1969 wow! That was the year I was born! haha. Nice one Skol, you have obviously lived a colourful life!
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1969 wow! That was the year I was born! haha. Nice one Skol, you have obviously lived a colourful life!
Attachment 4535
Abemama, 1971, long before the great gold debate. lol
Wow! Very cool!
http://www.cnbc.com/id/100756275
Just what I reckon, the goldbugs have got it all wrong, there will be no hyperinflation, Zimbabwe or Weimar republic.
Thanks for the info Daytr.
Skol....I'll catch you on Flightradar24.com. You'll have to wave though, so I'll know it's you :-)
Hi Skol, that piece by cnbc is absolute rubbish. 'Bank reserves are in effect embryonic money that hasn't been born yet. The bank can give birth to new money based on those reserves, using the fractional reserve system to create money and lend it out. But until those loans have been made and the new money born, reserves are just potential money sitting in the central bank's womb. ' Have you ever heard of any rubbish like that. Embryonic money, give me a break. That's right up there with some of the gold bug rubbish that's spouted. There has been rampant inflation for the about 10 years give or take when the oil price went through the roof & with it copper & health insurance costs etc. Somehow this doesn't translate to official inflation! Now as oil & the like are coming off we are likely to enter a period of deflation but perhaps the only thing countering that is QE, printing money to offset the deflation in commodities & the like. I'm not sure if we see hyper inflation, we might, but what we are & will carry on seeing is devaluing of currencies that are being impacted by QE which is the same in my book. Devaluing purchasing power has the same effect as inflation so in effect that's exactly what it is.
Assume QE causes high inflation. New Zealand so far has avoided QE. So if QE causes inflation and NZ doesn't do QE - the NZ$ Price of Gold might not generate a lot of excitement.
The problem with CPI is that nobody buys an average baskest of goods. I'd like to see representative samples to reflect different stages of life and economic situations (Like CPI for the under-employed, Young Adult, Young Family, Middle Aged Family, Retirees etc). I'm sure political operators could find lots of reactive material in such a toolset as well. In any case liberalised trade has mitigated a lot of inflation over the last 20 years (High health insurance and milk etc inflation has been offset by gadgets and clothes etc deflating).
Where I do think QE (with some help from demographics) has created inflation is investments - bonds, property, shares... ehem, maybe even gold. The extra liquidity isn't necessarily being consumed but it has to be invested somewhere ...and somewhere has gone up. Instead of CPI, if we contrived a purchasing power index for retirees it would have to be impacted by lower yields on one hand but higher capital values on the other. Too bad if you nervously sat on cash through the GFC and now want to switch to income in retirement...
Now if Bill Gross is right and the very long Bond bull market is done, we will see rising interest rates. This would likely lead to a solid correction on asset price valuations (I think this or next year). ...and still CPI may well be below 3%.
Daytr
"There has been rampant inflation for the about 10 years give or take when the oil price went through the roof & with it copper & health insurance costs etc. Somehow this doesn't translate to official inflation!"
You have been reading KWN and Zerohedge, they perpetrate the nonsense that the official figures are incorrect, you are a conspiracy theorist after all.
Gold down $50, looks like this could be the beginning of round 2.
Aaaah, no, I got into the debate when gold was $1100, so it's up 22%, not 45%.
Gold has been a suckers bubble, now deflating, and in fact it crashed about a month ago, but the crash isn't over yet, last time there was a major gold crash it declined for 20 years, probably going to be the same this time.
I have been warning for years about the danger of over-allocation to a useless yellow metal, and this is the consequence for one institution. I remember when they bought.
http://online.wsj.com/article/SB1000...trending_now_5
US$300,000,000 - ouch. Such idiots should get the sack!
Morning all. Skol, I never read KWN or Zerohedge. Not saying its a conspiracy I just don't believe the numbers accurately reflect the real cost of living. Just go shopping as one guy on HC said, or as I like to say, look back at your power bill. Halebop, in regards the cost of gadgets i.e. technology agree they come down in price as they are refined or become 'dated', however what is not included is replacement cost. i.e. previously people didn't need to update their phone or laptop, tv every couple of years & this adds to the cost of living, but its not taken into account. Same could be said for cars to a lesser extent. Things are becoming more 'disposable'. What's your thoughts on that Halebop? Maybe its just what I consume has gone up dramatically in the last 10 years, but I don't think so. Anyone else dispute their cost of living has gone up at least twice what the official figures say? I recon inflation is running north of 5% pa & I think that's conservative.
Would certainly agree that many companies have got better at building redundency into their product cycles.
My Dad now owns a flat screen TV. His first colour TV about 40 years ago was a Sanyo in a giant wooden box. It was only a few hundred dollars but both in his mind and I suspect in real disposable income terms it was the most expensive TV he ever purchased. 20+ years later he bought a larger CRT screen for $2,500. The more recent Samsung LCD screen was sub $1,000. If he gets 10 years out of it (and his buying history says he will probably die before he buys his next TV) then it hasn't got more expensive. Maybe the real difference re "disposable" is demographics and the power of marketing?
In the inflation context I think consumption is a key trigger but it doesn't really matter why someone consumes. If I have $50,000 to spend then it's my choice to replace my smart phone every year or not or buy cheese instead and the index doesn't care why I choose to do either. For me the problem is the smart phone/TV etc portions of the index reflects some concept of average and not what everyone is individually doing. I have a 2nd hand Galaxy S1 gifted to me so neither smart phone replacement cycles nor smart phone inflation/deflation registers high on my consciousness yet a portion of the CPI numbers that I do subconsciously build into my financial decisions will reflect the many people who do buy them more regularly.
Anyone buying a house in Auckland would certainly understand where inflation is higher than 5% though!
Daytr,
If you are a well-informed ex-bankster then I would have thought that Japanese shares were the way to go, a contrarian play I've been accumulating for 17 years that is like my own personal printing press atm, instead you are trying to cajole punters into an asset allocation that has had the mother of all runs, gold and silver. It's all over there buddy, there's too many walking wounded. I've spent a lot of time in Japan and wouldn't be at all surprised to see it eclipse China to become the second biggest economy in the world again.
I'm sure we were debating Gold pre- $1000oz ....I've been bullish since $600-700oz....If it wasn't you might have been someone else ...always laugh at the guys that gave me a hard time on OIL going past $40bbl they said it was a bubble ...the world couldn't survive with it so high ....now the fact is if oil even got close to those old highs half of the world producers would be out of business ....the same is happening to the Precious metals producers.... discovery Grades are reducing costs are rising ....but populations of new buyers are rising in the east the last boom bust of silver/gold was driven by only the western world ...
JB,
Too much KWN-the transfer of gold from West to East is a myth perpetrated by by the goldbug press. There has been some buying but it's mostly by a bunch of unsophisticated older chinese women referred to as 'aunties', get on board with them if you so desire.
=================
On Sunday afternoon, a microblogger in Beijing logged into Sina Weibo, China’s leading social media platform, to gossip about the “auntie” next door. It’s a broad term of respect for an older woman, and his followers understood precisely what he meant when he tweeted, “The auntie next door used all of her retirement savings to buy gold. When asked what she’d do if prices keep dropping, she replied that if everyone kept buying gold, the price wouldn’t drop.
=================
There's also this from today's USA Today.
===========================
http://www.usatoday.com/story/money/...goner/2355939/
The Texas Chainsaw Massacre - from Investing Decoded.
May
25
Losses in a worthless asset
Anybody from the State of Texas will most likely be able to tell you the story surrounding the horrible Battle of the Alamo. It was a horrible day for Texas, as all of the Alamo's defenders died to General Santa Ana. This battle was so gruesome, that kids still learn about it in history classes today.
Another bloodbath is taking place in Texas today, although (fortunately) this bloodbath is only on paper. Sadly enough, those involved don't even see the massacre happening and are more than willing to let it continue.
This modern day massacre is the losses taking hold in the University of Texas' Endowment.
As reported in this weeks Wall Street Journal, "Gold's slump has saddled the second-largest U.S. college endowment with more than $300 million in paper losses." The WSJ continues, "The organization holds about $1.1 billion of gold-related investments, down from about $1.4 billion before gold began heading south last October."
$1.1 billion invested in Gold.
Why would an organization pile so much money into an asset with no intrinsic value?
Bruce Zimmerman, the endowment's CEO explains, "Gold is a hedge, and it still fills that role."
I would love to analyze the hard numbers that Mr. Zimmerman has, because Gold certainly does not look like a hedge to me.
Investors buying gold often do so because of 3 principal reasons. The first reason is because of inflation. The second reason is because of the Federal Reserve and it's aggressive polity of monetary easing. The third reason is that it's a hedge on the stock market (IE, at the next recession, gold will increase/retain it's value while stocks decline).
All 3 of these reasons are fundamentally flawed, as I will explain below.
Inflation does have an impact on gold, but only to a certain degree... Given the monumental run in the price of gold, any future inflation is already priced into the metal, meaning investors buying the metal today will experience negative real returns in the future.
To reach this conclusion about inflation, I analyzed the price action in Gold from 12/1/04 to 4/1/13 , relative to the Consumer Price Index (CPI).
Between 12/1/04 and 4/1/13 (the last reported level of the CPI), the CPI increased 22.19%. During this same period gold increased almost 200% (197% to be precise, when using the GLD ETF). Investors in gold as an inflation hedge would have to see the CPI go up to 565.19, which would be an 143% increase from current levels.
This is not going to happen.
Inflation is not going to go up 143%.
And even if it where to happen, in theory, gold would be flat, as the current price already prices in 143% inflation.
Moving on, the second principal reason investors are buying gold is because of the Federal Reserve and their Bond Buying.
This reason is the most absurd of the 3, as the Fed's monetary easing has no realistic link to the price of gold.
Back in the days of the gold standard, for every dollar printed, The Fed was forced to buy an equal amount of gold. This is no longer the case. But even without a gold standard, Gold investors claim that The Fed's money printing will cause runaway inflation (as there will be more money in the economy and more demand for a finite supply of commodities, which will increase in value). This notion is false, as The Fed is printing money, going out and buying treasury bonds and the money is sitting in the Treasury's safe and/or repaying maturing bonds.
Only if the Government where to go out and increase it's spending would runaway inflation take place. This is certainly not happening with out do-nothing congress. Therefore, The Fed is printing money and it's hanging around doing nothing, and not causing inflation.
Finally, the 3rd principal for investing in Gold is that it's a hedge on a decline in the Stock Market. To this, I point to the results of gold since 2004. From 12/1/04 to date, the S&P 500 was up 61.7% (when adjusted to include dividends). Over this same period, Gold was up 196%. How is this a hedge? If Gold really was a hedge to declining equity prices, we most certainly not see it outpace the stock market in this fashion.
Gold continues to be in a classic speculative bubble and anyone who claims to tell you when it will end probably doesn't know what they're talking about. That's why I simply steer clear of the worthless precious metal and don't bother betting against it.
But, if you're the University of Texas, you can continue to believe that "gold is an investment that likely will benefit if inflation ever picks up, or if financial markets turn unhealthy as investors chase stocks and risky bonds, something generally called "asset inflation," as seen in the U.S. housing bubble."
Hey Skol, the PE of the NIKKEI is running at around 29 if you don't think that's a problem or a bubble then by all means you should keep investing in the Japanese share market. Japan is rolling the dice that they can reinvigorate their economy & perhaps they will to some extent, however the mountain of sovereign debt is already unsustainable & getting worse & if they do get some growth or even worse inflation & they have to raise interest rates the interest bill escalates & massively. The percentage of tax take that goes to paying interest alone on Gov. debt is already substantial & higher interest rates will only make that worse. You talk about the 'aunties' being the gold buyers is China, well its the Moms & Dads of Japan that have been buying JGBs & as they age they become sellers to fund their retirement. The Japanese Government will need to look to new buyers for their debt & they wont be willing to be paid the ridiculously low interest rate that Mr & Mrs Wantanabe has in the past. I worked for a major Japanese corporation for the best part of 10 years (based in Australia) so I have a fair background in how the Japanese tick etc. By no means am I suggesting anyone over allocate their portfolio into gold equities & I wouldn't suggest anyone do that in any market. When I was working for the Japanese I always thought their best chance was their proximity to China & that the certainly helped, but the Chinese certainly have no love for the Japanese. As for Japan regaining their No2 ranking I would pick countries like India, Brazil & perhaps Russia are more likely to eclipse Japan in regards size of economy than Japan regaining No 2. But that's just my view & yours obviously differs substantially.
India, Brazil & Russia outsize Japan, you gotta be joking, right? Mind you I'd sooner bet on those countries that put my faith in metal that you hope someone will pay more for than you did.
Russia is still in the dark ages recovering from 80 years of communism, a dictatorship rent with corruption, India is a country where everyone desires a public service job, a job for life, where protectionism and bureaucracy are the order of the day.
South America? Never been there but plenty have done their dough down South, a bit like Africa, boomtimes are just around the corner while waiting to get over the latest socialist revolution.
The 'great crash' isn't gonna happen, and the 'money printing' referred to is not money printing at all it's swapping reserves and bonds to bring down the cost of borrowing without increasing the assets on the balance sheet.
I still keep reading letters and posts that gold can't drop much further because it will be less than the cost of extraction. To illustrate how absurd this theory is you could equate it it to the cost of new car cannot drop any further because it will be less than the cost of production = the assembly line shuts down. Right?
well of course it does... look at "Ford Australia" or Aus mitz ....costs can only out way profit's for only so long ...GM . Ford would have collapsed had it not been bailed out from tax players..
the Fed made Americans a promise: In pursuit of that goal of economic recovery, it will keep buying bonds -- as many as necessary, for as long as necessary, to ensure that the federal funds rate (the rate at which the Fed loans money to banks) is at essentially zero percent
--so the FED creates 80 billion per month ...to buy debt bonds ......this adds to US treasury debt heading towards 20 trillion ...by 2020 it will be near 25 trillion ..... swapping reserves for bonds ?? hey skol I'll swap you endless JBMURC Bonds 2% return for the next 30yrs for your NZD's LOL
Id be very careful with the Japanese share market.
Right now it is ticking along with all that newly printed money.So far it has decreased the value of the yen[making your investments worth less] but the Yen is NOT the international currency. Its a dangerous game and your investments could easily crash and burn along with your crystal ball.
Every one knows about China,but theres talk that ,not just yet,but INDIA is the one to keep your eye on.....and I wouldnt be so quick to discount BRAZIL
Jewellery demand in China is now 185 tonnes in the first quarter. If we extrapolate for the full year we can easily see 740 tonnes. With Indian demand clearly in excess of 1000 tonnes, together these two nations brings in 1740 tonnes out of 2200 tonnes produced by all mining operations globally ex China ex Russia or roughly 80% of global production."
Good luck with your extrapolations, that's what the suckers did before the 1981 gold crash, I witnessed the entire debacle and subsequent bankruptcies and ruination.
Suckers were reading in advance what the price might be, drawing lines up the chart.
"It's gone up $50 this week, so it must go up $60 next week." lol
Nothing goes straight up (N225), the same as nothing goes straight down. (gold & silver)
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Commercial participants in the gold market, also known as “smart money” given that they work in the industry as opposed to being speculative trend followers, are the most bullish on gold in nearly five years.
As prices declined over the last few months, commercials - those involved in the production, processing or merchandising of a commodity - have been busy buying futures contracts and covering short positions, according to data from the Commodity Futures Trading Commission.
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Commitments of traders data suggests gold will rise
Their position rose from a low of a net short 269,270 contracts in October 2012 to the present net short position of 84,122, notes a report from Euro Pacific Canada today. This means commericials initiated new long positions, and covered previous shorts, resulting in an increase in their total net position by just over 185,000 contracts.
It’s a different case for the other two groups that the CFTC tracks in the commodity futures markets.
Large traders, mostly made up of hedge funds that are often trend followers, are currently net long 83,726 contracts - the most bearish reading since the October 2008 bottom. The group tends to be the most bearish at market bottoms and the most bullish at market tops, suggests Euro Pacific Canada analyst Dima Kash.
The third group, small traders, are those that control a very small portion of open interest in futures contracts, but their actions tend to help gauge retail sentiment nonetheless. Historically, they have been on the wrong side of the gold market at key inflection points, according to Mr. Kash. The group this month had a net short position of 1,704 contracts, an extremely bearish reading not seen since February 2001 when the gold market was about to begin its decade-long bull-market run.
Mr. Kash’s conclusion? “The current dynamics between the three groups signal that a significant intermediate-term bottom is forming in the gold market. This does not necessarily mean that prices cannot head lower, but it does mean that prices are attracting commercial buying interest – the smart money – at levels not seen since the financial crisis when gold declined from about $1,000 an ounce and hit a critical low at about $700 an ounce,” he said.
He thinks the key for investors now is to look for signs of a bottom, and technicals point to some important clues.
Click here to see Mr. Kash’s full report, which Euro Pacific has given us permission to republish in its entirety. It provides some interesting charts on the three group’s positioning in the futures market, as well as his
what are the thoughts on this???
-the Fed Chairman before Greenspan, said in 2009: “Gold is my enemy. I am always watching what gold is doing.”
-George Soros, the consummate political insider investor, bought $25m of call options of the North American GDXJ Junior Gold Miners Index in Q1 2013. He also increased his GDX shares by 30% to $100m, but reduced his shares in GLD by 20% to $82m.
-In the roaring 20’s, before the crash of 1929, share prices were frequently moved up and down by “pools” of brokers, investors, and finance houses, and these machinations were openly discussed in the newspapers. Is this ok? It’s a free market, so you can do anything that’s rational and makes a profit, right?
Well after the crash it didn’t seem like such a good idea. In the US it was outlawed in 1933 and 1934 by the Glass-Steagall Act and by the establishment of the Securities and Exchange Commission (SEC) to oversee “fair trading” in the markets. But the Glass-Steagall Act was repealed in 1999, and the SEC is a toothless tiger when it comes to precious metals (it has been investigating manipulation for several years, but oddly enough cannot bring itself to any conclusion).
http://www.321gold.com/editorials/evans/evans052713.pdf
Not to worry JB, paranoia's a common thread amongst goldbugs, they always feel as if they're up against it and the system's screwing them, the real story though is that gold and silver are largely irrelevant in today's markets. Why would you own a chunk of gold or silver when you could buy a gold ETF if you felt that way?
All the gold indexes down again last night, another bad day coming up for the XGD.
Last 12 months:
S&P500 +22%
HSI +21%
N225 +68%
DAX +30%
FTSE 100 +26%
XJO +25%
------------
Gold -11%
Silver -20%
HUI -39%
GDX -39%
GDXJ -44%
XGD -43%
Goldbugs will catch on one day. In the meantime all looks to be going OK with the US economy, consumer confidence is up, house prices are motoring away, hotel room prices are increasing at about 7%pa on the West Coast, tourism's booming. It's all hunky dory.
Goldbugs will catch on one day. In the meantime all looks to be going OK with the US economy, consumer confidence is up, house prices are motoring away, hotel room prices are increasing at about 7%pa on the West Coast, tourism's booming. It's all hunky dory.[/QUOTE]
I think I may have read a quote very similar to that from 1929--LOL
I think they have a good point in this article--people are reluctant to jump in to Gold ATM because they fear that another sell off could come--but if another fear comes along that is greater than that[sharemarket?] then things could change substantially.
Of course everything seems pie in the sky and being paranoid........until it happens
Skol, if I truly believed the financial institutions & CBs of the West were conspiring against gold then I would have stayed well away long ago as they have far more ammo than the gold bugs or the mums & dads etc. Its because I don't believe that, that I think the market will see sense & realize that the debt burden particularly in Japan is a real problem, let alone the US & Europe. I believe the market see gold as something that is bought & sold valued in currency which the CBs are willingly trying to devalue & the banks & hedgies will go long or short when they view it profitable to do so. My view is that we aren't far from that point & the massive spec short position will at some point need to be covered. What will spark that is any number of global sovereign debt issues around the world or a highly inflated Japanese stock market or it could be some thing geopolitical.
Daytr,
I've heard all that before - for years. "the massive short position". What massive short position? Global sovereign debt? Debt, schmet, if the 'big one' was gonna happen it would've happened by now, for sure.
Gold is a fad whose time has past, an anachronism, there's a gold boom every generation as the newbies latch on to some drama which has, or is going to take place that will send gold to the moon.
The GFC's over.
Skol, The massive short position is on Comex it's been publicized widely & has reached a record size, but no doubt you think that is another conspiracy dreamt up by the gold bugs. 'Debt, schmet' its that sort of thinking that let the debt in most of the major economies of the world get out of hand. I take my hat off to you though Skol, you have put it out there, the end of gold & it's thousands of year's of history. But hey you know when to call it, apparently its now, not in the next year or hundred years. Thousands of years of man's link to gold has finished. LOL
Daytr,
"thousands of years of man's links to gold has finished". LOL (real goldbug jargon)
Here's something you might find interesting about what a great long term punt gold is, I've put it here before.
----------------------
In his book Basic Economics, Thomas Sowell argued that, in the long-term, gold's high volatility when compared to stocks and bonds, means that gold does not hold its value compared to stocks and bonds:
To take an extreme example [of price volatility], while a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.
-----------------------------------
Sounds like a great deal.
Interesting choice of timeline again, gold was fixed for quite a bit of it, Skol.
Here is the chart of Comex gold shorts daytr was referring to I think.
http://www.zerohedge.com/news/2013-0...high-gold-shor
Now where is the bubble?
EZ,
Zerohedge, KWN. lol
"even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure..."
Well let's see shall we, how long do you reckon before the "massive short position" dudes get shafted? I've heard that for years, and I mean YEARS.
It's all too subtle for me, but these shorts make it harder for gold to fall, somehow.
http://www.fastmarkets.com/bullion-d...05282013usgold
Any meltdown, anywhere in the world, will sort out the shorters.
Bank of America slashes silver forecast by 25%, gold will follow silver - downwards.
http://www.cnbc.com/id/100768976
Like I said, nothing goes down in a straight line.
I'd just love $1 for every post I've seen in the last few years that said 'the shorters are gonna get burnt". I'm still waiting, it's the goldbugs that are bangin' on about the same old, same old.
It's so tedious that the goldbugs oughta produce a dictionary of goldbug jargon.
I'll start it off:
------
The bankster ruling elite of the fractional reserve banking system, assisted by the Rothschilds, the global massive shorts and the colossal global debt burden, are gonna see gold go the moon following the confiscation of the physical by helicopter Ben and the govnuts.
-------
Hahahaha, your turn.
yes and at the end of the article ---
Widmer added that he was more bullish on gold over the long-term.
"In our view, the gold bull market is pausing. However, we believe the structural rally is not broken, and we see several scenarios that could push prices higher again," he said.
"To pick just one, more affluent emerging markets could increase metal purchases to such an extent that gold could trade at $2,000 per ounce by 2016, even if investors bought only a third of the gold they purchased in 2012."
------GOLD 1406 ------- broken the barriers onwards an upwards
Attachment 4563[QUOTE=snapiti;409896]I'm not the simple one, the party's over buddy, well and truly, and if you're over-allocated to gold (or especially silver) there might be a few lean years coming up.
Maybe, Skol, but on a more recent scale gold hasn't been moving any lower, appeared to consolidate. The shorts are starting to be unwound.
http://www.proactiveinvestors.co.uk/...eats-0000.html
EZ,
Gold's been 'smashed' to use goldbug parlance. This has to be someone's fault, I'll surf the internet shortly and find out who's responsible for this dastardly crime. It'll be the banksters, the Fed, Bernanke, the Rothschilds, Goldmans or JP Morgan. I'll let you know what the goldbugs say.
What happened to the short covering that was gonna be a rip your face off job, sending gold to the next solar system?
Yep, Dow down, neither here nor there to me, I've been dollar-cost-averaging shares for about 30 years, real companies, real people producing real things, not a chunk of metal you bury underground and hope some sucker will come along and pay you more for it than you did.
hahaha
EZ,
2 goldbug theories, a 'smackdown' (bit of goldbug jargon there) from the US, and another says it's the hedge funds fault.
You notice the shortage of charts put up by goldbugs these days? That's because they look so bad and are portending much worse to come, like gold $1,000.
Well I was hoping gold would stay around $1420 over the weekend, but the US$ recovered a bit and that seemed to be the difference. But it did break well past $1400 for quite a few hours, which for struggling gold producers, gives them some hope of a profit in the months ahead. It's only a 2% drop to $1390, not the end of the world as a longer-term investment. But the top part of the gold price is all that a producer sees, that's their profit margin. It's not usually a very big margin. At $1000 an ounce, many thousands of miners and the suppliers that rely on them, would be out of work worldwide.
There's a rumour in the Bangkok Post that Italy will soon sell gold, which, if it's true won't do much for the gold price.
I see KWN are predicting a worldwide debt-fuelled collapse and that Japan will not survive. I've seen it all before at KWN, every 2 weeks.
Some companies have already put gold mines on care and maintenance, and I doubt they'd do that if they thought the current gold price was a temporary abberation.
Basically shutting them down, not abandoning them.
http://en.wikipedia.org/wiki/Care_and_maintenance
Yes a closed minesite where there is potential to recommence operations once the costs to sales margin decreases enough to see the company make a healthy profit from mining.....happens all the time in many different sectors .....shows just how much costs have risen in the last decade..where at the start of the decade miners were profitable at sub $500oz ,,also grades of metals mined are decreasing...lower the price higher the grades must be.....fact is GOLD will pass $2000-$5000 etc it's all a matter of time
Daryl Guppy predicts lower gold and silver.
http://www.cnbc.com/id/100752478
and Nouriel Roubini says:
http://www.project-syndicate.org/com...ouriel-roubini
In North Korea the Yuan and USD reign supreme, no mention of gold or silver here.
http://www.reuters.com/article/2013/...9510E720130602
Gold stocks seem to be doing OK today, which is not what I expected given the drop in the POG and the lead from the US.
RRL up 10.5c to $4.16, so I'm happy with that given gold is supposed to be in the toilet.
Equedia has some good background HC.
http://www.equedia.com/?p=50921&utm_...m_medium=email
Thanks ElZorro, I'll have a look.
I know you guys like a laugh, so here's a blog from 2009, predicting among other loony forecasts that the USA will totally collapse in 2009. Gullible goldbugs actually believed this crap, now they're paying the price.
http://www.henrymakow.com/dear_friends_and_family.html
N225 up 271.
2 years of stock gains on the way.
http://www.cnbc.com/id/100785848
Roubini is bullish?
Holy sh**, that is a very, very bad omen.
roubini is with Skol according to his twitter feed
http://www.project-syndicate.org/com...ouriel-roubini
Roubini puts up a good arguement
http://blogs.wsj.com/marketbeat/2012...rning-bullish/
Roubini turned bullish on stocks in Feb 2012, since that time S&P is up 21%, predicted S&P to end 2012 at 1300, it actually ended at 1409, an error of 8.3%.
He's predicting 2 more years of gains and $1,000 gold.
But Roubini ignored the cost of extracting gold, he only assumed the price will fall as countries sell their holdings. And he also said the underlying reason for the gold downtrend is that the world economies (previously based on cheap energy) will fix themselves in the years to come. Except he didn't say how that will happen.
What has the cost of extracting gold got to do with the price?
Theres talk now that alot of people invested in the Share market are getting a bit antsie about what will happen when the printing presses slow or halt[they cant go on forever folks] Up to now ,this has ,for a large part, been supporting the market .This could cause a big readjustment.
Doesnt necessarily mean Gold will benefit ,but its something to ponder
Here's a clip with Roubini talking of a perfect storm in markets....May 2012
http://www.youtube.com/watch?v=JvmpBEFZOZw
With the move low in AUD/USD AUD gold is now only $30 from $1500 which is still a great price for producers with tight cost controls
And many reporting profits/operating in USD but listed on the ASX
ASX 100 down about .5%, XGD down 4.5% today, a real slash and burn.
Another massacre on the XGD, down 5%, will it never end? Probably not, it's only a few points above a support level that will see it the lowest since 2005.
It has just dropped below 2716, the low on 28/10/2008, it's now the lowest since August 31 2005.
We can expect more downside, the punters who bought recently at the 'bottom' are gonna get a lesson in what a real bear market is like.
A 'smackdown' for silver, a big one. Daryl Guppy says where silver goes, gold will follow.
Rickards doesn't understand gold either, he's been predicting $4,000 - $11,000 gold for years. lol
More falls coming up for gold equities next week.
HUI -4.26%
GDX -4.32%
GDXJ -5.76%
XAU -3.9%
Rickards says the implied price of gold today is $7,000 an ounce. Another goldbug in la la land.
Its not about understanding gold--Its about understanding the economy--Do they actually think the money printing will[can]go on forever?
Which way for gold from here?
Downwards.
http://www.marketoracle.co.uk/Article40820.html
Some deluded goldbugs on other websites are 'backin' the truck up', still complaining about the Fed, manipulation, the 'Friday night smackdown', why gold isn't $50,000, ad infinitum.
http://www.emirates247.com/business/...06-09-1.509647
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In addition to that, with the recent rumours about a scale-back of the US QE3 programme, analysts fear that gold could, in theory, retreat to closer to levels before the QE1 programme was unveiled.
That would mean an approximately 50 per cent retreat from the current levels, which seems a little nerve-wracking, considering the amount of physical buying going on at these levels.
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A 50% retreat, that would certainly be a little nerve-wracking for goldbugs, but as I've said all along the value of gold is about $700. If it happens there's going to be a lot of poverty-stricken Indians and Chinese, and gold will probably migrate back to the West.
Gold looks to be resuming its downward trend, N225 up 5%.
There's a connection - precious metals and cranks.
http://www.bloomberg.com/news/2013-0...spiracies.html
Hey Skol, looks like the Chinese don't follow your view on gold & they continue to liberalize their gold market.
Over time this could be massive for gold. The transfer of wealth from West to East continues...
http://www.bloomberg.com/news/2013-0...e-bullion.html
When I was debating the peak oilers when oil was $140 a barrel they used to tell me that the Chinese were buying up all the oil companies they could lay their hands on and that the Chinese were "very smart people" buying at that price.
Did you read about the Chinese Aunty that was buying lots of gold? The neighbour asked her why she was using her retirement savings to buy gold and what would happen if the price went down.The aunty told the neighbour that if everyone bought gold the price would only go up.
True!
Ha ha very good Skol.
Down she goes, XGD down another 2.8%.
Aussie gold charts below. Aussie miners definitely getting a helping hand by the depreciating AUD.
http://www.goldmadesimple.com/images...1_AUD_Gold.gif
http://www.goldmadesimple.com/images...1_AUD_Gold.gif
Not looking good for the miners, or for gold for that matter.
http://www.reuters.com/article/2013/...0EL0QN20130610
Yep I would touch many of the majors with a barge pole. They get too fat & lazy & tend to think bigger is better at any cost. Rio, BHP, Newcrest, Barrack, you name it amongst the big boys, stuff up after stuff up. That's why I stick to juniors & mid tiers where I know they have a lean, mean management team. Think Newcrest are a possible takeover target at current S/P with circa 80M ounces of reserves from memory.
Just out from Bloomberg, gold 'expert', John Paulson's gold fund is down 54% since the beginning of the year.
He must have been reading KWN and all that other Schiff.
According to Bloomberg, Paulson's been 'backin' the truck up'.
Watch this space.
http://au.businessinsider.com/paulso...-54-ytd-2013-6
Skol, Marketclub have this video on the gold price, and they expect that based on pure technical analysis, gold will drop down from the pennant formation, to a price somewhere in the region of $1150 to $1259 an ounce, sometime soon.
The US$ basket continues to drop, however. Market jitters over the QE continuing at the current pace, and if money comes out of shares, where will it go? Into property? Bonds? or Gold?
INO had this interview, more positive for gold longer term, and a nice simple analysis.
http://www.ino.com/blog/2013/06/phys...for-supremacy/
Just keeps getting worse for OGC and NCM.
http://www.nzherald.co.nz/business/n...ectid=10890949
If investment demand continues to decline and gold ETF holders continue to sell, I believe a gold price below $1,000/oz .Gold will eventually return to its true cost of production.
In addition we have to accept no currency, stock or any commodity will go straight up and down. We had great rally for gold during last 10 years and gold cycle has reversed to bear territory now. There can be dead cat bounce for gold time to time and intelligent players will make use of this opportunity to sell their gold positions. It is time to become bullish on commodities with demand and supply mismatch and emerging commodities globally. Investors will have some great opportunity to pick some emerging commodity stocks globally in the coming weeks and months.
Myideas are not a recommendation to either buy or sell any security or currency.Please do your own research prior to making any investment decisions
James Steel, chief commodities analyst at HSBC in New York continues to be constructive on gold in the medium and long term and sees gold rising to $1,600/oz in the second half of 2013.
In a Bloomberg audio interview, Steel said that this year the gold market has been under pressure and has experienced a rotational shift out of commodities in general driven by the constant chatter of a tapering off in QE and experienced very steep declines in mid April. He likens it to a rugby scrum pulling back and forth near the $1/400oz level, between ETF outflows and strong physical demand for coins and bars, notably from China.
Steel said that in the past few weeks the heavy ETF outflows have died down, and prior to this year they were mostly static. The peak for ETF's was 85M ounces at the end of last year. He says most institutions have already exited that wanted to get out.
Market chatter has been nervous about the unwinding of QE3. Steel points out that unwinding or paring back is very different than an exit. The Fed many need to do tapering for a long time before it ends their program.
Steel mentions that it was the jewellery market that drove the gold market in the past and now it is investment demand and demand from China. He believes gold will average is $1,542/oz and he is predicting a rally in the second half of the year up to $1,600/oz. Longer term, he is on record as saying that gold will rise to over $2,000/oz.
Personally I believe gold will end up <$1,000, these guys say $1,200.
http://blogs.barrons.com/focusonfund...L_hpp_blog_fof
Gold forms another short-term bearish pattern.
http://www.forexcrunch.com/gold-form...arish-pattern/
Jay Taylor says look to mid-June for a turnaround in gold, Skol. Lots of other interesting comments here.
http://www.ino.com/blog/2013/06/in-p...-flow-is-king/
Keep on hoping EZ, looks very grim for precious metals and more carnage to come today on the XGD. Can't be too much longer before even the most diehard goldbugs throw in the towel.
Some might say I'm cherrypicking, but since gold peaked just under 2 years gold the DJIA has increased by 40% and gold has declined by 26%. In general stocks and gold are not correlated.
HUI -2.84%
GDX -2.87%
GDXJ -3.69%
Since gold peaked in Aug 2011 the XGD is down 68%.
Goldbugs, for some unfathomable reason have slavishly bought gold 'because the central banks are buying gold'
Why?
Beats me, I've never figured it out, these are supposed to be the best and brightest but have singlehandedly lost about $560 billion since gold peaked. Well done boys. It turns out they did the same thing in 1980, buying at the peak and selling at the low.
http://www.bloomberg.com/news/2013-0...mmodities.html
Bernanke is holding a press conference at the moment. Whatever is happening, there's a sharp spike in US$, and a dip in US$gold.
http://blogs.wsj.com/economics/2013/...trending_now_1
$1349, looks like the next whacking has begun.