Gold: I smell a trap

[hugolp]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

So, from around $17-18 silver shoot up to almost $50 in less than a year, and because it corrected back to $35 and now up to over $40, silver is a bad investment? I say that after such a rally its quite normal a correction.

You know better than this.

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[cypherdoc]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

So, from around $17-18 silver shoot up to almost $50 in less than a year, and because it corrected back to $35 and now up to over $40, silver is a bad investment? I say that after such a rally its quite normal a correction.

You know better than this.

wow, the attacks start back so soon?  i thought you'd at least say Welcome Back!

look, right now i said i was neutral, ok?  did i say it was a "bad investment"?  and if anything i'm net long gold but no position in silver. 

i'd like to take the position in this thread in pointing out certain things from a different perspective than just a permabulls, ok?  geez...

[cypherdoc]

Very interesting discussions. Went back and reread the OP, it seems this thread, especially the title of it, after 30 days and 26 pages, is now dated.

in all fairness, on 8/9 when i started this thread gold was at 1782.  are we really that much higher?

[hugolp]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

So, from around $17-18 silver shoot up to almost $50 in less than a year, and because it corrected back to $35 and now up to over $40, silver is a bad investment? I say that after such a rally its quite normal a correction.

You know better than this.

wow, the attacks start back so soon?  i thought you'd at least say Welcome Back!

look, right now i said i was neutral, ok?  did i say it was a "bad investment"?  and if anything i'm net long gold but no position in silver. 

i'd like to take the position in this thread in pointing out certain things from a different perspective than just a permabulls, ok?  geez...

It wasnt meant to be an attack.

[cypherdoc]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

So, from around $17-18 silver shoot up to almost $50 in less than a year, and because it corrected back to $35 and now up to over $40, silver is a bad investment? I say that after such a rally its quite normal a correction.

You know better than this.

wow, the attacks start back so soon?  i thought you'd at least say Welcome Back!

look, right now i said i was neutral, ok?  did i say it was a "bad investment"?  and if anything i'm net long gold but no position in silver. 

i'd like to take the position in this thread in pointing out certain things from a different perspective than just a permabulls, ok?  geez...

It wasnt meant to be an attack.

ok, thats fine.

i just would pt out that silver poked it head back over the 61.8% retrace back on 8/22 and instead of falling back and testing the $43.07 level before launching to new highs it has fallen below this level and COULD be failing.  again, i'm agnostic at this pt and i await confirmation either way.

[cypherdoc]

anyone know what happened to the "ALL" button after page 27 of this thread that used to be at the bottom left of this forum page?  its a pain to have to pick individual pages hunting for a previous post rather than just scrolling thru ALL of them.

[BitcoinBug]

wow, the attacks start back so soon?  i thought you'd at least say Welcome Back!

Hey, welcome back!
And sorry for my "attack" the other day, I'll try to be as neutral as possible from now on. And I hope you and miscreanity get the thread moving again!

[kjj]

I watch the super long 40 year dow/gold chart, and I occasionally look at Jesse's 2 year weekly close charts, but most of the time I'm looking at 2 day charts for gold and silver on nwtmint.com, just because I like the layout.

This is probably my own personal bias talking, but the impression I have from watching the short term charts for a long time is that for the last few years, they have been drifting up more than they have been drifting down, but the sudden movements have been in the other direction, with more sudden decreases than sudden increases.  Again, this is just the impression I have from memory, it isn't backed by any real data.

If that is really what is happening, the narrative I invent is that there is broad interest from common folks in holding metals, while the big institutional players are trying to push prices down by using their resources to create large movements to spook weaker players.

This story is pretty much what you hear if you spend a lot of time reading what gold bugs have to say about things, which makes me cautious.  But it still does sorta look like it, so maybe they aren't entirely crazy.

[bitcool]

Very interesting discussions. Went back and reread the OP, it seems this thread, especially the title of it, after 30 days and 26 pages, is now dated.

in all fairness, on 8/9 when i started this thread gold was at 1782.  are we really that much higher?

http://stockcharts.com/h-sc/ui?s=%24gold

It's not MUCH higher, but it should, considering SNB just killed CHF as a century old safe haven wealth preservation tool.

On 8/9, gold had been climbing for a full month after breaking out from the previous trading range, it made a lot of people uneasy, but now looking back, it clearly was not a trap.

One can still argue a bigger trap is forming, by the same token it can be said 1970~1980 ten year period was one huge "trap" for gold bugs.

[DavinciJ15]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

Silver has higher highs and higher lows forming a wedge pattern to the up side.

Up or down it does not matter reality will hit the currencies of the world and when it does what I would give to see the look on your face when the crack up boom happens. 

It would be priceless.

Silver and gold have been money for longer than you have been alive and will be money long after we are dead, reality does not change people's perception of it does.  You can ignore reality for a while but eventually it will smack you in the head and tell you WTF where you thinking.  Some people do not feel that hit as I have read that people actually believed, in the middle of hyperinflation, that prices would eventually come back down. 

[cypherdoc]

On 8/9, gold had been climbing for a full month after breaking out from the previous trading range, it made a lot of people uneasy, but now looking back, it clearly was not a trap.

quite correct; so far.

One can still argue a bigger trap is forming, by the same token it can be said 1970~1980 ten year period was one huge "trap" for gold bugs.

a double top here would be so nasty.

[onis_uk]

you've been trading in gold for bitcoins !??! all i can say is you crazy fool ......................... so exactly how much money have you lost so far ?!?! haha 

[cypherdoc]

silver STILL hasn't gotten back up over the 61.8% retrace from bottom to top in May.

Silver has higher highs and higher lows forming a wedge pattern to the up side.

Up or down it does not matter reality will hit the currencies of the world and when it does what I would give to see the look on your face when the crack up boom happens.  

It would be priceless.

Silver and gold have been money for longer than you have been alive and will be money long after we are dead, reality does not change people's perception of it does.  You can ignore reality for a while but eventually it will smack you in the head and tell you WTF where you thinking.  Some people do not feel that hit as I have read that people actually believed, in the middle of hyperinflation, that prices would eventually come back down.  

no, i hear ya man.  right now we're at a very dicey time.  this USD ramp is NEW and the gambit is whether gold/silver can stand up to it.

miscreanity has made a good point in the past.  if the gold community in aggregate is long gold/silver WITHOUT significant leverage or margin then they can withstand a market wide margin call on all assets as they plummet from here.

what the Fed is trying to do is create a deflationary wave, i think, to force gold holders out of their positions to meet those margin calls on the other parts of their portfolios, like stocks or other commods.  this is why you get the "all one market" moves inverse to the USD during the middle parts of the longer term waves (years).  investors would rather sell their winners than losers first.  w/o leverage then you're "golden"

this is why i've moved my shorts to stocks which are easier pickings for now vs. metals.

[cypherdoc]

you've been trading in gold for bitcoins !??! all i can say is you crazy fool ......................... so exactly how much money have you lost so far ?!?! haha 

not too much thankfully since i got into btc's quite early.  hopefully my fundamental analysis on bitcoins will be correct.

trying to be ahead of the crowd always involves risks and i'm always early but usually correct.  my time frame is long (10 yrs on btc) and i can afford to wait it out.

[cypherdoc]

you've been trading in gold for bitcoins !??! all i can say is you crazy fool ......................... so exactly how much money have you lost so far ?!?! haha 

i'll also pt out that i made a quintuple gain on silver and more than a triple on gold so yeah, that means i own alot of bitcoins.

[onis_uk]

fair enough, i'm heavily invested in pm's, personally i see silver hitting $250 at its top, and gold maybe $10k .... despite jpm's shorts. i dont think
they have enough "physical" metal left to control the price like they did in the May smack-down!!!! they will lose out in the long run because
of such strong public physical investment. the paper world will unfold and reach is true worth ....$0 !

"if you cant touch it you dont own it!"  

[cypherdoc]

fair enough, i'm heavily invested in pm's, personally i see silver hitting $250 at its top, and gold maybe $10k .... despite jpm's shorts. i dont think
they have enough "physical" metal left to control the price like they did in the May smack-down!!!! they will lose out in the long run because
of such strong public physical investment. the paper world will unfold and reach is true worth ....$0 !

"if you cant touch it you dont own it!"  

good for you.  that certainly seems to be the wisest play so far.  since i haven't seen you on this thread before though, i'd just encourage you to go back and read thru my reasoning about why i'm concerned.  i believe its logical and compelling altho ultimately could very well be wrong.

don't just watch gold/silver; watch the USD!

[onis_uk]

i do watch it!! because i believe that if the dollar tanks anymore then... pm's will do even better.

most large countries will be foreced in time to go back to a reserve currency! ie; gold or silver backed.
i've read in the past few months that 2 countries in africa have gone back to a gold standard and one
south american counrty has a silver backed currency in the pipeline !

i think the day for fiat money is over...we've had a 30-40 year laugh out of it but now comes payback time ;o)

[Melbustus]

what the Fed is trying to do is create a deflationary wave, i think, to force gold holders out of their positions to meet those margin calls on the other parts of their portfolios, like stocks or other commods.  this is why you get the "all one market" moves inverse to the USD during the middle parts of the longer term waves (years).  investors would rather sell their winners than losers first.  w/o leverage then you're "golden"

One thing that I don't think has been mentioned in this thread yet is the observation that Bernake is a depression-scholar, having done a lot of his academic work on how to *avoid* the natural deflationary wave that should follow a banking crises. So, going on that, we should expect him to position the Fed toward a strong inflationary bias. That's not to say a Fed Chairman will remain consistent with his academic past (look at Greenspan), but it does provide some insight. Plus, I think the political pressure is almost always short-term, which means alleviating immediate pain at the expense of bigger long-term pain; ie, prevent the deflation now, especially with an election around the corner. Couple that with Ben's demonstrated academic leanings, and it's a little hard to believe he won't use the Fed to *prevent* deflation as much as possible. Whether the Fed *can* prevent it is another matter.

[miscreanity]

i also have a short on the Euro since i'm sure their involved in this USD buying spree.  i think the union is toast.

Toast or not, probably a good position for another week. Every currency will be fairly well range-bound. These sharp spike moves occur in a manner which precludes the majority of profit potential. Earlier this year, the Yen had its massive spike and is now back near the lows. I can guarantee the same will happen with the Swiss Franc - population sentiment toward long held notions of a safe haven shift glacially compared to market savvy investors. Not to mention that Swiss financial stability is still viewed as much stronger than most of the world by those in finance, despite recent events.

anyone know what happened to the "ALL" button after page 27 of this thread that used to be at the bottom left of this forum page?  its a pain to have to pick individual pages hunting for a previous post rather than just scrolling thru ALL of them.

Use the print feature - it'll put the entire topic on one very clean page that's nice for saving to an html file as well. I'm glad this thread wasn't lost. Hooray, Cosby! Hey, if you can't take a joke...

This is probably my own personal bias talking, but the impression I have from watching the short term charts for a long time is that for the last few years, they have been drifting up more than they have been drifting down, but the sudden movements have been in the other direction, with more sudden decreases than sudden increases.  Again, this is just the impression I have from memory, it isn't backed by any real data.

The uptrend described in the first paragraph is easily apparent on charts from 1 month to 10 years and longer. The logarithmic chart in this post shows the sharp downward spikes fairly well.

If that is really what is happening, the narrative I invent is that there is broad interest from common folks in holding metals, while the big institutional players are trying to push prices down by using their resources to create large movements to spook weaker players.

That's one way to look at it and the numbers behind the scenes strongly support that. Another could be that the general populations are divesting while large interests are gradually accumulating so as not to lose their price advantage before the dishoarding is complete. Still other explanations could be offered, but it would seem that there is a definite transition process underway which is geared toward a higher value for gold.

what the Fed is trying to do is create a deflationary wave, i think, to force gold holders out of their positions to meet those margin calls on the other parts of their portfolios, like stocks or other commods.  this is why you get the "all one market" moves inverse to the USD during the middle parts of the longer term waves (years).  investors would rather sell their winners than losers first.  w/o leverage then you're "golden"

this is why i've moved my shorts to stocks which are easier pickings for now vs. metals.

That's guaranteed to be a big part of. The chairman tries to act as indirectly as he can to avoid disrupting markets, so offering greater investment incentives than gold or forcing a situation where liquidation is necessary just happens to be textbook Fed maneuvering.

"if you cant touch it you dont own it!"  

Booya! 'nuff said.

One thing that I don't think has been mentioned in this thread yet is the observation that Bernake is a depression-scholar, having done a lot of his academic work on how to *avoid* the natural deflationary wave that should follow a banking crises. So, going on that, we should expect him to position the Fed toward a strong inflationary bias.

That's a good point. Incorporating that knowledge into an overall strategy is prudent. I still prefer to rely on the numbers more than the tea leaves, but at least Bernanke's playbook is open for all to see.

Whether the Fed *can* prevent it is another matter.

Has any nation in the history of the world ever succeeded? A more appropriate question might be whether the Fed can help the country survive without being economically decimated.

It sure was nice spending extra time away from the computer...