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Fun with Kitco: GOLD SETS A NEW RECORD!!!
wayneherndon
Posts: 2,357 ✭✭✭
9/14/07 Update: With todays (9/14/07) London PM Fix again closing above $700 gold has now closed above $700 for six consecutive trading days the longest ever above $700. I'll continue updating the daily closes for awhile.
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With gold surpassing $700 again, I thought it would be fun to explore the past instances this has happened. Even though gold closed at $850 an once one day back in 1980, gold's time above $700 has been very infrequent and never lasted long. Will this time be different? Using Kitco history, I found the following:
Before last Friday (9/7/07), gold had closed over $700 only thirteen times.
The longest period of time where gold closed above $700 is one week (five trading days). In addition to the 5-day streak, there was a 3-day streak, a 2-day streak and three 1-day-only events. With today's close above $700, gold has now been above $700 at closing for a record 6 days.
The data points for those that are interested:
1980
1/16/80 $760.00
1/17/80 $750.00
1/18/80 $835.00
1/21/80 $850.00
1/22/80 $737.50
~
1/24/80 $717.00
~
2/6/80 $709.00
~
2/11/80 $710.50
~
9/22/80 $710.00
9/23/80 $711.00
9/24/80 $710.50
~
2006
5/11/06 $715.50
5/12/06 $725.00
~
2007
9/7/07 $701.00
9/10/07 $703.50
9/11/07 $704.15
9/12/07 $706.00
9/13/07 $704.50
9/14/07 $716.35
9/17/07 $719.00
9/18/07 $714.75
9/19/07 $725.15
9/20/07 $734.50
In mid-January 1980, the first time gold crossed the $700 level was it's longest stint above (5 days). In the three weeks that followed, there were three more one-day closings above $700. Gold then fell sharply, getting as low as $481.50 on March 18, 1980 but before gradually increasing and again crossing the $700 barrier for a three-day period in September 1980. Then followed dry spell that lasted over 25 years during which time gold closed as low as $252.80 on July 20, 1999 before finally peaking above the $700 level again in May 2006. The last few months of that rise were particulary steep and gold corrected during the balance of 2006 and early 2007 before finally returning to the $700 levels again in September 2007.
WH
------------------------------------
With gold surpassing $700 again, I thought it would be fun to explore the past instances this has happened. Even though gold closed at $850 an once one day back in 1980, gold's time above $700 has been very infrequent and never lasted long. Will this time be different? Using Kitco history, I found the following:
Before last Friday (9/7/07), gold had closed over $700 only thirteen times.
The longest period of time where gold closed above $700 is one week (five trading days). In addition to the 5-day streak, there was a 3-day streak, a 2-day streak and three 1-day-only events. With today's close above $700, gold has now been above $700 at closing for a record 6 days.
The data points for those that are interested:
1980
1/16/80 $760.00
1/17/80 $750.00
1/18/80 $835.00
1/21/80 $850.00
1/22/80 $737.50
~
1/24/80 $717.00
~
2/6/80 $709.00
~
2/11/80 $710.50
~
9/22/80 $710.00
9/23/80 $711.00
9/24/80 $710.50
~
2006
5/11/06 $715.50
5/12/06 $725.00
~
2007
9/7/07 $701.00
9/10/07 $703.50
9/11/07 $704.15
9/12/07 $706.00
9/13/07 $704.50
9/14/07 $716.35
9/17/07 $719.00
9/18/07 $714.75
9/19/07 $725.15
9/20/07 $734.50
In mid-January 1980, the first time gold crossed the $700 level was it's longest stint above (5 days). In the three weeks that followed, there were three more one-day closings above $700. Gold then fell sharply, getting as low as $481.50 on March 18, 1980 but before gradually increasing and again crossing the $700 barrier for a three-day period in September 1980. Then followed dry spell that lasted over 25 years during which time gold closed as low as $252.80 on July 20, 1999 before finally peaking above the $700 level again in May 2006. The last few months of that rise were particulary steep and gold corrected during the balance of 2006 and early 2007 before finally returning to the $700 levels again in September 2007.
WH
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Comments
It must be nice to be retired.
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
San Diego, CA
I knew it!!
i sold my gold last week
still did OK since I got in around $420.00
Its funny how everybody runs into buy gold when it hits a high, and the same folks come running to sell when the bottom drops out . I wonder how the he11 these folks make any money?
jim
<< <i>Its funny how everybody runs into buy gold when it hits a high, and the same folks come running to sell when the bottom drops out . I wonder how the he11 these folks make any money?
jim >>
Not gold, but my parents bought 36 ounces of silver back in 1980 at $40 per. Then after I inherited the stash in 2001, I sold all of it at $4 per ounce, convinced that silver would never do anything again!
Steve
My Registry Sets
Note that Kitco history charts use the London PM fix and the US close was up a few dollars from that close.
WH
so basically gold is at 350 if you adjust for inflation in 1980s dollars?
i feel it is not gold going up, it is the dollar crapping.
fiat currency + lack of trust = disaster
<< <i>so basically gold is at 350 if you adjust for inflation in 1980s dollars?
i feel it is not gold going up, it is the dollar crapping.
fiat currency + lack of trust = disaster >>
Couldn't agree more on all points.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
<< <i>Note that Kitco history charts use the London PM fix and the US close was up a few dollars from that close. >>
I was wondering about that, kitko was showing $710 earlier while CNBC was showing $720, at any rate it won't take long before the mint has to raise the price on the One ounce Uncirculated Eagles, right now they are underpriced, Spot Gold + $50 monitized value puts it above sale price.
Fighting the Fight for 11 Years with the big "C" - Never Ever Give Up!
Member PCGS Open Forum board 2002 - 2006 (closed end of 2006) Current board since 2006 Successful trades with many members, over the past two decades, never a bad deal.
<< <i>
<< <i>Note that Kitco history charts use the London PM fix and the US close was up a few dollars from that close. >>
I was wondering about that, kitko was showing $710 earlier while CNBC was showing $720, at any rate it won't take long before the mint has to raise the price on the One ounce Uncirculated Eagles, right now they are underpriced, Spot Gold + $50 monitized value puts it above sale price. >>
The $720 is likely a futures contract price. Commodity traders are mostly interested in the front month contract and that is widely quoted. The London fix is a cash price, and also widely quoted. There is also a U. S. cash price.
It pained me to do so, because gold is overbought and has gone up a lot in the short term, but I bought a bit of GLD today.
WH
PS: The London PM fix is once again above $700 making this a four-day run so far. I'll update later after the US markets have closed.
what about iran, syria, israel, iraq, afghanistan, russia, etc..
not much has changed man. some people in charge died and
now others have stepped up to fill their places.
israel is hopping over borders constantly to do raids on weapon
caches going to groups of people.
we have russia and the US warming up nuclear weapons.
did you read about the nuke warhead being flown on a jet's
wing recently in the USA, over our land?
http://www.forbes.com/feeds/ap/2007/09/05/ap4086085.html
i would love to hear your answers why this happened? lol.
here is some people discussing it.
http://slashdot.org/article.pl?sid=07/09/06/0045214
news for nerds.
<< <i>I noted during my 30 minutes at a coin shop today that lots of people were coming in to buy or inquire about buying gold. Funny how that happens. Buy high, sell low? >>
Yep, a lot of people do that, acting on the twin-killers of investment performance: fear and greed. Fear makes them want to sell out of panic when the blood is already in the streets. Greed makes them want to buy after the good buying opportunities have already left the station.
As Warren Buffett says, "be fearful when people are greedy, and be greedy when people are fearful." In other words, prepare to "buy low" when everyone else is selling the stuff and "sell high" when everyone else wants it. If you're going to dabble in "trading" securities and commodities for a profit, that's what you need to be able to do.
<< <i>
<< <i>I noted during my 30 minutes at a coin shop today that lots of people were coming in to buy or inquire about buying gold. Funny how that happens. Buy high, sell low? >>
Yep, a lot of people do that, acting on the twin-killers of investment performance: fear and greed. Fear makes them want to sell out of panic when the blood is already in the streets. Greed makes them want to buy after the good buying opportunities have already left the station.
As Warren Buffett says, "be fearful when people are greedy, and be greedy when people are fearful." In other words, prepare to "buy low" when everyone else is selling the stuff and "sell high" when everyone else wants it. If you're going to dabble in "trading" securities and commodities for a profit, that's what you need to be able to do. >>
Let me remind readers that commodities are a different animal from stocks. Many of the large fortunes in commodities have been made by trend followers. Many trend followers buy high and sell higher, buying when most folks think it is much too late in the move to buy. In stocks, momentum traders follow similar patterns.
As I already wrote, it pained me to do so, but I bought some GLD yesterday. Many believe it is too late to buy, and some even thought $700 would prove to be the top of this move. If this is the Real McCoy, a secular bull market, some on this board will be selling into gold market strength at close to the worst time in terms of giving up percentage gains per annum. Only in hindsight can a person tell if this is the real bull, or another fake out. That said, there are a lot of ducks in a row, that point to the possibility of a huge up move in the price of gold.
/edit to add: one more point, the reason that so many buy at the top and sell at the bottom is that is how markets work. Demand is greatest at the top, lowest at the bottom. More buyers create a market top, more sellers create the bottom. There is no getting around the basics of supply, demand and markets.
WH
I don't think anyone knows how much more the dollar will fall or how deep the recession may be if we have one.
I don't believe anyone "knows" one way or the other. Of course, lots of folks have an opinion on the matter and some are pretty vocal in expressing their thoughts. In my case, I don't really have an opinion but do find the current situation with gold intriguing enough to check it regularly.
WH
Right now, ALL the Markets are pricing in with certainty that the USA will put Iran back to the stone age within a month or so. What's Iran gonna do? Send in it's Reveolutionary Guard Operatives into Iraq with IPE's and wage war on us?...oh...that's right..they are already! Anyway, Iran imports more than 40 percent of its gasoline and diesel needs, so it's back to carts & donkeys when it happens.
BTW, anyone note that Israel just took out a Syrian/Iranian "Joint Venture" Facility a few days ago near the Iraq Border, half way to Iran? The operation involved ground forces and that the aerial strike left "a great hole in the desert." Although it did not name a specific source, the CNN network cited "US government officials." The 5 jets have been identified by the Turkish authorities as IAF F15Is, Israel's long-range bomber, after (Drop Tanks) fuel tanks were found in Turkish territory.
So much for Syria's Air Force & Air Defenses.
Look how far they went on the map, below! I love Israel, despite current leadership there (weak), they always have the balls to do what it takes to an enemy.
While it Just Drives the Surrender Monkeys in the D-Party Crazy!
The Markets never flinched.
Bottom line; when ever a war starts, it is good for the markets.
Ren
Wheat at $8.00! Who would have thought it? Farmland $5,000 per acre and climbing? And, The government says "No inflation".
Wayne, it is fun to discuss an speculate and I wouldn't bet either way at this point. Having traded commodities, one thingh I did learn was that there is nothing that is ever too high or too low. That thought has gotten me into trouble a few times.
Nukes flying on bombers is no big deal. Dad did that all the time... but we could pretend it is a big deal to advance a political idiotology.
Unintended flying of nukes on bombers is a big deal. It's good to know where all nukes are at all times.
WH
Russ, NCNE
San Diego, CA
The Fed is likely to cut rates. That should fuel the economy and counteract the drag mortgage foreclosures and high oil have on the economy. It seems sure to increase inflation.
I have some gold and I'm not selling until it gets around $900/oz. I predict this time we will set records in terms of days above $700. Thanks for the info Wayne!
Edited to add: I reread Wyane's update and I guess if you buy at the top it isn't a good hedge against inflation. Well I hope my timing is good.
Experience the World through Numismatics...it's more than you can imagine.
roadrunner
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>I have often heard gold described as a "hedge against inflation". I wonder how true that really is. It seems to me that it just depends on when you buy and sell. A poor sap who bought gold at the peak in 1980 would have lost 2/3 of his spending power between then and today. In that case not a very good hedge against the inflation that followed. On the other hand a genius that bought gold at its bottom in 1999 would have over twice the purchasing power today ($252.80 in 1999 adjusted for inflation is $316.07 today). In that case, gold turned out to be much, much more than a hedge against inflation.
WH >>
The most widely quoted buying power example I have heard is that of a fine man's suit of clothes. A $20 gold piece could buy one back in 1900 and could just about buy one today. Though when gold was in its doldrums, it was more like two of them for the nice suit, one gold piece could only get the cheaper suit. The really nice suits are like five $20 gold coins now (at melt value).
I have always seen gold as insurance against end-of-the-world financial scenarios for the long term. It is only with this pop above $700 that I see a good risk/reward for the short and intermediate term. Again, only time will tell how it will play out, but the odds look better than they have in a long time (even at lower gold prices).
US Treasuries are the security blanket.
the hedge?? I dont think there is one in this complex international economy any more.
I think the price of gold is a reverse indicator of the US dollar... as the dollar falls, gold (which is priced in dollars) goes up.
gold also fluctuates with supply and demand.
once the main stream media pick up on the rise in gold there will be a surge in demand and prices... but as we in the business say... "when Time magazine has the bull on the front page, it's all over."
Wayne Herndon, thanks for the chart. If you follow technical analysis, the actual or real break out for gold was in mid 2005. look at the "cup and handle" formation of the price movement. after the "handle" turns upwards the bull run was on.
in 2001, gold was just starting to build a "base" and the actual start of the break out didnt come until gold exceeded $400-or so an ounce and stayed there.
also there is moderate technical support for gold around $600. if the trend line comes back to $600 it would be a good price level for additional buying.
if gold should break through $850, then gold reaching 50% higher is not out of the question... that means gold reaching $1,275.
only if gold falls below $575 is there a risk of a "crash" and there is long term support at about $450.
and don't try to link price changes now with "fundamental news." every day you can find fundamental news to make gold go up, or make gold go down. follow the "technical trend" of the price.
fundamental news all comes out in the "trend" anyway.
cheers, Alan Mendelson
BestDealsTVshow.com
www.AlanBestBuys.com
www.VegasBestBuys.com
US Treasuries are the security blanket.
the hedge?? I dont think there is one in this complex international economy any more.
I think the price of gold is a reverse indicator of the US dollar... as the dollar falls, gold (which is priced in dollars) goes up.
gold also fluctuates with supply and demand.
Gold hasn't been a good hedge because of various factors: a constant pro-stock market environment where the market was almost rigged to go up long term, CB gold sales, fudging CPI stats since 1983 when home "rents" were substituted for home prices, a 401K in everyone's
pot, easier credit, derivatives and hedge fund growth, gold miners shorting and hedging their own production, jacking M3 by 13X over the past 25 years (this is not inflationary?), etc. In this total package with the FED and govt backing it, it's no surprise that gold has not performed. And this with gold in deficit production to boot.
Why invest in gold when you can jack the derivatives market from $10 Trillion to $450 Trillion in such a short period? It was a sure thing until people asked to see under the hood.
A lot of the above rigging is unravelling today. Gold will become a sound hedge and move independent of the dollar. The powers to be would love that the masses think there is no gold-hedge link anymore. It is changing. Our exported inflation is starting to come back to the mainland.
roadrunner
Tyler
<< <i>gold is no longer the "hedge" it once was, and it is not a security blanket either.
US Treasuries are the security blanket.
the hedge?? I dont think there is one in this complex international economy any more.
I think the price of gold is a reverse indicator of the US dollar... as the dollar falls, gold (which is priced in dollars) goes up.
gold also fluctuates with supply and demand.
once the main stream media pick up on the rise in gold there will be a surge in demand and prices... but as we in the business say... "when Time magazine has the bull on the front page, it's all over."
Wayne Herndon, thanks for the chart. If you follow technical analysis, the actual or real break out for gold was in mid 2005. look at the "cup and handle" formation of the price movement. after the "handle" turns upwards the bull run was on.
...
cheers, Alan Mendelson
BestDealsTVshow.com >>
Gold may or may not be a hedge. Gold hasn't been of much comfort during this subprime scramble. That said, gold remains a form of insurance that U. S. Treasuries can never be, given certain economic scenarios such as hyper inflation in the U. S. or a loss of confidence in the U. S. government. Americans haven't ever experienced these scenarios, so many believe they can never happen here. Let's hope that these scenarios never play out, but never is a long time. I continue to suggest a 2% to 3% exposure to gold for anyone with significant net worth. Cheap insurance that one hopes they will never have to rely on. Gold newsletters will suggest a much higher percentage, however, those that choose that route need to know what they are doing. A high percentage is not for average investors or average collectors.
Many believe that American popular demand for gold has only been a minor factor in the current bull run and will continue to be a minor factor. The potentially explosive demand is from the newly rich upper classes in India and China.
I look at a lot of charts. The two-year GLD chart is a text book base and break out. A chart that some might pick to use in a text book on technical analysis if GLD makes a big run from here. Whether it will prove to be another fake out or the real thing, time will tell.
WH
<< <i> This one, has just barely broken $700 and the closing have all been within a $5 range just over $700.
WH >>
This whole topic, closings above 700.00, has been very interesting. I'm glad you brought my attention to it.
Not only am I in the cheap seats, I wearing a cheap suit...
Experience the World through Numismatics...it's more than you can imagine.
The fed will not lower rates
The fed will not inflate to end the current financial crisis
The governments of the world will stop creating money at a 10+annual rate
Congress will stop using government money to buy the votes of the poor
The govenments of the world will stop spending more than they take in
Gold will be found above ground in huge amounts as the polar icecaps melt
Little green men will appear and show us how to make gold from sand cheaply
Otherwise I believe the price will continue to rise as the current manipulations unravel
What is true is that it doesn't appear to rise against a stagnant CPI (which by its very "well-planned" construction was resistant to rising). But those buying gold all along don't believe in fairy tales numbers from the BLS of 3% inflation against a back drop where most major nations are increasing money stocks at 12-52% yoy.
There have been numerous stretches in the past several years where gold rose with a rising dollar for weeks or months at a time. A tight link from the dollar gold is not always the case.
I've been buying gold since 2001 and certainly do look upon it as a very effective inflation and dollar hedge. I don't give 2 squats about what happened from 1980-2001 as I didn't own any significant bullion gold or generic $20's during that period. But I care now esp since that for the past 6 yrs gold and the CRB have outperformed all the stock indicies...by a lot...and will probably outperform them for several years to come. Get used to it. You only see this once every 15-25 years.
Gold hasn't been of much comfort during this subprime scramble
It seems to be working to me. Gold bullion is up 10% and many generic gold coins are up 10-20% in this same period. Gold stocks have also risen 10-20% as well over the past couple of months.
If this is not good performance during the subprime fiasco...well give me more of it as I can take the abuse.
Just remember, there are no true investments any more, it's just one big giant game of roullette that everyone is playing.
roadrunner
Back in 1982 I cut out an article a put it in an investment folder which I still have. The article stated that deflationary and inflationary cycles run around 18-23 years on average and have a very good track record. We began the last deflationary cycle back in the early 1980's when gold and silver peaked and interestest rates were almost 20%. Fast forward 18-23 years, mid-2000's, and we are entering a period of prolonged inflation. We seem to be at least 5 years into it. So, the question is, how high will precious metals get at the end of this cycle?
Ren
Gold is UP because it is denominated in DOLLARS, as is OIL. IF the dollar keeps falling, gold and oil will keep rising. END OF STORY.
For example: lets just say 1 oz of gold cost 500 euros and that doesn't change.
Lets also say 1 oz of gold cost $500 dollars. Thus $1 = 1 euros.
Lets say the dollar gets cut in half. So $2 = 1 euro. What is the price of Gold ???
Now 1 euro still buys 1 oz of Gold. But gold is denominated in dollars, so you have to convert your 1 euro to $2 and your 1 oz of Gold cost $1000 and ounce.
When your money (dollars) are losing value, it 'appears' that gold is going up, but it is NOT, because it is still only worth 500 euros.
Look at it this way. We've increased the money supply by 13X since around 1982. Stocks have generally increased around 15X in that same period......surprise...they are almost identical. One created the other. Yet the govt says we have only had a 2X to 3X increase in inflation in that same period (while college costs for example are up some 8-10X as well). And against this backdrop gold is up around 1.2X since 1982 and around 0.8X since 1980. What's wrong with this picture???
Metals will go far higher than 99% of the people expect. No different than how high the DOW has gone up since 1982. Had you asked people back them about a 10,000+ DOW what would have been their reaction? Answer: they would have laughed at you in 1982 and in 1987 at the hint of 10,000 DOW.
For now, I figure gold will go to over $1000 and under $2000.
Anything after that is too hard to predict. One estimate is 13X what gold was in 1980-1982 (>$5000). And that would tend to bring the DOW:Gold ratio back to 1:1 which historically is where it has headed to during full blow outs. For now, let's just get back to 2X or 3X the 1982 pricing which is frankly not even at the lowly govt reported inflation rates......to me that is the minimum level gold will reach ($1000-$1500). Like all manias induced by FED manipulations, gold's ultimate destination will probably surprise the majority of the people.
Gold has risen against all the major currencies starting several years back. The monetary debasement is world-wide. It's not just about the dollar. Gold will break away from the dollar at some point once again...at that point it will have become a full-fledged currency, at least for a short period.
roadrunner
<< <i>how high will precious metals get at the end of this cycle? >>
I am more optimistic than Roadrunner. I see $2000 gold before the top is in. Of course, I have been wrong before and may be wrong again. The other factor is how much buying power that $2000 might have, if and when it gets there.
Imagine if homes today still cost the same as they did in 1982?
That is, the Central Banks had huge portfolios of homes that they would dump on the market at times to keep the price down for 25 years. And they would place unfavorable tax treatment on home ownership as well as to constantly denigrate it in the press as a poor investment vehicle. And in the process they backed Tulips (or derivatives) as the long term investment vehicle of choice and applied favorable tax treatment to them.
roadrunner