Finally time to exit gold

[new_trader]

Tongue in cheek ref. to the 'end of days' gold horders that exist on the web...Gold for me was a hedge, a physical one + it was an interesting hobby of sorts. I got turned onto gold by a friend in 2005-6, his compelling argument encouraged me to buy. However, there came a tipping point of value where I didn't see the sense in acquiring anymore. If/when it collapses back to sub $800 per oz I may go back in and acquire what I need, but I'm not interested in bars, only coins. Maples next..but I can wait...no rush...a couple of coins a month would be nice.

I think gold is a hedge for most people, a way of preserving purchasing power/wealth. Here's a tip, buy UK coins which are legal tender, like Britannia's or Sovereigns because they are free from Capital Gains Tax. I only buy Bullion Britannia's.

 

[Atilla]

Atilla



The original bailout money is sitting on the Federal Reserve Balance Sheet as assets purchased from the banks in the form of MBS etc.

The banks, hold the cash as reserves and excess reserves.

The point I am making is this: the money creation since, far exceeds the original bailout money, and is growing constantly, everyday. To focus on the bailout money is to focus on the tree while ignoring the forest.

jog on
duc

Yes true - but why all the fuss now?

The straw that broke the camels back comes to mind.

Moreover, problem seems to have leapt from US to Greece / Portugal and perhaps now Japan too...

I'm not sure about the respite for the Euro with some concerted Chinese / Japanese and Russian support assisting the bailout. Situ is far from over imo. Fancy Japan (a bankrupt nation facing the precipice bailing out the Euro another currency on the brink). It's like two sky divers trying to push each other up whilst in free fall... :whistling

Revolutions in some countries quite likely in the advanced economies too. Not sure what form it will take but few years back people were laughing at the USD losing its international standard currency status. Not so funny now. Moody's reflecting hard on downgrading US debt. I can see wars between countries too as some default on their debt.

Cusp of a new era... indeed. Uncertainty is key word. Countries and empires are not industructable... I'm not convinced gold run is over. Maybe - but too many global issues for now...

 

[new_trader]

Yes true - but why all the fuss now?

The straw that broke the camels back comes to mind.

Moreover, problem seems to have leapt from US to Greece / Portugal and perhaps now Japan too...

I'm not sure about the respite for the Euro with some concerted Chinese / Japanese and Russian support assisting the bailout. Situ is far from over imo. Fancy Japan (a bankrupt nation facing the precipice bailing out the Euro another currency on the brink). It's like two sky divers trying to push each other up whilst in free fall... :whistling

Revolutions in some countries quite likely in the advanced economies too. Not sure what form it will take but few years back people were laughing at the USD losing its international standard currency status. Not so funny now. Moody's reflecting hard on downgrading US debt. I can see wars between countries too as some default on their debt.

Cusp of a new era... indeed. Uncertainty is key word. Countries and empires are not industructable... I'm not convinced gold run is over. Maybe - but too many global issues for now...

People were saying the gold run was over at $800oz...$900oz...$1100oz...Gold may go lower this year but it still hasn't broken its inflation adjusted high set around 1980. It went through a 20 year bear market since then and I expect it to go through at least a 20 year bull market, we are only about half way. Most people still don't own gold in any meaningful quantity. My long term view is that the current retrace will be the "bear trap" you see on the standard life cycle of a bubble graph. I don't think we have come anywhere near the public greed/delusional phase yet. The public are still clueless about gold, the few people I know who have talked about it were selling it to gold merchants.

 

[Atilla]

People were saying the gold run was over at $800oz...$900oz...$1100oz...Gold may go lower this year but it still hasn't broken its inflation adjusted high set around 1980. It went through a 20 year bear market since then and I expect it to go through at least a 20 year bull market, we are only about half way. Most people still don't own gold in any meaningful quantity. My long term view is that the current retrace will be the "bear trap" you see on the standard life cycle of a bubble graph. I don't think we have come anywhere near the public greed/delusional phase yet. The public are still clueless about gold, the few people I know who have talked about it were selling it to gold merchants.

Yes, I recall there was a psychological barrier to breach and quite some discussion back then. I see 1450 as the next barrier to breach and then ascent to 1600 should be taken rapidly.

There are costs to holding gold but as you say and in particular in the mind set of Indian and Chinese markets - demand for gold can also take on a new phase. Public demand for gold accounts for a very small % but this could always rise as people ponder how to reserve their assets in an inflation infested global market place where fiat money currencies lose their credibility.

 

[ducati998]

Atilla

I agree, it is unlikely that the gold run is over yet:

Key demand statistics

* Total gold demand was 922 tonnes, an increase of 12% from Q3 2009. In US$ value terms, demand grew 43% to US$36.4 billion over the same period. Demand for gold jewellery increased by 8% from Q3 2009, with four of the best performing markets - India, China, Russia and Turkey - accounting for 63% of global demand. In value terms, global demand for the 12 month period ending September 2010 hit a record US$137.5 billion.

* Retail investment rose 25% from Q3 2009 to 243 tonnes. The largest contribution to total demand growth came from bar hoarding, which increased 44% from the previous year. The total value of net retail investments during the quarter was a record $9.6 billion, representing a 60% increase from Q3 2009.

* Total gold ETF demand fell by 7% from Q3 2009 to 39 tonnes. Following a remarkable surge in the previous quarter, which was supported by heightened sovereign risk and currency worries, this quieter period for ETFs reflects consolidation in the market, as it contemplated the prospect of QE2.

* Industrial demand has recovered back to pre-crisis levels of 110 tonnes, reflecting an increase of 13% from Q3 2009. This recovery was driven by improving demand for consumer electronics goods globally, in particular from emerging markets such as China and India, as well as an increased range of new technology products with gold components.

jog on
duc

 

[eminiglobex]

I don't think we have come anywhere near the public greed/delusional phase yet. The public are still clueless about gold, the few people I know who have talked about it were selling it to gold merchants.

Agree with this. When joe public has a significant amount of their investment and pension portfolio's in gold it will be time to get out. No where near this at the moment.

 

[Atilla]

Atilla

I agree, it is unlikely that the gold run is over yet:



jog on
duc

Interesting charts Duc, have been looking at them but finding it difficult to read the data. Not sure I understand or understood the data well enough to be honest.

However the line chart is clear enough.

I'm wondering what could possibly make it revert to its long term mean trend? Mass floods or shocking discovery in the north pole once the ice caps have melted...