GOLD

[romans holiday]

 

 

Looks like a pattern's shaping up in the "major" currencies. A lot more volatile compared to the "central" currencies below.

 

 

 

 

 

 

Aside from the forced liquidation in '08 [which was beneficial to the central currencies], the rate of gold's strengthening against the central currencies is steadier.

 

Yen on steroids and has held its own against gold... for now.

[lyb]

Well, we've bounced nicely off the 200DMA.

 

 

Did not even touch the 200 DMA, currently at 1151 according to the following site http://www.scotiamocatta.com/scpt/scotiamo...ec/pm_daily.pdf

 

Usually gold falls below the 200DMA during the summer, however, over the last 2 years it has been

a very strong market.

 

I hope there will be a low during this month to complete my purchases.

 

[electroweak]

Did not even touch the 200 DMA, currently at 1151 according to the following site http://www.scotiamocatta.com/scpt/scotiamo...ec/pm_daily.pdf

 

Usually gold falls below the 200DMA during the summer, however, over the last 2 years it has been

a very strong market.

 

I hope there will be a low during this month to complete my purchases.

If it didn't touch, it was pretty close!

[electroweak]

What's this?

PRECIOUS-Gold rises above $1,200/oz on physical demand

04 Aug 2010 - 20:11

 

* Gold above $1,200 for first time in almost 3 weeks

* Market took heart from China gold market liberalization

* Coming up: U.S. July nonfarm payrolls on Friday

 

(Recasts, updates prices to market close, adds comments,

changes byline, dateline, previous LONDON)

By Frank Tang

NEW YORK, Aug 4 (Reuters) - Gold rose above $1,200 an ounce

on Wednesday for the first time in nearly two weeks, as strong

physical demand lifted the metal higher for its sixth straight

daily gain.

 

 

EDIT: aahh...

Gold Rises Most in Seven Weeks as China’s Plans Boost Demand

By Nicholas Larkin and Yi Tian

 

Aug. 4 (Bloomberg) -- Gold rose the most in seven weeks on speculation that China’s plans to relax rules on trading will bolster demand.

 

China’s said yesterday it would let more banks import and export gold and give foreign companies greater access to trading. China is the world’s second-largest gold buyer and biggest producer. Earlier, the precious metal reached $1,205.50 an ounce in New York, the highest level since July 16.

 

The Chinese plans are “mildly bullish,” raising the possibility of “increased demand as they become more open to trading and encourage investors to buy more gold,” said Dan Smith, an analyst at Standard Chartered Plc in London.

 

[Steve Netwriter]

But I still have a question puzzling me; say gold continues to only modestly strengthen against the US dollar [just for arguments sake] at say 20% a year, would it matter that much whether the chart was a logarithmic or a linear scale? I gather logarithmic charts are best for the large exponential moves.

 

Or in other words, say all currencies stay relatively strong against assets, but gold in turn strengthens against currencies... we would be looking at gold/ US dollar in terms of an fx exchange.... and not as a "mop for excess liquidity".

 

I mean, it wouldn't make much sense to map the kiwi dollar against the UD dollar logarithmically right?

 

This is why Albert Bartlett says "The greatest shortcoming of the human race is our inability to understand the exponential function".

 

I'll explain it very simply, as you can learn more elsewhere.

 

1. If a number (whatever it is, it could be a weight, and length, a price, an exchange rate) increases by a fixed percentage each period (say each year), then it will follow an exponential function.

 

y = e ^ kt

 

2. If you plot that curve from time t0 to time t1, they being the starting and ending times, and you plot on a linear vertical scale from ymin to ymax, then the plot will be curved, an exponential.

 

3. What matters most are the period over which the curve is plotted and the rate of change. The higher the rate of change, the steeper the plotted curve will be.

 

4. Yes, if the rate of change is smal, and you plot over a few years, the line will be close to straight. But if you increase the rate of change, or extend the period of the plot, it will become more curved, and a linear plot with straight trend line drawn will be more erroneous.

 

For more, please see this:

 

Exponential Functions, Things that grow at x%, and Bounded and Unbounded Plotting of them by Steve Netwriter

http://neuralnetwriter.cylo42.com/node/2944

 

and this one which appears to have been inspired by you!

 

Exponenetial Function

http://neuralnetwriter.cylo42.com/node/2889

 

Both Albert and Sal explain it better (and for longer) than I can in a short post.

 

The first link shows that it appears to be difficult for people to grasp this. Go back to apples on trees and you can see more easily how it works.

As you'll see, Chris Martenson was quite correct in the way he plotted his exponential curves, and in the implications he took from them.

 

[Steve Netwriter]

Sorry, missed a bit:

 

I mean, it wouldn't make much sense to map the kiwi dollar against the UD dollar logarithmically right?

 

Not for very long, no.

The NZ$US$ exhcange rate might move by x% per year for 10 years, and be an exponential move.

For those 10 years it would make sense to plot it on a log scale. Necessary if you draw straight line trend lines.

 

But, one would not expect that movement in exchange rate to continue forever. It would appear to be unlikely!

 

This is different to GoldUS$. The purchasing power of the US$ can decline by 7%/year with no limit, until it reaches zero

This is most important if GoldUS$ were to change by 30%/year, and over a very short period you would see a curve.

 

[Steve Netwriter]

What's his timeframe?

If he doesn't have one, it can never be disproved

 

I'm not sure about timeframe.

What I meant about disproved, is that so far no one has found fault with his theory.

Note he is talking about GoldUS$ in today's US$. One can probably assume he expects a timescale of less than 15 years, but that is just my point of view.

 

I repeat my oft-repeated forecast: Gold will be below $1100 in August.

Wait until then to buy=

 

Have you changed your mind?

 

Since it's broken the downtrend from June.

 

[warpig]

Sorry I missed this post, gold has performed as I was hoping it would. (thankfully!).

 

There appear to be many interpretations here, eg

 

one) being we're at a trend line and should expect a bounce or

 

two) being the current downdraft is less than that of the prior two therefore expect it to go lower

 

three) being the recent high only reached the mid-trendline therefore indicating bearish price action for gold

 

I'd be interested to hear other alternatives. There are many ways to read a chart (which is perhaps why no commentary was included).

 

There appears to be bearish implications for the trend but not immediately the price

 

What's yours?

[warpig]

Hi Steve,

 

Thanks for the reply and sorry I missed your post. It was very sobering to see an established business simply `shut up shop.` It struck a chord with me, I started thinking what could I do to help save this British business, but of course there isn't anything... It suddenly became clear to me, this is a progressive eroding trend that won't stop until the quality of life between the West and the East reaches some sort of parity. It seems almost impossible to imagine doesn't it!

 

Blimey, FOFA's FFPPDC is an eye opener. I've seen it before but I don't recall the values on the y-axis being so high!!! I understand how Sinclair picked the top of the gold market in the 80's, but for me I try and stay a little more grounded (opposing forces and all that) whilst acknowledging anything's possible! Personally I think $5K's a given, with $10K an outside possibility when talking in non-hyper dollars. As for timescales I tend to agree with you.

 

Hi warpig

First, interesting post about the aircraft! It's always good to hear real on the ground experiences.

 

The seasonal peaks seem to occur sometime between Jan and May. I think timing is the most difficult to predict, except in hindsight

I wouldn't mind betting Jim's prediction will be a few months too early. But, if something else breaks, who knows.

 

I only do this out of interest, for fun. My real view varies between this (note I did it a few years ago):

 

 

and this from FOFOA:

 

[Crashman begins]

 

Another Thoughts ??

 

CGNAO : A Cowboy And Arab Talk Frankly

 

http://www.housepricecrash.co.uk/forum/ind...l=arab&st=0

 

Posted 22 May 2008 - 12:23 AM

George Bush: "A lot of folks in America are upset over, you know, the high oil prices."

 

King Abdullah: "Need I remind you your dollar is worthless? Have you brought me any more collateral?"

 

GB: "Paulson said to tell you that IMF gold should have held you over for a while."

 

KA: "400 tons? You already owed us that from previous years."

 

GB: "We're having some, uh, difficulty obtaining more."

 

KA: "Is your Fort Knox not full?"

 

GB: "I'm told it's... encumberated, or something like that."

 

KA: "What about your Catholic boy? Did you not invite him to Washington last month?"

 

GB: " Uh, yeah, his Holiness, sir, but he wasn't very, uh, cooperatative."

 

KA: "Did you remind him another church scandal wasn't in his best interest?"

 

GB: " Yes I did, but he said the Vatican's gold was what saved their financial bacon in the first place".

 

KA: "You are in a predicament. What other collateral can you offer?"

 

GB: "My generals say there's new weapons in the pipeline- you know, really scary stuff. You can have first dibs".

 

KA: "We're already up to our eyeballs in weapons, and half of them don't work anyway".

 

GB: "Benny-Ben over at the Fed said there's some good deals on some banks he's getting ready to repo".

 

KA: "That Citi deal didn't exactly work out you know. How do you Americans say- it was "a pig in a poke"?"

 

GB: "I'm still working on a port leasing deal. It's politically, uh, still sensitive".

 

KA: "Your endless wars against my people's nations are becoming tiresome, besides unprofitable. Who can say how much longer we can support your dollars?"

 

GB: "(big gulp) I don't think Cheney's gonna like this. He made me come here anyway, I thought it looked, uh, too humblifying."

 

KA: "Stay in touch. Maybe you'll find some gold in Jerusalem next week".

 

GB: " I'm glad we had this frank exchange of, er, views. One decider to another".

 

 

 

 

 

[Rosco]

In case people didn't see here is an article from yesterdays FT comparing Gold vs Yen.

 

http://www.ft.com/cms/s/0/81552e06-9fe2-11...144feabdc0.html

 

[romans holiday]

In case people didn't see here is an article from yesterdays FT comparing Gold vs Yen.

 

http://www.ft.com/cms/s/0/81552e06-9fe2-11...144feabdc0.html

 

There are not many financial assets that are priced higher today than before the Lehman shock in September 2008. Two that have done investors proud are the yen and gold bullion.

That the Yen should continue to strengthen is predictable in hyper-deflation. Core funding currencies will strengthen due to "short-covering".

 

 

The inconvenient truth is that gold is not really an investment at all. Since it generates no return and thus has no fundamental value, the same arguments can be used to justify any price – $500 an ounce or $5,000. Gold buyers are simply trusting in the bigger fool theory – that someone else will take it off their hands at a higher price. They are speculating, not investing, and like all speculators what they are speculating on is the speculations of other speculators. Packaging it in an exchange-traded fund makes no difference.

 

The article has half truths. Here is one; that gold is not really an investment. Too right! Yet the author fails to perceive gold is in the process of being re-monetized... ie, increasingly performing the function of a currency for both investors and central banks. The investor is dis-investing when buying gold.

 

The reason gold is strengthening alongside Yen is in a period of uncertainty it becomes a prime form of liquidity.... being the strongest symbol of money. Even the Yen has political uncertainty hanging over it... even though it should continue to strengthen.

 

The dynamic of a debt deflation, where short-covering on currencies swells the currency, will also continue to crucify their economy. I expect the same to happen in the US.... and gold to continue strengthening.

[Rosco]

That the Yen should continue to strengthen is predictable in hyper-deflation. Core funding currencies will strengthen due to "short-covering".

 

 

 

 

The article is full of half truths. Here is another one; that gold is not really an investment. Too right! Yet the author fails to perceive gold is in the process of being re-monetized... ie, increasingly performing the function of a currency for both investors and central banks. The investor is dis-investing when buying gold.

 

The reason gold is strengthening alongside Yen is in a period of uncertainty it becomes a prime form of liquidity.... being the strongest symbol of money. Even the Yen has political uncertainty hanging over it... even though it should continue to strengthen.

 

The dynamic of a debt deflation, where short-covering on currencies swells the currency, will also continue to crucify their economy. I expect the same to happen in the US.... and gold to continue strengthening.

I agree but I dont believe the article was disputing the upside for gold vs other currencies , he simply has the opinion that the Yen will do better than gold.

 

 

[G0ldfinger]

I agree but I dont believe the article was disputing the upside for gold vs other currencies , he simply has the opinion that the Yen will do better than gold.

I fear that the Yen is one of the bigger turds out there.

 

I also see no reason whatsoever why the Yen should have any chance of outperforming Gold.

 

Gold in Yen is a very strong buy. Still far off the all-time highs.

 

http://gold.approximity.com/since1971/Gold_JPY.html

[romans holiday]

I agree but I dont believe the article was disputing the upside for gold vs other currencies , he simply has the opinion that the Yen will do better than gold.

It was an interesting article how gold was being compared to Yen. This is something that interests me also- I think the behavior of say the US dollar and Yen will be quite distinct against gold as say the Euro and pound. And then Aussie and Kiwi [minor currencies] will be in a different ball park again.

 

But the author's take on gold was that it was speculative, and involving the "greater fool" principle. I reckon this showed an ignorance towards gold. Assets are the objects of speculation. Gold is not an asset, therefore not speculative. It is a currency... or a liquid form of capital. Well, my 2 cents worth anyway.

 

Of course, this doesn't mean that there could be some speculative money in gold [hedge funds looking for an inflation hedge... or chasing a "bubble"], but you'd think that would have been washed out with deflation dominating the headlines these days.

[romans holiday]

I also see no reason whatsoever why the Yen should have any chance of outperforming Gold.

Read updated signature.

 

I agree that Yen will not outperform gold.

I disagree that Yen is a "turd".

[romans holiday]

 

Gold behaving like a currency here. Strengthening with the Euro lately against the dollar. As gold strengthens its aggregate price should prove a lot "stickier". On some headline news out of Europe, the Euro would fall, the dollar would go higher.... and gold will have kept its gains and in turn go higher still.

[Schaublin]

Good article on 321 gold by Darryl Robert Schoon outlining the massive spending on war by the US and the debt that they have accrued. A concise well-written account about why the US will fall hard - and soon.

 

http://www.321gold.com/editorials/schoon/schoon080510.html

 

The US borrows 45 % of all moneys borrowed by all governments and spends virtually that same percentage of global military spending. Beginning in 1980, President Reagan started the US on the road to financial collapse, borrowing heavily in order to fund the US military buildup, an act of fiscal irresponsibility that would later prove fatal. In his two terms, Reagan increased the US national debt by 258 %, the cost of which would be the loss of America’s economic power-base.

 

Edit: It is amusing that it is called 'defense' when, in reality, it is all spent on waging offensive wars on weak countries and bullying other nations with its threats.

[sid]

Good article on 321 gold by Darryl Robert Schoon outlining the massive spending on war by the US and the debt that they have accrued. A concise well-written account about why the US will fall hard - and soon.

 

http://www.321gold.com/editorials/schoon/schoon080510.html

 

The US borrows 45 % of all moneys borrowed by all governments and spends virtually that same percentage of global military spending. Beginning in 1980, President Reagan started the US on the road to financial collapse, borrowing heavily in order to fund the US military buildup, an act of fiscal irresponsibility that would later prove fatal. In his two terms, Reagan increased the US national debt by 258 %, the cost of which would be the loss of America’s economic power-base.

 

Edit: It is amusing that it is called 'defense' when, in reality, it is all spent on waging offensive wars on weak countries and bullying other nations with its threats.

 

 

I was going to post that but you beat me to it.

 

Agree 100% with your point, ironic, isn't it, its always been offensive yet its defense budget, it how you wrap it nowadays.

[DoctorSolar]

Thanks to those for pointing in the direction of the Gold Scents blog. From the most recent posting last weekend:

 

http://goldscents.blogspot.com/

 

The failure to follow through to the downside is a sign that someone was in the market buying all that the technical and emotional retail traders were selling.

 

Now we need two more things to happen before we can be reasonably sure the intermediate cycle has indeed bottomed. First, we need to complete a weekly swing low. That will happen this week if gold can hold above $1155.90 and move above $1194.50.

 

Done

 

We also need to break the pattern of lower lows and lower highs. Gold will do that if it can trade above $1204 next week.

 

Also done.

 

I think there is a very good chance gold put in the intermediate low this past Wednesday and we are now headed higher into the strong demand fall season. (Gold sentiment has since dropped below the level we saw at the February intermediate low. A definite sign we are nearing or at a bottom.)

[absolutezero]

So is now a good time to buy gold? I mean this month rather than, say, in 6 months.

Can get Britannias for £805. That a good price?

[azazel]

So is now a good time to buy gold? I mean this month rather than, say, in 6 months.

Can get Britannias for £805. That a good price?

 

Is that from Bairds? Im waiting until end of August and paying attention to what DrBubb thinks is a good buying time. But no one really knows. It also depends if you already have some.

 

[Errol]

There's never a bad time to buy gold. Judge wealth by ounces not the fiat units.

[Plastic Elastic]

So is now a good time to buy gold? I mean this month rather than, say, in 6 months.

Can get Britannias for £805. That a good price?

 

Nobody knows! Seasonally, now is a good time to buy. I, for one, have started buying (in £), and I will spread purchases over the month (€ purchases later).

 

The amounts I am spending will, however, not move the markets due to size, to put it mildly

 

 

[frizzers]

The lottery that is exploring for gold. 8 Minutes.

 

From: http://www.youtube.com/watch?v=http://www.youtube.com/watch?v=P6_RGMDlNA4