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All Majors and Gold

  • #5,781
  • May 10, 2013 10:04am May 10, 2013 10:04am
well, risk aversion may begin to occur soon, money made in equitites might make its way back to gold soon atleast partially: http://www.cnbc.com/id/100726621
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,782
  • May 10, 2013 10:45am May 10, 2013 10:45am
expected support level?
  • #5,783
  • May 10, 2013 12:15pm May 10, 2013 12:15pm
Quoting gnomoneey
here's my view on gbp/usd -current 1.5528 -bounce down the channel to 1.53 or actually breakout towards 1.63 {image}
as usual I was right.....back to resistance? or break?

Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdh4april30channel.png Size: 135 KB


Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdmay10h4channel bounce.png Size: 131 KB
Wooooohooooo or Boooooohooooo
  • #5,784
  • May 10, 2013 12:29pm May 10, 2013 12:29pm
Quoting gnomoneey
{quote} h4 needs to close and stay above 1437 for your trade to be invalid...otherwise keep going

this is still valid
Wooooohooooo or Boooooohooooo
  • #5,785
  • May 10, 2013 1:04pm May 10, 2013 1:04pm
what next with the gold? now try too pass 1438/1440.
  • #5,786
  • May 10, 2013 1:12pm May 10, 2013 1:12pm
Still not sure how long this will carry on. However I had a short position targeting 20's which I have closed now completing the trade cycle.(Please see my excess volatility trade posts).

On a fundamental level the volumes involved mean that about 500 million ounces were dumped to drive the price down to 1320. Since then 200 million ounces have been consumed by India domestic consumption and about 120 million ounces by China. Assuming that this was a naked short prices should be wound tight and break 1490 as expiry approaches. Bernanke's speech however, makes it seem like they are very wary of Gold rising along with whatever else they think is 'risky asset' class. It is obvious they want excess liquidity pumped through Fed replaced by common consumers money, which means, they want them out of savings, gold, silver pension funds. While this saga continue we can expect volatility. Lets hope for the best.

I am formulating a new trade now, but its a risky one.
  • #5,787
  • May 10, 2013 1:18pm May 10, 2013 1:18pm
so u think it will go up to 1490, but it risky?
it is likely that it will go down?
  • #5,788
  • May 10, 2013 1:36pm May 10, 2013 1:36pm
Why is implied Vola on atm Gold Options so moderate?
  • #5,789
  • Edited 1:57pm May 10, 2013 1:41pm | Edited 1:57pm
I wanted to say something about Buffet's quote on Gold. Though I am a great admirer of him, and I can understand his perspective, I am inclined not to agree with his opinion of Gold. What he says about Gold can be said about any asset class. The question is of entropy that has gone into producing the asset that gives its fundamental value. Gold is rare, hard to mine, and finite until we get off the planet. The amount of work that goes into mining, and refining gold has a bottom limit of $1000.

Now say if I have $100,000 and i wanted to buy something that I can leave my children and for myself in old age, lets see what options I have available:

Stocks: Based on a variety of factors stocks are very volatile. There are very few Coca Colas type firms in the world and its very difficult to find them when they are developing. I can guarantee you investing in Facebook or even maybe Apple (not too sure about APPL) will be futile in the long term. Stock create wealth but they do not store it. Plus it takes a lot more work entropy wise to keep a company going.

Property: Has to be maintained, and you are still relying on the fact just like Gold, that someone will pay you more for it in a few years than they will now. CPI on property is based on a variety of factors such as environmental,economical, social. For example if I had bought property in Chernobyl or Fukishima, or even Florida it would be worth very little now.

Other Asset Classes: Govt Debt, long term rates on Govt debt is a terrible idea because money wouldn't be worth much more than it is now or even could be worth less with most Govts having aggressive monetary easing policies (monetary easing is a one way road, it has never been shown to be reversed historically and it was what led to Roman Empires collapse)

Corporate Debt: That's all very good but the risk is that the riskier the business the more you will earn. And hence the risk remains of one losing all their investment.

There are other asset classes that I can go into but I don't have time to but it brings me to Gold. A gold bar will always retain the entropy that has gone into producing it just like an artists painting. Further, it can't be devalued, you cant print more of it, it cant be debased, it doesn't rot and doesn't need to be maintained, can be stored relatively safely and remain unaffected by disasters, and in all likelihood, it will only cost more to mine more in the future due to inflation (which every CB loves). So as a long term store of wealth Gold will win out and definitely should belong in a portfolio.

My conclusion, there is no logical way of agreeing with Buffets view point on Gold.
  • #5,790
  • May 10, 2013 1:43pm May 10, 2013 1:43pm
Quoting rajdel
so u think it will go up to 1490, but it risky? it is likely that it will go down?
Fundamentally should go above 1490. But I cant rule out another sustained attack on Gold driving it down to get people out of this asset class.
  • #5,791
  • May 10, 2013 1:53pm May 10, 2013 1:53pm
Quoting EricB
I wanted to say something about Buffet's quote on Gold. Though I am a great admirer of him, and I can understand his perspective, I am inclined not to agree with his opinion of Gold. What he says about Gold can be said about any asset class. The question is of entropy that has gone into producing the asset that gives its fundamental value. Gold is rare, hard to mine, and finite until we get off the planet. The amount of work that goes into mining, and refining gold has a bottom limit of $1000. Now say if I have $100,000 and i wanted to buy something...
Well written and stated, concur with your view point. I believe Buffet to be intelligent, but I also disagree with his take on gold.
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,792
  • May 10, 2013 1:53pm May 10, 2013 1:53pm
Quoting EricB
{quote} Fundamentally should go above 1490. But I cant rule out another sustained attack on Gold driving it down to get people out of this asset class.

Speaking the truth my friend....
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,793
  • May 10, 2013 2:13pm May 10, 2013 2:13pm
While I have the time here is my last observation. There just isnt enough productivity in the world at the moment to sustain World Growth. That is scary.

Phase I: Internet to make people spend more- e-Commerce the big thing in late 90's. Will revolutionise the World. It does but not enough so the markets crash into stagnation, deflationary environment in 2001.

Phase II to keep supporting World Growth create environment where people start taking equity out their home (with baby boomers having built it over decades i.e. all their hard work/productivity went into creating and maintaining their houses and spend it. It spurred Growth after Phase I crash, but wasn't enough to to sustain World Growth leading to Crash number 2.

Phase III - Create excess liquidity by printing money and keeping people believing the value of Fiat. Get people out of savings by having lower and lower interest rates, and attack any other asset class that isn't effected (gold). Excess liquidity and low interest rates will make consumer take risks and spend money again creating all kinds of bubbles (such as the stock market, and upcoming property bubble).

So what is Phase III's inevitable outcome? There just isn't enough money hidden under peoples bed to support World Growth, and hence we will see a few more bubbles pop and another crash.

Sorry for being so grim but it seems rather ominous/obvious.
  • #5,794
  • May 10, 2013 2:55pm May 10, 2013 2:55pm
Quoting EricB
While I have the time here is my last observation. There just isnt enough productivity in the world at the moment to sustain World Growth. That is scary. Phase I: Internet to make people spend more- e-Commerce the big thing in late 90's. Will revolutionise the World. It does but not enough so the markets crash into stagnation, deflationary environment in 2001. Phase II to keep supporting World Growth create environment where people start taking equity out their home (with baby boomers having built it over decades i.e. all their hard work/productivity...
Spot on my friend.
The current move in the stock market is all a bubble, lacking any substance to support the massive rally. What you are seeing in equities is inflation from all the printing, and people jumping on for the ride...be it known, upon slowing QE and removing qe, the stock market will crash, gold will erupt, as this is the only "SAFE" asset to survive all crashes throught mankind's history.

Everyone have a great weekend, lets make hundreds of thousands of GREEN PIPS next week! Cheers and Stolat!
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,795
  • Edited 3:41pm May 10, 2013 3:07pm | Edited 3:41pm
Quoting QuikFlipp
{quote} Spot on my friend. The current move in the stock market is all a bubble, lacking any substance to support the massive rally. What you are seeing in equities is inflation from all the printing, and people jumping on for the ride...be it known, upon slowing QE and removing qe, the stock market will crash, gold will erupt, as this is the only "SAFE" asset to survive all crashes throught mankind's history. Everyone have a great weekend, lets make hundreds of thousands of GREEN PIPS next week! Cheers and Stolat!
As much as I would like to agree do not forget CB's ability to lease gold in very large quantities via their trading partners like JP Morgan and pay negative interest rate i.e. they will lease you gold and will pay you money to have it. When something like that is in the arsenal of CB you can't fight a sustained attack on gold. However, I hope they realise the obvious that non-intervention is the best way to let markets normalise. They cannot forever avoid asset price haircuts by continuously supporting bad debt. Greece et al should leave Euro or Germany should leave Euro. There isnt a future for Euro unless they agree on Eurobond - which they never will. So the equation is : failure of Euro + dollar diminishing in value, Yen the same = what?? .

Something is going to pop at some point soon.
  • #5,796
  • Edited 3:41pm May 10, 2013 3:10pm | Edited 3:41pm
Quoting EricB
{quote} As much as I would like to agree do not forget CB's ability to lease gold in very large quantities via their trading partners like JP Morgan and pay negative interest rate i.e. they will lease you gold and will pay you money to have it. When something like that is in the arsenal of CB you can't fight a sustained attack on gold. However, I hope they realise the obvious that non-intervention is the best way to let markets normalise. They cannot forever avoid asset price haircuts by continuously supporting bad debt. Greece et al should leave...
failure of Euro + dollar diminishing in value, Yen the same = Asset Price Normalisation i.e. Everything will find its Fair Value - Including Gold.
  • #5,797
  • May 10, 2013 3:26pm May 10, 2013 3:26pm
Quoting EricB
{quote} failure of Euro + dollar will diminishing in value, Yen the same = Asset Price Normalisation i.e. Everything will find its Fair Value - Including Gold.
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,798
  • May 10, 2013 3:27pm May 10, 2013 3:27pm
Quoting QuikFlipp
{quote}

Darn, ran 4 dollars past my exit....oh well...next week is another week of PIP lovin
"It is not enough to have a good mind; the main thing is to use it well"
  • #5,799
  • May 10, 2013 3:52pm May 10, 2013 3:52pm
…a perfect timing after the signal of yesterday. Bearish head and shoulder on the hourly charts that anticipated the return to 1.2950, the 200-days moving average where EurUsd is going to play the game for the coming months. Right on target, but the week closes with a bearish engulfing pattern.
  • #5,800
  • May 10, 2013 4:08pm May 10, 2013 4:08pm
Quoting elisab
…a perfect timing after the signal of yesterday. Bearish head and shoulder on the hourly charts that anticipated the return to 1.2950, the 200-days moving average where EurUsd is going to play the game for the coming months. Right on target, but the week closes with a bearish engulfing pattern.
I wouldn't count on it too much. The resistance seen around 1.30 could be monetary supply related. Fundamentally it should be around 1.24-1.26 range but its not. Hence it could either go that and find its value or it could be propped up by ECB in which case that's a hopeless trade. I have been shorting EUR every opportunity, but when it stalls I am out.
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