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drbubb

Gold Comments - 2nd Half

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A very solid interview IMHO. Clearly we don't know how he performed his calculations and what assumptions/rates were used, but on that performance he's clearly a smart, lucid professional. One of the more credible investors / pundits out there in my view.

 

Very useful comments on juniors, I thought. Maybe you could get him on CWR CC?

 

 

This is the formula he was using

 

Similarly, if the amount of gold increases, the value of gold will decrease. Due to its physical properties almost all of the gold ever mined is still around in one form or another, which is one of the reasons why gold is so suitable to be money in the first place. The amount of gold mined on an annual basis is nothing other than inflation of the total amount of gold ever mined. The inflation rate of gold is thus new mine production as a percentage of above ground gold stock, which in turn is equal to the total amount of gold mined since the beginning of time.

 

Consequently, the change in the gold price, in dollars, over time will be in proportion to the inflation of the dollar and inversely proportional to the inflation of gold. We can calculate the theoretical gold price (Aun) as follows: Aun = Aun-1(M3n/M3n-1)(GPn-1/GPn) [Au = gold price; M3 = money supply; GP = gold production]

 

Noticed him doing the rounds lately think he is feeling the pinch too used to be around £1000 for annual subscription to his newsletter now around £150 oh and you can pay monthly too!.

 

https://www.paulvaneeden.com/pebble.asp?relid=496

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One possible count which would call for a wave 5 down from here -- this whole move down looks quite impulsive but the fundamentals argue against that being the first leg down of a major correction.

 

Still bullish but waiting to see what the chart does in the near term.

 

 

 

Gold25-08.png

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Can't find the original post about Paul Van Eeden saying gold was overvalued, but here is a recent interview

 

http://watch.bnn.ca/trading-day/august-200...2008/#clip84424

 

Bubb - u dismissed his reasoning - wonder if u could flesh that out a bit

 

He certainly looks quite smart just now - went neutral at 1000, nibbling sub 800, as beleives fair value = 760

 

It depends on the starting point, I suppose.

Does he really believe US inflation numbers? If so, he;s being foolish

 

Walden.

Where you put a 4, i might put an A, with a B and C to come*

003kb0.png

 

*Note: Mine is only one possible pathway

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Walden.

Where you put a 4, i might put an A, with a B and C to come*

 

*Note: Mine is only one possible pathway

 

 

Thanks for that addition, should have spotted the wave iv resistance at the recent high as possibly being the A leg peak with the B and C still to come ( Although there may have been an A-B-C up already )

 

The next week or two should complete the overall pattern down from the all time high as what looks like a corrective A-B-C, just a little concerned by the possible impulsive nature of the C leg and if it forms 5 down.

 

With seasonality favouring a move up in September, looking for a bullish move then.

 

 

 

 

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LOOK HOW Gold (GLD) continues to follow the same path as Oil (USO)

and Oil Service stocks (OIH): ... update

 

aa0tr3.gif

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THIS BIG GAP DOWN in Gold and Oil ...

 

May be exactly what is needed to put in a low.

 

I wasnt happy with the last low and Oil, and said it needed to be retested. This is it!

And so far, Volume looks lighter too

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Looks to have completed a wave 4 and now down into a possible wave 5 of the C leg down from the main A-B-C down from the peak over $1,000.

 

GOLDHOURLY02-09.png

 

So far this possible 5 waves down is pretty well behaved and now looking for that fifth wave to break down into it's own 5.

We should see a new recent low if that happens.

 

There's also rising trendline support currently close to $770 running up from July 05 --- that may prove to be strong support.

Minus development / rapid and sustained rejection up from around that $770 area would give a kiss it goodbye effect and would signal an important low. ------ Just one of many scenarios that may happen, but maybe one to look out for.

 

.

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What are the significance of 'Gaps' as seen on the Oil/Gold Charts and pointed out be DrB? :unsure:

 

Gaps tend to get filled (maybe 90-95% of the time).

So a gap down on the opening suggests that the market may want to come back up.

 

Did anyone bother to look at that XAU chart? ... update

aa2yc6.gif

 

The fact that XAU has come back down to the 987d.MA* on lighter volume with this Gold drop,

suggests that the downside pressure is exhausting itself.

 

I look for a move up in Gold and Gold shares from here

 

*987 is a Fibonacci number

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The possible A-B-C down from the all time high with the C wave breaking down into a 5 wave form looks to be in it's final wave v with just one more low to complete the pattern, probably in the next couple of days.

 

 

 

GOLD09-09.png

 

 

 

Rapid price rejection from a new low would be a good start for a bullish move.

 

.

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The possible A-B-C down from the all time high with the C wave breaking down into a 5 wave form looks to be in it's final wave v with just one more low to complete the pattern, probably in the next couple of days.

 

 

 

GOLD09-09.png

 

 

 

Rapid price rejection from a new low would be a good start for a bullish move.

 

.

 

Hi walden

 

I hope you are right, it certainly felt emotionally something like a low last week. I wouldn't like to see many more sharp around this low but carving out a low while any remaining bullish optimism is wrung out of the market.

 

I like biwwii's commentary on the HUI

 

http://biiwii.blogspot.com/2008/09/hui-wee...e-road-map.html

 

and I did like the volume on the HUI which suggested a strong powerful reversal.

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Look at those Gold lease rates - Sept.16th

 

1-month 0.7761% +0.3409

2-month 0.8209% +0.2379

3-month 0.8906% +0.2276

6-month 1.0520% +0.2607

1-year : 0.9954% +0.2646

/see: http://www.kitco.com/market/LFrate.html

 

This is bullish. Even paper Gold is getting hard to find & borrow.

The big jumps of yesterday are noteworthy

 

6 month rates over 1% ! - we dont see that very often

 

augo0182lsbpb4.gif

w450.png

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I've been working on the pricinple that the only reason to borrow gold is to short it.

Am I missing something?

 

sure.\

banks borrow it, sell it, and lend the money to gold miners

the gold miners repay gold

 

and /

Institutions that borrowed gold previously are seeing their borrowing costs rise,

and that will encourage them to buyback gold to cover their shorts

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Look at those Gold lease rates - Sept.16th

 

1-month 0.7761% +0.3409

2-month 0.8209% +0.2379

3-month 0.8906% +0.2276

6-month 1.0520% +0.2607

1-year : 0.9954% +0.2646

/see: http://www.kitco.com/market/LFrate.html

 

This is bullish. Even paper Gold is getting hard to find & borrow.

The big jumps of yesterday are noteworthy

 

6 month rates over 1% ! - we dont see that very often

 

Funny enough I was talking about gold lease rates with my GF earlier than you posted this - seems to me like the lease rates are more reliable than may other indicators I use at the moment.

 

A point I made was that those moves are massive - it is easy to dismiss small moves eg 0.2% , but really lease rates have basically quadrupled.

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Gold shares (GDX) - has broken down, with gold's fall below $850, and fallen back to OTP point near $xx

 

aa0ta6.gif

 

This is in a bad news background:

+ Merrill is talking about a fall in oil back to $50 - if we see global recessiom,

+ Factory orders fell 4%

 

The good news for gold bulls is the low volume on this slide

 

same chart for gold

aa5ln9.gif

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This is in a bad news background:

+ Merrill is talking about a fall in oil back to $50 - if we see global recessiom,

+ Factory orders fell 4%

 

This is the level Tim Wood and comrades have been suggesting too. His record is pretty good but do you think this level is attainable i.e. Will opec/ saudis / Russia allow it to drop below $90?

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David Bensimon was interviewed on Bloomberg:

 

He was he predicted a $732 low for gold, and $80 for oil.

He now thinks the current bounce will be followed by a retest - ideally in April 2009

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-9.05% HUI

-7.85% FTSE 100

-6.60% DOW

-7.10% S&P 500

-7.75% FTSE Eurofirst 300

-4.25% Nikkei

+4.37% Gold

 

It's not traded this low ratio to gold since the beginning of 2002, before the bull began!

 

bignn0.gif

 

Let's hope that it dosnt need to go all the way to the bottom

 

aa2jk8.gif

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bignn0.gif

 

Let's hope that it dosnt need to go all the way to the bottom

 

aa2jk8.gif

 

 

From the HUI:Gold ratio chart it looks like it might...

 

Looks like it broke through suport at 0.32, heading to 0.22....

 

(Sorry, can't copy the BBg graph over..)

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Looks like a nice double bottom could be in place

 

chartrh9.gif

 

And the lease rates are also bullish

 

augo0030lscy1.gif

 

SO GOLD may be on the launch pad again

 

== ==

 

DO BE CAREFUL : there's also some real threat of a bigger collapse.

If the lease rates werent so high,I would just stand aside. With those lease rates

some GLD,GDX, or RGLD calls could be good.

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Cgnao could be right. A bullish case for a gold low can be made

 

Here's how I draw the chart:

 

goldgldvv2.gif

 

If it can power through $850, we should see fresh highs, maybe fairly quickly (as the dollar falls)

 

goldgldew3.gif

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