Gold in a bubble and/or going to $3,000

[flintlock]

Re: Gold in a bubble and/or going to $3,000

i didn't buy any gold when it was cheap.

i don't own any commodities like silver.

i own stocks'

i pray to god gold falls hard so i won't look so silly for not buying it all these years.

missed the boat so i blah, blah, blah about intel & 1980 vs 1973 vs this time is like that time & newspaper articles tell you this & blabity blabity blabity blab... any asset i don't own with a high price is a 'bubble'... blah... blah... blah

blah, blah, blah...

I think you may be right about that!

[nero3]

Re: Gold in a bubble and/or going to $3,000

i'll translate nero3 for you...

yahoo forums are filled with this... motley fool. etc.

If you ask me, it seems you are rather worried some of what I write actually might be true, or that at least someone might think I'm right, as hard you try to discredit me.

[Milton Kuo]

Re: Gold in a bubble and/or going to $3,000

If you ask me, it seems you are rather worried some of what I write actually might be true, or that at least someone might think I'm right, as hard you try to discredit me.

I'm not sure if you've actually been in the U.S. recently to see for yourself how things are going but the large number of people who are unemployed, receiving unemployment benefits which are nowhere near as generous as the benefits you get in Norway, receiving food stamps, and defaulting on their mortgages; along with non-improving trends in median duration of unemployment, any jobs creation never mind high-paying jobs creation, and housing prices do not suggest a strengthening U.S. economy at all.

In particular, the lack of housing price inflation causes Bernanke to print money like there's no tomorrow in the misguided hope that he can re-inflate housing prices so that all the bad paper that Wall Street issued becomes good and the insolvent banks become solvent again. When the currency is so badly managed and the economy not improving quickly enough considering the U.S.'s debt and fiscal imbalances, gold's price in U.S. dollars can only go higher.

These are just some of the insights you would get if you read all of iTulip's excellent analysis on the U.S.'s current economic situation. It would also make it clear that gold is currently not a bubble.

It's interesting to note that all those people calling gold a bubble did not call housing or tech stocks a bubble during their bubble phases. These same people who were unable to see the tech stock bubble or the housing bubble until after they popped can now see a nascent gold bubble? I would say if you want to be contrarian, you'd have to say that gold is not a bubble based on these peoples' opinions.

[sishya]

Re: Gold in a bubble and/or going to $3,000

If you ask me, it seems you are rather worried some of what I write actually might be true, or that at least someone might think I'm right, as hard you try to discredit me.

i didn't buy any gold when it was cheap.

i don't own any commodities like silver.

i own stocks'

i pray to god gold falls hard so i won't look so silly for not buying it all these years.

missed the boat so i blah, blah, blah about intel & 1980 vs 1973 vs this time is like that time & newspaper articles tell you this & blabity blabity blabity blab... any asset i don't own with a high price is a 'bubble'... blah... blah... blah

blah, blah, blah...

Metalman is funny and nero3 is very civil in his replies. But nero3 can you tell us why you did not like Gold at $300 ? is it philosophical or moral issue(like some won't invest in liquor or tobacco cos) ? Money is Money right ?

[sishya]

Re: Gold in a bubble and/or going to $3,000

If I was to explain it. It could be that there is a outside buying pressure on the US equity market for some time coming from outside the US (as the numbers also show) given that both dollars and stocks weakened today, unlike in the past where the dollar could have rallied in the same environment. If the dollar is really going stronger, there is likely to be sector rotation, into more large cap stocks that are able to take advantage of a stronger dollar.

Today S&P and Dollar went down together. is that a sign of capital flight from US ? I am anyway out of stocks and have started shorting some inflation effecting stocks 3 weeks ago, which have already come down around 10%. I will anyway keep stop loss, to prevent being hung upside down if there is any rip to the upside.

[Raz]

Re: Gold in a bubble and/or going to $3,000

If you ask me, it seems you are rather worried some of what I write actually might be true, or that at least someone might think I'm right, as hard you try to discredit me.

No one needs to discredit you, nero3 - you're doing an excellent job on your own.

Your post in response to my question was unconcatenated, discombobulated, illogical verbiage.
Congratulations: you are now on my ignore list.

[nero3]

Re: Gold in a bubble and/or going to $3,000

Metalman is funny and nero3 is very civil in his replies. But nero3 can you tell us why you did not like Gold at $300 ? is it philosophical or moral issue(like some won't invest in liquor or tobacco cos) ? Money is Money right ?

I think I could have invested in gold, at that time. However i did not have cash to invest ,and borrowing money to speculate in gold was certainly not something I was thinking of at the time.

One thing I like to stress, is that, it's just in general a poor investment to put your money in gold in 2000-2001, as speculating on real estate on margin would had given a much better return, and then sell it before the crash (you would have to do that with gold now anyway). Putting money into a dead asset is not really an investment. It's also easy to say it was smart. But there was a lot of things going on, like the terror attacks, then the Iraq war. It's a lot of things that happened, that influenced the development for gold, things that were unknowable, and made those who bought it very early look very smart. I have to say i'm not really that impressed with someone making money just holding a dead asset. It's more impressive with someone buying Wal-mart stocks in 1980, than someone buying gold in 1971.

[nero3]

Re: Gold in a bubble and/or going to $3,000

Today S&P and Dollar went down together. is that a sign of capital flight from US ? I am anyway out of stocks and have started shorting some inflation effecting stocks 3 weeks ago, which have already come down around 10%.

It's a reversal of the weaker stocks, stronger dollar trade. The dollar should weaken when foreigners dump US assets. That's actually bullish, suggest the US market's are in a bull, unless this dumping is a sustained trend.

[nero3]

Re: Gold in a bubble and/or going to $3,000

No one needs to discredit you, nero3 - you're doing an excellent job on your own.

Your post in response to my question was unconcatenated, discombobulated, illogical verbiage.
Congratulations: you are now on my ignore list.

Maybe this gold bubble is in the denial phase already (meaning it's past the top). I had still thought gold to have a good chance at turning into a big bubble, but maybe it won't then.

[Raz]

Re: Gold in a bubble and/or going to $3,000

Don't blame me if you don't understand the futures market. Can you explain why this is bullish?
http://www.cftc.gov/dea/options/deacmxsof.htm
Maybe this gold bubble is in the denial phase already (meaning it's past the top). I had still thought gold to have a good chance at turning into a big bubble, but maybe it won't then.

I was both a stock AND futures broker with Dean Witter Reynolds in the 1980s.
I had one institutional futures client (Crude Oil) and four spec accounts, two of whom had been trading for about 15 years at that time.

I began trading futures in 1978 - were you born then?

I'm glad you made a perfect score on your IQ test. Now if you could only check your IgQ (Ignorance Quotient).

GOLD - COMMODITY EXCHANGE INC. Code-088691
OPTION AND FUTURES COMBINED POSITIONS AS OF 01/11/11 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
Long | Short |Spreads | Long | Short | Long | Short | Long | Short
--------------------------------------------------------------------------------
(CONTRACTS OF 100 TROY OUNCES) OPEN INTEREST: 795,947
COMMITMENTS
241,451 39,565 209,434 265,301 517,493 716,186 766,492 79,762 29,456

CHANGES FROM 01/04/11 (CHANGE IN OPEN INTEREST: -558)
-15,494 7,343 15,647 9,231 -18,269 9,385 4,722 -9,943 -5,279

PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADER
30.3 5.0 26.3 33.3 65.0 90.0 96.3 10.0 3.7

NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 393)
236 75 147 61 57 339 243


The record Net Long Position of Non-Commercials in Comex Gold was 283,462 contracts on October 5, 2010.
The Spot Future closed that week at $1,047.80. Eight weeks later it closed at $1,168.80. It has NEVER closed below 1,047.80 since!

The record Net Long Position of Non-Commercial and Nonreportable (small specs) combined was 328,344 on October 20, 2009. The Spot Future closed that week at $1,055.60. The following week it closed at $1,039.70 and the next week it closed at $1,095.10. It has NEVER closed below 1,039.70 since!!!

The Net Long position of Non-Commercials you cited is 201,886. Can you explain why this is bearish???

[touchring]

Re: Gold in a bubble and/or going to $3,000

Maybe this gold bubble is in the denial phase already (meaning it's past the top). I had still thought gold to have a good chance at turning into a big bubble, but maybe it won't then.

I think we don't know whether gold has peaked, but one thing for sure, a correction is due.

[Raz]

Re: Gold in a bubble and/or going to $3,000

I think we don't know whether gold has peaked, but one thing for sure, a correction is due.

I don't dispute the idea that gold is due for a correction (it's ongoing as we speak).
What I do dispute is that gold is at present a "bubble", and that the "top of tops" is taking place now.

Three analysts that I truly respect (EJ is certainly one) are all quite cautious on gold right here; one is very cautious on silver, thinking it could drop back to the low $20s if a real correction comes in 2011. But not one of them believes gold to be in a "bubble" even remotely comparable to the Nasdaq in 1999-2000 or Crude Oil in 2008 or the Housing bubble of 2004-06.
And neither do I.

As a matter of fact, the wave structure in gold looks like a market that could correct by mostly sideways to slightly lower pricing - and then by late Summer begin a parabolic upmove to $1,700 - $2,000.

I'll let the market speak for itself, but if gold is at present in a "bubble" then it's not like any "bubble" I've ever seen or experienced or read about.

[nero3]

Re: Gold in a bubble and/or going to $3,000

I don't dispute the idea that gold is due for a correction (it's ongoing as we speak).
What I do dispute is that gold is at present a "bubble", and that the "top of tops" is taking place now.

Three analysts that I truly respect (EJ is certainly one) are all quite cautious on gold right here; one is very cautious on silver, thinking it could drop back to the low $20s if a real correction comes in 2011. But not one of them believes gold to be in a "bubble" even remotely comparable to the Nasdaq in 1999-2000 or Crude Oil in 2008 or the Housing bubble of 2004-06.
And neither do I.

As a matter of fact, the wave structure in gold looks like a market that could correct by mostly sideways to slightly lower pricing - and then by late Summer begin a parabolic upmove to $1,700 - $2,000.

I'll let the market speak for itself, but if gold is at present in a "bubble" then it's not like any "bubble" I've ever seen or experienced or read about.

I'm not saying gold is presently a big bubble, for that to happen I'll need to see it at an inflation adjusted all time high, at least, if , if it goes to 1980 like heights adjusted for the money supply, Adam Hamilton predicts, then I will think it's a big bubble. If you look at the Nasdaq at the time of peak of the bubble, it was double that of the DOW in relative terms. Dow 24000 at that time would have matched the Nasdaq. Gold's increase is compared with other bubbles like the NASDAQ, and now it's just to let the last parabolic stage set in. However it's also possible to compare it with the DOW, instead of the NASDAQ during that last period. Maybe oil was the nasdaq of this commodity bull-market. If gold was to behave as the dow, not the nasdaq, at the point in the cycle, then an estimated top would only come in at the 1600-1800 range.

I I think it's a small bubble now in gold and I think it have had a bubble psychology to it for a long time. The big bubble might be in the expectations, or assumptions it will turn into a big bubble. I'm not saying it won't, or that the most likely thing is that gold have peaked. I'm just saying that a bull-market don't always have to end with a huge bubble. In 1979 inflation was running at a 20 %, plus rate in the US, at the worst. That's when gold really got going. I'm not seeing any of that. Had the inflation been in the, rich nations, after a decade of double digit inflation, I'd been a lot more bullish on gold.

[renewable]

Re: Gold in a bubble and/or going to $3,000

Putting money into a dead asset is not really an investment. It's also easy to say it was smart. But there was a lot of things going on, like the terror attacks, then the Iraq war. It's a lot of things that happened, that influenced the development for gold, things that were unknowable, and made those who bought it very early look very smart.

Neither 9/11 (september 2001), nor the Iraq war (March 2003) appear to have had any significant effect on the price of gold:

[nero3]

Re: Gold in a bubble and/or going to $3,000

Neither 9/11 (september 2001), nor the Iraq war (March 2003) appear to have had any significant effect on the price of gold:

I'm not talking about price spikes related to those events. Rather that those events helped fuel inflation and negative real interest rates, in what otherwise might had been deflation, it was first after the Iraq War started, that you got the boom from 2003 really going.