GOLD

[romans holiday]

eh?

 

link1 - pd price oct 08 sub $200 now $466

 

link 2- pt price dec 08 $800 / gold $750 (approx), now $1500/$1200 respectively

 

 

Link 1 pd price then $200 now $466

gold price then $750 now $1200

 

Put it all in context, and you can see the above "then" prices show how much better gold held up than palladium in the deleveraging of '08.. Palladium crashed to half it's price, and has only just recovered before heading down again now.

 

 

Considering pd is a lot more volatile, and can lose all its gains, I think gold still is the better buy. The risk hanging over pd is with another market crash, its price will also crash. Just to look at the nominal prices as they are now and then... without taking into account the larger macro risks... would be a classic case of money illusion, where all that counts is the momentary nominal numbers. Also, keep in mind that the reason commodities have risen was due to stimulus. Without stimulus support and a deflating economy, those commodity prices will deflate also.

 

Same goes for platinum.

 

The better investment is gold. Perhaps the better trade were the other metals.... but then to consumate that trade you would have to sell and realise gains in dollars... which I doubt many will do, and they will then see those paper gains evaporate on the next market crash. Though there is also the option to sell palladium here for gold...

[dietcolaaddict]

Interesting that the red bar on the left is the highest.

Why isn't the blue one? You would have thought that the largest difference in interest rates (in gold's favour) would have had the largest change in gold price.

 

Good Question, A.Z.

 

There are not an equal number of months for each of the bar regions:

 

less -2 24 months

-2 to -1 52 months

-1 to 0 59 months

0 to +1 70 months

 

The uncertainty of each value will depend on two variables for a "standard error" error bar - proportional to standard deviation and inversely proportional to square root of samples numbers N. (to be precise, SQRT(N-1 ) )

 

So with less sample numbers the very left hand column can only give a more uncertain result than those around it, all other things equal. Hence the exact pattern you expect at very negative interest rates is hidden by uncertainty in the relatively small sample size.

 

 

 

[DoctorSolar]

Case for this (743GBP being the low) strengthening as GBP continues to weaken vs USD

 

Yep still looking good. USD and gold rising together. Taking the advice of: no one knows where the bottom is so you need to be mentally and financially prepared to buy all the way down has worked well so far.

[romans holiday]

Yep still looking good. USD and gold rising together. Taking the advice of: no one knows where the bottom is so you need to be mentally and financially prepared to buy all the way down has worked well so far.

1214 ......and when the media and markets are facing deleveraging and deflation.

[HPCsoYESTERDAY]

 

 

Link 1 pd price then $200 now $466

gold price then $750 now $1200

 

Put it all in context, and you can see the above "then" prices show how much better gold held up than palladium in the deleveraging of '08.. Palladium crashed to half it's price, and has only just recovered before heading down again now.

 

 

Considering pd is a lot more volatile, and can lose all its gains, I think gold still is the better buy. The risk hanging over pd is with another market crash, its price will also crash. Just to look at the nominal prices as they are now and then... without taking into account the larger macro risks... would be a classic case of money illusion, where all that counts is the momentary nominal numbers. Also, keep in mind that the reason commodities have risen was due to stimulus. Without stimulus support and a deflating economy, those commodity prices will deflate also.

 

Same goes for platinum.

 

The better investment is gold. Perhaps the better trade were the other metals.... but then to consumate that trade you would have to sell and realise gains in dollars... which I doubt many will do, and they will then see those paper gains evaporate on the next market crash. Though there is also the option to sell palladium here for gold...

 

hmm, if the call was made before the 08 bust then yes au was a better hold than pd, however in mid 0ct 08 when the call was made, pd was sub $200 and hence has out-performed au thus far

 

therefore, it really is a case of wait and see for a conclusion to be reached since this particular date

 

i don't argue that gold is less stable than pd, however, imho, i don't think we will see a return to pd at sub $200 anytime soon

 

i also take your point about the better trade being the other metals but like i say, since the lows it is a case of wait and see

[romans holiday]

 

 

Inverse relation between gold and dollar looks to have broken down for good this year with gold monetized. Both strengthening together as prime forms of liquidity. The dollar because the world is heavily short dollars and deleveraging. Gold because it's the international currency transcending the debt shadow hanging over all national currencies.

[Gatesy]

Some sweet moves in the junior stocks today, against the general sharp downward trend on US stocks.

[Errol]

If Deflation Wins, What Will Gold Stocks Do?

 

But of course we’ve got the biggie we can look at, and the seriousness of the Great Depression can give us a big clue as to how gold stocks behave in a true deflationary environment. From 1929 until January 1933, the stock of Homestake Mining, the largest gold producer in the U.S., rose 474%. Dome Mines, the largest Canadian producer, advanced 558%. In spite of the gold price being fixed at the time, gold stocks rose dramatically. At the same time, the DJIA lost 73% of its value.

 

http://www.zerohedge.com/article/guest-pos...-gold-stocks-do

[Gatesy]

If Deflation Wins, What Will Gold Stocks Do?

 

But of course we’ve got the biggie we can look at, and the seriousness of the Great Depression can give us a big clue as to how gold stocks behave in a true deflationary environment. From 1929 until January 1933, the stock of Homestake Mining, the largest gold producer in the U.S., rose 474%. Dome Mines, the largest Canadian producer, advanced 558%. In spite of the gold price being fixed at the time, gold stocks rose dramatically. At the same time, the DJIA lost 73% of its value.

 

http://www.zerohedge.com/article/guest-pos...-gold-stocks-do

 

Right on.

[drbubb]

For those who think I am "dangerously Bearish" on Gold, I thought you might want to see this post from the Y-shaped thread

 

The next few months will be telling. The risk you run in selling at $1200 is taking profits in a weakening currency while losing your position in the strengthening one. Given the action in gold these past few years, I'm surprised you haven't built a core position in gold yet.

I am not the only one looking for a dip in Gold.

 

So does TFNN's Tom Obrien (the top Gold forecaster, I believe), and Pierre Lasonde:

 

http://kingworldnews.com/kingworldnews/Bro..._Lassonde_.html

 

Lassonde sees Gold falling back to $1050-1100.

 

BTW, I still have a long exposure to Gold and some Gold stocks.

I have made money in recent weeks, given the strength in GLW.t, and the way the GLD position is hedged:

My favorite Gold stock, and my largest single holding - about 10% of my Main portfolio

 

Gold Wheaton / GLW.t ... update

 

...enjoying a breakout of sorts, on high volume.

 

This is one of the reasons that I haven't worried too much about "downsizing" my Gold holdings.

Another is: I continue to have a LARGE position in Bull Spreads on GLD. So if Gold runs, I will make some nice money.

 

Having said that, I continue to expect Gold and Gold stocks to selloff, if Stock indices slide. But we are at the beginning of the usual BUY window for Gold.

[drbubb]

Some sweet moves in the junior stocks today, against the general sharp downward trend on US stocks.

Indeed.

If we get a Big slide in stocks, I will be amazed if the Juniors can hold.

But I am still net Long in that sector

 

[romans holiday]

I am not the only one looking for a dip in Gold.

 

So does TFNN's Tom Obrien (the top Gold forecaster, I believe), and Pierre Lasonde:

 

http://kingworldnews.com/kingworldnews/Bro..._Lassonde_.html

 

Lassonde sees Gold falling back to $1050-1100.

 

BTW, I still have a long exposure to Gold and some Gold stocks.

I have made money in recent weeks, given the strength in GLW.t, and the way the GLD position is hedged:

Is it a reasonable percentage of your worth or just a token amount? The impression you have given over the past few weeks is that you are not long with a decent core position.... and are bearish on gold at this juncture.

 

How have you made money on gold in the last few weeks? Have you taken some profits off the table? Will you take profits... as you expect stocks to crash... But then you think gold is at the beginning of the buy window. All sounds a bit confused.

 

The message a few weeks back was you were confidently bearish on the gold bullion price and you'd made good profits by selling most of your position. You now seem to be laying down another soundtrack to blur the previous one.

 

edit...

[drbubb]

Is it a reasonable percentage of your worth or just a token amount? The impression you have given over the past few weeks is that you are not long with a decent core position.... and are bearish on gold at this juncture.

 

How have you made money on gold in the last few weeks? Have you taken some profits off the table? Will you take profits... as you expect stocks to crash... But then you think gold is at the beginning of the buy window. All sounds a bit confused.

 

The message a few weeks back was you were confidently bearish on the gold bullion price and you'd made good profits by selling most of your position. You now seem to be laying down another soundtrack to blur the previous one.

 

edit...

I said that I had "neutralised" my Gold/GLD position -which is true*

and that:

I was still long some Junior stocks -GLW.t is the Biggest, by far. (abt. 70,000 shares) & also many MLA.v wts.

 

If gold runs here, I will do fine, but I will double or triple my exposure, if Gold falls back to below $1100.

== == ==

 

*It is quite complex:

Essentially, I am long lower strike GLD calls, and short higher strike GLD calls, so I benefit from time decay.

 

I also own some GLD puts

 

Although I am "mildly Bearish" on Gold, I was never willing to go net short.

I made money on Gold through the (surprising?) run-up in GLW.t - (up $0.75 from its low, is worth over $50k to me)

and the time decay on GLD calls, which I am short.

Some of my other Juniors have also moved up, but that is more due to rises in Uranium stocks

 

Sometimes these complex positions pay off for me (this is one of them), sometimes they are just a complex hodge-podge.

[romans holiday]

I said that I had "neutralised" my Gold/GLD position -which is true*

and that:

I was still long some Junior stocks -GLW.t is the Biggest, by far. (abt. 70,000 shares) & also many MLA.v wts.

 

If gold runs here, I will do fine, but I will double or triple my exposure, if Gold falls back to below $1100.

== == ==

 

*It is quite complex:

Essentially, I am long lower strike GLD calls, and short higher strike GLD calls, so I benefit from time decay.

 

I also own some GLD puts

 

Although I am "mildly Bearish" on Gold, I was never willing to go net short.

I made money on Gold through the (surprising?) run-up in GLW.t - (up $0.75 from its low, is worth over $50k to me)

and the time decay on GLD calls, which I am short.

Some of my other Juniors have also moved up, but that is more due to rises in Uranium stocks

 

Sometimes these complex positions pay off for me (this is one of them), sometimes they are just a complex hodge-podge.

As is well known, gold stocks/ juniors etc are not equatable with gold bullion. There is a good chance that bullion will outperform stocks in a deflationary environment. Though of course this is arguable, and gold stocks could be a leverage to gold in an inflationary environment, it makes sense given the uncertainty to have a core position in bullion... stocks/ juniors would then be added with a speculative element embedded within them.

 

How is this for a suggestion; why not state the percentage of your worth that is in bullion [allocated and unallocated, I'm with Jeff Christian on this]... and then gold stocks/ calls etc? This would simplify your message quite a bit and others would then know what your position actually is. It also avoids the need to mention actual nominal amounts, which may seem a lot, but in the context of one's larger worth may be a relatively small percentage.

[drbubb]

As is well known, gold stocks/ juniors etc are not equatable with gold bullion. There is a good chance that bullion will outperform stocks in a deflationary environment. Though of course this is arguable, and gold stocks could be a leverage to gold in an inflationary environment, it makes sense given the uncertainty to have a core position in bullion... stocks/ juniors would then be added with a speculative element embedded within them.

 

How is this for a suggestion; why not state the percentage of your worth that is in bullion [allocated and unallocated, I'm with Jeff Christian on this]... and then gold stocks/ calls etc? This would simplify your message quite a bit and others would then know what your position actually is. It also avoids the need to mention actual nominal amounts, which may seem a lot, but in the context of one's larger worth may be a relatively small percentage.

Take a look at Gold Wheaton & its business model - it is very close to being Gold

 

How would you evaluate GLD Call spreads?

 

+ The number of ounces they control?

+ The net value of the Long options & Short options?

 

It is not as simple as you may think. I wanted to maintain my 65 GLD calls (that's about 650 oz*. BTW)

and the calls I have sold, and puts I have bought are a way of financing them and neutralising them, until

I get more bullish.

 

*650 oz x $1200 = $780k . which would be a very meaningful slice of my NW.

Add the GLW shares, and it is $1mn. I also hold some Gold coins in a vault.

So you can see that I am not "dangerously bearish" on Gold. But I am far from "wildly bullish",

as this position is much neutralised by options around it.

[romans holiday]

Take a look at Gold Wheaton & its business model - it is very close to being Gold

 

How would you evaluate GLD Call spreads?

 

+ The number of ounces they control?

+ The net value of the Long options & Short options?

 

It is not as simple as you may think. I wanted to maintain my 65 GLD calls (that's about 650 oz*. BTW)

and the calls I have sold, and puts I have bought are a way of financing them and neutralising them, until

I get more bullish.

 

*650 oz x $1200 = $780k . which would be a very meaningful slice of my NW.

Add the GLW shares, and it is $1mn. I also hold some Gold coins in a vault.

So you can see that I am not "dangerously bearish" on Gold. But I am far from "wildly bullish",

as this position is much neutralised by options around it.

Isn't it possible to off the top of your head roughly state a percentage of how long gold you are?

 

For example, I'm roughly 50% long gold [with various allocated and unallocated institutions as well as coins in the vault].

 

A percentage really gives a clear idea of how bullish one is on gold. It would be interesting to see what others think a mildly bullish, and then a wildly bullish, position on gold would be. Is a 10%/ 20% long position that bullish? Is 50% wildly or mildly bullish? I think we'd all agree that 100% is wild.

[drbubb]

My target has been to hold $1mn* or more, and to hedge it when needed

 

In fact, that is why I held onto the GLW.t shares, despite being "mildly bearish"

 

I think the resilience in Gold over the last 2-3 weeks has been impressive.

It looks like it wants to come out of a seasonal low, but I still think that can be derailed by a selloff in Equities.

Having said that, as equities fell over the last two days, I am downsizing my Aug. puts, since expiry is fast-approaching

== ==

 

*(Gold, GLD, and some gold-proxy shares, like GLW and PHYS, are used in this calculation.)

[romans holiday]

My target has been to hold $1mn or more, and to hedge it when needed

Bubb, I think most like to keep their net worth private. By stating a nominal figure this can be meaningless.... a billionaire holding a million dollars in gold does not mean a lot. But for a millionaire it does... it's all relative. The problem is now that you've stated that nominal number, you will be giving away your net worth if you convert it to a percentage.

 

imo it is much better form to talk in percentages.

 

Still, if you are a million long then I'd guess that represents a relatively large percentage, which is bullish!! [yet you have given the impression of being bearish... are you doing a Soros on us? ]

[drbubb]

Bubb, I think most like to keep their net worth private. By stating a nominal figure this is meaningless.... a billionaire holding a million dollars in gold does not mean a lot. But for a millionaire it does... it's all relative. The problem is now that you've stated that nominal number, you will be giving away your net worth if you convert it to a percentage.

That is why I will not mention a %.

Also, I am not really sure what the aggregate NW figure is. But I am many million miles from being a billionaire,

and I do report all that I am meant to report to various authorities

[romans holiday]

That is why I will not mention a %.

Also, I am not really sure what the aggregate NW figure is. But I am many million miles from being a billionaire,

and I do report all that I am meant to report to various authorities

Yes, you've painted yourself into a corner by talking nominal numbers. The problem now is posters here can not really see how bullish you are on gold, by knowing a percentage.

 

I'm guessing you are actually a lot more bullish on gold, as a percentage would represent, than you appear to be in the bearish posts you have made over the past month or so.

[drbubb]

Yes, you've painted yourself into a corner by talking nominal numbers. The problem now is posters here can not really see how bullish you are on gold, by knowing a percentage.

 

I'm guessing you are actually a lot more bullish on gold as a percentage would represent than you appear to be in the bearish posts you have made over the past couple of months.

I think they may know from my statements here.

 

I don't think in Percentages, because my NW goes up & down. So I think of the $xmn figure as suitable insurance.

But it is heavily hedged right now. And I will make money if stocks fall now.

 

I have never been Net Short gold.

But I presently I hold more cash (C$, HK$, and US$) than I hold in Gold

[hockeyplayer]

Take a look at Gold Wheaton & its business model - it is very close to being Gold

 

How would you evaluate GLD Call spreads?

 

+ The number of ounces they control?

+ The net value of the Long options & Short options?

 

It is not as simple as you may think. I wanted to maintain my 65 GLD calls (that's about 650 oz*. BTW)

and the calls I have sold, and puts I have bought are a way of financing them and neutralising them, until

I get more bullish.

 

*650 oz x $1200 = $780k . which would be a very meaningful slice of my NW.

Add the GLW shares, and it is $1mn. I also hold some Gold coins in a vault.

So you can see that I am not "dangerously bearish" on Gold. But I am far from "wildly bullish",

as this position is much neutralised by options around it.

 

 

 

So by "maintain my 65 GLD calls" you mean that you have bought these on leverage!!!

I think anyone who buys on leverage to be a fool. why can't you just invest with what you own?

your gonna loose your shirt one day if you persist with the leverage route. (please take this as good advice not ment as an insult)

 

Back a few months you said you'd sold all of your gold positions and were sitting on a "big pile of cash"

but now your saying your maintaining 65 gld calls!?

 

You definatly send out mixed signals.

 

You seem to hold everything, lots of shorts, lots of longs, lots of cash, lots of gold, lots of property

you tell a story that your making money whatever the markets do.

But your just kidding yourself. You must be losing somewhere but you never mention your losses.

 

What ever you portfolio spread is, you cant be betting on every direction all the markets take. thats impossible.

After you take into account your longs and shorts, You must have a net position.

 

And its really simple. Are you currently betting on gold going up or down.

Do you currently have a net bullish position in gold?

 

 

 

 

 

 

 

 

 

 

 

 

[absolutezero]

For those who think I am "dangerously Bearish" on Gold, I thought you might want to see this post from the Y-shaped thread

 

 

I am not the only one looking for a dip in Gold.

 

So does TFNN's Tom Obrien (the top Gold forecaster, I believe), and Pierre Lasonde:

 

http://kingworldnews.com/kingworldnews/Bro..._Lassonde_.html

 

Lassonde sees Gold falling back to $1050-1100.

 

BTW, I still have a long exposure to Gold and some Gold stocks.

I have made money in recent weeks, given the strength in GLW.t, and the way the GLD position is hedged:

When you buy gold do you buy the physical metal and take delivery or are you just into gold stocks?

[absolutezero]

When you buy gold do you buy the physical metal and take delivery or are you just into gold stocks?

You answered that in one of your later posts.

[drbubb]

When you buy gold do you buy the physical metal and take delivery or are you just into gold stocks?

I have some physical, but only a few handfuls of 1-oz. coins, stored in a bank vault.

And a smallish holding at GM.

 

I am not comfortable holding large amounts of Gold in a bank vault. So if I go "big into physical", I may use GM,

or have to come up with another solution.

 

I have a friend who lives in HK, who keeps a large amount of Gold in a bank vault in NZ.

But is something disastrous occurred, he needs to get down there before he can use his giold.

 

I like GLD because I can buy options, and have limited cash invested, carrying a big position.

 

Believe me, I know how to use leverage. I used to teach options course, at one of the big banks.

So you need not fear I will misuse it.

 

Question, how much money would you tie up in Gold?