Gold

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[quote author="morekaos" date=1239052959][quote author="freedomCM" date=1235114648][quote author="morekaos" date=1235086246]Increased my shorts yesterday and today</blockquote>


Three pair today? or just added Depends?</blockquote>


Contemplating covering.</blockquote>






I know, just contemplating...along with my belly button
 
<span style="color: red;">OMG, Soros has been posting on IHB, under the name awgee...</span>



"After the financial market collapsed last fall, the Fed responded with a massive injection of liquidity and expansion of the monetary base.



Eventually, Ben Bernanke & Co. will face the challenge of having to remove that liquidity from the system. "That's a big and difficult task and probably the authorities will not be able to do it well," says legendary financier George Soros, chairman of Soros Fund Management. <span style="font-size: 13px;">"That's the fear that drives people into gold."</span>



<strong>Soros wouldn't say whether he's actively trading gold but certainly implied it's a good bet</strong>; more explicitly, he agreed with the view there's a "bubble" in Treasuries that's likely to burst sooner rather than later..."



<a href="http://finance.yahoo.com/tech-ticker/article/226767/Soros-Says-Fed-in-a-Bind-Beware-Stagflation-Bursting-of-Bond-Bubble?tickers=dia,spy,GDX,GLD,TLT,TLB,TIP">Linky</a>
 
[quote author="???" date=1236774001]

edit: Maybe momentum isn't the word I'm looking for... </blockquote>


Ah, "rotation" is the word I was looking for.



Of course, I have a feeling that money will be rotating back into GLD here again soon as this false "bull market" euphoria subsides.
 
Covered some in the last drop. I shorted originally at 912 then again at 956. Covered some last week and may hold on to others. Still in profit on all.
 
<a href="http://www.ritholtz.com/blog/2009/05/dow-gold-ratio/">Chart of the day: Gold/Dow ratio</a>.



?Today?s chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 9.2 ounces of gold to ?buy the Dow.? This is considerably less that the 44.8 ounces it took back in 1999. When priced in gold, the Dow is down 79% from its 1999 peak and the scale of the current two-month rally has not distinguished it from the many bear market rallies that have occurred over the past decade.?



http://www.ritholtz.com/blog/wp-content/uploads/2009/05/20090508.gif
 
I was hoping that Gold would be trading above $1000 most of 2009. I can't believe Gold is still under $1000 right now. What a bummer!
 
I was just reading in the comments on CR a prediction of a $750-900 trading range for 2009. Justified by saying that industrial use was down, and that people in India had sharply cut back on personal purchases, as well as increased recycling and sales into the market by broke people.



what do you think, awgee?
 
The underlying fundamentals for gold are still intact.



I see the following factors providing resistance to the rise in the price of gold in the short term.

1) lagging commodity prices (but this is correcting itself)

2) market consensus that we are in a deflation

3) USD index holding above 82

4) stable 10-year bond rates



The following is providing a floor to gold prices short term

1) government stimulus and bailout taking effect all around the world

2) failed auction of us treasuries and subsequent quantitative easing announcements from the US and EU

3) falling production from gold mines due to lack of credit and financing
 
[quote author="freedomCM" date=1242710916]I was just reading in the comments on CR a prediction of a $750-900 trading range for 2009. Justified by saying that industrial use was down, and that people in India had sharply cut back on personal purchases, as well as increased recycling and sales into the market by broke people.



what do you think, awgee?</blockquote>




Awgee,



It is interesting that you came up with the $1650 figure because that is exactly the value of gold when it peaked at $850 in 1980 accounting for inflation. Do you believe that gold will be $1650 before the peak, at the peak, or after the peak? Why 2011?
 
I'm not going to get too excited until i see that Dollar index drop to 50-60 range. Awgee, I have a feeling that the gold peak spike will arrive much earlier than 2011. I hope to be out of there by then.
 
[quote author="awgee" date=1242872644]Dollar index dropped 1.00 to a 81.03. Do most folks realize that the dollar index is a measure of the USD against a basket of other currencies and if the other currencies are devalueing, the index doesn't really give you a clear picture of the buying power of the dollar, except <strong>maybe</strong> some imports.</blockquote>
Can all the currencies in the world devalue at the same time if they are all printing money??? Kinda like asking the whole tree falling in the worlds question...
 
[quote author="usctrojanman29" date=1242886857][quote author="awgee" date=1242872644]Dollar index dropped 1.00 to a 81.03. Do most folks realize that the dollar index is a measure of the USD against a basket of other currencies and if the other currencies are devalueing, the index doesn't really give you a clear picture of the buying power of the dollar, except <strong>maybe</strong> some imports.</blockquote>
Can all the currencies in the world devalue at the same time if they are all printing money??? Kinda like asking the whole tree falling in the worlds question...</blockquote>


Yes, they can all devalue at the same time, and they have for many decades.



USD index less than 80.00 now.
 
Dollar index @ 79.98. 10 year @ 3.45%! But, isn't everyone saying that the quantitative easing by the Fed will keep the curve flat. And isn't everyone saying that China and Japan will keep buying US Ts or they will be cutting their own throat?
 
[quote author="awgee" date=1243048427]Dollar index @ 79.98. 10 year @ 3.45%! But, isn't everyone saying that the quantitative easing by the Fed will keep the curve flat. And isn't everyone saying that China and Japan will keep buying US Ts or they will be cutting their own throat?</blockquote>
Tell me that mortgage rates have also gone up since the 10-year Bond is up about 100bps from the low. Btw, when'd you become a moderator? Does this mean you can ban me?
 
From <a href="http://english.pravda.ru/business/finance/19-05-2009/107581-dollar_russia-0">Pravda,</a>









<em>The US dollar is not Russia?s basic reserve currency anymore. The euro-based share of reserve assets of Russia?s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote.</em>
 
I have a funny feeling that the Fed has moved their focus on buying Fannie/Freddie MBS bonds to keep mortgage rates low because I don't think rates have moved up 1%+ since the 10-year was around 2.50%. Where are those 5.50% mortgage rates?
 
Something interesting from rosie's morning report.



KEEP AN EYE ON THE U.S. DOLLAR:

IT IS BASIS POINTS AWAY FROM SEEING THE 50-DAY M.A. (83.8) CROSS BELOW THE 200-DAY M.A. (83.6). THE ?SPOT? INDEX IS 79.9. IN THE EVENT OF THE ?CROSSOVER?, WHICH LAST OCCURRED THREE YEARS AGO, THE COMMODITY COMPLEX AND PRECIOUS METALS WILL LIKELY RECEIVE AN EVEN LARGER PUSH TO THE UPSIDE.



thoughts?
 
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