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how high will it go?
MsMorrisine
Posts: 32,219 ✭✭✭✭✭
dollar index us up big again, then it turned down a not insignificant amount.
gold took off with strong volume at about 1pm est.
Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
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nevermind
1229.6
Should be interesting tomorrow.... Cheers, RickO
Index is strictly a weighted geometric mean of the dollar's value relative only to the following currencies:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight
The constantly changing strength/weakness of these six currencies determines the direction of the dollar index. For some time now dollar index has been a good inverse indicator for gold. Index up. . . dollar down. Note that China's Yaun is not in the dollar index formula, but make no mistake China's economic policy will play heavily in the value of all of the dollar index components.
Keep in mind that issuers of a currency constantly manipulate the value of their currency, normally devaluing it by either increasing it's quantity (via printing or public debt purchasing) or lowering interest rates. . . something the US has been doing to its dollar since 2008. While a strong currency at home is desirable, there are many reasons for a country to want a lower valued currency on the international trade scene and for those reasons we are currently caught up in a "currency war" with our international trade partners. Trade/Tariff wars will only add to the volatility of the currency war and the dollar index.
The White House has publicly decried current Fed policy to raise rates and given the current status of the "race to the bottom" among the world's currency issuers it will be difficult for the Fed to justify both its desire to raise rates and its desire to reverse its past increases in the money supply (QE). I'm putting my money on an eventual abrupt reversal of current Fed policy that only strengthens the currency in the face of intentional worldwide currency weakening. At some point the US will have to play along and this will bode very well (as it has in the past) for precious metals.
While the die hard Fed policy supporters on this forum attempt to debunk Jim Rickards, I find him to be a very insightful geopolitical economist on the dollar subject.
Give Me Liberty or Give Me Debt
We will see substantial gains when the market opens. All green arrows.
Really? I see nothing but red, but that's been the norm for a while. The big "money guys" will need to return to the PM markets before we see a prolonged "green" again.
So far... PM's heading down... not precipitously, but down..... a long day ahead. Cheers, RickO
Yep...all reds
It already went as high as I'll ever see it again, in my lifetime (most likely). And, so many bears missed their (one) chance in a generation.
The case for gold is not about price.
"It is about value. Gold’s price is not an indication of its value. The value of gold is constant and does not change. Its price is a reflection of the value of the U.S. dollar. Nothing more. Nothing less. Nothing else.
In 1971, the cost for one loaf of bread was $.24. The average cost for one gallon of gasoline was $.36. With gold at $42.00 per ounce, you could purchase one hundred seventy-five loaves of bread or one hundred seventeen gallons of gasoline (or some combination of the two).
Forty years later, in 2011, the average cost for one loaf of bread was $2.42; and one gallon of gasoline was priced at $3.52. Hence, again, using only one ounce of gold (this time priced at $1900.00 per ounce) you could purchase seven hundred eighty-five loaves of bread or five hundred thirty-nine gallons of gasoline."
Give Me Liberty or Give Me Debt
but with today's price $1,225 & it's been in that price range for a while:
gas at $3 a gallon= 408 gallons
bread @ $.99 - $4.00 a loaf( average price $2.50)= 490 loaves.
So I can't subscribe to your assessment in your first paragraph.
After all the changes on the board members and how price of gold is set, especially letting china in (non voting rights for now) no longer a correlation. It is thought as being a safe haven and for now, traders believe they have enough movement be it up or down to keep assets in the stock market.
Best place to buy !
Bronze Associate member
do I put my order in the monthly bst ?
The US$ and the Triffin dilemma
Give Me Liberty or Give Me Debt
Heres a good example of relative valuation. In 1971 the relative valuation of gold was 175 loaves of bread and in 2011 it was 785 loaves of bread. Did gold offer a good relative value? Some correctly claimed no, and have been proven correct, all the while being chastised for calling out the hyperbole, fake news, mis-information and lies.
Knowledge is the enemy of fear
LoL, no gold was constant, it was the bread and the gas that went down in value so dramatically during those 40 years!
Liberty: Parent of Science & Industry
Going down.
Value is determined by currency price, the common denominator among all assets when comparing value.
Valuation compared to any other single asset simply provides a ratio. Like the GSR, a ratio does not tell us value, it only helps us understand which is over (or under) priced when compared ONLY to the other asset in the equation. While the GSR may tell us that silver is cheap compared to gold, it does not enlighten us to silver's valuation when compared to platinum.
Give Me Liberty or Give Me Debt
Actually, price inflation (or deflation) is a result in value placed on the currency being used. . . not on the asset being purchased with it.
Give Me Liberty or Give Me Debt
Heres a good example of relative valuation. In 1971 the relative valuation of gold was 175 loaves of bread and in 2011 it was 785 loaves of bread. Did gold offer a good relative value? Some correctly claimed no, and have been proven correct, all the while being chastised for calling out the hyperbole, fake news, mis-information and lies.
Not really a good comparison, since Nixon closed the "gold window" in 1971 and it does take some time for the markets to equilibrate after a major change in monetary policy. I had to look it up, but private gold ownership wasn't legal again until 1977 when Ford made a proclamation declaring it legal.
As I recall, gold started a slow climb in the early '70s and then took off in 1977 - which I consider to be part of the adjustment that had to take place.
So I consider the 1971 price to still have been a depressed price. 2011 was obviously a speculative price. The true relative value in terms of loaves of bread has to be somewhere in between, if you're not cherrypicking your data.
I knew it would happen.
So when derryb made comment about 1971 and bread and gold it was ok....but when I comment it's not? LMAO.
Knowledge is the enemy of fear
The price of real gold will follow the price of synthetic gold (futures) until one day it doesn't.
Give Me Liberty or Give Me Debt
When did futures start to trade on gold?
Knowledge is the enemy of fear
In 1971, the cost for one loaf of bread was $.24. The average cost for one gallon of gasoline was $.36. With gold at $42.00 per ounce, you could purchase one hundred seventy-five loaves of bread or one hundred seventeen gallons of gasoline (or some combination of the two).
Forty years later, in 2011, the average cost for one loaf of bread was $2.42; and one gallon of gasoline was priced at $3.52. Hence, again, using only one ounce of gold (this time priced at $1900.00 per ounce) you could purchase seven hundred eighty-five loaves of bread or five hundred thirty-nine gallons of gasoline."
Not really a good comparison, since Nixon closed the "gold window" in 1971 and it does take some time for the markets to equilibrate after a major change in monetary policy. I had to look it up, but private gold ownership wasn't legal again until 1977 when Ford made a proclamation declaring it legal.
As I recall, gold started a slow climb in the early '70s and then took off in 1977 - which I consider to be part of the adjustment that had to take place.
So I consider the 1971 price to still have been a depressed price. 2011 was obviously a speculative price. The true relative value in terms of loaves of bread has to be somewhere in between, if you're not cherrypicking your data.
Feel better now, cohodk?? derryb's point is still valid, considering the overall regression line for the POG since 1960 or so. I would conservatively use the 2018 price as my endpoint since I think the POG has settled and is being suppressed. Same conclusion, not as dramatic a comparison. No biggie.
When did futures start to trade on gold?
Had to be around 1977, since I was buying some (mini) forward contracts in 1978.
I knew it would happen.
when will it go high?
The norm has been: "when least expected."
I still have a warm spot in my heart for the Bank of England's brainfart to divest of gold.
A church group SOLD me 600 Oz of gold one day later.
Bless that church.
Time for the gold whacker to show up. . .
Give Me Liberty or Give Me Debt
I noticed as well, what is causing this?
Collector, occasional seller
I think the market selloff is causing it.
dollar index is only down .26
I hope we get a 2000 point selloff.
Good thing we talk about relative valuations around here.
Knowledge is the enemy of fear
we knew it would go up
It still has a lot if work to do seeing that it is still about the same price as 5 years ago whIle the sp500 has almost doubled and home prices are up about 50%.
But it is insurance. Lol
Knowledge is the enemy of fear
"I like green colors. "
that was humor
it's past 1:30pm gold pit close and we are still making highs for the day in gold.
cascade buying?
FOMO?
MOMO?
WTH?
check out today's platinum graph. line up from 9:30 to now and making day highs. it's over a $20 move and Platinum is up $20 for the day.
Last Week Was Just A Taste Of The Coming Gold Short Squeeze
"Gold is the only thing that’s hasn’t been bid up to bubble territory in the past few years, which makes it cheap and therefore relatively safe. Combine this undervaluation with the even more important fact that precious metals have historically been THE safe haven in times of financial and geopolitical stress, and there’s a real possibility of global capital not just trickling but pouring into this tiny market. That gold short squeeze will be one for the history books."
Give Me Liberty or Give Me Debt