Posted on 09/26/2010 4:25:40 PM PDT by SeekAndFind
As gold hovers just below the $1,300 mark it broke last week, consensus expects the metal keep rising in the coming week.
The bull is back:
Bloomberg:
Sixteen of 23 traders, investors and analysts surveyed by Bloomberg, or 70 percent, said the metal will rise next week. Six forecast lower prices and one was neutral. Gold for December delivery was up 1.3 percent for this week at $1,293.60 an ounce at 11 a.m. yesterday on the Comex in New York. Futures climbed to a record $1,298 on Sept. 22.
...
The weekly gold survey that started six years ago has forecast prices accurately in 189 of 329 weeks, or 57 percent of the time
(Excerpt) Read more at businessinsider.com ...
Bloomberg News has all the details :
Is gold really going up,or is the dollar tanking?
The dollar is tanking. People (traders especially, and China also) are losing confidence in it as a sound currency.
Inflation is usually the friend of gold. However, what we see going on here is not inflation but COMPETITIVE CURRENCY DEVALUATION. In other words, the central banks of the world are trying to out-do each other in intervening to weaken their currency.
This is especially true in export oriented countries.
The USD is weak because of lack of confidence in our debt and deficit.
Japan weakens the yen to prevent exports from sliding. The US eases. Brazil weakens the real. Japan weakens again. Around and around the print parade goes on, and the main beneficiary is gold, the anti-currency.
It’s a pretty logical argument, and it’s not obvious what will end this game.
So, what will cause gold to fall ?
The answer is probably be a return to robust, sustainable growth and modest inflation — pretty much the opposite of what we see now. But this doesn’t seem imminent (but if the GOP takes over Congress and are SERIOUS about stopping the Obama agenda, this might just happen. If they’re simply going to do surface house cleaning, gold will not fall ).
But is there any other outside event or headline that could whack gold? I can only think of one, and that would be a serious move by China to revalue the yuan.
If China did it by her own, that wouldn’t necessarily be the economic panacea many of us imagine it would be. It wouldn’t all of the sudden reverse the much-derided trade imbalances. But it might put a halt to the competitive devaluation daisy-chain, as Japan, Brazil, and the US might feel a bit less pressure to weaken their own currencies.
That would probably take a lot of the air out of gold, but that being said, it’s hard to imagine China making this move any time soon, and in a dramatic way.
Hence, in the meantime, gold will continue to rise ( and watch silver also ).
Inflation is usually the friend of gold. However, what we see going on here is not inflation but COMPETITIVE CURRENCY DEVALUATION. In other words, the central banks of the world are trying to out-do each other in intervening to weaken their currency.
This is especially true in export oriented countries.
The USD is weak because of lack of confidence in our debt and deficit.
Japan weakens the yen to prevent exports from sliding. The US eases. Brazil weakens the real. Japan weakens again. Around and around the print parade goes on, and the main beneficiary is gold, the anti-currency.
It’s a pretty logical argument, and it’s not obvious what will end this game.
So, what will cause gold to fall ?
The answer is probably be a return to robust, sustainable growth and modest inflation — pretty much the opposite of what we see now. But this doesn’t seem imminent (but if the GOP takes over Congress and are SERIOUS about stopping the Obama agenda, this might just happen. If they’re simply going to do surface house cleaning, gold will not fall ).
But is there any other outside event or headline that could whack gold? I can only think of one, and that would be a serious move by China to revalue the yuan.
If China did it by her own, that wouldn’t necessarily be the economic panacea many of us imagine it would be. It wouldn’t all of the sudden reverse the much-derided trade imbalances. But it might put a halt to the competitive devaluation daisy-chain, as Japan, Brazil, and the US might feel a bit less pressure to weaken their own currencies.
That would probably take a lot of the air out of gold, but that being said, it’s hard to imagine China making this move any time soon, and in a dramatic way.
Hence, in the meantime, gold will continue to rise ( and watch silver also ).
I say again, the value of gold is entirely based on psychology and psychiatry, and not on economics or physics. You can get hurt really bad buying the stuff.
RE: I say again, the value of gold is entirely based on psychology and psychiatry, and not on economics or physics.
Would you rather put your trust on a piece of paper with ink added to it?
Since late July 2010 the London gold exchange (LBMA) are under pressure from Chinese, Arab, some Russian and other billionaires for physical gold deliveries. The LBMA is suppose to be storage facility for allocated accounts of gold. Allocated accounts means the LBMA cannot touch the gold, loan against it or loan it out. For decades the US COMEX and London Exchanges have created paper investments that are suppose to be backed by “physical” gold. There are analysts who claim that for every 40 to 100 troy ounce of gold represented by the paper investments, there is only one ounce of physical gold.
To cover these shortfalls the gold in the untouchable allocated accounts may have been loaned out and when the owners want their gold the exchanges scramble to buy gold on the open market or go to the other exchanges to get physical gold to cover the empty allocated accounts. There is a shell game amongst the exchanges to cover each other. The problem is what happens when all the owners of the allocated accounts want their physical gold.
China and Dubai recently open their own gold and silver storage facilities. The Chinese government already moved their national gold supply from London to Hong Kong. The Arabs governments moved their national gold supply from London to Dubai. Now the Arab, Chinese, Russian and some unknown billionaires are furious to find out that the LBMA have touched their allocated gold accounts. These billionaires are nicknamed “gold vigilantes”.
Ever since September they are launching gold purchases every ten to fourteen days with the aim to expose the LBMA’s lack of physical gold to back all their paper investment and contracts they sell to investors. The LBMA is having problems and are desperately borrowing physical gold from the US COMEX and other central bank exchanges as well as buying what is available on the open spot market to make deliveries to the allocated account owners requesting physical deliveries to Hong Kong and Dubai. In the past the LBMA would publish on a website for the public the amount of gold entering and leaving the London exchange. As of last July 2010, the LBMA stopped posting such data on its website.
The Chinese and Arab buyers swore to continue the demand for deliveries from their LBMA gold contracts/accounts till the LBMA bankers are “dead and castrated”..
How does that impact us? Price of gold and silver will go up because the current price of the metals are based on paper contracts that over estimate the physical metal supply by 40 to 100 times. When the LBMA is desperately buying gold to cover the deliveries, gold would go up. Silver usually follows the gold prices. If the LBMA scheme is exposed and confirmed, imagine the price of gold and silver based on a true physical supply that is 40 to 100 times less then previous official numbers.
The biggest danger this poses to the US is the US COMEX may get dragged into the LBMA crisis because they are loaning gold out of their allocated accounts to the LBMA. If the LBMA collapses and the paper shortfalls are exposed, JP Morgan and Golden Sachs investments in gold and silver derivatives will be severely impacted.
Let us pray that the US Treasury and Federal Reserve in desperation to rescue the US banks and COMEX do not involve loaning the US gold in Fort Knox (US has not done a physical inventory of its gold bars since the late 1950’s. US Treasury and Federal Reserve opposes calls in the current Congress to do a physical inventory. Hmnnn I wonder why). Congress would be in an uproar!!!
GOLD IS REALLY GOING UP!!! Yikes
My friend has a jewelry store and I told her that in Iceland jewelry is made with silver and stainless steel..and it is quite nice. The sparkles are crystals...there are some shops that have fine jewelry but the cost a year ago was terribly high and 14 and 18 kt is not often seen.
We joked that if the price of gold keeps climbing we will see our fine jewelry in silver and stainless too..
Local car dealer advertised they’re having gold buyers there this week.
“Sell your gold to get the down payment!”
(Yeah, not really to the point, but it’s the wierdest promotion I’ve ever seen...)
Question: I have a friend who was given his mother’s gold teeth after she died. He is now unemployed and wants to sell the gold. Does anyone know the value of gold used in dental cavities and where would he go to sell it? Thanks.
FYI...
Both.
Local car dealer advertised they’re having gold buyers there this week.
“Sell your gold to get the down payment!”
I recommend www.usgoldbuyers.com. They post their prices and being a direct melter they offer 90 percent spot price or more depending on the amount of gold being offered by seller. They are located in the diamond district of New York City. He can go there direct or have them send him a delivery package. Stay away from pawnshops or other buyers on the web unless they post their prices.
Yes, like oil prices, it is a combination of both. I track gold at kitco.com, which always splits the daily rise based on buying/selling and dollar fluctuations.
I wish you had told me that BEFORE I bought in at $850/ounce with half my savings.
You should have said "heavily" not "entirely" Buying water before a hurricane is also heavily a matter of psychology and psychiatry, as most people who buy water won't need it. Indeed, the vast majority.
Gold is going up because the dollar is going down and because everyone knows that bonds are about to be greatly devalued by inflation.
When Time or Newsweek starts touting gold, then I'll get out. I just don't know what I'm going to get into yet. That is the real problem.
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