The Gold and Silver Thread

[Toro]

FTR I believe there is a good chance the precious metals bull market of 1998-2011 is over. It may not be, IDK, but the top in 2011 looked like a classic commodities top, and silver subsequently fell by 60%. Stocks soaring and PMs collapsing makes me think the bull market is done.

 

[AmazonTania]

FTR I believe there is a good chance the precious metals bull market of 1998-2011 is over. It may not be, IDK, but the top in 2011 looked like a classic commodities top, and silver subsequently fell by 60%. Stocks soaring and PMs collapsing makes me think the bull market is done.

I disagree. With Hong Kong and China being net sellers of Treasuries and the Fed with it's taper talks, this is bad for the US Dollar and Strong for gold. Gold has already sold off on the anticipation of a taper that hasn't happened yet. The metal is due for a rally anyway, as the sell-off was extreme and led by speculators. Now that we've cleared off some of the resistance, I think we can easily have a $150 - $200 rally in the price of gold very quickly. It may or may not happen before we have another serious pull back towards the next level.

 

[KissMy]

For decades the Federal Government has been taking from the SS windfall. Now they have to start paying it back. They can't afford to stop printing money. They may have to increase the printing. Gold will not fall if Tapering does not start in September, which it most certainly wont.

 

[Toro]

FTR I believe there is a good chance the precious metals bull market of 1998-2011 is over. It may not be, IDK, but the top in 2011 looked like a classic commodities top, and silver subsequently fell by 60%. Stocks soaring and PMs collapsing makes me think the bull market is done.

I disagree. With Hong Kong and China being net sellers of Treasuries and the Fed with it's taper talks, this is bad for the US Dollar and Strong for gold. Gold has already sold off on the anticipation of a taper that hasn't happened yet. The metal is due for a rally anyway, as the sell-off was extreme and led by speculators. Now that we've cleared off some of the resistance, I think we can easily have a $150 - $200 rally in the price of gold very quickly. It may or may not happen before we have another serious pull back towards the next level.

Gold has been selling off for two years, including into the last round of QE, whereas stocks have been rising. I've always thought of QE as positive for gold and ultimately negative for most other things, except maybe for inflation. Again, IDK the future, but gold falling and stocks rising is telling me that I may be wrong and Bernanke is right.

Most people who are trading gold have never traded a bear market and don't know what one looks like. Most will not recognize a top either. There are too many who view gold as religion or ideology. They are useless. Sites like Zero Hedge cost people money.

If I'm wrong, I will trade gold to the upside. But there is massive technical damage in PMs. And until proven otherwise, rallies are to be shorted.

IMHO.

 

[whitehall]

Silver hovered around $32 per oz for a pretty long time and it dropped like a rock to around $18. Now it languishes at around $23. Gold is too expensive so what's the point.

 

[AmazonTania]

FTR I believe there is a good chance the precious metals bull market of 1998-2011 is over. It may not be, IDK, but the top in 2011 looked like a classic commodities top, and silver subsequently fell by 60%. Stocks soaring and PMs collapsing makes me think the bull market is done.

I disagree. With Hong Kong and China being net sellers of Treasuries and the Fed with it's taper talks, this is bad for the US Dollar and Strong for gold. Gold has already sold off on the anticipation of a taper that hasn't happened yet. The metal is due for a rally anyway, as the sell-off was extreme and led by speculators. Now that we've cleared off some of the resistance, I think we can easily have a $150 - $200 rally in the price of gold very quickly. It may or may not happen before we have another serious pull back towards the next level.

Gold has been selling off for two years, including into the last round of QE, whereas stocks have been rising. I've always thought of QE as positive for gold and ultimately negative for most other things, except maybe for inflation. Again, IDK the future, but gold falling and stocks rising is telling me that I may be wrong and Bernanke is right.

Most people who are trading gold have never traded a bear market and don't know what one looks like. Most will not recognize a top either. There are too many who view gold as religion or ideology. They are useless. Sites like Zero Hedge cost people money.

If I'm wrong, I will trade gold to the upside. But there is massive technical damage in PMs. And until proven otherwise, rallies are to be shorted.

IMHO.

Too many people have strayed away from Gold as there are too many bidders who are considering it in anticipation of a recovering economy. As positive news about the economy appears, Gold sells off more. The expectations of inflation has not really caused a rally, as there is plenty of news out there about inflation being nearly non-existent. The shorts are looking for confirmation of a recovering economy. Gold is going to take off as the market sees QE as indefinite. The gold traders (or at least the Gold Buyers) see through this.

 

[KissMy]

James Bullard, president of the St. Louis Fed, said "It is possible if you pull back too quickly you put more downward pressure on inflation and end up with inflation running below 1 percent. And then I think at that point, deflation possibilities would start to arise.... We're not in that situation right now, but that is one scenario that I would worry about."

"There has not been much indication, so far, that it has been ticking back up toward target... There are a lot of ways this could go. You could do a small amount of tapering versus a larger amount."

"I would be happy to claim that there has been substantial improvement in labor markets. I think the bigger question marks are on growth and on inflation."

The Fed's "committee has set a target. They've set it at 2 percent," Bullard said. "Once you've set it, you had better have some credibility that you are going to hit it."

Bullard, a voting member of the committee this year, dissented at the June meeting, saying that the Fed should have signaled more strongly its willingness to keep its stimulus in place out of concern inflation was not heading higher.

Bullard has been particularly outspoken on the issue, and released an unusually sharp statement to explain his dissent, although he voted with the majority at the July meeting after the inclusion of a low inflation warning in the statement.

 

[JWBooth]

FTR I believe there is a good chance the precious metals bull market of 1998-2011 is over. It may not be, IDK, but the top in 2011 looked like a classic commodities top, and silver subsequently fell by 60%. Stocks soaring and PMs collapsing makes me think the bull market is done.

Fine by me. I hope it tanks. I'll load up.

 

[KissMy]

Rick Santelli started the Tea Party with a rant. Since then he has been going after the Fed.

[youtube]ZEJ4jSXF2d4[/youtube]
[youtube]9jhXMB3bXMk[/youtube]
[youtube]bPCTvXlGE3o[/youtube]

 

[TakeAStepBack]

Gold has been rising since 71 with few lulls. This is one of those lulls and can be explained by easy M2, sell offs of large entities (created the closest thing to a natural correction we get) and a manipulation with ETFs.

It's rising again, and will rise even further when the federal reserve begins to "taper" off of its easing policies (I dont believe they will or can and know it). That is, if they ever actually do it. With the long end of the curve yielding negative, they know what will happen if they do. I think Ben is just waiting to leave before it happens so his "legacy" isn't tainted by those who believe the fed is doing a good job.

Gold fell 70% over 20 years. I'd say that's more than a "lull."

Where do you get that from?

In 1971, gold was $44.60 (FRN rate annual close)
In 1974 it hit $183.77
In 1980, $594.90
In 1990, $386.20 (showing the good standings of the 1980s confidence)
In 2000, $342.75
In 2012, $1,664.00


I bought my first lot in 2001. I've only gained significantly since then.

 

[KissMy]

The Fed will not "Taper" or "Tighten" in any way any time soon.

Bernanke said the 7.6 percent unemployment rate probably "overstates the health of the labor market" and that inflation remains below the Fed's 2 percent target. Moreover, fiscal policy remains "quite restrictive"..."Highly accommodative monetary policy for the foreseeable future is what's needed"

 

[TakeAStepBack]

the longer it continues, the less likely, or even possible it will be to tighten it back up. Goldman-Sachs paper about the long end of the yield curve turning negative already should be an indicator. The Fed will have to pull out some serious magic regarding its balance sheets in order to stem what would be essentially cardiac arrest from a raise in interest rates.

 

[Toro]

Gold has been rising since 71 with few lulls. This is one of those lulls and can be explained by easy M2, sell offs of large entities (created the closest thing to a natural correction we get) and a manipulation with ETFs.

It's rising again, and will rise even further when the federal reserve begins to "taper" off of its easing policies (I dont believe they will or can and know it). That is, if they ever actually do it. With the long end of the curve yielding negative, they know what will happen if they do. I think Ben is just waiting to leave before it happens so his "legacy" isn't tainted by those who believe the fed is doing a good job.

Gold fell 70% over 20 years. I'd say that's more than a "lull."

Where do you get that from?

In 1971, gold was $44.60 (FRN rate annual close)
In 1974 it hit $183.77
In 1980, $594.90
In 1990, $386.20 (showing the good standings of the 1980s confidence)
In 2000, $342.75
In 2012, $1,664.00


I bought my first lot in 2001. I've only gained significantly since then.

Gold peaked at $850 on January 21 1980. It bottomed at $252 on August 26 1999. That's a decline of 70%. That's a bear market.

Silver peaked at $49.79 on April 25, 2010. It hit a subsequent low of $18.23 on June 28, 2013. That's a decline of 63%. That's not a correction. That's a brutal bear market.

I think it's a good idea to have a bit of gold and silver in a well diversified portfolio. But right now, there is no reason IMO to load the boat on either.

 

[TakeAStepBack]

You're looking at peak, not annual close out. That's the difference. There are wild fluxuations in markets, as Im sure you are aware. But choosing the peak/bottoms over a ten year spread doesn't really tell us anything. Last/current year alone, looking at those indicators would say that gold is absolutely a "hands off" commodity. yet, it's not really giving the full story.

 

[Toro]

The Fed will not "Taper" or "Tighten" in any way any time soon.

Bernanke said the 7.6 percent unemployment rate probably "overstates the health of the labor market" and that inflation remains below the Fed's 2 percent target. Moreover, fiscal policy remains "quite restrictive"..."Highly accommodative monetary policy for the foreseeable future is what's needed"

The Fed has bought a trillion dollars in bonds, yet gold has gone down. When anything goes down hard on fundamentally bullish news, that's usually the market telling you that it's over, at least in the near term. When the market talks, it pays to listen.

I think every single commodity is trading well below its peak. Many have been cut in half or more. There is plenty of reason to believe that the bull market in commodities that started in the 90s is now over, and that includes gold and silver.

BTW, in 401k accounts, Apple was the largest holding, the GLD was second.

 

[Toro]

You're looking at peak, not annual close out. That's the difference. There are wild fluxuations in markets, as Im sure you are aware. But choosing the peak/bottoms over a ten year spread doesn't really tell us anything. Last/current year alone, looking at those indicators would say that gold is absolutely a "hands off" commodity. yet, it's not really giving the full story.

Bull and bear markets are annotated by price, not time. Time is end point sensitive, price is not.

 

[Toro]

BTW, QE may not be ending next month, but the market is sniffing it out. QE began in 2008. It is now 2013. QE will most likely begin to be unwound next year or 2015, probably the latter. If it is 2015, then we are in year 5 of a 7 year operation. Gold rose by 660% from the bottom to the $1921 top in 2011, which is a massive return.

The run is probably done.

 

[FireFly]

BTW, in 401k accounts, Apple was the largest holding, the GLD was second.

It is hard to believe the GLD is that widely held. Where did you get that info?

GLD holders must be getting scared of paper because I have been hearing physical demand is through the roof.

 

[TakeAStepBack]

You're looking at peak, not annual close out. That's the difference. There are wild fluxuations in markets, as Im sure you are aware. But choosing the peak/bottoms over a ten year spread doesn't really tell us anything. Last/current year alone, looking at those indicators would say that gold is absolutely a "hands off" commodity. yet, it's not really giving the full story.

Bull and bear markets are annotated by price, not time. Time is end point sensitive, price is not.

Right. so going by that logic, there was also a ~500% increase over 20 years except in a selective price interpretation. From June. 1 1992 to June 1 2012.

 

[TakeAStepBack]

BTW, in 401k accounts, Apple was the largest holding, the GLD was second.

It is hard to believe the GLD is that widely held. Where did you get that info?

GLD holders must be getting scared of paper because I have been hearing physical demand is through the roof.

As they should be. ETFs are absolutely manipulated.