I sold GLD last week at break-even (again) - $624. The chart is a perfect head and shoulders. I wanted to stay in, especially with Iran's August 22 approaching, but figure cash at this point is safer. Remember - my goal is asset protection during this meltdown. If gold isn't going to act in its traditional role as a flight to safety and store of value, what will?
Also, I've been watching the insane run-up in Nickel. Talk about a blow-off top and buying panic. Now you have the UK market makers restricting trades there.
Bottom line - with a worldwide recession coming, wouldn't that help tank commodities - Gold and Silver included?
Perhaps there are no safe havens? I hate US$, it needs a place to go, but that place must generate interest and maintain worldwide buying power.
August 20, 2006
Are we seeing a head and shoulders for Gold? And will we see a commodities meltdown now as well?
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is the price going up because indida and china are now demanding more of it?
move into euros - they'll take over for the dollar as the world reserve currency
You can't have it all!
If you're forecasting a worldwide recession, you can't have and a safe haven, and short time profit and maintain your worldwide buying power. This short-time-view is what has created this bubble-economy. Looks like you're starting to panic yourself. If you really believe your forecast yourself, start thinking about loosing less than the others in the long run. Then you can only win.
Advice from a humble european citizen with the same forecast.
i agree - the name of the game now is capital preservation.
I agree with JF and I have been asking the same question, "Where should I put my money?" I've never lived through a recession (was always a kid under my parents roof) and have only seen good times. I'm worried about what will happen, but I'm also ready to see what happens. A lot of us younger people need to learn to live through down times.
I bought gold and silver last year at $470 and $7. I'm sticking with it. I also bought FOREX it's earning interest, but it's been flucuating against the USD too much. Paper's not as safe as metal, IMO.
Debt is going to be the killer.
You MUST have NO debt!
Stay out of malls and TV land.
Become reality based.
Get out of debt.
Become more self sufficient.
Have some hard assets.
Learn how to use a weapon.
Farm Girl
(Sorry if my english is not always correct, it's not my mothertongue)
I've visited Atlanta and most of Florida last February. The question I asked myself was, who is going to live in all those houses, condominiums or whatever they were constructing everywhere we passed. I didn't see people sleeping in the parcs or on the streets, so there was housing for everyone. Eventhough you Americans are a little more fertile than us Europeans, this couldn't explain everything. "People are moving South" was about the only explanation people could give me.
Viewing the number of constructions it had to be an exodus from the North. Had to be an exodus of all the rich people, suddenly all of them in need of more sunshine. And looking at the prices the sunrays over there must be golden.
Since I've began to notice the same bubble signs over here in Europe, I started to do some research on the subject and even it made me somewhat anxious, it was like a new world opening. Thanks to internet I got all the answers I had been asking myself for years. The sky is indeed the limit, but I'm afraid we're reaching space now.
What I'm missing in most of the housing bubble blogs is... what do we do with this knowledge. Almost the only kind of comments I read is
...when do I step in...when is the bottom reached(or when can I make profit again).
Wouldn't it be time for Western world, US as always followed by ancestor Europe, to think what really matters in human life, which is to try to make the next generation a better one.
What do granite counter tops and a fully equiped kitchen count for if more and more people hardly use them anymore, because to busy earning MONEY and taking on debt for at least the next generation.
Let's start rethinking, that's called evolution and let our children and granchildren be proud of what we left behind us.
isreal made a commando raid into leb.
hez. is rearming.
passangers are walking off flights with ragheads on them.
iran is having another "war game" as i type.
iran just test fired a surface to surface missle according to my sunday radio.
aug 22 is two days away.
the traditional gold market heats up in the fall.
summer is over and traders and the street will be returning fromn the hamptons.
condo boom over in s fla - see sunday sun-sentinel.com
ford shutering plants.
northwest releases a book on how to save money-"go to junk yard for car parts"
gold and ESPECIALLLY silver will be the only way to preserve wealth. silver stocks are declining at comex and silver is used in weapons of war - electronics.
i believe this is the calm before the storm a head fake to get all scardy cats out before the shit really begins to hit the fan. my home has been on the market for 1 year- no offers no lookers. 4 price reductions and commission bumps and bonus. two neighbors moved out, there homes are still for sale and empty- they have to pay rent someplace else -right?
i cant buy enough gold or silver as it is. i look at every drop as a gift. grandich newsletter says buy he saw a drop to the 600 level before the ultimate rise, this is happeninng as of friday at 611.
the cease fire will end soon, turmoil in isreal with a call to oust olmert may spark avery aggressive idf to return to leb to show olmert is a hawk.
too much uncertainty. i think everyone has become complacent over the cease-fire the problem is still there.
bombs found at three german train stations.
spp protocal signed by bush fox and the frog will open the us border to mexican truckers with the need for papers or state plates. the longshoremans union wil be busted and the teamsteers - truckers will be next.
I invested in a german shepard, a double barrel 12 guage, and a supercharged black police interceptor.
Gold's only formed this head and shoulders when it had busted through the 425-475 channel into this bullish (or bubblicious) zone of 590-666.
The problem is that despite GLD and a few other markets, gold's not liquid enough of a unit of exchange to be an alternate currency yet.
So, if you'd bought gold this year, sell it and stick to cash for a while. If you're one of those who'd bought at <$450, then you're ok because that's a true support level.
Gold is not strongly economically sensitive, silver is mildly so, but traditional industrial demand (chemical photography) is waning.
Copper and steel are very economically sensitive.
Nickel, an expensive component of stainless steel, just hit an all time high.
If you think there's going to be a recession, then shorting non-exporting US stocks (I sold RTH short) and going long treasuries seems to be a decent course.
The "long treasuries" trade has already been done last week, looks like Bill Gross was finally right and I missed it.
There may be a reflex stock rally as Ben lowers the interest rates as recession looms but profit warnings will probably cut the legs under that.
Why should you gang up on commodities though? As western demand declines you'd probably see more pickup from Asia if it gets appreciably cheaper.
China probably has enough internal demand---they export electronic widgets---but at home they are building skyscrapers and dams and roads and other commodity-intensive purposes. I think they will maintain their domestic investment until the 2008 Olympics. At that point all the world will be in strong recession except China: they'll be gloating very annoyingly.
I'll be all in after august, its getting ready to run sometime in september. G/s stocks will fly
If the Fed has to inflate the economy gold will increase in price. The CPI is too manipulated and is now meaningless. Gold is money and has been for 4000 years. It's the ultimate preservation of wealth.
"Gold is money and has been for 4000 years. It's the ultimate preservation of wealth."
Dude, you might not want to parrot gold-eagle's rhetoric to make an argument.
The truth is that gold (and silver/precious metals) does well during inflationary and to a lesser extent, deflationary periods. We have a world where much of the exchanges are denominated in USDs which is why banks are trying to diversify and hold onto a basket of currencies to help deflate the overall power of the dollar.
In this world, gold is still viewed as either a commodity or a fear factor type of investment (i.e. war starts, people buy gold, etc). If it were monetarized, we wouldn't have seen concerted central bank gold sales for the past fifteen years.
Now, given this situation and the fact that gold's finished a multi-decade bear market via 2001, overall, gold's a good investment when timing/conditions are right. As of now, gold's in a speculative, oversold territory due to war fears, terrorism, etc. All you have to do is look at the past five years of charts to see what the true support/resistance level of gold is, let the market correct into those levels when the dollar makes another uptick in the forex, and buy/hold from that point on.
Don't be a gold bug, be a businessman.
I still can't sell my gold panda coins I bought in 1982 for a profit. Even with inflation I'd have been better in almost any other investment.
"But seriously, as Neo said in the Matrix, "Guns, lots of guns."
I favor Animal House. My advice is to start drinking heavily.
Please sell all your gold holdings because Chinese and Russian central banks are buying.
Interestingly enough, silver has more industrial uses
(i.e. defense, technology, etc.) even to the use in computers, dentistry, jewelry....than does gold. But the financial burden translates onto gold! Look at the historical values of both. Silver is still cheap and has huge potential for growth. Just a doubling would bring $24oz. Does gold have a potential to double @ a current $612?
Ever wonder why the US keeps 8500 tons (largest amount in the world) of gold at Fort Knox? Gold is money. Why is the USD the representative currency of the world? Bretton-Woods, the US has the gold and makes the rules.
Predictions:
Gold below $500 and eventually to the low $400s or even below, if deflation takes hold at some point.
Silver to $4-$5.
US$ Index to 103-105 (84 today) in the next ~2 yrs.
Real M2 growth at 0% to negative for the next 4-5 years (or as long as 7-8 years).
S&P 500 to 1000 or below this fall or early '07, 1100s-1200 by next spring-summer, and back to the '02-'03 lows by late '08 or early '09. The 10-year real change of the S&P 500 will turn negative later this year or sometime in '07 and remain their for yrs. along with the 5-year real return.
Hard landing in real estate lasting until '12-'13. Soaring mortgage and credit card defaults, Freddie/Fannie insolvent, banking crisis, and Fed cutting funds rate below 1% and pumping the monetary base at double digits to save the banks via purchase of gov't debt to shore up banks' balance sheets.
The national median home price will decline 25-33% either in nominal terms in 3-4 years or in real terms over a more protracted period, perhaps 7-10 years, before stabilizing and then reaccelerating in the late '10s to late '20s.
Real post-bubble (post-'00) GDP trend decelerating from 2.5% today to 2% and then below through the mid-'10s, with the 5% nominal post-bubble trend decelerating to 4% or perhaps even below at some point.
The US will become increasingly bogged down in the Middle East and Central Asia, losing influence in Asia and Latin America throughout the next decade and beyond.
China's economy will experience a hard landing, including a real estate bust and banking crisis, just in time for '08 Olymiad. Social unrest and gov't reaction and crackdown will follow the economic miracle fading as a result of massive malinvestment and the secular slowdown in the English-speaking and EU economies. Tensions between the US and China will rise as a result of the global economic slowdown, prompting a pulling back from investing in China by large US corporations.
Be advised, liquidity preference, risk aversion, and wealth preservation will be the dominant imperative over the next 7-10 years. People will be obsessed with return "on their money", but they should be far more concerned with return "of their money".
you sold gold last week? weren't you pumping then?
wow, look at the nasdaq100 spike last week. This could be a good entry point for shorts.
I really should brush up on my technical analysis. Could one of you with some expertise point me to a few good sites where I can learn the basics (and beyond)?
Thanks.
I really should brush up on my technical analysis. Could one of you with some expertise point me to a few good sites where I can learn the basics (and beyond)?
http://bigpicture.typepad.com/comments/
Barry Ritholz's site.
I'll bet gold is over $700 before the end of the 2006.
I'm not a gold bug. Gold is the ultimate money in today's fiat currency explosion. The US Fed is raising rates to curb inflation, BUT they're still PRINTING money like there's no tomorrow. You can't have both for ever.
Try Yen and Swiss Francs
bc_or: i agree.
Farm girl: You go! Do not forget dawgs and cattle, cash and gold.
I am in the preservation boat. Gonna be tough cause a lot of my money is in the 401K and I cannot short with the options they offer.
BEEN IN THE GOLD AND SILVER BIZ FOR 30 YRS. LOOKS TO ME LIKE THE EARLY 80"S..BUY GOLOD TILL U SEE INTEREST RATES START COMOING DOW AGAIN THAN UNLOAD..GOOD LUCK
:LOOKS TO ME LIKE THE EARLY 80"S
Not really, if you remember, gold was in a zig-zag pattern around 100-150 for much of that '74 to '77 period. It's only when it breached 200, in '78, did it skyrocket into bubble territory which had ended, at a peak of 850 in '80, before the subsequent crash and bear market once stagflation was contained.
Right now, no such inflationary pattern, since asset bubbles aren't included, are a part of the alternate investment world like it was in the late 70s. The whole $3 gas is a headache, mainly to SUV drivers but is more an inconvenience in contrast to the 70s gas lines, and the whole mideast/OPEC embargo which was in full effect before the gold bubble of '78. Currently, the job market is mediocre, no real 'next killer app' for the economy, mideast fears, etc, than a true runaway inflation scenario like it was back then.
Right now, the fundamentals support gold at 400 to 450 but no more, since it's not as liquid as currencies and for the most part is still a precious commodity than a currency alternative. All and all, it's still a reasonable hedge against both inflation and deflation but for now, it's in an overbought position. That's all.
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