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gkc
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Gold on Another Run

Gold (basis the active Comex December 2009 contract) gapped through old resistance at 1033 last Tuesday. It is now technically (and fundamentally, due to the $USD's continuation of its year-long downtrend) set up to run. Nobody knows how far.

Most of the best miners are still playing catch-up. AUY, GG, NXG, AEM, GOLD, and RGLD still haven't made new all-time highs (exceptions would be GOLD and AEM), but are poised to do so by year-end.

Silver still lags. And, in spite of the blatherings of the financial press, for good reason. It is not a world central bank reserve. Gold is the dog, and silver is the tail. Still, on most bull runs like this one, silver outperforms gold because it is the "thinner," less liquid market, on a world-wide basis.

Since the latter part of October and early November are cyclically weak periods, I am posting this information only to warn you. Do NOT chase these markets without tight mental stops. But, if you are interested (and you should be), DO have the guts to buy the dips, as they will occur... unannounced.

5% pullbacks should be bought.

My dilemma lies in whether or not to take huge profits, now, and wait, or sit tight and add on the dips.

Gold could fill its gap (cash 1019) or simply motor on. If it is the latter, you missed the move. If it is the former, the train hit a cow (or, more appropriately, a bear) and had to stop momentarily before resuming its run to whatever destination lies ahead. If it is the former, you should buy quality miners. They won't stay undervalued to bullion forever. After all, they mine the Great Yellow Turd at fixed costs. AUY and GG are the best plays, as I have been preaching since 2006 -- both are priced for around 700-800 gold.

I am sorry to be a broken record. I know NONE of you will heed this counsel, but, hell, most of you watch oscilloscopes with your eyes (as opposed to listening to music with your ears), so what else should I expect?

Again, the point of this post is not to urge you to buy. It is to urge you NOT to chase, and to buy smart -- that would be on the corrections. Many of my best friends (who do not subscribe to this site) ignored me at 250, 300, 400, 450 (a crucial level), 500, 700, and, yes, the fateful break above the nominal (i.e., not adjusted to inflation) 1980 highs at 850. Now, they all want in. Now. With gold at 1065 at today's close.

I am making a fortune. I deserve it for paying attention to reality. You may regard that last as arrogance, but I work hard, every day, charting these markets and analyzing the CFTC-published Commitments of Traders Reports. You earn what you work for.

Good luck, good listening, and this is the LAST you will ever hear from me on this subject.

Buddha
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Re: Gold on Another Run

Hey, man!

I don't think you should quit posting about this, I just don't know how to go about it.

You should sell a tutorial!

I'm spending the year primarily paying debt I accrued coping with my dear departed madre's slow motion demise - outside the entitlement of Medicare.

I couldn't even bear to tell my wife the damage. Toward the end, I was Mastercarding the costs. Maybe if I learn something I can recoup!

gkc
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Re: Gold on Another Run

Sell? I make enough money trading. So you get one for free. First, open an account at TDAmeritrade. Trades are 10 bucks, unlimited volume. You can get 7 or 8 elsewhere, but TDA is consistent, and they offer a tremendous variety of services. And, they are money-savvy (which means they won't go broke -- and, THESE days that IS a risk...). Their operators give excellent trade executions. Market orders consistently get filled at the bid. That is all I ask. When I want out, I do NOT want to have to worry about getting a decent fill. 3 bucks on commissions is chump change.

Second, subscribe to Stockcharts.com. 9 bucks a month. 2 triple-lattes, or whatever else you are wasting money on these days. Economize. Hey! It's the new thing!

Sorry. Just a joke. The Federal nut is now measured in double-digit FUCKING TRILLIONS. Sorry for the outburst. I was just venting.

Then go to school. At Stockcharts.com. No, I neither work for them nor shill for them. I am merely a satisfied customer. Go to school. Learn about technical analysis. Technical analysis ALWAYS blows the bugle before fundamental recognition. True, fundamentals drive the long-term trends, but the technicals allow you to compete against the smart money by giving you a day's head start. And, these days, a day is not only a buck saved, but psychological comfort. That latter is what you need to trade these markets. You need a trend (ahem. OBVIOUSLY up in gold), but you also need a road map to give you staying power.

Do the above. Post. I will take you further when you are in the game. Remember, once you open an account, you can close it. There are no obligations. True, you will be paid a piddling pittance for your money on the sidelines. But, unlike the current Fed Funds rate, it is not zero.

I'll check in, from time to time, to monitor your progress and answer your questions as best as I am capable. But YOU have to take the first teetering steps. I do not post on this shit for my own amusement, or for the shallow pleasure of gloating -- you know me better than that. When it comes to money, I am dead serious.

The Chinese say something important about the journey of a thousand miles. They also are long gold. Hmmmm.......

JIMV
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Re: Gold on Another Run

My fear is two fold. First, the government will steal privately held US gold as they did in 1934, and as part of the theft, they will only pay the face value on the bullion...($50 for a 1 OZ double eagle making vast profit for the government) and second, this time they may go after numismatic gold, which they did not do in 1934 and only pay bullion value for the coins.

Paper holdings are only as good as the paper.

So, I only have a few gold coins from other countries. They have never stolen silver so I have some of that as well

Buddha
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Re: Gold on Another Run


Quote:
My fear is two fold. First, the government will steal privately held US gold as they did in 1934, and as part of the theft, they will only pay the face value on the bullion...($50 for a 1 OZ double eagle making vast profit for the government) and second, this time they may go after numismatic gold, which they did not do in 1934 and only pay bullion value for the coins.

Paper holdings are only as good as the paper.

So, I only have a few gold coins from other countries. They have never stolen silver so I have some of that as well

The way the ammo market is going, you should hoard that as currency! Then, if someone doesn't take your currency, you 'use' your currency!

KBK
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Re: Gold on Another Run


Quote:
My fear is two fold. First, the government will steal privately held US gold as they did in 1934, and as part of the theft, they will only pay the face value on the bullion...($50 for a 1 OZ double eagle making vast profit for the government) and second, this time they may go after numismatic gold, which they did not do in 1934 and only pay bullion value for the coins.

Paper holdings are only as good as the paper.

So, I only have a few gold coins from other countries. They have never stolen silver so I have some of that as well

Which is, of course, the 'why?' behind the 30-35% premium for gold on Ebay. Not traceable, in most cases.

gkc
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Re: Gold on Another Run

JIMV, your fears are unjustified. 1934 is so last year.

Here, in the 21st Century, we have electronic trading and electronic transfers. And ETF's that track their underlying commodities, stocks, and indexes to 1%.

After Roosevelt confiscated gold, Homestake Mining more than tripled.

You don't NEED to buy a couple rolls of Krugerrands and a Browining any more, JIMV. You can actually be more civilized about things. Instead of in a bunker, you can hole up at your favorite bar and, via your hand-held gizmo, transfer your shit all over God's known universe. Between Martinis or Pink Padies (it's okay -- if you prefer the latter, we won't tell).

Hey. Just open an account -- in Oshkosh, Osaka, Oslo, or Mozambique (forget about Switzerland -- the IRS is onto 'em). If you can't beat the great raid with the flick of a finger, you ain't worth your paranoid stripes.

Otherwise, buy the good mining stocks. Hey. If you need the cold rocks to sleep on, buy 'em with your profits.

I swear, JIMV, you are SOOOO retro...

Good luck, and don't forget your night vision specs. And mind the, er, "residue" left behind by the various critters who shit in the woods...

KBK
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Re: Gold on Another Run

Clifton, I'm not going that modern until I get microchipped. I have to make absolutely sure that they don't miss a single moment of my life.

JIMV
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Re: Gold on Another Run


Quote:

Quote:
My fear is two fold. First, the government will steal privately held US gold as they did in 1934, and as part of the theft, they will only pay the face value on the bullion...($50 for a 1 OZ double eagle making vast profit for the government) and second, this time they may go after numismatic gold, which they did not do in 1934 and only pay bullion value for the coins.

Paper holdings are only as good as the paper.

So, I only have a few gold coins from other countries. They have never stolen silver so I have some of that as well

Which is, of course, the 'why?' behind the 30-35% premium for gold on E-bay. Not traceable, in most cases.

I would never, ever buy gold on E-bay...the responsible companies charge about 10% above spot.

KBK
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Re: Gold on Another Run

My point: If done right (buying)---the gold is untraceable on ebay.

Drug dealers and pimps gotta buy gold too. Along with republicans.

Monty
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Re: Gold on Another Run

Hey Clifton, do you post at Seeking Alpha? I swear I read a long article that mirrors your writing style the other day and it was about fiat money and gold.

The Chinese are't stupid. Rather than continue to buy treasuries and absorb a falling currency, they are buying commodities and laying their claims on rare earth materials in countries all over the world. When (if?) the Fed starts raising rates, this stock market party is going to evaporate in a hurry. Take a look at the dollar index and the S&P 500. Place the charts on top of each other and you have a perfect X.

The Fed's job is to provide a stable currency above all other concerns. The con being advanced by the Fed and the past two Administrations is looting not only the current citizenry, but the generation behind as well. Debasing a currency is nothing more than a stealth tax to repay enormous debt and it's placed on the backs of everybody who needs to use dollars to purchase not only discretionary items, but everyday necessities as well.

Don't look at gold as a way to "make" money, look at it as a way to preserve wealth. In an environment like we have going on right now, (asset inflation) the people who come out on top are the ones with assets that inverse the currency. That's not most people. There's no reasoning for holding currency only to watch its purchasing power deteriorate in order for the politicos to avoid implementing unpopular fiscal policy.

The bitch of all this reckless borrowing and so called stimulus is that it has had absolutely no impact on increasing the velocity of money. In other words, the multiplier that the Keyensians depend on to justify the 24/7 printing of money is not working. There is no back-up plan when that doesn't work. There's only, "Oh, shit."

KBK
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Re: Gold on Another Run

Well, the whole agenda was to build a world currency and a single world government and you can't do that with strong US. So now that the US has been used a blunt instrument on the rest of the world - it's time to tear down the US. Now they all act innocent and then mass of the public thinks that their 'leaders' are that stupid? Not a fucking chance. This is happening in a very purposeful and controlled manner/speed. Just below that of a real and actual rebellion by the people -is the key trick. But they are preparing a standby plan if the systematic and controlled collapse gets slightly out of hand. See it for what it is.

gkc
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Re: Gold on Another Run

Monty, I don't post at Seeking Alpha. I occasionally tune into their rants. While they, from time to time, post opinions that can be traded, most of the time their editorializing is either too far behind real market moves or too outre to consider rationally. Still, you try to read everything and sift out the dross.

One fool at that site predicted a short squeeze on the April (2009) Comex Gold contract. The shaky ground for his argument was backwardation (as opposed to contango) in the basis between cash gold (then, the February contract) and the active April contract. Look. I follow this shit, every day and week. There has NEVER been backwardation in the front-month basis. NEVER. This is a retro application of the current gold market to the Hunt "squeeze" situation in 1979-1980. I know THAT in detail. I was in the business, then, having worked both for a large bullion dealer and on the floor of the Comex.

Of course, there was no squeeze. I wrote a long and boring reply to this fool's ravings, and heard nothing more from him. This is what I hate about the internet (don't get me wrong -- there is much to be admired about the free flow of information, but it remains fertile ground for poseurs and various quacking conspiratorialistas...).

KBK, I am a speculator. I started buying gold futures, gold mining stocks, and (yes) physical gold and silver coins in 1993 (silver) and 1991 (gold). I have learned to respect trend and the discipline of holding cash product. You can make mistakes on trend (especially when the earth is shifting on its axis, as it did in 1999, when our Social-Security-financed "surplus" turned suddenly into a deficit, which was the "news" that got me long metals and miners within minutes after I saw the news). I have seen this movie before. Holding cash-paid metals is a great disciplinary tool for staying on long-term secular trends. You can wake up with a bad hangover and punch out of a winning on-line trades 'WAY too soon, but you LIVE with what you own. The thought of driving through downtown traffic with a couple-hundred grand in gold and silver coins in your trunk is a powerful motivation for holding on for a few more weeks. As I said. I have seen this movie before.

KBK, as a speculator, I just want to make more money than the market average. I want to be on trend. I want to ride the bull until he is exhausted. I won't see a top in my headlights, but rather in my rear-view mirror. The advantage of being in early, is that, while missing the top, you still make a hell of a lot of money.

Good luck, and good trading. Ditch the conspiracy theories. A weak $USD helps cut into our twin deficits. Period. It is a strategy, not a conspiracy.

gkc
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Re: Gold on Another Run

Monty, I am sorry that I didn't give your entire post the response it deserves. Here is my afterthought.

As you know, debt is a double-edged sword. Debt allows progress, but punishes profligacy.

Our system is opaque. It is grounded (even now) in a hard day's work for a decent day's pay, but its inner workings are opaque. The main reason I am a holder of cash product (real money, gold and silver coin), as I said, is NOT because I believe in conspiracies. As a speculator, I want simply to buy low (relatively) and sell high (relatively), or the inverse when it is time to sell short.

But, even though I do not believe in conspiracies, I DO believe in stupidity. And profligacy (a negative belief, that). Right now, we are borrowing more to pay off past over-borrowing. Even an opaque system can't cover that up. That is one of the drivers behind this current gold bull. We have stupid people at the highest levels of government (and the Fed, which isn't supposed to be "government," but is fast making the transition...) who think that time will solve everything, given the good people who work in this country to improved their lives. Said authorities understand the work, but they do not understand the opacity OR the need for debt-liquidation cycles to simply play out.

So, yes. I agree with what you say, in the broadest sense. But it is not a conspiracy. These morons aren't smart enough to pull off a proper conspiracy.

And that's what scares me. I can deal with the manipulators. But NOBODY can deal with institutionalized stupidity. And, NCdrawl and Lamont, there are NO party lines that can mark off rampant stupidity and delusional behavior. Once you are stupid, you are stupid. Whether you are Obama (and Geithner), on the one hand, or Bush (and Paulson) on the other. Stupid is stupid. Delusional is delusional. You can't compartmentalize stupidity across party lines. It is running amok.

Maybe Clinton and/or Obama would score higher on an I.Q. test than Bush. My guess is, probably not. But the broader point would be, how smart would you have to be to be able to do THAT? 'Twould be like choosing between a hippo and a rhino in a beauty contest. Why would anybody want to even TRY? Hey! They're all morons. That's why we elect them.

They now say Carter was an uncredited genius. Yeah. Right. I lived through his Presidency. Those who called him a moron during his time in office were right. And, surely, nobody would even attempt to defend the mental acuity of Reagan and Elderbush, right? C'mon. We have institutionalized stupidity and delusional thinking. It has been institutionalized on BOTH sides of the aisle.

Hence, $1000+ gold.

No conspiracy, here. Just a bunch of morons pretending that they know what they are doing.

Good luck, all. You will surely need it...

Monty
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Re: Gold on Another Run

I'm not suggesting a conspiracy of the sort that others latch onto. I'm suggesting a con being perpetrated on an ignorant public to avoid fiscal responsibility that would be politically painful. The type of con that involves pledging not to raise taxes while debasing the currency to accomplish the same thing. It's a lot like calling something a fee instead of a tax.

The dollar has fallen 12% since the first of the year. It seems clear to me that the Fed is hell bent on forcing people to spend and invest or face a decline in the value of their savings. People are becoming wise to this and instead of the Fed's policy having the effect of increasing the multiplier and velocity of money, people are pulling an Ayn Rand and ditching the currency for hard assets rather than being forced to spend and invest at a time when their better judgement is telling them to wait.

This is why the current situation is different this time. The structural damage to our economy is preventing the expected Keynesian multiplier and velocity to deliver us out of the hole. I expect the Fed to continue to hammer the dollar, regardless of what they say publicly, until the multiplier picks up or they run out of paper and ink.

As you can probably tell from my post, this is a hard thing to watch play out if you don't believe in Keynesian economic theory in the first place.

gkc
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Re: Gold on Another Run

Monty, you are obviously correct about the Fed's being "... hell bent" on prying frightened citizens away from their hoarded cash. That is why short rates are at 0%-1% and long rates aren't any better (that is, when you consider the risks of locking in time...).

For another interesting conspiracy theory, go to 321gold and read Stewart Thomson's "Gold Juniors Geyser Time." It is about selling dollars at the top and buying them back at the bottom, when they are backed by gold (which, according to Thomson -- an Australian --) is the whole point of trashing the dollar to worthlessness. This is too wild for me, because my experience of the world has been that it is too big and varied for any monolithic scheme to work for very long.

But, you are certainly right about the Fed's desperation to get $$$ back into circulation. And, by hook or by crook, they'll eventually succeed, because they can print an infinite amount of 'em. That is why the deflation arguments are wrong, whether nominal prices rise or not (and nothing that I buy is going down in price, but, rather, up on a gentle slope).

Good luck.

linden518
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Re: Gold on Another Run


Quote:
I'm spending the year primarily paying debt I accrued coping with my dear departed madre's slow motion demise - outside the entitlement of Medicare.

I couldn't even bear to tell my wife the damage. Toward the end, I was Mastercarding the costs. Maybe if I learn something I can recoup!


Sorry to hear, Buddha. Hope things turn better for you, man.

KBK
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Re: Gold on Another Run


Quote:

But, even though I do not believe in conspiracies, I DO believe in stupidity.
. . . .

No conspiracy, here. Just a bunch of morons pretending that they know what they are doing.

Good luck, all. You will surely need it...

British nuclear expert falls 120ft to his death in Vienna

A British nuclear expert has fallen to his death from the 17th floor of the United Nations offices in Vienna.

http://www.telegraph.co.uk/news/worldnew...-in-Vienna.html

Israel and Iran hold first talks in 30 years
Israel and Iran have held their first significant meeting in 30 years but the exchanges between the two adversaries quickly descended into acrimony.

http://www.telegraph.co.uk/news/worldnew...n-30-years.html

Hopes rise of end to impasse as Iran gets two days to back nuclear deal.

Enriched uranium would be processed in Russia

http://www.guardian.co.uk/world/2009/oct/21/iran-nuclear-deal

US-Israel war games start as deadline for Iran to approve nuke deal draws near

http://www.timesonline.co.uk/tol/news/world/middle_east/article6886328.ece

Uh huh.......

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