Gold

[Skol]

That guy was right about one thing Skol, the gold price has trended upwards over the years. No reason to expect that the general trend will stop.

On Friday night our time, gold suddenly bolted upwards by $30, and the US$ dropped at the same time. This was caused by the US non-farm payroll data, that came out at 8.30am EDT. It was poorer than expected. Coupled with that, the unemployment rate dropped, but partly because more people are retraining, not looking, or giving up on work. And average wages are DROPPING, with less hours being worked per week. At least in some areas.

http://www.reuters.com/article/2013/...96A0G320130802

I'll show you what a great 'investment' gold is EZ.

The S&P500 total return index (includes dividends) began on June 1st 1988 at 270 and it's currently 3083. Up 11.4 times.

The gold price on June 1st 1988 was $456 so gold has gone up 2.8 times.

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Do these guys ever give up? Jim Rickards still banging on about chaos, monetary collapse and the gold standard.

http://etfdailynews.com/2013/07/30/j...ikely-outcome/

He's been spending too much time in the office, ignoring the real estate boom and obviously hasn't travelled on an aircraft recently. The DJ Transports up 34% in the last year.

[elZorro]

Maybe Skol, but the Equedia article out today shows that most of the new US jobs are part-time ones, as their graphs demonstrate. And the rising 10 year bond graph points to higher housing interest rates, and an end to any housing boom there.

http://www.equedia.com/?p=51359&utm_...m_medium=email

[Skol]

Looks as if gold can't hold on to its gains, I thought all this 'chinese buying' would spur gold on to unheard-of heights, but it's beginning to fizzle out, sub-$1,300 looks a distinct possibility soon.

Not to worry, Mary-Ann & Pamela Aden who have been studying gold for 30 years say it might go up................or it might go down. Nothing like having a bet both ways, but the Aden Sisters have already predicted a gold price of $3,000-$5,000 by the end of 2012.

http://www.marketoracle.co.uk/Article41675.html

Meanwhile Jim Rickards never gives up, he says gold is on its way to $7,000, but with a haircut like this he looks more like a used car salesman.

'Have I got a deal for you.'

[Skol]

Yep, down she goes, Daryl Guppy says a break below $1,260 gives a target of $1,000

[Skol]

Societe Generale expect 'large scale selling through 2014'.


http://www.bloomberg.com/news/2013-0...mmodities.html

Could be a bad day for gold stocks.

HUI -6.01%
GDX -5.51%
GDXJ -5.23%

[Skol]

THE PRICE OF GOLD IS DROPPING LIKE A BRICK.

Aug 6 2013

The sinking price of gold is bad news for investors, but it could mean that a global economic recovery is finally taking hold. Gold bars are seen at the U.S. Mint at West Point in West Point, N.Y. (Mike Groll/AP)


Watch out for that shiny pendulum because it’s swinging back fast. Investors are chasing stocks and real estate and fleeing gold. The two former asset classes have experienced solid returns since 2012 while gold has suffered double-digit declines.

Large cracks in the “go-long-gold” strategy are evident. Economic weaknesses in Europe remain but no financial Armageddon has emerged. Keynesian economics remain the drug of choice, Japan being the latest user, yet inflation is non-existent. The strength of the dollar and the increased willingness of the Fed to taper quantitative easing undermine higher gold prices. Investor support is crumbling and gold bugs, those believing it is a stable investment, should be nervous.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains. Recent paper losses for hedge funder John Paulson have topped $1 billion. In just the last six months, gold has dropped by 22 percent, the worst fall since modern trading commenced in early 1970s. Gold is locked in a bear strangle and prices have plenty of room to fall still further.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains.

It has taken over a decade but the bubble has finally been pricked. The pin that popped this most recent asset swelling is not complicated. It’s a stock market that has reached new highs, falling unemployment and rebounding investor confidence in central banking policy. In the last year, gold investors have lost over 18 percent while those in S&P 500 stocks have enjoyed a 23 percent return. Real estate in the largest U.S. cities has also climbed 10 percent or more since last year and historically low interest rates are forcing investors to find new places for capital. Even junk bonds are back in vogue. Investors are starting to ask the right question: Why lose money on gold when you can gain big on stocks, real estate or new alternative investments?

Other commodities also point to a bust in gold. Silver, the poor man’s gold, has dropped in the last six months by 37 percent. Platinum, a metal that is 15 times scarcer than gold, up to recently, sold at a steep discount to gold. Today, platinum trading at $1,450 per ounce is moving back towards to its historical premium — another powerful sign that lower gold is in the offing.

Caveat emptor: The last gold bust was not kind to investors. From 1980 to 2000, investing in gold was dead money. When that bubble burst in 1980, gold plummeted by 60 percent in less than a year. Using history as a guide, the current pop could push gold down to $700 per ounce — a mind-numbing drop of over $1,100 per ounce from September 2011 historic highs. Taking into account the physical cost of extracting gold from the ground, it is under $600 per ounce. Selling at $700, would still generate modest mining profit. In recent months even gold mining companies have started to hedge against the fall of gold, attempting to lock in profit before it is too late.

The silver lining to all of this is that falling gold prices are a strong sign that market confidence is returning and a long-awaited global economic recovery is finally taking hold.

This time the gold bubble pop is even more hazardous to financial health. The great unknown is the effect of exchange-traded funds (ETFs) on gold prices as the global economy moves steadily back toward prosperity. Exchange traded funds are derivative instruments used by investors to quickly trade equities, bonds and other commodities like gold. Through the financial support of the World Gold Council, a London-based trade organization charged with stimulating market demand, the first gold ETF was launched in 2004. In less than a decade this ETF called the SPDR GLD and copycat funds have experienced hyper growth. At their peak they had a market capitalization of over $80 billion or 40 percent of the overall physical market. Armed with ETF’s, and a low barrier to entry, even small investors have jumped in to own a piece of gold.

But gold ETFs were created in a gold bull market and these same derivatives that played an important role in the price run up are now morphing into a giant wrecking ball. In 2013, gold ETFs are being bear-market tested. A single gold ETF like the SPDR GLD and how its investors think can dramatically move the price of gold up or down in a nanosecond.

As speculators continue to switch horses and move to stocks, real estate and other higher yielding investments, how far and how fast will gold prices fall? History suggests $700 gold is not out of the question (and that was before the advent of multi-billion dollar, rapidly traded ETFs). The silver lining to all of this is that falling gold prices are a strong sign that market confidence is returning and a long-awaited global economic recovery is finally taking hold.

[Skol]

On the 11th of July gold 'expert', Jimm Sinclair, told 591 people in Vancouver that the gold correction was over because it had broken $1275. Went to $1350, now back to $1275.
http://news.goldseek.com/PeterCooper/1373550660.php

[JBmurc]

Why the biggest fall in gold is yet to come:

http://www.nzherald.co.nz/business/n...909365&ref=rss

If we don't even have confirmation yet and this is not factored into the gold price, as has been clearly shown this week, then there is still more carnage around the corner. The stock market may take a dive, but I think gold will be absolutely pummelled once tapering is confirmed, the same way it went (deacresingly) upwards after each successive QE notice. So, a few more major downward legs are due over the coming years as the tapering takes effect, with the first being the worst (if history teaches us anything, which for some it doesn't!).

However, I thoroughly believe there is money to be made both going up and down in the market. Any downwards legs can be ridden at their bottom to a lower high that balances out to fair price before the next fall begins. You could also short gold, but that is too inherently risky considering it can be recalled at any time. Following Kitco and playing the charts has always been pretty foolproof for me!

Bring on the taper or even better end the Q.E all together yeah Gold/silver will get a hit for a start but once the affects of not having the funding prop in place to hold it all together the markets will go septic real quick GFC x2.... rates will have to rise esp long term ....FEAR will reign ... guess where funds will rush too >>>> where it aways does

[elZorro]

Where did you get that article above from, Skol? I don't think the author knows much about goldmining, because the numbers are well out. The rest of the text is dubious too.

Taking into account the physical cost of extracting gold from the ground, it is under $600 per ounce. Selling at $700, would still generate modest mining profit.

INO reported that some are saying China is still buying gold at a fast rate, implying there are tougher times around the corner, could this be the precursor of another flight to gold?

From Bloomberg: history in the making.

The Shanghai Gold Exchange, China’s largest bullion bourse, delivered 1,098 tons to buyers in the six months through June 2013, compared with 1,139 tons for the whole of last year (2012), according to data from the bourse on July 15. That was more than double the output in China, the world’s largest producer, which reached a record 403 tons last year (2012).
China’s purchases in June were nearly twice the 68 tons in the same month last year, according to the data from the Hong Kong statistics department. Mainland China doesn’t publish such data.

[JBmurc]

Yeah total costs to extract gold $600 tell him he's dreaming ....NCM average total av. costs $1283 per oz AUD from the many major ASX producers I've come across of recent times on the ASX are pretty high cost $1000+ ...and fact is Aussie one of the world's top producing countries......I could see more pain for Gold in the Short term but further out way more bullish