GOLD

[Aussie]

I never understand how the gold price move. On a day like this gold price should be up, yet it is down. Something I dont understand I stay well clear.

Dr. Who, in short . . . gold is a political metal. The G20 is about to start!

Have a good poke around the GATA site and carefully read their WSJ ad that ran last year, it will make everything a lot clearer.

http://www.gata.org/node/wallstreetjournal

BTW, Does anyone here think this looks like a normal trading chart . . .

Attachment 1410

I looks more like a chart depicting forces that were aiming to get the price back below $900 - found some strong resistance and were temporarily overwhelmed before returning to their mission. That's a huge price increase then decrease in the space of 2 hours.

How does that happen I wonder?

[peat]

but just to put things in perspective in relation to my comments in other thread about Martin Armstrong and gold price...

Colin Twiggs put out a warning on gold today.

"Spot gold broke through the band of support at $900 after earlier penetrating the rising trendline — signaling reversal to a down-trend. Expect support at the January low of $800, but the target is primary support at $700. "

kind of like the break that arco talked about in Silver.

[lakedaemonian]

but just to put things in perspective in relation to my comments in other thread about Martin Armstrong and gold price...

Colin Twiggs put out a warning on gold today.

"Spot gold broke through the band of support at $900 after earlier penetrating the rising trendline — signaling reversal to a down-trend. Expect support at the January low of $800, but the target is primary support at $700. "

kind of like the break that arco talked about in Silver.

I'm swapping my NZD for USD at these levels and will be buying lots more Gold on weakness.....enough to bring my dollar cost average up substantially....least bad option going forward in my opinion

[arco]

As a consequence of the US Mint's new pricing policy, the prices for gold coins will likely decrease this week.

Will collectors use this as an opportunity to buy US Mint gold coins?

http://mintnewsblog.blogspot.com/200...se-likely.html

[airedale]

Someone posted a link to Martin Armstrong recently. He suggested....a couple of weeks ago....? that the current drop in POG would fizzle out on Sunday 19th April.
The action since Sunday suggests that he may have been right.

[Aussie]

Someone posted a link to Martin Armstrong recently. He suggested....a couple of weeks ago....? that the current drop in POG would fizzle out on Sunday 19th April.
The action since Sunday suggests that he may have been right.

I'm following all this too airedale. It's going to be very interesting to see how things pan out . . . very interesting indeed!

[Aussie]

The Return Of "Risk Appetite"

Last week, we talked about the huge rally in global stock markets over the past month. This week, coupled with increasing talk - especially in the US - about the "end" of the recession, we have seen a surge of reports that investors are now reassured by the stock market and that their "risk appetite" is returning. One major piece of evidence for this is, of course, the falling $US Gold price. As you know, spot future Gold could not break back above the $US 900 level early in the week and then fell away to close on April 17 at $US 867.90. That is its lowest spot future close since January 22. For the record, the lowest spot future close so far in 2009 was $US 805.20 - reached on January 15. That's right, Gold has moved in an almost $US 200 range so far this year.

In reality, of course, there was very little in the way of "risk appetite" over the 25 years (1982-2007) when paper assets - stock market assets in particular and real estate in the later stages - were in their great boom. Most of the participants in these markets didn't see themselves as taking risks at all. When a market keeps setting new (nominal) highs for a quarter of a century, an attitude becomes entrenched. And once entrenched, it takes a HUGE amount of contrary evidence to destroy it.

A recent article in Bloomberg illustrates this point very well. The Boston College "Center for Retirement Research" has recently shown that a median-income worker who put money into an all stock retirement plan over the decade ending on March 31, 2009 would end up with 26 percent less than he or she had contributed. This has changed the investing habits of most people hardly at all. In the fourth quarter of 2008, 6.1 percent of retirement fund participants changed their asset allocation. This was up a mere 0.3 percent from the fourth quarter of 2007.

The Dow hit its all time high in the fourth quarter of 2007.
Nor has it changed the asset allocation of most of the big US retirement or mutual funds. To give one example, the Vanguard Group still maintains a 90 percent weighting in stocks for all investors under the age of 42. And that is after the already mentioned 26 percent haircut suffered over the past decade. The old mantra - "in the long run, stocks ALWAYS go up" - is not going to go away without a fight.

Even more to the point, it is an all but universal attitude in the US and in many other "developed" nations that stock market investments are actually "savings". When asked about the implications of the Boston College findings, the director of the college center which compiled the data said she was not surprised that most investors were still feeding their 401K plans as before. "What is the alternative", she said."Are you not going to save at all?"

Compare, for just a moment, the alternatives to putting one's "savings" in two other types of asset rather than stocks. Someone who had merely held cash in hand - earning no interest at all - would be 26 percent better off. Someone who had bought Gold ten years before March 31, 2009 would have seen their holdings appreciate from $US 287.80 to $US 922.60. That's an increase of 220.6 percent. Here's the scorecard, using $10000 as a constant.

In stocks: $10,000 on March 30, 1999 becomes $7,400 on March 31, 2009

In cash: $10,000 on March 30, 1999 remains $10,000 on March 31, 2009

In Gold: $10,000 on March 30, 1999 becomes $32,060 on March 31, 2009

Show this simple list to almost anyone who is dutifully keeping up his or her monthly contributions to a mutual fund or 401K fund which still allocates 80-90 percent to the stock market and they would not believe it. Don't forget, we are talking about a DECADE of comparative returns here, this is not a short term situation. Yet the attitudes of most people have not changed at all from what it was when stocks were peaking in early 2000 or peaking again in late 2007. They still see paper assets as the only viable means of either getting ahead or saving. The halving of stock indices and the much worse performances of many individual stocks since late 2007 has not dissuaded them. They did not sell out when stocks fell nearly 50 percent in the US last year. They did not sell when they plummeted even further in the period up to March 9 this year. And now, six weeks later, their "risk appetite" is returning??

They never had a risk appetite. They were sure they were onto a sure thing. Most of them still are. If anything, they are even more sure of it since now they believe that the government will always be on hand to bail out anyone or anything that gets into any kind of financial grief. It is a sad and tragic phenomenon to watch unfold.

US Treasury funded debt is now on the verge of being 100 percent of (real) US annual GDP. No nation has ever recovered from such a position without a gut wrenching valuation collapse. Even though the Fed cut official US rates to effectively ZERO last December and announced plans to directly buy (with US Dollars created out of thin air) Treasury debt a month ago, longer-term Treasury bond yields are inexorably rising. On April 17, the yield on the 30-year bond hit 3.8o percent. When the Fed cut rates to ZERO it was just over 2.5 percent. The yield on the ten-year bond has gone from 2.10 percent to 2.95 percent over the same period. Somebody out there is certainly not regaining their "risk appetite".

It is impossible to know how long US and world stock markets will continue their rally. It is crystal clear, however, that most holders of paper assets have sold little if any of them and that this rally has seen many of them buy more. No bear market ever ends before the majority of investors give up and sell in a panic. There has been no vestige of that yet in this paper bear market. That means that it has a LOT more to fall. And somewhere in that fall, the "no risk" attitude of those who have spent their lives watching paper assets go higher is going to crack right down the middle. Until then, Gold is going cheap.

[dumbass]

hey aussie no offence intended but your gold articles are the most one eyed , paranoid rantings ive read in a while.

heres a random date ive plucked out of the air and compared returns of gold , stocks and cash
by the way most people who hold cash get a return and compound it.


Here's the scorecard, using $10000 as a constant.

In stocks: $10,000 on March 31, 1980 becomes $86,948 on March 31, 2009

In cash: $10,000 on March 31, 1980 becomes $31,186 on March 31, 2009

In Gold: $10,000 on March 31, 1980 becomes $14,027 on March 31, 2009

it cant be true the shiny metal has returned sweet **** all, and thats being generous as i have factored in zero dividends in stocks and only a 4% compounded return for cash.
must have been gold cartel manipulation.

i just think you need to read some of these articles from a more balanced perspective.

[Aussie]

hey aussie no offence intended but your gold articles are the most one eyed , paranoid rantings ive read in a while.

Why would I take offense dumbass? I don't write 'em and don't vouch for the info, I just find the broad thrust of them interesting that's all.

So you don't believe there is a banking Cabal out there . . ?

[Aussie]

. . . i just think you need to read some of these articles from a more balanced perspective.

dumbass , I read and watch the mainstream media as well as the non MSM. I have generally found that what passes for news today (and particularly financial news) is often propaganda and this is usually confirmed to be so in the course of time. A great example is the so called Russian invasion of South Osetia last year. The Western press reported exactly the opposite of what really happened ignoring the real reasons behind the entire episode. It was nothing but a US propaganda exercise. And of course the people who saw the current financial crisis looming several years ago were laughed at - yet they were proven right. I tend to listen more to the folks who got it right and what they think is coming next, rather than those in control who "didn't see it coming" . . . yet were the very cause of it. They are hopelessly compromised.

The vast majority of people know nothing of what is really going on behind the scenes. They are simply financial taxpaying sheep that are herded, sheared in a continuous cycle. I am one them, it's hard not to be. But at least I am trying to look out of the stall and see what the farmers are doing. If you take the time to study and look hard enough you can catch glimpses, see patterns and make observations over time that paint a picture that looks far different to the one that our politicians / banker farmers would have us see.

In this current economic environment where there is no transparency, white is black and black is white. We are witnessing a huge economic paradigm shift. Permanent damage has been inflicted and things are never going to go back the way they were before. People have to come to terms with that. The global economic system has been gamed for decades by the collusion of Western banks and governments and their debt laden end is coming soon, no-one knows exactly when but eventually the laws of economics will ensure it does. A new financial system will have to emerge, and that may well be a part of the plan. Create chaos and then bring a new order out of that chaos. But who will be the new top dog? The current bankrupt Anglo American banking cartel or a new power base that emerges from China, Russia and the Middle East?

This decision will likely coincide with enormous social and political upheavals with once free countries becoming more and more centrally controlled as governments quell dissent from the masses while jockeying for position and grapple with the forces working against them. Human history and the cycles give clear warnings of the convergence of events that we are facing in the next few years.

There may be a bear market rally here and there but unstoppable forces are in play. The big dominoes are already slowly falling, most people haven't connected the dots yet but they are starting to. Look at the tax and spend rally's held in over 750 cities across America on April 15th. This is the start of a significant event and the MSM largely ignored it and the politicians (like Nancy Pelosi) demonized the participants. The coming years are likely to be very turbulent and I think the world will be truly shocked by heavy-handed government reactions.

If you continue to believe everything that gets trotted out by Obama, Geithner, Bernanke, Brown etc. then I think you will be very unprepared for what lies ahead. Look beyond the headlines, delve deeper into the issues and have an open mind.

Cheers