Gold

[Skol]

Addendum Farmer George, this is the return for gold against the S&P500 total return index which includes dividends, since '75.

Gold up 180%.
S&P500 up 1147%

Over time, shares, including dividends leave precious metals for dead.

GLD down another 1.2 tonnes overnight.

[Valuegrowth]

http://blogs.wsj.com/corporate-intelligence/2013/07/01/first-the-gold-bugs-got-stung-now-the-pawn-shops/

First the Gold Bugs Got Stung, Now the Pawn Shops

[Skol]

UBS advise their clients to get out of gold.

http://www.bloomberg.com/news/2013-07-02/ubs-rates-commodities-underweight-as-equities-seen-advancing.html

HUI -4.76%
GDX -4.58%
GDXJ -3.89%
SLW -5.95%

GLD ETF down another 3.4 tonnes overnight.

[elZorro]

Even Barrick is getting hammered, and 60% of its production in Q1 came from a cost base of about $600 an ounce. But:


Barrick could face a ratings downgrade of “another notch or so” if gold prices decline further and stay lower for a prolonged period, although it will probably remain investment grade, said Li.
“They will get hit pretty hard in terms of earnings and margins and free cash flow” at lower prices, he said.
Barrick has forecast it will cost $950 to $1,050 to produce an ounce of gold on average from all its mines this year. Goldcorp forecast a cost of $1,000 to $1,100.
Barrick’s net debt would probably increase to a peak of $15.8 billion in 2014 if it decides to cancel its Pascua-Lama project, assuming a gold price of $1,300, Anita Soni (http://topics.bloomberg.com/anita-soni/), a Toronto-based analyst at Credit Suisse Group AG, said in a note dated June 25. Net debt could rise to $17 billion in 2015 if the project on the Chile-Argentina border goes ahead.


That is the issue, look at the capital debt it takes to get a big mine up and running.

All very well to say that the GLD ETF is down another few tonnes, but are these investors selling when they should be holding? Who told them to sell? Gold is still four times above $300 an ounce, its recent low point over the last two decades.

[Valuegrowth]

Too much temptation on gold is not good for any economy. If we analyse Indian economy we can get some idea about this. In advance I had some concern about nation of gold consumers and how it will affect the economy. Now number one gold consumer India has to facefor the one of the biggest currency loss. Their currency fell 4.9 percent last month.

According to following link Jewellery sector in India agrees to stop selling gold bars and coins until India's trade balance improves. Gold has affected for their trade balance as well. Will this new developmentaffect negatively to the gold market?

http://goldnews.bullionvault.com/gold-bars-062520132 (http://goldnews.bullionvault.com/gold-bars-062520132)

Gold Bars & Coin Sales Suspended by India's JewellerySector

Myideas are not a recommendation to either buy or sell any security, commodity orcurrency. Please do your own research prior to making any investment decisions.Please note that I do not endorse or take responsibility for material in theabove hyper-linked sites.

[JBmurc]

Too much temptation on gold is not good for any economy. If we analyse Indian economy we can get some idea about this. In advance I had some concern about nation of gold consumers and how it will affect the economy. Now number one gold consumer India has to facefor the one of the biggest currency loss. Their currency fell 4.9 percent last month.

According to following link Jewellery sector in India agrees to stop selling gold bars and coins until India's trade balance improves. Gold has affected for their trade balance as well. Will this new developmentaffect negatively to the gold market?

http://goldnews.bullionvault.com/gold-bars-062520132 (http://goldnews.bullionvault.com/gold-bars-062520132)

Gold Bars & Coin Sales Suspended by India's JewellerySector

Myideas are not a recommendation to either buy or sell any security, commodity orcurrency. Please do your own research prior to making any investment decisions.Please note that I do not endorse or take responsibility for material in theabove hyper-linked sites.

And now their Silver imports are going through the roof ...

[Skol]

JB,

I love to disprove goldbug conspiracy theories because it makes them look so retarded, so here's the gold bar list for the SPDR GLD Trust that you condescendingly refer to as the next Enron.

http://www.spdrgoldshares.com/assets/dynamic/GLD/file/barlist/Barlist.pdf

[JBmurc]

In what is best described as the "Gold Saga" over a period of almost exactly 2 weeks from 9 April to 23 April (with the market impact from 10 April to 24 April), the gold price fell by more than $200/oz within a week. Goldman Sachs (Goldmans) went from bullish/buy gold up to 9 April at ~$1570/oz through "short" gold on 10 April, only to "change horses" back again on 23 April at ~$1408/oz stating close the gold "short" positions, as the gold price could rise.

http://www.breakawaydigger.com/Articles%20Digger%20June%202013/Article%2058.pdf

[Skol]

In what is best described as the "Gold Saga" over a period of almost exactly 2 weeks from 9 April to 23 April (with the market impact from 10 April to 24 April), the gold price fell by more than $200/oz within a week. Goldman Sachs (Goldmans) went from bullish/buy gold up to 9 April at ~$1570/oz through "short" gold on 10 April, only to "change horses" back again on 23 April at ~$1408/oz stating close the gold "short" positions, as the gold price could rise.

http://www.breakawaydigger.com/Articles%20Digger%20June%202013/Article%2058.pdf

So What?

Aren't they allowed to buy and sell gold?

Better get yourself some USD assets before it's too late JB. I'm on the West Coast atm. First thing I do on arrival is notice in the WSJ that new car sales are up 9.2% on June 2012,and in the first 6 months of 2013, Americans purchased 7.8 million new cars. Turn over the page and US oil production is up. The US and Canada are producing 3,000,000 barrels/day more than they were in 2008.

The place is chokka with tourists, even the beggars are having 4th of July off. lol

[macduffy]

I've just read an interesting article "Has gold lost its lustre" on John Mauldin's "Outside the Box". Rather too long to copy for this thread but it can be found on his website or by Googling "Outside the Box", if anyone's interested. I don't know the author but Mauldin is normally a good judge of what's worth reading.

[FarmerGeorge]

Addendum Farmer George, this is the return for gold against the S&P500 total return index which includes dividends, since '75.

Gold up 180%.
S&P500 up 1147%

Over time, shares, including dividends leave precious metals for dead.

GLD down another 1.2 tonnes overnight.


Cheers Skol - that's more like what I was expecting and is illustrative of the compounding effect of dividends. Perhaps you could have juiced your gold returns via leasing and picked up some income in the meantime which would also have compounded - but on the other hand if you think there's a currency crisis on the way you're not really likely to lend your metal for dollars anyway.

[blackcap]

I've just read an interesting article "Has gold lost its lustre" on John Mauldin's "Outside the Box". Rather too long to copy for this thread but it can be found on his website or by Googling "Outside the Box", if anyone's interested. I don't know the author but Mauldin is normally a good judge of what's worth reading.
thanks for the link macduffy. interesting and refreshing read, not only on gold.

[Skol]

Not long now until $1,000 gold.
The median house price in the USA is up 15.8% on a year ago, still quite a few homeowners underwater, but nowhere near as many as a couple of years back.
Barron's goldmining index is descending nearly vertically, down 4.52% last week.

If gold was to catch up to Barron's goldmining index the price would be $977, to catch up to the GDXJ it would be $892.
If silver was to catch up to the silver mining index it would be $17.37.

The SPDR GLD Trust is bleeding by the day, down 2.7 tonnes on 3 days ago.

[BIRMANBOY]

LOL.....Moosie, the meister of understatement....most of us cant even understand ourselves ...good luck on the other million "investors" out there.
thanks for the article macduffy. the thesis is that the market will only pay what it thinks a commodity is worth, and that value fluctuates as perceptions change. if you can put aside emotion and understand human psychology, the market should be quite easy to buy and sell into and out of.

[Skol]

Looks as if the employment figures did a bit of damage to the gold and silver price but as usual the goldbugs say the numbers are rigged, except when it's bad news and then it's proof that the USA is going to hell.

I can tell from the goldbug posts that resignation or 'capitulation' has arrived, they're very despondent, talking about 'stacking' all the way down, 'stacking fiat' (can you believe that), selling out, trying to guess when the 'bottom's in', blaming 'paper gold' for their problems, a bond crash. lol

What's left of the goldbug community will be pondering this weekend what to do, I'll guess that this week there'll be another rout.

[Skol]

And now their Silver imports are going through the roof ...

No they're not:

By RAJESH ROY

NEW DELHI—India's gold and silver imports in June fell 70% from the previous month following steps taken by the central bank and the federal government to curb demand, a senior government official said Friday.

India, the world's biggest gold consumer, is estimated to have imported $2.5 billion of gold and silver in June, compared with $8.4 billion of imports in May, said the official, who didn't want to be named.

The official didn't give separate figures for gold and silver. Usually, gold accounts for most of India's imports of precious metals.

The decline in imports will provide much-needed relief to the government, which is struggling to check a rising current-account deficit due to sustained demand for gold. India's current-account deficit was 4.8% of gross domestic product in the financial year ended March 31, up from 4.2% a year earlier.

The wide deficit has also been a cause of concern for foreign investors, who pulled $7 billion from Indian stocks and bonds in June, weakening the local currency which last week fell to an all-time low of 60.75 rupees to the dollar.

India has been taking steps to reduce gold imports, most recently by increasing the import tax on the yellow metal to 8% from 6%. The Reserve Bank of India has restricted banks and trading agencies from importing gold on deferred payment, effectively requiring dealers to pay cash in advance for imports.

A price slump in mid-April combined with peak wedding-season demand fueled gold purchases during April and May. Imports of gold and silver rose 109% from a year earlier to $15.88 billion during the two months.

[Skol]

SPDR GLD Trust down 16.04 tonnes of gold since Friday.

946.96 tonnes remaining.

[Daytr]

Yep & gold up 1.3% today. The fall since the US jobs number didn't last long. At $1180 we may have seen a bottom, but too early to tell yet. Certainly the market isn't as bearish as it was with quite a few banks saying the worst has been done for gold. ETFs although still bleeding are at a much lesser rate. Could be an interesting few days although can't rule out $1180 being tested again.



SPDR GLD Trust down 16.04 tonnes of gold since Friday.

946.96 tonnes remaining.

[Skol]

Thing you're going to be disappointed Daytr, the only thing that's gone up is the gold price everything else is down, HUI, XGD, Tonnage at SPDR GLD, Indian imports, China imports and sales, and US Mint sales.

http://www.investingdecoded.com/#!/2013/07/bubbles-bust-and-people-act-surprised.html

[Daytr]

Hey Skol, I think you are being a bit selective what you are comparing them to. The only one of the physical elements that is down YTD is the ETFs, everything else is up substantially ytd. The ETF sales seem to have slowed substantially & I wouldn't be surprised if in the next few weeks they become a net buyer again. If the gold price has bottomed, then the shares will rocket like any market that is over-sold. As you say back the truck up haha. Well I haven't done quite that, but I have been loading up a bit in the last week or two.


Thing you're going to be disappointed Daytr, the only thing that's gone up is the gold price everything else is down, HUI, XGD, Tonnage at SPDR GLD, Indian imports, China imports and sales, and US Mint sales.

http://www.investingdecoded.com/#!/2013/07/bubbles-bust-and-people-act-surprised.html

[Skol]

Daytr,
Don't think I am being selective actually, what is up? Nothing I can think of; gold, silver, HUI, XGD, GDXJ, GDX, SIL, SLV, SLW, mint sales, Indian imports.

Can you give me some examples of what are 'up substantially'?

Gold's down 35% from its high, to get back there it has to go up 54%. Could take some time.

[FarmerGeorge]

Just a quick point on when it can be worthwhile to take physical delivery. Bass is long a lot of traditional stocks and US housing, he made plenty from sub-prime and knows what he's talking about. I think it would be a mistake to dismiss his views as those of 'just a gold bug'.

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

[Skol]

The book 'Gold Bubble', which I have here was a great read, here's the author telling goldbugs why gold's going to $700.

http://finance.yahoo.com/blogs/big-data-download/gold-no-longer-safe-haven-strategist-says-175653878.html

= ~$10.70 silver.

SPDR GLD Trust down 7.2 tonnes overnight.

[elZorro]

I'm just going to say this now while I have the chance..

Gold to da moon! (Sort of).

[blackcap]

Its certainly taken off this morning (NZ time) hasnt it!! For those who think its falling to the 800 lows its a good time to buy puts or short :) But not for me at this stage. Just dabbling on the ipredict.co.nz site which has commodities markets :)

[elZorro]

All quiet from Skol - cheers Blackcap. The gold spike was in turn caused by a big drop in the dollar value, and this in turn was caused by Mr Bernanke.

http://www.incrediblecharts.com/tradingdiary/2013-07-11-gold-forex-markets.php

QE will continue. Interest rates will stay low. Cue an exodus from the US$. It was a very sharp spike, I expect to see it carry on tonight.

[blackcap]

Dont get me wrong elZorro, in the bigger scheme of things I dont like gold as an investment at all. It doesnt generate anything or produce anything. But its interesting to see the daily gyrations in the gold price and how certain people attach a religious fervour to the yellow metal.

Long term I think it will tend towards US 1000 but if QE continues and off course this will be inflationary then gold will hold its level (as its quoted in USD)

[Skol]

All quiet from Skol

only one thing to do EZ, back the truck up.

[Daytr]

Hi Skol, in the 1st quarter physical demand was up across the board, as you would expect with a falling gold price. I haven't yet seen Q2 figures but I suspect they were up as well, but perhaps not as strong as Q1. Obviously the ETF selling & market shorting has far outweighed this, however 1) shorts need to be covered at some point & 2) the ETF selling is a one off & potentially could turn to be a net buyer in the coming months.

I'm not a fan of these sights but when looking for the data I came across this.

http://www.zerohedge.com/news/2013-05-16/gold-demand-one-chart-physical-vs-etf


Daytr,
Don't think I am being selective actually, what is up? Nothing I can think of; gold, silver, HUI, XGD, GDXJ, GDX, SIL, SLV, SLW, mint sales, Indian imports.

Can you give me some examples of what are 'up substantially'?

Gold's down 35% from its high, to get back there it has to go up 54%. Could take some time.

[elZorro]

Yes, I would maybe back the truck up for a short time, if I had one, and the spare cash. Look at this prediction, lines up with Daytr. Longer term maybe not so good though.

http://www.ino.com/blog/2013/07/the-biggest-gold-prediction-of-the-year/

Turkey bought US$1.9 billion of gold in one hit.

[Valuegrowth]

http://www.forbes.com/sites/kitconews/2013/07/11/gold-prices-could-still-correct-50-rogers/

Gold Prices Could Still Correct 50%: Rogers

[elZorro]

MW: the headline is a bit inaccurate, the 50% drop prediction was from the $1900 high, not the current gold price.

As JB has been saying all along, the US appears to be having a bit of trouble in getting hold of enough gold to send back to the rightful owners, Germany. http://www.cnbc.com/id/100382718

Net longs in gold are now higher than net shorts, especially in the US.

http://campaign.r20.constantcontact.com/render?llr=orkbnrcab&v=001p0G3IzaXxpwN_cUI-EvdlxnqxrQosqrM_Y9_sftBZIBq_WTG_90cvjWUwzBE8NVyfT6 35qUVgGbqseT6sGfpLyGDMeExzS4w1cNNTW4oKNA%3D

Of course it's just a coincidence that when Germany asked for the gold to be repatriated, mid January 2013, gold was stable and trading within limits of $1600 to $1800 an ounce. It has been shorted down to $1200 and lower, since. Most of the shorting steps were brutal, a sign of massive selling power that triggered other trades based on stop-losses.

Germany is asking for 300 tonnes of gold to be sent back, and it's meant to be held in a Federal Bank in NYC. Its value is around $13.8 billion, but the tricky thing might be getting hold of that amount of gold bars, considering it's over 10Moz, or the entire contents of a very big gold mine.

More background on the USA's record of gold stockpiling. http://nsnbc.me/2013/04/18/federal-reserve-refuses-to-submit-to-an-audit-of-germanys-gold-held-in-u-s-vaults-2/

300 tonnes of gold is over 10% of annual worldwide production of gold, and the costs of that extraction at that level is relatively high, and not reducing. If some of the higher cost mines get mothballed, that would reduce the average cost of gold production, but gold output would be slashed.

http://www.miningfeeds.com/2013/04/22/world-gold-production-2013/

[Skol]

http://finance.yahoo.com/news/history-shows-gold-could-fall-123653573.html

[elZorro]

Comment on the INO website:


Anonymole says: July 15, 2013 at 8:19 pm (http://www.ino.com/blog/2013/07/think-its-time-to-get-back-into-gold-think-again/comment-page-1/#comment-172688)
Two points:
1) QE "should" have inflated the US$. It hasn't for another two reasons: a) two $trillion of the three $trillion QE that has been injected into the US "economy" has gone directly onto the central banks balance sheets. Central banks are just sitting on it (see ZeroHedge). This has kept the rate of inflation way down suppressing the price of gold. b) Foreign currency central banks have also been easing which has propped up the dollar and its index and again, suppressing the price of gold.
2) Gold has undoubtedly been manipulated over the last 4 months (since April). There is no way to beat the Fed's central bank partners when it comes to playing funny money with gold. Gold WILL go back up, but only after the central banks have pressured it as low as they think it will go without triggering scandal.

[winner69]

This guy got some charts too

http://www.mauldineconomics.com/ttmygh/what-if

[elZorro]

This guy got some charts too

http://www.mauldineconomics.com/ttmygh/what-if

Thanks for that W69, it lines up too. I hadn't seen that article, full of good info. Maybe my gold investments aren't such dead ducks after all. They just appear to be so.

Asking to have your physical gold returned is not the same as taking a loss on it, and once more investors start to realise that this is what's going on, the price should recover. In the meanwhile, the banks are foregoing some of their bullion leasing profits and concentrating on putting the word out that gold is in a downwards trend. Just so they can buy that gold back at an acceptable price.

Like a swan, all calm looking on top, paddling furiously under the water.

[Skol]

A break below $1260 has a downside target of $1000.

http://www.cnbc.com/id/100888334

[JBmurc]

[QUOTE=karlos;417107]No stress Daytr, it was the flippin fire water again:t_down:

As an apology, I present a superfast overview of last couple of years, got the idea from Phaedrus:t_up:
4651
If the masses are correct then I suppose we could see $5000:confused:

"The one who laughs last laughs best"

the Gold Silver story is far from over just as the US/UK/Euro fiat woes are also far from over

Skol was dead wrong from $1000 to $1900

I've been bullish Gold/silver from mid 2000's aka $500oz au $6oz silver ....

I stand but my statement Gold/silver hasn't seen a true Parabolic move to match the 80's

[Skol]

Parabolic enough to resign gold and silver as dog investments for the next 20 years. There are too many walking wounded for precious metals to recover, maybe the next generation might find something interesting in them.

[JBmurc]

Parabolic enough to resign gold and silver as dog investments for the next 20 years. There are too many walking wounded for precious metals to recover, maybe the next generation might find something interesting in them.

Wow that comment is going look very stupid in years to come ....
walking wounded yes I agree on the production side of Gold/silver if the price does stay at these levels it's going smashed production worldwide reserves /exploration that only much higher prices will fix..S.A gold production looks likely to hit the wall very soon

World population gowth ..approx. 1%pa
World gold production...approx. 1%pa
World fiat production..... ?

[Skol]

Real estate is the flavour of the day in many places, pm's have had it.

Where I live 5000 acres are going into residential real estate, it's also booming in the USA, and on TV there was a programme about the unaffordability of property near London. My neighbour has just had a visit from a guy who's done an aerial reconnaissance of the area and wanted to buy his property.

The gold decline has only just begun.

Gold production will decline, if no one wants it, it doesn't matter, mines will shut and the gold price will continue downwards, for some reason you think that punters will still want it. The hoarding, which has contributed to the absurd gold and silver price has stopped.

SPDR gold trust is down 11 tonnes since July 9.

[JBmurc]

Yeah nobody wants precious metals ? the world economy's are going boom right.....how about aircraft engines like in your pic

Aircraft Engines
The aviation industry uses precious metals in the manufacture of aircraft engines. Gold and silver, as well as palladium and platinum, are used in the manufacture of different types of aircraft engines, such as CF6 and the JT3D, according to the Aviation Suppliers Association. JT8D, JT9D, and RB211 aircraft engines also contain these metals. (See References 1 & 2)

Engine Parts
Typically, an aircraft engine has up to 23 parts that contain precious metals. Various aircraft engine parts that use precious metals include vanes, stators, blades, fuel nozzles, fuel manifolds, Tobi Ducts, and heat exchangers. Parts of an aircraft's engine turbine system and avionics system use gold and silver. And aircraft blades use platinum. (See References 1 & 2)

Recovery of Precious Metals
After the life of an aircraft engine is over, the aviation industry can still recover precious metal from aircraft engines and their parts. Companies that engage in such recovery typically sort and test the aircraft parts in order to get the most value out of them. They expose the parts to radioactive source so as to identify the precious metals and separate the parts that have them. Then, the recovery process involves leaching the metals out of the parts that hold them. Recovery of precious metals can account for up to 50 percent of an aircraft engine's recycling value. The recovery value of precious metal in a JT8D engine, for instance, could go to as high as $18,625, as of 2010, Aviation Week estimates.



Read more: http://www.ehow.com/list_7517611_uses-precious-metals-platinum-aviation.html#ixzz2ZRIheJtj

[Skol]

Last 12 months.

FTSE +16%
DAX +18%
N225 +65%
S&P +23%
CAC +18%
XJO +22%

Gold -19%
Silver -29%

[Skol]

The SPDR Gold Trust is currently losing 1.8 tonnes/day. At that rate, the total gold in trust will be zero at the end of next year.

[Skol]

The goldbugs keep saying that China will overtake the US, a patently absurd assumption. The Chinese, who, according to the goldbugs, are buying the world's gold, might soon be selling it.
------------------------------

'Rebalancing' ... the jargon phrase of the moment

All economic data are best viewed as a peculiarly boring genre of science fiction, but Chinese data are even more fictional than most. Add a secretive government, a controlled press, and the sheer size of the country, and it’s harder to figure out what’s really happening in China than it is in any other major economy.

Yet the signs are now unmistakable: China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.

Start with the data, unreliable as they may be. What immediately jumps out at you when you compare China with almost any other economy, aside from its rapid growth, is the lopsided balance between consumption and investment. All successful economies devote part of their current income to investment rather than consumption, so as to expand their future ability to consume. China, however, seems to invest only to expand its future ability to invest even more. America, admittedly on the high side, devotes 70 per cent of its gross domestic product to consumption; for China, the number is only half that high, while almost half of GDP is invested.

How is that even possible? What keeps consumption so low, and how have the Chinese been able to invest so much without (until now) running into sharply diminishing returns? The answers are the subject of intense controversy. The story that makes the most sense to me, however, rests on an old insight by the economist W. Arthur Lewis, who argued that countries in the early stages of economic development typically have a small modern sector alongside a large traditional sector containing huge amounts of “surplus labour” — underemployed peasants making at best a marginal contribution to overall economic output.


The existence of this surplus labour, in turn, has two effects. First, for a while such countries can invest heavily in new factories, construction, and so on without running into diminishing returns, because they can keep drawing in new labour from the countryside. Second, competition from this reserve army of surplus labour keeps wages low even as the economy grows richer. Indeed, the main thing holding down Chinese consumption seems to be that Chinese families never see much of the income being generated by the country’s economic growth. Some of that income flows to a politically connected elite; but much of it simply stays bottled up in businesses, many of them state-owned enterprises.

It’s all very peculiar by our standards, but it worked for several decades. Now, however, China has hit the “Lewis point” — to put it crudely, it’s running out of surplus peasants.

That should be a good thing. Wages are rising; finally, ordinary Chinese are starting to share in the fruits of growth. But it also means that the Chinese economy is suddenly faced with the need for drastic “rebalancing” — the jargon phrase of the moment. Investment is now running into sharply diminishing returns and is going to drop drastically no matter what the government does; consumer spending must rise dramatically to take its place. The question is whether this can happen fast enough to avoid a nasty slump.

And the answer, increasingly, seems to be no. The need for rebalancing has been obvious for years, but China just kept putting off the necessary changes, instead boosting the economy by keeping the currency undervalued and flooding it with cheap credit. (Since someone is going to raise this issue: no, this bears very little resemblance to the Federal Reserve’s policies here.) These measures postponed the day of reckoning, but also ensured that this day would be even harder when it finally came. And now it has arrived.

How big a deal is this for the rest of us? At market values — which is what matters for the global outlook — China’s economy is still only modestly bigger than Japan’s; it’s around half the size of either the US or the European Union. So it’s big but not huge, and, in ordinary times, the world could probably take China’s troubles in stride.

Unfortunately, these aren’t ordinary times: China is hitting its Lewis point at the same time that Western economies are going through their “Minsky moment,” the point when overextended private borrowers all try to pull back at the same time, and in so doing provoke a general slump. China’s new woes are the last thing the rest of us needed.

No doubt many readers are feeling some intellectual whiplash. Just the other day we were afraid of the Chinese. Now we’re afraid for them. But our situation has not improved.

The New York Times


Read more: http://www.theage.com.au/business/china/behind-the-great-wall-china-is-in-trouble-20130719-2q9h2.html#ixzz2ZWc1d2E4

[Skol]

so the chinese accumulation of gold is insurance against their own crashing economy? quite interesting and typically chinese!

Gold is crashing faster than the Chinese economy, so it's a lose-lose situation for them.

Last year

Gold -19%
HSI +8%
Shanghai Composite -8.8%

[JBmurc]

China(BRICS) succeeds and takes over from the old superpowers ....

Or China fails and drags all the world down

China(and many others BRICS etc) Make and the rest of the world thanks to low cost credit takes...

there is no win win for the old worn out western powers ... only keeping afloat by free money ...and investment from the likes of China,Middle east etc

Detroit BANKRUPT....and many so called experts believed the states can just borrow their way to prosperity? ......

[Skol]

Must be depressing continually forecasting the end of the world as we know it. Fortunately nothing lasts forever and neither will the recession, the company I work for has just submitted a request to bring in qualified staff from overseas because of a shortage.

In the 1970's New York teatered on the edge of bankruptcy, but the world didn't end, nor will it this time but one thing I can accurately forecast, poverty for overexposed goldbugs.

China will not take over from the superpowers, totalitarian states have a habit of failing if you studied history at school.

SPDR Gold Trust total gold in trust down 5 tonnes in the last 3 days of last week. The goldbugs keep banging on about the gold shortage, but I haven't noticed, gold is stuck in a rut, $1200-$1300, but will break out downwards soon.

The naive goldbugs used to bang on endlessly about how they must be right because the central banks were buying gold, but anyone with an ounce of common sense knows that central banks make some terrible decisions, esp. when it comes to gold.
The central bank of Sri Lanka is licking its wounds after paying too much, like many of the world's central banks.

http://www.lankabusinessonline.com/news/sri-lanka-forex-reserves-hurt-by-gold-price-fall/1870873682

[Toulouse - Luzern]

This guy got some charts too

http://www.mauldineconomics.com/ttmygh/what-if

Thanks.

Excellent backgrounder.

[JBmurc]

Must be depressing continually forecasting the end of the world as we know it. Fortunately nothing lasts forever and neither will the recession, the company I work for has just submitted a request to bring in qualified staff from overseas because of a shortage.

In the 1970's New York teatered on the edge of bankruptcy, but the world didn't end, nor will it this time but one thing I can accurately forecast, poverty for overexposed goldbugs.

China will not take over from the superpowers, totalitarian states have a habit of failing if you studied history at school.

SPDR Gold Trust total gold in trust down 5 tonnes in the last 3 days of last week. The goldbugs keep banging on about the gold shortage, but I haven't noticed, gold is stuck in a rut, $1200-$1300, but will break out downwards soon.

The naive goldbugs used to bang on endlessly about how they must be right because the central banks were buying gold, but anyone with an ounce of common sense knows that central banks make some terrible decisions, esp. when it comes to gold.
The central bank of Sri Lanka is licking its wounds after paying too much, like many of the world's central banks.

http://www.lankabusinessonline.com/news/sri-lanka-forex-reserves-hurt-by-gold-price-fall/1870873682

-Depressing not at all,,,I'm a pragmatic kind of investor history of mankind is filled of empires/economy's rising and falling ..
..the "World Bank" predicts a new world reserve currency.within this decade...you yourself love to China bash yet your own far more chinese products than Yank...

Been reading great book .."World right side up" just blows my mind on the growth of the middle classes of the many many emerging economy's and the growth to come just one example cellphones in southern Africa from 2000 10-15mill users to 2011 450mill+ ..

..US-UK-Euro growth days are over the average western consumer is filled with debt ...are lazier...more obese ...take higher amounts of drugs.need hand-outs to survive...stupider etc that ever before

many of the blue chip companies of the Word are growing in the emerging economy's Apple,Nokia,GE,Shell etc etc

And best of all for Gold is many of these billion's of emerging middle class investors understand hyper-inflation and sound money ..

Gold $1312

[Skol]

Actually there's very little around here made in China, maybe an iPhone or other electronic products, but US companies are bringing their production home after major quality failures.

There's books everywhere that predict the end of days, but it never happens, punters buy gold thinking the worst is going to happen and all they've done for the last 2 years is lose money, and silver ................ say no more.

Hyperinflation LOL how long have we been hearing that one? The goldbugs have been prediciting a hyperinflation-ravaged world for years, what a joke, they really do live on another planet.

[JBmurc]

Some great moves up in Gold shares again today my biggest PM investment PGI has really turn round from low 7's to decent sellers now 10c+ ....25%+ return not bad for under a month hold....

[Daytr]

Meanwhile Skol, gold has jumped 1.8% this morning & is now $140 off the lows. There is very good reason now to think gold has put in a bottom. I am aiming for circa $1450 USD gold & around A$1600 gold which will make my gold producers very profitable & that's all I care about! End of world no. However a tangible value of all things? Definitely!


Actually there's very little around here made in China, maybe an iPhone or other electronic products, but US companies are bringing their production home after major quality failures.

There's books everywhere that predict the end of days, but it never happens, punters buy gold thinking the worst is going to happen and all they've done for the last 2 years is lose money, and silver ................ say no more.

Hyperinflation LOL how long have we been hearing that one? The goldbugs have been prediciting a hyperinflation-ravaged world for years, what a joke, they really do live on another planet.

[slimwin]

Skol, I read an article in the economist about manufacturing going back to the states. They believed it was due to an increase in Chinese wages making it viable for an automated workforce to compete. My uncle, a manager at Husqvana in Sweden,mentioned quality was only an issue if you don't provide adequate quality control. The same as everywhere really.

[Daytr]

There is some evidence that manufacturing in the US is expanding. However the numbers of what is imported vs made in the good ol' USA are still dismal, pretty much like everywhere in the Western World. Its not only China but Mexico that is a significant low cost manufacturer among others. Bangladesh is also taking some of the manufacturing especially in textiles & fabrics business away from China. Similar to what China did to Korea & what they did to Japan before them..


Skol, I read an article in the economist about manufacturing going back to the states. They believed it was due to an increase in Chinese wages making it viable for an automated workforce to compete. My uncle, a manager at Husqvana in Sweden,mentioned quality was only an issue if you don't provide adequate quality control. The same as everywhere really.

[JBmurc]

Gold shorts getting crushed ...LOL burn baby burn

Gold Bulls Bet Right as Prices Rally Most Since ’11: Commodities
By Debarati Roy - Jul 22, 2013 4:47 PM GMT+1200


Hedge funds raised bets on a gold rally before prices capped the biggest two-week gain in 20 months as Federal Reserve Chairman Ben S. Bernanke damped speculation that a cut in stimulus is imminent.
Speculators increased their net-long position by 56 percent to 55,535 futures and options by July 16, the highest since June 4, U.S. Commodity Futures Trading Commission data show. Short contracts fell the most since November after reaching a record the previous week. Net-bullish wagers across 18 U.S.-traded commodities jumped 28 percent, the biggest gain since March.

Gold surged 6.7 percent in two weeks, the most since November 2011, as Bernanke signaled that decreases to bond purchases aren’t imminent. It’s “way too early to make any judgment” as to whether the Fed will start winding down its stimulus program in September, he said while testifying before the Senate July 18. Bullion fell into a bear market in April as some investors lost faith in the metal as store of value.
“We are seeing some support for gold as Bernanke’s statements tell us that the Fed wants to see a visible improvement in economic conditions before they begin tapering,” said Michael Cuggino, who manages $12 billion of assets at Permanent Portfolio (PRPFX) Family of Funds Inc. in San Francisco. “The longer-term reasons for owning gold, like capital preservation, remain as easy money will continue to flow into the system.”

http://www.bloomberg.com/news/2013-07-21/gold-bulls-bet-right-as-prices-rally-most-since-11-commodities.html

[JBmurc]

follow the momentum lol. wonder how long this will last. once QE is back on the block for an axing, she's going down again. right now, I'm in for a little over exuberant rallying ;)

Fact is they can't axe Q.E ..if they do...debt rates will increase next minute many of the western debt laden nations will find it hard to even pay the interest on the debts...

Currently the short side V's the long has never been more out of wack (12.3yr high) the massive once in a life time smash down in the gold/silver price created a massive short squeeze i.e-you had a huge amount of Gold bears jumping on board the Short train ...now the train has been put back on the Bull trend track ...I wouldn't be surprised to see one of the biggest moves north in the history of PM over the short term as shorter fight to take profits and in time save losing money...as I stated awhile ago commercial longs had increased while retail shorts hit records i.e big money gets out while small timers get in late

[peat]

gold is quite easy to play
4664
I just cant resist givin you some stick at this point moosie

:cool:

[JBmurc]

yes, shorts have to be covered, and there will be a huge upturn short term due to this. but that is not a solid long term bet for gold. and the idea that QE will never end is very naive JB. gold is quite easy to play as long as you read the charts, follow the momentum and dont get emotional about it!

Well your be a billionaire in no time ..moose....

[Skol]

Sell the present rally. From CNBC>

By that standard gold doesn't do as well. Since 1940 adjusted for inflation the only period over which gold has outperformed stocks is 2000 - 2010; and that lead is slipping fast. History suggests gold is extremely volatile in shorter terms but dramatically lags U.S. equities for the truly committed gold enthusiasts.

Those who quibble with that analysis, parsing the numbers to maximize the apparent returns of gold versus stocks are missing the point. Gold has worked over shorter periods as a speculative vehicle but the die hard goldbugs have seen minimal returns at best and dramatically underperformed stocks.

[JBmurc]

LOS ANGELES (AP) — A strange glow in space has provided fresh evidence that all the gold on Earth was forged from ancient collisions of dead stars, researchers reported Wednesday.

Astronomers have long known that fusion reactions in the cores of stars create lighter elements such as carbon and oxygen, but such reactions can't produce heavier elements like gold.

Instead, it was long thought that gold was created in a type of stellar explosion known as a supernova. But that doesn't fully explain the amount of the precious metal in the solar system.

About a decade ago, a team from Europe using supercomputers suggested that gold, platinum and other heavy metals could be formed when two exotic stars — neutron stars — crash and merge. Neutron stars are essentially stellar relics — collapsed cores of massive stars.

Now telescopes have detected such an explosion, and the observation bolsters the notion that gold in our jewelry was made in such rare and violent collisions long before the birth of the solar system about 4½ billion years ago.

People "walk around with a little tiny piece of the universe," said lead researcher Edo Berger of the Harvard-Smithsonian Center for Astrophysics.

http://www.redding.com/news/2013/jul/22/study-dead-stars-colliding-forged-gold-ea

[Skol]

Yeah, and Elvis Presley will be on the 6 o'clock news tomorrow night.

[elZorro]

I think that's a great way of looking at gold JB. It really is special, like all the other heavy elements.

Here's a link to the article that is current.


http://news.nationalpost.com/2013/07/17/dead-stars-that-crashed-long-ago-beofore-our-solar-system-formed-forged-gold-found-on-earth-study-says/

[Minerbarejet]

:eek2:What a completely fatuous statement. People "walk around with a little tiny piece of the universe," said lead researcher Edo Berger of the Harvard-Smithsonian Center for Astrophysics.
I can walk around with a shovelful of sand, a glassful of water or a lungful of air and I'm walking around with a tiny piece of the universe. Wow ( and I dont mean world of warcraft) and hes at HARVARD!!! :)

[peat]

Yeah, and Elvis Presley will be on the 6 o'clock news tomorrow night.

stranger things have happened
4666

[JBmurc]

Not very often you here a mainstream news stream like reuters with a more open view on Gold (and not the usual anti bah bah) ..

- The actual message of the backwardation is that there is behind the curtains a lack of confidence in the fiat monetary system, a de facto rejection of paper money by some people who prefer the real money (gold and silver)," said Barba.

http://www.reuters.com/article/2013/07/19/derivatives-gold-idUSL1N0FP1CB20130719

-add this in with the fact the likes of the Big bullion banks are finally going long after years of holding much bigger short positions ...
massive bounce in long term Bull trend 2k> the big boys made a killing on the way down thanks to them Gold had it's biggest Qtr fall in history ...now the same guys are getting set to make a by killing pushing it much higher thanks to good old leverage....just before killing off a bulk of the PM producers they just loaded up in...IMHO (I see recently US Gov talk of a move to stop Banks etc trading in commodities)

[Daytr]

Dennis Gartman has been a gold bear for quite some time & has now flipped & also talks up gold equities as they will out perform gold as they did on the way down. I have met Dennis a few times & seen him speak at various functions. I don't always agree with him, but he quite often spots what others don't.

http://www.cnbc.com/id/100907001

[FarmerGeorge]

Dennis Gartman has been a gold bear for quite some time & has now flipped & also talks up gold equities as they will out perform gold as they did on the way down. I have met Dennis a few times & seen him speak at various functions. I don't always agree with him, but he quite often spots what others don't.

http://www.cnbc.com/id/100907001

Haven't met him but have read a lot of his stuff. His is right more often than wrong but it can be tough to shadow-trade him. He changes his short term stance more often than I change my socks. Note he says he flipped three weeks ago but he wasn't on CNBC talking about it then!

If gold gets any momentum here the same market factors that drove it down will exaggerate the upside: ETF buying, short-covering, fear of missing out. Will be interesting to see how long it lasts but probably not long enough for us to become 'billionaires'. :)

[Silverlight]

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

GDX entry $23.55, today $28.35 +20.3% in under 4 weeks.
GDXJ entry $38.40, today $44.58 +16.0% in under 4 weeks.

Gold @ 1345 +7.6%

[Daytr]

Yeah, and Elvis Presley will be on the 6 o'clock news tomorrow night.

Elvis, now there's a man who liked to wear a lot of gold! All we need to do is bring back Elvis & Liberace & gold to da moon! LOL

[Skol]

Gold price might be going up but tons in SPDR Gold Trust keeps decreasing.

Down 33 tons since the beginning of the month.

Gold way below its record high while Dow hits a new record, the strongest bull market since WW2.

[elZorro]

GDX entry $23.55, today $28.35 +20.3% in under 4 weeks.
GDXJ entry $38.40, today $44.58 +16.0% in under 4 weeks.

Gold @ 1345 +7.6%

You must have been reading articles like this Silverlight.. the ETF numbers dwarf the 300 physical tonnes Germany wants back, but still, there are pressures on every ounce of gold that is being produced. Larger miners are scaling back predicted annual output by about 10%, at the current prices.

http://www.telegraph.co.uk/finance/personalfinance/comment/10163015/The-smart-money-is-quietly-buying-more-gold.html

[JBmurc]

The recent bankruptcy filing in Detroit is raising red flags about other major U.S. cities also dealing with billions in under-funded retiree benefits, prompting the question -- who might be next? (chances of Q.E ending anytime this decade unlikely IMHO)

Read more: http://www.foxnews.com/politics/2013/07/22/detroit-bankruptcy-raises-concerns-about-other-us-cites-under-huge-retiree-debt/#ixzz2ZxAM2fiP

We also got word late on Friday that JP Morgan had a withdrawal from their customer inventory of 90,000 ounces. This was a 66% drop and has left the inventory at a laughable 46,000 ounces. Was this to settle contracts that were due in May and June? Probably, but we are now staring August directly in the face with potential settlements greater than the inventories of JP Morgan, Scotia, HSBC and Brinks combined. The potential for an historic short squeeze in the gold market has never been greater, I think we will soon find out who really has it and who doesn’t.

http://www.silverbearcafe.com/private/07.13/understand.html

Manipulation no way !! surely not the honest bankers

JP Morgan Is Reportedly Getting Ready To Settle For $1 Billion For Manipulating Energy Markets

U.S. regulators and J.P. Morgan Chase are close to a monster settlement over allegations that the banking giant tampered with electricity markets in California and the Midwest, the Wall Street Journal reports.

Sources told the Journal the deal could come in close to a staggering $1 billion, the largest payout in the history of the Federal Energy Regulatory Commission (FERC), which overseas power trading markets.

At http://au.businessinsider.com/jpms-1-billion-settlement-2013-7

[Skol]

Detroit's bankruptcy is hardly surprising and not an indication of pending massive US financial contagion as goldbug JB Murc would have you all believe.
It's been coming for years, because of off-shoring, crime, unemployment, white flight and Federal legislation.

http://www.policymic.com/articles/45563/detroit-bankrupt-to-see-detroit-s-decline-look-at-40-years-of-federal-policy

In the meantime new home sales in the USA have hit a 5 year high.

http://finance.yahoo.com/news/home-sales-hit-five-high-140356921.html

[elZorro]

JB, detroit matters not. if the US deficit keeps increasing and that doesn't drive inflation or gold north then you really think one city going bankrupt is going to do it? need to admire the woods instead of the trees like skol pointed out.

Inflation is clamped because so many there are out of work. There's a strong argument that on days like today (last night) where gold was pulled strongly down in the US market, when there are signs all around of a shortage of physical gold for delivery, that gold is being manipulated. If this is wrong, why does gold generally rise in the other time zones?

[macduffy]

Just in case anyone is still interested in gold stocks, here's Macquarie's take on individual companies.

http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2013-07/AustralianGoldEquities230713e.pdf?cid=&spMailingID=6597629&spUserID=MTc5OTA1MjU1MDES1&spJobID=79585584&spReportId=Nzk1ODU1ODQS1

[JBmurc]

JB, detroit matters not. if the US deficit keeps increasing and that doesn't drive inflation or gold north then you really think one city going bankrupt is going to do it? need to admire the woods instead of the trees like skol pointed out.

Yes US deficit is increasing thanks to the loan of 80 billion per month from the FED and over spending .. if you read the article pasted it Talks of many other major US cities/states running into major issues on funding/debt and likely needing help or will go down the road to bankruptcy ... ...Near 1 trillion per year just to keep the US afloat .....just look at the damage Benny did with talk of even tapering the credit.....It's pretty Fk'n simple to see all is not rosy .....Inflation / Deflation / Stagflation /HyperInflation ..who really knows when the system is so corrupt of honesty

[Skol]

Yes US deficit is increasing thanks to the loan of 80 billion per month from the FED and over spending .. if you read the article pasted it Talks of many other major US cities/states running into major issues on funding/debt and likely needing help or will go down the road to bankruptcy ... ...Near 1 trillion per year just to keep the US afloat .....just look at the damage Benny did with talk of even tapering the credit.

That's his job Einstein, to keep the US economy ticking over and he's done a damn fine job of it considering we've endured the worst recession since the depresssion.

Goldbugs are irked because they want to see some real carnage- war, famine, economies crashing, currencies imploding, then they'd be happy, they could say 'I told you so'.

Except the goldbugs are getting desperate because gold isn't $10,000 and silver $500.

Drill some holes in your silver JB, it'll be cheaper than buying a new anchor for your fizzboat from the chandlery.

[JBmurc]

That's his job Einstein, to keep the US economy ticking over and he's done a damn fine job of it considering we've endured the worst recession since the depresssion.

Goldbugs are irked because they want to see some real carnage- war, famine, economies crashing, currencies imploding, then they'd be happy, they could say 'I told you so'.

Except the goldbugs are getting desperate because gold isn't $10,000 and silver $500.

Drill some holes in your silver JB, it'll be cheaper than buying a new anchor for your fizzboat from the chandlery.

LOL what I'd expect from a bus driver of the sky......so why did the GFC come about Skol ?? how is what benny doing/done fixing the problem for a brighter future ?

[Skol]

LOL what I'd expect from a bus driver of the sky......so why did the GFC come about Skol ?? how is what benny doing/done fixing the problem for a brighter future ?



The GFC came about because too many stupid people borrowed too much money, something The Economist and the FT warned about for years.
Quite simple.

And if you want an example of some very well educated but very stupid people look no further than Lehmanns, who leveraged their assets 35 times.
University graduates, God spare me.

Mostly it was greed. If you want to talk about corruption, have a look in your own back yard, 70 odd finance companies going under.

[JBmurc]

From your Idol Benny pre-GFC

http://www.youtube.com/watch?v=9QpD64GUoXw

[digger]

The GFC came about because too many stupid people borrowed too much money, something The Economist and the FT warned about for years.
Quite simple.

And if you want an example of some very well educated but very stupid people look no further than Lehmanns, who leveraged their assets 35 times.
University graduates, God spare me.

Mostly it was greed. If you want to talk about corruption, have a look in your own back yard, 70 odd finance companies going under.

Excellent post Skol. Do you have some special way of reading my mind because if you did that is exactally what it would have said. The GFC had to happen sooner or later and it would have been better for all if it were much sooner ---like about 1995

[Skol]

Excellent post Skol. Do you have some special way of reading my mind because if you did that is exactally what it would have said. The GFC had to happen sooner or later and it would have been better for all if it were much sooner ---like about 1995

Digger,

That's right, 70 finance companies go into receivership, something JB Murc doesn't really want to talk about because that's 'here', not in the USA. Real bad things have happened here too, finance companies, receiverships, mortgagee sales, gold scams, leaking houses, Blue Chip, David Ross,etc. etc.

[JBmurc]

Digger,

That's right, 70 finance companies go into receivership, something JB Murc doesn't really want to talk about because that's 'here', not in the USA. Real bad things have happened here too, finance companies, receiverships, mortgagee sales, gold scams, leaking houses, Blue Chip, etc. etc.

I'm more than happy to talk about it ! fact is whats to talk about NZ Finance companies pushes high yield returns via safe mortgage backed investment but the money was going into high risk spec build's that no Bank was keen on lending on ....pretty bloody simple
I myself was doing some spec build's locally glad to have sold the last one for tidy profit ...could see the writing the wall ..but thats
very micro ...I'm talking more so marco.... On why we had the bubble in the housing markets and the fact nothing really changed

[Skol]

SPDR Gold Trust down 42 tons for the month so far.

[Daytr]

SPDR Gold Trust down 42 tons for the month so far.

Yet gold is rising Skol. What's that tell you? Gold was dumped/shorted on a massive scale & that shook out massive liquidation from the ETFS. Gold would need to go back above $1550-1600 area for the same to happen again imo. There is little bang for the hedge fund's buck to short gold here & the risk is that the physical & CB demand at levels lower than the total cost of production prevents gold from going much below circa $1200. Could we see more ETF liquidation? Yes of course, however one would think most of the weak holders are already out. In regards the GFC had to happen as too many were borrowing too much too cheaply. Couldn't agree more & the likes of Goldman's peddling triple AAA rated CDOs that should have been rated at junk was the final straw. So if that was one of the major causes of the GFC, what do you call Governments that are doing the same on a much bigger in fact massive scale & at rates that are almost at zero? What will be the impact of that?

I saw Max Keiser this morning & yes he's a bit off the wall, but also very funny. Talking about the very current issue of banks involvement in physical commodity markets. Having traded the LME market for a number of years & seeing what was going on in the aluminium market for the last 4-5 years, this was always going to come to a head.

http://rt.com/shows/keiser-report/episode-475-max-keiser-536/

[Skol]

Keiser and ditzy Stacy Herbert have been predicting financial Armageddon for years, you must be the only one that watches them.

[Silverlight]

You must have been reading articles like this Silverlight.. the ETF numbers dwarf the 300 physical tonnes Germany wants back, but still, there are pressures on every ounce of gold that is being produced. Larger miners are scaling back predicted annual output by about 10%, at the current prices.

http://www.telegraph.co.uk/finance/personalfinance/comment/10163015/The-smart-money-is-quietly-buying-more-gold.html

Actually I don't read a lot of articles focussed on micro changes within sectors, unless I am really curious. From my experience, for me, it creates too much noise, that sways your opinion on making good short term trading decisions. Gold and silver have made large negative moves, backed up by speculators moving to their smallest long positions in over 6 years. This means there is little to zero downwards pressure left, best time to go long an asset is when everyone has sold in my experience.

Although I do own rare silver coins passively, I am not a perma bull or bear on gold, you can only trade well on sentiment, everything else is noise.

[Skol]

This means there is little to zero downwards pressure left, best time to go long an asset is when everyone has sold in my experience.

Then why is the SPDR Gold Trust losing 2 tons every day?

[Daytr]

can we not see the end of the secular bull market in gold here people? its over, and we will most likely see a levelling off followed by slow decline. the market is finding the bottom in order to balance. once a secular bear starts, its game over for many years (unless you short!)

Quite frankly no I can't see that & just saying it doesn't make it so. Why would there be a slow decline? The only real source of supply has been the ETFs & once that is sold its done. Asia is buying gold like its going out of fashion & the developing countries that are actually solvent are buying gold & by the truck load. To put it in Skol's terms, the CBs of the BRICs have backed the truck up & are coming back for more. What amases me is that people can't see this is the start of the Asian century & it is the Asians who have a love affair with gold.

[Daytr]

Keiser and ditzy Stacy Herbert have been predicting financial Armageddon for years, you must be the only one that watches them.

Skol, having worked as a trader of base & precious metals for 15 year I have seen what has been going on in regards the rort in deliveries out of LME warehouses. The issue is quite legitimate & the banks & trading houses yet again are manipulating a market like the did with LIBOR & energy markets. Enron was just the start...

[Skol]

Daytr,


That the Asians are having a love affair with gold is a goldbug fantasy. Chinese aunties had a love affair with gold but it's over, perhaps you could provide some evidence that the asians are buying all this gold.

So far, dimwitted central bankers that the goldbugs lauded for being smart enough to buy gold have had their fingers burned, big time, and now goldbugs say asians are buying. I can tell what is true-chinese aunties have lost heaps.

Even if it was true, so what?

Remember when the Japanese were buying up all the property they could find, particularly in the USA in the 1980's?

I do. Guess what happened? They went broke, and they sold it back to Americans at a fraction of the price.

Lots of gullible punters are finding out the hard way that gold is a useless piece of yellow metal. Gold is yesterday's punt, real estate is back in vogue, goes up about 14% a year at the moment where I live, and the land where a factory I own sits is going up about 25% p.a. Nice.

Gold bugs act like imbeciles, slobbering over their shiny stuff, telling anyone who'll listen that it's a 5000 year store of value, that we're running out and it can only go up, but history repeats itself all the time, so currently we're having a 1981 redux.

Bernanke says he doesn't understand gold, no one does, except goldbugs apparently, so how come Peter Schiff, Mike Maloney, the Aden Sisters, jim Sinclair, Jim Rickards, Egon von Greyerz, Martin Armstrong and all those other tossers got it so badly wrong?

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

You're getting hoodwinked into believing the gold bug conspiracy theories.

[Daytr]

No fantasy Skol, its a fact. China gold demand is on target to exceed 1,000 tons this year & demand is still growing. You can keep saying its the Chinese aunties all you like, to be honest I don't care who it is, but 1k tons is not to be sneezed at & its likely to grow to a number substantially higher over time. Indian demand is still strong despite the government their trying to rein in gold imports. Some of that US property is pretty cheap now & I don't think it was the Asians that created the property bubble in the US in 2007, in fact the Chinese have been buying up large in the last few years at rock bottom prices.

[Skol]

No fantasy Skol, its a fact. China gold demand is on target to exceed 1,000 tons this year & demand is still growing. You can keep saying its the Chinese aunties all you like, to be honest I don't care who it is, but 1k tons is not to be sneezed at & its likely to grow to a number substantially higher over time. Indian demand is still strong despite the government their trying to rein in gold imports. Some of that US property is pretty cheap now & I don't think it was the Asians that created the property bubble in the US in 2007, in fact the Chinese have been buying up large in the last few years at rock bottom prices.

Chinese demand 'could' hit 1,000 tonnes this year according to the WGC.

If you believe the WGC, you'll believe in fairies at the bottom of the garden.

"Indian demand is still strong".lol From July 19th.
----------------------------------------------------------
MUMBAI: Gold traders in India, the world’s biggest buyer of the metal, awaited bigger price falls before re-stocking, even as prices consolidated in a recent range. Silver edged lower.

Gold imports into India fell about 81 per cent in June from the previous month after the government raised import duty and stopped consignment imports.

“Demand is low as everyone is anticipating that gold prices will fall,” said Ketan Shroff, director at Mumbai-based wholesaler Penta Gold.

[Daytr]

Chinese demand 'could' hit 1,000 tonnes this year according to the WGC.

If you believe the WGC, you'll believe in fairies at the bottom of the garden.

"Indian demand is still strong".lol From July 19th.
----------------------------------------------------------
MUMBAI: Gold traders in India, the world’s biggest buyer of the metal, awaited bigger price falls before re-stocking, even as prices consolidated in a recent range. Silver edged lower.

Gold imports into India fell about 81 per cent in June from the previous month after the government raised import duty and stopped consignment imports.

“Demand is low as everyone is anticipating that gold prices will fall,” said Ketan Shroff, director at Mumbai-based wholesaler Penta Gold.

Skol, being selective as ever. June Indian demand was down compared to a record number in May. Indian demand for the year is still forecast to be around 850 tons. Again fact! The WGC although biased doesn't create these numbers they are supplied by the Govt Stats departs from around the world.

You state constantly that people that like gold are conspiracy theorists & then you throw in your own. Hard facts is what I base my judgments on, not cheap one liners me old mate.

[Daytr]

Moose, u can hardly compare rhodium to gold. I have also traded rhodium & the spreads were several hundred dollars wide per ounce. Trade size was around 50 ounces for wholesale!

[peat]

perhaps you could provide some evidence that the asians are buying all this gold.
Physical gold delivered on Shanghai Gold Exchange.
2008 543t
2009 599t
2010 837t
2011 1043t
2012 1138t
2013 1249t YTD

[Skol]

Physical gold delivered on Shanghai Gold Exchange.
2008 543t
2009 599t
2010 837t
2011 1043t
2012 1138t
2013 1249t YTD

Perhaps you can join the Chinese aunties buying gold - a classic case of herd behaviour. Not 'investors', but a collection of enthusiastic amateurs looking to get their fingers burned.


http://english.cri.cn/8706/2013/07/05/2561s774106.htm

And it's just come to my attention that gold 'expert', John Paulson's gold fund is down 65% so far this year.
That must be gripping for his 'investors' esp. in view of the fact that they'll be paying extortionate fees for these losses.

[digger]

Physical gold delivered on Shanghai Gold Exchange.
2008 543t
2009 599t
2010 837t
2011 1043t
2012 1138t


2013 1249t YTD

Peat is this net gold delivered or just gold bought in. Does the Shanghai Exchange sell gold during these times?

[Skol]

The recent bankruptcy filing in Detroit is raising red flags about other major U.S. cities also dealing with billions in under-funded retiree benefits, prompting the question -- who might be next? (chances of Q.E ending anytime this decade unlikely IMHO)

JB Murc and the goldbug community at large would have you believe that the Detroit bankruptcy is a sign of a greater chronic US financial contagion.

It isn't, it's the result of excessive taxation, govt. interference, extravagance, crime, illiteracy, city hall incompetence and white flight. It's been coming for years. Even now the City is looking to put 20 businesses per week out of business because they don't comply with city ordinances, so they'll pack up and go somewhere else.

Gold bugs are always searching for reasons the USA is going down the toilet, but it isn't.

[skid]

America used to make things--Now they just have their hands in someone elses pockets

[Skol]

I've just been reading an article in the WSJ for those that think this is going to be the 'Chinese century'.

The pollution there is so bad according to one author who's studied it , that it's got the potential to bring down the Communist Party.

China will overtake the USA, hahahaha, you guys are hilarious.

http://online.wsj.com/article/SB10001424127887323829104578624010648228142.html?m od=WSJAsia_hpp_LEFTTopStories

As China slowly but surely destroys its farmland with pollutants and the general populace get the idea that they're being poisoned, it will be very beneficial to the USA, Australia and NZ, we can make up the shortfall. The USA can produce enormous amounts of crops if it needs to, including rice.

Maybe the Chinese are hoarding gold hedging their bets, anticipating an imminent Communist Party implosion and subsequent Yugoslavia-style civil war.

[Daytr]

Hey Skol, all empires come to an end and the US 'empire' is on the wane. Detroit is just a symptom of what is wrong with the US economy that got fat & lazy. China has its issues no doubt & pollution is certainly one of them however I have no doubt its economy will overtake the US, but each to their own opinion.

[Skol]

Hey Skol, all empires come to an end and the US 'empire' is on the wane. Detroit is just a symptom of what is wrong with the US economy that got fat & lazy. China has its issues no doubt & pollution is certainly one of them however I have no doubt its economy will overtake the US, but each to their own opinion.

Spoken like a true goldbug.

Nothing's perfect, but a one-party, communist, totalitarian state will not overtake the USA, anyone with an ounce of common sense will know that daytr.

From what I've read, any Chinese family with money has another house in another country, I doubt that you'll find people scrambling to buy houses in the PRC. LOL

SPDR Gold Trust down 43 tons for the month of july. so far.

[Skol]

4668

Daytr,

An apartment building that's fallen down in Shanghai.

Maybe you can buy yourself a well designed apartment in the PRC. lol

[elZorro]

Many whites in rural USA are in poverty.

http://finance.yahoo.com/news/exclusive-4-5-us-face-175906005.html

Not such a rosy-looking picture.

[Skol]

4669
Many whites in rural USA are in poverty.

http://finance.yahoo.com/news/exclusive-4-5-us-face-175906005.html

Not such a rosy-looking picture.

Yes EZ, apparently many people in NZ are in poverty too, but there's so much activity around here that there's signs on the side of the road advertising for truck drivers, digger and scraper operators..

Forget about the USA and look in your own backyard.

Oh, I forgot to mention, in 2010 there were 180,000 riots in China, in their language, 'mass incidents', an average of 493/day. Since 2010 the number of 'mass incidents' has been a state secret.

Since 2011, 6 bridges have collapsed in China due to poor construction or overloading.

[Skol]

Many whites in rural USA are in poverty.

http://finance.yahoo.com/news/exclusive-4-5-us-face-175906005.html

Not such a rosy-looking picture.

I wouldn't believe that nonsense for 1 minute EZ. If the USA is one of the world's richest countries, then that means the rest of the world is in poverty. What a load of codswallop

"I think it's going to get worse", said Irene Salyers, aged 52 married and divorced 3 times.


If you get married and divorced 3 times, there's a fair chance you're not going to be very well off.

And here is the rebuttal:

http://finance.yahoo.com/news/no-80-america-not-poverty-145652504.html

Notice it uses the word 'mendacious', which means untruthful or lying.

[Daytr]

Skol, there have been a fair few bridge collapses in the US of late as well & there's houses falling into sink holes. Funny enough the US decaying infrastructure has been an opportunity to the US has failed to capture to bring jobs & growth into the economy & a much faster rate. The problem is the Government & individual States have so much debt they can't maintain them let alone replace. What they need to do is Government guarantee privatized funding to do a major rebuild of the infrastructure, a real opportunity missed imo. Agree on what you say about the riots / social unrest in China though it is a real risk to the economy going forward. My view is that China will be more & more liberalized over time to appease the social unrest, however if they don't I agree it could be a major issue for them. Probably right up their with gun crime in the US! LOL

[Skol]

Looks like the US housing bust is over.

The S&P/Case-Schiller Index shows home prices rose 12.2% vs a year ago. The biggest 12 month gain since March 2006.

[Skol]

JB,

Where do you fit in?

http://www.readersdigest.co.nz/most-trusted-professions-2013

[Skol]

Looks like there's some accountability at the central bank in Switzerland. The central bank owns 1040 tonnes of gold, an amount no doubt applauded by the gold bugs, except the tanking gold price has translated into an 18.5 billion franc loss in the second quarter.

I wonder how other central banksters feel after dipping their toes in the water at extortionate gold prices?

Tonight's gold price won't have helped much.

http://www.bloomberg.com/news/2013-07-30/snb-suffers-second-quarter-loss-after-price-of-gold-fell.html

[Skol]

Skol, there have been a fair few bridge collapses in the US of late as well & there's houses falling into sink holes. Funny enough the US decaying infrastructure has been an opportunity to the US has failed to capture to bring jobs & growth into the economy & a much faster rate. The problem is the Government & individual States have so much debt they can't maintain them let alone replace. What they need to do is Government guarantee privatized funding to do a major rebuild of the infrastructure, a real opportunity missed imo. Agree on what you say about the riots / social unrest in China though it is a real risk to the economy going forward. My view is that China will be more & more liberalized over time to appease the social unrest, however if they don't I agree it could be a major issue for them. Probably right up their with gun crime in the US! LOL

Daytr,

News that the Chinese are about to embark on the world's tallest skyscraper will probably invoke the dreaded Skyscraper Index.

The last one was completed just after the onset of the GFC.

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

SPDR Gold Trust down 48 tons for the month of July.

[Skol]

Yep, gold down to $1287, probably the beginning of the next leg down.
The SPDR Gold Trust down about 7 tons in the last few days, a message for the guys who say we're running out of gold.

Only 921 tons to go.

[Skol]

Last 12 months:

DJIA +21%
S&P +24%
FTSE +16%
XJO +20%
CAC +23%
HSI +12%
DAX +26%
---------------------
Gold -19%
Silver -28%
SIL -28%
Shanghai Composite -1%. (China will rule the world lol)
HUI -40%
GDX -38%
GDXJ -48%
XGD -51%

Who's stacking then?

[elZorro]

Moosie, the rest of us have figured out that when the banks can buy back enough gold cheaply, to return to legitimate holders who want it back, then the gold price will stop having these sudden dips. Dips that start with a warning from commentators or bank advisors, and are savage enough to trigger stop losses from ordinary investors. You can't deny that it's very expensive to dig the gold out in the required volume. It's the miners and small holders who are paying the price for the banks' continuing profits - made leasing non-physical gold to other parties.

[Skol]

SPDR Gold Trust down 3 tons last night. Someone must be buying it, but
I'll bet they're shorting at the same time to cover their ass.

[elZorro]

the gold companies are claiming poverty over the price but, as we have seen, they manage to adapt. OGC is one, going hedged again and having a game changer in didipio. others are cutting costs to levels still well under the current price. they can keep claiming poverty but they will keep cutting costs as necessary until the market finds balance and the price stabilises.

btw, do you think those bankers/traders really give two flying f's about gold companies? seems like a very naive excuse that they would stop manipulating the market so the real companies could stop struggling!

No, what I mean is that when countries ask for hundreds of tons of physical gold back onto their own soil, it will have to be bought from somewhere, mostly in smaller parcels from retail investors. It's unlikely to be sitting unencumbered in bank vaults en masse, because the banks have recycled it already. The Fed could show this idea up as a lie, by inviting independent teams in to inspect holdings in Fort Knox and NYC for example. But they have always refused to do this properly, instead showing a glimpse of the holdings from afar.

Stuck between a rock and a hard place, the banks will orchestrate the gold market down, buy the gold back as cheaply as they can, and send the equivalent back to its owners.

OGC lost a lot of money in its last hedging effort, towards the end of the term. It doesn't change the fact that a lot of high-priced energy is used to extract lower-grade gold ore from the ground.

[Skol]

No, what I mean is that when countries ask for hundreds of tons of physical gold back onto their own soil, it will have to be bought from somewhere, mostly in smaller parcels from retail investors. It's unlikely to be sitting unencumbered in bank vaults en masse, because the banks have recycled it already. The Fed could show this idea up as a lie, by inviting independent teams in to inspect holdings in Fort Knox and NYC for example. But they have always refused to do this properly, instead showing a glimpse of the holdings from afar.

You've been reading too much gold bug propaganda EZ. There's loads of gold available, contact the World Gold Council and they'll let you have some of the several tons being sold per day out of the SPDR Gold Trust. There's 921 tons available.

You can go and see the gold in New York, it's a tourist attraction.

http://www.newyorkfed.org/aboutthefed/visiting.html

[elZorro]

You've been reading too much gold bug propaganda EZ. There's loads of gold available, contact the World Gold Council and they'll let you have some of the several tons being sold per day out of the SPDR Gold Trust. There's 921 tons available.

You can go and see the gold in New York, it's a tourist attraction.

http://www.newyorkfed.org/aboutthefed/visiting.html

Only several tonnes a day? That's not very much when it's spread around. And I bet any large purchaser would want to buy at a lower price than the market.

That link didn't mention anything about looking at gold reserves. There's a photo of robots in a large warehouse handling paper bills though. That would be on show, no problem.

Those timelines and the selldown graphs the goldbugs posted a few days ago look fairly compelling to me. There's something going on.

[Skol]

This one then:

http://gonyc.about.com/od/attractionslandmarks/p/federal_reserve.htm

You can visit the gold vault, but the gold bugs will tell you it's fake gold or full of lead or another of their conspiracy theories.

[Skol]

Looks like Warren Buffet is right, Berkshire Hathaway shares up 38% in the last year, 2Q profit up by 46%.

I wonder how much profit gold and silver made?

[elZorro]

This one then:

http://gonyc.about.com/od/attractionslandmarks/p/federal_reserve.htm

You can visit the gold vault, but the gold bugs will tell you it's fake gold or full of lead or another of their conspiracy theories.

OK, Skol, but explain why the official figure of gold held here in an unchecked internal audit was only 466 tons a few months back, when Wikipedia and other sources say it's meant to be half of the US holdings, and more like 7,000 tonnes? Germany alone asked for 300 tonnes to be returned from this bank. It doesn't add up.


http://www.silverdoctors.com/treasury-dept-releases-findings-of-ny-fed-gold-audit-states-gold-more-pure-than-previously-thought/

Not sure if this has been posted before, but it details the gold leasing arrangements that the big banks have all been doing for years. It also explains why the German banks have been happy to wait for 7 years to get back a total of 300 tonnes. That's because Germany sent a lot more than that to New York for safekeeping (1536 tonnes), and it's patently no longer physically in the NYC Reserve Bank vaults.

http://inflationdata.com/articles/2013/07/31/disappering-gold/

[Skol]

I don't look at Silverdoctors, Silverbearcafe, Mineweb, Max Keiser or Stacey Herbert or any of the other conspiracy websites. I prefer Yahoo Finance, Reuters, Boomberg, WSJ and Barron's.
And occasionally CNBC, according to the goldbugs, anti-gold, but it's just another conspiracy theory, like Bernanke wants the price of gold down.
Bernanke couldn't give a toss about the gold price, any more than he's watching the feeder cattle price.

[elZorro]

OK, I might be wrong and you are right Skol, because this article states that the audit was only on the US owned gold held in the New York Fed bank, and it was 34,021 gold bars (466 tonnes).

http://articles.latimes.com/2013/feb/18/business/la-fi-mo-gold-new-york-fed-audit-pure-20130218

The NY Fed states they have about 7000 tonnes of gold in total. But I guess that is ultimately unaudited at this point in time. They say that they will be able to return all owners their original gold bars, untouched, because they are all demarcated.

[Skol]

The author Tim McMahon - a goldbug, what do you expect?

Tim McMahon

My grandfather lived through the Hyperinflation in Weimar, Germany--to say he was an original “gold bug” would be an understatement. I began reading his “hard money” newsletters at the age of 16 and the dividends from gold stocks helped put me through college.

-------------------------------------------------
From Forbes, a few hours ago:

Clearly stocks have been the place to be in 2013 with the Spyder Trust (SPY) up 19.6% and the German Dax Index (not shown) up close to 8%. The weakest performer is still gold as the SPDR Gold trust (GLD) is still down 21.7% despite its recent rally.

The cut in the dividend of Barrick Gold (ABX) will put more pressure on the beaten-down gold miners. The rebound in gold still looks to me like a bull trap as the OBV has already broken down and is likely leading prices lower. A close in GLD below $124 should be enough to signal another wave of selling.

[Skol]

Total gold remaining in the SPDR Gold Trust has dropped another 3 tons to 918 tons. At its peak GLD had 1353 tons in its inventory, so there's been an outflow of 435 tons, or 32%.
The outflow is just under 2 tons per day since its peak about 7 Dec 2012.

2 tons of gold being sold daily won't help the gold price, it's bearish, and it doesn't include other funds which are also probably selling.

[elZorro]

China looking to back the Yuan with gold, not a new story. The comments after this article are interesting too.

http://rbth.asia/business/2013/07/17/china_reportedly_planning_to_back_the_yuan_with_go ld_47997.html

[Skol]

I know you guys like a laugh, I've just been reading a post on a gold bug website where one deluded gold bug says gold doubles in value every year because gold has gone up 37 times in 43 years since it was $35 in 1970.

I can tell this guy isn't Albert Einstein re-incarnated. It's great comfort to him apparently that gold is nearly doubling every year. Makes you wonder how long he's owned it.

If gold was to double every year since 1970 then an ounce would currently be worth $153,931,627,888,460. Even stranger was that this genius got 4 thumbs up. Yep, the US deficit wouldn't be a problem at all with 8,000 tons of it in Fort Knox.

No wonder I stick around, they reckon laughter's the best medicine. 100% per annum, quite a good return, guaranteed too, wonder if he has a website? He could join Peter Schiff, Mike Maloney, the Aden sisters and all the other gold 'experts'.

I'll have to get in on this one, I've always wanted to buy the United States of America.

[elZorro]

That guy was right about one thing Skol, the gold price has trended upwards over the years. No reason to expect that the general trend will stop.

On Friday night our time, gold suddenly bolted upwards by $30, and the US$ dropped at the same time. This was caused by the US non-farm payroll data, that came out at 8.30am EDT. It was poorer than expected. Coupled with that, the unemployment rate dropped, but partly because more people are retraining, not looking, or giving up on work. And average wages are DROPPING, with less hours being worked per week. At least in some areas.

http://www.reuters.com/article/2013/08/02/us-usa-economy-idUSBRE96A0G320130802

[Skol]

That guy was right about one thing Skol, the gold price has trended upwards over the years. No reason to expect that the general trend will stop.

On Friday night our time, gold suddenly bolted upwards by $30, and the US$ dropped at the same time. This was caused by the US non-farm payroll data, that came out at 8.30am EDT. It was poorer than expected. Coupled with that, the unemployment rate dropped, but partly because more people are retraining, not looking, or giving up on work. And average wages are DROPPING, with less hours being worked per week. At least in some areas.

http://www.reuters.com/article/2013/08/02/us-usa-economy-idUSBRE96A0G320130802

I'll show you what a great 'investment' gold is EZ.

The S&P500 total return index (includes dividends) began on June 1st 1988 at 270 and it's currently 3083. Up 11.4 times.

The gold price on June 1st 1988 was $456 so gold has gone up 2.8 times.

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

Do these guys ever give up? Jim Rickards still banging on about chaos, monetary collapse and the gold standard.

http://etfdailynews.com/2013/07/30/jim-rickards-a-collapse-of-the-u-s-dollar-is-the-most-likely-outcome/

He's been spending too much time in the office, ignoring the real estate boom and obviously hasn't travelled on an aircraft recently. The DJ Transports up 34% in the last year.

[elZorro]

Maybe Skol, but the Equedia article out today shows that most of the new US jobs are part-time ones, as their graphs demonstrate. And the rising 10 year bond graph points to higher housing interest rates, and an end to any housing boom there.

http://www.equedia.com/?p=51359&utm_source=August+4%2C+2013&utm_campaign=August+4%2C+2013&utm_medium=email

[Skol]

Looks as if gold can't hold on to its gains, I thought all this 'chinese buying' would spur gold on to unheard-of heights, but it's beginning to fizzle out, sub-$1,300 looks a distinct possibility soon.

Not to worry, Mary-Ann & Pamela Aden who have been studying gold for 30 years say it might go up................or it might go down. Nothing like having a bet both ways, but the Aden Sisters have already predicted a gold price of $3,000-$5,000 by the end of 2012.

http://www.marketoracle.co.uk/Article41675.html

Meanwhile Jim Rickards never gives up, he says gold is on its way to $7,000, but with a haircut like this he looks more like a used car salesman.

'Have I got a deal for you.'

[Skol]

Yep, down she goes, Daryl Guppy says a break below $1,260 gives a target of $1,000

[Skol]

Societe Generale expect 'large scale selling through 2014'.


http://www.bloomberg.com/news/2013-08-04/gold-bulls-cut-wagers-on-signs-u-s-growth-quickens-commodities.html

Could be a bad day for gold stocks.

HUI -6.01%
GDX -5.51%
GDXJ -5.23%

[Skol]

THE PRICE OF GOLD IS DROPPING LIKE A BRICK.

Aug 6 2013

The sinking price of gold is bad news for investors, but it could mean that a global economic recovery is finally taking hold. Gold bars are seen at the U.S. Mint at West Point in West Point, N.Y. (Mike Groll/AP)


Watch out for that shiny pendulum because it’s swinging back fast. Investors are chasing stocks and real estate and fleeing gold. The two former asset classes have experienced solid returns since 2012 while gold has suffered double-digit declines.

Large cracks in the “go-long-gold” strategy are evident. Economic weaknesses in Europe remain but no financial Armageddon has emerged. Keynesian economics remain the drug of choice, Japan being the latest user, yet inflation is non-existent. The strength of the dollar and the increased willingness of the Fed to taper quantitative easing undermine higher gold prices. Investor support is crumbling and gold bugs, those believing it is a stable investment, should be nervous.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains. Recent paper losses for hedge funder John Paulson have topped $1 billion. In just the last six months, gold has dropped by 22 percent, the worst fall since modern trading commenced in early 1970s. Gold is locked in a bear strangle and prices have plenty of room to fall still further.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains.

It has taken over a decade but the bubble has finally been pricked. The pin that popped this most recent asset swelling is not complicated. It’s a stock market that has reached new highs, falling unemployment and rebounding investor confidence in central banking policy. In the last year, gold investors have lost over 18 percent while those in S&P 500 stocks have enjoyed a 23 percent return. Real estate in the largest U.S. cities has also climbed 10 percent or more since last year and historically low interest rates are forcing investors to find new places for capital. Even junk bonds are back in vogue. Investors are starting to ask the right question: Why lose money on gold when you can gain big on stocks, real estate or new alternative investments?

Other commodities also point to a bust in gold. Silver, the poor man’s gold, has dropped in the last six months by 37 percent. Platinum, a metal that is 15 times scarcer than gold, up to recently, sold at a steep discount to gold. Today, platinum trading at $1,450 per ounce is moving back towards to its historical premium — another powerful sign that lower gold is in the offing.

Caveat emptor: The last gold bust was not kind to investors. From 1980 to 2000, investing in gold was dead money. When that bubble burst in 1980, gold plummeted by 60 percent in less than a year. Using history as a guide, the current pop could push gold down to $700 per ounce — a mind-numbing drop of over $1,100 per ounce from September 2011 historic highs. Taking into account the physical cost of extracting gold from the ground, it is under $600 per ounce. Selling at $700, would still generate modest mining profit. In recent months even gold mining companies have started to hedge against the fall of gold, attempting to lock in profit before it is too late.

The silver lining to all of this is that falling gold prices are a strong sign that market confidence is returning and a long-awaited global economic recovery is finally taking hold.

This time the gold bubble pop is even more hazardous to financial health. The great unknown is the effect of exchange-traded funds (ETFs) on gold prices as the global economy moves steadily back toward prosperity. Exchange traded funds are derivative instruments used by investors to quickly trade equities, bonds and other commodities like gold. Through the financial support of the World Gold Council, a London-based trade organization charged with stimulating market demand, the first gold ETF was launched in 2004. In less than a decade this ETF called the SPDR GLD and copycat funds have experienced hyper growth. At their peak they had a market capitalization of over $80 billion or 40 percent of the overall physical market. Armed with ETF’s, and a low barrier to entry, even small investors have jumped in to own a piece of gold.

But gold ETFs were created in a gold bull market and these same derivatives that played an important role in the price run up are now morphing into a giant wrecking ball. In 2013, gold ETFs are being bear-market tested. A single gold ETF like the SPDR GLD and how its investors think can dramatically move the price of gold up or down in a nanosecond.

As speculators continue to switch horses and move to stocks, real estate and other higher yielding investments, how far and how fast will gold prices fall? History suggests $700 gold is not out of the question (and that was before the advent of multi-billion dollar, rapidly traded ETFs). The silver lining to all of this is that falling gold prices are a strong sign that market confidence is returning and a long-awaited global economic recovery is finally taking hold.

[Skol]

On the 11th of July gold 'expert', Jimm Sinclair, told 591 people in Vancouver that the gold correction was over because it had broken $1275. Went to $1350, now back to $1275.
http://news.goldseek.com/PeterCooper/1373550660.php

[JBmurc]

Why the biggest fall in gold is yet to come:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10909365&ref=rss

If we don't even have confirmation yet and this is not factored into the gold price, as has been clearly shown this week, then there is still more carnage around the corner. The stock market may take a dive, but I think gold will be absolutely pummelled once tapering is confirmed, the same way it went (deacresingly) upwards after each successive QE notice. So, a few more major downward legs are due over the coming years as the tapering takes effect, with the first being the worst (if history teaches us anything, which for some it doesn't!).

However, I thoroughly believe there is money to be made both going up and down in the market. Any downwards legs can be ridden at their bottom to a lower high that balances out to fair price before the next fall begins. You could also short gold, but that is too inherently risky considering it can be recalled at any time. Following Kitco and playing the charts has always been pretty foolproof for me!

Bring on the taper or even better end the Q.E all together yeah Gold/silver will get a hit for a start but once the affects of not having the funding prop in place to hold it all together the markets will go septic real quick GFC x2.... rates will have to rise esp long term ....FEAR will reign ... guess where funds will rush too >>>> where it aways does

[elZorro]

Where did you get that article above from, Skol? I don't think the author knows much about goldmining, because the numbers are well out. The rest of the text is dubious too.


Taking into account the physical cost of extracting gold from the ground, it is under $600 per ounce. Selling at $700, would still generate modest mining profit.



INO reported that some are saying China is still buying gold at a fast rate, implying there are tougher times around the corner, could this be the precursor of another flight to gold?

From Bloomberg: history in the making.


The Shanghai Gold Exchange, China’s largest bullion bourse, delivered 1,098 tons to buyers in the six months through June 2013, compared with 1,139 tons for the whole of last year (2012), according to data from the bourse on July 15. That was more than double the output in China, the world’s largest producer, which reached a record 403 tons last year (2012).
China’s purchases in June were nearly twice the 68 tons in the same month last year, according to the data from the Hong Kong statistics department. Mainland China doesn’t publish such data.

[JBmurc]

Yeah total costs to extract gold $600 tell him he's dreaming ....NCM average total av. costs $1283 per oz AUD from the many major ASX producers I've come across of recent times on the ASX are pretty high cost $1000+ ...and fact is Aussie one of the world's top producing countries......I could see more pain for Gold in the Short term but further out way more bullish

[Skol]

Where did you get that article above from, Skol? I don't think the author knows much about goldmining, because the numbers are well out. The rest of the text is dubious too

The author teaches finance risk management and capital markets at Boston University School of Management and is a former senior commodities trading floor executive. lol

http://cognoscenti.wbur.org/2013/08/06/gold-value-mark-williams

[elZorro]

The author teaches finance risk management and capital markets at Boston University School of Management and is a former senior commodities trading floor executive. lol

http://cognoscenti.wbur.org/2013/08/06/gold-value-mark-williams


Profile Summary

Mark T. Williams is a risk management practitioner and academic with two decades of experience. Since 2002, he has been on the Finance & Economics Faculty at Boston University and currently holds the academic rank of Executive-in-Residence/Master Lecturer. Prior to teaching, he worked as a senior trading floor executive, a bank trust officer and as a bank examiner for the Federal Reserve Bank. He is particularly experienced relating to risk management in the energy trading, banking industry and derivative matters involving the capital markets. In addition to his teaching duties at the graduate as well as undergraduate level, his expertise is called on frequently by national media. He has also been a guest columnist for Forbes.com, Reuters.com and the Boston Globe. In 2010 he published Uncontrolled Risk (McGraw Hill), a book examining the root causes of the financial crisis and the rise and fall of investment banking giant Lehman Brothers. Outside of academics, he conducts risk management seminars, has provided consulting for various Fortune 500 companies, and is a senior advisor at the Brattle Group. On several occasions, he has also been an expert witness in various corporate cases involving risk management matters.


So he's been in the University system for 11 years, and he's had fleeting experience on the trading floor, but it's unknown if this involved gold, or if he has been checking how the higher price of energy and exploration costs may have impacted on gold miner profits. He also omitted to mention that some countries, like China, have doubled their buying of gold over the last 6 months.

He can look at the price of it all he likes. What matters is the demand, in the end. It suits the US banks to have the gold price lower, they need to buy some in, to repatriate it. At the moment their down-ramping is working. It's also helping China increase their gold holdings.

[Skol]

So he's been in the University system for 11 years, and he's had fleeting experience on the trading floor, but it's unknown if this involved gold, or if he has been checking how the higher price of energy and exploration costs may have impacted on gold miner profits. He also omitted to mention that some countries, like China, have doubled their buying of gold over the last 6 months.

He can look at the price of it all he likes. What matters is the demand, in the end. It suits the US banks to have the gold price lower, they need to buy some in, to repatriate it. At the moment their down-ramping is working. It's also helping China increase their gold holdings.

The flash-in-the-pan Aunty buying probably accounted for most of China's purchases, but that's all over. Herd behaviour that's now ended given China's economic problems and it's a fact that the US is leading the world recovery and China is sinking fast. The best performing markets are US bourses.
Why do the US banks want a lower gold price? Like Bernanke they probably couldn't care less about the gold price.

I'm certain Williams is not that far removed from the real world, you don't have to be a genius to work out that gold's been a massive bubble that's now deflating, you just have to read the newspaper.

This what it says in a book I have here printed in 2012:

'A large gap between the cost of mining and production (around $600 an ounce) and the actual selling price of gold ($1,900) points to overspeculative gold prices.'

[elZorro]

The flash-in-the-pan Aunty buying probably accounted for most of China's purchases, but that's all over. Herd behaviour that's now ended given China's economic problems and it's a fact that the US is leading the world recovery and China is sinking fast. The best performing markets are US bourses.
Why do the US banks want a lower gold price? Like Bernanke they probably couldn't care less about the gold price.

I'm certain Williams is not that far removed from the real world, you don't have to be a genius to work out that gold's been a massive bubble that's now deflating, you just have to read the newspaper.

This what it says in a book I have here printed in 2012:

'A large gap between the cost of mining and production (around $600 an ounce) and the actual selling price of gold ($1,900) points to overspeculative gold prices.'

Skol, that post is full of half-truths. I don't think that the Chinese small retail gold buyer sentiment will change quickly, it could collectively take years. I'd expect there will always be more buying on any price dips. The best performing bourses are also the ones most propped up with QE. How much of it is real?

The banks want a lower gold price because they have to get their hands on some actual real gold, to give it back to the rightful owners. And it's a lot of gold compared to annual production. They'll come unstuck because the lower gold price is mothballing mines.

The true average cost of getting gold out of the ground, averaged all over the world, has to include exploration and capex costs, restoration costs. This has been covered properly by many people, experts in this area. It's way above $600 an ounce. These so-called experts of yours, who look at a gold miner's annual report to see only the raw cost of gold extraction at their mine(s), have the wrong figure. Which they then use to incorrectly inform their readers of a rort by miners.

What happened when gold got to $1800 an ounce briefly, was that mining companies realised that perhaps they could make a sensible profit, after all the hard graft. At the moment it's looking doubtful, until the US and other banks find enough cheaper gold to hand back to the real owners. The propaganda war continues.

[Skol]

Skol, that post is full of half-truths. I don't think that the Chinese small retail gold buyer sentiment will change quickly, it could collectively take years. I'd expect there will always be more buying on any price dips. The best performing bourses are also the ones most propped up with QE. How much of it is real?

The banks want a lower gold price because they have to get their hands on some actual real gold, to give it back to the rightful owners. And it's a lot of gold compared to annual production. They'll come unstuck because the lower gold price is mothballing mines.

Give the gold back to the rightful owners? What a load of codswallop, banks don't need gold any more than a fish needs a bicycle, gold belongs to whoever bought it. If they need gold they only have to contact the SPDR Gold Trust ETF that's shedding 2 tons every day of the year.

Almost every day I read a post by some deluded soul who says 'the bottom's in'.

But it's not, far from it.

Have a look at this, maybe you can see something in it, but I can't, gold's a bottomless pit.

The SPDR Gold Trust has sold 8 tons since last Saturday, punters are liquidating gold, no one wants it.

[Skol]

Another reason not to own gold. The amount of gold investment, if you can call it that is currently being sold off, as evidenced by the dramatic fall in ETF gold in trust.

http://www.investingdecoded.com/#!/

(Part 2)

The SPDR Gold Trust is shedding about 175, 400oz bars per day. If anyone wants some gold there it is.

910 tonnes to go.

[elZorro]

Another reason not to own gold. The amount of gold investment, if you can call it that is currently being sold off, as evidenced by the dramatic fall in ETF gold in trust.

http://www.investingdecoded.com/#!/

(Part 2)

The SPDR Gold Trust is shedding about 175, 400oz bars per day. If anyone wants some gold there it is.

910 tonnes to go.

I couldn't find the chart you mentioned there Skol. However my faithful Wikipedia mentioned that:


The Trust’s allocated gold bullion is kept in the form of London Good Delivery gold bars (http://en.wikipedia.org/wiki/Gold_bar) (400 oz.) and held by the Custodian, HSBC Bank USA (http://en.wikipedia.org/wiki/HSBC_Bank_USA), in its London vault or in the vaults of sub-custodians.[6] (http://en.wikipedia.org/wiki/SPDR_Gold_Shares#cite_note-info-6) The ETF pays an annual expense charge of 0.40% per annum.[6] (http://en.wikipedia.org/wiki/SPDR_Gold_Shares#cite_note-info-6) The ETF has been criticized by Catherine Austin Fitts and Carolyn Betts for its extremely complex structure and prospectus (http://en.wikipedia.org/wiki/Prospectus_(finance)), possible conflict of interest (http://en.wikipedia.org/wiki/Conflict_of_interest) in its relationships with HSBC and JPMorgan Chase (http://en.wikipedia.org/wiki/JPMorgan_Chase) which are believed to have large short (http://en.wikipedia.org/wiki/Short_(finance)) positions (http://en.wikipedia.org/wiki/Position_(finance)) in gold, and overall lack of transparency.[7] (http://en.wikipedia.org/wiki/SPDR_Gold_Shares#cite_note-metals_puzzle-7) Some critics compare the ETF with mortgage-backed securities (http://en.wikipedia.org/wiki/Mortgage-backed_securities) and collateralized debt obligations (http://en.wikipedia.org/wiki/Collateralized_debt_obligations).[7] (http://en.wikipedia.org/wiki/SPDR_Gold_Shares#cite_note-metals_puzzle-7) These problems with SPDR Gold Trust are not necessarily unique to the fund, however; as the dominant gold ETF, the fund has received the most extensive analysis.



In May 2013 they had about 2400 tonne of gold bars.

[Skol]

In May 2013 they had about 2400 tonne of gold bars.

I think you'll find that to be incorrect, currently they have 910 tonnes, the maximum they've had is about 1300 tonnes.

http://www.spdrgoldshares.com/

[elZorro]

I think you'll find that to be incorrect, currently they have 910 tonnes, the maximum they've had is about 1300 tonnes.

http://www.spdrgoldshares.com/

It's just possible that I multiplied by 2.2 when I should have divided, I will concede Skol :)

But that weakens your argument, as if Germany wants 300 tonnes back, the massive SPDR has only sold 390 tonnes, because as investors pull out of their fund they sell gold. It has gone somewhere, probably to smaller hoarders all around the world. Not back to Germany.

And what about the USD? It can't seem to make up its mind. It's in a runaway resonance mode. I think that's a new TA term.

[Skol]

The endless conspiracies about the German gold are just that, conspiracies. The Germans don't want their gold back all at once it's that simple, but gold bugs can invent conspiracy theories out of thin air.

http://www.bundesbank.de/Redaktion/EN/Pressemitteilungen/BBK/2013/2013_01_16_storage_plan_gold_reserve.html

Notice it says 'phased relocation', it doesn't say the gold is missing or stolen.


The SPDR won't be the only ETF selling gold either, others will be doing the same.

Barron's has produced an article on which gold miners will survive at $900 gold, so some analysts obviously believe it's possible.

http://blogs.barrons.com/focusonfunds/2013/08/07/gold-miners-to-stay-solvent-even-with-another-30-price-slump-cowen/

The first hint that QE is ending is gonna send gold through the floor.

[peat]

Almost every day I read a post by some deluded soul who says 'the bottom's in'.

.
Hey Skol
I think the bottom is in :p

I've been slowly increasing my silver under $20
For the long haul if necessary.

[Skol]

Hey Skol
I think the bottom is in :p

I've been slowly increasing my silver under $20
For the long haul if necessary.

If you wait, you'll probably be able to buy silver for less than $10. The iShares Silver Trust has 10,396 tonnes.

[elZorro]

The endless conspiracies about the German gold are just that, conspiracies. The Germans don't want their gold back all at once it's that simple, but gold bugs can invent conspiracy theories out of thin air.

http://www.bundesbank.de/Redaktion/EN/Pressemitteilungen/BBK/2013/2013_01_16_storage_plan_gold_reserve.html

Notice it says 'phased relocation', it doesn't say the gold is missing or stolen.


The SPDR won't be the only ETF selling gold either, others will be doing the same.

Barron's has produced an article on which gold miners will survive at $900 gold, so some analysts obviously believe it's possible.

http://blogs.barrons.com/focusonfunds/2013/08/07/gold-miners-to-stay-solvent-even-with-another-30-price-slump-cowen/

The first hint that QE is ending is gonna send gold through the floor.

The first article also states that Germany is asking for all of its 374 tonnes of gold from Paris by 2020 also. They don't need to be in France to exchange gold for Euros. It does seem a bit strange that this relocation is also going to take a long time, 7 years, even though it could all be done overland. They have also assured everyone that they now have room in Germany to store the gold. It won't take up much space.

http://www.nytimes.com/2013/01/17/business/global/german-central-bank-to-repatriate-gold-reserves.html?_r=0

England actually charges Germany 550,000 euro a year for storing some of its gold there. Germany will leave all its holdings in England. Strikingly, the USA provides the New York storage service for free, saying that it makes their economy look stronger. France also charges nothing.

Here's an article from 2012 where it states that Germany pulled back 930 tonnes of gold from England, about 10 years ago, and converted some it into new Good Delivery Standard bars. It all checked out fine. On the other hand, France and USA have not done anything more than show Germany the security in place, and have issued annual certificates for the presence of the gold.

http://www.bundesbank.de/Redaktion/EN/Interviews/2012_10_25_thiele_dpa.html

So at this stage Germany was only looking for 150 tonnes of gold from USA, 50 tonnes a year. Now it's 300 tonnes, spread out until 2020. If England can send over 930 tonnes in a short time, what is the issue?

Here is one blog post from Drake07 in the Washington Post:


Most of the gold in the Fed's vaults has been rehypothecated and everyone knows it. The problem is like Dave Kransler pointed out the other day, that both China and the U.S. have a vested interest in keeping the price of gold down. The U.S. because fiscally it is a basket-case, and China because they want to accumulate more of the shiny stuff. They are strip mining their country's reserves faster than they can develop mining projects to dig it up out of the ground.

If all of the gold is tied up in derivative contracts that can't be unwound at current prices, then what happens when someone who is not as polite as the Bundesbank shows up and demands their gold reserves, that are supposed to be hanging out in New York?

You know what happens. They are told to get in line or take dollars. Just like Nixon did in 1971. But the minute that happens publicly, the whole gig goes up in smoke. So, is that really what the Fed wants to happen? Of course not, so the Bundesbank allows them to save face, temporarily, and only demand a little at a time, just enough to ensure that the price doesn't drop anymore, thereby eroding the ECB's balance sheet due to their gold being marked to market while the Fed's and China's is not."

It's all about confidence in the dollar - or not. And when the "not" arrives, watch out below!


Regarding the second part of your post that the larger gold miners are still profitable at $900 an ounce, Skol. According to that chart they might be, but would any large company accept that sort of a return on assets? They will by then, be mothballing mines and sacking thousands of miners. There would also be no exploration going on to replace depleted reserves. All the smaller miners would also be well in the red, and soon shut down.

If QE is halted or tapered off, the effect on US stocks will be major, and gold will soon be the benefactor of a safe haven flight of cash.

[Skol]

I wouldn't take too much notice of tossers like Drake 07.

It's standard goldbug BS with the usual conspiracy theories and words like 'rehypothecated', a regular from the gold bug dictionary along with others words like 'fractional', and 'confiscation'.

Gold is just another commodity like lead or feeder cattle, the price goes up, the price goes down, but mostly down and the US, Chinese, or Russian govt. couldn't give a toss, except a few central bankers will be sweating because they got gold fever and paid way too much.

Ask Drake 07 for proof. Bet he can't provide it, just another another in a boring, tedious, endless string of conspiracy theories.

The goldbugs are upset because they're losing money and looking for someone to blame.

Gold is no safehaven, ask the suckers who paid $1,920.

[elZorro]

But aren't we bloggers too, Skol? Why is gold or silver the only "commodities" stored in bank vaults, if that's all they are? I can accept that the USA did put people on the moon, now that you can see the landing spots by telescope. But I'd like to see similar real proof of the overseas gold holdings in USA vaults. The goldbug theories make a lot of sense.

Am I correct in assuming that you think gold will never go above US$1920 again? Your reasoning for that conclusion, is? Could you make the same conclusion about any one share you'd like to name? My point is that it's virtually 100% certain that the price of gold will tend to rise against, or with, a basket of currencies. It has a strong energy content (mining costs), so if energy costs more in future, so should gold. You just can't say that about most individual shares.

Two factors are holding gold down at the moment. The large banks and China are wanting to repatriate or hoard lower cost gold bars, so there is some PR going on, and economies are giving the impression of a slow recovery. Without any major internationally scary situations that the public are generally aware of, there is no immediate rush to buy gold.

[Skol]

I'm afraid you've been reading too much goldbug propaganda EZ.

What banks want gold? Where does it say that? Let me guess, KWN or Jim Sinclair. I've never seen any bank wanting gold, if they want it there's plenty for sale

Gold will go above $1,920, but not anytime soon, could be years, even decades away, gold doesn't always rise, have a look at any gold boom chart and you'll see that when it falls, it stays there for a long time.

Shares are NOT gold, companies make things, gold vegetates in a safe.

The amount of gold you're talking about is actually chicken-feed anyway, all the gold in Fort Knox wouldn't pay the US military budget for 1 year.

The suckers who paid $850 for gold in 1980 still haven't got their money back.
Taking inflation into account gold will have to rise to $2409 for them to break even.

A real safehaven all right. lol

And here's another great precious metals deal, the suckers that bought silver in 1980 at $45 would have to get $128 now to break even.

Not a snowball's chance in hell.

And I've used the official inflation rate, which according to the goldbugs is incorrect, it's a Fed and Govt conspiracy and is a lot higher, so gold and silver bugs will need heaps more to recoup their losses.

"It has a strong energy content". Maybe, but gold isn't a requirement in everyday life like oil or copper. We don't need gold unless you want to escape from Iran or North Korea.

Or you're paranoid!!!!!!!!!!!!!!!

Or you could buy Auckland property which I 100% guarantee will beat gold.

[elZorro]

But many miners continue to lose money even now..

http://www.dw.de/gold-miners-under-pressure-over-plummeting-metal-prices/a-17004009

The top part of the article is factual. The miners expect that longer term it'll be OK. In other words they expect the price of gold to climb back up.

Then the writer says gold was only a good investment while there were fears of massive inflation. That is not the whole truth at all.


Regarding Auckland house prices, you'd better hope Labour doesn't get in Skol, with cheaper houses for the masses..

[Skol]

Even if there was a bout of inflation it doesn't mean gold will increase. This is from Investing Decoded:
-------------------------------------------------------
Gold bulls will claim that the federal reserve's quantitative easing will increase the money in circulation and therefore, runaway inflation will take place.

Runaway inflation may very well happen, but runaway inflation will not lead to a bump up in the price of gold. Since January of 2000, the consumer price index has increased by a total of 38%. Over this same period, the CBOE Gold Index increased by 103% (based on Friday's close).

Despite it's recent 65% drop off its record high, the CBOE gold index still has a lot of downside. If the CBOE index were to drop 47% tomorrow, it would be equal to inflation since the year 2000. Gold's huge increase relative to inflation makes the inflation protection argument moot until we start seeing $400-$500 gold.

Now I certainly don't encourage investors to bet against the gold bubble (even though are a growing number of ways, including this index). Gold has been highly irrational and prices could spontaneously move higher in the coming weeks. I would simply avoid gold at all costs and go into much better asset classes like stocks (which are experiencing a nice little summer sell-off).

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

$400 -$500 gold!

Re. Auckland house prices, if Labour win the next election and stick their fingers in the housing pie which they will, it will only increase the price of houses and increase rents as landlords attempt to recover any additional taxes or levies they may have to pay.
Any official tampering won't have the desired effect, if there's a CGT, landlords won't sell and the price of existing housing stock will increase.

It's all been done before, and someone my age remembers Bill Rowling's Property Speculation Tax 1973. Like many large companies , politicians have no collective corporate memory, and administrators, whether corporate or central govt. are only interested in their term in office and don't care what happens afterwards, a reason for eliminating bonuses.

The Property Speculation Tax was an abysmal failure and repealed several years later, but at the time it satisfied the left's desire to put the boot into nasty, moneygrubbing 'speculators', a dirty word in the socialist dictionary.

No earthquakes either, thousands of families moving to Auckland from down south, and it's going to be several years before this massive house building programme actually gets under way, so it's reasonable to expect that the existing housing stock will continue to increase in the meantime.

I live not far from a dormitory town, cheaply built 1970's Keith Hay houses sell for between $500,000 and $600,000. Once you move out of Auckland you never get back, it's too expensive. Many of my colleagues have left Auckland and now couldn't afford to buy back the houses they sold. In a popular industrial/commercial area in West Auckland land will cost you $800/sq.m, that's $640,000 for a 1/5 acre.

The other unknown will be the cost of labour. If they can't recruit digger and scraper operators locally what chance have they got finding builders, electricians and plumbers, many of whom have emigrated to Australia during the GFC and thanks to Jenny Shipley, apprenticeship schemes are in tatters. They have to import foreign labour now to re-build Christchurch.

What did Isaac Newton say? "To every action there is an equal and opposite reaction."

http://www.magazinestoday.co.nz/Features/Issues/Capital+gains+tax+not+the+magic+bullet+some+people +hope+for.html

In 1987 the average price of gold was about $450, an increase of 2.9 times to now.

The average Barfoot and Thompson Auckland sale price in 1987 was $130,000, it's now $654,000, an increase of over 5 times.

But it won't go on forever, nothing does, like gold there will come a time when buyers will refuse to pay or find other solutions.

[elZorro]

OK Skol, but since 2000 we've had the GFC in 2008-2009 onwards, energy prices have steadily risen, gold in ground at the right grades is getting harder to find, and so a crude comparison of the gold price with inflation is not the right way to look at it at all.

In fact JBMurc had a post that showed an incredibly strong correlation of the US$gold price with the amount of overseas investment in US Bonds. More recently the gold spikes downward have been correlated with the timing of repatriation of gold to countries like Germany. It's obviously a much more complicated picture than inflation alone. Since the US Bonds graph was so tight against gold, I'd be expecting the gold price to return to following that, once some gold bars have been freed up from the weaker hands.

I guess your political persuasion is towards the right, mine is to the left. The main reason Labour want to bring in a CGT is to refocus investors on higher-producing assets. Assets that make goods that we can export perhaps. It lines up with their across-the-board, easily accessible R&D Tax credits scheme which any SME can apply for. (National canned it). They will not introduce a CGT on the sale of a regionally modest home, and if that means that many slip through the net, too bad. The idea is to refocus, and some big commercial investors might do just that.

[Skol]

I thought gold bugs like physical gold because it's actually in their hands and no one elses. Right?

Well that's why kiwis like property, they haven't got their money in the hands of Alan Hawkins, Ron Brierley, David Ross or anyone else who are likely to lose it for them. it's something that's completely, 100% theirs and no one elses.



A CGT is doomed to failure and will be easily circumvented, there's already a capital gains tax on property anyway. A tax on anything increases the price, there's no exceptions.

Oh, and I forgot, Auckland property up 5+ times since 1987 (gold up 2.9 times) and that doesn't include the rent. How much rent do you get from your gold EZ?

Punters are moving away from gold into more lucrative assets like property and shares and the selloff will continue. The absurd notion that gold is being forced down by the Fed, the Chinese, the banksters or anyone else is pure fantasy.

A conspiracy theory straight out of KWN. 2 years since gold reached its peak and diehard goldbugs still hanging in there hoping for the best...........slow learners.

There's lots of hand-wringing from goldbugs that if the price of gold continues to plummet then the gold miners will run at a loss. Correct, what's the problem? There's plenty of gold around and as gold becomes a less fashionable asset to own, more will make it's way to the auction block.

[Skol]

Last Year:

DJIA +17%
DJT + 28%
CAC +19%
XJO +18%
N225 +53%
FTSE +13%
HSI +10%
STI +6%
Shanghai Comp -2.5%
Auckland Property +14%
------------------------------
Gold -19%
SLV -28%
SLW -24%
XGD -54%
GDXJ -50%
GDX -41%
HUI -45%

As you can see EZ, the place NOT to be is in Asia (except Japan) and gold and silver. Goldbugs will tell you China is going to rule the World, but the real place to be recently is the USA, the epitomy of all that is fraudulent and corrupt according to the bugs, so it'll be a double whammy for them because they won't own any US assets.

[elZorro]

But I still have to come back to the liquidity graph Skol. Here is a different version of it, plotting total US liquidity against the gold price. It includes the money coming in from overseas, buying US treasuries, or bonds. An incredibly interesting graph, especially when you look at the gold price diving off the trendline. What caused it to do that? (I have a few ideas, mainly to do with large banks). Will the gold price likely revert to the norm? Statistics says it will.

http://www.usfunds.com/investor-resources/frank-talk/how-far-is-gold-off-course/#.UgcGyiSN200

[Skol]

Will the gold price likely revert to the norm? Statistics says it will

If gold reverts to the mean EZ it'll be around $700.

[Skol]

You might find this chart interesting EZ, this is gold reverting to the mean. $700.

Gold was deregulated in 1971 at $35, an inflation calculator shows that in today's money that's $202, which shows you how out of whack gold is.

In 1913, gold was $19, the inflation calculator says adjusted for inflation gold should be $450.

Do gold prices still have a long way to fall? They sure do!

[elZorro]

The US prints a whole lot of money, they'll have to print more in the next 10 years, and some of it gets invested in more gold to store in various parts of the world, as a safety measure. The halfway mark up that gold price graph of yours is meaningless. But tied to the US liquidity measures, $1780 an ounce looks sensible. If that chart continues and they need to add a few trillion of liquidity within 10 years, it'll go a lot higher still.

The CPI chart is obviously not well correlated with the gold price. So why show the two together as if there is some strong link? Unless you want to add to the bank propaganda. It's so unrelated, that a linear equation is a very poor fit, it's not parabolic , there is no equation that you could use on data of that kind to get any kind of a tight prediction.

This is more like a chart that shows what has happened. Unhappily, it would seem that Skol might (sort of) be right about the banks not pulling down the price of gold. Well, not directly. Overseas investors must be thinking the US economy is on the way up, and they can do better with stocks. The overseas investment side of the Treasuries total is the part most strongly correlated with the gold price. On July 16 Treasury released data up to June. I charted the foreign ownership. It looks a lot like this is very linked to the US$gold price. The right side is in Billions of paper dollars.

[elZorro]

Recycling of jewellery may help gold price improvement

Ross Louthean — 12 August 2013
Where else should the now concerning course of the gold price be discussed than Australia’s gold capital of Kalgoorlie.
It was an issue raised often during last week’s annual Diggers & Dealers Forum with the most magnetic presentation being by the World Gold Council’s managing director of investment, Marcus Grubb.
The question of where was the gold price heading was asked of a few speakers and Grubb’s blunt response was that because of his position in the industry it was not an issue he could, or would, discuss.
However, his presentation showed there were some good pointers for the price of gold and these indicated that the gold price may not continue a downward spiral.
Journalists asked the same question of OceanaGold Corporation’s chief executive Mick Wilkes and he indicated it was difficult to predict but he felt it was likely to go “sideways” for a couple of years and then perhaps it might recover.
A positive factor for Wilkes was that the Kiwi dollar, for its New Zealand production, was more likely to regress as a generality rather than rise against the American greenback – the currency on which it details its production costs and capital spend.
Marcus Grubb said the bullion market, now in surplus, could set the stage for a price recovery. Supplies of gold from recycling would fall by 300 tonnes in 2013, almost a fifth of last year's 1,600 t. The lower bullion prices have been deterring investors from cashing-in their jewellery.
He told a media conference following his presentation: “Recycling is positively correlated to the gold price. In a bull market recycling rises as the price goes up, on the downside when the price drops - like we saw this year - you see recycling fall because people do not think they will get a good price for their gold.
This drop-off began in the March quarter when recycling fell 4% as prices sagged, and accelerated in April when gold saw its sharpest drop in 30 years.
Strong global economic data has dented gold's safe-haven appeal, physical buying in top consumers India and China remains subdued and traders expect further price falls.
India and China continue to lead the trade in recycled gold where individuals hold 20 000t and 10 000t respectively.
Grubb told the ABC radio programme AM that the decline in recycling combined with less "new" gold output from mines was helping offset the additional 650t estimated to enter the market in 2013 as more holdings by exchange traded funds are unwound.
“What that has done is create a temporary surplus this year," Grubb said. "You need balance to be restored in the gold market in the short term for the longer term drivers of the price to return.
So I think overall we see it more that the market balance between physical demand and supply is being re-established very quickly, probably before the end of this year that will be done.
So, you have very strong demand from Asia, central banks, long-term demand kicking back in with mine production probably likely to fall rather than rise. So because of that, we're pretty bullish on gold in the medium term.
AM reporter Sue Lannin asked: What happens though if the US central bank, the Federal Reserve, does start to withdraw stimulus from the US economy? That will push up the $US and push down the price of gold won't it?
Grubb responded: Certainly a stronger dollar is a headwind for gold. I mean that's a well known fact in the gold market. It's negatively correlated with the trade-weighted $US.
However we feel that scenario is by no means a certainty. And as we were hearing from another speaker at Diggers and Dealers, the outlook for the US economy is not nearly as rosy as some observers would currently claim. We also think that the Federal Reserve may not taper as early as September or even December.
So, asked Sue Lannin, do investors still see gold as a safe haven?
Grubb answered: Undoubtedly they do. And I think the interesting thing though is throughout this cycle with the credit crunch and the recovery and where we are today, you've seen gold move around.
It can be a safe haven and a store of value, so it effectively reacts as a risk-off asset. It can also though act as a risk-on asset. So if people get more bullish, if investors become more positive about equities - provided interest rates don't rise too rapidly, if there is a little bit of inflation - then gold can rally at the same time as equity markets.
It hedges you in both scenarios. Once it is clear, once you're through the uncertainty, and you know which way markets are generally going, gold then still acts as a hedging asset one way or the other and that's one of its great strengths.
Sources: nzresources.com files and abcnews.net.au/am


From NZResources. A reduction of 300 tonne in recycled gold as the price dropped. Producers all showing concern at the lower prices for gold, but in the medium term there is better to come.

Since a strong economy is founded on a monetary surplus from cheap energy, I don't see where the USA or Europe are going to find this in the short term. They will continue to print money. China and India still effectively have cheap energy from their populations. The longer-term answer is clear: the world needs to develop the tools to have cheaper, more carbon-neutral energy sources, pronto.

[Skol]

This should give you an indication of how far gold might fall.

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


Louis Woodhill-Contributor


Was gold “worth” $1,895.00/oz on September 6, 2011? Yes, in the sense that participants in a deep, liquid, world-wide market were willing to trade 1,895 dollars for one ounce of gold on that day. No, if judged in the light of historical relationships with other real goods and services.

In 1967, 57.14 ounces of gold would buy you a new VW Beetle with no air conditioning, no power anything, and 53 horsepower. On September 6, 2011, the same amount of gold would have allowed you to purchase a new 2012 Mercedes S550 with 429 horsepower and every luxury feature known to man.

In 1967, an ounce of gold was worth $35.00, which would buy 78 Big Macs. On September 6, 2011, McDonalds would have been happy to sell you 466 Big Macs for the $1,895.00 that you could have obtained for the same one ounce of gold. Yesterday (June 26), an ounce of gold would still have gotten you 301 Big Macs.

Could gold fall farther? Yes. The price of gold and the general price level always equilibrate eventually. In other words, a gold price of $1,895.00/oz on September 6, 2011 made it certain that either gold prices would fall (by a lot), or inflation would rise (by a lot).

How much farther could gold fall? Well, the price of gold would have to go to $316.56 just to restore parity with the Big Mac. And, a $35/oz gold price in 1967 would be the same as $192.50/oz today, after adjustment via the GDP Deflator.


http://www.forbes.com/sites/louiswoodhill/2013/06/27/dont-cry-for-the-gold-bugs-when-golds-a-good-investment-the-economy-sags/

[Daytr]

Skol, you have a very transparent habit of selecting points in time or articles that suit your argument. Anyone that only ever looks at one side of a coin has a flawed argument. However your constant anti gold barrage is at least amusing, albeit a little fixated. Gold will go up, gold will go down, its just my view that over time gold will be quite a lot higher than where it currently is. The USD is likely to gather strength at least short term if they reign in QE & gold could suffer more if that happens as well, however in AUD terms it could be higher or at least any strength in the USD would be cushioned. I looked back to when you started this thread in Dec 2009 when gold was trading around $1150, so in 3.5 years you are yet to be right. You missed a circa 70% rise in the POG to when it peaked but you still were bearish all the way. If you had shorted gold in Dec 2009 you would still be out of the money by 15% at the current price. Keep it up Skol, if not to only to amuse as I enjoy your posts. Cheers Daytr

[Skol]

Daytr,

Yes I picked that gold was in a bubble 2 years before everyone else, copped a fair bit of flak for it too, but not to worry, I've got a thick skin and I've still got my money, which a lot of gold and silver bugs haven't.

And for the last 2 years, I've been right, the bubble's popped, for sure, gold is still the most overvalued asset on Earth.

Others say why haven't I shorted it and made some money. I have - I own shares, lots of them that for the last 2 years have made quite a lot of money while gold and silver have crashed!!. lol A man of your alleged experience will know that shares and precious metals are mostly uncorrelated.

The side of the argument I don't look at is the KWN, SilverBearCafe et.al argument and the conspiracy and Armageddon scenarios, I'll leave that to you Daytr.

You're one of the few remaining diehards along with JBMurc and El Zorro, almost everyone else has thrown in the towel and moved on to more profitable trades.

[Daytr]

Hi Skol, you don't leave the likes of KWN etc to me, as I largely ignore them as well or Armageddon scenarios as when have I ever written anything along those lines? I too own shares, shares in miners be them gold stocks, or growth related mining stocks that mine iron ore & copper etc. I also own bank shares which have done very well. However since the gold crashed & bottomed it has been my gold stocks that have out performed & since I loaded up around 6 weeks ago I have done very nicely. You say you called a gold bubble 2 years before anyone else or actually you were just wrong for 2 years. I called the gold bubble when it started to soar from $1650 to $ 1920 & advised clients to hedge & hedge as much as they could especially when it started trading around $1850. I am now advising clients to buy gold stocks & have been doing so for the last 2 months.

[Skol]

Well Daytr, one guy who absolutely rubbished me was this dude:

http://www.goldoz.com.au/home.0.html

A gold 'expert', no less.

Have a look at the last time he updated his portfolio - 29/12/12, there'll be a good reason for that which you won't need to be Albert Einstein to deduce. He called me a 'serial nuisance', just before gold crashed, but not much from him recently.
Gold is merely taking a breather before the next step down, which will be to around $1,000.

The gold chart doesn't look like it's 'bottomed out' to me.

[elZorro]

Skol: I'm not a diehard..by now I must be a contrarian, because gold seems out of favour:)

[Daytr]

Hi Skol, not rubbishing you, apologies if it came across that way. However I do think you need to look at positives & negatives & weigh up the balance of those. You obviously feel the negatives for gold far outweigh any positives. Short term its possible you maybe right & gold could go lower again, I don't know if it will or wont. However over time once the ETF pressure comes off I think gold will be much higher than where it is now. My own personal view is that gold could test the lows again, however I don't see it going much lower than that as I think a lot of the ammunition that thumped gold a few months back has been spent. Gold appears to be relatively well balanced trading where it is with sentiment probably slightly bearish, so if gold had neutral sentiment I suggest it would be trading perhaps $100 higher. If sentiment turns strongly bearish again then we will see those lows of $1180 tested again.

[Skol]

I don't feel at all offended Daytr, but I think that you will have to agree with me that everything returns to the mean, and so will gold.

Charles P. Kindleberger's book "Manias, Panics and Crashes', refers to the 1970's surge in the price of gold, and made the observation that 'the price of gold was increasing, because the price of gold was increasing'.

In other words a mania was afoot, like recently, but the book also makes the observation that gold is a good inflation hedge, but currently gold is so far ahead of inflation it will take years, or a violent crash to work it out.

[Daytr]

Moosie, I think much of the QE tapering is already priced into gold, although yes I agree if & it is a big if they start tapering soon then yes its a negative for gold as the USD is likely to strengthen. IMO they won't begin tapering unless unemployment is around 6 - 6.5% & at the current rate of job growth that could take at least a year. Meanwhile the Chinese Aunties as Skol refers to them as keep buying.

http://www.bloomberg.com/news/2013-08-12/china-on-track-to-overtake-india-as-gold-consumption-jumps-54-.html?

And Skol I don't agree everything returns to a mean, with that argument the share market must also head south? And the oil price what does that argument mean for that? There are many instances where 'thing's don't return to a mean price particularly if you are including a period of time for gold where it was fixed at $35/ounce artificially. Things will return to a level that the market is willing to pay for them in relation to the value of other things. Another words what the market perceives as value.

[Skol]

Daytr,
The stockmarket has in no way emulated the gold mania of the last few years, gold increased from $400 in Jul 05 to $1,920 in Sept 2011, an almost 5 fold increase.
The DJIA has from its low in 2009 to its high in 2013 increased only 2.2 times.

And as I say endlessly, stocks produce things people need, gold produces nothing, it's dug up, refined and then reburied. It has no utility.

Gold induces a kind of madness in people every generation, it crashed 60% in 1980 when gold fever subsided and it took several years to hit rock bottom, whereas it's only 2 years since the recent bubble burst, impoverishing many goldbugs who keep picking the bottom.

It could be a fatal mistake assuming that chinese aunties will keep buying, they have the same human frailties and idiosyncrasies as everyone else and are just as prone to herd behaviour as the rest of us. When I was debating the peak oilers they used to keep telling me "the chinese are buying all the oil they can find".

They were too, but only until they realised that the oil mania was over when it rose to $147 and crashed.

Here's something else from Bloomberg:

On Sunday, Shanghai-based Liberation Daily, a newspaper owned by the Shanghai Communist Party, not only joined other news outlets in comparing the gold-shopping habits of aunties to grocery shopping but also suggested: “Their knowledge of banking and finance is close to zero, so their investments change with the winds. They’re also based on feelings, as well as the advice of close friends.”

and:

"The current rush is unusual in two ways. The first is its epic scale. The second is that, according to both traditional and social media, aunties are doing most of the buying."

Join them if you must Daytr.

http://www.stuff.co.nz/business/money/9032745/Three-more-years-of-housing-heat-tipped

[elZorro]

Maybe in the next day or so we'll see if the gold market is being played or not. Have a look at this recent chart, the writer says to watch out for a suckers rally here.

http://www.ino.com/blog/2013/08/gold-chart-of-the-week-46/

[blackcap]

[QUOTE=Daytr;421324

And Skol I don't agree everything returns to a mean, with that argument the share market must also head south?.[/QUOTE]


There is a difference between a stock market and a commodity or a currency. Commodities and currencies are zero sum games but stocks are not. Stocks produce earnings, have dividends and can grow infinitely and do not have to return to the mean. Commodities and currency are a totally different story.

[peat]

This video provides a very thorough, quality technical analysis

http://www.forexspace.com/forex-insights/3496/video-updategold-has-a-short-term-bullish-structure

[elZorro]

This video provides a very thorough, quality technical analysis

http://www.forexspace.com/forex-insights/3496/video-updategold-has-a-short-term-bullish-structure

Thanks Peat. The 'pa-turn' is for gold to move higher in the short term. Using Elliot wave, TA, etc, they all concur. There is also a possibility that gold has completed 5 stages of a downward move, and could move up more solidly from here. Who would be brave enough to act on that?

[Daytr]

Skol/Blackcap, then we are in agreement, I was responding to Skol's statement that EVERYTHING returns to a mean & clearly it doesn't. Yes companies have earnings & they can also incur losses. Currencies also have earnings as in interest rates, gold has an interest rate although like the USD it has been around zero for some time. To be honest I'm not sure on gold from here short term, it needs to break & hold $1350 for mine otherwise it will test $1280 again.

[Stranger_Danger]

Seriously, those who are pro-gold, can you not see the QE train coming into station in less than a month? That light at the end of the tunnel is not your salvation, its a big metal object coming to squish you if Mr Bernanke decides to taper!

Would like to hear some pro-gold ideas on this, and not just "la-la-la, eyes and ears closed, Bernanke will QE forever". I want to hear what you think will happen if it does go through in a month and how you plan to stave off a crushing blow...

I'm not pro-gold, but, I am a life-long devil's advocate.

Why do people buy gold? Is it really about endless money printing, or inflation? Or perhaps it is about fear?

What will happen when QE does stop? Will gold really crash due to an end to inflation expectations and money printing, or, will everything else crash due to the support being removed? Every time the support even looked like being removed, the market freaked.

Personally, I think it could go either way. But I think fear is more than possible. I think gold would drop on this fear, but, if sustained, would later start to rise on fear too.

The fear would then lead us back to where we started, with the Fed reintroducing QE, which takes us back to the endless QE argument.

Damn. I didn't really help, did I.

[Daytr]

StrangerDanger, I think you summed it up quite nicely. I buy gold stocks as a proxy to gold & exploration upside. The gold component of the reason I buy which is the majority of the rational the other components are related to selecting the right producers who will make the most of the POG. Its my view that enough people have a degree of fear around money printing & sovereign debt issues & that Asia & developing countries are buying it. In most cases the governments & their people that are buying are in development stage of their economies with a quickly expanding middle class & large sovereign reserves, whereas the Western governments particularly Europeans are at the other end of the spectrum in regards growth & debt. The US has similar issues, but more potential for growth imo & they aren't selling their gold reserves.

[Skol]

It's hard to understand why goldbugs get so excited about gold, in the big picture, all the gold ever extracted isn't actually worth that much.
The 2013 US military budget is $682b.
My calculation is that all the gold in Fort Knox is worth $191b.

Ben Bernanke says the US owns gold because it's 'traditional'. Sounds fair to me, it's been there since the 1930's.

[Skol]

Citigroup forecasts average $1,143 gold for 2014.

http://www.ibtimes.com/gold-miners-shares-are-too-expensive-own-thats-going-be-big-problem-producers-citi-1383695

When Apple shares plummeted a while back, goldbugs gloated that the Apple bubble had burst, but AAPL actually makes things people love, I recently bought an iPhone 5 myself, very cool.

Carl Icahn has taken a large stake in AAPL and says the shares are probably worth $700.

You won't see Carl Icahn or Warren Buffet for that matter taking a large stake in gold.

[JBmurc]

Citigroup forecasts average $1,143 gold for 2014.

http://www.ibtimes.com/gold-miners-shares-are-too-expensive-own-thats-going-be-big-problem-producers-citi-1383695

When Apple shares plummeted a while back, goldbugs gloated that the Apple bubble had burst, but AAPL actually makes things people love, I recently bought an iPhone 5 myself, very cool.

Carl Icahn has taken a large stake in AAPL and says the shares are probably worth $700.

You won't see Carl Icahn or Warren Buffet for that matter taking a large stake in gold.


-Smartphones on average use

0.015g palladium
0.034g gold
0.35g silver
16g copper

According to Ken Beyer, CEO of the Electronics Recycling Company, there is in fact more gold in a pound of electronics than in a pound of rich gold ore.Forget South Africa, is Urban Mining the future for gold and silver producers/ recyclers ?

http://www.silverdoctors.com/mining-your-iphone-for-gold-silver-the-infographic/

A Ton of your phone Skol "apple 5s" (yes very nice got one) would yield 9.72oz gold.... now thats 300x better than the average major gold mining operation ...
Yeah but what do you alway bleat on about ..Gold is for suckers .relic .has no use ...poor investment rah rah ..then you even come out in a post and state how little of the precious metal is held even by the USA empire...

[Skol]

If you're a gold bug and easily depressed then don't read this:

http://www.bloomberg.com/news/2013-08-13/losing-faith-in-gold-from-ghana-to-vancouver-proves-rout.html

[JBmurc]

If you're a gold bug and easily depressed then don't read this:

http://www.bloomberg.com/news/2013-08-13/losing-faith-in-gold-from-ghana-to-vancouver-proves-rout.html

Great Anti gold propaganda Skol.... NOT!! ...like the replies ...now the Gold price is $1322oz US (much higher in most other countries Fiat) you keep going on about no Inflation ....? now read the below ...

http://online.wsj.com/article/SB10001424052748704792104575264863069565780.html

It's been the amazing, runaway boom of the past decade. If you'd put your money into gold at the lows about 10 years ago, you'd have made a nearly 400% return. That's left pretty much everything else—stocks, China, let alone housing—in the dust.

But with gold now trading near record highs, the big $1,200-an-ounce question is obvious.
Is the gold rush over?

Some smart people wonder. "The time to buy gold was in 1999, not 2010," Harvard professor Niall Ferguson tells The Wall Street Journal—though he added that momentum might still drive it higher. Others will tell you that "the smart money got out of gold months ago."

------wow Gold is higher that record BOOM Bubble times "May 2010" ...yet it's all DOOM DOOM now only years apart whats going on Skol ..Gold bad bad now Gold boom boom only three years ago ? No Mining cost Inflation ?

[Skol]

JB,

Yep, gold left everything else in the dust for a few years, just like it did in 1979/80 too, but it never lasts.

Sounds like you're easily depressed, you shouldn't have read it.

[JBmurc]

JB,

Yep, gold left everything else in the dust for a few years, just like it did in 1979/80 too, but it never lasts.

Sounds like you're easily depressed, you shouldn't have read it.

LOL depressed checkout PGI gold producer brought a truckload only the other week currently I'm up 8k

As usual you didn't answer my above one minute media worldwide is boom boom Gold next Doom doom crash yet it's priced higher now
personal if gold was 700-800oz etc yeah I'd agree doom times all round for the sector....

then we get to all the Gold majors complaining about tight margins ...Inflation ??

[JBmurc]

JB, your article is 3 1/2 years out of the date. the recent rise is on very low volume and is not confirmed at all. VERY solid resistance is at $1350. I would be exiting any long position right now before the next leg down starts as gold is now trading in a range that will fall sharply should QE be cancelled in a month. the risk is massive compared to reward. id be taking the cash and running, fast...

Yeah well that was my point 30 months ago Gold was booming @ round $1200oz the PM sectors were well liked investment wise... Media also talked up Gold as a investment etc ...profits looked large for producers / Explorers raise funds easier no worries

.Present time Gold $1320oz we have a smashed PM sector/talk of mass lay off's, mine closure's
Mass Anti-PM sentiment i.e only for nut job Gold bugs weirdo's that will lose everything DOOM DOOM Gold Crash any-day bah bah T/A shows it's all over ....

? whats changed

Oh thats right Obama US FED etc said it's all good in the O USA .....going stop creating trillion's more debt soon we HOPE so all good

how humanity is magnificently capable of self-deception thanks to the media

[digger]

JB, your article is 3 1/2 years out of the date. the recent rise is on very low volume and is not confirmed at all. VERY solid resistance is at $1350. I would be exiting any long position right now before the next leg down starts as gold is now trading in a range that will fall sharply should QE be cancelled in a month. the risk is massive compared to reward. id be taking the cash and running, fast...

From my observations prices only move wildly on black swan events that by nature were unforeseen. Everybody and his dog knows about the QE being wound up in the near future so if anything gold is more likely to go up on that event as it will be already factored in. Kind of like sell the rumour buy the fact.

[Skol]

It's been the amazing, runaway boom of the past decade. If you'd put your money into gold at the lows about 10 years ago, you'd have made a nearly 400% return. That's left pretty much everything else—stocks, China, let alone housing—in the dust.

That's cherry-picking, everything out-performs for short periods, but over time gold is a lousy investment.

http://www.bloomberg.com/infographics/2013-08-14/gold-price-decline-felt-around-the-world.html

http://www.barfoot.co.nz/Info/Market-Info/Stories/Annual-Average-Price-Graph.aspx

For example:

Average AKL sale price 1973 $18,469
Current sale price, $645,000
Up 34.9 times.

Average 1973 gold price $97.39.
Current price $1,320.
Up 13.5 times.

And that doesn't include the rent!!!!!!!!!!!!!!!


Silver is even worse, since 1973, silver is up 10.5 times.
Not gonna be much of a retirement at that rate JB.

[JBmurc]

That's cherry-picking, everything out-performs for short periods, but over time gold is a lousy investment.

http://www.bloomberg.com/infographics/2013-08-14/gold-price-decline-felt-around-the-world.html

http://www.barfoot.co.nz/Info/Market-Info/Stories/Annual-Average-Price-Graph.aspx

For example:

Average AKL sale price 1973 $18,469
Current sale price, $645,000
Up 34.9 times.

Average 1973 gold price $97.39.
Current price $1,320.
Up 13.5 times.

And that doesn't include the rent!!!!!!!!!!!!!!!


Silver is even worse, since 1973, silver is up 10.5 times.
Not gonna be much of a retirement at that rate JB.

Cherry picking thats rich coming from the cherry picking King LOL

AKL property you see that continuing ? so say Auckland properties in 20yrs go up 17 times(using half your above metric's timeframe)
so 2033 Average AKL sale price 10.9mill NZD LOL

The likes of Silver has been very depressed for the last 40-60yrs but over the last decade It's finally getting some legs now I could see Silver doing what Auckland property did over the last 40yrs in the next 40 easy on the back of higher demand / tighter supply ....$720oz Silver for a precious metal that's 10,000 application's used all mostly daily...

Oil for 100yrs didn't move much at all priced in todays US dollars ....But then demand started to increase more than increase of production / discoveries harder to find to replace reserves ...

[biker]

Cheap section for Auckland Waterfront!

[JBmurc]

JB,

You can't rent silver, even the dimmest punter knows that, that's why it's dragged its feet.

As for AKL property, why not? I bought a waterfront section a while back for $288k (had to be lucky numbers, bought it off an asian) and sold it for $560k.

Why not? well it's pretty simple 10.9mill for a 150yr old villa ...so the average Auckland family will be needing to earn mega money to just pay the interest bill ....going need some serious Inflation at some stage ....down here been very little in property inflation for the last 6-7yrs ...can buy houses under cost to replace ...agents need more listings ..overall stagflation conditions costs to build increase but values aren't moving much at all..will see prices move but be lucky to see 1% cap growth p.a if taken from 04-05..but some how Auckland will just keep going up talk about bubble fueled by low interest rates how many new buyers are debited to the eyeball's just keeping afloat thanks to record low rates and the beliefs from the SKOLs round that Auckland property will only ever keep going up>>>

[Skol]

Cheap section for Auckland Waterfront!

Bought it a while back in area punters said nothing would ever happen, that I'd do my dough. For a while I thought they were right, then it went ballistic.

[JBmurc]

Bought it a while back in area punters said nothing would ever happen, that I'd do my dough. For a while I thought they were right, then it went ballistic.

same happen when I brought several section's in unliked part of Invercargill valuator believed the price I paid was only 2-3k less than his new value thought I was dreaming to even get that value ..sold them all to a big timer North Island developer for 24,500ea more than I paid 12months later 1700% return on invested funds..

After that sale in 07 I really wanted to buy into the Auckland apartment market that was hitting the wall in 08 but badly bank wouldn't lead me the money didn't like the market at the time

[Skol]

John Paulson finally throws in the towel.

http://www.bloomberg.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-as-soros-sells-out.html

[JBmurc]

John Paulson finally throws in the towel.

http://www.bloomberg.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-as-soros-sells-out.html

Yeah media really pumping the negatives just like they were pumping the positives at 1800oz+ in the mean time Gold 1341oz USD
$1465oz AUD

[Daytr]

If we break & hold $1350 I think speccys get on board & we see gold go quickly higher for another $50-80. Big technical level at $1350 imo.

[Daytr]

Wow that's a lot of selling for the market to take & yet it appears to have done it quite easily with gold still recovering.


John Paulson finally throws in the towel.

http://www.bloomberg.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-as-soros-sells-out.html

[Daytr]

Thursday night when I was trading gold was more often than not rally night. There seemed no rhyme or reason why we looked into it numerous times to figure out why more often than not that Thursday nights would see a big push higher. Could be wrong, but just get the feeling we are going to push through $1350 tonight as gold seems to keep pushing back to the top od resistance over the last few weeks.


seen how low the volume of those trades are though? and what good news is ahead that will push it through that huge $1350 hurdle? pray, do tell...

[JBmurc]

seen how low the volume of those trades are though? and what good news is ahead that will push it through that huge $1350 hurdle? pray, do tell...

Well many reason but the most likely is the fact if the Q.E is tapered or stopped the markets will crash ....I personal see it as pure grand-standing ....also seasonality sept-nov-dec on average are the best growth months for Gold IMHO we have seen the lows for the year

Also the contrarian play all the mass media is over the top anti-gold ....how many times do you see the dead opposite happen going forward...

[JBmurc]

If QE made gold go much higher over the years, what do you think will hapoen when it is tapered? sure the market will go down, but golds price has been built on the speculation of inflation through QE!

seems like paulson is the contrarian indicator. if we see a push higher, he's going to be a goid one in that regard! then again, what if he and soros know something we don't? we have seen the opposite happen many times when the media turns, but I just can't ignore the facts and my gut.

if I had played OGC from the recent low to now would have made 50%+. I only made a fraction of tgat due to going in on other stocks and reducing risk in my portfolio. you can bet I'll be buying in on the next big leg down if it does hapoen though!


Bloomberg Huge buying in phyz
http://goldsilver.com/video/there-is-a-huge-run-on-physical-gold-commodity-trader-tells-bloomberg-tv/

Gold goes through $1350 >>>>1400-1430 looks likely

[Skol]

If John Paulson, hero of the GFC meltdown who made billions out of selling short the sub-prime debacle throws in the gold towel, what are the great unwashed out there going to be thinking?

Better sell my gold before everyone else does, right?

[Valuegrowth]

It is time to analyzenew development in the gold market.

http://www.businessweek.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-percent-as-soros-sells-entire-holding (http://www.businessweek.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-percent-as-soros-sells-entire-holding)

Gold Bull Paulson Cuts SPDR Stake by Half in Bear Market

http://www.cnbc.com/id/100963985 (http://www.cnbc.com/id/100963985)

Paulson & Co more than halves gold ETF stake in Q2

http://en.ammonnews.net/article.aspx?articleno=22762#.UgyRSDmN3IU (http://en.ammonnews.net/article.aspx?articleno=22762#.UgyRSDmN3IU)

India hikes gold duties again to plug trade gap

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse ortake responsibility for material in the above hyper-linked sites

[JBmurc]

"The U.S. government has to borrow 43 cents of every dollar that it currently spends, four times the rate in 1980"

Many Investors complacency is the greatest enemy...i.e letting the media tell you how to invest ..whats going to go up or down from the experts of course currently the media is 100% attack GOLD now lets see
how it all plays out ....by years ends

[Skol]

"The U.S. government has to borrow 43 cents of every dollar that it currently spends, four times the rate in 1980"

Many Investors complacency is the greatest enemy...i.e letting the media tell you how to invest ..whats going to go up or down from the experts of course currently the media is 100% attack GOLD now lets see
how it all plays out ....by years ends

"media attack"

The usual goldbug paranoia. lol

And other goldbug hero, George Soros joins others in dumping gold, looks like the party's over.

http://www.cnbc.com/id/100964542

[elZorro]

George Soros has found what he believes to be a better investment, that is all.

Gold pushed firmly up above $1350 in the last 2-3 hours. US$ heading down.

Here is another article in a long line pointing out the shaky position of the American economy.
http://www.ino.com/blog/2013/08/the-federal-reserve-relies-on-a-flawed-economic-model/comment-page-1/#comment-175184

Lots of numbers there, and I still say it can be boiled down to just one fact: the cost of energy is high enough that there is little enterprise profit left, especially when western wages are involved. We will not see any of the issues being fixed until there are major moves in the area of cheaper, sustainable energy for the masses.

[JBmurc]

DOW got smashes yet again overnight last I seen late last night on the Nymex open like the anti-gold crowd tried there best push down gold $15 then great to see at present the Bulls have pushed it through the 1350 resistance ....$1361oz ....going up from here
good to silver Silver formed a solid bottom and is now made a bull breakout north

[Skol]

DOW got smashes yet again overnight last I seen late last night on the Nymex open like the anti-gold crowd tried there best push down gold $15 then great to see at present the Bulls have pushed it through the 1350 resistance ....$1361oz ....going up from here
good to silver Silver formed a solid bottom and is now made a bull breakout north

A suckers rally that's gonna see them cleaned out.

[JBmurc]

low volume yet again. better hope some steam keeps coming and that ehypt gets worse JB!

the steam thats comes is from the Shorts at this stage ...I see more Central banks worldwide are asking for their bullion back from the Western major Bullion banks ....one hell of a **** storm brewing IMHO

Also I see all the media Bah ...like the sale of ETF was back in JUNE not now yet they like to bring it out now it back on it's way back to it's mean

[Skol]

the steam thats comes is from the Shorts at this stage ...I see more Central banks worldwide are asking for their bullion back from the Western major Bullion banks ....one hell of a **** storm brewing IMHO

You've been reading too much KWN.

In 1980 gold fell 41%, rose 27% and then the rot really set in.

Since the 2011 high, gold has fallen 38% and risen 15%.

If the same happens this time gold would get to $1500 and then continue the crash.

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

"History repeats itself all the time in Wall Street"

Edwin Lefevre - Reminiscences of a Stock Operator.
------------------------------------------

If history does repeat itself, gold will end up at $672

And if the 1980 silver crash repeats itself, silver will end up at $5

[Daytr]

Agree Elzorro, WTI/Nymex have gone through the roof in recent months up around 20% that will certainly put a brake on US growth if it stays here or goes higher.

Nice to see gold make the break through $1350 despite what Skol says.
My resources portfolio is up 25% in two days & I expect more out of this spurt in gold yet. If it holds $1350 tonight then hopefully we should see an assault on $1400/1420 area, needs to hold first though.

[Skol]

Daytr,

The goldbugs were crowing, "it's different this time" all the way to $1,920.

Is it?

[Daytr]

Hi Skol, what the article fails to mention is that Soros bought call options in gold mining juniors, spent $25M in premium. Not huge for Soros, but that's a lot of leverage to gold juniors.


"media attack"

The usual goldbug paranoia. lol

And other goldbug hero, George Soros joins others in dumping gold, looks like the party's over.

http://www.cnbc.com/id/100964542

[Daytr]

Ha ha nice one Skol. When you think about it, its actually different everytime! So maybe this time it goes higher than $1920. Haha. Who knows, I just play the game in front of me. I do think $1350 was an important technical level, but needs to hold it & then move higher to have consolidated the gain.


Daytr,

The goldbugs were crowing, "it's different this time" all the way to $1,920.

Is it?

[Skol]

Value of gold: is this time really different?




Why is gold valued? is year in year out one of the most visited posts on this blog. For some reason that I still cannot fathom people care a lot about the value of gold. The fact that is does not have much fundamental value except for what people believe it is worth makes it almost as much a fiat currency as the money doom sayers want it to replace. Another repeated myth about gold is that its value is stable or can only go up, despite the fact that there have been some spectacular drops. Like now, where people claim that this time it is different, gold is the best refuge in the face of a major meltdown of various currencies. Or at least as a hedge against pending inflation.

Claude Erb and Campbell Harvey explore the role of gold as a hedge against inflation. It turns out gold is a very poor hedge, and if it were, it should be at half its current price. I guess this over-reaction can be attributed to herd-behavior, which nowhere as common as for gold. And with the real price of gold at twice the long term average, and the fact that mean reversion invariably kicks in, sooner or later the price is going to go significantly down. Always has, always will. This time is no different.

If gold has a useful property, it is a very good hedge against inflation in the very long run. We are talking centuries here. Erb and Harvey compare the pay of Roman and US soldiers in gold and find that they are remarkably similar. But this means also that gold does not have returns that are in any way comparable to equity. We are taking here about returns that are a small fraction of a percent. Hardly a good investment. Also, gold is no good currency hedge either, as its fluctuations are so big that they drown out the fluctuations in exchange rates. Etc. Erb and Harvey go through a series of other arguments why gold should be held, and none seems to hold water. But gold is shiny.

[STRAT]

Id love to see a turn in gold but its just a knee jerk reaction to the Egypt situation I reckon. Oil too.

Hi Skol.
How are those Airlines treating ya?

[Daytr]

You are right Skol & we wouldn't need gold if monetary policy was done responsibly, however particularly in recent times the likes of Greenspan & now Bernanke & his European & Japanese counterparts are willing to throw the kitchen sink at their currencies to stave of a depression & inflate their way out of debt. Gold physically values things & although is produced out of the ground which has a substantial production cost to it & cannot be printed in the trillions that we are seeing now & have done for decades.

[peat]

One of the things that interesting right now is that the gold/silver ratio has seemingly made a major turn, generally speaking when PM's are bullish silver will rise faster than gold and this ratio will fall.
I'm picking a quick run to 27 with silver but after that maybe lower again. I don't know, and no one does, but at sub US20/oz I'm happy to buy and hold and be patient.

4714

[Skol]

Id love to see a turn in gold but its just a knee jerk reaction to the Egypt situation I reckon. Oil too.

Hi Skol.
How are those Airlines treating ya?

Hi Strat, not too bad thanks, only own VAH airline-wise, do a bit of trading with it. Yep, I think gold might be a flash in the pan, but could be profitable for those willing to take a punt on it. (Long as they don't leave it too long)

Bought a few IVC a while back, started watching then at $6, left it too long, not to worry, death won't be going away any time soon.

[Skol]

"Buffett targets cars, oil and satellite TV

Berkshire Hathaway invests the most money in stocks since 2011"
---------------------------------------------------------
Headlines from FT, can't be very good for non-dividend gold and silver.

Soros and Paulson are bailing out of gold and Buffett is piling into stocks, what's that mean to the trained mind?

[JBmurc]

Tonight sees a Comex option expiry...going be very interesting with the record amount of Shorts on the books ...or will it be the usual takedown ...looking at the chart again for last night US trade where we seen the major sell-off followed by nothing much till major buying near the close .....

from the DOC

It’s so ugly that in the silver market, JPMorgan has not yet satisfied and delivered on the June silver futures contracts! It’s so ugly that using hidden entities that Andrew Maguire has detected in London, JPM is using hidden entities to hog 90% of the July silver deliveries! It appears that JPM doesn’t have the silver to meet June delivery, and is trying to replenish their own vaults by taking delivery in London, secretly, to replenish their inventory! Where are they getting it from? Maybe the SLV!
The JPM clients have removed between December and June- close to 40,000 kg of gold- thats 40 metric tons. While JPM’s house account has removed over 40 tons in the same period! What’s the lesson there? It appears JPM’s best friends and clients don’t trust them anymore!
My best source (originally a trader with Scotia Mocatta) tells me that the allocated gold account raids have resulted in 40-60,000 tons of gold! (The US likely doesn’t have any of its reported 8,500 tons left at all!). Rubin and Clinton might have made $2-$3 trillion leasing and selling the US gold. Someday the US may have to replenish its gold.
We’ve had other things like ABN Amro’s default, and another small Dutch bank just made the same statement that they’re not going to redeem on gold accounts. Morgan Stanley is stalling on every single metals transfer request. When it is finally transferred the serial numbers and weights are different than what was documented. Clearly the broker dealers are going into the market to find the gold, to find supply just in order to meet their daily requirements.
The Brinks’ accounts are going bare and are almost down to zero – these are all problems on the supply side!

[JBmurc]

4717
if this is public knowledge then why haven't th PM's skyrocketted lately? call me whatever you like, but this sounds like typical goldbug hype with little to nothing to show for it. got a link to a reputable news agency such as, say forbes or reuters for this?

--Reputable LOL no see there to busy coming up with anti PM press to push and positive angles to push on the fiat economies Bullishness not to talk about higher interest rates ,bond rates,bond bubbles,Fail Wars,Currency Wars.......etc etc

[elZorro]

Not sure if this helps the goldbug argument or not, but a link via JB shows that there are some very large lower grade undeveloped gold reserves.

http://www.visualcapitalist.com/portfolio/global-gold-mines-and-deposits-ranking-2012

[JBmurc]

And there goes all credibility, lambasting Reuters and Forbes.

You didn't answer my question: Why hasn't gold skyrocketted then?

That is the 64mill dollar Question.....why hasn't Gold gone to the moon ??? well it's moved some $200 from it's recent bottom now thats a start..
...But Now I'm not a all knowing Metals GOD I don't know every reason why Gold has gone up or down or sideways Geezzzz All we can do is really put all the piece's of imfo together and make are own mind up to where we stand,,,,

---You didn't answer my Question ??my Question Geez ***************** now keeping my 1yr daughter happy at times can be a chore
but a poster called Moose!! ....how about doing your own research like reading the last 357 pages of this thread many of us have posted masses of imfo both pro and con since $1000oz gold then out of the blue I get "There goes all credibility" LOL Oh no what will I ever do...

[elZorro]

Maybe gold is going to the moon, Moosie.

http://www.fxempire.com/technical/technical-analysis-reports/gold-prices-august-19-2013-technical-analysis/

[Daytr]

Wow was that a semi positive comment from Skol on gold ?! I'm putting that one in the vault, right next to where all the gold is supposed to be stored! haha that last comment was just for you Skol. Haha Happy Monday mate.


Hi Strat, not too bad thanks, only own VAH airline-wise, do a bit of trading with it. Yep, I think gold might be a flash in the pan, but could be profitable for those willing to take a punt on it. (Long as they don't leave it too long)

Bought a few IVC a while back, started watching then at $6, left it too long, not to worry, death won't be going away any time soon.

[Skol]

Wow was that a semi positive comment from Skol on gold ?! I'm putting that one in the vault, right next to where all the gold is supposed to be stored! haha that last comment was just for you Skol. Haha Happy Monday mate.

Yeah, you could say that, but you never know when the axe is going to fall even though Eric Sprott says gold will be $2400 by this time next year.


When the fire in the picture theatre starts everyone will be heading for the exit at the same time.

[JBmurc]

Treasury International Capital Data for June

8/15/2013
WASHINGTON – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for June 2013. The next release, which will report on data for July 2013, is scheduled for September 17, 2013.

The sum total in June of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC outflow of $19.0 billion. Of this, net foreign private outflows were $4.6 billion, and net foreign official outflows were $14.3 billion.

Foreign residents reduced their holdings of long-term U.S. securities in June; net sales were $77.8 billion. Net sales by private foreign investors were $81.6 billion, and net purchases by foreign official institutions were $3.8 billion.

At the same time, U.S. residents decreased their holdings of long-term foreign securities, with net sales of $11.0 billion.

Taking into account transactions in both foreign and U.S. securities, the net foreign purchases of long-term securities were negative $66.9 billion. After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, the overall net foreign acquisition of long-term securities is estimated to have been negative $85.4 billion in June.

Foreign residents increased their holdings of U.S. Treasury bills by $8.8 billion. Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities decreased by $4.4 billion.

Banks’ own net dollar-denominated liabilities to foreign residents increased by $70.8 billion.

Complete data are available on the Treasury website at:
www.treasury.gov/resource-center/data-chart-center/tic/Pages/index.aspx

[Skol]

Rising bond yields could be the death knell for non-yielding gold and silver.

[JBmurc]

Rising bond yields could be the death knell for non-yielding gold and silver.

Wasn't the Rates very high last time Gold/silver went ballistic ? in the late 70's ?.....high rates = high Inflation

[Skol]

I'm not talking about hyperinflation that goldbugs get themselves in a lather about, I'm talking bond yields edging up, good for savers, bad for gold.

[JBmurc]

I'm not talking about hyperinflation that goldbugs get themselves in a lather about, I'm talking bond yields edging up, good for savers, bad for gold.

Gold 1381oz USD $1498oz AUD .....the last time AUD broke past $1500 the priced moved solidly to a new 1700's high Overall the AUD gold chart looks pretty good for ASX producers

[Daytr]

They would need to go a lot higher than the current almost zero for savers tho Skol. I would say at least 5% deposit rate to attract savers.

I'm not talking about hyperinflation that goldbugs get themselves in a lather about, I'm talking bond yields edging up, good for savers, bad for gold.

[skid]

Yup, a good reason for Bond yields rising, but gold is only mildly up. If it can punch through $1500 and head back to all time highs or above then I might concede defeat, but long term the PoG is looking pretty shaky at best.

Still no reason why it's not skyrocketting?

The reason may be that the "fire in the picture theater'' hasnt actually started yet--we're talking the sharemarket-not gold
there are some pretty heavy hitters quietly selling off shares--one of them is Buffett

[Skol]

The reason may be that the "fire in the picture theater'' hasnt actually started yet--we're talking the sharemarket-not gold
there are some pretty heavy hitters quietly selling off shares--one of them is Buffett

You've got that one wrong buddy!!

http://www.reuters.com/article/2013/08/15/us-berkshire-buffett-idUSBRE97E0FS20130815

Berkshire Hathaway spent $4.64 billion on equity investments in the last quarter.

OMG --------------goldbugs. lol, no wonder they eventually get cleaned out.

hahahaha

[JBmurc]

Ridiculously oversold : Fund Manager

http://www.cnbc.com/id/100968550

[Skol]

Ridiculously oversold : Fund Manager

http://www.cnbc.com/id/100968550

John Hathaway, another goldbug in the mould of Peter Schiff and Mike Maloney. Here's what he said on 26/10/2011.


JH: "From years of experience, I have learned never to combine a price prediction with a specific point in time. The gold price will continue to rise until the fiscal and monetary policies of Western democracies undergo severe alteration in the direction of sanity."

The gold price "will continue to rise".

He's been wrong ever since.

Keep up the hilarious posts JB, I'm not busy at the moment and need a little light entertainment.

[JBmurc]

John Hathaway, another goldbug in the mould of Peter Schiff and Mike Maloney. Here's what he said on 26/10/2011.


JH: "From years of experience, I have learned never to combine a price prediction with a specific point in time. The gold price will continue to rise until the fiscal and monetary policies of Western democracies undergo severe alteration in the direction of sanity."

The gold price "will continue to rise".

He's been wrong ever since.

Keep up the hilarious posts JB, I'm not busy at the moment and need a little light entertainment.

Hilarious like your pick on GOLD being priced well below $1000oz now thats been muti year Joke

[Skol]

Hilarious like your pick on GOLD being priced well below $1000oz now thats been muti year Joke

Afetr the 1980 gold crash, gold took 5 years to hit rock bottom, it's early days.

[JBmurc]

I wouldn't be so boastful, gold has been closer to skol's pick (and still is) than matching or beating the multi year high of $1900...

Gold price is much higher than my first posts on Gold direction aka $500-$600oz Skol came in just as Gold broke $1000 stating it was a bubble way over brought >>>Also as my only investment in GOLD are via Gold explorer's/Producers on ASX the AUD price is tapping on $1500 (4734which outside the small window of a high price spike higher $1700's during 2011-2012) is a very strong price..

[Skol]

I started this thread at US$1100 and said it was a bubble, which it was. You may as well calculate the gold price in Rupees, the standard price for gold is $US.

[Daytr]

Moosie, Skol said gold is going to $500 repeatedly, so gold is a lot closer to $1920 highs than $500. FOMC tonight so that should dictate gold's next move short term. Big Ben in a rock & a hard place imo as wants to start tapering but economy not cooperating as quickly as he would like. With gold in a bubble since it went through $1100 again according to Skol, he is yet to be right. Gold did get into a bubble when it surged from $1550 to $1920 & with any bubble it will sell off harder than it should & that's what I believe we saw in the last few months. There is considerable resistance now in front of gold at $1380-$1450 so it will probably take an event or Big Ben to back away from tapering to push on. However one would think US equities would also get a boost from that sort of rhetoric.

[Skol]

Moosie, Skol said gold is going to $500

I have too, but you need to give it time, didn't you read what I posted before? In 1980, gold took 5 years to bottom out.
It's only been 2 since the bubble burst.

[Daytr]

Fair enough Skol, just its currently going in the wrong direction! haha. With a lot of the ETF selling done I just can't see it in the current environment of QE & low interest rates.

[JBmurc]

think last year was our "its going to the moon again, better buy back in before I miss out" phase for zee gold bubble (if it was a bubble). seeing a final hurrah before more falls now if the way bubbles perform is correct...

Well we will find out in time ...in the mean time smart buyers are making some great Cap growth I see OGC 2.15 asx nice Short term gain
really the whole sector is bouncing back ....

[JBmurc]

yes very nice bounce indeed. I made a bit but sold out when $1350 was tested and failed earlier. the whole sector was highly sold off, but there was a lot of fear there for awhile!

Yes and as the old saying goes be greedy when others are Fearful ....I here it has been reported by some gold analysts that JP Morgan is now long gold and silver on Comex"...which if True is a massive turn-round from one of the bigger Short players in recent times