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drbubb

Gold comments - for the first half of 2008

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TOO BULLISH?

Are we moving into the second half of January with too much Bullsishness?

The usual pattern is: once that nearly everyone who is going to buy has already bought,

there is only one way the market can go... and that is now.

 

Look at these indications:

 

1/ From the "what will happen in 2008" podcast on CW Radio:

 

+ There seems to be plenty of agreement that Gold is about to experience a big surge up.

Only Faber is in dollars, and then only for "a month or so". (Do we have too much concensus?)

 

+ Several of us are bearish on Sterling from $2.00-type levels. Falling North Sea oil production

was mentioned by Rogers, Faber, and Zapata George. Sterling will be hurt by its emerging

Property slide. The BofE may have to drop rates to help banks and housing. When they do,

Sterling may slide, even against a weak dollar.

 

+ Food and agricultural commodities are likely to be helped by all the CB pumping

 

+ High inflation (or hyperinflation) is not likely until after a US recession hits. And only then, if the

conditions become bad enough, that it is seen as a lesser evil than economic stagnation.

 

2/ Just saw a poll on Bloomberg:

Out of almost 30 opinions, only 1 was bearish- as Gold hits $900 (Feb'08 contract)

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(in response to a PM elsewhere):

 

Sorry to trouble but wanted a quick word, i bought Gold last week at $887 ish.......everyone is shounting at me "FOOL". They say that Gold has peeked and its all time high was $890 ish.

 

Now to my mind i face:-

A £ about to tank

Inflation as a result

Gold all time high was 27 years ago and it would be $2000 + in todays money.

 

Any thoughts?

Cheers, XXX

===============

 

 

I think it is headed higher. And it is $900 (feb contract) today. So you are in profit.

 

Do those people who "think you are crazy" make money regularly? If not, you can disregard them.

 

But since you are nervous, I suggest:

put a very tight stop on maybe half your position, at a level which insures a profit. This way, if it get hit, you have a smaller position to worry about, and also a profit in teh bank. If Gold keeps running higher, then raise the stop.

 

If this advice makes no sense, then maybe you shouldnt be in the market. \

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I am still long from $892 Gold futures. Looks liike we are in the midst of a parabolic move with this mornings performance. The Gold shares should have a good day.

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DrBubb,

I also get worried when everyone agrees.

But I've had conversations with a few "men on the street" recently, and they have no idea about the reasons to buy gold.

 

I'm just sat here in amazement this evening watching it rocket upwards.

 

My reaction is mixed.

 

1. Oh great the price is going up.

2. Oh damn, it'll be a lot more expensive to buy more.

3. Oh damn, that means all the paper currency based assets (cash, houses, land, whatever) are all going down in real value.

 

Maybe you can't be too bullish when all the indicators point so obviously in one direction.

Steve

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TOO BULLISH?

Are we moving into the second half of January with too much Bullsishness?

The usual pattern is: once that nearly everyone who is going to buy has already bought,

there is only one way the market can go... and that is now.

 

How many of the new bulls in gold will have the stomach for a nasty correction when it comes ?

Maybe the market will balance things out that way, with only the hard core gold fans holding on.

 

It would likely need to break below 850 though to shake out some of those Bloomberg pundits I suppose.

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In Mr Sinclair's words:

 

Gold is heading to $1050 where a battle royal will take place, after which gold moves onward to $1650.

 

The US dollar is headed for .72 on its way to .52.

 

All else is babble.

 

Good Evening, Jim

 

= =

 

I hope he is right. And the $20 drop is the "pause that refreshes"

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Rob McEwen of US Gold Corp sees $2000 gold by 2010 with the run reaching $5000 gold subsequently.

 

http://broadband.bnn.ca/bnn/?sid=205&vid=26028

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Interesting vault-face from Goldman Sachs. I can recall nearly choking on my evening green tea when I heard the Bloomberg reporter say that Goldmans had advised clients to short gold for 2008 citing a dollar recovery B)

 

Imagine my surprise when I read this http://www.bloomberg.com/apps/news?pid=206...fer=commodities

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CHannel must be respected

aa0nl4.gif

 

gap down near $850 - a real target now : chart

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Interesting vault-face from Goldman Sachs. I can recall nearly choking on my evening green tea when I heard the Bloomberg reporter say that Goldmans had advised clients to short gold for 2008 citing a dollar recovery B)

 

Imagine my surprise when I read this http://www.bloomberg.com/apps/news?pid=206...fer=commodities

 

Goldman Sachs Raises Gold Forecasts for 2008 Through 2010

 

By Stuart Wallace

 

Jan. 16 (Bloomberg) -- Goldman Sachs Group Inc., the world's largest securities firm, increased its gold forecast for 2008 through 2010 because of expectations for a U.S. recession in the second and third quarters and a weaker dollar.

 

The metal will average $915 an ounce this year, compared with an earlier estimate of $800, the bank said in an e-mailed report today. Gold will average $870 next year and $940 in 2010, from earlier forecasts of $852 and $907, the bank said.

 

= =

 

B@st@rds!

Seems they want to tale profits on those longs from last year, when they got to buy from

clienst dumb enough to short gold

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(from the RUG thread):

 

"...talk of the pog going down to $700, do these people live in the real world?"

 

Of course not.That's just what the market needs - some fear

 

What is completely NATURAL, NORMAL, AND EXPECTED (by me at least!)

 

is for gold prices to return to the old highs of $850,

for a "kiss it goodbye look" before taking off again

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I love that 'kiss it goodbye' !

 

It happens rather often!

(I believe I coined the phrase- in the context of a technical move on a stock chart)

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I thought some different views on buying and selling gold:

 

One view is: "Buy some if you think the price offers a good buying opportunity. Sell if you've made a bit and think it might drop back." - the trader.

 

Then there is the: "I bought some gold and the price has dropped. I'm getting out quick". - the unsure, uninformed

 

But there is also this: "The more worried I get about where ever I have money, the more gold I buy." - the worried accumulator

 

At $880/oz a fall back to $850 would cost 3.5%. Maybe that is not a bad temporary insurance premium to pay to avoid loosing money elsewhere.

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A look back at that 1980 peak - it was $845, it seems

 

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Gold : $860 now

 

Beautiful set-up here for a "kiss it goodbye" touch of $845/850- the old, old highs

 

I'm buying a long list of Juniors today in one of my accounts

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I dont see this Dollar Rally going much further ... update

 

historygg0.png

 

The falling 144d.MA is a good target

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