The coming collapse in gold!

[Neubarth]

I have been explaining the collapse in Gold that I said was coming, but nobody wanted to hear about it.

Gold is just a commodity like Silver, Copper, Zinc, Corn, Wheat. Gold is used to electroplate some electronics and is used greatly in the Jewelry business. It is not money. It is not food. When push comes to shove and people in a severe crisis will need to eat, Gold will quickly lose value against eating for survival.

Gold is hyped by shysters to no end. They make up outrageous lies that the governments of the world are going to go back on the Gold standard. The United States alone spends more money in a year than there are gold reserves around the world. No country is going to go back on the Gold standard.

It would be more practical to go back on the Corn standard as there is a lot more of it and people can eat it.

In reality, the US is on the Corn standard. Our dollar is backed by the productivity of the American people and by our natural resources that we can sell to the world for profit.

The reality is that the US is many times richer than any other five countries put together. Our manufacturing is more than that of China and Japan put together. If we banned imports from those countries their economies would collapse. That is the reason why they keep their currencies valued way below that of the United States. They keep the dollar strong because they need to sell to us. Even Europe wants to see a strong dollar as long as we are buying more from them than we are selling to them. Funny how that works.

Gold is worth what the Jewelry industry is willing to pay for it. Gold is subject to wide swings in price that is totally dependent upon the gullibility of people who buy it.
That gullibility is totally associated with the hype from the shysters (like Ron Paul) pushing it to try to drive up the price so they can profit from the fools that are convinced via advertising that it is a good buy. I have seen gold CRASH in price several times in my life. It is due for a crash again.

 

[antagon]

another collapsalypse.

 

[Douger]

I agree. I also think the fools that bought paper gold don't realize more has been bought than exists in the earth.
It's a scam.............like everything else murkin.

Copper, nickel and aluminum are the three true "precious" metals.Zinc and cadmium are important too.Your electricity, surgical instruments, cooking utensils etc.
Those and arable land are what supports life.

The rest is bullshit speculation.
Gold_____berg
Silver_____stein
Jew_______elry
See a pattern here ?

 

[Valerie]

I tend to agree gold is fixing for a retrace of it's ascension to these all time highs...I say sell.

When you see every street corner with offers to buy your gold jewelry for cash that is a sign the market is reaching it's peak right now...



BUT, here is an interesting article I read the other day:

Is $10,000 Gold Merely an Interim Projection?

For obvious reasons, there are few questions asked as regularly of precious metals commentators as “how high do you think the price of gold and/or silver can rise?” Before I look at what is implied when people ask that question, I will discuss the answers to that question – and what is implied by these estimates.

The starting-point is to go back to when the bull market began for precious metals, at roughly the turn of the millennium. At that time, the small number of informed, precious metals commentators who occupied this niche were “estimating” that the price of gold could hit $1000/oz – with the more confident/bullish pundits suggesting that gold might even reach $2,000/oz.

Skip-ahead to today, and now any experienced precious metals commentator who estimates $2,000/oz as a “ceiling” for the price of gold is seen as being extremely conservative. Veteran precious metals commentator, Lorimer Wilson, recently surveyed these analysts, to compile a list of such estimates – in order to set some parameters for these prices.

He found five commentators currently suggesting that the price of gold could eventually exceed $10,000/oz, nearly two dozen who chose figures between $5,000 - $10,000/oz, and then another dozen who had specifically chosen $5,000/oz as their price target. He added more than two dozen other estimates of between $2,500 - $5,000/oz – and didn’t include (or couldn’t find) a significant number of informed commentators expecting anything less than that.

What happened between then and now?
Is $10,000 Gold Merely an Interim Projection? -- Seeking Alpha

IMO, these type of projections are what keeps people buying from those who are now selling...That's what makes the market go round.

 

[loosecannon]

I agree. I also think the fools that bought paper gold don't realize more has been bought than exists in the earth.
It's a scam.............like everything else murkin.

Copper, nickel and aluminum are the three true "precious" metals.Zinc and cadmium are important too.Your electricity, surgical instruments, cooking utensils etc.
Those and arable land are what supports life.

The rest is bullshit speculation.
Gold_____berg
Silver_____stein
Jew_______elry
See a pattern here ?

I like rare earth elements as a long term hedge against dollar depreciation!

 

[loosecannon]

I agree. I also think the fools that bought paper gold don't realize more has been bought than exists in the earth.
It's a scam.............like everything else murkin.

Copper, nickel and aluminum are the three true "precious" metals.Zinc and cadmium are important too.Your electricity, surgical instruments, cooking utensils etc.
Those and arable land are what supports life.

The rest is bullshit speculation.
Gold_____berg
Silver_____stein
Jew_______elry
See a pattern here ?

There is something to your statement that since much of what is sold as gold doesn't exist that gold as it is being marketed may be hugely over priced. The premium between delivered gold and leased gold should probably be about 75% of the delivered gold price.

Jew_____elry?

 

[Toro]

I highly doubt we are seeing the end of the gold bull market.

Bull markets end when monetary conditions are tight. Right now, they are very loose.

Though I think we are at the beginning of a much needed correction, I would be surprised if gold didn't eventually go much higher.

 

[Valerie]

Yes, the dollar is at an all time low and gold is at an all time high...I think at least a temporary retrace is due. Conditions have been so loose for so long the tightening is just bound to happen soon, IMO.

GOLD – Prices continue to push higher, with the bulls now testing resistance just below the $1400 figure at $1383.00, the 200% Fibonacci extension of the Mar’08-Oct’08 decline. A break above this juncture exposes the top of a rising channel established from the cyclical low in October 2008, now at $1433.35, followed by the 223.6% Fib at $1465.67.


US DOLLAR INDEX – Prices tested support at 76.60, the previous 2010 year-to-date low, but failed to close below it. This boundary is being reinforced by the bottom of a falling channel established from the swing top in June. A bullish Hammer candlestick has now formed, hinting a move higher may be ahead, though additional confirmation is required. A daily close above the top of a shorter-term channel in place since September at 77.11 would open the door for a recovery to the 80.00 figure.


US Dollar Positioning Hints Recovery Ahead as Stocks Form Double Top - Yahoo! Finance

 

[william the wie]

I highly doubt we are seeing the end of the gold bull market.

Bull markets end when monetary conditions are tight. Right now, they are very loose.

Though I think we are at the beginning of a much needed correction, I would be surprised if gold didn't eventually go much higher.

Being a contrarian I find your statement disturbing. Silver is outpacing gold at the moment so I was already counting on a short-term correction. But Hulberts gold-bug index is low on bullishness at the moment and it looks like a rise to DJIA=15+K is likely before May 1, 2011 due to QE II. But the rise will be on ever lighter volume if trends stay steady so I was expecting DJIA=5-K= 1 oz AU by Dec. 31, 2011. I hate finding out that people agree with my strategy.

 

[loosecannon]

Yes, the dollar is at an all time low

the dollar is around 78 (and rising) on the DXY scale but 2 years ago when oil was $146/bbl the dollar was as low as 70.

US Dollar Index Future - Spot Price, DXY Index Quote - (NASDAQ) DXY, US Dollar Index Future - Spot Price Index Price

 

[uscitizen]

Ahh it wont drop below a thousand.
Still double what I paid.

 

[Toro]

William

You can't possibly be the only person in the world who thinks like that.

COT specs for silver was the highest in five years last week. For gold the highest ever. Silver is up 40% in two months. RSI for both was above 80. You had a big intraday reversal closing on the daily lows on heavy volume a few weeks ago. "Risk On" assets have been on fire but some appear to be topping near term. The dollar may be putting in a bottom (so I bought dollar calls today). Interest rates have been moving sideways for two weeks. And perhaps the biggest Sell The News events ever with QE2 and the election two weeks away. I would be shocked if there wasn't a near term correction.

 

[uscitizen]

gold is used for many things besides Jewelry.
Electronics for one.

the gold bubble will pop when the fools realize they have paid for more gold than exists.

Mine is in a safety deposit box I have the key to.

 

[Valerie]

Yes, the dollar is at an all time low

the dollar is around 78 (and rising) on the DXY scale but 2 years ago when oil was $146/bbl the dollar was as low as 70.

US Dollar Index Future - Spot Price, DXY Index Quote - (NASDAQ) DXY, US Dollar Index Future - Spot Price Index Price

Yes, I mean generally speaking...My link was the technicals from last week, so you see how the dollar is now showing a sign of technical strength here...I just looked and it's ~ $81.5 at the moment.

 

[Norman]

gold is used for many things besides Jewelry.
Electronics for one.

the gold bubble will pop when the fools realize they have paid for more gold than exists.

Mine is in a safety deposit box I have the key to.

No. The prices of gold will sky rocket after that. As everyone tries to chase the real stuff. Decreased supply = higher price. Popping of bubble means lower prices as bubble means there is too much demand caused by speculation. This is the opposite pretty much. You could argue that the paper gold is a bubble.

Dollar is the bubble (Which BTW is 2nd thing positive for gold, as if dollar goes to zero, gold goes way up as an asset). Gold is a.... goldmine. I mean the real stuff, the fake is still fake.

As for OP's text, I disagree with pretty much every point of it about the "strenght" of US. The trade deficit tells a bit different story than the OP suggests.

 

[The Rabbi]

The dollar is going to zero? IN whose lifetime?

All the positives have been priced into gold already. That leaves the negative prospects. Even a slight tightening by the Fed will cause gold to drop like a rock.
Further, as mentioned, look at the "mining operations" going on on every street corner. That's a lot of supply coming online.

 

[Neubarth]

The dollar is going to zero? IN whose lifetime?

All the positives have been priced into gold already. That leaves the negative prospects. Even a slight tightening by the Fed will cause gold to drop like a rock.
Further, as mentioned, look at the "mining operations" going on on every street corner. That's a lot of supply coming online.

Indeed! My father financed his way through medical school by buying old gold, smelting it in his basement workshop and selling it to dentists so they could make gold crowns for their patients. Dad did this during the Great Depression. Where there is a will there is a way.

 

[topspin]

No one can correctly pick the price of gold or the stock market. Gold has more hype in it than oil did at $146. Lots of safety freaks are going to get burned when it tumbles.
This is why I stick mailing to investing in great companies.

 

[Neubarth]

No. The prices of gold will sky rocket .............

Dollar is the bubble (Which BTW is 2nd thing positive for gold, as if dollar goes to zero, gold goes way up as an asset). Gold is a.... goldmine. .....

As for OP's text, I disagree with pretty much every point of it about the "strenght" of US. The trade deficit tells a bit different story than the OP suggests.

You are obviously not educated enough to know what the trade deficit is, nor what causes it.


How can the currency of the strongest economic power in the world go to zero? I think you have partaken of too many recreational chemicals.

About the time it went down thirty percent in value against the other currencies of the world, China's economy would start teetering.

If it went down further, the whole world would be pegging their currencies to the Dollar to stop any further depreciation.

 

[Norman]

No. The prices of gold will sky rocket .............

Dollar is the bubble (Which BTW is 2nd thing positive for gold, as if dollar goes to zero, gold goes way up as an asset). Gold is a.... goldmine. .....

As for OP's text, I disagree with pretty much every point of it about the "strenght" of US. The trade deficit tells a bit different story than the OP suggests.

You are obviously not educated enough to know what the trade deficit is, nor what causes it.


How can the currency of the strongest economic power in the world go to zero? I think you have partaken of too many recreational chemicals.

About the time it went down thirty percent in value against the other currencies of the world, China's economy would start teetering.

If it went down further, the whole world would be pegging their currencies to the Dollar to stop any further depreciation.

I will promise to admit that I was wrong here, if your case does happen. But I doubt it. It will save us time arguing, as both of us can't do a thing about this.

Trade deficits are always caused if country is not competitive or if their currency is overvalued. If there is trade deficit it also must be paid back. The only way to do this is of course is to let dollar to fall, so the trade relations can reverse (other countries will then start to buy from US).

US is the strongest trade deficit nation, it doesn't matter if the economy is big. Further there are no savings, no capital goods.... So they can't pay back in any other way than dollar losing value. They also have lots of promises to be paid to their citizens that can't be paid, this must be financed with debt or inflation.

China has the produce, US has dollars that they send there. Now who is in trouble again if dollar falls? Not china... it has citizen too, and they get richer when government stops the peg. They are rich enough to consume their own TVs, how would it be possible to not consume the stuff you made?

Soviet union also was a huge economy and it collapsed BTW. Gold has nowhere to go but UP, or it has, but bernanke guarantees it doesn't.