Gold Discussion

Not saying I disagree, but on the EUR forum you post the same completely useless messages. Care to explain your viewpoint instead of just posting a directional bias?

What do u think guys?
1006$/ounce.
What are the chances to beat 1100$ - and in what time?

its really volatile im flat in gold really don't have any signals with candlesticks

Previous highs rejected with force

My daily chart is posted here

Once more price of Gold showed that it wants to go lower. I know I had a great time shorting spikes, and I hope you did the same!

My daily chart is posted here

Hi Hell, shame about your site closing, though I can understand why. Will you keep posting daily updates here? Would be nice.

I am expecting gold to go down in the near term

It's active again, but no update this evening as I'm tired and want to go to sleep. I'll post a chart in a few hours.

A quick 15 min nap later

Daily chart posted here

Derivatives Collapse and the China Gold and Silver Markets


(BobChapman) – In 2009, China opened up various exchanges for investment in both gold and silver to the Chinese public, which previously was not allowed to invest in gold and silver. The opening of silver exchanges to the Chinese public is the most recent development and was accompanied by a ban on silver exports. The Chinese government is actively touting both gold and silver as an investment to the Chinese public, and with good reason.

Bob Chapman
Infowars
September 10, 2009

The yuan, like the dollar and virtually all other paper currencies, with the exception of the euro, are one hundred percent fiat currencies backed by absolutely nothing but government promises which aren’t worth the powder to blow them to hell. Even the euro’s gold backing is pathetic at best. Initially it was a respectable 15%, but the backing is probably now about half of that due to Washington Agreement gold sales and surreptitious gold leasing.
http://freespeech.vo.llnwd.net/o25/p...s/onepixel.gif

http://www.infowars.com/images/gold-silver.jpg


Chinese government officials are now attempting to protect themselves by dumping large portions of their dollar denominated reserves for gold and silver.

The Chinese government knows that if they do not allow the public to protect their new wealth with gold and silver, a decline in the yuan due to hyperinflation caused by massive government stimulus and an ongoing bailout and subsidization of mass failure in their banking and corporate sectors due to declining exports and trillions of dollars worth of spurious loans undergoing increasing rates of default, loans which often were given to Chinese communist party members, could very well lead to revolution. Chinese government officials are now attempting to protect themselves by dumping large portions of their dollar denominated reserves for gold and silver, as well as for commodities such as copper and oil, and they want the Chinese public to be able to do the same with gold and silver, for maximum possible protection – and, more importantly, for avoidance of revolution. We believe that the Chinese government has acted far too late, but it’s better than doing nothing. We also applaud their attempt to protect the wealth of their people, even though it is self-serving.

China, Bernanke, and the price of gold

By Ambrose Evans-Pritchard Last updated: September 7th, 2009

China has issued what amounts to the “Beijing Put” on gold. You can make a lot of money, but you really can’t lose.

I happened to see quite a bit of Cheng Siwei at the Ambrosetti Workshop, a gathering of politicians and global strategists at Lake Como, including a dinner at Villa d’Este last night at which he listened very attentively as a number of American guests tore President Obama’s economic and health policy to shreds.

Mr Cheng was until recently Vice-Chairman of the Communist Party’s Standing Committee, and is now a sort of economic ambassador for China around the world — a charming man, by the way, who left Hong Kong for mainland China in 1950 at the age of 16, as young idealist eager to serve the revolution. Sixty years later, he calls himself simply “a survivior”.

What he said about US monetary policy and gold – this bit on the record – would appear to validate the long-held belief of gold bugs that China has fundamentally lost confidence in the US dollar and is going to shift to a partial gold standard through reserve accumulation.

He played down other metals such as copper, saying that they could not double as a proxy currency or store of wealth.

“Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not stimulate the market,” he said.

In other words, China is buying the dips, and will continue to do so as a systematic policy. His comment captures exactly what observation of gold price action suggests is happening. Every time it looks as if the bullion market is going to buckle, some big force steps in from the unknown.

Investors long-suspected that it was China. We later discovered that Beijing had in fact doubled its gold reserves to 1054 tonnes. Fait accompli first. Announcement long after.

Cheers, letting someone else use their money to test it out sounds wise.

And wise it was indeed

My weekly update is posted on my blog

Canary in the Coal Mine

by Peter Schiff

September 12, 2009

Like a battering ram in a medieval siege, gold keeps hammering away at the gate. For the third time in less than twelve months, the yellow metal is once again crashing into the $1,000 per ounce level. As of press time, it looks like gold will close above that level today and will set a new record in the process. Even if the breach is fleeting, who can doubt that it will mount another assault soon? In the meantime, there is no shortage of market analysts who are not buying gold while questioning the motives of those who are. Although they offer a variety of strained reasons, they nearly all agree that it has nothing to do with inflation, which is nearly universally considered dead and buried. As a self-confessed gold bug, I can assure all that inflation is the only reason I buy gold. And recently, I'm buying a lot.

When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold.

Some believe that gold investors are primarily motivated by fear. It is often assumed that gold is the one asset class that holds its value when all other asset classes are falling due to market uncertainty. But this explanation brings us right back to inflation. When economies move into recession, there is always political pressure for governments to intervene. Their one tool is the printing press.

When governments act to prop up sagging markets, or bail out investors or depositors of failed institutions, they create inflation (print money) to pay for it. This, in effect, transfers capital from prudent investors to speculators. At the same time, it pulls the rug out from under the safest vehicles of traditional investment – bonds and cash. It becomes hard for investors to protect their principal, much less grow their wealth. Some turn to gold, with its historically guaranteed ‘floor’ against losses, and others start making ever riskier investments to try to ‘beat’ the inflation rate.

Gold’s appeal as an asset of choice during times of political uncertainty, particularly during wartime, is again a function of its being a hedge against inflation. Wars are always expensive. They are also often unpopular, which makes paying for them through tax increases politically dangerous. As a result, they are almost always financed through the ‘secret tax’ of inflation. For a nation that loses a war, or suffers revolution or systemic civil conflict, there is always the chance that its currency could become worthless. While this may not be the kind of inflation that we read about in the business section, it is the ultimate form of the monetary malady – whereby a currency loses all of its purchasing power.

Whenever the price of gold rises sharply, I always take it as an early warning sign that inflation expectations are rising. If those expectations are not met, its price will fall. If the market is correct, gold will maintain its gains. And if the inflation continues to intensify, so too will gold’s rise. Most analysts, however, simply look at the dubious CPI to determine the presence of inflation and inflation expectations. They perennially forget that prices are a lagging indicator and only a symptom of inflation, and may in fact not be rising at the moment when inflation kicks into high gear.

The anti-gold camp takes their greatest solace from the bond market, where things have been eerily quiet. They maintain that since bond yields have not risen much, inflation must not be a problem, and so the gold bugs are simply paranoid. The bond market, they tell us, is populated by ‘vigilantes’ who sound a bugle call at the first whiff of inflation. But this argument ignores the fact that central bankers themselves are the biggest bond buyers and are in effect ‘vigilantes-in-chief.’ Their outsized participation in the market has led to gross distortions. When the Fed or another central bank buys treasuries, real returns are not considered. Purchases are made for political reasons rather than investment merit, which renders meaningless the signals current bond prices are sending.

The gold-bashers also believe that reduced consumer demand due to unemployment will keep inflation pressures at bay for the foreseeable future. However, inflation will ultimately act to reduce the supply of goods much faster than unemployment reduces demand for goods, sending prices up despite lower demand. The stagflation of the 1970s is an example of such an outcome.

The bottom line is that gold is continuing its long-term bull run, and those who dismiss the message behind its rise do so at their own financial peril. When it comes to inflation, gold is the canary in the economic coal mine. Just as unseen toxins kill the canary before the miners succumb to the fumes, a spike in gold is a harbinger of reckless monetary devaluation. Our leading commentators think that since they can’t see or smell the gas, all those canaries (gold prices, commodity prices) must be dying of natural causes. Good luck to them when the toxins flood the mine.

13 Reasons for Major Gold Breakout

Jim Willie CB
Sep 11, 2009

Basically the reasons extend from the many tentacles and ramifications of the Grand Paradigm Shift in progress, the complete overturn of the USDollar global financial system. It is being turned upside down before it goes inside out, and finally fractures into a million pieces. This is an irreversible process that is already one year into the collapse process. Here are reasons according to my analysis and perceptions. They only number 13 this time:

1. PARADIGM SHIFT away from a USDollar centric world manifested as the global revolt against the USDollar in reserves management and transaction settlement, extended from bank structures

2. colossal irresponsibility of major central banks with expanded balance sheets, money creation, and credit growth, endorsing their government profligacy

3. failure of the central bank franchise model, exhibited by the ongoing credit crisis, insolvency of banks, and desperate attempt by the US Federal Reserve to serve as the global bank

4. ruined global monetary system from the complete debauchery of money itself

5. perversion of the USDollar from required USMilitary subsidy, from coerced USTreasury Bond support, and from tacit acceptance of Wall Street corruption (past bond fraud and debt rating agency collusion without prosecution)

6. proliferation of OTC derivatives over $1 quadrillion in value with no prospect of resolution, no hope of regulation, and deep corruption, but with deadly dependence

7. gradual recognition of a financial crime syndicate having taken control of the USGovt finance ministry, that involves official channels of slush funds, bond counterfeit, and narcotics money laundering

8. dishonor of financial contract law, chronic lapses in financial market integrity, and constant intervention in those financial markets

9. expectation of mammoth price inflation just over the approaching horizon, unless the central bank balance sheets inflate beyond measurement in Weimar style

10. anticipation of banking system meltdown in at least the United States and United Kingdom, likely to result in bank holidays, useful for a forced Bank Consolidation with dead banks capturing the system or for a climax Wall Street theft event

11. observation of gradual economic disintegration and the decline of global trade

12. trend toward commodity stockpiles, of which gold is the financial commodity core element and crude oil is the industrial commodity core element

13. specter of numerous pockets of armed conflict, military war, and possible nuclear events, as chaos spreads and nations desperately exploit the confusion, and react to lost sponsorship relations, if not parasite-host pacts.

CHINA DECLARES A SUBTLE FINANCIAL WAR

China made three major announcements in the first week of September, each highly disruptive, enough to add thrust to the Paradigm Shift, enough to usher in the nasty phase (see Trade War escalation). The timing of late August and early September for disruptions and onset of instability has not been a disappointment. Some are disappointed, and will remain disappointed, unless the sun does not rise at all. They will never be satisfied. China has shaken the global system in three key ways, resulting in a grand challenge to the power structure. China announced:

1. permission granted for state owned firms to selectively dishonor OTC derivative contracts by means of self-administered Stop-Losses in reneges

2. Hong Kong demands the return of its gold bullion held in custodial accounts held in London, to make its own airport vault facility (the Zurich Switzerland model)

3. Mongolian rare earth metals will no longer be exported to the West, an assault against hybrid cars, certain electronics, and military weapons (missiles).

In this apocolyptic scenario, what good is gold? What can I do with it? Maybe it retains credibility somewhat longer than paper currency, but ultimately its just dead weight.

The famous "If you can't eat it - it is useless" theory.

The advise of Jim Rogers for would be money managers

Become a farmer. The world has tens of thousands of hotshot fund managers right now. If I am correct, the financial community is not going to be a great place to be in for the next 30 years. We have many periods in history when financial people were in charge, we had many periods when people who produced real goods were in charge -- miners, farmers, etc.

The world, in my view, is changing and is shifting away from the financial types to producers of real goods, and this is going to last for several decades as it always has. This may sound strange but it always happens this way. Ten years from now, it may be farmers who will drive the Lamborghinis and the stock brokers will drive tractors or taxis at best.

But I'll stick to exploiting price movements for now. I will buy gold when my charts tell me to, just like I will sell it

Fool, you're correct if you are thinking strictly in the short term. But gold has always been the preferred medium for long term storage of value. Think post-apocolypse. Think carry trade.

@ Hell, I wouldn't want to argue with J. Rogers.

Buying and selling electronic paper is cool, (we're all doing it to one degree or another) but if and when the shit hits the fan, be sure you have at least a small stash of physical. You know, just in case.

Hell7 I have been wanting to pop into this thread - I am catching gold fever in a big way. But I did not imagine it would be with this kind of intro...

http://www.earthtoolsbcs.com/html/bcs_implements.html

Anyway if I make some extra cash trading XAU I will get one of these (see link). The biggest one they make with a 12hp diesel engine is ideal for the kind of raised-bed gardening I do. I have a 10 acre place near Seattle & am slowly bringing most of it into production of some kind. I could grow about 1/2-acre of sunflowers every year to get 50-gal of usable oil & the diesel engine in the walk-behind and in the other diesel Kubota tractor I have could run straight off the VO or I could make biodiesel. I already have one of these tillers but its old & has a 10hp Acme gas engine - got to get off the fossil fuels. New model 853 with a nice rotary plow or spader would be about $6k.

If that gold trade keeps paying off (lets say another $40k or so) I will put up about a 4-5kW photovoltaic plant on the barn roof and maybe a 2.5kW windmill and get off the grid entirely. Then, the Tesla Roadster would be a nice Christmas present, if anyone is listening. I have been good...pretty much....

According to the WSJ:

Gold is still off $1,280.09 from its inflation-adjusted record close of $2,284.99 in July dollars, hit in January 1980.

I guess that means it still has a long ways to run, but probably only if inflation goes back to double digits, which I don't see happening.