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G0ldfinger's GOLD Thread: Longer Term Aspects

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Nice suprise to see gold and silver are up today from yesterday although I was looking forward to buying some silver. I will get on to Bullion Vault again to see whats happening with silver. The latest was that they were waiting for customs to agree that it is VAT exempt in the format that Bullion vault provide. Otherwise its going to be coins.

 

It should be going ballistic through the coming months but it wont look obvious to the doubters imo. $1350 in time for the real green shoots. (spring)

I was expecting gold and silver to go up today as the october options have now expired worthless as was the cartels target. I am expecting tomorrow to be even better.

 

Why don't you use goldmoney for silver, no waiting around and a safer setup?

 

 

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http://www.bloomberg.com/apps/news?pid=206...id=anNG9T__.c_M

Paul Tudor Jones Says Now Is Time, Place for Gold as an Asset

 

By Nicholas Larkin

 

Oct. 29 (Bloomberg) -- The time to hold gold is now as faster inflation and increased purchases through exchange-traded funds and by central banks boost demand amid stagnant mine output, Paul Tudor Jones’s Tudor Investment Corp. said.

 

“I have never been a gold bug,” Jones, whose company manages about $11.6 billion out of Greenwich, Connecticut, told investors in an Oct. 15 letter, a copy of which was obtained by Bloomberg News. “It is just an asset that, like everything else in life, has its time and place. And now is that time.”

...

While metal exploration expenditure has increased, mine production has been “stagnant” the past decade and new output is “marginal” in terms of available supplies, according to the letter.

 

“Any incremental demand for gold must be met through sales from current owners,” the company said in the letter. “They just aren’t making that much of it anymore.”

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More from Paul Tudor Jones;

 

Paul Tudor Jones: Why Gold Will Soar

 

Paul Tudor Jones appears to have shifted from the bear market rally camp to the bull market camp. As of our last update he was firmly in the position that the market had rallied too much and was due for a downturn. Late last summer Tudor Jones stated his desire not to chase the 45% rally in stocks and rather, buy into an autumn downturn in anticipation for a year end rally:

 

While 45% is nothing to ignore, one should take into account that the S&P through July 31 is still down more than 20% on a price basis year-over-year. The bottom line is that we are not inclined to aggressively chase the market here. Rather, we eye a better opportunity to be long equities into year-end on a potential autumnal pullback.

 

He has changed his tune a bit now and believes the economy has the potential to remain quite robust into Q2 of 2010 as Fed policy remains accommodative, the dollar remains weak and inventory de-stocking continues:

 

The forceful policy response to avert depression tail risks posed by the financial crisis has likely unleashed a wave of liquidity which is probably greater than that of 2001-2003. Our job is to identify the best performing assets of this “Great Liquidity Race.” At present, it appears those assets are gold, emerging market equities denominated in local currencies, and commodity related stocks.

 

Liquidity is making its way into bond purchases by banks, into equity markets, into capital flows to emerging markets and into international reserve accumulation and related diversification away from the dollar. This will be the trend over the next quarter—or two—even before discussing potential portfolio shifts within it.

 

Due to this easy money approach he is becoming heavily invested in gold and other precious metals as he expects metals to win the “great liquidity race”:

 

“precious metals exposure has been increasing and is currently the largest commodity exposure. As a result we have included, for this quarter, a separate discussion on gold as an appendix. I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time.”

 

In the bond market he likes Curve Flatteners as inflation is likely to pick-up in the coming quarters. Although Julian Robertson does not have the same gold outlook he does like the same bond trade.

 

“Curve flatteners also provide tail risk insurance against long gold, short dollar and long equity positions and, as such, marry well with other market views presented here.”

 

In terms of currencies he sees the dollar falling further on the back of the Fed’s easy monetary approach. He likes the Brazilian Real and the Australian Dollar. He also likes the Korean Won and Yuan, but believes their appreciation against the dollar will be slower. He does not find the Euro intriguing.

 

He continues to like equities into year-end. Let’s just hope he didn’t just buy at the top:

 

“the stage should be set for another run of meaningful size into year-end. Ensuing developments lead us to think that run could continue well into the first quarter of next year.

 

As for our regional preferences, we continue to favor emerging markets in general, and countries like Brazil and Taiwan, in particular.”

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The next couple of months should be fun for all gold and silver holders, not for those hoping to buy at cheaper prices though. Part of the trouble with holding "spare powder" is if there is a big gust of wind as is currently being sucked up by the cartel. :)

 

seasonalgold.gif

 

GATA be in it to win it....

 

 

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I was expecting gold and silver to go up today as the october options have now expired worthless as was the cartels target. I am expecting tomorrow to be even better.

 

Why don't you use goldmoney for silver, no waiting around and a safer setup?

 

I tried to open an account and it was too much hassel at the time. They had glitches on the website. Im not in a hurry, physical or BV will do me when the time comes.

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I tried to open an account and it was too much hassel at the time. They had glitches on the website. Im not in a hurry, physical or BV will do me when the time comes.

When I opened my account with GM, I downloaded the CAP form and got my accountant to verify it, was easy really. Didn't try the online verification.

 

 

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I tried to open an account and it was too much hassel at the time. They had glitches on the website. Im not in a hurry, physical or BV will do me when the time comes.

I opened an account before it was possible on the website. Getting a copy of my passport notarized was the main inconvenience. My local council offices have notaries public and they did it for less than 3 euros.

 

The rest was just filling out the forms, including notarized copy of passport and an electricity bill (original) to verify my address. I then stuck it in the post and the account was active about 10 days later. Easier than I expected.

 

Assuming BV do start to sell silver I will be especially interested in how their fees compare with GM. At GM silver purchase fees start at 4.24% (dropping for large purchases) but the fee for selling is zero.

 

I made lots of small purchases as the volatility meant I could easily save more than what I might have saved on fees through a big purchase by being a bit patient and waiting for pull backs.

 

Let us know if you hear more about BV silver.

 

One advantage of using both is that it splits your holdings betweeen different companies. At GM you can swap into various currencies although the last time I looked the interest rate was zero per cent for all.

 

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seasonalgold.gif

Well, if this winter follows the long-term average seasonal trends we are looking at 4 consecutive up months. Would be nice after all the waiting.

 

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Well, if this winter follows the long-term average seasonal trends we are looking at 4 consecutive up months. Would be nice after all the waiting.

I think the next four months should be particularly good, especially after the massive inverse head and shoulders consolidation pattern of the last year and a half.

 

$1350 here we come :D

 

 

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W(h)ither gold?

 

Bob Hoye's new interview on Howestreet.com:

 

Howestreet.com

 

"Rising dollar in 2008 signalled start of crash. . . "

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as i say, i am not a trader but i have an elementary sort of a question for those of you who do trade.

 

why go both long and short a security or commodity simultaneously? it doesn't make sense to me at all. if you own it and think it is going down, then why not sell some or all of it. conversely, if you have no exposure to a security or commodity that you believe is going to go up, then why not just buy some?

 

why hedge when you could simply sell? are option / contracts for difference cheaper to purchase than actual security exchange contracts? what am i missing?

You are 100 correct%.

 

People who hedge themselves could as well hold a fiat position.

 

People who trade massively, essentially buy and sell their positions (as Bubb said: like a hedge fund).

 

Both behaviours are fundamentally different from a buy and hold strategy. If they dominate your portfolio, then the long term aspects (benefits) of holding for instance gold totally get lost. As explained above, you could as well hold cash or trade any other market (e.g. tech stocks).

 

You are also correct with the fees part: instead of trading in physical bullion, the paper games will always be cheaper.

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LOL

 

The rat and the dog? Maybe there's a parable there somehow. Tigers are cool. Im more of a tiger man, I think.... :unsure:

The most popular in Western cultures is the horse, they always sell for a good premium.

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Interesting observations. :)

 

Bet you wish now you hadn't sold so much of your gold just recently. :P

 

Yes, it is interesting. And surprising to me. I didn't think gold would act like it has this week. But I'm happy to be proved wrong. Looking at BV I see I can buy my gold back for only about £200 more than I sold it for - and this disparity only came into play yesterday as the pound fell against the dollar. But on the other hand I've made much more than this by hedging my silver exposure. Its roundabouts and swings I suppose.

 

Fortunately, I still hold more gold than I did in August, including now my first physical, so I'm not too upset. I've also done well this week on S&P Shorts.

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Supply and Demand...Got Gold?

 

http://www.marketoracle.co.uk/Article14679.html

 

20091031-chart_c.gif

 

At $1,000 gold, to push China's gold holdings to 5% of reserves would take $55.3 billion; to 10% would cost $144.4 billion; to be the world's top gold dog would run $227.6 billion.

 

Chinese reserves are approaching $2.3 trillion, of which almost 70%, or $1.6 trillion, are denominated in U.S. dollars. The cost to become the world's biggest holder of gold would be a pittance compared to the amount of money China has available. In other words, money is not a problem.

 

Combining the country's massive holdings of dollars and the very real likelihood those dollars are going to lose much of their value, the motivation to buy tangible assets is urgent.

 

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Goldfinger,

 

How may pinned Gold threads do we need?

 

Does it make sense for you to start the November Gold thread,

and call it:

Gold Thread for Nov.2009 - For Traders and Investors

Incorporating the G0ldfinger Gold thread

 

The problem is:

We dont have enough space for pinning here

 

So I dont even pin my own DrB Diary

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Goldfinger,

 

How may pinned Gold threads do we need?

 

Does it make sense for you to start the November Gold thread,

and call it:

Gold Thread for Nov.2009 - For Traders and Investors

Incorporating the G0ldfinger Gold thread

 

The problem is:

We dont have enough space for pinning here

 

So I dont even pin my own DrB Diary

 

I respectfully request that the Gold Conspiracy thread be unpinned.

 

 

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Mish Shedlock (with currency charts):

Why did gold rise with the dollar January-February? Those three charts above offer a possible answer.

 

The Euro bottomed against the US$ at the same time the crisis in the Hungarian Forint, Czech Krona, and Polish Zloty subsided vs. the Euro.

 

Although we would likely see weakness in gold if the dollar rallies, toss that relationship out the window if there is a currency crisis in Eastern Europe, or Asia. This could be another situation where gold rises with the dollar, as it did in the first quarter this year when the stock market collapsed.

Over the longer term, gold's move is a symptom of a flight from fiat currencies and various credit stresses in general, not just the dollar. If you are watching the US$ only, you are watching an incomplete picture. There are significant problems elsewhere.

http://globaleconomicanalysis.blogspot.com...n-european.html

 

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I respectfully request that the Gold Conspiracy thread be unpinned.

I've done that, and so has been this one here. I'll still post things here that I don't want to 'drown' in the monthly threads.

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