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drbubb

Gold: the Bull's thread

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thanks for the comments guys, ive obviously got a lot to learn. can anyone suggest any good websites where i can learn about this kind of stuff?? thanks again

 

drbubb - are you as bullish as duane over the next couple of years?

 

www.financialsense.com (by far the best as it brings together reports from different sites also a very very insightful radio programme on a saturday morning a must listen)

www.goldseek.com (also provides a radio programme on sunday - gold bullish)

www.kitco.com (latest news, spot prices and futures)

www.dailyreckoning.com (these guys are very bearish on the economy and bullish on gold, bill bonner wrote the ever popular 'empire of debt' worth a read for a better understanding of global economy)

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I am bullish-but it wont be straight up

 

In fact, looks like we have some opening gaps up, including one today

so gold may have to retrace before moving higher

 

there's strong resistance at $600, and that may prove a real challenge just now

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As Bubb Said,

 

Depends.. in a deflationary environment gold would go down, but that would mean CB's would have to act now and increase interest rates substancially resulting in the much needed recession and contraction in the money supply. We all know this will not happen as it will be suicide for the US economy and would increase the value of US bad debts - on the upside, in this scenario when they have decided to reinflate the worry is hyper-inflation so gold would come back with a smile.

 

I used to think that gold would act this way in a deflationary environment.

 

However IF gold can take on the role of money during what would be a period of financial chaos, then it could rise in value.

 

It makes sense to buy and hold your own bullion if you expect deflation in any event.

 

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

 

 

BTW my (oft flawed) analysis suggests gold will break and could stay above $600 from here. I hope we have completed a "c" wave to $655 ish. MACD for GBS still indicating buy / hold.

 

 

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Has anyone here commented on Ian Gordon's TA??? (I have not seen a post).

 

He said, way back, when gold was under $500 that we would go to $740 break down to $565 and then move to new highs. By far the most accurate prediction that I have seen.

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I spoke with Gordon's trader (Barry) the other day, and he expected a pullback from $600

for a brief while. Looks like we are getting it now

 

gold is at $589, this morning

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Doc, am I correct in recalling that you know Ian Gordon personally?

 

If so would it be possible to involve Ian with GEI? Perhaps an Ian Gordon Q and A thread?

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Sounds good, ETF.

 

This on the other hand looks less good and explains yet again why gold yet again failed to rally.

 

fsspon14copyff4.png]gold[/url]

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If stocks take a big tumble from their current overbought extremes, there could be an indiscriminate sell-off as witnessed back in May / June. In which case gold at $525 - $540 could be a real possibility. I'd fill my boots if it did... can't see it staying down there for long!

 

On the other hand, crude broke below massive support today but then only fell a moderate amount (by recent volatile standards) and bounced back quite strongly. I am about 90% certain it's putting a bottom in... would be very suprised if it dipped below $55. This could support gold around current levels.

 

EDIT: lots of "coulds" there. Maybe I should have just said "The gold price could do anything" :-)

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Sounds good, ETF.

 

This on the other hand looks less good and explains yet again why gold yet again failed to rally.

 

All that I know for sure Frizzers is that I sleep all the better for holding gold and a little silver. I plan to buy more gold and silver as time goes by.

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"would it be possible to involve Ian with GEI? Perhaps an Ian Gordon Q and A thread?"

 

He's my broker. i have an account with Boulder.

I see him from time to time at various conferences, and we chat

 

I can ask him if he will do a "Ten questions" session (or maybe 12).

Have you got some questions for him?

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"would it be possible to involve Ian with GEI? Perhaps an Ian Gordon Q and A thread?"

 

He's my broker. i have an account with Boulder.

I see him from time to time at various conferences, and we chat

 

I can ask him if he will do a "Ten questions" session (or maybe 12).

Have you got some questions for him?

 

It would be great if you could persuade Mr Gordon to answer a few questions, I have a lot of respect for his work.

 

The question I’d like to ask, of course, relates to the behaviour of gold during a deflationary period.

 

When I look back at the price of gold through the late 1920’s through to the mid 1930’s then I observe a drop in the value of gold – not a rise.

Gold seemed to come into it’s own when the government fixed the price. Who would not have liked to own gold at this time, at a fixed price; it was relatively rising against every other asset!

 

I also have a worry that gold was effectively pegged to the Dollar at this time. (Could one not go into a bank and exchange gold for Dollars at the time)? In other words gold was money either way you may look at it during the great depression.

 

I doubt if gold (or gold stocks) would enjoy either of these advantages if a deflationary episode were to unfold today.

 

Does Ian agree with my observations? And, notwithstanding these points, why is Ian so convinced that gold will perform so well this time around?

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"late 1920’s through to the mid 1930’s then I observe a drop in the value of gold – not a rise. "

 

The Gold price was controlled- fixed exchange rate to the dollar

 

But the price of Homestake Mining, a gold share, shot up

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Homestake:

 

But on the whole, the city and its residents prospered as a result of the mine. In the early 1930s, as the rest of the nation suffered economic hardship throughout the Great Depression, the management of Homestake set a shorter work week with an increase in wages, and provided end of year bonuses to workers.

 

http://www.homestaketour.com/history.html

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Thanks for your answers Doc / Sigmadelta.

 

I was aware that Homestake performed well, thanks for the link - interesting.

 

Doc, you seem to agree with my point, in part, that gold was fixed to the dollar during a "bull market for cash".

 

I am worried that this is why / partly why gold performed so well - rather than gold having properties that will ALWAYS do well in such an environment.

 

For what it's worth I think that gold will become money of last resort in either a very high/hyper inflationary scenario OR in a deflationary one.

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Can I guarantee that Gold will perform well in a deflation? No.

 

In fact, if we get high inflation first, gold may get pushed up "too far" (ahead of inflation),

and fall back sharply when the -perhaps inevitable- deflation sets in

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Can I guarantee that Gold will perform well in a deflation? No.

 

In fact, if we get high inflation first, gold may get pushed up "too far" (ahead of inflation),

and fall back sharply when the -perhaps inevitable- deflation sets in

 

this is what I expect will happen and want to happen.

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Can I guarantee that Gold will perform well in a deflation? No.

 

In fact, if we get high inflation first, gold may get pushed up "too far" (ahead of inflation),

and fall back sharply when the -perhaps inevitable- deflation sets in

 

That may have happened already - I think we may see all too soon.

 

I think I understand your views on gold much more of late. FWIW, I, broadly speaking, agree with you.

 

Thanks as always Doc for taking the time to share your knowledge and opinions.

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This paper looks in detail at the the US gold price in deflationary times:

 

http://newsmine.org/dbsrv/cabal-elite/inte...aviorofGold.pdf

 

The nub of the argument is that when deflation is in prospect gold becomes an attractive hording vehicle because of its credit-worthiness compared to alternatives such as foreign currencies - but much depends on whether or not deflation becomes international or whether it is limited to the US (and/or the UK?).

 

Good argument or not?

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This paper looks in detail at the the US gold price in deflationary times:

 

http://newsmine.org/dbsrv/cabal-elite/inte...aviorofGold.pdf

 

The nub of the argument is that when deflation is in prospect gold becomes an attractive hording vehicle because of its credit-worthiness compared to alternatives such as foreign currencies - but much depends on whether or not deflation becomes international or whether it is limited to the US (and/or the UK?).

 

Good argument or not?

 

TNX NB.

 

I have seen this piece before - the arguement has many merits.

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Guest Guest_duane_dibbley_*
Does anyone know why the pound price of gold per ounce has gone down from 330 to 325 today?

 

Am I missing something?

 

the dollar is dropping in value to the £.

 

gold is priced in dollars.

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The gold and silver movements and stresses in the charts on KITCO are amazing.

 

The last 3 hrs of silver - have you seen anything like that before?

And the funny old hits down on gold every few hours, then each time a steady return. How do the chart experts interpret those shapes?

 

All the while the dollar is slipping

slipping

slipping

 

So clear but this amateur must be wrong. It's entertaining.

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Guest duane dibbley
The gold and silver movements and stresses in the charts on KITCO are amazing.

 

The last 3 hrs of silver - have you seen anything like that before?

And the funny old hits down on gold every few hours, then each time a steady return. How do the chart experts interpret those shapes?

 

All the while the dollar is slipping

slipping

slipping

 

So clear but this amateur must be wrong. It's entertaining.

 

I been watching silver for about 18 months - never seen that before, up and down like the graph you would expect to see if 2 receptors were connected to helicopter bens pulse rate.

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TNX NB.

 

I have seen this piece before - the arguement has many merits.

 

Gold and silver are win win at the moment (although there might be a pull back in silver short term). Effectively if there is inflation you win. Because of the amount of debt around if there is deflation then there is a good chance banks go under. In which case the government would be forced to create money to keep them afloat.

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Gold priced in £ hasn't risen all month, and is only up 12% ish over the last 12 months. Well worth watching the £ vs $ price charts on Kitco if you're not spreadbetting (or whatever) directly on the dollar price.

 

I am wondering - is the £ really deserving of all this strength? Our economy is similar to that of the US and M4 is growing at 14% YoY. So does the £ not face the same fate as the dollar? If so, when are the forex markets going to start treating it with the contempt it deserves?!

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Yes Yogi - when?

The £ seems well-managed to stay in-line with the Euro for several years past.

 

I haven't found a convincing reason why the UK will not follow the US in terms of housing & debt & economy? One year behind? (apart from the Russians are coming for housing).

 

I was just trying to rate my various investments in terms of risk - how can I rate the cash £ as low risk?

Apologies for cross-posting re £ savings & inflation etc - however 12% gold is nearer 14% M4 than 5% savings rates.

 

#################

 

"Gold sales on the Chinese mainland gained three percent in the third quarter, boosted mainly by surging demand for investment bullion, the China affiliate of the World Gold Council said yesterday in an industry report.

 

Sales totaled 62.9 tons in the third quarter, including jewelry and investment bullion, the gold advocate said."

 

A shop assistant shows a pair of "gold pigs" at a store in Hangzhou, East China's Jiangsu Province, November 28, 2006. The pig ornament is priced at 1,080 yuan (US$138). Pig ornaments are becoming popular in China as next year is the Year of the Boar, according to the Chinese traditional lunar calendar

 

http://www.chinadaily.com.cn/bizchina/2006...tent_745864.htm

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