The Gold and Silver Thread

[KissMy]

Gold just opened down $16 on new that house passed debt bill & senate is closer to agreement.

 

[Toro]

Gold just opened down $16 on new that house passed debt bill & senate is closer to agreement.

And then bounced on the horrendous ISM number.

 

[KissMy]

Citigroup says Gold could top US$2,500 an ounce and might even hit US$5,000

JAPAN PREPARES FOR CURRENCY INTERVENTION

 

[Ernie S.]

Au $1666.10
Ag $41.09
I'm so proud of my President, I could vomit.

 

[Valerie]

Wednesday, August 3, 2011


Central banks are ramping up their gold buying as they seek to diversify their reserves away from the dollar and other beleaguered currencies.

South Korea became the latest government to disclose a big bullion purchase, saying Tuesday that it recently bought 25 metric tons - more than doubling its holdings to 39 metric tons. Mexico, Russia and Thailand have also been major buyers in 2011.

This year, governments have almost tripled their net gold purchases, increasing their holdings by 203.5 metric tons this year, up from a 76-metric ton rise last year, according to the World Gold Council, an industry group backed by miners.

The demand marks a major shift in central banks' thinking about gold. Increasingly, they see bullion as protection against risks posed by declining paper currencies and global economic upheaval, and their vast resources and conservative bent make them a powerful force in the gold market.

central-banks-join-rush-gold-wsj: Personal Finance News from Yahoo! Finance

That's A LOT of Gold!

 

[KissMy]

Wednesday, August 3, 2011


Central banks are ramping up their gold buying as they seek to diversify their reserves away from the dollar and other beleaguered currencies.

South Korea became the latest government to disclose a big bullion purchase, saying Tuesday that it recently bought 25 metric tons - more than doubling its holdings to 39 metric tons. Mexico, Russia and Thailand have also been major buyers in 2011.

This year, governments have almost tripled their net gold purchases, increasing their holdings by 203.5 metric tons this year, up from a 76-metric ton rise last year, according to the World Gold Council, an industry group backed by miners.

The demand marks a major shift in central banks' thinking about gold. Increasingly, they see bullion as protection against risks posed by declining paper currencies and global economic upheaval, and their vast resources and conservative bent make them a powerful force in the gold market.

central-banks-join-rush-gold-wsj: Personal Finance News from Yahoo! Finance

That's A LOT of Gold!

Yeah - The dollar & other paper currency are done as far as world reserve currencies. The US Federal reserve will end up buying all of our debt to prevent the US from having to pay a real interest rate. We are basically monetizing the debt.

 

[LordBrownTrout]

I don't want to see our economy at $5000 an ounce. I'd prefer to be in the mountains at that point.

 

[Trajan]

in adjusted dollars gold peaked at approx. 2100 bucks in the carter years so, hang on....

 

[KissMy]

Gold had a $40 reversal today along with a top 9 stock market sell-off. I am wondering if now that QEII has ended & a austerity bill is now law does this mean deflation is now actually setting in? The dollar may rise & all prices fall until a new QEIII plan is actually implemented.

Gold & Silver may start dropping big like the stock market. There are even rumors of China slowing. We could be again facing global deflation/depression. Until other countries start printing money & or the US cranks up QEIII, we may be in for a slide.

Cash may be King again.

 

[Mad Scientist]

Gold had a $40 reversal today along with a top 9 stock market sell-off. I am wondering if now that QEII has ended & a austerity bill is now law does this mean deflation is now actually setting in? The dollar may rise & all prices fall until a new QEIII plan is actually implemented.

Gold & Silver may start dropping big like the stock market. There are even rumors of China slowing. We could be again facing global deflation/depression. Until other countries start printing money & or the US cranks up QEIII, we may be in for a slide.

Cash may be King again.

Really? All I'm reading about is that currency wars are heating up, that means inflation and currency devaluation.

 

[editec]

I guess I am becoming cynical in my old age (and I mean cynical in the bad sense of the word, not that noble philophical sense of the word).

What is the worst possible outcome? STAGFLATION, right?

All the pain of inflation but as the economy tanks, nobody is making more money to compensate for the losses in the value of their money.

Remember that state of affairs, folks?

Given that that is the worst possible outcome?

That's what I expect we'll be seeing.

In fact, that is what we are ALREADY seeing, isn't it?

The cost of living is climbing but wages and employment are stagnant.

We'll have both an increasing supply of money but those greenbacks will be chasing an decreasing amount of goods and services.

Somebody (other than the FED) has GOT to get some real (read not NEW) follars back into circulation, folks.

IF the government cannot spend because it is broke, then the fat cats sitting on old money had best pony up and start investing in THIS nation for a change.

 

[hjmick]

I didn't feel like reading the whole thread... I hope no one else beat me to it...

[ame=http://www.youtube.com/watch?v=oMlqn_Hjyi8]‪Rudolph the Red-Nosed Reindeer "Silver and Gold"‬‏ - YouTube[/ame]

 

[Toro]

Gold had a $40 reversal today along with a top 9 stock market sell-off. I am wondering if now that QEII has ended & a austerity bill is now law does this mean deflation is now actually setting in? The dollar may rise & all prices fall until a new QEIII plan is actually implemented.

Gold & Silver may start dropping big like the stock market. There are even rumors of China slowing. We could be again facing global deflation/depression. Until other countries start printing money & or the US cranks up QEIII, we may be in for a slide.

Cash may be King again.

Right now, I'm 92% cash. The rest is mainly property casualty insurance stocks.

Bull markets usually end when monetary conditions are tight, not when they are extraordinarily loose, as they are today. Bull markets usually don't end when monetary conditions begin to tighten either. The last years of the bull markets in technology and housing saw their best years when the Fed was at the end of their tightening cycle, not at the beginning. With the politicians kicking the can down the road and the Fed talking about QE3, the developed world policies remain extraordinarily bullish for precious metals.

Having said that, in the developing world, monetary conditions are either tight or becoming tight. The yield curves in India and Brazil are inverted, while China has been tightening reserve requirements and have been clamping down on housing speculation. This is bearish for precious metals in the near term.

Also, if we are crashing, I do not expect silver and gold to hold up. When we start plummeting, the margin clerks take control, and they will sell whatever they need to get liquid, including gold and silver. Remember, during the Financial Crisis, silver fell from $20 to $8. However, silver went to $50 a few years later.

I am expecting a similar response, as I expect precious metals to eventually enter a parabolic stage in the future. But maybe I'm wrong, I don't know.

 

[Toro]

Speculation is that the ECB will buy Italian and Spanish bonds. If true, this is very bullish for gold and silver, though there may be some knee jerk selling on dollar strengthening.

 

[KissMy]

Speculation is that the ECB will buy Italian and Spanish bonds. If true, this is very bullish for gold and silver, though there may be some knee jerk selling on dollar strengthening.

This is Europe's QEI.

Markets are freaking psycho.

For some reason my volume chart is flat-lined due to a high spike this morning. Freaking $400 point bounce in the DOW while I went to the bathroom. High frequency computer traders are screwing things up.

 

[Toro]

We need a witty monicker.

EQE? QEE?

 

[KissMy]

Gold upgrade to a Tier 1 Asset while US Bonds get downgraded.

 

[editec]

Gold and silver prices are barometers of the herds' uncertainty.

Their prices are driven in large part by ANIMAL SPIRITS.

Remember when gold hit the high $800s in the late 70s?

Then it fell and stayed in the $300 range for decades?

Markets for those commodities are rational until the market isn't rational.

 

[Toro]

Friday was quite the day for gold.

We had the ECB continue to let its balance sheet deteriorate and the US was downgraded.

The fundamentals for precious metals have gotten a whole lot brighter.

 

[editec]

Friday was quite the day for gold.

We had the ECB continue to let its balance sheet deteriorate and the US was downgraded.

The fundamentals for precious metals have gotten a whole lot brighter.

If the play is short term (like a futures contract), I suspect it is an over-reaction.

If the play is longer term, (like a buy and hold strategy) then I suspect it is sage.