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XAU/USD & XAG/USD - Gold & Silver Traders Thread

  • #26,401
  • Oct 10, 2013 6:58pm Oct 10, 2013 6:58pm
Quoting SpacyTrader
{quote} It'd have to be WW3 to deprive gold of its value. As for the price- it doesn't seem to be overvalued if you look at the cost of production. It's true gold has the problem of huge inventory potentially ready to be dumped on the market. Precious metals consumed by industry like palladium, platinum and silver have an advantage in that respect.
I dont think the market outside exchanges is dumping gold now. It's only in venues like Comex that these prices can be reached. This is because of the limited access to it and the fact that in that context, size matters. IMHO industrial versatility doesn't necessarily mean that the metal will keep its value in tough economic conditions. If you are starving you probably wouldn't bother about a piece of technology containing traces of silver and the industry might be paralyzed for unsustainable costs. As a raw metal gold will be always preferred to the others. Gold is a very stable and ductile metal with many industrial uses. It's not widely used simply because of its cost.
  • #26,402
  • Oct 10, 2013 7:31pm Oct 10, 2013 7:31pm
Quoting Greener
{quote} I dont think the market outside exchanges is dumping gold now. It's only in venues like Comex that these prices can be reached. This is because of the limited access to it and the fact that in that context, size matters. IMHO industrial versatility doesn't necessarily mean that the metal will keep its value in tough economic conditions. If you are starving you probably wouldn't bother about a piece of technology containing traces of silver and the industry might be paralyzed for unsustainable costs. As a raw metal gold will be always preferred...

I don't know, hey. I'm not disagreeing but let it be said all of this discussion is speculative. I really don't think we can understand or predict Gold because we are effectively looking at a riddle via a mirror.

Gold is used in circuit boards for the ductile property you mention. That is a huge industrial application and yet I often read that "silver is an industrial metal, gold is only a store of value". Silver, I'm told by the experts, has massive (and emphasize massive) consumption because it is used in photographic film. What is that? I wonder. Arguably, an exhaust catalyst uses more platinum than a circuit board uses gold but consumables like PCs and phones and anything else with a circuit board are a real and sizeable usage. Can gold be replaced with something else? Sure. Can the petroleum engine be replaced by something else? Sure.

For me it's a case of trading the price chart. Instead of "Gold" it might as well be "fried eggs". Up or down doesn't matter - i'm in a trade for no longer than 24hrs and i'm not buying to hold, it's simply my instrument of choice (for a handful of unimportant reasons). With trading we have the opportunity to use the leverage (free money) that brokers throw at us in order to make a fortune in a relatively short span of time. I'm not saying people shouldn't improve their understanding of the metal, its history and market vectors but I see more benefit in improving my ability to analyse the chart. Fundamentals and other "important" pieces of information don't have a consistent effect on price, but the chart is what it is.
cryptocurrency everytime
  • #26,403
  • Oct 10, 2013 10:10pm Oct 10, 2013 10:10pm
Something like 90% of all Gold mined is stuck in a vault (or underneath a bed) somewhere.

And probably something like 90% of Silver is a part of some manufactured item.

It only makes sense when one costs 60 times the other.
  • #26,404
  • Oct 11, 2013 1:31am Oct 11, 2013 1:31am
im confused.

when US is not going well, do we long or short XAU USD?

can anyone teach me?
  • #26,405
  • Oct 11, 2013 1:55am Oct 11, 2013 1:55am
Quoting breaklimit
im confused. when US is not going well, do we long or short XAU USD? can anyone teach me?

hi breaklimit,

it doesn't work like that. unfortunately, don't have time to teach you but don't worry about the news and fundamentals. Trade the chart each day is what we do as traders, so my advice is to learn technical analysis:

1) Support and Resistance (supply and demand levels)
2) Stochastic, RSI and MACD indicators
3) Fibonacci levels and relationships between waves of price action

hope that helps
cryptocurrency everytime
  • #26,406
  • Oct 11, 2013 1:57am Oct 11, 2013 1:57am
Quoting venzen
{quote} hi breaklimit, it doesn't work like that. unfortunately, don't have time to teach you but don't worry about the news and fundamentals. Trade the chart each day is what we do as traders, so my advice is to learn technical analysis: 1) Support and Resistance (supply and demand levels) 2) Stochastic, RSI and MACD indicators 3) Fibonacci levels and relationships between waves of price action hope that helps

but fundamentally? if U.S is not doing well, do we long xau/usd??
  • #26,407
  • Oct 11, 2013 2:12am Oct 11, 2013 2:12am
Quoting breaklimit
{quote} but fundamentally? if U.S is not doing well, do we long xau/usd??

this is what i'm saying to you (and most traders here will agree with me) - the fundamentals are irrelevant. If fundamentals mattered (risk of US default) then Gold would have been shooting higher right now. You see? Analyse the price chart - that will tell you where PA is heading. Not every second of the day, but what you're looking for are high probability opportunities of a directional move. The list I gave you are the basic tools.
cryptocurrency everytime
  • #26,408
  • Oct 11, 2013 3:02am Oct 11, 2013 3:02am
Quoting venzen
{quote} this is what i'm saying to you (and most traders here will agree with me) - the fundamentals are irrelevant. If fundamentals mattered (risk of US default) then Gold would have been shooting higher right now. You see? Analyse the price chart - that will tell you where PA is heading. Not every second of the day, but what you're looking for are high probability opportunities of a directional move. The list I gave you are the basic tools.


i understand that is why i am confused on since the debt ceiling has been increased, it would mean that USD would appreciate, having lesser usd to purchase 1 gold. meaning short. but however, it is climbing as of now.
  • #26,409
  • Oct 11, 2013 3:27am Oct 11, 2013 3:27am
Quoting breaklimit
{quote} i understand that is why i am confused on since the debt ceiling has been increased, it would mean that USD would appreciate, having lesser usd to purchase 1 gold. meaning short. but however, it is climbing as of now.
Fundamentally, if the debt ceiling is raised it would have a -ve impact on USD. Raising the debt ceiling would imply higher national debt for the US, which would depreciate $$ value. Logically and fundamentally, this should see Gold and Silver rallying.

Having said that, not raising the debt ceiling does not mean that Gold and Silver will depreciate. I have a feeling though that big players and CBs are at this time waiting for the debt ceiling decision before pumping money to start buying gold and silver again.
Fall seven times, stand up Eight! #GGMU
  • #26,410
  • Oct 11, 2013 3:33am Oct 11, 2013 3:33am
Quoting KADC
{quote} Here's one answer: http://www.cbc.ca/news/business/hedg...tock-1.1705063 addendum: You could also look at who is buying the assets they are selling if you really think there's a deeper story here, but I'm sure it's just other members of the gold cabal.


goldfields it is..
A trade should be based on an assumption based on facts
  • #26,411
  • Oct 11, 2013 3:34am Oct 11, 2013 3:34am
Quoting SunTrader
{quote} You can do whatever. Me I'll just follow the PA where it leads.
zzz
A trade should be based on an assumption based on facts
  • #26,412
  • Oct 11, 2013 4:32am Oct 11, 2013 4:32am
Quoting venzen
{quote} this is what i'm saying to you (and most traders here will agree with me) - the fundamentals are irrelevant. If fundamentals mattered (risk of US default) then Gold would have been shooting higher right now. You see? Analyse the price chart - that will tell you where PA is heading. Not every second of the day, but what you're looking for are high probability opportunities of a directional move. The list I gave you are the basic tools.
Fundamentals matter, gold has traditionally been a "safe haven", it has always been a hedge against financial armageddon, war, etc but that this hedge ceased to work in 2012, it began to track the risky assets (like the SPX for example) last year. This calls into question the role of gold as a safe haven, cos if gold isnt a safe haven, it pretty much has no value since it has no yield and there is little industrial use for it, whatever little value it has would only come from jewelry demand, but that alone will not support prices for very long.

I think gold investors are capitulating, they are probably asking the same questions that I raised here.
"Where you want to be is always in control, never wishing, always trading.
  • #26,413
  • Oct 11, 2013 4:39am Oct 11, 2013 4:39am
Oh yea! a dive from 1800+ to 1280 looks like a capitulation.
But seems to be bottoming out. At least for the time being.
Patience is magic
  • #26,414
  • Oct 11, 2013 4:41am Oct 11, 2013 4:41am
Quoting Spec_And
{quote} Fundamentals matter, gold has traditionally been a "safe haven", it has always been a hedge against financial armageddon, war, etc but that this hedge ceased to work in 2012, it began to track the risky assets (like the SPX for example) last year. This calls into question the role of gold as a safe haven, cos if gold isnt a safe haven, it pretty much has no value since it has no yield and there is little industrial use for it, whatever little value it has would only come from jewelry demand, but that alone will not support prices for very...
gold will be always a safe haven but this is paper gold which is different. In april 2013 UK and US central banks injected a lot of paper with no correspondent gold in this market which is how they neutralized fundamentals. At one point they will get rid of that paper and boost demand for gold in order to leverage inflation and growth.
  • #26,415
  • Oct 11, 2013 4:48am Oct 11, 2013 4:48am
Quoting Greener
{quote} gold will be always a safe haven but this is paper gold which is different. In april 2013 UK and US central banks injected a lot of paper with no correspondent gold in this market which is how they neutralized fundamentals. At one point they will get rid of that paper and boost demand for gold in order to leverage inflation and growth.
Totally agreed. Real gold and paper gold are different.
Bottomless wonders spring from simple rules, which are repeated without end
  • #26,416
  • Oct 11, 2013 4:49am Oct 11, 2013 4:49am
Hello

Do you guys think that gold will hit below 1257 this week,i hope not because i have a long position.If i do something for real it always goes wrong.
  • #26,417
  • Oct 11, 2013 4:54am Oct 11, 2013 4:54am
Quoting Greener
{quote} gold will be always a safe haven but this is paper gold which is different. In april 2013 UK and US central banks injected a lot of paper with no correspondent gold in this market which is how they neutralized fundamentals. At one point they will get rid of that paper and boost demand for gold in order to leverage inflation and growth.
I disagree. Bullion prices pretty much track paper gold, though it has always done so with a slight premium, that premium isn't any larger now than it was when gold was at 1900 USD per ounce, both bullion and paper gold prices have fallen by roughly the same margin.

The second argument sounds good but central banks in the developed world have injected liquidity for several years now and there hasn't been much inflation in most of these countries, perhaps we will see some inflation in 2014 and beyond, but I doubt it. There is too much debt and deleveraging going on in the developed world, increasing the monetary base isn't going to stoke inflation in such an environment, the banks needs to lend that money out but that just isn't happening now.
"Where you want to be is always in control, never wishing, always trading.
  • #26,418
  • Oct 11, 2013 5:12am Oct 11, 2013 5:12am
Gold, silver and few other metals have been historically used as the form of a global currency, before they were replaced by paper currency in exchange for keeping gold reserves in the Mint.

And when the currency of a country fails, eg. Zimbabwe etc, its not far, when people would resort back to barter system for buying goods within their boundaries in exchange for gold or other metals.

With Gold having the key characteristics of not rusting, being attractive and also not rot like grains, fruits or evaporate like water, it will always be a key player as an alternative / reserve currency.

The only reason why Gold now has a less appeal as a means of Trade (for buying goods) is because big brother has managed to have $ as the global currency. The day $ rots, Gold takes precedence, atleast until an alternate global currency is formed.
  • #26,419
  • Oct 11, 2013 5:27am Oct 11, 2013 5:27am
Bounce coming at 1273..............http://www.dailyfx.com/forex_forum/i...ilies/cool.png
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Money Makes Money
  • #26,420
  • Oct 11, 2013 5:55am Oct 11, 2013 5:55am
Quoting auther
Gold, silver and few other metals have been historically used as the form of a global currency, before they were replaced by paper currency in exchange for keeping gold reserves in the Mint. And when the currency of a country fails, eg. Zimbabwe etc, its not far, when people would resort back to barter system for buying goods within their boundaries in exchange for gold or other metals. With Gold having the key characteristics of not rusting, being attractive and also not rot like grains, fruits or evaporate like water, it will always be a key player...

in the case of Zimbabwe, once the local currency started depreciating too fast, people at street level started showing a preference for other accessible currencies (and perceived as valuable) such as the South African Rand and the US Dollar. Business and banking of course are forced to transact in the national currency (Zimbabwean Dollar).

Somalia's national currency lost value due to successive waves of civil war (with occasional outside "assistance" from "you-know-who") and the same thing: common people reverted to the US Dollar. Here in Thailand market people and even businesses will accept US Dollar without question, smile, say "sorry" and then accept British Pound/Euro/Ringhit and hesitate about most "known" foreign currencies such as Yen, Rouble, Peso, etc. but ultimately accept them after much enquiry and authentication. But as I mentioned before - no one will accept a Gold coin because it cannot be authenticated or easily transacted back to Thai Baht.

Based on these observations, I think the US Dollar will remain King of Cash for years to come - all things remaining equal. As KADC pointed out: only complete and pervasive collapse of all fiat would render currencies (including Gold) useless. As long as people believe in paper notes, they will transact with them. This seems logical to me.
cryptocurrency everytime
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