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drbubb

Gold: the Bull's thread

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Looking at the GCZ06 Gold chart it looks as though $560 has provided key support three times since Feb and this time may be critical as it will coincide with the 300 day MA.

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3rd time unlucky?

 

From a purely TA view, does this mean that it may fall down below $560 this time or is this the indicator that gold will shoot to the stars?

 

I like to think that if there is support at $560 this time then that will be the sign to pile in!

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Bottom in?

 

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Has the trend turned?

 

fsspon1aq9.png]gold[/url]

 

We won't know for sure till we see the retest of this major line of resistance.

 

fsspon2copyue1.png]My Webpage[/url]

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Gold has taken a beating today, down to almost $580 even with the threats from N. Korea on testing nuclear weapons and talks of sanctions against Iran....

 

It's all too much for me, I have taken money out of gold and will see for the next couple of weeks but may just get out of this game altogether. I just can't guess what this market will do.

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Gold has taken a beating today, down to almost $580 even with the threats from N. Korea on testing nuclear weapons and talks of sanctions against Iran....

 

It's all too much for me, I have taken money out of gold and will see for the next couple of weeks but may just get out of this game altogether. I just can't guess what this market will do.

 

Is that you as a guest again Frizzers?

 

Gold certainly got hit Yesterday but there still appeared to be some support from Asia last night which should build in the next couple of months.

 

Fundermentals for the gold bull are still in place mid to long term nothing has changed:

 

1. Oil was at $80 only a couple of months ago it was around $60 this time last year as the bull was raging as we have seen before oil can add $20 over just a couple of weeks and at $60 downside is minimal as OPEC members get twitchy and threaten to cut supplies.

 

2. The Dollar still has to carry a massive defecit with the risk of a possible default its only a matter of time before it has a crisis

 

3. Inflation has not gone away Money supply here in the UK is running over 13% while in the States its so high that they have stopped publishing the M3 figures.

 

4. Gold and Silver ETFs are starting to reach critical mass putting power into the hands of the people and away from the market manipulators

 

5. Central banks fell 20% short of selling their quota under the Washington agreement before September 27 2006 despite sales of three times average in September which saw prices pulled back below $600

 

6. Barclays SLV ETF have asked for permission to double their holdings to around $300 million Oz of real (allocated) silver which is more than would appear to be available Today on the worlds markets. Note: real not paper silver which has been leased over and over again to manipulate the markets in the past.

 

7. Commentators talk of the gold bubble bursting but that wasn't a bubble, that was only the first stirrings of the gold bull, at least I hope so ;)

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Guest Guest_Tahoma_*

You were saying?

 

Gold just hit $563.

 

iTulip's Ka Poom throery suggests Gold could be driven as low as $430. I am fed up with seeing it get bombed downwards when every ounce of common sense says it should be grinding up.

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US is said to have 8,000 t of gold ~ c.25% of world supply (World Gold Council) so should be able to direct the gold market to some degree; I imagine gold would be a competitor of a weakening dollar.

 

The Central Bank Gold Sales agreement seems to refer to European banks, although I have read the US abides by the agreement - whatever that means. I haven't been able to find any info about recent US Gold holings or sales though.

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A report on recent ECBank sales - an interesting chart and comments.

 

http://www.resourceinvestor.com/pebble.asp?relid=24412

 

I read a pdf report recently that argued central banks were not concerned about the actual price at which they sell gold due to the way it is managed by their accountants.

 

Now that investors own more gold than the central banks does this mean the balance of power has changed and we may start to see increased volatility in the gold market as price sensitive investors trade more frequently than the banks. Another key point is that the central banks have traditionally been bearish on gold possibly timing their sell offs to contain the gold price whenever possible, investors will have taken active steps to buy into gold so by default will tend to have a more optimistic outlook which should help push prices higher.

 

“As investors accumulated close to 200 million ounces of gold over the past five years, the argument can be made that a lot of gold has moved from weaker hands into stronger ones,” he added.

 

Nadler said the funds largely increased positions during the last few weeks while gold was holding support from $590-$600/oz, but sold today when support was broken.

 

"Whether or not some bank 'rushed' to sell in the final days of last month is not as important to the market as which buyers out there did not rush to mop up the available gold," Nadler concluded.

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Shirley Williams said on Question Time last night that during a visit to America last week she became aware of a large element in congress who thought an attack on Iran was inevitable. One expert she spoke to said the chances of there NOT being and attack on Iran to destroy their nuclear capability was 3:1.

 

Despite a body advising that it would take at least five years for Iran to pose a realistic threat she formed the opinion that things were moving much faster than that and if there was no dialogue directly between Iran and the States things could move very quickly. She said that comments by Condelisa Rice a couple of months ago where she defended the right of Bush to authorise an attack on another country without consulting Congress were deeply concerning. The prospect of an attack on Iran chilled her to the bone as it presented the biggest risk to world stability and could easily result in a route of UK and US forces in Iraq should they be targeted directly by Iranian military.

 

Shirley Williams must be really concerned about developments in the US for her to divulge such sensitive information on a popular show such as Question Time. The US and UK spin machines must be blowing a gasket trying to paint a rosy picture of current events, when the truth comes out it could be explosive for gold.

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Thanks Needle - if Fr sold, I wonder why they didn't sell openly under the year's Quota, rather than ahead, wasting previous quota and using 'next year's'?

 

Can't see the 'attach image' option at the moment, but the CB gold sales & buy chart looks fairly uniform for the last 5 years, apart from a 100t purchase by China around Dec 2002.

 

 

 

The invasion of Iraq was unbelievable. Hans Blick, weapons inspector, said every night on the telly - we ain't found nothing yet. Taking that situation as an indicator of reason being of no consequence, it doesn't look good for the Iran situation. Sadly, it seems as if many Americans believe(d) that Iraq has long been the base for AL Q. It's a horrible subject.

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North Korean nuclear tests only added about $5 to the price of gold and it still languishes under $600. That's pretty bearish for the short-term IMO.

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BULL OR BEAR? Differing views at the Hong Kong Conference...

=========

 

 

"....Over the three days, we will see most of the worthies in the world of gold. The first day included some star speakers, such as Doug Casey, Frank Veneroso, James Turk, and Ian Gordon, amongst others. Casey's talk opened the morning session, and was not for the faint-of-heart. He spoke of the trillions of US dollars that were overseas. These would eventually be exchanged for other assets when their foreign holders dump them. And this would trigger a collapse in exchange value of the dollar, increased inflation in the US, and other headaches. He seemed comfortable talking about gold at US$2,000-3,000/oz, world war three, and the possibility of nuclear bombs being brought into New York harbour one day. Chilling, but familiar territory, for many gold bugs, I suppose. The Hong Kong audience did not seem shocked, even if it was new to them.

 

Frank Veneroso's talk was a surprise to me. He is not in the bullish camp. Using a more academic approach than Doug Casey, he displayed rows of figures showing jewellery and bar-hoarding demand over the past ten years. A decade earlier, he had forecast big future increases in Far Eastern demand, counting on investors in these areas consuming more jewellery, as they got richer. This has not happened. Exploding incomes in China, Hong Kong, and Taiwan, have been accompanied by a fall, not a rise in demand. And the oft-cited commodities supercycle has only brought a 2 per cent/annum rise in copper demand.

 

The explanation Veneroso had for the rise in prices was: Hedge Funds. He presented a chart showing a tripling of commodity derivatives on the books of US banks between 2004 and 2005. He said this big jump was due to speculative demand coming from Hedge Funds. The recent US$6 billion loss reported by Amaranth showed how huge the positions controlled by hedge funds had become. His main fear was that a future collapse in copper prices- similar to what we have seen in recent weeks in the natural gas market- would spill over into silver and gold. Ironically, he said that gold is likely to fare better than the other metals, because Central Bank intervention had kept gold prices down. In a metals slide we could see short-covering by Central Banks, and this meant that gold's fall could be limited.

 

Jim Turk was the most articulate of gold bulls. He entitled his talk, “Gold's Inevitable Climb to US$1,000/oz.” His charts showed that gold is in a bull market that goes back to the late 1960's, and the prices falls of the eighties and nineties are nothing more than a two decade correction to a longer uptrend. Drawing comparisons with the seventies, he said the current rally has further to go to catch up with the moves of thirty years earlier. The main problem is the excess printing of money, to cope with various financial problems. Like Casey, he sees a big fall in the dollar, and the possibility of hyperinflation, if the Fed is unwilling to take the pain of deflation. The end of reporting of M3 money supply data is a clear sign to Turk that the Fed wants the freedom to keep printing without much scrutiny by the markets.

 

Philip Koetse, Axel Merk, and Ian Gordon put forward generally upbeat presentations on gold. Gordon made his usual Long Wave presentation, and answered a question raised by Frank Veneroso, why has demand for gold not risen much amongst Far Eastern investors? His answer was that they are still making big money on their paper assets. The Hong Kong Stock index is hovering at just below 18,000, less than 1 per cent below its all-time high from 2000. Falling stock prices, and fear, would drive investors back into gold, he said."

 

...MORE: http://www.minesite.com/storyFull5.php?storySeq=3854

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from a lehman analyst.

 

"LME base metals inventories have been falling. Use LME Go on Bloomberg, then select warehouse stocks (items 25 to 32). Inventories of zinc (LSZS Index GP), Nickel (LSNI Index GP) and copper (LSCA Index GP) have been most impressive lately. Nickel inventories are at remarkably low levels, which helps explain why the nickel price was at a 19-year high yesterday. The zinc price has rallied as well on falling inventories.

 

market sentiment in mning sector appears to be getting more positive, or at least less negative. I think the recent rally has not been driven by short covering. Investors have been looking for long ideas in this sector over the past week or so. I did a dinner with NY-based hedge funds yesterday and the mood was positive. This is very different from the general mood around this sector a month ago. Xstrata is still our top pick despite strong move up over the past week.

 

Q - What is the reason HFs are getting bullish on mining sector ? Short-trading or low LME inventories ?

 

A - Two main reasons. First, lower LME inventories. Second, they also seem less worried about US economic outlook."

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could someone answer this: if the US/UK economies go into recession would the price of gold go up or down? i had thought up but after doing a bit of reading im more and more confused. cheers

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There are far more knowledgable people than me on here to answer this, but I would say... down initially, as everyone panics and flees to cash and bonds, selling everything else. Then up as thoughts turn to the inevitable reflation effort and interest rates are slashed.

 

As if it were that simple.. haha :mellow:

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depends on what causes the recession.

 

if it comes as a result of rate rises as the dollar falls, then when rates get high enough,

precious metals might fall- but they would have a helluva ride first

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could someone answer this: if the US/UK economies go into recession would the price of gold go up or down? i had thought up but after doing a bit of reading im more and more confused. cheers

 

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.

 

What the US wants to do is keep inflation going so that the value of their debts is eroded somewhat as the billions of dollars they owe in debt will not be so many billions of dollars in an inflated environment. They have to balance this by making sure the general public do not see this so they don't want the inflation numbers to increase too dramatically (so they fudge it). Problem is people are starting to wise up and US debts are getting bigger and bigger. They will continue to inflate and as they do gold will climb. Add high energy costs and wars into the equation and it is the perfect recipe for a massive gold spike over the next few years.

 

The ideal scenario for me is for investors to hedge inflation with gold, then for Joe public to notice a new investment class in precious metals and start buying in, I then want this to turn into a frenzy of speculative buying and for precious metals to turn into a bubble making it overvalued. At this point when inflation is rampant, the dollar is losing value, speculators have entered the market and my taxi driver and hairdresser are telling me about their gold investments i will await news of the government doing something about it - like raising interest rates dramatically, at this point I will bail out and await the crash.

This is similar to what happened in the 70's - the last great bull run in gold.

 

The figure to bail out at is not known but a leading expert once said that gold will end this bull run with three zeros, the question is what will be the leading number??

 

That's anyone's guess.

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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?

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