Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
Im not going to panic over this sell off in gold. $50 an ounce is nothing when you consider that gold rose virtually unchecked for the last two weeks.
in a worst case, there is a very, very strong support line at 1,000 an ounce. and even with a retracement to 1,000 the new bull is still intact. and would not prevent the reverse head and shoulders pattern from coming through to the upside.
"The fall was triggered by concerns about the potential fallout from Dubai World's debt standstill. However, the move in gold comes in thin trade after with the U.S. Thanksgiving holiday Thursday and many traders still out on Friday."
<< <i>Nice bounce back earlier this morning though. Got back 1/2 of the $50 loss quickly.
With world equity markets down an average of 5% over the last 36 hours, I a bit surprised the Dow futures are only down 2%. >>
Good economic news came out of Europe reversing their markets losses. Asia, was already closed at that point. Our futures improved with that news. Gold is trading down in tandem with the equities market. Oil and silver are getting taken to the woodshed. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Yeah, been playing back and forth. Mostly breaking even. Been playing the emerging markets short which has been much more profitable. But really havent been in the markets much at all the last 5 weeks as it has been hunting season.
I am still going to hold to my belief that this run is marking a top that will hold for at least 18-24 months. One thing about parabolic moves is that they "borrow" return from the future. That is precisely what is happening now. FWIW--the dollar is almost exactly at the same level as in late Oct when I started this thread. Silver is virtually unchanged and the discount on 90% has increased.
I expect a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trendline.
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
<< <i>I expect a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trendline. >>
<< <i>I expect a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trendline. >>
Your guess is good as mine. In a bull market bouncing off the 200-dma are nice buying ops. I'd love to see sub-$1,000! Then shoot up and hit that "Sinclair number."
Thanks Bill. I see my original chart had disappeared so I renewed it with vendio. I plan to post a follow up chart every quarter.
I mentioned in my original post "I may be premature, ", and this was proven correct. I would have looked like a genius had I waited 4 weeks, but I think I'll still be ok come end of the year. Gold should close 2010 in the red.
All things considered gold has held up fairly well. Last time the dollar was at this level gold was $950. So it either means gold is doing its job or it has much further to fall.
I think if Gold sells off below $1,000 say to $900 or so the real bargains wont be in buying physical bullion it will be in some of the well run mining stocks as they tend to sell off much harder than the bullion does. Of course if gold sells off to $900 or less the stock market will also have had a fairly sizeable correction as more than likely the dollar will have triggered the selling in commodities and equities.
I think the only people that need to worry are those in paper PM's. Physical seems to be holding up very well. I wish I could find melt or near melt at these level here but that's not happening.
If you look at that graph, notice the number of dips, and then the climp. We are in one of those dips, and there is no doubt about it. It will shoot back up by the end of March.
The FED is predictable. Once they begin changing interest rates, they will stay on course for some time. As the economy recovers, they will begin to raise interest rate gradually over a period of time. It is not a question of if, but when. As the interest rates are increased, demand for US dollars will increase and the dollar will strengthen. Those who believe the dollar will sink into oblivion need to look at historical charts. As the dollar strengthens, the price of gold will decrease in USD. Most of the 2001-2009 gold rally was tied the US dollar decreasing to foreign currencies. The tide is about to change, it always does.
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
<< <i>Im not going to panic over this sell off in gold. $50 an ounce is nothing when you consider that gold rose virtually unchecked for the last two weeks.
in a worst case, there is a very, very strong support line at 1,000 an ounce. and even with a retracement to 1,000 the new bull is still intact. and would not prevent the reverse head and shoulders pattern from coming through to the upside. >>
It's virtually doubled in the past 5 years. Silly how people fret about short term moves, no?
"Poets are the unacknowledged legislators of the world." PBShelley
The dollar has had a long downtrend. Whether it's undervalued or not seems irrelevant. Trends reverse just because the time is up. It's been mentioned by many sources that Greece, Portugal, Spain, Italy, and Ireland are dragging down the Euro thereby bolstering the dollar's fortunes. Greece in particular only makes up a couple of percent of the EU GDP. Yet you don't see any mention of the fact that California (a US state) which makes up over 10% of US GDP is probably just as bad off as Greece. Toss in a few other states that have similar problems to California and you have a much more sizeable chunk of the US GDP showing cracks than the above Euro States do. But it does seems this dollar momentum could last for a surprisingly long period.
As the interest rates are increased, demand for US dollars will increase and the dollar will strengthen. Those who believe the dollar will sink into oblivion need to look at historical charts. As the dollar strengthens, the price of gold will decrease in USD. Most of the 2001-2009 gold rally was tied the US dollar decreasing to foreign currencies. The tide is about to change, it always does.
While the intial effect of bumping interest rates could initially push the prices of PM's down, the longer term effect is just the opposite. A quick look over the past 40 years will show quite convincingly that as interest rates rise, the price of gold rises. It's not a perfect relationship but pretty close. What actually drives the pog directly are real interest rates (quoted interest rate - true inflation rate).
What if the Fed created a trillion dollars and made it available to the big banks at 0% interest with the condition that they had to use the money to buy Treasuries in the auctions because the foreigners were no longer doing so?
If this is the case then just exactly how do rates go up?
I suppose that the interest on Treasuries could go up and the Fed could re-loan the banks the trillion, but then what about new debt.
In order to keep this ponzi scheme going, new money must come in to pay off the old debtors. Perhaps this is why the government wants your 401K money to go into Treasuries?
If the Fed has loaned the big banks a Trillion dollars why is there none to lend to business? Well because the money is being spent in the multi billion-dollar Treasury auctions each week.
Having anyone put money into gold, silver, oil etc. must be the governments worst nightmare when they need the ponzi scheme to keep going fueled by cash.
although i own a bit of physical gold bullion as insurance, I'm glad to see it stabilize in value rather than shoot higher, because of what high gold prices would mean to my family and our lifestyle in other ways (the social and economic forces (primarily, fear) that would harm us and make us need insurance. (of other kinds, too. I hate insurance, which is essentially a bet that something bad will happen. I've never filed an insurance claim in my life, never taken gov't benefit handouts of any kind, and am soo grateful that I've spent all that insurance money even though in hindsight it was a waste)
Anyway, I bought my gold in 1999-2004 period, i have no sympathy for those who bought last year or two and are whining about the decline. I say, you liked it at $1100? you should love it when it falls to $950 as the world breathes a sigh of relief that life is not ending.
although i own a bit of physical gold bullion as insurance, I'm glad to see it stabilize in value rather than shoot higher, because of what high gold prices would mean to my family and our lifestyle in other ways (the social and economic forces (primarily, fear) that would harm us and make us need insurance. (of other kinds, too. I hate insurance, which is essentially a bet that something bad will happen. I've never filed an insurance claim in my life, never taken gov't benefit handouts of any kind, and am soo grateful that I've spent all that insurance money even though in hindsight it was a waste)
Anyway, I bought my gold in 1999-2004 period, i have no sympathy for those who bought last year or two and are whining about the decline. I say, you liked it at $1100? you should love it when it falls to $950 as the world breathes a sigh of relief that life is not ending.
What do you mean I'm funny? What do you mean, you mean the way I talk? What? Funny how? What's funny about it? What did ya say? Funny how? What? You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny? I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny!
What went right with gold? Massive IH&S or cup/handle formation. Essentially the entire commodities sector including PM's have been been following a breakout of that formation. Gold lead the way.
<< <i>What do you mean I'm funny? What do you mean, you mean the way I talk? What? Funny how? What's funny about it? What did ya say? Funny how? What? You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny? I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny! >>
Baley---You sound a bit angry.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Nothing wrong with being wrong... has happened to me more than a few times. If you're not out there arguing and analyzing you'll never be wrong, but you'll never be right, either.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< <i>What do you mean I'm funny? What do you mean, you mean the way I talk? What? Funny how? What's funny about it? What did ya say? Funny how? What? You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny? I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny! >>
One of the greatest movie dialouges of all time. Classic Godfella's
Almost as good as Christopher Walken's scene with Dennis Hooper in True Romance
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I thought about this thread yesterday when I looked at a long term silver chart starting from the late 70's... and I thought to myself... this is looking like a gigantic cup'n handle... or the mother of all double tops.
Much props' Dave... I'm looking forward to your analysis.
<< <i>Nothing wrong with being wrong... has happened to me more than a few times. >>
I thought I was wrong once but I was mistaken.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Ok, finally got a chance to revist this thread. Gold was at about $1080 when I wrote this and ended 2010 at about $1400. Epic fail? Lets see.
As anyone who as followed my writings over the past few years you would know I value human emotion greatly in my trading. In fact, I value it even more than fundamentals. College professors spend their entire lifetimes trying to "build a better mousetrap" and create a "magic" formula to beat the markets. Some even win Nobel Prizes, which btw, only gives one the ability to nearly bring down the global financial system. I claim that the single most important factor in determining whether a "asset" increases or decreases in price is human emotion. It is fear, greed, apathy, embarrassment, excitement, ect that causes humans to buy or sell. And it is this buying or selling that moves prices.
So what were the factors that I saw when I started this thread.
First, there was EXTREME pessimism of the dollar. Never before had I "felt" such loathing or disgust towards the greenback. In fact, I believe I wrote in another thread that I was going to start to clear a campsite for dollar bulls, as I didnt think there was anyone else left to start building. The dollar index was about 75 at the time. Eight months later it was at 88--a 17% move higher. Even at the end of 2010, the dollar index closed over 79. So my reasoning here was correct. The dollar was higher, but had no impact on the price of gold. Most of this is due to the near collapse of the Euro and billion and billions of Euros being exchanged for gold. The fear of fiat collapse supported gold prices. So the extreme pessimism I felt toward the dollar that I thought would lead to a dollar rally was in fact correct, but there wasnt enough fear in fiat currency in general to warrant a top in gold prices. When gold does eventually top, it will probably coincide with pessimism among all currencies. Just something to watch for.
Second, I perceived incredible bullishness in gold--especially physical gold. Proof gold eagles were selling for over $1700, maybe even as high as $2000. The 70%+ premium I though was excessive, I stated so, and was called out by a large gold dealer on this board. I see APMEX has Proof Gold Eagles available for $1600. People putting proof gold in their IRAs at the the end of 2009 LOST MONEY. Also trading at huge premium was generic gold--ie, MS 63/64/65 Saints trading at about $1450, $1600, $1950 respectively. Today those same Saints are selling $1550, $1700, $1950. So a $300 rally in gold, netted physical buyers very small gains, if any at all. Gold bullion did well, but for those who only buy pre-1933, it was not a great year. In fact I think this segment underperformed US Treasury bonds. So again I was correct in sensing extreme bullishness in the form of incredible premiums being paid that caused many gold investors to actually lose money. If only they have bought paper gold instead.
Third, and this is one where I should have used more discretion, was that gold had closed higher for 9 consecutive years. In hindsight, I should have weighed the fact that in the early years of this rally, the gains in gold were quite small, and it is entirely possible that the 30%+ drop in gold in 2008 maybe have been sufficient as a "cleansing" period for the 4 fold increase from 2001 to 2008. So not good analysis here.
In summary...While spot gold prices increased 30%, many gold investors did not participate. The best trade in gold was to own paper rather than physical, which I find a bit ironic as true gold investors loathe paper. Iy you were able to buy physical gold at spot then you did well. If you were a "new" investor in gold and fell into the trap of paying huge premiums for "supposed" safety, then you did quite poorly. So overall my call for a top in gold proved wrong, but my warnings to those paying "up" for gold proved correct. Will I claim a "win"? Absolutely not. Will I claim a "loss"? Not likely.
Dave, you really should run for office Happy New Year
FYI- I made a killing betting against the dollar last year. You just had to be in the right currencies (pairs). That stupid basket is misleading.
MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Also trading at huge premium was generic gold--ie, MS 63/64/65 Saints trading at about $1450, $1600, $1950 respectively. Today those same Saints are selling $1550, $1700, $1950. So a $300 rally in gold, netted physical buyers very small gains, if any at all. Gold bullion did well, but for those who only buy pre-1933, it was not a great year. In fact I think this segment underperformed US Treasury bonds. So again I was correct in sensing extreme bullishness in the form of incredible premiums being paid that caused many gold investors to actually lose money. If only they have bought paper gold instead.
The premiums on those Saints by the end of November 2009 were much higher than that. Approx $1800, $2100, $2500 as I recall. Saints were so badly beaten at the Philly show that year that 63/64 Saints were able to advance around 50% by the time gold hit $1226....outstripping bullion if your timing was decent. And much of that gain was available in only a few months in the 2nd half of the year. I might be wrong but I think those Proof AGE's got to around $2100-$2200 last year, priced similarly like a 64 Saint. Like anything else, timing is everything. But no question those slabbed mint state $20's have been a huge disappointment since Dec. 2009, losing much ground to bullion over the past year.
And as MJ alluded to, the USDX just compares "air" to "air." If the USDX gains strength while the Euro collapses. I don't think we're going to see a high gold price in Europe while the US price is low. Even with an ocean between us, gold trades instantly worldwide. Demand from Europe and Asia will help keep the US price of gold propped, regardless of what the fiat pairs might imply.
Comments
in a worst case, there is a very, very strong support line at 1,000 an ounce. and even with a retracement to 1,000 the new bull is still intact. and would not prevent the reverse head and shoulders pattern from coming through to the upside.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>Check out the financial news regarding Dubai. >>
Gold is tanking as we speak!
Ray
"The fall was triggered by concerns about the potential fallout from Dubai World's debt standstill. However, the move in gold comes in thin trade after with the U.S. Thanksgiving holiday Thursday and many traders still out on Friday."
Nice bounce back earlier this morning though. Got back 1/2 of the $50 loss quickly.
With world equity markets down an average of 5% over the last 36 hours, I a bit surprised the Dow futures are only down 2%.
I think this will make gold stronger-soon.
<< <i>Nice bounce back earlier this morning though. Got back 1/2 of the $50 loss quickly.
With world equity markets down an average of 5% over the last 36 hours, I a bit surprised the Dow futures are only down 2%. >>
Good economic news came out of Europe reversing their markets losses. Asia, was already closed at that point. Our futures improved with that news. Gold is trading down in tandem with the equities market. Oil and silver are getting taken to the woodshed. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>
<< <i>Check out the financial news regarding Dubai. >>
Gold is tanking as we speak!
Ray >>
Gold is at 1180 now. Tanking??
<< <i>Should be a good day for our OP trader!
Yeah, been playing back and forth. Mostly breaking even. Been playing the emerging markets short which has been much more profitable. But really havent been in the markets much at all the last 5 weeks as it has been hunting season.
I am still going to hold to my belief that this run is marking a top that will hold for at least 18-24 months. One thing about parabolic moves is that they "borrow" return from the future. That is precisely what is happening now. FWIW--the dollar is almost exactly at the same level as in late Oct when I started this thread. Silver is virtually unchanged and the discount on 90% has increased.
Knowledge is the enemy of fear
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
Will paper continue to go down? Lets see the paper printing chart please.
<< <i>I expect a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trendline. >>
Why?
<< <i>I expect a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trendline. >>
Your guess is good as mine. In a bull market bouncing off the 200-dma are nice buying ops. I'd love to see sub-$1,000! Then shoot up and hit that "Sinclair number."
Trying to figure out these movements ~ promise of higher interest rates?
apologies if this is beating a dead horse.
I mentioned in my original post "I may be premature, ", and this was proven correct. I would have looked like a genius had I waited 4 weeks, but I think I'll still be ok come end of the year. Gold should close 2010 in the red.
All things considered gold has held up fairly well. Last time the dollar was at this level gold was $950. So it either means gold is doing its job or it has much further to fall.
Knowledge is the enemy of fear
Interesting. I mean, "who'd have thunk it"?
I knew it would happen.
Have you seen the projected budget deficit and commercial real estate reset charts, per chance?
There's alot of financial smoke out there. Just sayin'
I knew it would happen.
<< <i>Im not going to panic over this sell off in gold. $50 an ounce is nothing when you consider that gold rose virtually unchecked for the last two weeks.
in a worst case, there is a very, very strong support line at 1,000 an ounce. and even with a retracement to 1,000 the new bull is still intact. and would not prevent the reverse head and shoulders pattern from coming through to the upside. >>
It's virtually doubled in the past 5 years. Silly how people fret about short term moves, no?
<< <i>BOOOO HISSSS. traitor! off with his head! >>
<< <i>CNBC, "the dollar index is at a 5-month high....."
Interesting. I mean, "who'd have thunk it"? >>
Knowledge is the enemy of fear
As the interest rates are increased, demand for US dollars will increase and the dollar will strengthen. Those who believe the dollar will sink into oblivion need to look at historical charts. As the dollar strengthens, the price of gold will decrease in USD. Most of the 2001-2009 gold rally was tied the US dollar decreasing to foreign currencies. The tide is about to change, it always does.
While the intial effect of bumping interest rates could initially push the prices of PM's down, the longer term effect is just the opposite. A quick look over the past 40 years will show quite convincingly that as interest rates rise, the price of gold rises. It's not a perfect relationship but pretty close. What actually drives the pog directly are real interest rates (quoted interest rate - true inflation rate).
roadrunner
Brian...I agree with what you stated above and think that the initial push in interest rates will indeed lower PM. It will also kill the DOW (IMHO)
Both you guys and others here offer well thought out ideas on the what where when who and why's.
I am not a lopdog if either, just an avid fan of reading this one forum on CU.
What if the Fed created a trillion dollars and made it available to the big banks at 0% interest with the condition that they had to use the money to buy Treasuries in the auctions because the foreigners were no longer doing so?
If this is the case then just exactly how do rates go up?
I suppose that the interest on Treasuries could go up and the Fed could re-loan the banks the trillion, but then what about new debt.
In order to keep this ponzi scheme going, new money must come in to pay off the old debtors. Perhaps this is why the government wants your 401K money to go into Treasuries?
If the Fed has loaned the big banks a Trillion dollars why is there none to lend to business?
Well because the money is being spent in the multi billion-dollar Treasury auctions each week.
Having anyone put money into gold, silver, oil etc. must be the governments worst nightmare when they need the ponzi scheme to keep going fueled by cash.
Enough to sting investors bad enough for them to stay away from that risky road.
ETF's to me seem to be away to have a control on PM's with out actually owning any.
All this talk of tungsten, how about the physical that is suppose to back paper gold?
although i own a bit of physical gold bullion as insurance, I'm glad to see it stabilize in value rather than shoot higher, because of what high gold prices would mean to my family and our lifestyle in other ways (the social and economic forces (primarily, fear) that would harm us and make us need insurance. (of other kinds, too. I hate insurance, which is essentially a bet that something bad will happen. I've never filed an insurance claim in my life, never taken gov't benefit handouts of any kind, and am soo grateful that I've spent all that insurance money even though in hindsight it was a waste)
Anyway, I bought my gold in 1999-2004 period, i have no sympathy for those who bought last year or two and are whining about the decline.
I say, you liked it at $1100? you should love it when it falls to $950 as the world breathes a sigh of relief that life is not ending.
"paper gold"??
oxymoron imo
Liberty: Parent of Science & Industry
Knowledge is the enemy of fear
<< <i>great call & analytical reasoning, cohodk
although i own a bit of physical gold bullion as insurance, I'm glad to see it stabilize in value rather than shoot higher, because of what high gold prices would mean to my family and our lifestyle in other ways (the social and economic forces (primarily, fear) that would harm us and make us need insurance. (of other kinds, too. I hate insurance, which is essentially a bet that something bad will happen. I've never filed an insurance claim in my life, never taken gov't benefit handouts of any kind, and am soo grateful that I've spent all that insurance money even though in hindsight it was a waste)
Anyway, I bought my gold in 1999-2004 period, i have no sympathy for those who bought last year or two and are whining about the decline.
I say, you liked it at $1100? you should love it when it falls to $950 as the world breathes a sigh of relief that life is not ending.
"paper gold"??
oxymoron imo >>
Pretty funny, in hindsight.
What do you mean, you mean the way I talk? What?
Funny how? What's funny about it?
What did ya say? Funny how?
What?
You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny?
I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny!
Liberty: Parent of Science & Industry
roadrunner
<< <i>What do you mean I'm funny?
What do you mean, you mean the way I talk? What?
Funny how? What's funny about it?
What did ya say? Funny how?
What?
You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny?
I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny! >>
Baley---You sound a bit angry.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Liberty: Parent of Science & Industry
<< <i>Oh, oh, PerryHall. He's a big boy, he knows what he said. What did ya say ProofCollection? Funny how? >>
Funny - amusing.
The only analysis needed is that you didn't listen to me!
<< <i>What do you mean I'm funny?
What do you mean, you mean the way I talk? What?
Funny how? What's funny about it?
What did ya say? Funny how?
What?
You mean, let me understand this cause, ya know maybe it's me, I'm a little f-ed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to f-n' amuse you? What do you mean funny, funny how? How am I funny?
I don't know, you said it. You said I'm funny. How the f- am I funny, what the f- is so funny about me? Tell me, tell me what's funny! >>
One of the greatest movie dialouges of all time. Classic Godfella's
Almost as good as Christopher Walken's scene with Dennis Hooper in True Romance
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I just knew you would bring this thread back.
You are the man.
I thought about this thread yesterday when I looked at a long term silver chart starting from the late 70's... and I thought to myself... this is looking like a gigantic cup'n handle... or the mother of all double tops.
Much props' Dave... I'm looking forward to your analysis.
<< <i>Nothing wrong with being wrong... has happened to me more than a few times. >>
I thought I was wrong once but I was mistaken.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
As anyone who as followed my writings over the past few years you would know I value human emotion greatly in my trading. In fact, I value it even more than fundamentals. College professors spend their entire lifetimes trying to "build a better mousetrap" and create a "magic" formula to beat the markets. Some even win Nobel Prizes, which btw, only gives one the ability to nearly bring down the global financial system. I claim that the single most important factor in determining whether a "asset" increases or decreases in price is human emotion. It is fear, greed, apathy, embarrassment, excitement, ect that causes humans to buy or sell. And it is this buying or selling that moves prices.
So what were the factors that I saw when I started this thread.
First, there was EXTREME pessimism of the dollar. Never before had I "felt" such loathing or disgust towards the greenback. In fact, I believe I wrote in another thread that I was going to start to clear a campsite for dollar bulls, as I didnt think there was anyone else left to start building. The dollar index was about 75 at the time. Eight months later it was at 88--a 17% move higher. Even at the end of 2010, the dollar index closed over 79. So my reasoning here was correct. The dollar was higher, but had no impact on the price of gold. Most of this is due to the near collapse of the Euro and billion and billions of Euros being exchanged for gold. The fear of fiat collapse supported gold prices. So the extreme pessimism I felt toward the dollar that I thought would lead to a dollar rally was in fact correct, but there wasnt enough fear in fiat currency in general to warrant a top in gold prices. When gold does eventually top, it will probably coincide with pessimism among all currencies. Just something to watch for.
Second, I perceived incredible bullishness in gold--especially physical gold. Proof gold eagles were selling for over $1700, maybe even as high as $2000. The 70%+ premium I though was excessive, I stated so, and was called out by a large gold dealer on this board. I see APMEX has Proof Gold Eagles available for $1600. People putting proof gold in their IRAs at the the end of 2009 LOST MONEY. Also trading at huge premium was generic gold--ie, MS 63/64/65 Saints trading at about $1450, $1600, $1950 respectively. Today those same Saints are selling $1550, $1700, $1950. So a $300 rally in gold, netted physical buyers very small gains, if any at all. Gold bullion did well, but for those who only buy pre-1933, it was not a great year. In fact I think this segment underperformed US Treasury bonds. So again I was correct in sensing extreme bullishness in the form of incredible premiums being paid that caused many gold investors to actually lose money. If only they have bought paper gold instead.
Third, and this is one where I should have used more discretion, was that gold had closed higher for 9 consecutive years. In hindsight, I should have weighed the fact that in the early years of this rally, the gains in gold were quite small, and it is entirely possible that the 30%+ drop in gold in 2008 maybe have been sufficient as a "cleansing" period for the 4 fold increase from 2001 to 2008. So not good analysis here.
In summary...While spot gold prices increased 30%, many gold investors did not participate. The best trade in gold was to own paper rather than physical, which I find a bit ironic as true gold investors loathe paper. Iy you were able to buy physical gold at spot then you did well. If you were a "new" investor in gold and fell into the trap of paying huge premiums for "supposed" safety, then you did quite poorly. So overall my call for a top in gold proved wrong, but my warnings to those paying "up" for gold proved correct. Will I claim a "win"? Absolutely not. Will I claim a "loss"? Not likely.
Knowledge is the enemy of fear
FYI- I made a killing betting against the dollar last year. You just had to be in the right currencies (pairs). That stupid basket is misleading.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>So I am going to go out on a limb and say that gold will close below the close of 2009, thereby 2010 will be a down year for gold. >>
<< <i>Dave, you really should run for office
FYI- I made a killing betting against the dollar last year. You just had to be in the right currencies (pairs). That stupid basket is misleading.
MJ >>
Believe me, you dont want me in a position of political power.
T'was a very good year for trading. Lets do it again in 2011.
Knowledge is the enemy of fear
I knew it would happen.
<< <i>I also use the Hari Seldon approach to investing.
I learned from Tom Bombadil.
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
The premiums on those Saints by the end of November 2009 were much higher than that. Approx $1800, $2100, $2500 as I recall. Saints were so badly beaten at the Philly show that year that 63/64 Saints were able to advance around 50% by the time gold hit $1226....outstripping bullion if your timing was decent. And much of that gain was available in only a few months in the 2nd half of the year. I might be wrong but I think those Proof AGE's got to around $2100-$2200 last year, priced similarly like a 64 Saint. Like anything else, timing is everything. But no question those slabbed mint state $20's have been a huge disappointment since Dec. 2009, losing much ground to bullion over the past year.
And as MJ alluded to, the USDX just compares "air" to "air." If the USDX gains strength while the Euro collapses. I don't think we're going to see a high gold price in Europe while the US price is low. Even with an ocean between us, gold trades instantly worldwide. Demand from Europe and Asia will help keep the US price of gold propped, regardless of what the fiat pairs might imply.
roadrunner