Short Covering and Momentum Funds Push Gold Higher
http://www.kitco.com/reports/KitcoNews20100422D2.html
Interesting article, precious metals spot prices on the rise too
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Short Covering and Momentum Funds Push Gold Higher
http://www.kitco.com/reports/KitcoNews20100422D2.html
Interesting article, precious metals spot prices on the rise too
It was my old favourite FML, it had a pretty good quarter on top of commissioning 3 mile hill, it's not for the faint hearted though, pure gambling stock. If gold goes off it will do very well, but lets face it the gold buffs have been calling a big rise for ten years now, but with Greece into junk status, it might be contagious ????????? and then it will happen.
JB,
Looks like the Greek mess is sorted out, what now?
Goldbugs will be bitterly disappointed that Greece hasn't descended into anarchy and spreading all over Europe.
I just finished reading the Mike Maloney "Investing in Gold and Silver" book. I thought it was a really good book.
However....
He says that when one bubble is forming, just move to the next? My question is, how to do you know when you are in a bubble?
JB,
We need to lighten up a bit so I thought for a laugh we could list a few of the conspiracy theories about why gold is being manipulated downwards.
I'll go first then maybe you could tell us your one about the video camera being switched off then someone being run over by a car.
I think my favourite is that the Reserve Bank of Australia is manipulating the price. This is because Dwight Eisenhower told Sir Robert Menzies in 1959 to toe the line and do what the Federal Reserve said. The current Governor Glenn Stevens is unflatteringly referred to as the bald headed traitor because he was trained by the Fed and is carrying out their instructions.
OK, your turn.
Mike Maloney says that gold will reach $15,000 an ounce $USD
That seems a bit of a long shot I would have thought?
Skol it is well over a million dollars an ounce in Zimbabwean dollars
now thats overboard I'm in the $2000oz within the next couple year camp longer term $3000+
but your in the mass deflation camp which means you believe gold will go down to $450oz etc which would mean central banks worldwide would increase rates 10%+ An withdraw the easy bailout free money thats been created faster that any other time in fiat history
Oil would have to fall to sub $40bbl Or maybe someone that really has a huge amount of real gold would let the market know well before putting up for sell so the buyers can short the paper market down an pick up the gold cheap like what the drop kick flash Gordan Brown did
Or maybe a mass human extinction -WW3 Nuclear holocast -blackdeath etc etc
I dont get how we can have inflation if consumers aren't spending money but saving it and unemployment is still rising?
Why are the stock markets going up still when businesses aren't making much more money than in 2008 and unemployment and consumer spending aren't looking too flash. All the fundamentals are looking bad whilst all the markets are looking good...
Gold making new short term highs in AUD 1290 talk round the USD gaining even more back on the AUD new producers like NAV with high start up costs per oz of $800oz AUD still be looking at a tidy $490oz-------- EBIT of $49mill june 2010-2011
JB,
Gold is down in USD the XGD is really tanking and USD is way up.
Tell me why, when in times of crisis everyone goes for USD. Why isn't gold the flavour of the day right now?
Tim Geithner was right, everyone still goes for the USD despite the goldbugs saying it's doomed.
Oil went up 8 times in 8 years and then the inevitable happened. Down 81%.
yep then oil went back up as producers where stopping exploration an demand increased prices went up an will continue to go up with inflation
The USD attached debt is only going one way how can any smart economist see the hugely increasing USD debt levels as a positive step longer term
If interest rates go back to some kind of sane level the US will be paying 1 trillion just in interest per year on the massive debt.
USD is (a) where debt is centred and so it must be bought to pay off those debts (deleveraging)
and (b) the reserve currency of the world and
(c) militarily, the US is the strongest country by far , controls all the shipping lanes , the continent of North America is impregnable
so thats why its the safe haven, and especially when the EU seems to be imploding...
ENP here is a graph of a bubble
Conspiracy theory #2.
Every time gold goes up the Federal Reserve contacts the world major major banks and instructs them to short gold.
Only problem with this wacko theory is that unless physical gold is actually sold it will have nil effect on the POG.
not really sure myself.... it could be still in the mania phase or the bull trap - compare and make your own call....
I got out of my speculative gold longs quite quickly as trading gold is scary to my money management rules but still hold some silver for the long term but have an acceptance of high volatility (possible low prices) with that.
People I listen to (Global Gann Financial) remain bullish on gold but EWI (Prechter using Elliot Wave) spotted an ending diagonal triangle formation (bearish)
News
April 29, 2010
Why Are Silver Sales Soaring?
Jeff Clark, Senior Editor, Casey’s Gold & Resource Report
The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.
While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles.
Yikes.
This is especially explosive when you consider that roughly 40 per cent of all silver is used for industrial applications, 30 per cent for jewelry, 20 per cent for photography and other uses, and only five per cent or so for coins and medals.
To be sure, mine production is not the only source of silver. In 2009, approximately 52.9 million ounces were recovered from various sources of scrap. Further, the U.S. imported a net of about 112.5 million ounces last year. (Dependence on foreign oil? How about dependence on foreign silver!) So it’s not like there’s a worry there won’t be enough silver to produce the Eagle you want next month.
Still, why so much buying? The silver price ended the first quarter up 15.5 per cent from its February 4th low – but it was basically flat for the quarter overall, up a measly 1.9 per cent. We tend to see buyers clamoring for product when the price takes off, so the jump in demand wasn’t due to screaming headlines about soaring prices.
I have a theory.
For some time, silver has been known as the “poor man’s gold.” Meaning, silver demand tends to increase when gold gets too “expensive.” The gold price has stubbornly stayed above US$1,000 for over six months now and has spent much of that time above US$1,100. You’d be lucky to pay less than US$1,200 right now for a one-ounce coin (after premiums), an amount most workers can’t pluck out of their back pocket. But Joe Sixpack just might grab a “twelve-pack” of silver.
What would perhaps lend evidence to my theory would be if gold sales were down in the face of these higher silver sales.
Sure enough, the U.S. Mint reported a decline in Gold Bullion sales of 20.8 per cent this past quarter as against the same quarter in 2009. Further, other world mints have seen sharp declines in Gold Bullion coin sales as well: the Austrian Mint reported an 80 per cent drop in sales for the first two months of the year and the Royal British Mint a 50 per cent decline in gold coin production for the first quarter.
What’s even more dramatic is the difference in the dollar value of the sales. Gold Eagle sales in the U.S. dropped US$10,263,500 from a year earlier – but silver sales increased by US$61,855,290. So, not only did silver sales make up the drop in gold sales, they exceeded them by $51,591,790.
Is the rush into “poor man’s gold” underway?
Why the answer to that question is significant is that a shift toward silver for this reason could signal we’re inching closer to the greater masses getting involved in the precious metals arena. And that – for those of us who’ve been invested for awhile now – would be music to the ears. Because when they start getting involved, the mania will be underway, and from that point forward, it’s game on.
I’m not saying the mania is starting, and I actually think we could see another sell-off before things take off for good. Gold could dip to US$1,000 and maybe even US$950, with silver going to the US$14 to US$15 range. But as clues like these begin to build up, we’ll know we’re getting closer. (And any drop to those ranges would clearly be a major buying opportunity.)
Everyone talks about gold, but a meaningful portion of one’s precious metals portfolio should be devoted to silver. The market is tiny, making the price potentially explosive. Remember that in the 1970s bull market gold advanced over 700 per cent, but silver soared over 1,400 per cent.
Don’t be a “poor man” by ignoring gold’s shiny cousin.
And while buying silver is a must, it’s the silver stocks that will truly soar in a mania.
<- Back to: News Stories for NewsletterPrint this news
Conspiracy theory #3
Punters have lost faith in the exchanges because the POG is being manipulated downwards and is not the true value of gold, so the gold is going direct from the mines to the new owners.
Agricultural commodities are the one bright spot at the moment JB, bought some AAC recently. Book value A$2.44
Conspiracy theory #4.
Fort Knox is empty.
Fort Knox's vault has a 22 ton steel door and is guarded by tanks, machine guns and hundreds of soldiers. This is to prevent the American public from finding out the vault is empty.
Who cares, in times of crisis it's the USD everyone goes for, not gold.
Conspiracy theory #5
There is a secret 'gold war' being fought between China and the USA. This the 3rd gold war being fought, the USA and its allies losing the first 2.
China has lost faith in the USD and is covertly acquiring trillions of dollars in physical gold which it will distribute one way or another to its populace.
This will then be the springboard for the goldbugs aspirations of 500-1000% return on their investment and US$10,000+ gold.
Yeah right!
As probably the biggest single investor in US Treasuries the Chinese Government will be creaming it as the USD appreciates against almost everything else.
Conspiracy theory #6
There are gold bars out there that are gold coated tungsten. Never verified or proven.
Conspiracy theory #7
I think this is my new favourite.
Haiti, which was subjected to a massive earthquake followed by torrential rain was hit United Nations (which rules the world) directed weather weaponry. This was because Haiti had discovered oil and gold and refused to hand it over to the multi-national corporations.
Yep, there's some loonies out there alright.
Conspiracy Theory #101
Skol is a Fed Reserve mole cunningly posting on sharetrader to artifically increase the US peso to the detriment of gold and silver and to increase his airlines around the world using his own oil BwaaHaHa bwaHaHa!
I've got a little more time now so I can expand on conspiracy theory #7. This is apparently scalar technology and not only weather weaponry but is used by the UN to punish countries that don't act in accordance with UN instructions.
Icelands volcano was ordered to erupt because it wouldn't pay after the Icelandic bank meltdown.
Japan got some typhoons and earthquakes because the Toyota family won't part with their shares and give it to the banks.
China got a few earthquakes because they won't go along with the sanctions on Iran.
Any herd looks for a leader. One of the best examples of herd behaviour was the Nazi movement, and so the goldbugs search for their fuhrer.
Names like Doug Casey, Kitco, Mark Lundeen, Paul Mylchreest, Jeff (silver will be $1000 an oz) Nielson, James Turk keep popping up.
They, like Adolf Hitler, look for their scapegoats why gold isn't exploding. The IMF, Federal Reserve,Glenn Stevens, Ben Bernanke et al.
They're looking for the leader to get them to the US$10,000+ promised land.
Uncanny do you think?
Well Silver has been known to be manipulated in the past, so its pretty safe to assume gold has been/is as well.
Govt interference, well why is the US printing money if it's got all that gold in fort knox???
I mean the US Govt owes China $800b i think from memory, thats without the interest either
Cant see Silver getting over $US25/oz or Gold over $US1250/oz this year, but i do think they will both test it, before a retrace
What herd??? I don't know anyone that owns any decent amounts of gold bullion(an I'd say most here would be the same) ---the only bubble I see is the massive debt bubble Thats only getting larger -greece is only the tip of the ice berg---high Inflation is coming the powers that be want it they need it --Gold/silver are a great hedge against the devaluation of the tenders of exhange.....
I've had strict advice from JB not to buy USD. Bad advice indeed, because the USD has strenghtened against almost every other currency as the flight to safety takes place.
The NZD is up because of employment figures and looming interest rate increases.
Hold on!
Isn't the flight to safety supposed to be gold?
Conspiracy theory #8.
During WW2 a vast treasure of Japanese gold that had been looted from Asian countries was found by US troops in the Phillipines. It was hidden over 175 sites and amounted to 300,000 tons of gold. (Never mind that only 161,000 tons has been mined in history). This gold has been used by the US & Western intelligence agencies manipulate the markets, overthrow governments and fill the coffers of the administrators, to use the goldbugs favourite word, the 'cabal'.
Every President since Harry Truman has been aware of this along with the major banks, and a group of powerful and superrich European families who actually control the Federal Reserve and don't have the best interests of the USA at heart. The secret organisation administrating this fortune is known as 'The Enterprise'.
Gold, is this the time, money to be trashed and gold to be king again.?
I have some insurance
Conspiracy theory #9
Something like that. The Illuminati story is so weird as to almost defy imagination. Goldbugs will believe anything.
Read about it here:
http://socioecohistory.wordpress.com...-lust-for-gold
Make sure you get your food, water, guns &ammo and of course, gold & silver.
LOL
The moment of your redemption is here trackers, this will get the herd really excited.
I gues we'll all be carrying pieces of eight around in our back pockets, right. But in those days citizens carried pistols and daggers so better get yourself a firearms licence.
well with the USD an Gold going up it's very good for gold producers(In time USD will also fall then gold will be heading over 1500) like NAV if the current selldown of profitable miners continue as well as increasing AUD gold NAV will make more than it's market value in the first year of 100koz production june10/11 smart investors will be soaking up shares in the goldies in this sell-off--I see some goldies in other markets up 5%-8%
golds going much higher
GOLD $$1359oz AUD
Conspiracy theory #10.
This is a variation of the Illuminati theme, but so totally, incredibly, 'off the planet' you might say that I don't think even the goldbugs will buy it. Well, maybe they will.
http://home.iae.nl/users/lightnet/cr...onspiracy2.htm
The real winner today? Gold. It’s up about $25, to $1,200. People want real money. They do not trust the debt-laden currencies of Europe and the United States. Or for that matter Japan. Gold is fast becoming, once again, a reserve currency of choice.
http://kudlowsmoneypolitics.blogspot.com/
Hi,
Please explain this graph. Thanks.
http://www.marketobservation.com/blo...SInflation.jpg
Yes, in 1980 lots of people lost lots of money. That's what that graph says.
My advice - pay off the mortgage.
Take my word for it ENP, the bedlam, chaos, anarchy and USD implosion the goldbugs pray for will never happen.
Seen it all before.
I can't even begin to remember how many times in my life I've read about punters killing themselves because of the colossal amount of money they've lost.
Yes well by the looks of that one, it isn't used as a hedge against inflation but more for speculation of making a quick dollar. And if it repeats from 1980, gold could lose about 70-80% of its value in 2-3 years.
Scary thought.
NAV down 1.5.
Yep, punters really piling into those good value gold shares alright.
Phaedrus was right.
Skol in his position as a Fed Reserve mole/agent(cunningly placed on ST to villifey those nasty evil godless metals) also owns a paper and ink company and in collusion with his Fed reserve masters realises he can make a fortune printing notes for every stimulii package at every crisis in all or any countries with very little cost and no risk.
Damnded sight easier and quicker than that dangerous dirty messey digging and refining.
And if there is hyperinflation or financial meltdown he can just print more and more and more and more and AAAA HA HA HA AR HA HA HA AR HA HA HA HA HA and and and and then people could use them as firestarters and and and then riot and and and and then burn stuff.
BWAHAHA BWAHAHAHA BWBWBWHAHAHAHA
Well those sellers of NAV will look back 12m from now kicking themselves for selling so low ,If I didn't have a house to pay for I'd be loading up the truck with cheap shares--fear is in control
GOLD is moving steady higher
NAV from june will produce est. 277oz gold per day they will make a profit per day of $155,674 AUD(1362oz aud) gee making that profit per day should really hurt them LOL so far NAV have keep to there plan 100% I have no doult NAV will annouce production numbers this month..
JBmurc happy holding truck loads of NAV & NAVO
Told you to buy AAC JB, you can't eat the yellow metal.
Keep your dosh in NZD or AUD. Neither countries have ever had hyperinflation.
J B, where do you buy your 1kgs of silver? Ive bought gold coins before ,but not sure about silver.
what are the advantages of buying bullion over say silver futures contracts / silver stocks? You seem to pay quite a premium for bullion compared to the spot price
I keep to well known bullion brands I've brought before - remember if you buy bullion it must be .999% pure an this should be stated on the bar,coin
everything one needs to prove is on the bullion ----A bullion maker for one must be registered--(I would buy if I didn't trust the bullion stamp)
An as for fake silver bullion I'd be surprised if there was much because of the low price
the safest option if you go to buy deal with the guys than have sold alot of bullion an have good feedback
Hi Josh,
Rumour has it that JP Morgan have been indicted for manipulation of the silver market.
As a precaution we are not taking new orders until 30 mins after market open at 9.00am tomorrow.
Apologies for any inconvenience.
Regards
Mark
They're burning the midnight oil in Brussels. The ECB say they will defend the Euro at all costs.
Won't be good news for AU.
JB,
Euro markets go through the roof.
I heard the other day that the reds from Central Otago aren't that good this year, so a Pinot from somewhere else please.
Inflation is coming fast and will be severe. Change is in the wind and finally gold will be King again, theres no stopping it this time.
http://www.completeinvestor.com/site...DM1209sub1.gif
Contrarian warning: tricha's buying gold.
A piece from the WSJ a few hours ago.
Commodity and currency ETFs and ETNs may also be getting a second look. PowerShares DB US Dollar Index Bullish ETF (UUP), which lets investors bet the dollar will appreciate against a euro-dominated basket of foreign currencies, has returned about 7% year to date. SPDR Gold Shares (GLD) has gained about 10%.
But gold, at more than $1,200 an ounce, has already benefited from a long bull run that many think is nearly spent.
"I wouldn't touch gold at a $1,000 an ounce," says Herb Morgan, chief executive of money manager Efficient Market Advisors LLC. Among bearish signs Morgan sees: Recent television ads promoting gold seem like evidence that investors are chasing hot retuns.
"It's game over," he predicts.
gold back over 1200oz higher lows---- higher highs
We could be in for something we have never seen in our lives, been doing some reading and inflation is next on the agenda.
Gold is at the crossroads, maybe - maybe not, for a little life insurance, some gold in physical or shares is a must. So I hold one gold stock as a hedge against massive inflation, remember folks the printing presses are working o\t.
Happy investing.
http://www.kitco.com/ind/baker/apr292010.html
Homestake MiningWe are in the camp with Jim Rogers, Bob Hoye, David Nichols, Marc Faber and Pamela & Mary Anne Aden. Up is the direction and the remaining question is how high? With the analysis above we believe we can potentially frame the high between $2,450 and $3,500. A wide range we agree, but we believe we will see signs along the way as price reaches our estimated time frame for the top.
http://www.kitco.com/ind/Baker/images/apr292010_7.jpg
When we start to see gold go parabolic, rising day after day and everyone in the world getting excited and joining the party, then we will know gold is in a bubble. We believe that gold’s big move up with be a moon shot like this chart of Homestake Mining from 1932 to 1934. Our challenge then will be to exit before the masses and we see the strong possibility of this event happening within the next 18 months.
We believe investors are being given the rare possibility of a once-in-a-lifetime-opportunity, yes, a parabolic move in gold. The question is what will you do with it and do you need some assistance?
For those readers unfamiliar with our services:
Dudley Baker
Owner/Editor
Guadalajara/Ajijic, Mexico
April 29, 2010
Yeah, if the posters here go to the peak oil thread tricha, they'll see how accurate you were on that one.
tricha's a CONTRARIAN WARNING posters.
Started the peak oil thread and guessed what happened to the POO, it crashed.
Started the "Airlines r a great public service endorsed by Skol" thread and airlines have been stand out stocks.
nice history Huang
could it be a new all time high for gold tonight???
silver over 19 as well....thats up 60c in the last hour or so
Peat,
Just a quick question if I may, What is the all time high of gold. Not needing the inflation adjusted.
Thanks in advance
*************************************
Edit
Just found it out. Thanks it probably took me more time to post the request than it took to find it out. Cheers,
$1226.56 on Dec. 3 2009
Kitco
Spot
Bid/Ask 1231.80 - 1232.80
and
Comex gold futures Tuesday afternoon hit a new all-time record high of $1,232.50 an ounce.
iShares COMEX Gold Trust
The iShares COMEX Gold Trust was launched by iShares on 21 January 2005 and is listed on the New York Stock Exchange (NYSE: IAU) and Toronto Stock Exchange (TSX: IGT). As of April 28, 2009 the fund held 62.32 tonnes of gold in storage.[10] As of 2009, doubts have been raised about the gold which COMEX claims to store in its vaults.[11]
Have u got any goldies Huang, looks like a pretty good day today, is this the start when cash is set to became trash ???????
253
TRY http://www.stocknessmonster.com/imag...ound_small.gif 10 4.1%
4:09 pm
It seems you've metamorphised from a peak oiler to a goldbug tricha.
"cash is set to become trash".
I can't get to grips with the goldbugs psyche. These are people who are hoping the world currency system will implode; hyperinflation, chaos and anarchy will reign. The goldbugs will be unemployed.
It'll be like Zimbabwe.
They'll be suburban and apartment dwellers who wouldn't have a clue how to live off the land, defend their property, own and fire a gun, kill and butcher an animal, locate clean water, find firewood, provide electricity or feed their families.
They will be rich, they think, but no one will want their gold or silver because you can't eat it. Maybe you can slice little slivers off.
They should be careful what they wish for.
I have all that here, and when their family's starving, I'll sell them some meat, for a kg of gold.
Physical metal only please, no ETF's or share certificates, definitely no Comex, IOU's or unallocated accounts.
Some light reading on ETF's.
A common way to invest in gold or silver without having to physically store it yourself is through a precious metals ETF. ETF is an abbreviation "exchange-traded fund". It is like a mutual fund that is traded on a stock exchange like a stock, and can be purchased and liquidated very simply through any trading platform, even a discount online brokerage account. ETFs track indices such as the S&P 500, or industries, or in this case a commodity, specifically a precious metal like gold or silver. You purchase shares of the fund, and the fund managers invest that money in gold or silver on your behalf. If the value of metal increases, the value of your fund shares also increases. When you cash out the fund sells your portion of the metals and gives you your money. Theoretically speaking, that is.
The problem with gold ETFs is that unlike possessing physical gold bullion, you never really know what is happening with your gold. You don't even know if any gold is really allocated to you. You certainly don't own any of the fund's assets, the fund owns them. If you read the fine print of the ETF prospectus you will likely find some fishy statements, such as the iShares Silver Trust which states that "The iShares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in silver." What do they mean by "an investment similar to an investment in silver"? That statement is good evidence that not all of your shares are backed by real physical silver. They may be backed by cash, they may be backed by a piece of paper that promises to give the fund some silver in the future, but not every share is backed by the physical bullion you intended to invest in.
Let's say the fund managers are playing with your money in creative ways through futures and whatnot, and make a big mistake and lose a large portion of the fund's assets? The value of your shares could drop like a rock even if the value of gold is skyrocketing at that very moment. That possibility is evident in another quote from the iShares Silver Trust prospectus that says "the liquidity of the iShares may decline and the price of the iShares may fluctuate independently of the price of silver and may fall". There, they admit it. This investment is not an investment in silver, at least not completely. I don't know how likely it is that the fund price will drop independent of the metal's spot price, but one of the major reasons for holding physical gold and silver is to protect your wealth in times of chaos. But in times of chaos I wouldn't be very uncomfortable holding shares in a trust that is owned by a bank. If that bank decided to shut down the trust and default because they don't have the physical metals to back your shares, what could you do about it? It sounds unlikely, but in times of chaos who knows what could happen. That's the point of having a safe haven investment in physical metals.
If you are an active short term trader, ETFs are a reasonable trading vehicle. You can sell your shares easily any time you want, through any trading platform including a discount online brokerage, the buy/sell spread is much more narrow than when buying physical precious metals. The funds basically do follow the movements of the precious metals they are meant to track, so if you plan on making short term trades ETFs are fairly secure. The problem comes through exposing yourself to risk through longterm investment in an ETF. In that case I highly recommend that you be the sole owner of your own physical bullion and personally possess it, either in your home or in an allocated storage facility.
To learn more about investing in gold and other precious metals, visit http://the-gold-market.blogspot.com
Article Source: http://EzineArticles.com/?expert=Paul_Jorgensen
See:
http://money.cnn.com/2010/05/12/markets/gold/index.htm
My opinion is to buy gold shares with production now and soon in proper time. Gold producers are equal to Money printers.
Ive noticed that some people like to use the ''you cant eat gold if things collapse'' thoery,but i think there are alot ofphases that can happen between where we are now,and total economic collapse.
It makes sense that alot of economic powers would want to move in the direction of a more gold based standard,at least partially,in light of the current paper currency situation.[Hell,theyre selling it in vending machines now]
China has been buying up big time and is now encouraging its people to buy silver as savings[its easier to afford] It seems logical that we could be seeing the start of a slow repositioning of how at least some economic powers choose to back thier assets.
"They're selling it in vending machines now".
Correct.
Good contrarian signal. Hey skid, you heard any politicians talking about going back to gold?
Aren't pollies more likely to be printing money?
What's going to happen when inflation becomes an issue down the line?
Gold now at $US1234.60
Interview: GSA's Doody Says Gold Market Not a Bubble Yet
13 March 2010, 5:14 p.m. EST
By Terry Wooten, Interviewed by Daniela Cambone
Of Kitco News
New York -- (Kitco News) --Gold isn't in a bubble yet but concerns over inflation, soaring debt and the U.S. dollar have many people eyeing the precious metal as a hedge, according to John Doody, author and publisher of the Gold Stock Analyst.
When asked if gold was in the bubble stage, Doody countered with a question of whether taxi drivers were telling their passengers that they should buy gold. If not, he said, "We're not in a bubble. Isn't that the classic definition of a bubble--when everybody has gold?"
Doody said it may be on people's minds to buy gold because of the economic crises in Europe , the possibility of inflation and the health of the U.S. dollar. "It may be on people's minds, but we are not there yet," he said.
He said during the past two years of the economic crises, there has been too much paper created by governments to try and float the economy out of the deep waters.
"Now they are creating a lot more paper and a lot more inflation is going to come out of that," Doody said in an interview with Kitco News on the sidelines of the Hard Assets Investment Conference in New York. China is also seeing record inflation too, he said "People are thinking about buying gold but they aren't buying it yet.”Until your taxi driver starts telling you to buy gold, I think you are safe buying it."
Gold's rally has been driven in part by momentum funds, Doody said, but he said the printing presses working overtime were also a substantial contributor. He noted the U.S. is showing budget deficits of a trillion dollars a year, and that Europe just did a debt guarantee program that will create another trillion a year deficit.
"They're trying to paper over problems with more paper," Doody said. "That doesn't get you out of a financial crisis.... it just delays the inevitable."
Doody said in Europe there are still memories of the Weimar Republic and visions of housewives going to the market with a basket of cash because it took that much to buy a basket of groceries. "They know what rampant inflation is," he said. "And I think we are closing in on that mode. When the US economy and the world economy start running again, and recovering from the crash of 2008, all the money that is in the system is going to show up in increased inflation."
As for concerns over China, Doody said the huge country will have its ups and downs because its growth has been so rapid. "It's going to take tremendous amounts of electric power to handle the growing move from the farms to the urban areas, it's going to take more factories producing things," he said.
The rapid growth China has experienced makes it likely there will be some slowing, he said. "I don't think they are in a bubble in the sense that they are going to collapse," said Doody.
Gold Stock Analyst is known for its 10 top stock picks and Doody was asked what he looks for in a company and its stock. He said he wants companies that are producers. If they are not yet a producer, he wants to see an independent feasibility study by an independent engineering firm that shows drilling results, capital costs to build a mine, the recoveries and the metallurgy.
Such a report blesses the deposit the same way an independent accounting firm blesses the financial statements, he said. "Are they always right? No. But are accounting firms always right? No. But most of the time they are. "
Doody said he's often asked to name his favorite stock. "I say, what is your favourite child? I don't know the answer to that. If I did, I wouldn't be here. I'd be on my 200-foot yacht in the Mediterranean.”
--By Terry Wooten twooten@kitco.com and Daniela Cambone dcambone@kitco.com of Kitco News;
You won't see on other threads posters referring a 'leader' the way goldbugs do.
Gold threads often refer to a 'leader' like Mark Lundeen, Kitco, Clive Maund, John Doody, Peter Schiff ad infinitum.
Goldbugs need to be led and pay homage to the 'leader'.
Adolf Hitler said the herd need a leader and because of their low intellect the more lies the 'leader' tells the more the herd responds.
I'm not paying any homage to any "leader", i merely posted an article that also raises the issue of inflation.
(Yes, Kitco has some rampant Gold bugs/bulls on it, im not one of them)
You can't keep printing money & expect it won't devalue your currency, Zimbabwe is a prime example of this.
The US will face an inflation problem down the line, which will more than likely further devalue it's currency & boost Gold.
It's not rocket science here
You're really scratching the barrel to introduce Adolf Hitler into a gold debate/thread!
I don't know where Skol's point about a "leader" sprang from?
I couldn't see any reference to such in the Kitco article and shasta certainly didn't use the word.
It seems perfectly logical to me that while governments keep printing money, the threat of high inflation will persist and the price of gold will remain firm. I won't be buying any physical gold but I have a small part of my spec portfolio in gold stocks.
Hey skol, Thanks for your reply.
Do you take your que from the politicians?
Im not saying the end is near,but i see that China and others are starting to slowly move away from $US base assets.They are trying to buy Kiwi farms and telling their people to buy silver for savings.
Some other form of value aside from paper money.Does that seem so far fetched?
Im not selling the house to buy gold,but I do have a bit as an insurance policy.
After all,we do live in uncertain times
You can in fact have deflation (as opposed to inflation) while they are printing money.
It would occur when credit is being removed from the system faster than the money is being printed - and that IS what's happening now.
It's about to change, way too much money being printed, gold will be "the" choice of currency again, sooner than later.
Remember Germany, 19twenties, cash was trash and it took a wheelbarrow of it to to buy a loaf of bread, WELL it looks like the Germans are getting ready.
Gulf hotel installs gold-dispensing machine
Amena Bakr
DUBAI
Thu May 13, 2010 12:49pm EDT
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http://www.reuters.com/resources/r/?...S-GOLD-VENDING
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http://www.reuters.com/resources/r/?...S-GOLD-VENDING
http://www.reuters.com/resources/r/?...S-GOLD-VENDING
http://www.reuters.com/resources/r/?...S-GOLD-VENDING
http://www.reuters.com/resources/r/?...S-GOLD-VENDING
DUBAI (Reuters) - It's the ultimate hole-in-the-wall -- a money machine that dispenses pure gold.
Lifestyle
But installed beneath the gold-coated ceilings of Abu Dhabi's Emirates Palace hotel, where royalty and billionaires come for cappuccinos topped with gold flakes, the machine almost seems part of the furniture.
"The reason we chose Emirates Palace is because it really fits with the surroundings here," said German entrepreneur Thomas Geissler, creator of the "Gold to Go" brand and chief executive of Ex Oriente Lux.
The exterior of the machine is coated with a thin layer of gold and offers customers 320 items to choose from, ranging from gold bars that can weigh up to 10 grams, to customized gold coins.
"All the gold is imported from Germany, and soon we will have a customized gold bar with a print of the Emirates Palace logo, which will be a nice souvenir for guests to take home," said Geissler.
Through a computer system, the ATM gold machine updates the gold price every 10 minutes to match international markets.
For now, it takes notes of the local dirham currency, but the option of using credit cards will soon be introduced.
The cash-for-gold machines were first tested in Germany in 2009, but Geissler chose Abu Dhabi for the official launch of his invention because of the region's high demand for gold.
"On the first night we had a lot of demand," he said. "One customer even bought one item of every product we have."
Geissler's timing is spot-on, as investors flock to gold as a safe haven from economic turbulence.
On Thursday, gold priced in sterling and euros reached record highs, while that priced in the more usual dollar denomination was quoted at $1,236 an ounce, with dealers expecting it to reach fresh highs over coming days.
(Editing by Paul Casciato)
Gulf hotel installs gold-dispensing machine
If there is a silver version, I'm sure JBM will order one for his basement.