roundcorners - 11 November 2009 10:13 PM

Panda.. finally dumped half of my US equities holdings, today… this is one day where everything was up, Gold, Dollar, Oil, Dow.. very strange… Geithner had to really pump the dollar up a little for the Japanese today…

It is time for Geithner to jaw bone the falling dollar.

awgee - 12 November 2009 03:42 AM

green_cactus - 12 November 2009 02:13 AM

Gold has a tremendous industrial use; especially when it comes to electronics. I don’t quite buy the industrial demand as a major difference with platinum (and noble metals in general). I just can’t look at the gold chart without thinking “speculation”.

Okay, since you seem to know that gold has a tremendous industrial use; especially when it come to electronics,
how much gold as a percentage of either above ground gold in existence or yearly mined gold or any other way you care to consider is used for electronics and all industrial uses combined?

There was a flow chart of some sort that tells you how the gold was used, and vast majority of it are in non-industrial usage, such as coin/bar/jewelery.  Very small portion are used in electronic, etc..

Astute Observer - 12 November 2009 08:34 PM

awgee - 12 November 2009 03:42 AM

green_cactus - 12 November 2009 02:13 AM

Gold has a tremendous industrial use; especially when it comes to electronics. I don’t quite buy the industrial demand as a major difference with platinum (and noble metals in general). I just can’t look at the gold chart without thinking “speculation”.

Okay, since you seem to know that gold has a tremendous industrial use; especially when it come to electronics,
how much gold as a percentage of either above ground gold in existence or yearly mined gold or any other way you care to consider is used for electronics and all industrial uses combined?

There was a flow chart of some sort that tells you how the gold was used, and vast majority of it are in non-industrial usage, such as coin/bar/jewelery.  Very small portion are used in electronic, etc..

In terms of basic material for industrial production, sliver and copper has a much wider application than Gold. And yes, the gold commodities market is rigged just like oil and everything else.

WELCOME TO PANDA’S HOUSE!

PANDA - 11 November 2009 06:02 PM

I don’t know Bondtrader….  I would like to see Gold back down to 920 - 960 one last time so i can buy more, but it appears that Gold is headed to $1200 and Silver $25 by year end.

For those of us who are not watching the daily pricing, can you let us know when this happens, if ever?

Thanks for your time and patience in replying to my dumb questions!

I don’t understand the significance, can you educate me?

Just a couple quick thought on gold,

1. Gold market is as manipulated as the stock market at the current stage. Keep remind yourself these two magic words “Carry Trade”. Gold price went up simply because dollar was trashed by the Fed, stop talking about stuff like higher consumer demand for gold, when oil hit $147 in 2008 in the middle of a deep recession , is there really that much demand for oil in the world?

2. Fed hates gold above $1000, because higher gold, higher inflation pressure, then more pressure for the Fed to raise rates, which we all know they can not do, they will run gold price back down below $1000 sooner or later

3. Last time I check, we still have deflation and as long as the banks are not lending and the velocity of money doesn’t recover, meaning if money is not flowing, we will not have inflation. With that said, yes, we are having commodity inflation but deflation everywhere else for the moment.

FYI, an interesting article about gold as a fiat commodity that was linked on The Big Picture.

Is Gold up for a short term correction any time soon? I mean nothing can go straight up forever. MoreKaos, are you still continuing to short at these levels? Though I don’t think this is the ulimate top for Gold…. I am waiting for a correction here.

Yup

morekaos - 18 November 2009 08:48 PM

Yup

For someone who owns a yatch on Long Beach… I don’t doubt your timing on your shorts

I just placed a big bet in the Panda challenge that GLD will be down before Dec. 19th. We will see how that pays off.

A Déjà Vu Moment in Gold?

Those who believe the rally in gold is sending the wrong message on inflation might take comfort from the fact that the price of the yellow metal relative to that of the 30-year Treasury bond is approaching a 30-year high.

Perhaps not coincidentally, the earlier run-up marked the peak of hysteria about inflation — and a multi-decade top in gold.

Of course, there may be other reasons why precious metals (and other commodities, for that matter) are rallying, including safe haven buying and the torrent of cheap money flowing into a wide range of speculative asset classes.

Still, it seems like the gold bulls may be getting a bit ahead of themselves.

graphrix - 18 November 2009 09:35 PM

I just placed a big bet in the Panda challenge that GLD will be down before Dec. 19th. We will see how that pays off.

Count me in, Dec GLD 105 put and UUP for a TRADE.

Oil took about 8 yrs to finally reach a peak. It’s roughly the same for Gold ($255 around beginning of 2001). We remember all too well how oil had its runup before it crushes, not to mention the angle of ascent for oil is a lot steeper. With that said, I don’t expect a 20-30% correction on Gold in the near term, a pull back of 5-10% is very likely, then it certainly can edge higher. The inverse head and shoulder pattern formed since the beginning of 08 (broken out to the upside recently) suggested a potential top arond $1250.

I’m not changing my long term bullish view on gold until it become part of everyday American conversation, until Panda is telling me to dump my long term holding of gold. The precondition for gold to have its finally leg of melt up was that no one believe it could including the hardcore gold bugs (Panda) and the precondition required for gold to go back under $500 is that no one in their right mind would believe its possible. 

But of course it is. A trade is a trade.

BondTrader - 13 November 2009 09:40 PM

Just a couple quick thought on gold,

1. Gold market is as manipulated as the stock market at the current stage. Keep remind yourself these two magic words “Carry Trade”. Gold price went up simply because dollar was trashed by the Fed, stop talking about stuff like higher consumer demand for gold, when oil hit $147 in 2008 in the middle of a deep recession , is there really that much demand for oil in the world?

2. Fed hates gold above $1000, because higher gold, higher inflation pressure, then more pressure for the Fed to raise rates, which we all know they can not do, they will run gold price back down below $1000 sooner or later

3. Last time I check, we still have deflation and as long as the banks are not lending and the velocity of money doesn’t recover, meaning if money is not flowing, we will not have inflation. With that said, yes, we are having commodity inflation but deflation everywhere else for the moment.

Paul Kasriel on the carry trade -

U.S. Dollar Carry Trade?

Although total bank credit is contracting, one element of it - Treasury and Agency securities - is growing at an annual rate of 19% (see Chart 2). Banks’ marginal cost of funds, the effective federal funds rate, is about 1/8%. Banks can purchase 2-year maturity Treasury securities yielding about 0.8% or bit a better (see Chart 3). Although this is not a huge positive differential, this yield-curve trade does not incur any charges against risk-based capital for banks. So, although per 100 thousand dollars, this trade does not earn much, because it incurs no risk-based capital charges, banks can engage in many hundred of thousands of dollars of the trade. This trade played a big role in recapitalizing U.S. banks in the early 1990s and it is playing the same role today.

Just read that trader sentiment on gold is 97% bullish.  Ya think those last 3% may go long?  Yeah, I didn’t think so.

Panda’s latest business…

PANDA - 20 November 2009 07:32 PM

BondTrader - 18 November 2009 09:51 PM

graphrix - 18 November 2009 09:35 PM

I just placed a big bet in the Panda challenge that GLD will be down before Dec. 19th. We will see how that pays off.

Count me in, Dec GLD 105 put and UUP for a TRADE.

Oil took about 8 yrs to finally reach a peak. It’s roughly the same for Gold ($255 around beginning of 2001). We remember all too well how oil had its runup before it crushes, not to mention the angle of ascent for oil is a lot steeper. With that said, I don’t expect a 20-30% correction on Gold in the near term, a pull back of 5-10% is very likely, then it certainly can edge higher. The inverse head and shoulder pattern formed since the beginning of 08 (broken out to the upside recently) suggested a potential top arond $1250.

Awgee, you are talking about very near term for minor support and floor right? because i see a 20% correction happening on gold prices.

Seriously? You honestly think the dollar is never going to recover?

Nude - 20 November 2009 10:16 PM

PANDA - 20 November 2009 07:32 PM

BondTrader - 18 November 2009 09:51 PM

graphrix - 18 November 2009 09:35 PM

I just placed a big bet in the Panda challenge that GLD will be down before Dec. 19th. We will see how that pays off.

Count me in, Dec GLD 105 put and UUP for a TRADE.

Oil took about 8 yrs to finally reach a peak. It’s roughly the same for Gold ($255 around beginning of 2001). We remember all too well how oil had its runup before it crushes, not to mention the angle of ascent for oil is a lot steeper. With that said, I don’t expect a 20-30% correction on Gold in the near term, a pull back of 5-10% is very likely, then it certainly can edge higher. The inverse head and shoulder pattern formed since the beginning of 08 (broken out to the upside recently) suggested a potential top arond $1250.

Awgee, you are talking about very near term for minor support and floor right? because i see a 20% correction happening on gold prices.

Seriously? You honestly think the dollar is never going to recover?

Awgee, what happens when the dollar does a full reversal up to 85 from 75? I agree with you on the floor of $1000, but it go can lower, but not much lower. Marc Faber is in agreement with you that Gold will never breach under $1000 again, but I’ve also seen him wrong on some of his calls. Personally, I see a major correction coming (somewhere between 19 - 25%.) When there is too much publicity on Gold (when you start seeing GLD guys on CNBC) and when everyone starts hating the dollar is when i get cautious. Both Marc Faber and Peter Schiff are tainted in my eyes. The Gold trade is too crowded right now.

PANDA - 20 November 2009 10:22 PM

Awgee, what happens when the dollar does a full reversal up to 85 from 75? I agree with you on the floor of $1000, but it go can lower, but not much lower. Marc Faber is in agreement with you that Gold will never breach under $1000 again, but I’ve also seen him wrong on some of his calls. Personally, I see a major correction coming (somewhere between 19 - 25%.) When there is too much publicity on Gold (when you start seeing GLD guys on CNBC) and when everyone starts hating the dollar is when i get cautious. Both Marc Faber and Peter Schiff are tainted in my eyes. The Gold trade is too crowded right now.

Panda, I PM’ed this to you back in August

Panda - 0

Ukyo,

It appears that inflation is starting to kick in this year. The dollar has weakened and foreign currencies have strengthen. Do you think the Gold will test $880 - $900 again before hitting $1000 and above?

ukyo116 - 0

It could, and if it does, I think you have only a few hours to catch that bottom because I know a lot of people will be buying if it ever touches that point.

I do think the chances are very low however.  All these comments from PIMCO and buffett are probably shifting perceptions on the dollar and gold. I also know the russians have been buying, and now the chinese are starting public campaigns to purchase silver.

...

If it hits $900, I will buy more because the price should already be past $1000 given all these bank failures, budget shortfalls, China, calls for end to the dollar, etc, etc etc.  I watch the $GOLD chart almost everyday and it is absolutely unreliable. I think ebay presents a better picture of the price of gold. So, I am trying to find a better gauge of the real gold price, because its obviously not the comex price.

I would have to respectfully disagree about the gold trade being crowded.  I think the overall community was more bullish at $700-$800 than at present levels.  It’s still relatively pessimistic for Gold.

Crowded for the traders.  Interestingly, I watched a documentary that did a short segment on the gold pit. And one of the traders was saying “Gold is the canary in the coal mine on the mismangement of the US dollar”. And this was 2007,2008? I will have to check.

Not crowded at all in terms of general public. I should have been more specific. Apologies.

I wonder if that whole Swiss stair thing is true. I guess we will find out.

Awgee and Ukyo116,

Both of you guys don’t see any chance of a very near term dollar rally?

Months from now, when the price is $150-$200 higher, these comments will seem just as silly as the “OMG what do you think will happen if the price goes from $800 to $850?  The gold bubble will surely burst at 900.”  The back and forth is futile.  In 2004, cries of real estate fundamentals fell on deaf ears.  the fundamentals don’t mean shit when anybody can get a loan.  Understand it and profit from it.  The gold situation is somewhat similar.  cry about the fundamentals all you want, but gold is going up because money is being debased like loans were being handed out in ‘04.  It will leave the numbers guys walking in circles sputtering to themselves in disbelief.