What is th edeal with GOLD???

[loweyecue]

I don't have subscription anymore, just checking to see what is the current thinking on Gold? It's getting hammered to death. Not sure what to make of it. Any enlightenment is much appreciated.

[cobben]

Re: What is th edeal with GOLD???

I don't have subscription anymore, just checking to see what is the current thinking on Gold? It's getting hammered to death. Not sure what to make of it. Any enlightenment is much appreciated.

To be honest, I am at fault. Every time I come back to Sweden, gold gets trashed, exactly to the day.
Well, at least this year it's turned out that way every time.
I'm sure I can find a statistician somewhere who will tell you that two times out of two is statistically significant.

[charliebrown]

Re: What is th edeal with GOLD???

I don't have a subscription either. Every once an awhile, i will pay the $45 and read for a month.
anyhow, all I can say is platitudes ...

1) If you believe gold and oil are correlated, we are still in the normal range for that correlation which is 15 +/- 4. Right now we are at 13.5
2) Everytime I read on-line, central banks are still accumulating.
3) Central banks still expanding balance sheets.

4) negatives are rising rates makes the cost of holding a non-income producing asset relatively higher.

I assume that in an over-leveraged economy, interest rates produce a bathtub curve for gold. Low interest rates = high gold, medium interest rates = low gold, high interest rates = high gold

in an over-indebted economy high rates will make it become apparent the debt can never be repaid, the default risk grows.

I am taking my licks too. I am dollar cost averaging into gold at this point to bring my allocation back up. I'm going slowly in though.

[BK]

Re: What is th edeal with GOLD???

My non-expert view is : I think you have to consider the size of the Gold Investment market and compare it to others asset classes. Gold investing is a tiny market when compared to things like the US Bond Market. When Gold is trading down it is leveraged money and weak hands are dumping their positions-this lead to waterfall like moments.

At some point the trend will reverse and there may be a time when money pours into Gold related investments.

I try to imagine the world of Investment choices as a super-market full of shelves and Gold is on one end-cap in the back of the store. You have to walk by aisles and aisles of bonds, stocks, real estate to get to the end cap with gold investment options.

[brent217]

Re: What is th edeal with GOLD???

Follow Martin Armstrong. So far his gold calls have all been right. Gold is going down because the price is in USA dollars, which are rising in value as EU and Japanese bondholders flee to the safer American monies.

[DRumsfeld2000]

Re: What is th edeal with GOLD???

Can you give us any insight into what Martin Armstrong thinks of the future for gold?

[shiny!]

Re: What is th edeal with GOLD???

Can you give us any insight into what Martin Armstrong thinks of the future for gold?

In a nutshell, he says that gold will rise and be valued again, as all fiat money experiments have always ultimately failed. Since all countries are now on fiat money systems, gold will be seen as the only honest money as fiat money fails.

But until then:

http://armstrongeconomics.com/2013-a...rray-for-2013/

[ProdigyofZen]

Re: What is th edeal with GOLD???

I don't have subscription anymore, just checking to see what is the current thinking on Gold? It's getting hammered to death. Not sure what to make of it. Any enlightenment is much appreciated.

That's the problem, every reason that all market participants "thought" why gold went up since 2008 are now no longer extant in their view. That is "money printing," "negative real rates," "US public debt increasing" "US GDP not growing" "dollar falling" etc.

All the wrong reasons that people bought gold are now all the wrong reasons they are selling.

[rogermexico]

Re: What is th edeal with GOLD???

That's the problem, every reason that all market participants "thought" why gold went up since 2008 are now no longer extant in their view. That is "money printing," "negative real rates," "US public debt increasing" "US GDP not growing" "dollar falling" etc.

All the wrong reasons that people bought gold are now all the wrong reasons they are selling.

+1

[Raz]

Re: What is th edeal with GOLD???

Some lite reading.

[gwynedd1]

Re: What is th edeal with GOLD???

The price of gold was driven by the speculative demand for gold as insurance against the collapse of fiat currency. As that fear dissipated, gold moved towards the marginal cost of production which will form the bottom. Once it hits that it will move with inflation in the long term, that is until financial instability returns.

[charliebrown]

Re: What is th edeal with GOLD???

Has any of the backdrop changed? We get Dr. B saying he "might" taper in the fall, the bond market goes nuclear and stocks take a right-cross.
Now the GDP print for Q1 is revised down to 1.8. Dr. B can't taper. If he really does taper, and even eliminate QE forever, what will rates move to?
3%, 5%?? With debt at 350% of GDP it will be lights out gracie if rates move there. There is no organic growth genie waiting to take over.

Notice how with Europe in a depression, China having trouble, Japan wobbling, oil is still $95 a barrel?

[verdo]

Re: What is th edeal with GOLD???

I don't have a subscription either. Every once an awhile, i will pay the $45 and read for a month.
anyhow, all I can say is platitudes ...

1) If you believe gold and oil are correlated, we are still in the normal range for that correlation which is 15 +/- 4. Right now we are at 13.5
2) Everytime I read on-line, central banks are still accumulating.
3) Central banks still expanding balance sheets.

4) negatives are rising rates makes the cost of holding a non-income producing asset relatively higher.

I assume that in an over-leveraged economy, interest rates produce a bathtub curve for gold. Low interest rates = high gold, medium interest rates = low gold, high interest rates = high gold

in an over-indebted economy high rates will make it become apparent the debt can never be repaid, the default risk grows.

I am taking my licks too. I am dollar cost averaging into gold at this point to bring my allocation back up. I'm going slowly in though.

and this is precisely why I'm not worried about what is going on atm.

[davidstvz]

Re: What is th edeal with GOLD???

I've just written off all my gold. Like... what if it all just melted and seeped into the dirt and vanished? I'd live.

That's the only way I can stay sane right now. 30% down from the beginning of the year? This is just nuts. I keep not selling because I don't want to be that idiot that sold on the way down when it's going to go back up later and I don't need to liquidate to get the cash right now or anything. But man it's hard to just watch it fall and not do anything. How low can it go?

[ProdigyofZen]

Re: What is th edeal with GOLD???

I've just written off all my gold. Like... what if it all just melted and seeped into the dirt and vanished? I'd live.

That's the only way I can stay sane right now. 30% down from the beginning of the year? This is just nuts. I keep not selling because I don't want to be that idiot that sold on the way down when it's going to go back up later and I don't need to liquidate to get the cash right now or anything. But man it's hard to just watch it fall and not do anything. How low can it go?

People are selling thinking just like this.

I bet gold has been falling the last week from 1350 to 1200 because one of the large hedge funds had to liquidate their position because of 1) fund outflows or 2) being down 8 to 10% + on their Fixed Income positions.