Gold

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From CR:

The U.S. Treasury more than tripled its planned debt sales for this quarter to help finance a 2009 budget deficit that bond dealers advising the department estimate may swell to almost $1 trillion.



Borrowing needs are expected to rise to $550 billion in the three months to Dec. 31, compared with the $142 billion predicted in July, the Treasury said in a statement in Washington. That follows a $530 billion record in the July-September quarter.
 
[quote author="morekaos" date=1225859117]Looking at shorting here. SMN hit a triple bottom. $65 dolla</blockquote>


Shorting gold? Based on the technicals of an ETF that covers basic materials? How is that related to precious metals?
 
Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.
 
[quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


As of 11/4/08 the COT shows commercials being net short by about 75k, and they have been net short for months now. The commercials tend to be right more often than they are wrong. I have the same feeling, gold will be below $700 by year end, and we will be talking about hitting $600 around the middle of next year.
 
[quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


You are right on. There is no inflation or stagflation. We are in deflation and will remain for some time.
 
[quote author="blackvault_cm" date=1226561949][quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


You are right on. There is no inflation or stagflation. We are in deflation and will remain for some time.</blockquote>


How long is some time? About? And reasons?
 
[quote author="awgee" date=1226565492][quote author="blackvault_cm" date=1226561949][quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


You are right on. There is no inflation or stagflation. We are in deflation and will remain for some time.</blockquote>


How long is some time? About? And reasons?</blockquote>
My guess is under credit markets get more back to normal. The Fed may be printing money 24/7, but the reality is that credit is a multipler of money and right now we are going through deleveraging which is slowing things down in every economy in the world. Unless we stop deleveraging and begin to get out of the recession, you will not see any kind price inflation for goods and services. How long that may be, who knows...maybe by the end of next year or 2010.
 
[quote author="awgee" date=1226565492][quote author="blackvault_cm" date=1226561949][quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


You are right on. There is no inflation or stagflation. We are in deflation and will remain for some time.</blockquote>


How long is some time? About? And reasons?</blockquote>


Blackvault?
 
[quote author="awgee" date=1226619972][quote author="awgee" date=1226565492][quote author="blackvault_cm" date=1226561949][quote author="usctrojanman29" date=1226540205]Not a bold prediction here, but gold is heading under $700 before year-end. The inflation that everyone fears is nowhere to be found as all commodities are getting taken out back and shot.</blockquote>


You are right on. There is no inflation or stagflation. We are in deflation and will remain for some time.</blockquote>


How long is some time? About? And reasons?</blockquote>


Blackvault?</blockquote>


Sorry. Must have missed this until now.



Well mainly because last 10 years US economy was built on credit. We had a housing bubble, commodity bubble etc...but really it was all driven by a bigger bubble. THE CREDIT BUBBLE. In order for our economy to grow people's income needs to grow as well. Stats show that average income has decreased past 8 years, so money supply isn't there. Things appreciated and corps profits came from credit. Now that credit is gone, peoples 401ks, savings, home values and even jobs; just puts more pressure on everything else.



Like Winex said in the "commercial real-estate blow up" fed just keeps printing money to increase supply of it...however that will just lead to inflation down the road.



I think you are somewhat concearned about gold prices....I say they continue to go south, but down the road when inflation takes over...I say it goes up. Does that mean gold drops from 700 to 400, then goes from 400-700 later? I don't know the answer...and can't forsee how long deflation will last.
 
According to the <a href="http://www.cftc.gov/dea/options/deacmxsof.htm">current COT report it shows 233,150 short positions</a>. On the peak <a href="http://www.cftc.gov/files/dea/cotarchives/2008/futures/deacmxsf071508.htm">July 15th report</a> there was a total of about 480k open positions, in today's report there was about 400k. So considering that less positions are open, and the fact that commercials are still net short, then I am still not bullish on gold.
 
[quote author="graphrix" date=1226744700]



According to the <a href="http://www.cftc.gov/dea/options/deacmxsof.htm">current COT report it shows 233,150 short positions</a>. On the peak <a href="http://www.cftc.gov/files/dea/cotarchives/2008/futures/deacmxsf071508.htm">July 15th report</a> there was a total of about 480k open positions, in today's report there was about 400k. So considering that less positions are open, and the fact that commercials are still net short, then I am still not bullish on gold.</blockquote>






Oops, I had the futures only for the July 15th report, but combo for today's. So... then taking the highest amount of open futures day of July 15th, when 72% of the commercials were short, and comparing it to today's report of the lowest ever of open positions, when 63% of the commercials are short, and this has been averaging in the lower range for most of the year, has what sort of significance? I'm being serious, as I am not sure what this means, and if I am missing something I really want to know.



To me what is the most significance is the huge drop in positions, and people don't want to trade even gold. If hedgies are unwinding gold, as has been reported, then that explains that, and shouldn't be news that positions have been closed. What I also find interesting is that copper has seen an increase in positions, and copper has almost always been net long, but in today's report the commercials are net short. Again, the increase in copper positions is amazing.
 
This is why I have come to respect you... You add your points, and you conclude with I dunno. At least we can agree we both dunno. And... I will do some more research on this as a whole. Not only could I learn something, but you might as well. I really should charge for this kind of thing, and if I ever do, you will get it as courtesy awgee for being as open minded as you are.







It is depressed, but you mentioned how commercials are typically short commodities/metals, when in fact they have been long copper for way, way too long, and are finally starting to see net short. My point was to prove you wrong that commercials being long has not been right, and proving me wrong that commercials have been right in their positions. The net short is small, so if history tells us anything, then being short copper may not be the right play, or not, or it is, or I dunno.







True, and they were invested in ETFs of gold. And... what are the ETFs of gold based on? Yup, futures. So... maybe the unwind was not just gold, but the ETFs and as the ETFs that are based on gold futures unwind it causes the futures positions to close. I think you get my point, and I think you can see I will be bullish on gold and bearish on the dollar when the reality becomes true. But, I will not become bullish until I see a reason to. I'm kickin a$$ in the pandaless challenge on my dollar up and double Euro down positions. Why? Because I didn't get arrogant and stubborn like Schiff and others, I saw it for what it was. Yeah... I wish I did it for real. I really wish I had my time machine right now, but everyone wants to borrow it, and Panda hogs it.
 
Oh well...I just finished reading through this thread...so much information. I only know one thing now...I am really confused!



I learned a few things and a couple laughs as well so it was worth it.
 
I've got a dumb question, but why deflation would reduce the price of gold? I understand why deflation would impact housing and most goods, but I am not sure why it has to impact gold.
 
question: for those of you who fear the repercussions of current events translating into massive inflation, why not buy TIPS? the rest of the mkt has dumped them and they're trading at a huge discount right now. real 3% yield right now.
 
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