Current Gold Price

[clv101]

Gold has been used as a park for all the money that exited the bond and stock markets. As they recover (if they recover) it'll crash out of gold to chase growth again.

They aren't going to recover.

If anyone tells you what's going to happen in the medium term with any confidence, be wary. I don't expect markets to recover, but my confidence is low!

[JavaScriptDonkey]

This is complete and utter rubbish, JSD. It all depends on the value of gold.

Which depends on what you value gold in. If you price it in a devaluing USD then the only way is up. If you price it in tin, it's perhaps not looking so good. The value that you can extract from your store of gold shouldn't always be measured in money.

Of course if there is a complete fiscal collapse with hyper inflation and the GBP heads towards the toilet then I'd be a lot happier holding gold rather than a bank statement. Even though the Govt would seize it at least I'd get something back for it.

I think in your situation I'd do the same. Not enough money to buy useful land but too much to leave it devaluing in the bank.

[UndercoverElephant]

This is complete and utter rubbish, JSD. It all depends on the value of gold.

Which depends on what you value gold in.

In this case, the only value which matters is the value in fiat money.

If you price it in a devaluing USD then the only way is up. If you price it in tin, it's perhaps not looking so good. The value that you can extract from your store of gold shouldn't always be measured in money.

I agree that in the long-run, gold will be going up against the fiat currencies but not against other hard physical assets.

Of course if there is a complete fiscal collapse with hyper inflation and the GBP heads towards the toilet then I'd be a lot happier holding gold rather than a bank statement. Even though the Govt would seize it at least I'd get something back for it.

I think in your situation I'd do the same. Not enough money to buy useful land but too much to leave it devaluing in the bank.

Yes.

[UndercoverElephant]

We have a real fightback now, in both gold and silver.

Gold: £1071
Silver: £24.02

This takes us almost back down to where we were on August 15th. If it goes any lower then this could be the dip back below £1000 that Beria said he was waiting for.

The reason, apparently....

http://money.cnn.com/2011/08/24/markets/gold/

...is that "stimulus hopes are waning". In other words, they think Helicopter Ben isn't going to hint/announce QE3 on Friday. Others put it down to "profit taking." This may be short-term speculators getting out of the market, temporarily.

http://www.reuters.com/article/2011/08/ ... AC20110824

Investors have been hoping for additional action from the
U.S. central bank to help.

"The speech is a real wild card for markets so people are
being cautious," said Kathy Lien, head of research at GFT Forex
in New York.

For gold investors, analysts said it's time to take money
off the table after a safe-haven rally extended too far, too
fast in recent weeks. Bullion had been up by as much as $400
per ounce since July.

In other words, nobody has a clue what he's going to say so people are getting back into cash, ready to make their move when the Great Man speaks.

[DominicJ]

Gold and Silver are both down on the week.
Thats interesting

Gold is still 5% up on the month, but silver hasnt been this cheap for 6 weeks.

I'm not a fan of "lines of support" and "head and shoulder" pattens, frankly I think all such "technical" analysis is rubbish, but if silver drops below 20, it could be interesting.
As could gold below 1000

[UndercoverElephant]

Gold and Silver are both down on the week.
Thats interesting

Gold is still 5% up on the month, but silver hasnt been this cheap for 6 weeks.

I'm not a fan of "lines of support" and "head and shoulder" pattens, frankly I think all such "technical" analysis is rubbish, but if silver drops below 20, it could be interesting.
As could gold below 1000

There were margin hikes in the Asian markets. We expected this to happen sooner or later. There is also a lot of people (day trader types) currently holding cash, waiting for what Ben Bernanke is going to say tomorrow. Depending on what he says, PMs could drop further or they could shoot straight back up again. Everybody is waiting for clues about QE3.

[DominicJ]

There were margin hikes in the Asian markets.

See thats kinda worrying, because mass buying "on margin" is generaly the last phase of the bubble.
Its basicaly what hedgefunds do all the time, but its what average joe was doing on wall street.

Margin calls get nasty fast.

But, I'm still a way from investing.

[UndercoverElephant]

Heading back upwards again...

[Lord Beria3]

Heading back upwards again...

OK - this correction was primarily caused (in my opinion) by the massive jacking up of margin costs for traders which flushed out some of the short term speculative money flows.

However, this dip in price has only caused massive renewed buying from long-term buyers which is why prices are already going up again.

What this shows is that the old tricks to keep the prices down works for less than 24 hours for gold because the macro situation in the world economy is so f***ed.

I wouldn't advice waiting for the dip to £1000 per ounce - it may happen - but it will last their for hours and if you are thinking of buying get some now! At the end of the day, the prices are going to go up multiples in the future.

UE - that was a interesting article. I think that at some point this year, Ben will bring in QE3 (but I doubt that he will say that this weekend which will send the equity markets down next week anather 10%) and this will trigger the sense of crisis that will allow Ben to bring in QE soon.

Regarding the medium term, i think that for the next few years, central banks will continue down the path of QE because they genuinely think that growth will return... however soon (once PO is absorbed by the markets within the next 2 years) that perception will also die.

At that point certain countries will start to re-link their currency to gold and slowly but surely a gold standard will reemerge, but only after much more QE by central banks around the world.

A conservative estimate would be $7,000 per ounce, anather bank has said $12,000 per ounce, I suspect that once all the QE comes through it will hit a average price of $36,000 per ounce.

I also suspect that a final mania stage in the gold price will send it to circa $50,000 per ounce - this may be a good time to sell most of your gold and convert it into property and land.

However, all this is still at least a few years away.

[Lord Beria3]

http://www.investorschronicle.co.uk/Inv ... dium=email

As of Tuesday's highs, gold had become very stretched on almost every measure. Its monthly relative strength index reading stood at 82 per cent. The last time it scaled such heights was in early 2008, after which its spot price went on to suffer a violent pull-back of almost 29 per cent over eight months.

This was not an isolated occasion. Similarly or more extreme readings in 2006, 1980 and the late 1970s all culminated in corrections of 20 per cent or more. However, only in one of those cases - in 1980 - did it prove to be the end of the long-term bull market in gold.

In this case, I do not think we have seen the end of the long-term bull market in gold. Nor I do believe that gold has entered a bubble. If you compare the recent spike in gold with the last confirmed bubble in gold - heading into that 1980 high - it looks pretty tame. Between November 1978 and January 1980, the price went up by 340 per cent.

That said, gold has clearly become ripe for a pull-back. A substantial dip is needed in order to unwind momentum readings to levels from which the next sustained move higher can continue. A fall of 20 per cent would take it down to around $1,500. That's also the region where gold's 34-week exponential moving average is currently situated. The metal has had an uncanny habit of finding a floor at this level during past corrections.

I would regard a significant fall like this as a major buying opportunity in the making. Once gold resumes its uptrend, I expect it to head for $2,000 and then beyond. A bubble in gold could eventually occur, just like it did in 1980. We're nowhere near there yet, though.

Good analysis where gold is going.

[UndercoverElephant]

http://www.investorschronicle.co.uk/Inv ... dium=email

As of Tuesday's highs, gold had become very stretched on almost every measure. Its monthly relative strength index reading stood at 82 per cent. The last time it scaled such heights was in early 2008, after which its spot price went on to suffer a violent pull-back of almost 29 per cent over eight months.

This was not an isolated occasion. Similarly or more extreme readings in 2006, 1980 and the late 1970s all culminated in corrections of 20 per cent or more. However, only in one of those cases - in 1980 - did it prove to be the end of the long-term bull market in gold.

In this case, I do not think we have seen the end of the long-term bull market in gold. Nor I do believe that gold has entered a bubble. If you compare the recent spike in gold with the last confirmed bubble in gold - heading into that 1980 high - it looks pretty tame. Between November 1978 and January 1980, the price went up by 340 per cent.

That said, gold has clearly become ripe for a pull-back. A substantial dip is needed in order to unwind momentum readings to levels from which the next sustained move higher can continue. A fall of 20 per cent would take it down to around $1,500. That's also the region where gold's 34-week exponential moving average is currently situated. The metal has had an uncanny habit of finding a floor at this level during past corrections.

I would regard a significant fall like this as a major buying opportunity in the making. Once gold resumes its uptrend, I expect it to head for $2,000 and then beyond. A bubble in gold could eventually occur, just like it did in 1980. We're nowhere near there yet, though.

Good analysis where gold is going.

It may turn out to be a very bad analysis. Nobody knows what Helicopter is going to say tomorrow.

[Lord Beria3]

http://wallstreetpit.com/82445-marc-fab ... gh-of-1370

Speaking from Sao Paolo, Brazil, Faber said that the S&P won’t surpass the 2011 high of 1,370 and that investors are “better off in equities than bonds.” Faber also said that keeping money in cash in 10-Years is a “disaster.” Excerpts from the interview can be found below, courtesy of Bloomberg Television.

Faber on whether this is the market rally he’s been expecting:
“We had rally from the low on the ninth of August at 1,101 on the S&P to almost 1,200. Then we came right down again. Basically we did not make new lows. And now I think we can rally again for a while.”

Faber on how long his view of the market is:
“I think a lot of people will say the markets formed a double low and we have some technical indicators that are going to turn positive, so we could rally around 1,250, but as I said before, for me, we reached a high on May 2, 2011. 1,370 on the S&P–that we will not go through. My view is you have a lot of people with strategies that are very bullish. They have a yearend target of around 1,400-1,450 on the S&P. Then you have the super bear. I think both camps will be disappointed.”

On why the markets won’t come back down again to the lows that were hit in 2009:
“On fundamentals one could make the case that we could go lower to around March 2009 lows at 666 on the S&P. But I think we have to be realistic that if the market dropped here another 10% or 15%, there would be for sure another quantitative easing move and other measures taken to support asset prices.”

On what we’ll hear from Bernanke on Friday and whether there will be a selloff of Treasures after that:
“I think what [Bernanke] will say is that they are monitoring the situation, and they will take ‘appropriate measures’ when they are required. To some extent we are in midst of QE3 already, because by announcing the Fed will keep zero interest rates until the middle of 2013, they basically encourage financial institutions to borrow short-term and to buy 10-year Treasuries.”

My favorite investment remains gold. As it happens the gold price is coming down, and I hope it will drop $100 or $200. Not necessarily a prediction. I think we will go down in a correction because there has been too much enthusiasm recently.”

The legend has spoken... gold and equities are not bad bets at the moment... certainly better than bonds.

[UndercoverElephant]

http://kingworldnews.com/kingworldnews/ ... _Gold.html

With gold accelerating today’s gain in access market trading to over $57, King World News interviewed James Turk to get his thoughts on where gold and silver are headed from here. When asked about the action in gold Turk stated, “This was a big day and a great close to the week. The strength that gold displayed suggests that we are going to probe $1,900 very quickly, possibly as soon as next week. What seems apparent is that a lot of people jumped on the short side and are now caught, so the short covering rally could be quite spectacular.”

Translated into normal English: When the price of gold started sliding last week, a lot of traders wanted to make a bet that it would keep falling quite a long way - that the "bubble" had burst. So they borrowed gold from somebody else and sold it, with a plan to re-buy at considerably lower prices and pocket the difference. But they "got caught", because the dip wasn't as low or long-lived as they thought it would be and gold has already started going back up again. That means they have to decide whether to hold out for another drop in price or risk unlimited losses if the price goes higher (which it will). Eventually, and probably quite quickly, they will be forced to cover their shorts - this will send the price of gold even higher.

[Lord Beria3]

Looks like James Turk is right, the correction is over! $2,000 per ounce next month?

[biffvernon]

The love of gold has consequences: the destruction of Rosia Mountain.
http://www.worldcrunch.com/gold-rush-st ... lions/3641