A Little GLD At The Open Might Be A Good Trade

storm888

October Surprise Begins.............


Oct 26 02:20 PM US/Eastern

By ALBERT AJI

Associated Press Writer


DAMASCUS, Syria (AP) - Syria's state-run television and witnesses say U.S. military helicopters have attacked an area along the country's border with Iraq, causing casualties.
The report quoted unnamed Syrian officials and said the area is near the Syrian border town of Abu Kamal. It gave no other details on Sunday's attack.

Local residents told The Associated Press by telephone that two helicopters carrying U.S. soldiers raided the village of Hwijeh, 10 miles inside Syria's border, killing seven people and wounding five.

The U.S. military in Baghdad had no immediate comment.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

COINB0Y

Non-sense!

Better worry that when the opportunity appears and the Military is held back by the politicians.

When opportunity appears, you strike! They sent in operators from Task Force 77 on that one.

They cleaned out a rat's nest. Gold will drop ;>

roadrunner

Regardless of that military action, I liked the action in gold on Friday as it rose from the dead at $680 to close at $734.

I think Monday will be an up day as well. Though $739 offers some good resistance. But if big bank fails before then, or the FED decides to dump $10 TRILLION into the economy on Tuesday, that will be perceived as dollar positive and gold will tank.

Edited to add: I didn't realize until tonight that gold blew through $740 late Friday on the way to $750. The PPT Fire House Co. was called to the scene and got it below $740 by close of business. Now we can't have that kind of reversal right slicing through "major" resistance can we? Monday's another fight.

roadrunner

storm888

"...or the FED decides to dump $10 TRILLION into the economy on Tuesday, that will be perceived as dollar positive and gold will tank. ..."

///////////////////

Yup.

As I have been saying for years, looking at the "fundamentals" of a "failed currency"
will bankrupt gold's permabulls.

It makes ZERO sense, but it is how it is.

roadrunner

As I have been saying for years, looking at the "fundamentals" of a "failed currency" will bankrupt gold's permabulls.

One thing is for sure. It will bankrupt the currency.

Fundamentals are looking up though. How many hedge funds still have any gold left to sell? Not many I think as gold would have been the first thing they would have tossed out. I think now it's down to the IMF and other "secret" sources to keep the gold flowing out of CB vaults.

roadrunner

MoneyLA

Gold is now trading at about $735 which is just a couple of dollars from the $730 "panic point".

A bounce off the current level and a rally here would be positive.

But a rally here that fails to get gold back above the $800 is really meaningless.

The larger picture shows that gold had a rally failure at $1,000.

Gold prices could zig zag between 680 and 980 and all it would be is a flip flop.

there is no clear trend for gold now.

but if you want to trade... go at it. you will probably have many short term pops and drops over the next few months.

Deadhorse

<< <i>but if you want to trade... go at it. you will probably have many short term pops and drops over the next few months. >>





I would tend to agree with that statement...... for the short term.

Next year I do believe inflation will start to kick in and then all bets are off.

My guess is a rise in PMs as there aren't many other alternatives in an inflationary ramp up where the market remains unstable.

roadrunner

But a rally here that fails to get gold back above the $800 is really meaningless. The larger picture shows that gold had a rally failure at $1,000. Gold prices could zig zag between 680 and 980 and all it would be is a flip flop. there is no clear trend for gold now.

Why a move above $750 is meaningfull is to stem the tide of gold falling back to sub-$675....or even sub $600. Putting in a foundation at $700+ will allow for steady accumulation and a restoration of confidence. This reminds me a lot of what we went through in the summer of 2006 trying to cement a bottom in gold. A fruther glitch in stocks, banks, or geo-political event could send gold well above the $900 point again. I prefer the zig to $950 rather than the zag to $550. Tell me which is better for stock market psyche, zigs and zags between 7500 and 9500 or just a fairly steady meandering in the 8500 range??

Let's face it. The PPT is nearly out of paper gold to dump on the market. They now have to search out real gold to dump the price further and miners are reluctant to give it to them. That leaves it up to raiding the ETF or further depleting the IMF or Central Banks. I mean how much lower can they help push gold stocks considering they have already fallen 50-90% across the board? That's why $750 at this point is meaningfull. It's physical. And while there is no clear trend for gold at the moment, neither is there a trend for anything in the stock, bond, or commodity world. You place your bets and take your chances.

roadrunner

Deadhorse

<< <i>Let's face it. The PPT is nearly out of paper gold to dump on the market. They now have to search out real gold to dump the price further and miners are reluctant to give it to them. That leaves it up to raiding the ETF or further depleting the IMF or Central Banks. I mean how much lower can they help push gold stocks considering they have already fallen 50-90% across the board? That's why $750 at this point is meaningfull. It's physical. And while there is no clear trend for gold at the moment, neither is there a trend for anything in the stock, bond, or commodity world. You place your bets and take your chances.

roadrunner >>




I made my choice sevral years ago and I'm content to let it ride.

I think the upside for metals is more promising that anything else these days.

MoneyLA

raodrunnere wrote... "Why a move above $750 is meaningfull is to stem the tide of gold falling back to sub-$675....or even sub $600."

unfortunately I can't teach you about technical analysis here. but to put it briefly, a rise to 750 will put gold in a "price vacuum" without a support level. only a rise back to 800 would help give gold some support.

but frankly, gold is now a lost cause. it is going lower and lower. there might be some bounces up, but the trend is back to 650 and Im afraid to levels below that. perhaps back down to 300.

COINB0Y

PreTurb

but frankly, gold is now a lost cause. it is going lower and lower. there might be some bounces up, but the trend is back to 650 and Im afraid to levels below that. perhaps back down to 300

Now, I do think in this deflationary environment PM's will fall, but I have a hard time coming up with actual world circumstances that will result in gold dropping to $300.

MoneyLA (and anyone else), putting technical analysis aside, what situation could the world possibly find itself in that gold would approach $300?

roadrunner

but frankly, gold is now a lost cause. it is going lower and lower. there might be some bounces up, but the trend is back to 650 and Im afraid to levels below that. perhaps back down to 300.

When I see forecasts such as this, it only makes it clearer to me how wrong the "majority" is and what the future holds.
The deflationist/depressionist camps will be proven incorrect soon enough. The FED pushes the so-called deflationist agenda so that they can continue to pump away at M2/M3 with the people's good graces.

No need to teach anyone here TA. In this volatile environment there is no way to employ TA. You can't chart fear, but be my guest if you want to try.

roadrunner

asin

WOW!!!!! If gold drops to $300.00 a OZ. WILL the cost of a car drop to $2000.00 Dollars and will dow drop to 2000. It's just not in the cards.
ALAN @ MoneyLA

roadrunner

In 1970 the FED and other US financial leaders said that gold was headed to under $10/oz. That was the popular belief at the time....and obviously totally wrong.

roadrunner

fc

<< <i>WOW!!!!! If gold drops to $300.00 a OZ. WILL the cost of a car drop to $2000.00 Dollars and will dow drop to 2000. It's just not in the cards.
ALAN @ MoneyLA >>



gold was at 300 before in recent times and a car cost more then 2000 and the dow was higher then 2000.

so gold and the cost of goods and the dow can have pretty strange relationships for certain time frames.
will it happen again? i don't know. just as good as chance as gold going to 1600 if you ask me.

secondrepublic

To the extent history provides any guide, the critical question is -- are we more similar to 1976 or 1980?

Gold actually experienced a big run up in the early 1970s after Nixon closed the gold window. The closing prices end of year went from $44.60 in 1971; to $63.84 in 1972; to $106.48 in 1973, and all the way up to $183.77 in 1974. On a percentage basis, that's more of a 400% increase. LINK to data. That's actually quite similar (and even larger than) the percentage increase from the $280 low around 1999/2000, through to the $1000 peak earlier this year 2008.

So what happened next? Gold in the mid-1970s actually stagnated and fell in price. In 1975, the price fell to $139.29, about a 25% decline from the prior year. Gold also fell somewhat in 1976, ending at $133.77. However, from there it rose -- in 1977, the first year of Jimmy Carter, it ended at $161.10. (At that point, it was still below the 1974 peak). From there, the story is well-known -- it kept going to $208.10 at the end of 1978, $459.00 at the end of 1979, etc. on to its absolute peak, in relative terms, in 1980.

Someone who bought in 1974, at the then-"peak," would have easily tripled his money by selling in 1979/1980.

Notably, even after the bubble burst in 1980, gold prices in the 1980s never really fell below $300. In other words, they never again reached the levels of the early to mid 1970s.

Is this illustrative of what may happen again? I have no idea; but I certainly think it's possible, and becoming more possible as the government continues to debase the currency. Of all the possible outcomes, I don't think gold returning to $300 is remotely likely.

DoubleEagle59

Every American should note that in other currencies, the price of Gold is actually quite high.

Gold in US dollars has dropped only because of the sudden strength of the US dollar.

So Internationally, Gold is still very strong.

Does it go lower from here OR is the 'strong' US dollar just a temporary 'blip' in the marketplace that when corrected, will rocket Gold much higher?

I don't know but it sure will get interesting.

roadrunner

Gold rising with respect to all the other world currencies other than the Yen and USDollar is indicative of gold doing what it should be doing in times like this. Once the artificial "strength" or "convenience" in the Yen and USD disipate as contracts and carry trades are settled, they'll follow the lead of the other currencies vs. gold.

roadrunner

bluelobster

No one really knows with certainty where gold price is going (except Sinclair, of course ) but technically gold hs broken support and the near term trend is down, and I also agree a rise to 750 is meaningless unless you are buying or selling there. At this juncture, it is impossible for anyone to gauge the full extent of the credit crisis as of yet and contraction of credit IS defaltionary, there is really no argument about that.(I know some would....whatever) If the world monetary authorities can get credit loosened up, this current deflation will pass sooner than later, and inflationary forces can take hold again in the US, but it usually takes some time. $300 gold seemed ludicrous as of a couple of months ago and I don't think it will trade that low...but I'm sure no one thought gold would be trading in the $200 range, some TWENTY years after it's historical runup in 1980. So it is my contention that anyone who thinks they know what will happen to PM prices, based on mainly theory and predictions of future events and not on current market fundamental and technicals, is in for a rough ride. but that's true for any market not just PMs..imho.

MoneyLA

can gold drop back to $300. of course it can.l. that is where the long term support line of the last ten years is.

my operative word is "can."

why would gold drop to $300??

deflation, recession, and momentum.

we have deflation now.
we are entering a recession.
and the momentum is for lower and lower prices.

would I "short gold?" heck no. I don't short gold. that would be "gambling" and I dont gamble with gold.

but with that said, I would not be buying gold either, because there are no indications now that gold will be moving higher, and any rallies now in gold would be "sucker rallies."

only if gold moves back above 1,000 an ounce and stays there would a new rally period for gold begin.

as Ive said here many times before, there is a wide trend for gold to bounce around in without giving us a clear sign of a new break out to a new rally. if you want to trade these fluctuations go ahead and do that. those of you who like to trade fluctuations will find ample opportunities to buy and sell and make profits.

but there is no bullish trend now for gold, and there is more downside risk.