The Gold and Silver Thread

[Toro]

News of the interest rate cut on dollar swap lines has stocks and gold soaring this morning. I had been buying gold heavily the past week and got very lucky this morning. I have only bought a little silver. It has been trading in a narrow range lately. However, given gold is beginning to move and liquidity is increasing, I imagine silver will climb. So I plan to start buying silver in size.

 

[Toro]

Gold is likely to be higher in early January than it is today, according to a contrarian analysis of current gold-market sentiment.

To appreciate the confidence with which contrarians can make such a forecast, consider the conclusion of contrarian analysis in early July, the last time I devoted a column for Barrons.com on the subject. (See Hulbert on Markets, "Gold Can Head Even Higher," July 13.)

Gold bullion then was trading for around $1,550 per ounce, and I reported that, according to contrarian analysis, "The sentiment stars are aligning powerfully in favor of gold continuing its recent rally, which has already taken it into new all-time high territory."

Sure enough, the rally that contrarians were then anticipating continued for the next month and a half or so, reaching a high in late August at over $1,900 an ounce. That was a gain for bullion of more than $350 an ounce in just six weeks. …

Fortunately for gold's short-term prospects now, there are even fewer gold-market bulls today than there were in early July. Given that an ounce of bullion is worth $200 more today than it was then, this greater pessimism leads contrarians to reach even more bullish conclusions today than in July.

The basis of these conclusions is the average recommended gold-market exposure among a subset of short-term gold-market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI).

This average currently stands at just 13.7%, which means that the average gold-market timer is recommending that his clients allocate almost all of their gold-oriented portfolios to cash.

On the date of my Barrons.com column on gold sentiment in July, in contrast, the HGNSI stood at 20.3%.

In other words, the net effect on sentiment of gold's extraordinary rally to new all-time highs above $1,900, its subsequent fall from grace back to around $1,600, and finally its recent rally back to the mid $1,700s, has been to leave the average gold timer even more skeptical about the yellow metal than he was then.

Since gold likes to climb what contrarians refer to as a wall of worry, this is an encouraging sign for bullion's near-term prospects.

What are the prospects that gold's rally will last further into 2012 than just early January? Contrarian analysis of necessity must be a bit tentative in any answer. …

The bottom line? Gold is likely to be higher than today in one month's time. And it wouldn't surprise contrarians if gold's anticipated rally continued for longer than that.

Market Timers' Bearishness Points to Higher Gold - Barrons.com

I own a lot of gold and silver. But I might change my mind and sell it all tomorrow.

 

[Trajan]

Gold is likely to be higher in early January than it is today, according to a contrarian analysis of current gold-market sentiment.

To appreciate the confidence with which contrarians can make such a forecast, consider the conclusion of contrarian analysis in early July, the last time I devoted a column for Barrons.com on the subject. (See Hulbert on Markets, "Gold Can Head Even Higher," July 13.)

Gold bullion then was trading for around $1,550 per ounce, and I reported that, according to contrarian analysis, "The sentiment stars are aligning powerfully in favor of gold continuing its recent rally, which has already taken it into new all-time high territory."

Sure enough, the rally that contrarians were then anticipating continued for the next month and a half or so, reaching a high in late August at over $1,900 an ounce. That was a gain for bullion of more than $350 an ounce in just six weeks. …

Fortunately for gold's short-term prospects now, there are even fewer gold-market bulls today than there were in early July. Given that an ounce of bullion is worth $200 more today than it was then, this greater pessimism leads contrarians to reach even more bullish conclusions today than in July.

The basis of these conclusions is the average recommended gold-market exposure among a subset of short-term gold-market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI).

This average currently stands at just 13.7%, which means that the average gold-market timer is recommending that his clients allocate almost all of their gold-oriented portfolios to cash.

On the date of my Barrons.com column on gold sentiment in July, in contrast, the HGNSI stood at 20.3%.

In other words, the net effect on sentiment of gold's extraordinary rally to new all-time highs above $1,900, its subsequent fall from grace back to around $1,600, and finally its recent rally back to the mid $1,700s, has been to leave the average gold timer even more skeptical about the yellow metal than he was then.

Since gold likes to climb what contrarians refer to as a wall of worry, this is an encouraging sign for bullion's near-term prospects.

What are the prospects that gold's rally will last further into 2012 than just early January? Contrarian analysis of necessity must be a bit tentative in any answer. …

The bottom line? Gold is likely to be higher than today in one month's time. And it wouldn't surprise contrarians if gold's anticipated rally continued for longer than that.

Market Timers' Bearishness Points to Higher Gold - Barrons.com

I own a lot of gold and silver. But I might change my mind and sell it all tomorrow.

stand fast in the ranks.

 

[Toro]

Bad day in the PM and risk markets today as ECB President Draghi said the bank wouldn't be expanding it's bond purchase program.

I unwound my silver position at a small loss - this year has been a succession of unwindings at small losses for me - because the technical position near term cannot be construed as bullish. The technical position in gold is still positive but precariously so. Thus I have retained my position. Like silver, gold had a bearish outside reversal day and closed on the lows, but it is sitting on support and can still be construed as being in a near term uptrend. However, a break below $1700 and I will liquidate my position.

 

[Toro]

I liquidated all my gold holdings today for a sliver of a profit. I think we are not far from bottoming but I want to see more consolidation first.

Gold has bounced off the 150 day moving average five times since 09. The 150 dma is $1665. Watch that price.

 

[KissMy]

Printing presses are running full time to keep the EU a-float until they get a working united governmental budget structure in place. This will likely take them 2 years. There will be an awful lot of printing going on until then.

 

[Jos]

Gold dropped $50?
Live Gold, Silver, Platinum, Palladium Quote Spot Price Chart - Kitco

 

[Zander]

$1665 last I checked...

 

[KissMy]

$1665 last I checked...

Glad I shorted GLD to cover my physical gold in my safe late on Friday after the failed Euro meeting. The money the worlds central banks printed will not cover the coming economic slow down. Less debt velocity, fewer loans & slowing velocity of money means strong currency. Gold will continue down until countries start stimulating. Oil & Grains will get hit the hardest. After a couple of months they will finally dump enough currency into the banks to cover all the bad debt. Then money velocity will turn & gold will rise again.

 

[Toro]

I shorted silver yesterday after the Fed meeting and covered this morning. Precious metals have been routed, and the technical trend that began in 2009 has been broken. That doesn't mean gold and silver can't continue to rise or that the bull market is over. However, both have some work to do to reestablish the upward trend.

In the meantime, gold bounced off the bottom boundary of a large triangle today and held. If it holds, upside is as high as $1700. I will watch to see if gold holds over the next few days. If it does, I intend to play it as a short-term trade.

 

[Toro]

$1665 last I checked...

Props to Zander for shorting gold near its all-time high.

Well done sir!

 

[KissMy]

'True Revolution' Ahead for US Fiscal Future: Alan Greenspan

The United States faces a "true revolution" in the choices it will have to make to secure its fiscal future now that the welfare state has run up against a "brick wall of economic reality," former Federal Reserve Chairman Alan Greenspan said Wednesday.

January 2010 - Employee Compensation in State and Local Governments

A recent study by Robert Novy-Marx and Joshua Rauh found that governments are “severely underestimating” their pension liabilities by the use of high discount rates.10 Using more realistic assumptions, the authors found that state and local pensions were underfunded by $3.2 trillion, or three times more than the officially reported amount.

Funding gap doubles for US corporate pensions

From a moderate surplus at the end of 2007, pension plan assets at S&P 500 companies now cover only about 74 per cent of estimated liabilities, calculates Credit Suisse, a deficit of roughly $450bn. At the start of the year the S&P 500 pension funding gap was estimated at $250bn, according to Credit Suisse.

I love how the media always hypes that corporations are sitting on piles of cash.

The Fed's $16.6 Trillion Bailouts Under-reported

Actual U.S. Debt Exceeds GDP Of Entire Planet

 

[KissMy]

Zero Hedge: Foreigners Sell Record $85 Billion In Treasurys In 6 Consecutive Weeks - Time To Get Concerned?

...contrary to what one hears in the media, foreigners are offloading US paper hand over first...the traditional diagonal rise in foreign holdings of US paper has not only pleateaued, but it is in fact declining: a first in the history of the post-globalization world." Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasurys in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year. And since the sellers are countries who have traditionally constantly recycled their trade surplus into US paper, this is quite a distrubing development. So while the elephant in the room could have been ignored 4, 3 and 2 weeks ago, it is getting increasingly more difficult to do so at this point, especially with US bond auctions mysteriously pricing at record low yields month after month. But at least the mass dump in Treasurys explains the $100 swing higher in gold in the past month.

 

[Toro]

10 year T bonds hit a low of 1.87% yesterday.

 

[editec]

Speaking as a working class stiff, I find it highly amusing watching the MERELY AFFLUENT trying to protect their nesteggs from the manipulations of their MASTERS.

Buy gold! buy bonds! beat inflation! Keep playing the losing game that we're manipulated such that for people like you there will be no SAFE HAVENS.

MERELY Affluent Americans, many of them at least, are in for a very unpleasant wake up call when the shit once again hits the fan.

No matter how the merely affluent structure their portfolios, when enough of them have put their money in one kind of investment, the MASTERS OF FINANCE will find a way of raping that game.

The can crash the market when that's where the money is, they can crash real estate when that's where it is. They can yank the values of bonds, or commodities at will.

The ONLY protection we really have is an honest goverment.

In orhter words?

We have no protection from the highly skillfully organized criminals that dominate the world of finance.

 

[Trajan]

$1665 last I checked...

Props to Zander for shorting gold near its all-time high.

Well done sir!

time to sniff my jock just cashed a 5 week 25% killing on Adobe.......boooyah baby.

 

[Zander]

$1665 last I checked...

Props to Zander for shorting gold near its all-time high.

Well done sir!

Blind squirrel

Nut ?


:Lol:

 

[Toro]

BTW, ECB LTRO = EuroQE

Good for precious metals.

I'm still waiting though.

 

[FireFly]

Fed says no rate hike until 2014!

Gold is going ballistic!

 

[Toro]

I just shake my head at what a damning indictment this is of the utter failure of the economics profession. Monetary policy has become a complete joke.

Both the Fed and the ECB are engaged in QE, so the capital markets are experiencing a sugar high.

The questions is where does gold peak? $2000? $3000? $4000? I don't know, but I can't imagine that it has peaked, given how the monetary authorities are doing their best to wreck their currencies and punish savers at the expense of reckless debtors.