Why are gold and silver tanking so rapidly?

[Nicolasd]

Just to start a discussion --all opinions welcome

[Tulpen]

Re: Another question: Why is gold and silver tanking so rapidely?

Because it was in a speculative bubble.

[Guest]

Re: Another question: Why is gold and silver tanking so rapidely?

Because it was in a speculative bubble.

No - because it's taking a much needed (big) correction. $750 gold coming up straight ahead. With respect, you don't have a handle on the fundamentals of this market Tulpen. This is the way it "behaves" on the long road up.

http://www.itulip.com/forums/showthr...1050#post31050

[Tulpen]

Re: Another question: Why is gold and silver tanking so rapidely?

With respect, you don't have a handle on the fundamentals of this market Tulpen.

Well you are entitled to your opinion and so am I.

To me it is crystal clear speculation. When I hear people write that gold is a sure thing to go up, $2000, $3000, I know we are in a speculative bubble.

Oil seems to be on its way back by the way, my account value is growing again.

[metalman]

Re: Another question: Why is gold and silver tanking so rapidely?

Because it was in a speculative bubble.

spoken like a guy who missed the boat

every fund on earth is piling into the 7 yr old dollar depreciation/reflation/inflation trade this year driving prices up. but that can't go on forever... expect a 20% correction at some point before the next phase... agree with this...

Gold Update: The small trade within the big trade

early innings, tho...

Shayne McGuire: The Early Innings of a Gold Boom

the dollar will stay under pressure unless you think the usa can afford to shut off its major source of growth now... exports.

that said, jack crooks' 7 cases for a 2008 dollar rally and declining gold are compelling.

i'm not inclined to try to trade these, tho. holding since 2001 has worked for me. always looking for reasons to move out of gold and into the next thing but see only reasons to increase positions on pullbacks. crooks says the structural problems with the dollar mean even if the dollar rallies that's time to increase dollar short positions and gold is a dollar short, in my view.

my 2 cents.

[blazespinnaker]

Re: Another question: Why is gold and silver tanking so rapidely?

Just to start a discussion --all opinions welcome

Unlike oil, real estate, or many other commodities, gold has no significant intrinsic value. It has as much value as sand dollars you can pick up on a beach, really.

You can't eat it, you can't live in it, you can't fuel your car with it.

The fact is, if gold really had any value, we'd probably try to create it from depleted uranium or something. But it doesn't have any value, so we don't bother, and gold bugs bid it up like rare stamp collectors.

Not that anyone around here is like that! ;)

Basically, I agree with Tulpen that it is in a speculative bubble. If you really feel the need to hedge/speculate against the dollar, I'd listen to Jim Rogers, and plow into agriculture or many of the other necessary things we need to live. There is a big difference between structural problems with the dollar and buying gold to defend against those structural problems.

I could believe that gold could go to 2000 and still not buy it. I have this general rule about only buying things that I think are relevant to the real, productive world.

BTW also, look at gold history. Gold bugs can talk all day long, but they can not deny the historical volatility. If you're OK with that, then I suppose it's your game. Those long term graphs look like a casino to me, though. I could not sleep with my money in gold, knowing that the IMF or whoever could just bail on gold overnight.

[blazespinnaker]

Re: Another question: Why is gold and silver tanking so rapidely?

spoken like a guy who missed the boat

Hah hah. Missing the boat is irrelevant. Plenty of people will sell at the top of a speculative bubble. I sold my real estate because I thought it was in a bubble.

every fund on earth is piling into the 7 yr old dollar depreciation/reflation/inflation trade this year driving prices up. but that can't go on forever... expect a 20% correction at some point before the next phase... agree with this...

Gold Update: The small trade within the big trade

early innings, tho...

Shayne McGuire: The Early Innings of a Gold Boom

the dollar will stay under pressure unless you think the usa can afford to shut off its major source of growth now... exports.

that said, jack crooks' 7 cases for a 2008 dollar rally and declining gold are compelling.

i'm not inclined to try to trade these, tho. holding since 2001 has worked for me. always looking for reasons to move out of gold and into the next thing but see only reasons to increase positions on pullbacks. crooks says the structural problems with the dollar mean even if the dollar rallies that's time to increase dollar short positions and gold is a dollar short, in my view.

my 2 cents.

You're talking a lot about the dollar. The dollar is a straw man / red herring in the gold argument.

I think there is a lot of agreement on the bad situation of the dollar. I think the problem here is gold as a proper hedge.

[GRG55]

Re: Another question: Why is gold and silver tanking so rapidely?

spoken like a guy who missed the boat

every fund on earth is piling into the 7 yr old dollar depreciation/reflation/inflation trade this year driving prices up. but that can't go on forever... expect a 20% correction at some point before the next phase... agree with this...

Gold Update: The small trade within the big trade

early innings, tho...

Shayne McGuire: The Early Innings of a Gold Boom

the dollar will stay under pressure unless you think the usa can afford to shut off its major source of growth now... exports.

that said, jack crooks' 7 cases for a 2008 dollar rally and declining gold are compelling.

i'm not inclined to try to trade these, tho. holding since 2001 has worked for me. always looking for reasons to move out of gold and into the next thing but see only reasons to increase positions on pullbacks. crooks says the structural problems with the dollar mean even if the dollar rallies that's time to increase dollar short positions and gold is a dollar short, in my view.

my 2 cents.

This is the difference between someone playing the secular trend and someone trading the short term perturbations like Tulpen. As I recall he posted a while back that he made 40% on the last oil pullback. Since crude barely moved 10% (and that only if one caught the closing high and low of the move) that suggests leverage of some sort to generate a return of that magnitude on anything directly related to the commodity itself. Nothing at all shabby about those returns, if that is the game one wants to play, and one has the skill and temperament. Tulpen apparently does.

I don't. Therefore I lean more towards your approach and just let time do its good work.

[GRG55]

Re: Another question: Why is gold and silver tanking so rapidely?

Unlike oil, real estate, or many other commodities, gold has no significant intrinsic value. It has as much value as sand dollars you can pick up on a beach, really.

You can't eat it, you can't live in it, you can't fuel your car with it.

The fact is, if gold really had any value, we'd probably try to create it from depleted uranium or something. But it doesn't have any value, so we don't bother, and gold bugs bid it up like rare stamp collectors.

Not that anyone around here is like that! ;)

My wife disagrees with you (don't take it personally, she disagrees with me all the time :rolleyes: ) On the last short term gold run-up I skimmed some profits from my gold portfolio and bought her a new horse trailer - one she has wanted for years. All aluminum, goose-neck, angle haul, dressing room, separate tack room. Now I admit you can't eat it. Didn't ask her if she bought groceries with whatever was left over.

Regardless, she's wondering if you could explain how she can replace her pick-up by investing in sand dollars on the beach. She wants me to try it, because it will free up all our money so she can immediately buy more horses. I, of course, am partly responsible for this situation. I figured that when Peak Oil hits and she has to convert the pick-up to a flower bed, we can always live in the trailer, and ride the horses... ;)

[blazespinnaker]

Re: Another question: Why is gold and silver tanking so rapidely?

My wife disagrees with you (don't take it personally, she disagrees with me all the time :rolleyes: ) On the last short term gold run-up I skimmed some profits from my gold portfolio and bought her a new horse trailer - one she has wanted for years. All aluminum, goose-neck, angle haul, dressing room, separate tack room. Now I admit you can't eat it. Didn't ask her if she bought groceries with whatever was left over.

Regardless, she's wondering if you could explain how she can replace her pick-up by investing in sand dollars on the beach. She wants me to try it, because it will free up all our money so she can immediately buy more horses... ;)

Fair enough... I was getting a little hyperbolic. But, the point is, I wouldn't be suprised to see someone sell their gold in exchange for more tangible assets.

Anyways, the rapid decline over the last day or so.. last time we saw volatility like this was in 2006. 8% decline in 48 hours .. every 2 years?

I really have no idea how gold investors can sleep at night.

Dollar bear, I can understand ... gold buying at these levels, I really do not.

[FRED]

Re: Another question: Why is gold and silver tanking so rapidely?

Fair enough... I was getting a little hyperbolic. But, the point is, I wouldn't be suprised to see someone sell their gold in exchange for more tangible assets.

Anyways, the rapid decline over the last day or so.. last time we saw volatility like this was in 2006. 8% decline in 48 hours .. every 2 years?

I really have no idea how gold investors can sleep at night.

Dollar bear, I can understand ... gold buying at these levels, I really do not.

Looks like more of The small trade within the big trade.

What shared factor of pricing can drive gold and silver prices together the same amount at the same time?

[touchring]

Re: Another question: Why is gold and silver tanking so rapidely?

Looks like more of The small trade within the big trade.

Fine with small trade within the big trade, but the C period (H1 2006) 20% correction is not exactly small. :eek:

Within the current rapid speculative trade, we are watching for short term price volatility much as occurred at the end of the previous similar period C (H1 2006): a 20% correction from $720 to $580. A similar correction today would take gold prices down $200.

[GRG55]

Re: Another question: Why is gold and silver tanking so rapidely?

Just to start a discussion --all opinions welcome

Have a look at the US $ action against the Yen and Swissie today. Doesn't look like Hank's "strong dollar" dream is about to come true just yet.

If commodities tank, and the US $ goes into a sustained rally, the stock market will tank too. All that's been propping up earnings for a broad swath of US companies are gains on currency conversion for foreign earnings.

I doubt the Fed wants that scenario...

[touchring]

Re: Another question: Why is gold and silver tanking so rapidely?

I think we're not doubting the LT direction of precious metals, but whether the C period (H1 2006) will repeat itself.

If commodities tank, and the US $ goes into a sustained rally, the stock market will tank too. All that's been propping up earnings for a broad swath of US companies are gains on currency conversion for foreign earnings.

I doubt the Fed wants that scenario...

[friendly_jacek]

Re: Another question: Why is gold and silver tanking so rapidely?

It's a weird action today, as all commodities and equities are going down rapidly. More yen unwind vs. big selling placed by commercial traders? There could be also some selling to raise money for capital gain tax a la 2000 and 2001 this time of year.