Wednesday, December 28, 2011
Saturday, December 24, 2011
Get ready. We are now entering the final stages in the collapse of the U.S. dollar...
And it's not going to be pretty.
The massive increases in money supplies will tank the value of the dollar and erode the very fabric of America's economic security.
As a result, gold and silver prices are will no doubt skyrocket, despite the short-term major volatility we've recently seen.
Many investors have been rushing to me asking if it's too late to buy precious metals with gold in the $1,500/oz range and recently spiking to nearly $50/oz. I keep telling them the same thing...
Despite whatever the price of gold or silver is today, both metals will be worth more than twice as much within 12 months.
That means $3,000 gold this time next year! After that, I think gold could break $6,500 an ounce.
And as you know, silver's gains will be much greater. When the bull market is all said and done, there's no doubt we could be looking at silver prices exceeding $600 an ounce.
And we can all thank the crooks in D.C. for it...
In his first ever press conference after a policy meeting two weeks ago, Bernanke told us all the ways he has saved our economy.
What a crock!
The Federal Reserve can't prevent the coming financial meltdown.
So far this year, the U.S. Treasury has raised $293 billion in net cash by selling debt securities. And so far this year, the Federal Reserve has purchased a net $330 billion of Treasury notes and bonds.
This translates to the Fed providing 100% of the net new cash the Treasury has raised this year — plus another $37 billion needed to mop up even more mess!
But who will buy Treasuries when the Fed doesn’t? China? Germany? Japan? You? Me?
Going to Hell in a Hand Basket
We are now getting very close and even accelerating toward the end game for the U.S. dollar and the American Empire as we know it. Have your life boats ready.
It won't be much longer before people really start buying both gold and silver to protect themselves from this enviable collapse.
The only way out of our dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways:
Outright via contractual abrogation (surely unthinkable)
Surreptitiously via accelerating and unexpectedly higher inflation (likely, but not significant in its impact)
Deceptively via a declining dollar (currently taking place in front of our very eyes)
Stealthily via policy rates and Treasury yields far below historical levels (paying savers less on their money and hoping they won’t complain)
I would bet on a combination of deception, betrayal, and trickery.
Following the Smart Money
This past month, the University of Texas bought a billion dollars' worth of gold and is having it stored in a private depository. This is huge news.
More and more, the intelligent group of our population is starting to figure things out. Unfortunately, however, the unsuspecting masses are being led perfectly by the well-oiled government/media propaganda machine like sheep to the slaughter.
This is going to be a terrible reality for so many unfortunate Americans who have no idea as to what is coming shortly down the road.
And you can rest assured the politicos in Washington will do what all politicians do when they are trapped in such a manner: lie, cheat, steal, spin the facts, cover their asses at all costs, abuse their power, and misinform on a massive scale.
But even with the help of the government-controlled media, the time of consequences can no longer be held at bay.
Free market forces will win; governments, banksters, and their power structures will come tumbling down just as we have been seeing elsewhere around the world these past six months.
The spoils will go to those who were prepared and understood the debacle years before it hit.
The precious metals and the junior mining shares will reward those who understood, and punish those who didn’t.
Yes, the precious metals market will be extremely volatile in both directions at times, but buy the dips as gold and silver will keep heading to higher and higher ground.
As long as the Fed and U.S. government follow the course of “Quantitative Easing” or anything like it, you can rest assured that gold and silver prices will soar!
If you leave your money in U.S. banks in dollars, you will lose most of the purchasing power of your money.
Use the downside volatility to buy any dips you see in the metals. Whether you bought gold at $600, $1,000, or $1,500 an ounce, it really won’t matter much when gold is trading at $6,500 an ounce or more.
The same thing can be said for silver. Don’t worry so much whether you bought at $25 or $50; silver will be priced in the hundreds of dollars an ounce, possibly $600 or more as the silver to gold ratio descends to 15 to 1, and possibly even 10 to 1.
In fact I believe silver stocks will actually be one of the biggest winners over the next 24 months.
Time is of the essence.
The lies of the Fed and the U.S. gov't are becoming bigger and more complex, their noses growing longer and longer as the fiat currency-economic-insanity comes to a head.
Analyst, Wealth Daily
Investment Director, Mining Speculator
Tuesday, December 20, 2011
Last week, I told you about the scramble among investors for American Silver Eagles. These coins, minted by the U.S. government, contain exactly one troy ounce of 99.9% pure silver.
Twice between 2008 and 2009 the U.S. mint had to suspend sales... and demand has almost doubled since then. All-in-all, in the past five years, demand for Silver Eagles has grown 31% annually. Roughly 40 million of these coins will be snapped up this year alone.
Meanwhile, silver has been in one of the biggest bull markets of the decade. During a roller coaster period for the broader market, silver has seen gains in eight of the past 10 calendar years.
So how high will silver go?
To be honest, trying to nail down a specific target number is tough to do. In this case, I think it's best to simply look at what could happen... and why.
That's where things get interesting. In 1980, silver spiked to about $143 per ounce in today's dollars -- roughly $110 dollars, or 393% higher, than today's price.
But things were different then. Back when silver peaked in 1980, it was primarily due to a few investors snapping up as much silver as they could.
Thirty years later, the silver story has changed. That's because silver is needed in just about every electronic device modern society runs on -- from TVs to computers to cameras to MP3 players to iPads... and that's on top of millions of investors snapping up silver as a hedge against uncertainty.
Meanwhile, silver consumption keeps climbing. About 70% of the world's annual silver output is gobbled up by industry. This percentage is rising every year, and once that silver is used, it's rarely recovered.
Since 1999, consumption in electronics has increased 120%. And many new products contain such small amounts of silver that they're not worth recapturing. More than half of all silver in TVs and computers ends up in landfills.
And it's not just U.S. consumers that need more silver. Developing countries such as China and India are using it by the truckload. After all, it takes a lot of silver to equip 2.5 billion people with cell phones.
That's why China's silver imports increased four-fold last year. In fact, in 2005, the Chinese exported 100 million ounces of silver. But by 2010, they were importing 120 million ounces.
The basic problem is that we simply use more silver than we mine.
Every day, the world takes roughly 1.75 million ounces of silver from the earth. But we consume more than 2 million ounces. This kind of consumption is quickly drying up our dwindling silver reserves.
In 1900, there were 12 billion ounces of above-ground silver on the planet. By 1990, we were down to 2.2 billion ounces. Today, we're down to about a billion ounces.
That's a drop of 92%. A vital material, prized by man since the time of the Pharaohs, is literally disappearing before our eyes... used up in industrial products. It has taken 65 years to obliterate the silver inventory that it took the world 5,000 years to accumulate.
It's a different story for gold though. Since 1950, the amount of gold above ground has surged from 1 billion to 7 billion ounces.
Action to Take -->Yet despite these dynamics, silver remains dirt cheap relative to gold. Assuming you use recent prices ($29 per ounce for silver and $1,575 per ounce for gold), you can buy 54 ounces of silver for every one ounce of gold. Seeing as silver is only 17 times more abundant on Earth than gold, these numbers seem highly disproportional.
No wonder investors seem to be snapping up all the silver coins the government can mint.
*Post courtesy of Paul Tracy, Street Authority.
SOURCE : http://www.wealthwire.com/news/metals/2400?r=1
Thursday, December 15, 2011
Article written by Shaun Connell
We are living in extremely exciting times. The Europeans are struggling to get their economy back on track and they have made some recent decisions that might cause silver prices to continue to drop like a rock.
The details that matter
First, Europe has a total of 9 countries on its credit watch. They will be adding 6 more. These 6 currently have a triple AAA rating and make up much of the traditionally core “good” economies of Europe, so being added to the watch list will effect the economic outlook of Europe negatively.
Second, the European Bank has again stated they don’t want solve this problem by printing money. If they maintain this position, three countries will likely default on their debts: Greece, Italy and Spain. If even one of these countries default, there will be a massive credit crunch throughout the world – not unlike 2008.
Third, while this is a sovereign countries debt liability, the bigger issue is the “insurance” banks across the globe carry on the bond’s within these countries. If the banks are required to pay out on the insurance for the debt that these countries carry, it would have a massive global ripple effect and squash available credit supply, especially when cash reserves are liquidated for the insurance of the bonds.
If this becomes a global problem, we might see some under the table finagling from the Federal Reserve with the banks that back the bonds. While this is pure speculation, its not a long shot considering how the Fed floated trillions of printed money to banks in Europe during the ‘08 crisis.
As it stands – we need to watch the European Central Bank. If they won’t print, at least one of the three countries will likely default on its debt (as long as our Fed doesn’t get involved).
How prices may continue to drop…
If a country defaults and the European Central Bank doesn’t print money to save them, the resulting credit crunch will drive down silver prices. Why?
Significant debt default has forced the precious metal markets down throughout history.
Most people will have to liquidate their assets (silver) to cover their shorts and debts in other areas.
Also, as the ripple effect of the debt default moves throughout Europe, many people will begin seeing the dollar as a safe haven from the euro. This rise in the dollar will likely cause downward pressure on the metal markets.
Why Silver Prices won’t stay down…
From 1950 to now we’ve gone from an estimated 10 billion ounces silver to 700 million ounces in above ground available physical silver. That’s a 93% drop.
But demand is still surging.
For example, in 1999 we had around 100 million ounces in the electronic industry. Today we have closer to 250 million. In the solar industry silver wasn’t really used in 1999. 2014 projections are expecting the industry to use 130 million ounces a year.
Investment demand of physical silver is also rising. In 2010, there were 35 million American Silver Eagles sold. That nearly equaled the entire physical silver mined that year. This year, 22 million American eagles were sold by June.
Production seems to have peaked in silver as well. A recent report (seen here: http://www.scribd.com/doc/68287518/Peak-Silver-Revisited) shows that of the top eight states in the U.S. have peaked in silver production. There are several reasons, but one is because silver is mostly a by-product of copper mines. Copper supply has peaked worldwide and is exponentially getting harder to supply. This means silver focused mines take much more financial investment to get a return of silver – in both energy, capital and time.
The fact of the matter is simply this: despite advances in technology and machinery, it is taking more resources and time to mine less silver that it did in the past.
Even though we can mine ten ounces for every one ounce of gold (10:1) and silver has more industrial demand than gold, silver is still valued (on average) at 1:53 the price of gold.
Physical silver supply is diminishing, but demand for silver across industry and as an investment is growing.
Those who know and foresee the results of silver’s future will likely jump into the silver market with extreme energy when the European default causes downward pressure on the silver price. (If only to buy up a needed commodity for the production of their industry products.)
But immediate depression in our economy will be stronger than long term supply.
It is even possible, especially if a European country defaults, that silver goes under the mid-twenties before the industry buy-up begins.
Article by : Shaun Connell
Gold is down, copper is down, gasoline is down, oil is down, stocks are down, heating oil is down… and the dollar is up.
The reason for this is because cash is the ultimate /short-term/ safe-haven for investors. Over time, cash will lose value, but during times of short bouts of economic turmoil and insanity, cash’s value goes up because everyone is trying to rush to that cash. The US dollar is a good example of this as the world’s reserve currency.
The dollar is up 2% for the year, and is up significantly for the day as well. Considering the US got downgraded, that should tell you something about how much uncertainty exists.
There are plenty of reasons for what’s going on. Liquidation, year end caution, a credit slowdown in China — whenever a market drops in price, there are usually millions of reasons why, with a few “big” reasons leading the charge. With the current drop, here’s what’s likely:
Liquidation. It’s near the end of the year, and investors are looking for good investments to sell so they can salvage profits for the year on some level. This makes them look better on paper to people who are investing with them. Mutual funds are especially susceptible to selling off a long-term winning asset when it begins to “crash” — they want to make sure they get at least some of those profits.
Fear. People are horrified of what’s going on in Europe and Asia. The idea that there’s a possible new recession on the horizon means many investors are going to the one short-term asset that generally does fine during a crash or recession — cash. The dollar is up 2% so far this year, actually.
Reflexivity. Reflexivity means that whatever the market does, the market usually does a little too much because of speculation. This is especially true for commodities, because commodities don’t provide an income.
This means that gold and silver will probably drop “too much” before bouncing back whenever they do bounce back. That could be today or next week or next year. I’m thinking within a few weeks, assuming this isn’t “the crash” that I’ve talked about. There’s no telling.
For the record, I’ve spent the last year explaining that gold and silver are both susceptible to these sorts of crashes, and that’s why everyone should stay away from leverage, and also have cash, bonds, and dividend stocks in their portfolio. Anything else is just too risky.
It’s also possible we’ll see a long period of low gold/silver prices before the “big one” inflationary event that’s inevitable.
This is also another reason you should invest in gold and silver gradually over time, rather than all at once.
Friday, November 18, 2011
Wednesday, November 9, 2011
Thursday, October 27, 2011
Gold didn't do a whole heck of a lot in Far East trading on Wednesday, but the price was up about a percent shortly after 2:00 p.m. Hong Kong time...and that was the high print for the gold price in the Far East.
From there it went into a very slow, quiet decline that lasted until minutes after the New York open yesterday morning. The price bottomed at Tuesday's closing price in New York...and after that, a rally began. This rally ended just a few minutes before the 1:30 p.m. Eastern time Comex close...and the gold price pretty much traded sideways from there.
By the close of the New York electronic market at 5:15 p.m. Eastern time, gold was up $20.90 at $1,725.50 spot. Net volume was around 140,000 contracts.
The silver price pattern was a totally different animal to gold's price action yesterday...and was far more 'volatile' and, if you hadn't already noticed, it has a tendency to be more 'volatile' every day compared to gold. It was obvious to me that every time that the silver price tried to break out anywhere in the world on Wednesday, a not-for-profit seller was close by.
The high of the day [probably a hair over $34.00 spot] came shortly before the London a.m. silver fix at noon local time. After that, the price was never allowed to get very far...and had a downward bias for the rest of the day.
Silver closed up one thin dime from Tuesday's close at $33.37 spot. Volume was pretty decent at around 34,000 contracts net.
Here's the New York Spot Bid price for silver yesterday, to give you a closer look at the price action in the market where it really matters. You can see the actions of the not-for-profit seller quite clearly...although there is a chance that this could have been the small Commercial traders [Ted Butler's raptors] dumping their long positions for a profit. However, it's a stretch to think that a 'for profit' seller would ever exit a profitable long position in such a price-disrupting manner.
The stocks did just OK yesterday, but I'm hard pressed to explain the decline in the gold stocks starting about 10:25 a.m. Eastern time. In the space of less than 20 minutes, the HUI declined three percentage points. There was a tiny $12 drop in the gold price during that time frame, but a sell off of that size in the shares to go along with it, seemed like a bit of an overreaction.
But, when all was said and done, the HUI still finished up 1.04% on the day.
Despite the fact that silver was only up a dime on the day, most of the silver shares did much better than that...and Nick Laird's Silver Sentiment Index closed up a respectable 1.85%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 66 gold and 7 silver contracts were posted for delivery on Friday. Most of the delivery action in gold centered around JPMorgan. The link to the 'action' is here.
There were no changes reported in either GLD or SLV yesterday.
The U.S. Mint had a smallish sales report yesterday. They sold 1,500 ounces of gold eagles along with 40,000 silver eagles.
And, for the second time in a week, the action at the Comex-approved depositories on Tuesday is not worth mentioning.
1 Tonne Gold Kangaroo Coin
Up until yesterday, Canada held the record for the largest gold coin in the world...a 100 kilogram monster that was produced by the Royal Canadian Mint some years back.
My good friend Bron Suchecki at The Perth Mint sent along this photo of the world's now-largest gold coin in the world...a 1,012 kilo leviathan.
(Click on image to enlarge)
There's also a way to view it in three dimensions...and see how it was made. The link to that is here...and is a must read/watch/listen. The West Australian newspaper also did a big story on it...and here's the link to that.
Silver analyst Ted Butler posted his mid-week commentary yesterday for his paying subscribers...and I've expropriated a couple of paragraphs for you.
"As far as the timing of the implementation of the all-months-combined position limits [in silver], it would appear to be at least a year or two from now. Upon first hearing of the time delay, most come to the conclusion that the silver manipulation will remain a crime in force for the next year or two. Perhaps that will turn out to be the case, but I don’t think so. Markets have a way of discounting and adjusting to certain known events before enactment, even manipulated markets. Further, a trader would garner unwanted regulatory attention were he to play over position limits up until the deadline.
"Of more concern is the current level of proposed silver position limits of over 4,500 contracts (22.5 million oz). This level is three times the 1,500 contract level requested by thousands in the public comments. The question becomes is the level so high as to negate the anti-manipulative protections promised by legitimate position limits? While I could make the case for 1,500 contracts in my sleep, the staff’s formula is a good first step in silver position limits. Everything is relative. 1,500 contracts would be a better level than 4,500 contracts, but 4,500 is a heck of a lot better than what we have now, which is no limit at all, thanks to the CME which only seems to exist to reward its biggest members and punish the public by promoting manipulative trading practices . Certainly, JPMorgan is currently short more than three times the amount of the proposed silver position limit, so one would think they have some short covering in store or som e fancy explaining to do. Time will tell, but my reaction to what just transpired is positive.
I have the usual number of stories for you again today...and, once again, I will leave the final edit up to you.
Wednesday, September 28, 2011
28 September, 2011
- How far will gold fall?
- Recommended article: It’s not all doom and gloom for Britain
- Yesterday’s close: FTSE 100 up 4% at 5,294... Gold up 1.46% to $1,650.13/oz... £/$ - 1.5634
A nasty fall for goldFrom Dominic Frisby, in LondonDear Dina Talib,
Don’t panic, Mr Mainwaring, don’t panic.
Yes, gold’s been hammered. Yes, silver’s been hammered even harder. Yes, it’s ugly out there. But it’s all perfectly normal.
It’s happened before. In fact, it usually happens once or twice a year. It always seems to happen when the Chicago Mercantile Exchange changes its margin requirements. And it’ll happen again.
And if you’re one of those people who wished they’d bought gold but didn’t because the price had gone up too much, now’s your chance.
Let me start with the ten-year, log chart of gold. I have drawn some parallel trend lines on either side. As you can see, gold went to its upper trend line, then bounced off it, just as it did in May 2006 and February 2008, the previous occasions when gold got too far ahead of itself.
Based on this chart, the gold price could fall to $1,200 an ounce and there would still be an argument that the bull market is intact. Unless this exceeds the ugliness of 2008, I don’t think it’ll do that.
So how far have we fallen? The high earlier in the month was $1,920 and on Monday morning we touched $1,530. Almost $400. That’s quite a wallop.
But at the beginning of July gold was at $1,480. We’re higher than we were at the beginning of July.
I’ve always recommended buying gold on pullbacks. When gold pulls back to its 52-week moving average (its average price over the last year), buy then. But, although it would regularly do so between 2001 and 2008, since 2009 gold hasn’t done that. The furthest it’s fallen is to its 144-day moving average and that, as I’ve identified before, has been proving an excellent entry point.
On the following chart, the red line shows the 144-day moving average. We actually went through for a couple of hours on Monday, though outside of US trading.
It wouldn’t surprise me to see the 144-day moving average fail in the coming months. I’m not saying it will. With all the goings-on in Europe, we’re in anything-can-happen territory. But the evidence of the last three years says it won’t.
The one-year moving average sits at just below $1,500, so that’s another possible target.
Gold and silver have been hit by margin hikes
Over the summer, gold had actually decoupled from stock markets and was behaving like the safe haven it is purported to be. Every time stock markets sold off, money would go into gold.
But then the Chicago Mercantile Exchange (CME) – the world’s largest commodity exchange – upped the amount of margin it required to buy a gold future (in other words, you had to put more money down to invest). There have been three rises since July and in total margins have risen by $5,400 – nearly 90%.
Something similar happened with silver when it went ballistic in the spring. The CME raised margin requirements four times in a fortnight, amounting to an 84% hike.
It’s no wonder both sold off.
It’s easy to get suspicious when this happens, particularly as both times it has stopped the market in its tracks. But the CME does have a remit to calm markets where there is excess speculation. If it ups the amount of margin required, those with too much leverage will have to close their positions.
In the short term it may look ugly, but longer-term I feel it is good news. The weak hands have been well and truly shaken out.
Another factor that will have driven prices down is losses elsewhere. Whether it’s home traders or large funds, people will want to lock in some profit where they have it. Gold and silver are where they will have had it, so that’s where the selling will have come in.
I know from experience this is what happens. The psychology is that you’d rather take a profit than a loss. And it’s a relief to take a profit in a falling market.
The biggest beneficiary of all this has been the dollar, just as it was in 2008. For all the touted ’safety of gold’, it’s still the dollar people rush to in a panic, largely, I suspect, because they must settle their debt in dollars. There were signs this was changing in the summer, but these have disappeared. One day it will be gold, not the dollar, that people rush to. And the looser US monetary policy gets, the sooner that day will come.
The gold bull market is not over
The fundamentals for gold haven’t changed. I don’t need to remind you of them. I imagine the next few months will see whipsawing and consolidation rather than new highs. Indeed we have already seen quite a bounce off Monday’s lows.
In the event of a 2008-style meltdown – which is looking increasingly likely – gold will sell off. The baby will get thrown out with the bathwater. It usually does. But it was the last liquid asset class to capitulate in this carnage. And just as then, I expect, should such a scenario occur, that it will be the first to rise out of it all.
The only thing I can see that will kill my conviction that this bull market is not over is the kind of deflationary crash the likes of Robert Prechter have been predicting, where the Dow goes back to 1,000 points or something stupid. But I don’t think such a scenario is possible. Currencies will collapse first – in which case you would do well to own gold.
We have seen how policy-makers, whether British, American or European, will do everything they can rather than face the music and take the pain. They will be leant on to print, to bail out and to inflate – and print they eventually will. Heck, it appears our lot at the Bank of England are planning to re-start in November.
I took my kids to Thorpe Park a couple of weeks ago. I hated it. My kids loved it. But we’re all already reminiscing about what fun it was. Do the same with gold. Ignore the noise, hold your gold, buy the dips – and in a few year’s time you’ll look back on September 2011 with same fondness you look back at the time you screamed for your life on some crazy thrill ride.
Sunday, September 25, 2011
By Shufaad, 25 September, 2011
Good day traders!
Lets look at our daily gold chart:
- I drew a fibonacci retracement level from point A dated 1 July 2011 till point B dated 6 Sept 2011.
- After registering the lowest level since August at $1628, price rebounded nicely at our 61.8% fibonacci level at $1647 and close the week at $1656.
- From the daily perspective, nearest resistances are found at 8 Aug 2011 gap at $1682 and psycho level $1700. The said psycho level is decisive since it is leveled with our fibo level 50.0%. Breaking that level would push the price towards $1750/52 zone (fibo level 38.2%), strong psycho at $1800 and fibo level 23.6% at $1816.
- I would strongly stress here that both psycho level $1700 and $1800 plays a major role in the traders sentiment versus bargain hunting appetite.
- Going south, Friday’s low at $1628 should provide the first support before a marching towards another psycho level at $1600. Further down, $1577 and $1550 should provide the needed support.
- Gold is still in long term trend with the trend line drawn from 28 Jan 2011 is still much attach.
- While the twist program seem to lure some traders to sell 0ff their gold, I’m looking at it as a short term correction. With the recent lower price, gold bargain hunters are looking ready to steps in.
While I’m bias to the upside, a potential drop towards $1600 is possible and I expect a mighty bounce from the said level.
By Shaun Connell 24th September, 2011
I’ve received nearly a hundred emails over the last two days from people worried about the correction going on in gold and silver right now. Silver prices have tanked nearly 30%, and gold prices have dropped several hundred dollars.
Perhaps the simplest explanation of what I'm doing is : the same thing I was doing last month, the month before, and the month before that. We've been here dozens of times, folks, and the best strategy is one that doesn't require you to change everything because prices take a dive. Markets are complicated - but a good instrument strategy for most people should be simple.
Keep Buying Gold and Silver
Emotionally speaking, we’re wired to want to dump an asset when it dips and buy it when it’s going up. Ironically, this leads to most people getting absolutely destroyed by the market. My strategy is simple and timeless. I’m writing an entire course on it that I’ll be emailing subscribers about in a week or two — it’ll explain how to invest in gold during bull markets, bear markets, sideways markets, and every other kind of market.
Good strategy ignores the season, timing, and everything else — good strategy works always. It let’s you sleep well at night, turn off the news, and live your life. Stay tuned for the course.
It’s All About Consistency
Don’t save up money to buy gold or silver all at once — buy it gradually. This cuts the volatility and is just generally less risky. The best way to buy gold and silver gradually over time is through Silver Saver. They do both gold and silver, and automate the process of buying physical bullion every week or month. It’s an amazing idea — I wish I’d thought of it first.It's All About Diversity
Remember, gold stays flat over time. We’re in a bull market, but over time, the value of gold goes up just slightly. This is very, very good — we should make gold the official money of our government again. But if this is your only investment asset, you’ll get destroyed over time.
This is a huge market opportunity. If you like stocks, real estate, gold, silver, oil, or pretty much anything, then they’re all on sale. Don’t just buy gold — buy enough of every cheap asset. Stay balanced and don’t be afraid to re-balance. I recently bought some Philip Morris International, and will probably be buying some more soon.
It’s All About Nerves of Steel
Most people lose money investing because they chicken out. On the bright side, this means if you’re able to control your emotions, you can make a killing. I’m not a fan of Warren Buffett, but he did say something that was brilliant: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Could This Be the End of Gold?
If you didn’t think so last week, and nothing has changed, then you shouldn’t think so now. That said, the best time to buy gold was 15 years ago. The second best time is always now — always, always. Same for stocks. Same for land. Same for a good business.
Investment advisers can’t stand the investment beliefs I have, because it basically makes their life more difficult. Their job is to get you worried so you’ll pay them money to hear someone who barely is in the middle class after decades of being an “expert” tell you what to do. I’m in partial retirement, and I’m not yet 30. Good strategy wins. Always. This is an important philosophical concept, and it’s why so many people can’t make money — they just go with the stream, rather than against the stream.
Over the next few weeks, I’ll be letting you know about a course I’m almost finished with. It’ll explain everything you’ll need to know about investing in gold for the long haul. It’s explained so simply, you’ll wonder why you hadn’t thought of it yourself. And more importantly, it’s a strategy that has worked over the last 30 years — not just during “bull markets”.
Friday, September 23, 2011
As I write, the market is staging a fight-back:
Today I want to briefly follow up on gold from yesterday to illustrate (in almost real time) the tremendous power of my tramline methods for putting in price targets.
When I left the gold market early yesterday morning, it had broken minor support at the $1,800 level, where I put on a short trade.
Then the market fell to my second level of support at the $1,770 level. I noted that if this level gave way, it was off to the races.
After signing off, the market collapsed, along with just about everything else.
For the gold bears, it was truly exciting action, and I was pleased to be amongst them.
My target was hit within hours
I had drawn in my tramline pair and said that my first target was the lower tramline at the $1,730 area. I had little idea that this target would be hit within a few hours!
Here is the updated chart:
(Click on the chart for a larger version)
I have marked the point where I had signed off yesterday with a yellow arrow. The market collapsed right to my tramline for a gain of $50, or a profit of £500 per £1 bet (going short).
Note the oversold momentum reading at the tramline where a bounce would be expected.
But what now? Will the lower tramline hold?Beware: the ‘bond bubble’ is about to burst
Right now the flow of money into UK government bonds is frighteningly high...
Thousands of private investors are blindly pouring money into bonds in the hope of getting a safe return, while pension funds and fund managers are ALL using them for a big portion of their portfolios.
But they could be making a lethal mistake.
(Click on the chart for a larger version)
The first bounce off the tramline has taken the market right to my central tramline, which lies mid-way between my original lines! This is marked by my green arrow.
Very pretty. And that was also a great place to short again.
This central tramline sports some nice touch-points, as marked by my purple arrows. I believe I can rely on this line.
OK, the market is trying to get back to this central tramline as I write.
Longer-term, yesterday's low in the $1,720 area is only $20 above the crucial $1,700 support from August. If this gives way, that would confirm the double top and much lower prices would beckon.
Of course, long-term traders who believe we have seen the tops would still be holding their short positions – and adding on rallies.
As I have said before, traders who see the potential early in the trend will reap the most rewards.
And don't forget to be searching for those tramlines on your charts.
Have a great weekend!
Got a comment on this article? Leave a comment on the MoneyWeek website, here.
John C Burford
Wednesday, September 7, 2011
There are growing signs that gold is looking toppy. Yet most people are NOT overinvested...
WAY BACK in 2002 – and in 2003 (and 2004...) – my dad told me the following:
"Son, I'm behind you in everything you do...But there's no way I'm buying any gold."
This was his reason:
"Son, I bought gold Krugerrands in the late 1970s, and I'm still down on 'em 25 years later. Gold is never going up."
In the nearly two decades I've been analyzing investments, my dad bought just about everything I recommended. But he drew the line when I recommended gold in 2002, writes Steve Sjuggerud in his Daily Wealth email.
I thought, "Wow. Now this is what a bottom looks like...when even my dad doesn't trust me on this one."
Back then, the gold story was simple to me...
Gold is financial catastrophe insurance. When is catastrophe insurance the cheapest? When there hasn't been a financial catastrophe in decades. In the early 2000s, that's where we stood. So I recommended buying gold. It wasn't about being a gold bug. It was about buying something cheap.
Back then, my parents bought everything I recommended – except gold. And my in-laws were starting to do the same. But they drew the line at gold, too. They thought I was nuts.
What really did it was when I started recommending Gold Coins in 2003. Cancellations to my newsletter started pouring in. The typical letter said, "Steve has always had outside-the-box ideas, but this Gold Coins garbage has gone too far."
I'd never seen such a hated asset class. I personally believed gold could absolutely soar. And readers who actually took my advice and bought my 2003-recommended MS-63 Saint-Gaudens Gold Coins made hundreds of percent profits.
Now, nearly a decade later, the situation is much different...
Gold has gone up 10 years in a row. My in-laws now have a big portion of their portfolio allocated to gold investments. And all this week, CNBC is having a special called "GOLD RUSH," where the commentators are in underground gold mines in South Africa.
A decade ago, you could hardly get a quote for gold on CNBC or Yahoo Finance. Today, gold quotes are on the front page.
If you want to make hundreds of percent on an investment, you have to buy it for pennies on the Dollar, when nobody wants it. With a week-long gold special on CNBC, it's hard to say nobody wants it.
In short, it feels like we're closer to a top than a bottom in gold. On the other hand, the numbers we track tell us we might not be at the top yet, because most people are NOT overinvested in gold.
The details are complicated. But the basic thought is simple: People are watching gold go up, like spectators watching from the sidelines. They are not active participants...yet.
Colleague Chris Weber explained the situation best recently:
This kind of market [in gold] is the dream of an investor like me. A bull that is so quiet and so looked down upon by most people...If you are just coming on and are hesitating to put too much of your wealth in the area, I can say without worry that there is still a lot of room, and time, left.
I believe Chris is right. There is more upside. It sure doesn't feel like the real estate boom, or the dot-com boom yet, when EVERYBODY is in. That's when we're at the top.
Gold will certainly have extreme corrections. On its march from $35 to $850 an ounce in the 1970s (peaking in January of 1980), gold lost HALF its value multiple times. But I don't believe the top is in yet.
View writer profile, Steve Sjuggerud,
Thursday, August 25, 2011
- they does not know where to buy
- they does not know the return of gold investment
- they are afraid being cheated
- they are skeptical whether they can sell off the gold bar easily
- they are low risk takers, they prefer keeping their money at the banks
- they do not have money to buy
- they do not know where to keep their money
- they need guidance
- they cannot decide
- they are overloaded with information
Enough talking... Now the action time!
Monday, August 22, 2011
Good day traders!
Gold highest price now is $1911.86.
Nearest resistance is $1925, then $1950.
Technically, there’s going to be a correction as nearly all technical indicators are overbought.
Daily RSI has reached 84.4 level, the highest level I’ve seen. Extremely Overbought.
Daily Stochastic is at 96. Extremely overbought.
Daily ADX is at 77. Too much Extremely strong trend.
MACD is interesting. Its Hourly study shows a Divergence while its Daily study shows parabolic (see red line i price and MACD). This is an indication of a correction might happen.
Correction is what gold needed to move upwards and continue its long term bull.
In short and near term,I remain bias to the downside.
So, if you pay RM818 for your 2nd purchase of 1Dinar, your wealth is equalised (Gain from keeping 1 Dinar - the extra amount of money you are paying for 2nd purchase of 1Dinar).
Friday, August 19, 2011
Posted: Thursday , 18 Aug 2011
LONDON (REUTERS) -
Gold rallied back toward record highs above $1,800 an ounce on Thursday, driven by unease over the lack of a solution to the European debt crisis and sluggish growth in the developed world which has shaken investor confidence in stocks, bonds and hard currencies.
Prices have climbed to within $5 of last week's record high of $1,813.79 an ounce.
Although it remains off the inflation-adjusted peak above $2,000 struck in 1980, it is one of the top performing assets this year, up by over 25 percent versus a 15-percent loss in U.S. blue-chip stocks .SPX or a 7.7-percent decline in the price of copper.
Growth in the United States, which last week lost its top-notch credit rating, has been patchy, while European leaders struggle to contain the spread of the debt crisis that has forced Greece, Portugal and Ireland to seek emergency funding and now threatens to swamp Italy and Spain.
Spot gold was up 1.1 percent on the day at $1,808.20 an ounce by 6:48 a.m. EDT, set for a 3.6 percent gain this week and a nearly 9 percent gain over the last two weeks, its best two-weekly performance since mid-February 2009.
"There is a genuine feeling that all of these issues are playing indirectly into gold, and the impact these factors have on the currencies mean people are getting out of those and into gold," said ANZ head of metal sales Peter Hillyard.
"I'm one of those people who think gold is going to $2,000 and it's getting there. The underlying reasons don't change, there is a lack of confidence in everything else," he said.
Plans from France and Germany to move toward fiscal union in 2012 got a chilly response from other euro-zone countries and failed to reassure investors worried about the region's debt crisis and weakened economies.
Austria, Finland and Ireland all questioned bold proposals from French President Nicolas Sarkozy and German Chancellor Angela Merkel to give up sovereignty over budgetary policies as a means to shore up their 17-nation currency union.
"Investors were still digesting comments from Merkel and Sarkozy late on Tuesday night where the leaders pledged to defend the euro at all costs," wrote VTB Capital analyst Andrey Kryuchenkov in a daily note. "However, what the markets really need is a concrete action plan."
Demand for gold has been fairly evident through increases in holdings of the metal in exchange-traded funds and rising open interest in U.S. gold futures, building on a decline in the second quarter of the year.
The World Gold Council said in a report on Thursday overall gold demand fell 17 percent in the second quarter to 919.8 tonnes, as growing interest in jewelry, coins and bars failed to offset a sharp decline in ETF buying.
Investment in ETFs fell by more than 80 percent on the same quarter last year, although inflows this year are up by a net 6 percent, with most of that investment materializing in the last month, according to ETF data monitored by Reuters.
DEMAND PICKS UP
"Although profit-taking, margin requirement hikes and seasonally soft physical demand could temper the rally intermittently, the external environment has turned increasingly fertile for gold," said Barclays Capital in a research note.
Gold's fortunes could be altered in the case of rising real interest rates, controlled inflation and a stable macro-environment, it added.
Later in the day investors will comb through weekly data on first-time unemployment benefit claims for a read on the health of the U.S. jobs market, as well as U.S. consumer prices.
Data on Wednesday showed the sharpest pick-up in producer prices excluding food and energy in six months in July, although weak consumer demand was expected to keep inflation at the farm and factory gate in check.
In other fundamental news, Venezuelan President Hugo Chavez said the country will nationalize its gold industry and is moving its international reserves out of Western countries.
In other precious metals, silver rose 0.5 percent to trade at $40.38 an ounce.
Platinum was flat at $1,835.74, while palladium was down 0.1 percent at $769.47 an ounce.
(Editing by Alison Birrane)
MY PERSONAL OPINION ON THE GOLD PRICE BASED ON
THE INSTA TRADER GOLD CHART
For those who is inclined to buy, this might be a good chance for you to grab. Don't be too late (or decide for tooo loong) as you might missed the drop. They said the price will go up to USD2500/oz by end of the year.