It's looking grim again. Is gold the would-be saviour?
Discussion
DonkeyApple said:
Just got emailed this by a mate: http://goldsilver.com/buy-online/Valcambi-Gold-Com...
When tinfoil just isn't enough.
talk about exploiting MoneyWeek pensioners.
I take two! One orange flavour and one fruit and nut.When tinfoil just isn't enough.
talk about exploiting MoneyWeek pensioners. Digga said:
DonkeyApple said:
Just got emailed this by a mate: http://goldsilver.com/buy-online/Valcambi-Gold-Com...
When tinfoil just isn't enough. talk about exploiting MoneyWeek pensioners.
I take two! One orange flavour and one fruit and nut.When tinfoil just isn't enough.
talk about exploiting MoneyWeek pensioners. 
DonkeyApple said:
I suspect the 'Fruit and Nut' has been in big demand.
DA, nothing personal and I am sure you know I value your contributions to the thread, but I don't see how you can say you think $2000 per ounce is potentially achievable, but generally seem to say gold is a dud investment and all the "bug" are making a big mistake.Buying today at 1600 and selling at 2000 is a rather large profit.
I completely take on board your points made and I think I agree with most of them given the limits of my knowledge, but at the same time you do not need to temper your statements once in a way!
It's not an issue with gold but with buyers and rampers etc.
Most people simply don't understand what gold is and how it works and as such buy the wrong product for the wrong reasons. The market is also preyed upon by pro vultures who also don't understand the product but know how to sell etc.
The key areas are having a balanced portfolio which few people do. Understanding that when it turns to a buyers market how their asset will perform and whether they will even be able to sell it and what a USD priced commodity is really about.
For example, all these firms selling physical gold will not be buyers in a turn. History tells is this time and time again. Any buyers that do appear will be deeply discounted. So the risk of holding unsecured physical is far larger than most understand and no vendor has an interest in explaining this.
The currency angle means that gold price for a UK holder has to be viewed with exchange risk in mind.
Plus, many collective schemes will transpire to be ponzis as it is an unregulated market. The client money has long been sent offshore and no gold has ever been bought.
Spank shop media ramp this market up as it is the holy grail of non regulation and fear and with huge comms and kickbacks.
It is a filthy market, riddled with spivs and conmen and many have been taken for a total ride.
Outside of the mechanics, looking at the 'trade' itself, $2000 is achievable. It will take an increase in USD printing and/or further depreciation of EU etc or some other significant value decline or fear event.
However, my personal view is that the recession in the West is over and has been since Q3 so the fear factor is out of gold and because equities are delivering better returns and prospects there is an asset reallocation out of gold.
What is going on at the moment is that gold has become a brilliant hedge for long US equity and I think this is the smart play for the moment. For example, the SandP is approaching 10th closing high and the rules state that this run will break. If it breaks on the back of a piece of negative news then I think gold is a sure fire trade to clear $1600 and further very rapidly. But the sentiment is still going to be with equities so I'd expect to switch back rapidly.
But fundamentally, gold isn't an investment because it has no yield. Worse, it costs money to hold. It's a tool for a specific set of jobs.
Most people simply don't understand what gold is and how it works and as such buy the wrong product for the wrong reasons. The market is also preyed upon by pro vultures who also don't understand the product but know how to sell etc.
The key areas are having a balanced portfolio which few people do. Understanding that when it turns to a buyers market how their asset will perform and whether they will even be able to sell it and what a USD priced commodity is really about.
For example, all these firms selling physical gold will not be buyers in a turn. History tells is this time and time again. Any buyers that do appear will be deeply discounted. So the risk of holding unsecured physical is far larger than most understand and no vendor has an interest in explaining this.
The currency angle means that gold price for a UK holder has to be viewed with exchange risk in mind.
Plus, many collective schemes will transpire to be ponzis as it is an unregulated market. The client money has long been sent offshore and no gold has ever been bought.
Spank shop media ramp this market up as it is the holy grail of non regulation and fear and with huge comms and kickbacks.
It is a filthy market, riddled with spivs and conmen and many have been taken for a total ride.
Outside of the mechanics, looking at the 'trade' itself, $2000 is achievable. It will take an increase in USD printing and/or further depreciation of EU etc or some other significant value decline or fear event.
However, my personal view is that the recession in the West is over and has been since Q3 so the fear factor is out of gold and because equities are delivering better returns and prospects there is an asset reallocation out of gold.
What is going on at the moment is that gold has become a brilliant hedge for long US equity and I think this is the smart play for the moment. For example, the SandP is approaching 10th closing high and the rules state that this run will break. If it breaks on the back of a piece of negative news then I think gold is a sure fire trade to clear $1600 and further very rapidly. But the sentiment is still going to be with equities so I'd expect to switch back rapidly.
But fundamentally, gold isn't an investment because it has no yield. Worse, it costs money to hold. It's a tool for a specific set of jobs.
BJWoods said:
dash to gold? - if the EU/Cyprus government can just raid bank savings accounts..
ie public thinking in EU countries like Italy, Spain, Portgugal etc... if they can do that in Cyprus......
Interesting to see what effect it will have on gold. I think we can be sure of one thing, that gold won't behave like we think it should!ie public thinking in EU countries like Italy, Spain, Portgugal etc... if they can do that in Cyprus......
You'd expect a jump in price as a reaction.
However, there are a few things to consider. Most of the cash being haircut is untaxed, evasion profits from Russia, Greece and other European countries. So it isn't easy for these people to move it quickly.
The locals, like most basic Med dwellers, already keep much of their real wealth in either property or under the mattress.
Because of the history of invasion in Cyprus, many people will already be sitting on higher levels of flight assets than would be normal.
The Cyprus incident alone isn't going to trigger any demand.
So, the wider picture of fear amongst the PIGS retail banking sector? Well, you'd expect something but again, this is going to be retail flow so not very strong.
The thing that could cause a big jump is institutional buying on a belief that the EU just killed itself.
Whether the Cypriot Govt votes yes or know the PR implications of what has happened is likely to be immense. On the one hand it may send a hugely positive message to the PIGS people that if they don't force their Govts to stop spending then they will lose savings directly, or it may trigger the genuine exodus of PIGS from the Euro.
One thing I do believe is true, although not relevant to this thread, is that even though Cyprus is a bent country that runs bent money for bent EU residents and has facilitated money laundering and tax evasion and ignored all the EU rules and paid heresay to demands to stop and fundamentally deserve every bit of crap they have brought on themselves, the British tabloids will ensure that every Briton is aware that the EU will take your savings if you don't sell straight bananas.
I think that for Britain we are well and truly out of the Euro debate and a step further away from Europe.
However, there are a few things to consider. Most of the cash being haircut is untaxed, evasion profits from Russia, Greece and other European countries. So it isn't easy for these people to move it quickly.
The locals, like most basic Med dwellers, already keep much of their real wealth in either property or under the mattress.
Because of the history of invasion in Cyprus, many people will already be sitting on higher levels of flight assets than would be normal.
The Cyprus incident alone isn't going to trigger any demand.
So, the wider picture of fear amongst the PIGS retail banking sector? Well, you'd expect something but again, this is going to be retail flow so not very strong.
The thing that could cause a big jump is institutional buying on a belief that the EU just killed itself.
Whether the Cypriot Govt votes yes or know the PR implications of what has happened is likely to be immense. On the one hand it may send a hugely positive message to the PIGS people that if they don't force their Govts to stop spending then they will lose savings directly, or it may trigger the genuine exodus of PIGS from the Euro.
One thing I do believe is true, although not relevant to this thread, is that even though Cyprus is a bent country that runs bent money for bent EU residents and has facilitated money laundering and tax evasion and ignored all the EU rules and paid heresay to demands to stop and fundamentally deserve every bit of crap they have brought on themselves, the British tabloids will ensure that every Briton is aware that the EU will take your savings if you don't sell straight bananas.
I think that for Britain we are well and truly out of the Euro debate and a step further away from Europe.
Well, it up past the important 1600 marker, but I don't think it's going to soar to anywhere near 2000 (or even 1700) yet (if ever!).
What is interesting though, is that in the event of a big, new "fear" gold has reacted the way it has from 2002 - 2011...
There may be some puff in the old girl yet.
What is interesting though, is that in the event of a big, new "fear" gold has reacted the way it has from 2002 - 2011...
There may be some puff in the old girl yet.
AdvocatusD said:
Well, it up past the important 1600 marker, but I don't think it's going to soar to anywhere near 2000 (or even 1700) yet (if ever!).
What is interesting though, is that in the event of a big, new "fear" gold has reacted the way it has from 2002 - 2011...
There may be some puff in the old girl yet.
Definitely. As a hedge v long equity portfolios it has been very good. With exchanges closed over weekends, going long spot gold on Friday over the weekend has proven to be a good match for a while. I reckon it will hold as a trade for as long as we continue with rising equity markets but unresolved economic issues in the West.What is interesting though, is that in the event of a big, new "fear" gold has reacted the way it has from 2002 - 2011...
There may be some puff in the old girl yet.
There's no institutional buying any longer. But reallocations means there is relatively steady selling.
This is why it's a good hedge on equities for short term periods just at the moment.
The Cyprus affair isn't believed by the market to present significant risk to PIGS so no upside momentum.
However, there is now talk of Cyprus selling some of its 14 tonnes of gold. Although personally they probably already sold it and are sitting on 14 tonnes of gilded tungsten knowing them.
This is why it's a good hedge on equities for short term periods just at the moment.
The Cyprus affair isn't believed by the market to present significant risk to PIGS so no upside momentum.
However, there is now talk of Cyprus selling some of its 14 tonnes of gold. Although personally they probably already sold it and are sitting on 14 tonnes of gilded tungsten knowing them.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Have a read of this thread and the mention of gold more than once. Interesting to see the psychology we discussed playing out in our own micro slice of life...
Have a read of this thread and the mention of gold more than once. Interesting to see the psychology we discussed playing out in our own micro slice of life...
Very interesting post on ZH from an article by Bloomberg on central bank's gold reserves: http://www.zerohedge.com/news/2013-03-26/guest-pos...
zerohedge said:
Bloomberg is essentially saying that roughly 10% of the total gold available inside the country during that period was added to China's reserves. While it's true that Chinese citizens are buying a lot of gold (though perhaps more silver), it's highly doubtful that private parties bought 90% of all the gold brought to the Chinese market during this period. I think – but can't prove – that China's central bank is buying more gold and at a faster pace than its Russian counterpart.
Jim Rickards, a highly respected author and hedge fund manager, said last month that China has probably already accumulated between 2,000 and 3,000 tonnes of additional gold reserves. If he's right, that would be roughly double or triple the 1,054 tonnes it reported in 2009 – not the 40% increase Bloomberg's numbers suggest.
At the very least, we can say that the Bloomberg report left consideration of China's imports and production out of its report naming Russia the top gold buyer of 2012. Okay…but so what?
Well, Jim thinks the next big catalyst for gold will be an announcement from China about its reserve position. Here's what he told me in late December:
"The catalyst for a spike into the $2,500 to $3,000 price range for gold will be an announcement by China, probably in late 2013 or 2014, that they have acquired 4,000 tonnes or more in their official reserve position. This will put China on an equal footing with the US in terms of a gold-to-GDP ratio, and validate gold as the real foundation of the international monetary system. Once that position is validated, gold will move to the $7,000 range in 2015 and beyond."
Jim Rickards, a highly respected author and hedge fund manager, said last month that China has probably already accumulated between 2,000 and 3,000 tonnes of additional gold reserves. If he's right, that would be roughly double or triple the 1,054 tonnes it reported in 2009 – not the 40% increase Bloomberg's numbers suggest.
At the very least, we can say that the Bloomberg report left consideration of China's imports and production out of its report naming Russia the top gold buyer of 2012. Okay…but so what?
Well, Jim thinks the next big catalyst for gold will be an announcement from China about its reserve position. Here's what he told me in late December:
"The catalyst for a spike into the $2,500 to $3,000 price range for gold will be an announcement by China, probably in late 2013 or 2014, that they have acquired 4,000 tonnes or more in their official reserve position. This will put China on an equal footing with the US in terms of a gold-to-GDP ratio, and validate gold as the real foundation of the international monetary system. Once that position is validated, gold will move to the $7,000 range in 2015 and beyond."
jshell said:
How will the EU theft of various' countries gold reserves affect the long term stability of the price? They've started with Cyprus, possibly Portugal next and who then?
Chances are that this big sell off this afternoon is due to the market waking up to the probable scenario that Cyprus is sitting on painted lead after selling their gold years ago and hiding the USD in the Cayman. In response to the comment though, nothing has been stolen from Cyprus. Quite the opposite. They have spent 20 years, post Lebanon decline stealing money from Europe. Totally bent economy based on deceit and fraud.
Never should have been allowed into the Euro as it just enabled the ramping up of criminal activity.
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