GOLD

[drbubb]

WOW . Oil. whatta a move!

 

$25 is like $200 on Gold

[warpig]

I think this is already factored in to it's market value, nevertheless I fail to see it detaching given it's historical importance.

 

i m not going to get carried away with silver, the price increase may come up as a brief spike. It still comes out of the ground at ratio between 50 and 100 to one.

 

Check out Griffin Mining's last trading statement, they mined 800 ounces of gold to 90,000 ounces of silver.

 

 

Rhodium, another silver coloured metal always provides a reminder that falls are as dramatic as the rises

 

 

[narco]

Interesting technical view on the USD / EUR future on dailyfx

 

http://www.dailyfx.com/story/dailyfx_repor...2118478130.html

 

 

[frizzers]

WOW . Oil. whatta a move!

 

$25 is like $200 on Gold

 

I understand it's because a lot of traders demanded delivery as futures expired and, with recent bad weather, there wasn't the oil to deliver. This resulted in a huge short squeeze.

 

One day this will happen in silver.

[Steve Netwriter]

Given the likely fall of the dollar, is it better to hold gold in $ or £ or euros?

 

Forgive my ignorance, but if the recent events in the US are having an adverse effect on the $, and gold is priced in $, what impact would this have for us in the UK?

 

I'm assuming that everyone here buys bullion in £s, not $s, and although sterling has problems, the US has always been ahead of us (starting with the sub-prime crisis). Could the dollar fall dramatically against the pound, and what would this mean for POG in UKP?

 

If that's combined with the possibility of a smackdown before the November elections, can we see any better buying opportunities for gold ahead?

 

This is quite a common question, and one I identify with, because when I started looking at gold & silver I also was told that they were priced in US$.

It took me a while to get my head around what I think is the best way to think about this.

 

Because it's a common question, I've created these for you.

 

The first one is a basic 'law' of forex trading. Basically you can't sit there making money just by swapping US$ for GBP for Yen for US$ round and round in a circle. It would be nice, but alas

 

 

 

This applies the same law to gold:

 

 

 

I would like to encourage everyone to use this terminology, as I think the 'normal' one is based on mis-information created by those who would like everyone to think gold & silver are just commodities.

 

 

 

I hope that helps you to appreciate that gold & silver are currencies in their own right. So if you live in the UK and think in GBP, then look at the movements of GBP against Gold.

If the US$ goes down, to maintain the arbitrage triangle, the GBP and Gold must move appropriately.

[id5]

...

I hope that helps you to appreciate that gold & silver are currencies in their own right. So if you live in the UK and think in GBP, then look at the movements of GBP against Gold.

...

 

Lots of Forex brokers agree with you Steve, the one I use has as forex pairs

 

XAUUSD

XAUAUD

XAUEUR

XAUJPY

XAUHKD

 

and the same for silver

[Steve Netwriter]

Lots of Forex brokers agree with you Steve, the one I use has as forex pairs

 

XAUUSD

XAUAUD

XAUEUR

XAUJPY

XAUHKD

 

and the same for silver

 

:D

 

I remember having a conversation with a sugar trader. It's not so long ago.

He was convinced (as was everyone else there) that it was priced in US$, and that only the US$ mattered, and that the US$ would always be the world reserve currency, that gold is a commodity and not a currency, and is priced in US$ etc etc .......

 

I wonder what he thinks now :lol:

 

Edited to add: Since I was the only one in a group of ~20 who held my view, that convinced me that gold was a good thing to buy. And was no where near a top

 

It's quite funny looking back at that. They were all happily agreeing with each other and glad to have greatly outnumbered me.

 

And so was I

 

[Dispassion]

This is quite a common question, and one I identify with, because when I started looking at gold & silver I also was told that they were priced in US$...

 

I've vowed to myself not to respond to "gold is currency" stuff again, but read it back and I'm sure that you'll agree that there is no logic in this post.

 

Since no one rose to the challenge last time, I offer the same challenge to anyone that believes that gold is currency and not a commodity, to define the terms "currency" and "commodity".

 

I really shouldn't be concerned with this, but I don't like to see mis-representation, even if I agree with the motive.

[Steve Netwriter]

So Gold's struggling to punch through $900, and Silver's stuck at $13.33333

 

Does anyone think that maybe, just *maybe* in the TA world we've got here a little too quickly?

 

I appreciate there was a blip over $900 last week - but it didn't last long.

 

The fundamentals are there, stronger than ever, but I fear in the eyes of traders a pullback is needed before we can advance further.

 

 

Or maybe I'm spouting utter tosh.

 

I did some analysis a while back and found that a lot of the time gold bounces off the 200 day MA.

But sometimes (and knowing when is the trouble) it doesn't, it just goes UP !

 

[Steve Netwriter]

I've vowed to myself not to respond to "gold is currency" stuff again, but read it back and I'm sure that you'll agree that there is no logic in this post.

 

Since no one rose to the challenge last time, I offer the same challenge to anyone that believes that gold is currency and not a commodity, to define the terms "currency" and "commodity".

 

I really shouldn't be concerned with this, but I don't like to see mis-representation, even if I agree with the motive.

 

 

IMO you suffer the same problem that others have when reading my posts. You read what you want to read, not what I've said.

 

I have been abused on another forum for a while. The claim was that I had said "gold is not a commodity".

 

After letting the other poster abuse me for a few days I then asked him to prove I had said that.

 

He couldn't because I had not.

 

Please note: Saying gold is a currency DOES NOT exclude it from also being a commodity. Likewise vice versa.

 

For your information I think gold & silver act as both commodities and currencies. The importance varies. Sometimes they are mainly commodities, at other times they act mainly as currencies.

 

You prove they do not have the characteristics of currencies.

 

Edited to add: Maybe I have more chance of an apology on here than on that other forum.

You have accused me of "mis-representation". I refute that.

 

 

[Dispassion]

IMO you suffer the same problem that others have when reading my posts. You read what you want to read, not what I've said.

 

I have been abused on another forum for a while. The claim was that I had said "gold is not a commodity".

 

After letting the other poster abuse me for a few days I then asked him to prove I had said that.

 

He couldn't because I had not.

 

Please note: Saying gold is a currency DOES NOT exclude it from also being a commodity. Likewise vice versa.

 

For your information I think gold & silver act as both commodities and currencies. The importance varies. Sometimes they are mainly commodities, at other times they act mainly as currencies.

 

You prove they do not have the characteristics of currencies.

 

 

I'm not abusing you, and I'm not reading anything but the words and I really do apologise for any offence caused.

 

Whilst I agree that the movement of gold is well correlated with currency movements at the moment, if you check my previous posts you'll see that I've often pointed out this correlation with respect to the gold price. All it takes is look up the definition of currency and commodity to invalite the statements:

 

"gold is a currency"

http://dictionary.reference.com/browse/currency

http://en.wikipedia.org/wiki/Currency

 

"gold in not a commodity"

http://dictionary.reference.com/browse/commodity

http://en.wikipedia.org/wiki/Commodity

 

I'm not claiming that you said either of these, only that I've seen these statements paired many times. I'd rather see people discussing correlations, than making assertions, but I really wish that I hadn't posted now, because it's really not worth fighting over.

[CIGA]

I've vowed to myself not to respond to "gold is currency" stuff again, but read it back and I'm sure that you'll agree that there is no logic in this post.

 

Since no one rose to the challenge last time, I offer the same challenge to anyone that believes that gold is currency and not a commodity, to define the terms "currency" and "commodity".

 

I really shouldn't be concerned with this, but I don't like to see mis-representation, even if I agree with the motive.

 

OK DP let's get this straight and now.

 

In most large exchanges there are trading desks where entities are grouped together and traded, like commodities, financials, even down to just wheat or oil or orange juice etc, etc.

 

Now Gold DOES NOT trade on the commodities desk, in any respectful organisation it trades on the currency desk. The reason for this is gold behaves like and is considered like for like a currency. Gold is money.

 

Go Figure.

 

[Steve Netwriter]

I'm not abusing you, and I'm not reading anything but the words and I really do apologise for any offence caused.

 

Whilst I agree that the movement of gold is well correlated with currency movements at the moment, all it takes is look up the definition of currency and commodity to invalite the statements:

 

"gold is a currency" http://en.wikipedia.org/wiki/Currency

"gold in not a commodity" http://en.wikipedia.org/wiki/Commodity

 

I'm not claiming that you said either of these, only that I've seen these statements many times.

 

Sorry, I'm not accusing you of abusing me. But this is a slightly sore point with me, because I have had a very similar conversation with someone who was abusive. I was explaining that situation, not this one.

 

I still refute the claim that I am "mis-representing" though. You may disagree with my view. That's fine. It may be a difference of view based on timescale.

I am looking over 4000 years, not the recent movements in the last 37 years which I consider trivial and momentary.

 

So I include the possibility of the collapse of the US$. In the US gold & silver could then become the only currency.

 

I am not saying anything that many others do not say. And people with far more knowledge and experience than me. James Turk for example.

 

[Steve Netwriter]

"gold is a currency"

http://dictionary.reference.com/browse/currency

http://en.wikipedia.org/wiki/Currency

 

"gold in not a commodity"

http://dictionary.reference.com/browse/commodity

http://en.wikipedia.org/wiki/Commodity

 

I'm not claiming that you said either of these, only that I've seen these statements paired many times. I'd rather see people discussing correlations, than making assertions, but I really wish that I hadn't posted now, because it's really not worth fighting over.

 

Thankfully not by me

I would disagree with anyone who claimed that gold does not act as a currency or does not act as a commodity.

 

I do not wish to fight either

I think a more productive discussion would be for example to look back over history and see how gold changes its behaviour (characteristics) over time.

Sometimes we just 'fight' over words, which IMO is rather pointless. Everyone has their own definition.

 

It's much more important what people think.

 

Can you explain your viewpoint ?

 

[qwerty]

Whilst I agree that the movement of gold is well correlated with currency movements at the moment, if you check my previous posts you'll see that I've often pointed out this correlation with respect to the gold price. All it takes is look up the definition of currency and commodity to invalite the statements:

 

"gold is a currency"

http://dictionary.reference.com/browse/currency

http://en.wikipedia.org/wiki/Currency

 

"gold in not a commodity"

http://dictionary.reference.com/browse/commodity

http://en.wikipedia.org/wiki/Commodity

 

I'm not claiming that you said either of these, only that I've seen these statements paired many times. I'd rather see people discussing correlations, than making assertions, .

 

 

Maybe this will help from Marc Faber. Money?

 

 

Buy gold to side-step the collapsing US dollar!

My preferred asset currency is still gold and other precious metals. Near term, however, sentiment is overly positive and additional positions should only be taken on a setback.

Thursday, November 08 - 2007 at 08:44

 

 

But how can a responsible central bank cut interest rates and pursue an expansionary monetary policy when the stock market is close to an all time high and when it is faced with a weak currency and soaring food and commodity prices?

 

'Only in America' one should say because the US-infected IMF and World Bank would advise any country under these conditions to 'tighten' monetary policies and to raise interest rates. But since the Fed's only objective today is to 'inflate' asset markets further at the expense of totally debasing the currency we need to look at a new currency as a 'unit of account' and as a 'store of value'.

 

Gold rules

In my opinion, the world's new currency with the qualities of being a 'unit of account' and 'store of value' will be gold and to a lesser extent other precious metals.

 

Let me explain! In an environment of monetary debasement - that is when cash loses rapidly its purchasing power - all goods, services (R&D, patents, etc.), and assets become currencies as investors and savers realize that the only way to protect the purchasing power of their money is to move from liquid into 'illiquid' assets.

 

Consequently, money is no longer just dollars, Euros, Yen and Chinese RMB, and short dated bonds but also real estate, stocks, commodities, paintings, and even collectibles.

 

Now, the same way as in a free market economy currencies fluctuate in value against each other (so far the US dollar mostly down), the various asset classes, which have increasingly become 'money', will also fluctuate against each other.

 

And the way sound currencies tend to strengthen and currencies with poor fundamentals tend to weaken, the various asset class monies will, depending on their fundamentals, either appreciate or decline against each other.

 

Cash unsafe

Simply put, whereas in the past cash could be perceived as 'reasonably' safe, today cash may, courtesy of modern central banking under the auspices of the US Fed, actually have become quite a dangerous asset class due to its depreciation not only against asset prices but also against consumer prices, if these were measured properly by government agencies.

 

In short, the problem an investor is facing is the following: In the past, savers who wanted to avoid the problem of taking investment decisions and allocating their funds to different asset classes could keep their money in short term deposits.

 

But in today's new monetary regime - characterized by massive monetary and debt growth and central banks that seem to be perfectly happy at 'printing money', which leads to a loss of money's purchasing power - savers are almost forced to invest into 'something' in order not to end up as 'penniless billionaires.'

[Steve Netwriter]

OK DP let's get this straight and now.

 

In most large exchanges there are trading desks where entities are grouped together and traded, like commodities, financials, even down to just wheat or oil or orange juice etc, etc.

 

Now Gold DOES NOT trade on the commodities desk, in any respectful organisation it trades on the currency desk. The reason for this is gold behaves like and is considered like for like a currency. Gold is money.

 

Go Figure.

 

I don't think that really helps. My 'friend' the commodity trader would use the same argument to suggest the opposite.

 

Now who was it who said it's important to say "gold AS money". I think it was that podcast the other day, The religious guy.

 

Ahhh, words, they drive us mad !

 

[Steve Netwriter]

Thanks Quark

 

Maybe we need a "gold AS money" or something thread. I have read a lot of descriptions. And it seems using exactly the right word is important. I try but I guess I must sometimes get it wrong.

 

I wonder whether it belongs in the "history of gold as money" thread

 

It's something like:

 

Things become commodities, then some of those are tested as money. Some work better than others.

Some commodities work better AS money than others. Gold & silver have proved to be the best over a long test period.

 

Then there is "money is......" etc

 

Does anyone else find it funny that we are discussing what money is ?!

You'd kinda think that would have been pretty much sorted after all these years.

 

[warpig]

I would suggest these descriptions are collectively exhaustive but not mutually exclusive.

 

Please note: Saying gold is a currency DOES NOT exclude it from also being a commodity. Likewise vice versa.

[romans holiday]

I've vowed to myself not to respond to "gold is currency" stuff again, but read it back and I'm sure that you'll agree that there is no logic in this post.

 

Since no one rose to the challenge last time, I offer the same challenge to anyone that believes that gold is currency and not a commodity, to define the terms "currency" and "commodity".

 

I really shouldn't be concerned with this, but I don't like to see mis-representation, even if I agree with the motive.

 

You do not always have to reduce something to one single category.

 

Gold is both a currency and a commodity... and also money. Economically speaking, it is a triune substance.

[Steve Netwriter]

Can be used AS money

 

I think !

 

I lost the plot with "collectively exhaustive"

[Steve Netwriter]

GoldUS$ = 907

SilverUS$ = 13.58

 

GoldGBP = £487.8

SilverGBP = £7.3059

 

The GM NZ$ price appears to be wrong

 

GoldNZ$ = 1,173.90

 

Edited:

 

Hmm, yes it is.

 

907 / 0.6909 = 1312.7

 

Hmmmmmm

[Steve Netwriter]

and I really do apologise for any offence caused.

 

You really are very much nicer than the guy on the other forum

 

I apologise for overreacting.

 

 

[Compounded]

Money IMO is

 

1. Store of value

 

2. Medium of exchange

 

3. Measure of value.

 

Currently I am using gold for purpose 1. and am beginning to use it for purpose 3.

 

I beleive it is now the best money for long term saving.

[warpig]

No worries, I was agreeing with you. This is how it would be described in terms of logic/probability/statistics.

 

Can be used AS money

 

I think !

 

I lost the plot with "collectively exhaustive"

 

[Steve Netwriter]

No worries, I was agreeing with you. This is how it would be described in terms of logic/probability/statistics.

 

Yes but it's been along night

And now you mention "logic/probability/statistics" as well. My brain cannot cope :lol:

I need more sleep !

 

---------------------

 

from Jim:

 

Dear Extended Family,

 

Today's events have put two very important criterion in place for the markets that you must be aware of going into January 14, 2011.

 

The dollar has a solid roof above it that now cannot be penetrated.

 

Gold has a solid floor underneath it that now cannot be penetrated.

 

Selling the dollar on strength and buying gold on weakness with attention to what I have taught you has lost 90% of its risk factor.

 

With a solid floor under gold, the gold mining business becomes a more sound investment than it ever has been. That is simple logic and is now fact.

 

With diminishing reserves and very few potential mines coming online, the juniors with the real thing will transition to valuation based on the value of their underlying assets and the quality of deals they make with partners. This will effectively end the rein of the short seller, both illegal and legal.

 

This understanding will be of great value to you as we move towards 2011.

 

The more dynamic the event, the less words are required for you to grasp the CONSEQUENCES.

 

Respectfully yours,

Jim