. It is time to become bullish on commodities with demand and supply mismatch and emerging commodities globally. Investors will have some great opportunity to pick some emerging commodity stocks globally in the coming weeks and months.

Myideas are not a recommendation to either buy or sell any security or currency.Please do your own research prior to making any investment decisions

James Steel, chief commodities analyst at HSBC in New York continues to be constructive on gold in the medium and long term and sees gold rising to $1,600/oz in the second half of 2013.

In a Bloomberg audio interview, Steel said that this year the gold market has been under pressure and has experienced a rotational shift out of commodities in general driven by the constant chatter of a tapering off in QE and experienced very steep declines in mid April. He likens it to a rugby scrum pulling back and forth near the $1/400oz level, between ETF outflows and strong physical demand for coins and bars, notably from China.

Steel said that in the past few weeks the heavy ETF outflows have died down, and prior to this year they were mostly static. The peak for ETF's was 85M ounces at the end of last year. He says most institutions have already exited that wanted to get out.

Market chatter has been nervous about the unwinding of QE3. Steel points out that unwinding or paring back is very different than an exit. The Fed many need to do tapering for a long time before it ends their program.

Steel mentions that it was the jewellery market that drove the gold market in the past and now it is investment demand and demand from China. He believes gold will average is $1,542/oz and he is predicting a rally in the second half of the year up to $1,600/oz. Longer term, he is on record as saying that gold will rise to over $2,000/oz.

Skol

18-06-2013, 08:25 AM

Personally I believe gold will end up <$1,000, these guys say $1,200.

http://blogs.barrons.com/focusonfunds/2013/06/17/socgen-gold-price-heading-for-1200-doubt-miners-cost-figures/?mod=BOL_hpp_blog_fof

Skol

18-06-2013, 01:24 PM

Gold forms another short-term bearish pattern.

http://www.forexcrunch.com/gold-forms-another-short-term-bearish-pattern/

elZorro

19-06-2013, 07:43 AM

Gold forms another short-term bearish pattern.

http://www.forexcrunch.com/gold-forms-another-short-term-bearish-pattern/

Jay Taylor says look to mid-June for a turnaround in gold, Skol. Lots of other interesting comments here.

http://www.ino.com/blog/2013/06/in-precious-metals-cash-flow-is-king/

Skol

19-06-2013, 09:31 AM

Keep on hoping EZ, looks very grim for precious metals and more carnage to come today on the XGD. Can't be too much longer before even the most diehard goldbugs throw in the towel.

Some might say I'm cherrypicking, but since gold peaked just under 2 years gold the DJIA has increased by 40% and gold has declined by 26%. In general stocks and gold are not correlated.

HUI -2.84%
GDX -2.87%
GDXJ -3.69%

Since gold peaked in Aug 2011 the XGD is down 68%.

Skol

19-06-2013, 11:30 AM

Goldbugs, for some unfathomable reason have slavishly bought gold 'because the central banks are buying gold'

Why?

Beats me, I've never figured it out, these are supposed to be the best and brightest but have singlehandedly lost about $560 billion since gold peaked. Well done boys. It turns out they did the same thing in 1980, buying at the peak and selling at the low.

http://www.bloomberg.com/news/2013-04-24/gold-rout-for-central-banks-buying-most-since-1964-commodities.html

elZorro

20-06-2013, 07:12 AM

Bernanke is holding a press conference at the moment. Whatever is happening, there's a sharp spike in US$, and a dip in US$gold.

http://blogs.wsj.com/economics/2013/06/19/what-to-expect-from-fed-today-2/?mod=trending_now_1

Skol

20-06-2013, 08:37 AM

$1349, looks like the next whacking has begun.

Daytr

20-06-2013, 12:35 PM

yep have to agree gold looks like it will test 1300 soon and if it breaks that it will test 1200 very quickly.
Time to sell out of my gold mining play, happy with 20%.

However Aussie gold is actually up as the Aussie got smacked harder than gold. Looks like the Aussie is finally acting as a commodity currency cushioning the drop in USD commodity prices. NAB today sai they are looking for 88-87 area in the Aussie.

Skol

20-06-2013, 03:18 PM

Help yourselves guys, back the truck up, I've been watching goldbugs do it all the way down from 1920. A couple of gold enthusiasts I was debating with backed the truck up at $1650, it was an absolute steal according to them.

Pumice

20-06-2013, 08:19 PM

Got down to a touch over $1300
Cant be too many bullish bets out there now.

JBmurc

20-06-2013, 08:25 PM

Got down to a touch over $1300
Cant be too many bullish bets out there now.

Yes in free-fall of late ,,like the AUD/USD rate ....AUD Gold $1431oz hardly moved much of late .....ASX exports should get a good kick on I know the like of many miners i.e PAN for every 1c move in AUD/USD south their earnings increase 2-2.5mill p.a last few days they have just added 10mill p.a (if cross rates stay round new levels) ....

nearly all my ASX companies I'm invested in currently create there earnings outside Aus last few month their revenues in AUD are up 12%+ yet Share prices been smashed

Pumice

20-06-2013, 10:28 PM

Yes in free-fall of late ,,like the AUD/USD rate ....AUD Gold $1431oz hardly moved much of late .....ASX exports should get a good kick on I know the like of many miners i.e PAN for every 1c move in AUD/USD south their earnings increase 2-2.5mill p.a last few days they have just added 10mill p.a (if cross rates stay round new levels) ....

nearly all my ASX companies I'm invested in currently create there earnings outside Aus last few month their revenues in AUD are up 12%+ yet Share prices been smashed

It will be a long night commodity currencies and gold, now under $1290.
Great for those of us long USD (I suspect Skol probably is).

Long may it continue, aussie miners and manufacturing have been waiting for this boost awhile now.

Skol

21-06-2013, 01:21 PM

I'm waiting to hear from Mike Maloney, Peter Schiff, the Aden Sisters, Ron Paul, Jim Sinclair, Egon von Greyerz, Eric Hommelberg, Martin Armstrong, Jim Rickards, James Turk and all the other 'experts' that have convinced gullible goldbugs to throw their money away.

Must be pretty gut-wrenching for John Paulson, his gold fund's down over 60% this year, you can bet there's another few billion dollars worth of gold that will find itself on the market soon. He's in deep Schiff.

Looks like another spanking underway at the moment. When will it end? Not any time soon.

Which reminds me, I'm still waiting for someone to tell me the relationship between the cost of extraction and the price of gold.

Wonder how the 'very clever chinese', that have bought this supposed thousands of tons of gold are taking it, probably not very well, and lots of chinese 'aunties' crapping themselves.

Not to mention the university-educated central banksters that have also bought loads of yellow stuff. LOL

JBmurc

21-06-2013, 01:41 PM

Thought my portfolio would get a good hammering today ....but only holding CVR,PGI in the PGM sector the latter with 1300oz gold hedging and low cost structure I'm UP $400 thanks to ELM and others shares in the Oil&Gas sector ......OXX,MPO

Skol

21-06-2013, 01:57 PM

JBmurc

21-06-2013, 02:25 PM

How about your 1500 ounces of silver, how's that going?

Fine be great to add to my own kiwi saver at these levels just about back at purchase price
$25oz nzd

Yes snapiti the cost of gold extraction is heading up bout as fast as US debt
Newcrest use to average $250 decade ago now it's like $900oz many many mines
Will close if paper gold keeps heading south

Skol

21-06-2013, 02:27 PM

Fine be great to add to my own kiwi saver at these levels just about back at purchase price
$25oz nzd

Well, back the truck up then.

JBmurc

21-06-2013, 02:56 PM

Well, back the truck up then.

Yes don, t worry if oxx comes in I,ll be taking my holding to 3000oz
My safe should be able to hold 5000oz+ which I plan to have before
I,m 40

Skol

21-06-2013, 02:58 PM

Yes don, t worry if oxx comes in I,ll be taking my holding to 3000oz
My safe should be able to hold 5000oz+ which I plan to have before
I,m 40

Well if you wait just a little bit longer you'll be able to pick silver up for half the current price, however when precious metals tank they tend to stagnate for 20+ years which will take you to a lot more than 40.

JBmurc

21-06-2013, 04:34 PM

Well if you wait just a little bit longer you'll be able to pick silver up for half the current price, however when precious metals tank they tend to stagnate for 20+ years which will take you to a lot more than 40.

Absolute bollocks

Skol

21-06-2013, 05:09 PM

Absolute bollocks

Here's a couple of quotes of yours from the silver thread.

"there's no way silver's gonna see the '20's again"

On 13.12/2011, "I bought physical $42oz".

I always read the public notices in the paper, JB, maybe I'll see your name in the bankruptcy column, the fun's only just started.

JBmurc

21-06-2013, 07:31 PM

Here's a couple of quotes of yours from the silver thread.

"there's no way silver's gonna see the '20's again"

On 13.12/2011, "I bought physical $42oz".

I always read the public notices in the paper, JB, maybe I'll see your name in the bankruptcy column, the fun's only just started.

-Fundamentals will shine though only a matter of time till the fiat madness ends the sell-off ...if the price of cattle went below the cost to farm the cattle how long would cattle farmer keep farming ??? IMHO whats happening to silver is not much different than what we seen from the Oil price during 08 GFC the price got absolutely smashed $140-$33 ...I remember Skol bleating on how right he was.... on the new low Oil prices ...heaps of it blah blah then what happen pretty much overnight ...Oil started a new trend back up as the fundamentals were out of wack now $102 brent oil.... "Crude Oil" is used in the most different applications of all commodities ....Silver is second with just over 10,000 ....

-bankruptcy not likely unless Queenstown property goes to zero value overnight

Gold $1405oz AUD

Skol

22-06-2013, 12:00 PM

Looks like the gold bugs are 'unstacking phyzz', if I can use one of their more absurd expressions.

The Chinese aunties and enthusiastic Indians will be licking their wounds having found the bottom isn't in, so they'll be a lot more cautious this time around. One large Indian bullion company is now refusing to use gold as collateral for loans.
The bullion bloodbath is all set to continue.

http://www.nasdaq.com/article/may-gold-sales-fall-at-perth-us-mint-cm252367

And goldbug poster boy John Paulson gets pulverised - again.

http://au.businessinsider.com/john-paulson-gold-stocks-performance-2013-6

Who's 'backin' the truck up'?

Skol

22-06-2013, 12:42 PM

..if the price of cattle went below the cost to farm the cattle how long would cattle farmer keep farming ???

He wouldn't farm it, he'd move on to something else, lamb or crops, whatever pays the money, or he could stop buying tractors, supplementary feed, fencing, fertiliser etc. Cut costs. Gold will drop below the cost of extraction for many miners and they'll abandon or sell the mines, place them in care and maintenance or go out of business, it's quite simple. Gold isn't essential for the normal operation of society, it looks nice, that's it. You can't eat it, which you can do with beef of course. When beef runs out there's every chance the price will increase because it's a perishable commodity, virtually all the gold mined is still in existence.

Just because the mines stop producing gold doesn't mean gold will go up, many people will sell the gold they've accumulated to do other things with, in fact I saw a post from a goldbug yesterday selling at a loss to carry out alterations to his house.

Last time gold crashed it stagnated for 20 years, there's no reason to believe it will be any different this time.

Skol

23-06-2013, 12:11 PM

46124613

Looking similar? A long way to fall yet.

JBmurc

23-06-2013, 12:30 PM

Yes it does look similar ...and by all means Gold/Silver looks to be in the Despair phase ....looking forward to returning to the mean

Skol

23-06-2013, 12:43 PM

Yes it does look similar ...and by all means Gold/Silver looks to be in the Despair phase ....looking forward to returning to the mean

Not sure why you're looking forward to it, the mean is probably somewhere around $600.

This an excerpt from a book I have here.

"Moreover, the existence of a speculative bubble in gold makes the upcoming price collapse much more dangerous. Since the implosion of a bubble tends to drag prices down even below long-term averages, as panicked investors overreact to the downside, we can forecast prices to drop to levels near gold's long-term mean ($500 to $700) and below."

That won't be much fun JB, silver $9. Oh, Schiff!!!!!!!

Valuegrowth

23-06-2013, 02:07 PM

He wouldn't farm it, he'd move on to something else, lamb or crops, whatever pays the money, or he could stop buying tractors, supplementary feed, fencing, fertiliser etc. Cut costs. Gold will drop below the cost of extraction for many miners and they'll abandon or sell the mines, place them in care and maintenance or go out of business, it's quite simple. Gold isn't essential for the normal operation of society, it looks nice, that's it. You can't eat it, which you can do with beef of course. When beef runs out there's every chance the price will increase because it's a perishable commodity, virtually all the gold mined is still in existence.

Just because the mines stop producing gold doesn't mean gold will go up, many people will sell the gold they've accumulated to do other things with, in fact I saw a post from a goldbug yesterday selling at a loss to carry out alterations to his house.

Last time gold crashed it stagnated for 20 years, there's no reason to believe it will be any different this time.

Whenever there was a bull market somewhere some said this time is different. What happened in the markets in the past will happen again and again in a different way. Time to time we will see currency crisis, gold crisis, oil crisis, credit crisis and banking crisis this financial world. Everybody should have some sort effective risk management system.Based on the new developments gold will go down to $1000 if we don’t get any strong support around $1000 it can goas low as $500 level during next couple of years. Now party is not only over for gold but also for few more commodities such as corn and soya bean. Some commodities with demand and supply mismatch including emerging commodities will become bull commodities in the coming decade. USD will go up further against AUD and NZD.

http://finance.yahoo.com/blogs/daily-ticker/gold-prices-collapse-everyone-remembers-just-yellow-metal-150633740.html (http://finance.yahoo.com/blogs/daily-ticker/gold-prices-collapse-everyone-remembers-just-yellow-metal-150633740.html)Gold (http://finance.yahoo.com/blogs/daily-ticker/gold-prices-collapse-everyone-remembers-just-yellow-metal-150633740.htmlGold) Prices

Collapse As Everyone Remembers It’sJust Yellow Metal: Blodget

My ideas are not a recommendation to eitherbuy or sell any security or currency. Please do your own research prior tomaking any investment decisions. Please note that I do not endorse or takeresponsibility for material in the above hyper-linked site.

elZorro

24-06-2013, 07:31 AM

An Equedia letter today: facts on the debt funding China's growth.

http://campaign.r20.constantcontact.com/render?llr=orkbnrcab&v=0012owTUmCeP-SCtAN-FtvJtOooKE-dCngc0Do96QAberDHDQjGXSlGNcbGsxyTw8IjX-r-wHlfSPvFkyRFnULttkg-kcET3C4DW78BPxJ-ces%3D

Skol

24-06-2013, 07:57 AM

The 'aunties' and 'very smart Chinese' lick their wounds: Herd instinct at its best.
--------------------------------------------------------------

Taiwan's investors cautious about buying gold despite price fall

2013/06/23 21:30:27

Taipei, June 23 (CNA) Taiwanese investors, who purchased over 10,000 gold bars in April, were more cautious about the market now that the international price has tumbled again to below US$1,300 per ounce, local jewelry shops said Sunday.

Earlier in April, a group of investors, mostly mothers, created a gold buying craze by flocking to the stores as news emerged that the U.S. Federal Reserve may be ready to bring quantitative easing to an end, pulling down the price of gold to US$1,321 per ounce.

The purchasing price of 3.75 gram of gold was at NT$4,450 (US$147.35) while the selling price at local shops stood at NT$5,000, the lowest in the last three years, according to a jewelry union in Taipei.

The international price that was down to less than US$1,300 per ounce this month was driven by speculations that U.S. Federal Reserve may wind down its quantitative easing policy, it said.

More investors were inquiring about the market but the similar trend of buying craze has not occurred, Shih Wen-hsin, a union official, said.

He expects these hesitant investors will enter the market when the price bounces back next week.

After the international gold price fell below US$1,300, the number of people opening gold passbook accounts also dropped because they were adopting a wait-and-see attitude, Bank of Taiwan said.

Skol

24-06-2013, 05:50 PM

XGD down 7.7%, more chaos on the horizon and gold down again today, lower highs and lower lows, and we all know what that means.

Gold sub $1300 and silver sub $20.

Looks like Round 3 might have begun.

Another bad day coming up for gold equities, HUI -3.5%, GDXJ -5%.

http://www.cnbc.com/id/100837732

JBmurc

25-06-2013, 11:37 AM

TORONTO, June 24 (Reuters) - Barrick Gold Corp will lay off about 30 percent of corporate staff at its headquarters in Toronto and in other offices in a downsizing plan triggered by problems at major mines and a drop in the price of gold.

Barrick and rival gold miners such as Newmont Mining and Newcrest Mining are shaking up operations, halting projects, slashing exploration spending and cutting jobs as the industry struggles with high costs and weak metal prices.

Barrick, the world's largest gold producer, confirmed on Monday a Reuters report that the layoffs were coming and said the cuts were part of an effort to "streamline the organization and manage costs in a challenging business environment".

Barrick said it is eliminating about 100 office positions, most of them at its home base in Toronto. The company will also cut jobs at a number of its regional offices as part of a company-wide effort.

Chief Executive Jamie Sokalsky announced the cuts at a town hall meeting with staff in Toronto last week, sources familiar with the situation told Reuters on Sunday.

The sources, who asked not to be named as they were not authorized to speak about the matter, said the cuts in Toronto were to begin on Monday and will be completed before the end of the week. Cuts in Vancouver and other offices could drag into July.

Barrick has about 400 corporate staff, about 300 of them in Toronto.

The sources said Sokalsky, a long-time Barrick hand who took over as CEO barely a year ago, was visibly emotional during the mid-week town hall meeting with employees. He declined to take questions and informed staff that their direct managers would respond to their questions.

Shares in Barrick, which have more than halved in value over the course of the last year, were down 4.3 percent at C$16.95 early on Monday afternoon as the price of gold fell about 1 percent following last week's 7 percent decline.

BROADER CUTS

Spot gold, which peaked at more than $1,900 an ounce in late 2011, was trading at $1,285 an ounce at 1630 GMT on Monday, not far from a near three-year low touched last week.

One source said Barrick's latest job cuts were part of a broad cost-cutting initiative announced earlier this year, and not a knee-jerk reaction to declines in the price of gold.

In addition to pressure from the gold price, Barrick faces operational and regulatory issues at some mines and projects.

Chile last month fined Barrick and ordered it to halt all work at its massive Pascua-Lama project, on the border of Chile and Argentina, due to environmental violations. That was just the latest setback for the project, where capital costs have mushroomed over the last year.

The company has also faced setbacks at its copper mines in Zambia and Saudi Arabia, and has halted work on a number of projects in other parts of the world.

Barrick, which employs roughly 25,000 people, is also cutting jobs at a number of mines. Last week, it said it was cutting 60 to 65 jobs at its U.S. operations after earlier this month announcing a few dozen cuts in Australia.

Many of Barrick's competitors are taking similar actions.

Newmont said earlier this month it would cut its workforce at its home base in Denver, Colorado, by at least 33 percent over the next three months. And Australian gold miner Newcrest said it would write down its asset values by about $6 billion.

Skol

25-06-2013, 03:55 PM

Check out these dreamers, some of the posters here thought they were on the money. lol
You don't hear much about them anymore.

http://bullionbullscanada.com/index.php?option=com_content&view=article&id=21102:these-90-analysts-believe-gold-will-go-to-5000ozt&catid=61:lorimer-wilson&Itemid=138

JBmurc

25-06-2013, 10:52 PM

The Gold/Silver Haters going get one big wake up call soon enough ....why

#1 -the move away from US bonds is turning into a Stampede
http://www.cnbc.com/id/100840444

#2-Comex's Gold inventory's are dropping to new lows.... yet the Spec paper shorts are at their highest levels in years
work that out ....http://harveyorgan.blogspot.co.nz/

Now this is dead opposite to want should be happening right SKOL ??? physical gold should be flooding into comex invertory's not exiting it....Bond rates should be holding strong on the strength of the US economy not increasing as investor flee .... to what ?? not the stockmarkets ...Cash maybe

Who owns US debt
http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm

Skol

26-06-2013, 08:16 AM

The momentum is downward JB, I've heard all the arguments about why gold and silver are going to the moon but they never do. I'm expecting a colossal downward correction soon, a big one, maybe down to $1,000 over a period of a few days.

The 'clever Chinese and asian' investors that the gold bugs bang on about have had their fingers burned and so have the whizz kids at the central banks, losing $600 bill., the Indians are paying heaps in taxes to import gold and as most families major asset they must be having a pretty close look at this very depressing situation as well.

Capitulation is nigh, I even see goldbugs talking about putting gold in the bottom drawer and one says he'll keep his silver and start selling it when it gets to $100 an ounce, which is never going to happen. The whole world has got it wrong according to the goldbugs, they like to portray Bernanke as a moron, a man with experience and an education second to none, whereas many goldbugs have probably never graduated from high school, they've got a degree from the University of KWN and Zerohedge, many struggle to spell properly when they post.

Goldbugs are eating humble pie - lots of it. It's finally sinking in, the party really is over.

bear

26-06-2013, 09:16 AM

Skol

26-06-2013, 09:39 AM

Hey Skol

I admire your conviction and continuous warnings over the gold price..... have dabbled a bit with some of the mid tier producers and made some $$$

just wondering with such a firm position re $1000 gold price whether you are shorting gold.

bear

bear,

No, not shorting it but I do own lots of stocks which are generally not correlated with gold, besides I'm not planning on taking on the hedge funds and banks which will be doing just that, not many will be willing to throw their hard-earned cash at gold atm. I've noticed goldbugs 'backin' the truck up' all the way down from $1920, must be pretty painful for some.

I have to honestly say I haven't made a lot of money in the last few years, but I didn't lose any either. I converted my super to 50% cash prior to the GFC and have most of my stocks offshore, unhedged, and gains on stocks have largely been offset by currency movements, but what worries me is a major crash in the NZD, something that foot and mouth disease might precipitate. Some commentators say it's inevitable, one day it will arrive. I'm not planning on being the richest man in the cemetery, just having an extremely comfortable retirement. I plan on travelling when I retire, not down the back either, and not in backpackers or youth hostels.

My super is currently 100% cash, but would look at some exposure to stocks in the event of a reasonable correction, which given the state of the world economy probably won't happen. Goldbugs are always predicting financial Armageddon.

I work in the aviation industry, there is a thread here rubbishing it and portending its doom, but it isn't going to happen, aviation is booming, and in my very long experience in the industry (45 years), I've never seen anything like the current expansion. 848 Boeing and Airbus jets have just been sold at the Paris Air Show. The total Boeing and Airbus backlog is over 9000 jets.

I bought my current property several miles from the nearest town in a rural area 8 years ago to get away from it all and graze a few beef, the expansion is so great here that water pipes are being layed 3 km away and within a few hundred meters they're laying stormwater pipes, the city is about to arrive.

2000 hectares are planned for development around here and not far away is a 270 acre mall under construction.

Goldbugs endlessly bang on about debt, Greece, Spain, Euro crash, JP Morgan, USD crash, Dow crash, bond crash, property crash, manipulation, the Rothschilds, banksters, LIBOR, Bernanke, ad. infinitum, and has any of it happened? Yes, in some places there was a significant decline in property prices, an overheated market propped up with colossal amounts of shonky debt The Economist and the FT warned about for years. Much of the pain in the property market was self-inflicted, dopey people saddling themselves with huge amounts of debt believing the snake-oil salesman that property will never go down, buy land they're not making any more of it, and waterfront property only goes up. All you had to do was watch the TV programmes 10 years ago to know that something very bad was going to happen, humans get themselves in some fixes, but it's never permanent.

Goldbugs portray themselves as victims in a system where the 'manipulators' are winners and they're losers, the dice are loaded they say. If they believe that why are they dabbling in PM's? They go on endlessly about the 'naked shorters', JP Morgan, Bernanke, Fort Knox is empty, the Germans aren't going to get their gold back because it isn't there, yadda, yadda, yadda, it's very tedious. If you disprove one of their conspiracy theories they'll invent another one to counter it, some theories are so insane that I reckon the posters are certifiable, like the goldbug who believes that condensation trails from aircraft are because special chemicals are placed in the fuel tanks by the CIA to psychologically disable the population. When I pointed out that there's filters in the fuel system which would filter out such a chemical he reckoned the filters are specially designed CIA filters.

The goldbugs say the USA is in decline and China will run the world. Yeah, right! China is a communist one-party state, run by tyrants, rent wih corruption, pollution and internecine ethnic conflict. There are hundreds of riots in China each day, but we don't hear about them. China could be the next Yugoslavia. USA-hating is a goldbug trait.

Goldbugs are wrong, the world isn't ending, but I find it thought-provoking and amusing.

Cheers

Skol

26-06-2013, 11:39 AM

hey skol, you invested in AIR.NZ?

No, but I own VAH, I like the CEO there.

Pumice

26-06-2013, 02:49 PM

$1,247 not looking good for gold, another breakdown in price.

Skol

26-06-2013, 03:03 PM

Yep, silver $18. If it multiplies itself by .5 from here we should be getting close to 'the bottom is in'. Maybe.

Hey JB, this promises to be a barrel of laughs, Ron Paul, Peter Schiff, Rick Rule and Dr. Doom, you should go, if you can afford it by then. Ron Paul, who's overloaded with gold juniors will probably be bankrupt by November.

https://jeffersoncompanies.com/new-orleans-investment-conference/home

One of the things I've noticed recently-gold bugs aren't saying 'I'm backin' the truck up', they're saying, 'if I had spare cash I'd buy some more'. lol

Valuegrowth

26-06-2013, 09:53 PM

http://www.bloomberg.com/news/2013-06-25/gold-bear-market-hits-hardest-in-south-africa-mines-commodities.html (http://www.bloomberg.com/news/2013-06-25/gold-bear-market-hits-hardest-in-south-africa-mines-commodities.html)

Gold Bear Market Hits Hardest in SouthAfrica Mines: Commodities

(http://www.bloomberg.com/news/2013-06-26/gold-heads-for-worst-quarter-since-at-least-1968-as-demand-ebbs.html)http://www.bloomberg.com/news/2013-06-26/gold-heads-for-worst-quarter-since-at-least-1968-as-demand-ebbs.html (http://www.bloomberg.com/news/2013-06-26/gold-heads-for-worst-quarter-since-at-least-1968-as-demand-ebbs.htmlGold)

Gold and Silver Slump to Lowest SinceAugust 2010 on Fed Outlook

Skol

27-06-2013, 08:04 AM

Only thing left to do is hope and panic.

http://finance.yahoo.com/blogs/breakout/gold-unsafe-price-dicker-135904756.html

Another bad day for gold coming up.

HUI -6.06%
GDX -6.1%
GDXJ -6.56%
SLV -5.4%

blackcap

27-06-2013, 08:39 AM

Warren Buffet has never liked gold, but I think I would rather own Ketchup as well. I cannot fathom the fascination with gold. You cannot eat it, its heavy, only really used for jewelry and some industrial uses. It does not produce income and to me it is a dead weight. Yes it used to be used as a means of exchange but that is long gone. What is it actually good for? Im not being facetious here, really trying to understand the appeal. Don't hold and won't go short either, just sitting on the sidelines watching the carnage.

Aaron

27-06-2013, 09:16 AM

I buy into the argument that gold in the past has been used as money and to back paper currency and it is only when the world's central banks get rid of all their gold reserves that it is only likely to be valued based on the demand for it as jewellery. Why do the central banks continue to hold gold? At what point do you loose faith in the US$ if they are creating an additional $85billion every month? The US has 314million people I think. If money printing is the answer why don't they just hand out around $270 dollars every month to every man woman and child in the US. that would get their economy humming and inflation pumping I'm sure. It's great to see SKOL having such a great time and I have to admit it doesn't look good for the price of gold unless something triggers the worlds financial markets into loosing faith in the dollar as it is only faith and trust that places value in currency. Ben's money printing could eventually undermine that faith and the day that faith disappears(if it happens) gold's fortunes might head up again. At best it is an insurance policy for financial disaster but as SKOL points out people expecting this usually have guns and bunkers as well and they are firmly in the minority at present.

Skol

27-06-2013, 10:13 AM

Aaron,

I'm not sure if you're aware but I have been the target of many disparaging remarks from the goldbugs, however any amusement I derive from gold collapsing comes from the fact that I've managed to identify a bubble, a big one, and they all ultimately collapse.

As I've said many times, it's not 'different this time', although the goldbugs will tell you it is.

If you check the peak oil thread you'll see I also correctly identified a bubble in the oil price, which collapsed from $147 to $32.

Goldbugs are a paranoid lot, thinking that Bernanke's at his desk with his finger on the 'gold manip' button, but it's not true, he couldn't care less about gold or silver, the USA owning gold is 'traditional' according to him. Gold is an asset, not money or a currency.

One of the amusing things is that in the case of both oil and gold I was told "China is buying all the gold/oil they can lay their hands on".

Well if they have they're losing Schiffloads. Central banksters are over $600 billion out of pocket. What a laugh.

Aaron

27-06-2013, 10:36 AM

I wouldn't say it's different this time but the actions of some central banks has gone beyond what they have done in the recent past. I am sure currencies have been undermined/debased before in history. I guess I need to find out what has happened in the past when faith in a currency is lost.

Skol

27-06-2013, 02:18 PM

The goldbugs have gone very quiet as many of the raisons d'etre for gold's spectacular rise have evaporated. Some time back we were all regaled with tales of the 'elite', the 'New World Order' and the 'rich' that owned gold, that were allegedly in with the Rothschilds and the JP Morgan banksters. They had secret information that would make them rich, while all others like you and I would end up in desperate straits as the world economic system crashed and bought everyone (except the goldbugs) to their knees.

Now it's the goldbugs on their knees, strange how things turn out.

http://www.ft.com/intl/cms/s/0/9aac9378-de3f-11e2-9b47-00144feab7de.html#axzz2XNVdbyKP

China was going to take over the world according to the bugs, the USD would crash, the Fed would send the USA broke, there was going to be riots and upheaval, the whole rotten system would fall apart and a military coup would ensue. Fort Knox would be found to be empty of course.

Actually it's China that's likely to fall apart, it was reported that in 2010 there were 180,000 what the Chinese call 'mass incidents'. 27 have just been killed in rioting in Xinjiang.

CAM

27-06-2013, 11:07 PM

If you check the peak oil thread you'll see I also correctly identified a bubble in the oil price, which collapsed from $147 to $32.
.

And what's the price of oil now?

Skol

28-06-2013, 07:08 AM

And what's the price of oil now?

$95. Nowhere near $147. The peak oilers of course predicted the end of the aviation as a smokestack industry and said that oil would go much, much higher.We were running out according to them, a bit like the goldbugs will tell you that we're running out of gold and silver and the dopier ones will tell you gold is hard to get and the chinese are buying.
Try your local gold dealer, he'll have heaps.

Peak oil? Where have you seen those words lately?

Skol

28-06-2013, 12:29 PM

Nobody wants gold (or silver).

http://www.theage.com.au/business/markets/gold-plunges-nobody-wants-it-20130628-2p0ni.html

JBmurc

28-06-2013, 02:05 PM

Yes in some PM producers the lower it goes the better in the short term anyway... for my PM investment PGI with a full $1320oz US hedge ....as for one the PM prices keep crashing the more Gold/Silver PGM mines will have to close....the cheaper buying resources for miners with lower cost structure like PGI with their gold/silver tailings retreatment project Albion Process Technology....low cost ...high profits

I see Citi Bank analysts have taken the liberty of ignoring the cost price levels published by the world's gold miners and instead add-in all cost ingredients including capex, exploration, corporate costs, cash taxes and other operating costs themselves. The conclusion? Nobody is making money at current price levels.

Yes, you read that correctly. Citi thinks 90% of all Goldminers currently in operation are losing money at the current, unhedged price of gold bullion $1200 etc..

now as much as the Gold haters don't think 50-60% mine closure will not affect the Gold price...I think it will as many underground mines esp will need much higher prices to re-open ...it's not just a matter of a flick of a switch when your 2-3km deep mine is fill of water ...and the 100,000-500k workers your've just laid off are rioting casing mass damage to the mines etc....

Bring on $100oz GOLD LOL .....Like to know where Apple ,Samsung will get their Silver from when the bulk of the Silver miners will be closed and unlike Gold 90% of all silver ever mined is gone....

At current Gold price if you divided all gold on the earth to each human,,, it'a value wouldn't even break $1000 USD....

JBmurc

28-06-2013, 03:25 PM

4618

Major ETF selling =selling of long contracts to cover the paper ETF's ....

blackcap

28-06-2013, 03:36 PM

Sorry JB, cannot buy that argument... that because it costs $1000 + to get the stuff out of the ground that that will keep the price of gold above $1000. I cannot think of an economic theory to back that up.

To me it means that producers who have high costs will have to shut and the ones who can dig the stuff out of the ground cheaper will survive. Traders, buyers etc of gold really don't care about how many mines shut or how many people are laid off as callous as that may sound.

Im not saying gold is going to fall below $1000. I have no idea where it will end up. But I don't like gold for the very fact that it does nothing for you, does not offer a return and the world will keep turning without it.

JBmurc

28-06-2013, 04:16 PM

Ok well lets see what happens if Gold stays at current levels or lower and the vast bulk of the gold producers and all the explorers close up shop.....Bring it on I say my Silver bullion is a Long term 20-30yr hold got a couple PM producers one thats in the crapper the other that will likely do very well in any short term pain with gold hedged for the next 3yrs and a low cost operations ....with the bulk of investment funds in Oil&Gas
Don't know about yourself Blackcap but if i see Silver producer after silver producer(many gold producers have Silver as bi-product) shut up shop I'd be even keener to buy the metal sub-economic extraction costs... with 10,000 different applications and demand over billion troy oz per ann ..It's a no brainer unless you think electronics demand will also drop 70-80% etc

Miners Can’t Operate With Gold Below $1,500, Gold Fields Says

Bullion must rise to $1,500 an ounce for the gold mining industry to be sustainable, according to Gold Fields Ltd. (GFI)’s Chief Executive Officer Nick Holland.

“The industry is not sustainable at $1,230 an ounce, which is where the gold price is at the moment,” Holland said today in a telephone interview. “We’re going to need at least $1,500 an ounce to sustain this industry in any reasonable form.”

Gold entered a bear market in April on signs the U.S. economy was improving and fell further this month as Federal Reserve Chairman Ben S. Bernanke signaled he may slow bond purchases should the U.S. recovery continue. The plunging price of bullion is squeezing producers who spent $195 billion on acquisitions in a decade-long price boom that peaked in 2011, when prices reached $1,900 an ounce.

The decision by Newcrest Mining Ltd. (NCM), Australia’s biggest producer, to write down the value of its mines by as much as A$6 billion ($5.5 billion), will lead to the biggest one-time charge in gold mining history. Rivals such as Barrick Gold Corp. (ABX), the biggest producer, and Newmont Mining Corp. (NEM) may be next, according to Jefferies International Ltd.

“There’s going to be significant rationalizing in the gold industry,” Holland said. “You can’t keep mines producing if they’re losing money.”

Gold Fields’s South Deep mine in South Africa is one of the few mines that could survive at the current gold price of 1,230 an ounce, Holland said. The mine’s size and the fact that it’s largely mechanized, meaning it’s less reliant on labor demanding pay rises, will help keep costs low, he said.

The Bloomberg Research Global Mining & Exploration Index has fallen 41 percent since April 9, while gold has dropped 22.3 percent amid its biggest three-month decline on record.

Andy Lloyd, a spokesman for Barrick and Omar Jabara, a Newmont spokesman, declined to comment on potential writedowns earlier this month.

To contact the reporter on this story: Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Skol

28-06-2013, 04:21 PM

As the price falls it becomes a vicious circle, the ETF's must sell in a weak market and if they buy back they buy in a stronger market, a death spiral. In addition not only ETF's will be selling but individuals, mutual funds, short sellers and hedge funds.

The end of the quarter is upon us, who will want to be seen with gold on their balance sheets? John Paulson could be losing hundreds of millions a day.

The godbugs erroneously push the theory that gold cannot go down below the cost of extraction, but I'm betting it will, tonnes of it are hitting the market every day and there's very high volumes in the biggest ETF - GLD. The ETF's own thousands of tonnes, it will all be out there for sale as the price falls, but who will buy in such a weak market?

All the gold that's ever been mined is still here, with consumables you eventually run out and July is traditionally a weak month for gold.

Goldbug psychology will be shattered, many will liquidate, many will go broke. I saw a post a couple of years ago by a guy who'd sold the house, the car, everything and bought gold, this won't be an isolated case.

All this will be very bad news for some who have involved their friends and family in the gold boom and bust, I've seen a number of posts where gold 'experts' have advised 'selected' family and friends to throw lots at gold, for older people it could be like the finance company bust. It's called a psychological feedback loop, the transfer of enthusiasm and speculative fever from one person to the next as the price climbs.

Once a speculative boom is over it's generally over for years, and I'm sure this one will be no exception.

Are we going to see some gold funds go bust? Probably, it'll be big news when it happens and poison the gold investment theme even more.

How low could it go? Who knows, but a book I have says that EWT suggests a possible low of $252.80, depending on the wave. This book 'Gold Bubble', forecast a top between July and October 2011, bang on.

The author reckons the low will be $500/$700.

JBmurc

28-06-2013, 04:34 PM

As the price falls it becomes a vicious circle, the ETF's must sell in a weak market and if they buy back they buy in a stronger market, a death spiral. In addition not only ETF's be selling but individuals, mutual funds, short sellers and hedge funds.

Yes dead right as to why we are seeing the paper price getting crushed ...they brought paper Gold they sell paper Gold etc
as to why we see physical buying demand staying strong yet prices crash

good example is a listed Company's value if everyone decided to sell a companies' shares it's price/value could fall to lowest number the Market allows .001c etc Yet the Company profit wise could be fine

..Give me control of a nations money supply, and I care not who makes it’s laws -Rothchild

"The one aim of these financiers is world control by the creation of inextinguishable debts." - Henry Ford

JBmurc

28-06-2013, 04:44 PM

If gold hit $252 you could bet your bottom dollar I'd be buying a few bars just for the hell of it! ;)

yes maybe one for the hell of it ,but if Silver was still cheaper least 9:1.. I'd still buy over Gold as I know the Industry demand will always be there.....unless we go back to cave man days

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented." - Major L.B.Angus

We fix the price of gold and silver to make them valuable or not." - J. P. Morgan, in a letter to his son

Skol

28-06-2013, 05:38 PM

Skol

28-06-2013, 07:06 PM

If gold hit $252 you could bet your bottom dollar I'd be buying a few bars just for the hell of it! ;)

Yeah, if it hits $252, I'll buy a krugerrand or 2, just for fun. Xmas presents this year.

JBmurc

28-06-2013, 08:27 PM

JB,

Like many goldbugs you need to get over the paper/physical price. What's the difference, and show me how gold at your local dealer is any different from GLD, except maybe a few dollars extra when you buy and less when you sell (and less liquidity) for the 'phyzz'. lol

And btw, where is the 'demand' for physical you're talking about, only suckers buy in a falling market? Proof please. The price is falling because the demand isn't there.

physical price = ETF price more or less, there's no difference, except ETF's are a better deal.

You need to stop quoting long dead financiers.

Really no difference with a ETF:GLD to Bullion ...well one is a piece of paper that only represents the price of Gold (Fiat in everyway)
the other is pure .999% GOLD.... big F'N difference chap ...

-Now the total US dealer inventory of gold is at a very dangerously low level of only 42.27 tonnes !!
-The total gold comex open interest surprisingly rose by 3588 contracts from 390,647 up to 394,235 with gold falling by $45.00 yesterday. This is totally absurd!

http://harveyorgan.blogspot.co.nz/

by the way skol I'm a Silver bug not Gold ...Only brought my Gold producers as they had good silver exposure an I hold Silver bullion

oh and here you go...

Money is not based on gold anymore; money is only an idea. Ideas are not scarce. There should be no shortage of money to lubricate the gears of commerce any more than there should be a shortage of imagination. Today money is created on computers and paper, and since it is so easy to create, no one should have a right to charge interest on its creation. Yet, that is what the Federal Reserve System does - loans money to the people, charges interest on it, and puts the working public into debt just for being given permission to build for itself its own prosperity." -

elZorro

28-06-2013, 10:34 PM

And if fiat currencies collapse, then what? There are still some goldbugs out there buying physical gold.

http://www.ino.com/blog/2013/06/who-killed-the-gold-price/

Snow Leopard

29-06-2013, 12:23 AM

Thought I would do a little research and found this BBC article (http://www.bbc.co.uk/news/magazine-21969100) and this from a phone number (http://www.numbersleuth.org/worlds-gold/) web site.

So there is:
probably about 171,000 tonnes of mined gold in the world, (or 2,500,000 tonnes);
which is about 24g (less than one troy oz) per person in the world;
about 52,000 tonnes yet to be dug up;
2,500 tonnes mined per year;
300 tonnes used by industry per year, some of which may be lost forever.

Best Wishes
Paper Tiger

Skol

29-06-2013, 08:06 AM

And if fiat currencies collapse, then what? There are still some goldbugs out there buying physical gold.

http://www.ino.com/blog/2013/06/who-killed-the-gold-price/

Fiat currencies collapsing is a goldbug fantasy. It's been forecast for years by 'experts' (lol) like Peter Schiff, Jim Rickards, Ron Paul, Mike Maloney etc. etc.

It won't happen, it's gold that's collapsing.

The link above is a goldbug website still banging on about it's the Fed's fault, the Bank of England's fault, and the biggest laugh of all, people cashing out of ETF's to buy real gold.

People are cashing out of ETF's to avoid becoming insolvent.

Where I live property prices are up 14% in the last year, S&P500 is up 18.5%.

Gold is down 26%.

What would you sooner not own EZ?

Skol

29-06-2013, 08:49 AM

JB.
-----------------------------------------
Really no difference with a ETF:GLD to Bullion ...well one is a piece of paper that only represents the price of Gold (Fiat in everyway)
the other is pure .999% GOLD.... big F'N difference chap ...

-----------------------------------------

Explain the difference!

When I buy an ETF I'm actually buying gold, but I don't have the hassle of picking it up, selling it or storing it and I can buy and sell with a keyboard.

There's absolutely no difference. The paper/physical scenario is another goldbug fantasy.

elZorro

29-06-2013, 09:06 AM

First , thanks for the links in your post PT. According to this, currently economically mineable gold reserves are only about 2% of all the gold ever mined. That figure gets lower if the gold price collapses. About 10% of the gold mined each year is lost to landfill, every time we throw away an electronic appliance, cellphone, etc. As these goods become cheaper and their lifetimes reduce, this is a process that will only use up more gold. So all that was interesting, and puts some kind of a value on gold. It also shows that it's not a useless metal.

Skol - yes, last year was better for property owners, but if we'd all bought some gold in bars or ETF form 10 years ago at about $300, and sold near the recent two peaks of US$1800, without any effort or real risk at all, show me any property which could have given that return in current dollars. I want to understand how most of us missed that opportunity, and whether it will happen again.

I take JB's point, if ETFs are the same as physical gold, how can they sell a lot more gold that way than has been available to pick up from vaults? Some of it is not real, and couldn't be delivered.

Skol

29-06-2013, 10:05 AM

I take JB's point, if ETFs are the same as physical gold, how can they sell a lot more gold that way than has been available to pick up from vaults? Some of it is not real, and couldn't be delivered.

JB is talking goldbug codswallop, if they're selling more gold than they own then it's a ponzi scheme that will bring gold to its knees for decades, such a scheme couldn't possibly be legal. Any such ETF collapsing would be worldwide news, and there isn't any, not yet anyway, if there is one he should name it.

Here's a quote from a live financier: "It's only when the tide goes out you find who's been swimming naked". - Warren Buffett

If I buy an ETF, the gold is purchased and sold on my behalf.

Skol

29-06-2013, 02:52 PM

The goldbugs will say anything to prop up their failing 'investment', even that the Asians are buying They aren't buying.

http://www.ft.com/intl/cms/s/0/83a07c16-e007-11e2-9de6-00144feab7de.html#axzz2XZNOYIcn

FarmerGeorge

29-06-2013, 04:37 PM

"When I buy an ETF I'm actually buying gold, but I don't have the hassle of picking it up, selling it or storing it and I can buy and sell with a keyboard.

There's absolutely no difference. The paper/physical scenario is another goldbug fantasy"

Hi all - apologies if I'm telling you how to suck eggs, but just to be clear, Skol is half right: The major Gold ETF is in fact backed by bullion and must buy and sell the hard stuff to manage the $ coming in/out of the ETF. As an aside: you can see that this creates more volatility in the Gold price as exuberance pushes up the gold price, lifting the ETF, requiring the ETF to buy physical which... pushes up the gold price. Of course this works on the way down as well...
On the other hand the paper/physical difference is real, it's just not related to the GLD ETF. When 'they' talk about 'paper gold' (if they know what they're talking about) they're talking about the deriviatives (forward,future,option) markets and these are significantly bigger than the physical market. These are almost never directly related to the physical - ie if I have a Call Option on Gold I'm very unlikely to actually exercise it and get the counterparty to deliver an ounce to my house - I'm more likely to settle the cash value of the Call prior. It is true that's there's not enough physcial out there to settle all the paper transactions and if everyone demanded that happen that would be a massive issue. That's often the point where 'gold bugs' decide that physical is 'safer': because is gold if spiking then currency is collapsing and they're not interested in settling via cash at almost any price.
It is worth bearing in mind that this is true of all commodities I know of: if you tried to settle every Oil derivative with physical there would be a real problem - not to mention a lack of tankers...
Again sorry if this is all basic knowledge but it's good to put it out there anyway.

Skol

29-06-2013, 04:48 PM

FarmerGeorge,

Yes, good post thanks, but I've been referring to, and so have the goldbugs, ETF's, which should have sufficient gold in their vaults to cater for any contingency. Derivatives are an entirely different matter, and how likely is that that everyone would settle at the same time and have the oil or gold delivered to their house?

Not very. I am absolutely certain that gold is better in your safe than a call option if you're that insecure, but if we all thought that way we'd store petrol in our houses to cater for the time when petrol companies run out of oil.

I get your point though.

FarmerGeorge

29-06-2013, 09:45 PM

Cheers Skol, I wasn't sure so just thought I'd put my thoughts out there. Thanks for not biting my head off!

I think you hit the nail on the head when you say "if you're that insecure" - my feel is that it is that insecurity which makes a gold bug a "bug" rather than your more standard "bull" who comes from a different angle.

My view on the ETFs is that their existence caused gold to overshoot on the upside and will similarly cause an undershoot on the downside. Fundamentals and cost of production figures would suggest we're near a bottom in terms of USD$/oz but given size and importance of the ETFs it's difficult to be sure and could well push further. Just my view.

Valuegrowth

30-06-2013, 12:10 AM

I believe gold will go to $800 level. Even it can go below that level depend on some factors. We will see bigger drop in commodities prices such as gold, corn, soybean prices and currencies such AUD, NZD, and CAD during next 18 months.

When these assets and things become bearish we will see another basket of bull commodities and currencies. It is time to go behind next bull commodities including emerging commodities and currencies before others.

There will be day for even Chinese currency. Now the day is belongs to USD. Few more currencies also will go up in the future. In a way what we see now is kind of gold crisis and currency crisis. When crowd becomes panic on few currencies and gold other crowd also become panic and sell some other currencies and commodities. These types of mistakes create opportunities in the market. Now we can find valuable cheap commodity stocks globally.

My ideas are not a recommendation to eitherbuy or sell any security ,commodity or currency. Please do your own research prior tomaking any investment decisions

Skol

30-06-2013, 02:44 AM

Farmer George,

I'm certain you're 100% correct when you say ETF's have caused a blowout on the upside and will cause an undershoot as gold falls. Gold fell spectacularly in 1981 and there were no ETF's then, it could be worse this time. The constant touting of these products by the institutions that sell them and their 24 hour-a-day trading has increased speculation in gold and other commodities from the comfort of home, anyone can do it.

Will we see any gold funds fail? More than likely, there's so many of them, someone's going to be caught with their pants down.

If John Paulson still owns the stocks and gold he filed at the end of last quarter, on one day last week he lost nearly $130,000,000. This quarter is the worst slide in the gold price in decades, many won't have been expecting it and stories are starting to emerge of punters losing their shirts.

Cheers

http://finance.yahoo.com/news/first-person-got-caught-gold-buying-frenzy-cost-214600177.html;_ylt=AqfQ8cjS_QTTF3wOJehLUp.L_IdG;_ ylu=X3oDMTNlOTUxdTlzBG1pdANGaW5hbmNlIEluZmluaXRlIE Jyb3dzZSBTcGxpdARwa2cDYmJmMGRiZTEtMDk2Ny0zNzNiLTlk YTctMzE0NGQ4NGU1MmM4BHBvcwNsMTQEc2VjA21lZGlhaW5maW 5pdGVicm93c2VsaXN0;_ylg=X3oDMTM5MDE0b2Z0BGludGwDdX MEbGFuZwNlbi11cwRwc3RhaWQDMjg3N2Q4NmEtMTMzYS0zMzYy LTkyOGYtNTRmOTA4MjM5MjQ4BHBzdGNhdANleGNsdXNpdmVzfH RoZWV4Y2hhbmdlBHB0A3N0b3J5cGFnZQ--;_ylv=3

Skol

30-06-2013, 09:06 AM

From The Economic Times. (India)
---------------------------------------------------------------------------
Won't get fooled again: physical gold buyers sit out this price rout

Reuters Jun 28, 2013, 06.49AM IST

(Dealers and jeweller report)

LONDON/NEW YORK/MUMBAI: In April, after gold dived more than $200 an ounce in two days, an unprecedented scramble to buy everything from coins to jewellery at "bargain" prices helped arrest the plunge, tempering fears of a prolonged rout.

But not this time, say dealers and jewellers, who report that consumers across the world are reluctant to buy even after a price decline of almost $200 in 10 days as investors rushed to liquidate their gold in anticipation of the Federal Reserve's scaling back its bond-buying stimulus since November 2008.

JBmurc

30-06-2013, 10:28 AM

GOLD ETF

http://www.youtube.com/watch?v=l36wa9fZEZk

FarmerGeorge

30-06-2013, 11:33 AM

Will a gold fund or ETF fail? It's an interesting question - remember when all thought it was impossible for Money Market Funds to 'break the buck'? If that can happen then it's certainly possible.

Skol

30-06-2013, 12:26 PM

FarmerGeorge,

I'm sorry if I come across as a little gruff, I think I've developed a thick skin after all the name-calling and finger-pointing by the gold bugs as gold spiked higher and higher. I first said it was a bubble at about $1100, the bugs rubbished me and said I had no idea what I was talking about, and that gold was going into the thousands, 'to the moon', Peter Schiff, Mike Maloney, the Aden Sisters, Eric Hommelberg, Gerald Celente, Jim Sinclair, Jim Rickards, ad. infinitum, said so.

They were right, I was wrong, I knew nothing about gold. Maybe, but I know a bit about bubbles, so it's time for a little schadenfreude. I've posted this here before, the goldbugs are seeing the trainwreck unfolding, this might begin to be familiar to them after 2 years since the high in gold.

A few of paras. from a book I have here.

'Speculative manias are always supported by authoratative opinion that reassures speculators.'

'Participants ignore the voices of doom, which really are the voices of reason.'

'It is impossible to invest successfully in a speculative mania. A mania is a lot like a speeding freight train. It accelerates, rockets along, slows at some points, only to speed up again. Getting on and off at just the right time is near to impossible. More likely, you'll end up standing in front of it, unable to move as it bears down on you.'

'All manias end abruptly, and with little warning.'

'People become hostile to the message-giver that arouses anxiety, and ignore the message. By shooting the messenger, investors often put a bullet into themselves. This helps explain why people are so critical of doomsayers. If the market is rising, or even if it starting to fall, people who are bullish tend to ignore those calling for a market decline. During each of the manias we will discuss, someone of prominence (Warren Buffett in this case) always warned that a frenzy had taken hold.'

blackcap

30-06-2013, 05:02 PM

And vice versa too Skol. Ie when everyone is picking a bear market and you say to ppl that they are wrong or that there is a bear bubble (if that can exist) the same psychology applies. Gold was a bubble and I have read recently publications that picked gold to go to $5000 (the china story) with the most amazing conspiracy theories... and people do get sucked in. And if you are not careful it sounds so plausible too. You can almost start believing it yourself. The same applies to stock bubbles. I was heavily involved in the market round the internet boom (Nasdaq to 5000 etc) and you hear the same terminology. This time it is different, PE doesnt apply anymore etc. Back then I believed the hype. But you live and learn.
Just for the fun of things I might see through my broker what the price of calls and puts on gold is at various strikes and maturities. Could be interesting. Im sort of kicking myself for not buying some long dated puts when gold was around the $1800 level!!!!

elZorro

30-06-2013, 07:21 PM

I've learned quite a bit from this thread the last few days, or maybe been reminded of some things.

FarmerGeorge correctly pointed out the difference between gold ETFs and options on gold, certainly the latter are the more obvious paper transactions, my mistake. JB supplied a video pointing out that even Gold ETFs don't fully back the gold bets, and that a bank like HSBC can get out of the deal if everything falls flat, it's in the fine print.

I agree with FarmerGeorge, that the PoG now reflects roughly the cost of production for average gold miners, except if their capital costs are amortised into the equation. And any business that wants to survive longer term, has to do that. Gold bears can talk about the marginal cost of production as though doing better than that is OK, well it isn't. Even at $1800/oz there are lots of low-grade areas that won't get mined. http://www.zerohedge.com/news/2013-04-16/if-gold-was-just-commodity-what-would-be-its-support-price

Maybe the bears and investors changing tack will pull gold lower from here, but it shouldn't go much lower.

Skol

30-06-2013, 07:41 PM

As a dyed-in-the-wool bubble watcher this one is about as classic as you can get, the psychology, the feedback loop, the exponential spike that conforms almost exactly to the various stages of a bubble, the authoratative opinions from the 'experts', and the final cataclysmic crash and subsequent panic.

As I've said here before, a crash like this is like a fire in a picture theatre, everyone's rushing for the exit, some will get out, most won't, many will be killed in the rush.

The goldbugs meanwhile are having a conference in the middle of the theatre to determine the cause of the fire and how much damage will be done before the fire brigade arrives.

Valuegrowth

30-06-2013, 09:43 PM

http://finance.yahoo.com/blogs/the-e...184734466.html (http://finance.yahoo.com/blogs/the-exchange/gold-slide-isn-t-over-184734466.html)

The Gold Slide Isn’t Over

catbert

01-07-2013, 12:38 AM

Gold Was A Horrible Investment From 1500 to 1965 - The Atlantic (http://www.theatlantic.com/business/archive/2013/06/gold-was-a-horrible-investment-from-1500-to-1965/277186/)

elZorro

01-07-2013, 07:21 AM

blackcap

01-07-2013, 08:06 AM

But isnt gold denominated in USD? THerefore if the US is printing and doing things like QE.... it follows that the real value of gold will keep falling even if the "price" of gold rises.

Skol

01-07-2013, 08:16 AM

MW: your article assumes that the US economy is fixing itself, but the figures show that it is an illusion propped up by paper money as a result of QE. True, inflation has not resulted, yet. But where are the easy real profits from cheap energy that a thriving economy is built on? Energy prices are still high.

The fundamentals for holding gold, or the gold price as regards mining, are still sound in the medium-longer term according to Equedia. Plenty of data in this article, and they reckon the demand for gold is still very high in USA, and other countries - from smaller investors - it's just the bigger players who have backed off for the time-being.

http://campaign.r20.constantcontact.com/render?llr=orkbnrcab&v=001oBPX2EUZHJPJKNov1pqgCF5Xo5FgXiPjM9fqtgB7xhSQ4 aqFP-GOYfGINt4wg4Ylv-t2iMlUhIzEcdoK9y56nMtuK19zCrGECDmPns6iEOU%3D

EZ,

Here's a quote from your article.

---------------------------------------

Clearly, the demand for physical gold is stronger than ever but we are still witnessing gold plunge.

That is more than enough evidence to prove that gold-backed ETFs are backed by paper, and not gold.
--------------------------------------------------

If the gold demand is stronger than ever, why is the price of gold plunging? It's simply not true, perhaps you can enlighten us all and prove that punters are queueing up buying gold.

ETF's are backed by gold, the GLD ETF is required to buy and sell as their demand fluctuates, this dude is scaremongering, but the more they do it the more gold is likely to plunge if people actually believe this nonsense.

The goldbugs just can't get over the paper/physical propaganda, but they're leaving the banksters alone at the moment as the crash focuses their attention, problem is they're standing right in front of a speeding locomotive.

The nearest historical event to the current debacle is 1981. If gold falls by the same % then it will end at $690.

Skol

01-07-2013, 11:47 AM

Just for those who say that gold ETF's don't own any gold. GLD currently has 969.5 tonnes.

http://www.spdrgoldshares.com/

From today's Herald:

"Inexperienced investors, attracted by the safe haven image of gold and able to buy easily through new commodity trading products, were also panicking and selling."

JBmurc

01-07-2013, 03:11 PM

Skol

01-07-2013, 03:13 PM

Yes and Enron was "America's Most Innovative Company" for six consecutive years.

I was waiting for that............... the conspiracy theory. lol

I knew you wouldn't be able to resist it, I can read you like a book JB.

JBmurc

01-07-2013, 03:20 PM

I was waiting for that............... the conspiracy theory. lol

I knew you wouldn't be able to resist it, I can read you like a book JB.

As the majority would have said to anyone that believe Enron was a scam.....

COMEX inventory's keeps going down ....??? this shouldn't be happening ....aren't we in a major BEAR gold market ...Gold crashed the most since 1980 ...!! Spec shorts at all time high ....commercial longs increasing ....

Not sure if you have SKYTV skol but I highly recommend- http://www.sho.com/sho/oliver-stones-untold-history-of-the-united-states/home

I watched the last episode last night ...really shows the direction the USA has taking the world ....and the future we will have under the American Empire ...

Skol

01-07-2013, 03:36 PM

Yeah, but it's such a lot of codswallop I prefer to watch something educational like The Normans.

Instead of worrying about the USA you should be worrying about China, that's one place that really is likely to implode.

I suppose you even support that traitor Snowden, now stuck in the Moscow transit lounge with no passport and cut loose by the Ecuadoreans. A comfy cell in Fort Leavenworth must be looking better all the time.
--------------------------------------------------------------------------------------------------------------------------------------

"Not all goldbugs are nutters, but all nutters are goldbugs."....................Anonymous.

JBmurc

01-07-2013, 03:56 PM

Instead of worrying about the USA you should be worrying about China, that's one place that really is likely to implode.....

If China did implode it will drag everyone down ...for one they have over one trillion USD in the reserves they could dump to help out..

worth a watch one funny aussie how he sees it US vs China--http://www.youtube.com/watch?v=VLuBA66xc0c

Halebop

01-07-2013, 07:39 PM

COMEX inventory's keeps going down ....??? this shouldn't be happening ....aren't we in a major BEAR gold market ...Gold crashed the most since 1980 ...!! Spec shorts at all time high ....commercial longs increasing ....

Look at the basis margin. It has more than halved. Shorters have shifted to leasing because gold owners are getting more income from leasing than from basis margins. Leasing does not require Comex warehoused gold. Not at all surprising that Comex stocks decline in this scenario.

JBmurc

01-07-2013, 08:23 PM

Look at the basis margin. It has more than halved. Shorters have shifted to leasing because gold owners are getting more income from leasing than from basis margins. Leasing does not require Comex warehoused gold. Not at all surprising that Comex stocks decline in this scenario.

So we could see Comex stocks continue to fall because major gold holders are leasing their gold out ...so many a vault operator's can earn extra income by leasing out gold and silver that it knows it will never be required to produce for delivery....smart move just don't tell the guys that your holding the gold for ...aka Germany

latest from the Comex--

"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only." - disclaimer now posted on the Comex gold and silver daily warehouse stock report as of Monday, June 3, 2013.

Halebop

01-07-2013, 08:49 PM

I don't know the answer but the more interesting question for me is why have basis margins collapsed?

Skol

01-07-2013, 09:07 PM

Let's keep it simple JB, you're reading too much into the trivia like the goldbugs have a habit of doing. All the trillions of words the goldbugs have written about how the world is about to arrive at financial Armageddon have come to SFA.

I will quote from a book I have here just to remind you:

"In the late 1970's, people seriously believed that money would become worthless because of accelerating inflation."

The big picture is that the world is progressing quite normally given that we've had a very problematic recession, however deleveraging is taking place on a massive scale and QE is going to end, it always was, nothing lasts forever and neither is the gold and silver mania, with silver declining 62% from it's peak, must really suck for those overexposed to it.

Psychology is the key and for precious metals, it's shot to bits, gold punters are going to sell all the way until it hits the bottom. Most 'investors', particularly retail , buy at the top and sell at the bottom, and so in this case have the 'experts', the central banks. The goldbugs have made a big deal about the central banks buying and been trying to emulate them, but the cenral banksters have been amongst the biggest losers, and it's not the first time, it's all been done before.

elZorro

01-07-2013, 09:12 PM

This is way above me, but are you guys talking about this type of spread profit-taking?

http://monetary-metals.com/why-is-gold-draining-out-of-comex-warehouses/

I can see that it could have a big effect on the gold price, yet the original seller of the leased gold loses no money, it's all sorted.

Mr Wiegand tries to put Skol on the back foot..conspiracy..

http://www.ino.com/blog/2013/06/roger-wiegand-predicts-a-brand-new-world-for-gold/

JBmurc

01-07-2013, 09:20 PM

'Unprecedented' $80 Billion Pulled From Bond Funds

"A record amount of money poured out of exchange-traded and mutual bond funds in June, according to a fresh report by TrimTabs, nearly double the amount pulled out of bond funds at the height of the financial crisis in October 2008"

http://www.cnbc.com/id/100855508

No your right skol nothing to worry about sleep easy... the powers at be will take care of everything...just do as your told..be a good little sheep now.LOL

You love taking about your great ability to spot bubble's in history but you never talk about the biggest in modern history which is the BOND BUBBLE

Valuegrowth

01-07-2013, 10:05 PM

Some players in the financial world think gold isa bubble. We need more study. I believe at different times there will be different crisis such as currency crisis, gold and oil crisis, credit and banking crisis and housing crisis in the coming three decades. In some period some assets can become bubble due to over speculation and when all money including hot money chases those assets. Both AUD and NZD became bubble currencies due to over speculation and hot money.

Now Both AUD and NZD dollar has entered a multi-year bear cycle. Similarly gold has entered a multiyear bear cycle. I am bullish on new assets including emerging commodities and global stocks in all types of markets in the coming decade. I am also bullish on USD and few other currencies. For me money flow, crowd behavior and crowd thinking etc are very important to have some estimation on future targets. Nobody can predict 100% correctly in this financial world. There are so many instruments in the financial world as well.

http://www.forbes.com/sites/investor/2013/04/15/the-gold-bubble-pops-others-will-follow/ (http://www.forbes.com/sites/investor/2013/04/15/the-gold-bubble-pops-others-will-follow/)
The Gold Bubble Pops, Others Will Follow
http://au.businessinsider.com/gold-open-interest-shows-bubble-2013-6 (http://au.businessinsider.com/gold-open-interest-shows-bubble-2013-6)
The Chart That Best Illustrates How Gold Was ABubble
http://www.ibtimes.com/gold-bubble-real-says-societe-generale-calling-1200oz-q4-1310191# (http://www.ibtimes.com/gold-bubble-real-says-societe-generale-calling-1200oz-q4-1310191#)
Gold Bubble ForReal Says Societe Generale, Calling For $1,200/Oz. In Q4
http://www.cnbc.com/id/100847575 (http://www.cnbc.com/id/100847575)
Has Gold Entered a Long Term Bear Market?
My ideas are not a recommendation to either buy or sellany security, commodity or currency. Please do your own research prior tomaking any investment decisions. Please note that I do not endorse or takeresponsibility for material in the above hyper-linked sites.

Skol

02-07-2013, 08:08 AM

No your right skol nothing to worry about sleep easy... the powers at be will take care of everything...just do as your told..be a good little sheep now.LOL

Let's see who the sheeple are:

Last 12 months:

DJIA +16%
N225 +48%
DAX +27%
FTSE +8%
CAC +13%
XJO +16%
---------------

Gold -24%
Silver -29%
HUI -46%
GDXJ -51%
GDX -46%
XGD -60%

FarmerGeorge

02-07-2013, 09:50 AM

Given the global money printing we might be on the verge of a global currency crisis and I'm not going to completely dismiss the idea.

However I also have in my little personal library and book called "You can profit from a monetary crisis" by a man named Harry Browne.
It was written in 1975 and helps give some context to a lot of the conversations happening now. Whenever I get the urge to go 'all in' on gold I read a few pages again and think of all the people who may have gone 'all in' in 1975 when they read this book.

Skol could prob give some stats on the relative performance of Gold and the Dow (incl. Divs) in that time but I suspect Gold would not look great.

Silverlight

02-07-2013, 10:12 AM

I bought back into Gold today, after been out for almost 20 months, through shares in couple of companies and an ETF. Gold @ 1250.

Skol

02-07-2013, 10:19 AM

Farmer George,

Actually gold hasn't done too badly since 1972, out of the the S&P500 and gold, gold is ahead, but given that the stockmarket is on the way up and gold is on the way down it could be completely different in a few months time.

In today's dollars since 1972,

S&P 500 (divs incl) up 2.76 times.
Gold up 3.8 times.
And JB's favourite, silver, up 1.7 times.

But long term, gold is one of the worst 'investments' on the planet.
--------------------------------

In his book Basic Economics, Thomas Sowell[68] argued that, in the long-term, gold's high volatility when compared to stocks and bonds, means that gold does not hold its value compared to stocks and bonds:
To take an extreme example [of price volatility], while a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.