GOLD

[stunlee]

A big up move for Gold today, and interesting as it started just as the dollar was making new lows against the yen. Is gold starting to replace the dollar as the safe haven, or is it just random fluctuations?

At 1687 we are just below the 50 day moving average which has been influential on the gold price and a strong support since August 2010. Silver also looks to have broken convincingly up against the 25 day moving average.

[G0ldfinger]

Hmmm, the "resolution" of the Euro crisis should actually make gold jump again, because how couldn't it be (hyper-)inflationary? There is no solution except for crash & burn or extend & pretend (= PRINT). So, it is clear what your local politico will prefer.

 

http://www.bloomberg.com/news/2011-10-25/gold-may-gain-for-a-third-day-as-europe-debt-woes-spur-demand.html

Gold Tops $1,700 on EU Crisis Concern

...

Gold futures rose to the highest price in more than a month, topping $1,700 an ounce, as delays in resolving Europe’s debt crisis and renewed inflation concern in the U.S. spurred demand for the precious metal.

[G0ldfinger]

I sort of can't see how gold wouldn't blast through $2,000 like a hot knife through butter anytime soon.

 

But then, I can't see how gold can be sub-$5,000 right now anyway.

[Sumarokov]

I am increasingly convinced that gold is acting as a currency. In which case, is it right to constantly watch its price in US dollars? Should one not be looking at how it is doing in the "next best currency to gold"? Against the euro, I can tell you that it is going nowhere right now...

[Pixel8r]

I am increasingly convinced that gold is acting as a currency. In which case, is it right to constantly watch its price in US dollars? Should one not be looking at how it is doing in the "next best currency to gold"? Against the euro, I can tell you that it is going nowhere right now...

Why value it against any failing fiat currency, much better to use something of determined value like the commodity index. Here's a chart of gold valued against the CRB commodity index, as you can see were moved a large amount yesterday back above the 50 MA.

 

 

 

[G0ldfinger]

Let's stay focused here. There is no solution for nothing, except:

 

[Perishabull]

Google trends can often come up with some interesting data;

 

"GDX" searches on Google

 

Over the last 3 years there has been a very steady increase in news reference volume for GDX

 

 

Also searches for "Gold miners" on Google;

 

A similar picture with gold miners.

 

More news reference volume clearly leads to more public awareness. In some ways I think the performance of the miners compared to gold itself is perhaps related to the public still not believing in gold as it rises higher and higher, really typical of bull markets. The majority aren't on board. Perhaps a trigger point is needed, that may be a sustained rise above $2000. That should trigger another wave of discussion, and lead to more public participation.

[G0ldfinger]

Nice to see gold bounce back after the idiots' sympathy selling.

[signofthetimes]

Nice to see gold bounce back after the idiots' sympathy selling.

 

http://www.bloomberg.com/news/2011-11-01/top-gold-forecasters-see-bullion-rallying-to-record-by-march-commodities.html

 

 

The most accurate forecasters say gold will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe’s debt crisis is unresolved.

 

Futures traded in New York may rise 13 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates compiled by Bloomberg

 

[Gatesy]

http://www.bloomberg.com/news/2011-11-01/top-gold-forecasters-see-bullion-rallying-to-record-by-march-commodities.html

 

 

I'd prefer to see a forecast at $1250 an ounce from the median group of Bloomberg forecasters...

[Perishabull]

Greenlight's Einhorn Bets Mining Companies Will Beat Gold

 

"Hedge-fund manager David Einhorn is betting that gold-mining companies will outperform bullion, reversing the trend from the past six months. "A substantial disconnect has developed between the price of gold and the mining companies," Einhorn said today in a conference call discussing results at Greenlight Capital Re Ltd. (GLRE), the reinsurer where he is chairman.

 

The reinsurer cut holdings of the commodity in the third quarter and moved funds into the Market Vectors Gold Miners ETF, Einhorn said. The exchange-traded fund lost 5.4 percent in the six months ended yesterday, while bullion gained 11 percent.

 

"With gold at today's price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further," Einhorn said. "Since we believe gold will continue to rise, we expect gold stocks to do even better.""

 

 

 

 

Einhorn's a well known value player. Others will follow him.

[Perishabull]

I'll post a better chart of GDX/GLD later, I think the ratio may be in the midst of a turn up...

 

 

http://stockcharts.com/h-sc/ui?s=GDX:$GOLD&p=D&yr=3&mn=0&dy=0&id=p41763087645

 

I think the gold miners may be about to enter a phase where they outperform gold.

[signofthetimes]

hello again £1100

[G0ldfinger]

The ECB has just cut rates, so, money, money, moneyyyyy...

[Perishabull]

I'll post a better chart of GDX/GLD later, I think the ratio may be in the midst of a turn up...

 

 

http://stockcharts.c...id=p41763087645

 

I think the gold miners may be about to enter a phase where they outperform gold.

 

GDX/GLD

 

To me, this looks like the ratio has bottomed...

 

Since Q1 2010 GDX and GLD have moved in lockstep up until April this year, now there is a marked divergence.

 

I'm looking for this divergence to begin closing up from here. Gold's ascent to continue and the gold miners to play catch up.

[Perishabull]

What happened next?

 

 

On checking gold futures this morning, they spiked to $1774.80, and are now slightly lower at $1761.

 

Gold futures - 1 year chart non log;

 

What this chart shows is volume, both in standard format at the bottom of the chart, along with volume plotted in profile across price in blue. The further the blue is to the right of the chart for a given price level, the higher the volume has been at that price level.

 

 

There are similarities between the chart above, and a chart I posted of Silver futures on 21st April this year on the "$50-ish Peak in Silver Coming? Hunting the Top" thread.

 

Silver futures - 1 year non log (21st April 2011);

 

 

 

On the log chart the move is quite striking.

 

Gold futures - 1 year log;

 

Similarities to the parabola we saw in silver?

 

I was too early looking for a top there.

 

Here's the same chart, updated;

 

 

 

You can see by comparing the grey Linear Regression trendlines to the previous trend back in August (in red) that the trend maintains exactly the same trajectory. What's really interesting here is the indicator on the bottom. It's called the Disparity index and it caught both the high and the low, although much like me, it also thought there might have been a top at $1775. Those that are looking to add to gold holdings would do well by paying attention to it.

 

What is the disparity index?

 

 

 

The GLD/GDX ratio is at the same level as it was during the bottom in stocks on 6th March 2009;

 

 

I posted this at a key point since the ratio stopped dead in it's tracks at the same level. The level as it was during the bottom in stocks on 6th March 2009.

 

 

An updated chart;

 

The ratio at 3 looks like even more of a key level now.

[Gatesy]

 

 

The ratio at 3 looks like even more of a key level now.

All very interesting PD. Thanks again for posting. Do you think the ratio of 3.0 will hold or do you not have a view. Thanks DD

[Perishabull]

All very interesting PD. Thanks again for posting. Do you think the ratio of 3.0 will hold or do you not have a view. Thanks DD

 

I'm looking for the gold miners to switch from a period of underperformance, compared to gold, to a period of outperformance, from this point on. That means that I believe that the 3 level in the ratio may prove significant and may well have signalled the transition from gold miner underperformance to outperformance.

 

If gold miners outperform gold from here on in the ratio of GLD:GDX will switch into a downtrend moving away from 3 towards 2.

[Errol]

Good post from a blog I read -

 

http://expectedreturnsblog.com/the-inevitable-contagion/

 

I cannot stress enough how gold needs to be bought on all pullbacks. There are no true safe havens besides gold. People thought the Euro was a viable alternative to the dollar just a couple of years ago- now those views are laughable. People thought the Swiss Franc was a safe haven until the government devalued. Now people think Treasuries are a safe haven and I am telling you this is the spike top in Treasuries. Gold and treasury yields should rise in explosive fashion and I am sure most of you will regret not buying more gold shares when you had the chance.

[50sQuiff]

All very interesting PD. Thanks again for posting. Do you think the ratio of 3.0 will hold or do you not have a view. Thanks DD

 

Seconded. Thanks for the interesting charts and commentary PD.

[Errol]

G-20 Demands German Gold To Keep Eurozone Intact; German Central Bank Tells G-20 Where To Stick It

 

Going back to the annals of brokeback Europe, we learn that gold after all is money, after the G-20 demanded that EFSF (of €1 trillion "stability fund" yet can't raise €3 billion fame) be backstopped by none other than German gold

 

http://www.zerohedge.com/news/g-20-demands-german-gold-keep-eurozone-intact-german-central-bank-tells-g-20-where-stick-it

[electroweak]

interesting.. thin end of the wedge. Of course, in Greece and Italy, tax evasion has become an art-form. I expect this art-form to expand and become more complex.

 

http://www.bbc.co.uk/news/business-15619642

Metal dealers come under tax scrutiny by HMRC

 

"This taskforce will come down hard on scrap metal dealers and their customers or suppliers who have chosen to break the rules or deliberately evade the tax they should be paying. This is just the start."

 

The same issue will be studied among self-employed, or small business, builders in the north-west of England and North Wales.

 

Taxpayers failing to submit their tax returns in the south-east of England will be targeted, as will landlords owning three or more properties but not paying enough tax in the north-west of England or North Wales.

 

The taskforces aim to flood a particular sector in short bursts to ensure that tax is being paid.

 

It is part of a campaign to seek £7bn of extra income each year for the government by 2014-15 by tackling tax evasion, avoidance and fraud.

[Errol]

Euroland makes a fool of themselves almost daily. The Fed is hiding, hoping it will all go away, but it will not.

 

That is what the gold trend is telling you.

 

Jim Sinclair - www.jsmineset.com

[drbubb]

Good post from a blog I read -

 

http://expectedreturnsblog.com/the-inevitable-contagion/

 

I cannot stress enough how gold needs to be bought on all pullbacks. There are no true safe havens besides gold. People thought the Euro was a viable alternative to the dollar just a couple of years ago- now those views are laughable. People thought the Swiss Franc was a safe haven until the government devalued. Now people think Treasuries are a safe haven and I am telling you this is the spike top in Treasuries. Gold and treasury yields should rise in explosive fashion and I am sure most of you will regret not buying more gold shares when you had the chance.

How about: Food..., Energy..., Guns

 

"If you really need Gold, you will need Lead more."

 

NOTE these key facts:

 

+ Gold is rising on FALLING open interest and light volume in GLD

+ Silver is lagging behind gold

 

I can understand why Gold is rising, but I cannot help but notice the terchnical weakness in the current rise.

Watch what I am doing on the Beating B&H thread. I loaded up the truck near $1600, and am lightening up a

bit now.

 

I have to ask: Who has called the Gold and Silver markets well this year? I think the perma-bulls have mixed returns. I would be interested to see how they would do with a B&H or Beating B&H portfolio.

[romans holiday]

How about: Food..., Energy..., Guns

 

"If you really need Gold, you will need Lead more."

Gold should be considered an alternative currency.... no more, no less.... no drama required.

 

I have to ask: Who has called the Gold and Silver markets well this year? I think the perma-bulls have mixed returns. I would be interested to see how they would do with a B&H or Beating B&H portfolio.

Have to say, you're continuing to compare apples and oranges here. Trading gold and investing in gold [or disinvesting] are two very distinct activities. It's not a competition. Don't let the few anti-trading purists color your view of "B&H". Live and let live.