It's looking grim again. Is gold the would-be saviour?
Discussion
BlackLabel said:
Gold drops below $1200 (a 4 year low) now. Silver and platinum are both at multi year lows too.
Yup. The speculative premium for most commodities is still dropping and with recent data showing growth slowing in markets like China the industrial demand for many commods is also falling. I'd expect to see some, like copper (and possibly gold), hold or rise in light of the Ebola problem as that could lead to supply falls but as all have been falling for two years now the demand from investment capital isn't really there.
Looming at gold, central banks aren't in a great need to currently build reserves, investors will buy tomorrow as it will be cheaper than buying today and industrial demand seems to be easing and as the value of the USD seems to be in a strong run as the US comes closer and closer to raising rates the real play in the market that will impact the price of gold is very much bearish for gold. Rising US rates and a strong US economy could push gold well under 1000.
Ironic that the day after the BofE announces it's intent to start minting a smaller gold coin so that rampers and scam artists can widen their target base to exploit poorer people the price dumps to the lowest level since 2010 at around $1170.
With the US halting QE and markets now moving into the next phase of focussing specifically on rate rises there still seems to be little reason to be a bull.
For all those who were duped by unregulated scammers into buying exposure to gold it will be interesting to see what offer price those holding physical are being made by their claimed two way vendors and more depressingly the clock is ticking to the first announcement that a buy&store facility never bought and has nothing stored.
With the US halting QE and markets now moving into the next phase of focussing specifically on rate rises there still seems to be little reason to be a bull.
For all those who were duped by unregulated scammers into buying exposure to gold it will be interesting to see what offer price those holding physical are being made by their claimed two way vendors and more depressingly the clock is ticking to the first announcement that a buy&store facility never bought and has nothing stored.
There was an interesting argument between Peter Schiff and presenters on CNBC news where he held the opinion he had two years back that 'technically' $5k USD gold is possible in a couple of years. I think the trouble is that the rule book has been thrown out of the window - there is not an economy in the world today that is not hooked on ZIRP, if not also QE. So Schiff could well be wrong about gold, if not in the very long run, then certainly in a long enough run for all intents and purposes.
The thing Schiff is right about (and to an extent where part the worry comes from for people to seek the 'insurance' of gold in the first place) is the way equities are being pumped up, sometimes way beyond actual performance of the companies.
The thing Schiff is right about (and to an extent where part the worry comes from for people to seek the 'insurance' of gold in the first place) is the way equities are being pumped up, sometimes way beyond actual performance of the companies.
Digga said:
There was an interesting argument between Peter Schiff and presenters on CNBC news where he held the opinion he had two years back that 'technically' $5k USD gold is possible in a couple of years. I think the trouble is that the rule book has been thrown out of the window - there is not an economy in the world today that is not hooked on ZIRP, if not also QE. So Schiff could well be wrong about gold, if not in the very long run, then certainly in a long enough run for all intents and purposes.
The thing Schiff is right about (and to an extent where part the worry comes from for people to seek the 'insurance' of gold in the first place) is the way equities are being pumped up, sometimes way beyond actual performance of the companies.
Equities are definitely being pumped up. It's a combination of excess cash via excessive debt and high relative yields. The market crap out over the last few weeks stands testament to the fact that everyone knows the equity markets are running large premiums. The thing Schiff is right about (and to an extent where part the worry comes from for people to seek the 'insurance' of gold in the first place) is the way equities are being pumped up, sometimes way beyond actual performance of the companies.
What you would expect is that once the first rate rise actually appears the equity side will first soil itself and then return with better selection than currently.
But the only reason people call big numbers for Gold is so that they get airtime in order to sell their product. The media isn't interested in talking to people who reckon Gold might fall or rise a little but some frother who claims it is going to zero or $5000 is going to get them eyeballs for their ad model while the frother gets to validate his business by effectively being endorsed by a trusted media outlet.
There still isn't any actual logical reason to physically hold gold, it's a terrible investment that has bid/offer spreads that are insane, a buy side that will close shop in a falling market so effectively making some holdings worthless and zero yield. It's why n order to sell the stuff you have to resort to trying to frighten people into swapping a viable and valuable investment into one that isn't.
DonkeyApple said:
But the only reason people call big numbers for Gold is so that they get airtime in order to sell their product. The media isn't interested in talking to people who reckon Gold might fall or rise a little but some frother who claims it is going to zero or $5000 is going to get them eyeballs for their ad model while the frother gets to validate his business by effectively being endorsed by a trusted media outlet.
True and, to be fair to Schiff, he was also one of the people who rightly called the US property market collapse in the media - yes, I know about stopped clocks etc. etc. 
DonkeyApple said:
But the only reason people call big numbers for Gold is so that they get airtime in order to sell their product. The media isn't interested in talking to people who reckon Gold might fall or rise a little but some frother who claims it is going to zero or $5000 is going to get them eyeballs for their ad model while the frother gets to validate his business by effectively being endorsed by a trusted media outlet.
Interesting to note how many people from the precious metal sphere are now claiming Bitcoin is the saviour from the perpetually forthcoming collapse. Looking on assorted forums, the culture seems to be where the precious metal world was a few years ago :-1) Make outrageous claim for future price
2) Label any analysis contradicting your position as disinformation
3) Smear anyone who disagrees with you as a bank/government plant
4) Appear on every alternative financial podcast possible
Shame really, as the crypto world has some interesting stuff happening once you get beyond the speculation and outright pumping.
Digga said:
DonkeyApple said:
But the only reason people call big numbers for Gold is so that they get airtime in order to sell their product. The media isn't interested in talking to people who reckon Gold might fall or rise a little but some frother who claims it is going to zero or $5000 is going to get them eyeballs for their ad model while the frother gets to validate his business by effectively being endorsed by a trusted media outlet.
True and, to be fair to Schiff, he was also one of the people who rightly called the US property market collapse in the media - yes, I know about stopped clocks etc. etc. 
2003 I was staying in LA with a mate who was working for one of the big management consultants. He had just written a paper advising that his firm disengage from their clients who were selling mortgages. He had been heading a team brought into one of the largest Californian mortgage brokers and probably due to being English a few things had surprised him such as the ability for the mortgage buyer to walk away from liability. He began analysing the products, the customers and the market and established that not only could very few of the firm's customers handle the repayment rates after the intro discount came to an end but that the brokerage not only new this but had built its model around it.
He couldn't quite believe what he was seeing, that it was one huge bucket shop but when he wrote his paper he learned that it wasn't a one off but how they all were operating and all over the US. Then he found that he hadn't uncovered anything but that there was an army of people all out there saying this was insane and would catagorically lead to a collapse. But just like the gold boom, anyone who bought in was violently shouting them down and lobby groups were legally threatening them.
hornet said:
DonkeyApple said:
But the only reason people call big numbers for Gold is so that they get airtime in order to sell their product. The media isn't interested in talking to people who reckon Gold might fall or rise a little but some frother who claims it is going to zero or $5000 is going to get them eyeballs for their ad model while the frother gets to validate his business by effectively being endorsed by a trusted media outlet.
Interesting to note how many people from the precious metal sphere are now claiming Bitcoin is the saviour from the perpetually forthcoming collapse. Looking on assorted forums, the culture seems to be where the precious metal world was a few years ago :-1) Make outrageous claim for future price
2) Label any analysis contradicting your position as disinformation
3) Smear anyone who disagrees with you as a bank/government plant
4) Appear on every alternative financial podcast possible
Shame really, as the crypto world has some interesting stuff happening once you get beyond the speculation and outright pumping.
The key is unregulated markets. In the 80s these people learnt their trade selling forex until it became regulated. Then they moved on to futures. After that became regulated they moved onto OFEX.
Some moved into regulated markets such as penny shares, spread betting, advisory CFDs and IPOs but others remained in the unregulated sphere and all will move to whatever scam is hot at the time.
So one year all the retail mugs will be hot for buying worthless plots of land for massive premiums, next it will be fine wines, then gold, then a black box spread betting system.
It is the same people behind all these firms all the time and almost all of them can be linked back to the same few original scam firms in the City from the 80s and 90s.
It's why I tend to crop up on threads where the latest wheeze is being pumped up by people who have been suckered in by them. I despise them with a passion. They give my industry a terrible name and damage all of us who own brokerages. We know who they are, we know which countries they live in and we know that our extremely expensive regulator does nothing about it but would rather milk is for excess fees to justify an ever growing army of staff who only work a few hours of a few days a week and have no actual understanding of the markets.
guardian said:
Fears that ‘dangerous’ Switzerland referendum could spark gold rush
The Swiss like referendums: there were 11 last year and there have been nine more this year, on subjects ranging from who pays for abortions to whether the state should buy a certain type of new fighter aircraft.
This Sunday there are three more, but one has attracted more attention than most – because there are fears that if it wins majority support it could trigger a worldwide gold rush.
Five million Swiss voters are to decide on a proposal that would force the central bank to triple its gold reserves. The vote is being watched closely by financial markets and governments around the world.
Under the “Save Our Swiss Gold” initiative the Swiss National Bank (SNB) would be obliged to hold at least a fifth of its assets in gold within five years. The bank would be required to repatriate all Swiss gold held abroad and be banned from selling any of its holdings in future.
A fifth of Switzerland’s 1,040 tonnes of gold reserves are held with The Bank of England and nearly a third with the Canadian Central Bank.
http://www.theguardian.com/world/2014/nov/25/fears-switzerland-referendum-spark-gold-rushThe Swiss like referendums: there were 11 last year and there have been nine more this year, on subjects ranging from who pays for abortions to whether the state should buy a certain type of new fighter aircraft.
This Sunday there are three more, but one has attracted more attention than most – because there are fears that if it wins majority support it could trigger a worldwide gold rush.
Five million Swiss voters are to decide on a proposal that would force the central bank to triple its gold reserves. The vote is being watched closely by financial markets and governments around the world.
Under the “Save Our Swiss Gold” initiative the Swiss National Bank (SNB) would be obliged to hold at least a fifth of its assets in gold within five years. The bank would be required to repatriate all Swiss gold held abroad and be banned from selling any of its holdings in future.
A fifth of Switzerland’s 1,040 tonnes of gold reserves are held with The Bank of England and nearly a third with the Canadian Central Bank.
DonkeyApple said:
I've worked in the markets for 20 years and one thing I can tell people is that it is the same people behind the scams all the time.
The key is unregulated markets. In the 80s these people learnt their trade selling forex until it became regulated. Then they moved on to futures. After that became regulated they moved onto OFEX.
Some moved into regulated markets such as penny shares, spread betting, advisory CFDs and IPOs but others remained in the unregulated sphere and all will move to whatever scam is hot at the time.
So one year all the retail mugs will be hot for buying worthless plots of land for massive premiums, next it will be fine wines, then gold, then a black box spread betting system.
It is the same people behind all these firms all the time and almost all of them can be linked back to the same few original scam firms in the City from the 80s and 90s.
It's why I tend to crop up on threads where the latest wheeze is being pumped up by people who have been suckered in by them. I despise them with a passion. They give my industry a terrible name and damage all of us who own brokerages. We know who they are, we know which countries they live in and we know that our extremely expensive regulator does nothing about it but would rather milk is for excess fees to justify an ever growing army of staff who only work a few hours of a few days a week and have no actual understanding of the markets.
I enjoy reading your posts... was enjoying this one but at the end a question popped into my head...no offence intended at all though...The key is unregulated markets. In the 80s these people learnt their trade selling forex until it became regulated. Then they moved on to futures. After that became regulated they moved onto OFEX.
Some moved into regulated markets such as penny shares, spread betting, advisory CFDs and IPOs but others remained in the unregulated sphere and all will move to whatever scam is hot at the time.
So one year all the retail mugs will be hot for buying worthless plots of land for massive premiums, next it will be fine wines, then gold, then a black box spread betting system.
It is the same people behind all these firms all the time and almost all of them can be linked back to the same few original scam firms in the City from the 80s and 90s.
It's why I tend to crop up on threads where the latest wheeze is being pumped up by people who have been suckered in by them. I despise them with a passion. They give my industry a terrible name and damage all of us who own brokerages. We know who they are, we know which countries they live in and we know that our extremely expensive regulator does nothing about it but would rather milk is for excess fees to justify an ever growing army of staff who only work a few hours of a few days a week and have no actual understanding of the markets.
being honest, to what extent is your dislike for them due to the impact on and competition with "brokerage owners"?
for example... is it not akin to a traditional fund manager having a dislike of algos because algos deprive them of the ability to manage a portfolio in a consistent way, instead of pre-empting developments and having a long-term vision, the fund manager is instead having to pre-empt algos profit taking
however, take away the algos, who is to say the fund manager is any better or any more trustworthy?
take away the people behind these developments who you dislike, what is to say the side of the industry you do respect would not move in for the kill too?
BlackLabel said:
guardian said:
The Swiss like referendums: there were 11 last year and there have been nine more this year, on subjects ranging from who pays for abortions to whether the state should buy a certain type of new fighter aircraft.
http://www.theguardian.com/world/2014/nov/25/fears...menousername said:
I enjoy reading your posts... was enjoying this one but at the end a question popped into my head...no offence intended at all though...
being honest, to what extent is your dislike for them due to the impact on and competition with "brokerage owners"?
for example... is it not akin to a traditional fund manager having a dislike of algos because algos deprive them of the ability to manage a portfolio in a consistent way, instead of pre-empting developments and having a long-term vision, the fund manager is instead having to pre-empt algos profit taking
however, take away the algos, who is to say the fund manager is any better or any more trustworthy?
take away the people behind these developments who you dislike, what is to say the side of the industry you do respect would not move in for the kill too?
A good question. I'm not really mercenary enough to look at these people as taking revenue from me. Guess that's why my firm is quite small. being honest, to what extent is your dislike for them due to the impact on and competition with "brokerage owners"?
for example... is it not akin to a traditional fund manager having a dislike of algos because algos deprive them of the ability to manage a portfolio in a consistent way, instead of pre-empting developments and having a long-term vision, the fund manager is instead having to pre-empt algos profit taking
however, take away the algos, who is to say the fund manager is any better or any more trustworthy?
take away the people behind these developments who you dislike, what is to say the side of the industry you do respect would not move in for the kill too?
I catagorically believe in regulation and believe that we do not have enough in the retail sector. Far too much has been removed. I'm certainly a loan voice in my sector as everyone panics about keeping up with CySEC and their comically lax interpretation of MiFID. My view is that Cyprus will dissapear up its own criminal wazzoo and it will then look embarrassing for is to have been trying to compete in the cowboy stakes.
But what really makes me angry is that the old hands who learnt their craft in the FX and futures scams of the 80s have been free to take their craft into places like AIM with bent firms, bent NOMADs, bent analysts and then on into myriad of other investment scams and the SFO and FCA have never done anything.
It is so epidemic now that they have reached the point that if they started to crack down now the can of worms would be too immense.
I've hated watching the gold scam. Unregulated and full of lies. It just depresses me to see people who have worked hard and intelligently for their money get duped into lobbing away.
The farce this month has been Quindell on AIM. It's just miserable to watch.
There is very little professional pride in OTC broking and I am probably out of place.
"With no chance that the Swiss central bank will be the next big buyer of gold, it’s one more reason for investors to be bearish.
Voters today rejected a referendum requiring the Swiss National Bankhold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold. Had it been approved, it would have led to purchases of at least 1,500 metric tons over five years. With lower oil prices reducing costs for consumers and the U.S. considering raising interest rates, demand is fading for hedges against inflation such as gold."
https://www.bloomberg.com/news/2014-11-30/swiss-vo...
Voters today rejected a referendum requiring the Swiss National Bankhold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold. Had it been approved, it would have led to purchases of at least 1,500 metric tons over five years. With lower oil prices reducing costs for consumers and the U.S. considering raising interest rates, demand is fading for hedges against inflation such as gold."
https://www.bloomberg.com/news/2014-11-30/swiss-vo...
Most global indicators are flagging deflation quite clearly currently. If we do get deflation then we will see huge short selling action on gold. There is still a huge premium that can be beaten out.
The big trade that is looming is oil. Currently the world is undecided as to whether the premium is coming off because of reduced demand (ie economic slowdown) or because the Saudis are putting the shale producers out of business but what we know about oil is that it is finite and it will be driven back up so the key is to find the point at which to start going long.
I wouldn't touch it at these levels but under $50 and it will be an opportunity to start slow scaling in over set medium term time periods with a price level override covering when it starts to climb.
That's a trade I've done a few times over the last twenty years when it gets over sold and it's well worth focussing on.
The big trade that is looming is oil. Currently the world is undecided as to whether the premium is coming off because of reduced demand (ie economic slowdown) or because the Saudis are putting the shale producers out of business but what we know about oil is that it is finite and it will be driven back up so the key is to find the point at which to start going long.
I wouldn't touch it at these levels but under $50 and it will be an opportunity to start slow scaling in over set medium term time periods with a price level override covering when it starts to climb.
That's a trade I've done a few times over the last twenty years when it gets over sold and it's well worth focussing on.
Edited by DonkeyApple on Sunday 30th November 22:43
BlackLabel said:
It's been hovering around that price for the last year and a half.It won't last, great time to buy.
cheddar said:
BlackLabel said:
It's been hovering around that price for the last year and a half.It won't last, great time to buy.
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