Thesis change time? Gold approaching $760

[phirang]

Re: Thesis change time? Gold approaching $760

Mr Market also had FNM over $30

According to John Authers of the FT, there have been large inflows into US equities (9, 'Turbulent Times').

Also rumours of large inflows into 30-year treasuries.

Looks to me like folks are pricing in deflation followed by a US-first recovery...

You choose whether to fade Mr market...

[Chris]

Re: Thesis change time? Gold approaching $760

I've been watching the price of bags of 90% silver coins for the last few hours. I had been considering a $1000 (face value) bag from Tulving, but they sold out, so I started looking at APMEX. They sold out of $1000 bags about an hour ago. Now they're out of all products in that category, including $500 and $100 bags and $10 rolls.

Yet the price keeps dropping.

I wonder if it's anything to do with those scientists down at the Large Hadron Collider? Perhaps they've managed to bend space-time so we've got last years prices at next years demand?

[LargoWinch]

Re: Thesis change time? Gold approaching $760

Look at this from the bright side:

Before I was 59% PMs (all assets included).

Jim N. concluded that this was somewhat - I mean way - too much.

I was in the process of lowering this to around 40-50%...

but no need to! Their value just melt (no pun intended here) and my portfolio rebalances itself!

You see Jim, that was easy.

PS: No I am not selling. I sleep very well. See you in 2015.

[zoog]

Re: Thesis change time? Gold approaching $760

The big question in my mind is when do the central banks start buying big after bringing prices down?

The following is from Wikipedia on how Nathan Rothschild made a killing in London by tricking the public into thinking the English lost to Napoleon at Waterloo;

To the Rothschilds, [England's] chief financial agents, Waterloo brought a many million pound scoop. ... a Rothschild agent ... jumped into a boat at Ostend ... Nathan Rothschild ... let his eye fly over the lead paragraphs. A moment later he was on his way to London (beating Wellington's envoy by many hours) to tell the government that Napoleon had been crushed: but his news was not believed, because the government had just heard of the English defeat at Quatre Bras. Then he proceeded to the Stock Exchange.
Another man in his position would have sunk his work into consols (securities issued by the UK government), already weak because of Quatre Bra. But this was Nathan Rothschild. He leaned against "his" pillar. He did not invest. He sold. He dumped consols. ...Consols dropped still more. "Rothschild knows," the whisper rippled through the 'Change. "Waterloo is lost." Nathan kept on selling ... consols plummeted—until, a split second before it was too late, Nathan suddenly bought a giant parcel for a song. Moments afterwards the great news broke, to send consols soaring. We cannot guess the number of hopes and savings wiped out by this engineered panic.

If the Fed & CB's are engineering the 'ka', when is the right time to buy...??

Interesting story but you did forget to include the following sentences questioning the claims:

Research by the Rothschild family and others has shown that this legend originated in an anti-semitic French pamphlet in 1846, was embellished by John Reeves in 1887 in The Rothschilds: the Financial Rulers of Nations and then repeated in other later popular accounts, such as that of Morton. Many of the alleged facts stated are incorrect. For example, it has been shown that the size of the market in government bonds at the time would not have enabled a scenario producing a profit of anything near £1 million.

[waysouth]

Re: Thesis change time? Gold approaching $760

I must admit to being surprised by the over convoluted approach on this site

Gold has formed an unpleasant double top and is now in a confirmed bear market.The technicians have been projecting an initial target of $650 for weeks now.

Why argue with the facts?As camus would observe(to paraphrase),explanations are for the guilty.

[Guest]

Re: Thesis change time? Gold approaching $760

Waysouth gets it right. Prepare to see all your PM inflation proofing investments locked up and non-performing for a couple of years. Maybe even longer.

[FRED]

Re: Thesis change time? Gold approaching $760

I must admit to being surprised by the over convoluted approach on this site

Gold has formed an unpleasant double top and is now in a confirmed bear market.The technicians have been projecting an initial target of $650 for weeks now.

Why argue with the facts?As camus would observe(to paraphrase),explanations are for the guilty.

iTulip is about asking "Why" and "What shall be" not "What is." Clearly gold is in an bear markets. So are many commodities.

The question is: Why are they in a bear market? Our theory in March was that funds were going to dump them.

[jtabeb]

Re: Thesis change time? Gold approaching $760

iTulip is about asking "Why" and "What shall be" not "What is." Clearly gold is in an bear markets. So are many commodities.

The question is: Why are they in a bear market? Our theory in March was that funds were going to dump them.

And why is physical UNAVAILABLE but prices are dropping.

1+1 = 69, that's a new one for me.

[Andreuccio]

Re: Thesis change time? Gold approaching $760

And why is physical UNAVAILABLE but prices are dropping.

1+1 = 69, that's a new one for me.

Couldn't that just be logistics? As an example, let's say APMEX has huge numbers of both buyers and sellers today. More sellers than buyers, so prices drop, but the number of buyers still overwhelms their inventory, and they can't resell the new stuff coming in until they've inventoried it.

Not saying that's what's going on, but could it explain the seeming paradox?

[ASH]

Re: Thesis change time? Gold approaching $760

Couldn't that just be logistics? As an example, let's say APMEX has huge numbers of both buyers and sellers today. More sellers than buyers, so prices drop, but the number of buyers still overwhelms their inventory, and they can't resell the new stuff coming in until they've inventoried it.

Not saying that's what's going on, but could it explain the seeming paradox?

I think if you add logistics to the fact that entirely different groups of investors drive "paper" versus physical PM demand, you have a pretty good explanation. The way I see it, the PM universe is divided into two different groups. There is a small group of individual investors who fear a systemic collapse who are interested in physical PM (lets call them Gold Bugs), and there is a much larger group (in dollar terms) that includes both funds and the odd punter who have no such systemic fears and are chiefly in the business of chasing the flavor of the month (lets call them Traders). I haven't done anything like a proper survey, but it seems to me that the most widespread viewpoint is that there's danger of a "Japan-like deflation" (and don't start with the definitions and history and so forth -- I'm relating what I think other people are thinking), which is why the majority of Traders are piling out of PM; they happen to mostly own paper gold, so paper gold drops. Simultaneously, the Gold Bugs see the drama in the financial world and conclude that The End is Nigh, and they increase their purchases of physical gold. The discrepancy has to do with the logistic issue of how practical it is to rapidly turn paper gold into physical gold, and the fact that the physical gold market is smaller than the paper market. Alternatively, you might say that iTulip is thinking two steps ahead (poom) whereas the Traders are reacting to ka.

(By the way, this argument includes a lot of assumptions on my part -- for instance about the relative sizes of the paper and physical gold markets. The reader is cautioned that I am speculating from a basis of very little knowledge; perhaps more knowledgeable members of the community will correct factual errors.)

[Joy]

Re: Thesis change time? Gold approaching $760

Hi,

This is my first post on Itulip.

Looking at price movements of Gold in the 1970s there were some wrenching pullbacks. Should it be surprising that we would get pullbacks like the one we are experiencing right now given the number of leverage accounts out there trying to ride every trend.

GC1976btm.gif

Notice in 1973 Gold prices pulled back from 125 to 90 after a nice run up.

[Andreuccio]

Re: Thesis change time? Gold approaching $760

Hi,

This is my first post on Itulip.

Looking at price movements of Gold in the 1970s there were some wrenching pullbacks. Should it be surprising that we would get pullbacks like the one we are experiencing right now given the number of leverage accounts out there trying to ride every trend.

[ATTACH]566[/ATTACH]

Notice in 1973 Gold prices pulled back from 125 to 90 after a nice run up.

Hi Joy,

Welcome to iTulip.

I assume you're comments were directed towards my post and the immediate discussion before it, since that's where you posted, so I'll answer based on that.

The pullbacks themselves, and their degree, may or may not have been a surprise. EJ a few months ago predicted it, but it seems is surprised to see the gold price drop below $780. Lukester, on the other hand, has been saying for a month or two that based on other things he had read he expected a significant pullback in the price of gold well beyond $780.

My post and jtabeb's before it, however, weren't directed towards the price drop itself, but to the odd event that prices are dropping but dealers seem to be running out of inventory. Why are prices dropping if there is so much buying going on that dealers run out of stock?

[jtabeb]

Re: Thesis change time? Gold approaching $760

Silver also not happy.

This is, of course, a very short term reaction to Fannie/Freddie, but if these prices hold up(down) for a couple of weeks...

SPOT MARKET IS OPEN closes in 4 hrs. 48 mins. Sep 10, 2008 12:27 NY Time Bid/Ask 761.60 - 762.60 Low/High 758.00 - 784.40 Change -14.40 -1.86% 30daychg -61.40 -7.46% 1yearchg +59.40 +8.46%

Sep 10, 2008 12:27 NY Time Change Silver 10.88 -0.36 Platinum 1169.00 -42.00 Palladium 225.00 -5.00 Rhodium 4,510.00 -190.00

I'm not very worried, check this out (LOTS OF OTHER EXAMPLES, go see for yourself)

			Lot of 5, 2008 Canadian Silver Maple Leaf Coins	Item number: 220277879432

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View larger picture Current bid: US $80.00 Your maximum bid: US $ Place Bid > (Enter US $81.00 or more) End time: 18 mins 32 secs (Sep-10-08 16:00:00 PDT) Shipping costs: To United States -- US $10.00 UPS Standard United States Service to United States (more services) Ships to: Canada, United States Item location: Spruce Grove, Alberta, Canada History: 14 bids High bidder: t***t( 159) You can also: Bid with Bid Assistant Get SMS or IM alerts | Email to a friend Listing and payment details: HideShow Starting time: Sep-05-08 16:00:00 PDT Starting bid: US $3.00 Duration: 5-day listing Payment methods: PayPal (preferred) See details

[Mega]

Re: Thesis change time? Gold approaching $760

I guess we see who has "Brass balls"..........its not too bad for me as i paid for it using £...........which is down 20% ish.
Mike

[c1ue]

Re: Thesis change time? Gold approaching $760

I don't have a specific trading strategy for PMs - but I will note this:

while the US MUST inflate its way out of its debt, this doesn't have to happen today.

Or tomorrow.

Or even next year.

I have historically ALWAYS been right on the general sequence of events (thus far) but my timing has also almost always been early.

Buying into Internet in 1999 and selling at the end of 2000.

Buying bank stocks in the Latin American default years and selling in Q3 2007.

Buying AMD at $5 in 1996 and selling in 2001. Shorting AMD in 2001 and getting killed (too short duration options) in 2002.

Buying tech sector in 2003, selling everything in 2006.

Shorting GOOG in Q3 2007, covering in Q1 2008.

Thus my impulse to buy gold at present is not a positive indicator ;)