GOLD

[signofthetimes]

Buying some gold in GBP here. Tough decision, would have liked it to be lower (wouldnt we all), though the Sep-March cycle could play out again and sitting in GBP otherwise and looks oversold on a ST basis at least....

 

Any further current thoughts on £GOLD out there?

 

dollar price will likely fall back over winter but I expect £ to suffer due to UK defecit / dollar to continue rally short term, so gold priced in £ may not change much.

[Traktion]

if more customers are coming to them as buyers than sellers then they raise their prices.

 

if more customers are coming to them as sellers than buyers then they lower their prices.

 

if more customers are doing business with their competitors then they narrow their spread (or go bust or somehow offer a higher value service).

 

pretty simply stuff really.

 

the eggs futures market was closed down in the '40s. I haven't had any trouble aquiring eggs lately.

 

I believe BullionVault have its own internal bidding system too (although I have only used GoldMoney so far).

[wren]

I believe BullionVault have its own internal bidding system too (although I have only used GoldMoney so far).

It has a market board. So customers and BV itself place bids and asks and people buy and sell as they choose. Most of the trades at present are BV-with-customer (the counterparty involved is named (nickname) on the email confirmation and I have seen only BV as my counterparty over many trades).

 

As bars can be withdrawn it is connected physically to the rest of the physical market which should keep arbitrage down.

 

[BHP Tinto]

[romans holiday]

U.S. Dollar Breakout Means Gold Has a Lot Further to Fall

 

http://www.marketoracle.co.uk/Article15950.html

Big overseas Treasury holders such China and Japan are believed to have “strong-armed” the US in the recent past behind the scenes and essentially said “You either quit undermining your currency and defrauding us with your zero interest rate policy or we are going to dump them, big time, and collapse the Treasury market.” The Treasury market is the “aorta” of the US, which involves swapping essentially worthless paper for the goods and services of countries that are dumb enough to buy them, thus allowing the US to live way beyond its means running continuous massive deficits. It is viewed by the administration as infinitely more important than the stockmarket, which is small in comparison. It is thus clear that if it is necessary to sacrifice the stockmarket by raising interest rates to rescue the Treasury market, then that is what’s going to happen. The rising Treasury yield curve, which has recently become very steep is indicating that rate rises are in the pipeline.

 

Smart Money has already got wind of this and has been stampeding to close out US dollar carry trade positions, hence the breakout and sharp rise in the dollar, and the plunge in gold. The ordinary Joe sat rustling his newspaper hasn’t got the faintest idea of what is going on as usual. Given the magnitude of the US dollar carry trade positions that have built up this year on the back of unprecedented negative real interest rates in the US it should be obvious that a intensifying stampede out of them could easily drive a massive dollar spike, perhaps considerably larger than the one we saw last year, especially given the precarious condition of many countries in the European Union. In this situation commodities and the stockmarket will be trashed.

 

Those of you who may be deluding yourselves that the dollar’s recent rise is just a countertrend blip might like to reflect on this article in The Wall St Journal titled Net Assets in Bullish US Dollar ETF Go Vertical in December . The point to appreciate here is that this asset buildup is not occurring at the end of a move, but rather at the start of it, and is thus a proxy for very high volume on the dollar breakout, indicating both that it is genuine and that the dollar is destined to go MUCH higher.

 

Looks like it has once again become a dollar story. Even if we see a massive rally in the dollar here, I doubt gold will fall too far... sticking to 900 the handle for now. Another article here on the dollar which I found a good read:

 

U.S. Dollar Grinds Higher after Convincing Breakout

http://www.marketoracle.co.uk/Article15944.html

 

 

 

[cornish pasty]

I sold out of ETF Gold with a 25% profit a few weeks ago.

I have £20K savings, and I've made £4000 from trading shares, corp bonds, euros etc this past year.

But hey if you need money for a house, to match the price moves you need leverage..so I'm going to gamble £3000 of my profits on a single trade. I'm keeping the rest of my capital in relatively safe defensive stocks, funds and a basket of currencies.

 

 

Well tell me I'm a total idiot..but this is the trade I'm planning to make in the next weeks.

 

 

Deposit £3000 with my CFD dealer.

Place a buy order for 20 units at 5% margin with a strike price of $1000/oz. That exposes me to $20 per point.

That will cover my margin if the price drops as far as $900/oz.

 

On the next leg up I expect gold to move up to $1500.

That should make a £10,000 profit on the trade. I will be placing a trailing stop loss on the way up though for sure.

 

This will be my first ever leveraged trade, I understand the risks but think I've a good change of making good money on it.

Is this totally crazy????

 

 

[carbon junkie]

U.S. Dollar Breakout Means Gold Has a Lot Further to Fall

 

http://www.marketoracle.co.uk/Article15950.html

 

 

Looks like it has once again become a dollar story. Even if we see a massive rally in the dollar here, I doubt gold will fall too far... sticking to 900 the handle for now. Another article here on the dollar which I found a good read:

 

U.S. Dollar Grinds Higher after Convincing Breakout

http://www.marketoracle.co.uk/Article15944.html

The article makes no senes to me China is already divesting itself of US treasuries but is at the same time strong arming the US to hold the door open whilst they walk through.

 

A strong dollar is in nobodies interest anymore. US wants more jobs only going to happen through weak dollar. Obama wants green jobs can only justify with weak dollar.

 

China wants a weaker dollar as it makes the cost of filling aircraft carriers etc. that much more prohibitive.

 

Dollar buyers are like lambs to the slaughter

 

From:

[radge]

Dollar buyers are like lambs to the slaughter

 

 

I'm afraid it's a 'Meh!' from me. Didn't fancy riding the drop from $1225 all the way to £850-$1,000. I agree the $ is pants, but for the moment I didn't fancy being trampled to death by the rushing flock of lambs.

 

Hopefully manage to get back into the safety of rather more Au than I had before I wimped out if I time it right.

 

[radge]

This will be my first ever leveraged trade, I understand the risks but think I've a good change of making good money on it.

Is this totally crazy????

 

Hats off to the size of your cahones! With gold this volatile, I won't be touching anything leveraged with a bargepole.

 

[cornish pasty]

Hats off to the size of your cahones! With gold this volatile, I won't be touching anything leveraged with a bargepole.

right on!! but buy on the dips ok..

[romans holiday]

right on!! but buy on the dips ok..

For sure!

 

[Perishabull]

COMEX Raises Gold and Silver Margin Requirements, Validates Bull Market Strength

 

 

 

I've posted several times before that the CFTC can order increased margin requirements to cap the level of gold and silver (on behalf of US Government and the bankers).

 

This will continue to happen if the price gets lofty again.

[electroweak]

COMEX Raises Gold and Silver Margin Requirements, Validates Bull Market Strength

 

 

 

I've posted several times before that the CFTC can order increased margin requirements to cap the level of gold and silver (on behalf of US Government and the bankers).

 

This will continue to happen if the price gets lofty again.

until eventually the rigged market is sidestepped...

http://www.hkmerc.com/en/index.html

[drbubb]

Just bought: Jan'11.GLD-$90.calls at $21.50

This brings my Bull Spread back "into balance" eliminating the small short position

We have closed under the 50mda which points towards a test of the 200mda, no?

No point in maintaining a short with this chart ... update

 

If today's low is broken, next stop may be GLD-$100.

We may see that, perhaps after a rally to GLD-$112 or so.

 

It would be interesting to hear what others are thinking, including Gurus like JS.

I may turn myself into a FOPP for a while. Having enjoyed the freedom of non-FOPP-ship thinking

in the recent past, I am not going to ignore the fact that JS and his team have made many good calls.

[G0ldfinger]

According to Jim Willie a a gold bullion bank run is currently in progress -

Not sure that I can take this seriously.

[cornish pasty]

I sold out of ETF Gold with a 25% profit a few weeks ago.

I have £20K savings, and I've made £4000 from trading shares, corp bonds, euros etc this past year.

But hey if you need money for a house, to match the price moves you need leverage..so I'm going to gamble £3000 of my profits on a single trade. I'm keeping the rest of my capital in relatively safe defensive stocks, funds and a basket of currencies.

 

 

Well tell me I'm a total idiot..but this is the trade I'm planning to make in the next weeks.

 

 

Deposit £3000 with my CFD dealer.

Place a buy order for 20 units at 5% margin with a strike price of $1000/oz. That exposes me to $20 per point.

That will cover my margin if the price drops as far as $900/oz.

 

On the next leg up I expect gold to move up to $1500.

That should make a £10,000 profit on the trade. I will be placing a trailing stop loss on the way up though for sure.

 

This will be my first ever leveraged trade, I understand the risks but think I've a good change of making good money on it.

Is this totally crazy????

hey, hoped to get more feedback on this idea! what's wrong with it?? If nothing why don't you all do it!! LOL

[romans holiday]

hey, hoped to get more feedback on this idea! what's wrong with it?? If nothing why don't you all do it!! LOL

I basically agreed with Radge's comment. You realise it's a gamble, and it could pay off handsomely. Good luck with it.

 

My more conservative strategy is to continue to hold both the gold I have bought at a lower price, and the US dollars I had raised... expecting a decline.

 

When the price declines, I'll buy.... silver!

[romans holiday]

But hey if you need money for a house, to match the price moves you need leverage..so I'm going to gamble £3000 of my profits on a single trade. I'm keeping the rest of my capital in relatively safe defensive stocks, funds and a basket of currencies.

I'm not so sure of this. Consider an alternative. The government's effort to reflate/ support over-inflated house prices fails with prices declining to a more "sustainable" level in the next few years. Your deposit, kept dry in the strongest currencies, strengthens against assets as they deflate.

 

No leverage required then to mulitply your deposit to keep pace with inflating house prices... just a good solid deposit kept safe while houses deflate in value.

[El Dali]

hey, hoped to get more feedback on this idea! what's wrong with it?? If nothing why don't you all do it!! LOL

 

 

Trading margin can make you alot but you can lose alot too, and faster than you think. I'd say its important to get practice with low stakes so that you're not bricking it when things don't go your way, and believe me that will happen at some point.

Not trying to put you off or saying dont do it, but be real careful and keep stops tight. 3K might be profit bt its still 3k right? Wait till the trend is your friend too. As said before if you're buying ONLY buy the dips or you'll be upside down before you start.

 

All the best .

[cornish pasty]

Guys thanks for those comments.Making a lot of sense.

 

One thing though with CFDs the minimum you can risk really is £2000 to open the trade.

 

about following the trend..yes..good thinking. I was basically not planning to pick the low but accept a downside before the upside. So buy in at 1000 and expect it to go down to 950, 900 at the extreme. Your comment made me think about that one so maybe I'll revise that plan and wait until there's a technical trend upwards.

 

About deflating assets..yes it going to happen and it is sensible to hold strong currencies/gold/solid defensive stocks and let nature take its course. So I'm only going to risk what I can tolerate. Yes i may have to bang my head against a wall a few times if I lose it all, but I won't be slashing my throat at that level.

 

Once again, many thanks.

 

Simon

[Perishabull]

until eventually the rigged market is sidestepped...

http://www.hkmerc.com/en/index.html

 

Surely the dollar would need to lose reserve status before people accepted the true price of gold being the one valued in another currency...?

 

Goldfinger what's your take on the margin requirement situation? I haven't noticed Jim Sinclair mentioning this.

[Vedantafxtrader]

You might consider buying now the GLD March Put with a strike price of 96, costing 1.48 at the moment, which would cost you $152 USD...if Gold gets down to 900 USD this option could give you about 700% profit, which would offset your drawdown on your position.

[wren]

...

This will be my first ever leveraged trade, I understand the risks but think I've a good change of making good money on it.

Is this totally crazy????

Not crazy. Good luck. I think you've got a fair chance.

 

[cornish pasty]

You might consider buying now the GLD March Put with a strike price of 96, costing 1.48 at the moment, which would cost you $152 USD...if Gold gets down to 900 USD this option could give you about 700% profit, which would offset your drawdown on your position.

 

Thanks Vedanta! My knowledge and understanding of trading is building up slowly. I've spent a few weeks understanding the maths behind CFDs and leverage, and right now thats the limit of my knowledge. Option theory is the obvious next step but i dont want to run before i can walk! Having said that the more I read the suggestion the more interesting it looks, but I'm definately not going to make a trade I don't understand 100%.

[romans holiday]

You might consider buying now the GLD March Put with a strike price of 96, costing 1.48 at the moment, which would cost you $152 USD...if Gold gets down to 900 USD this option could give you about 700% profit, which would offset your drawdown on your position.

A good time to start talking about where gold could bottom out.

 

Looks to me that gold could easily revisit the 3 digit area if the dollar continues to strengthen. I think the price would be quite solid at 950-1000. and would be surprised to see it go sub 900. I see 900 as solid support with this only being breached on another round of deleveraging/ deflation scare.