Many of you gold bears are now panicking!

[Charles Mackay]

Even a big stock sell off doesn't affect gold now. That hoax only worked on the naive players who have now been surgically separated from their gold.

[bobola]

Re: Many of you gold bears are now panicking!

Gold May Break Out to Record, Grabham Says: Technical Analysis

Sept. 1 (Bloomberg) -- Gold may advance to a record $1,325 an ounce if it first breaks out of a symmetrical, triangular pattern, a move that may occur in the next one or two weeks, Standard Bank Group Ltd. said, citing trading patterns.

http://www.bloomberg.com/apps/news?p...d=aqg7fd0Bs6lU

[FRED]

Re: Many of you gold bears are now panicking!

Even a big stock sell off doesn't affect gold now. That hoax only worked on the naive players who have now been surgically separated from their gold.

We have no idea why anyone ever believed that gold will follow stocks.

Chart from original iTulip gold "buy" call September 2001, eight years ago this month:

Stocks/Gold ratio today:

[pescamaaan]

Re: Many of you gold bears are now panicking!

i was curious as to what the data showed for a relationship between the stock market and the price of gold.

i ran a correlation of the daily returns between the s&p and gld for sept 1, 2007 through sept 1, 2009.

i found the correlation is close to zero (.03).

i also ran the correlation of days when the s&p return is negative to the return for gld that day and it was also close to zero (-.02)

am i missing something?

[FRED]

Re: Many of you gold bears are now panicking!

i was curious as to what the data showed for a relationship between the stock market and the price of gold.

i ran a correlation of the daily returns between the s&p and gld for sept 1, 2007 through sept 1, 2009.

i found the correlation is close to zero (.03).

i also ran the correlation of days when the s&p return is negative to the return for gld that day and it was also close to zero (-.02)

am i missing something?

Exactly right! There is no price correlation what so ever. Gold and U.S. stocks are each separately correlated to a third factor: confidence in the management of the United States of America. The bubble in confidence peaked in 2000 with gold at $270.

[doom&gloom]

Re: Many of you gold bears are now panicking!

I bought some gold, bought some silver, and don't even look at the daily close price. I figure itwill all go up as the country goes to shit and the dollar does it's swan dive.

[flintlock]

Re: Many of you gold bears are now panicking!

So no dip in gold prices anticipated? I'm looking for some more and was hoping for a dip.

[jpatter666]

Re: Many of you gold bears are now panicking!

So no dip in gold prices anticipated? I'm looking for some more and was hoping for a dip.

We could see a dip, but more likely in the "electronic" form. If there is any level of panic, expect dealers to jack up the premium on physical.

Thus, I'm fleshing out our physical PM positions now. I've got electronic (GTU, GLD, CEF and SLV) plus some PM miners I buy on the lows. I'll add to those on any serious dips.

[flintlock]

Re: Many of you gold bears are now panicking!

We could see a dip, but more likely in the "electronic" form. If there is any level of panic, expect dealers to jack up the premium on physical.

Thus, I'm fleshing out our physical PM positions now. I've got electronic (GTU, GLD, CEF and SLV) plus some PM miners I buy on the lows. I'll add to those on any serious dips.

I was looking to add to my CEF holdings.

[Jay]

Re: Many of you gold bears are now panicking!

I just keep buying physical slow and steady, from all the cash I save renting. I have no idea what the daily price is, except that I see it when I buy some. No reason to get all amped up about short term price fluctuations, it is all about big picture to me. What's 50 bucks an ounce here or there? It's insurance against government stupidity and so a one way bet in my book. When do we start calling the dollar the assignat?

The only conversation I have with myself is when it will be right to buy a house and how thrifty can I learn to live and still live well. Our standard of living in the Western world will fall greatly in my mind. All I hope to do is to arrest that fall as much as possible for my family and to keep the hurricane of corrupt speculative culture away from my loved ones.

[jpatter666]

Re: Many of you gold bears are now panicking!

I was looking to add to my CEF holdings.

Just be aware there is a NAV premium on CEF (and GTU!) as well. They spiked during the panic. To check out what the current premium is, use something like ETFConnect:

http://www.etfconnect.com/select/fun...sp?MFID=169250

[Jay]

Re: Many of you gold bears are now panicking!

Just be aware there is a NAV premium on CEF (and GTU!) as well. They spiked during the panic. To check out what the current premium is, use something like ETFConnect:

http://www.etfconnect.com/select/fun...sp?MFID=169250

You can use this to your advantage if you are patient. Myself, I just buy physical now.

[jimmygu3]

Re: Many of you gold bears are now panicking!

FRED,

If S&P is 500 to 600 by year end and gold stays around $1000, that puts Dow/Gold at about 5, right at the lower limit band. Are we still looking for overshoot to Dow/Gold=2 or will Dow/Gold=5 be the time to reallocate back into stocks? Thanks.

Jimmy

[sn1p3r]

Re: Many of you gold bears are now panicking!

Great post, Jay...what are your current thoughts on buying a house? I'm roughly in the same boat...

[Dr.No]

Re: Many of you gold bears are now panicking!

FRED,

If S&P is 500 to 600 by year end and gold stays around $1000, that puts Dow/Gold at about 5, right at the lower limit band. Are we still looking for overshoot to Dow/Gold=2 or will Dow/Gold=5 be the time to reallocate back into stocks? Thanks.

Jimmy

If it bottomed at 2 in the 30s and 1 in the 60s, it may well bottom at 0.5 this time. Who knows ahead of time. Maybe we'll see Dow 5000 and gold $10000 or Dow 2500 / gold $5000 at some point in the next 3-7 years. Gold has hit an inflation adjusted peak of about $10000 before - I believe as recently as the year 1869.