Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...
The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.
ARCHIVED DISCUSSION FROM 1/12/2006 All times are U.S. Mountain Time (Yesterday's Discussion.) Belgian (1/12/06; 23:50:25MT - usagold.com msg#: 140409) @David Blunt answer : To hell with all gambling positions on the goldprice ! Shrimps (us) can never win (net-net) against the goldprice derivative bookmakers.After having speculated full 25 years on goldmines, I "had" to conclude that gold IS in the process of changing and that all further goldprice speculation/gambling will end badly ...with great loses...opportunity losses, for the most succesful amongst us, who would succeed in break even.David, I even don't look at any position anymore. I want the chocolat, the tomatoes, and the BULLION in my hand...NOW ! No stocks, no bonds, no derivatives ! I don't even bother to short all this stuff. Am definitely "out" of the arena and don't even watch the games anymore. Goldilox (1/12/06; 22:19:02MT - usagold.com msg#: 140408) Gold Leads Stocks in a Bullish Technical Pattern http://www.financialsense.com/Market/wrapup.htm snip:A long-term chart ratio suggests that gold will outperform stocks in the next few years. Based on technical analysis, the odds favor stocks dropping with gold stable, gold rising with stocks stable, or gold rising with stocks falling. Since the beginning of the gold bull market, analysts have been pointing to the out-of-whack low gold to Dow ratio as a reason why gold should outperform stocks in the years ahead. This is fundamentally correct, and now it appears that there is a technical signal that suggests that the gold to Dow ratio should get back "in whack" sooner rather than later. "Sooner" means in the next 3 years or so.The long-term monthly chart below depicts the Gold to Dow Jones Industrial Average (DJIA) ratio from 1990 to the present. After making a bottom in 1999, the ratio had a successful retest of the 1999 low in early 2001, before forging ahead until early 2003. If you had bought gold at the second bottom and shorted the Dow in early 2001, you would have made 100% on your money by early 2003. The ratio then formed a basing pattern until the end of 2005, and now appears to be breaking out to new multi-year highs. The two moving averages displayed on the chart (10 and 30 month) seem to suggest a bullish long-term pattern. The out-performance of gold compared to the Dow puts all the media excitement about Dow 11,000 in perspective. In terms of real money, the Dow has done nothing in recent years.-GoldiloxI would add, the DOW has not only done nothing, in gold terms it has dropped 55% in five years.DOW2000 (11k) = 45 0z goldDOW2006 (11k) = 20 0z goldWhich one guards your future financial security? OvS (1/12/06; 21:08:23MT - usagold.com msg#: 140407) Belgian. I read every word of yoursabout gold and try to absorb your very deep andprofound knowledge aboutthe metal and all thosepolitical connections.But you do not understandsilver. As far as I am con-cerned it is not a monetarymetal; there is not enougharound and it is constantlyused-up...So how in the worldcould it be a monetary metaldown the road? It's more inthe nature of palladium, orplatinum, or rhodium (whichtraded for $5,200 dollars forone ounze not so long ago, and now is meandering around$3,000). Enough of that.If East European gangs don'trob or steal silver and orother old coins...well, theyjust aren't so smart then.The silver petition crown coinof 1663 sold in 2003 for138,000 pounds.The 1796 no pole half centcopper coin sold for $506,000.A Thomas Jefferson Indian pence'medal' went for $115,000 andan 1804 Silver Dollar from theWalter H.Childs collection for$4,140,000. Yes, that's millions.Back to gold and all those impli-cations; it's immensely inter-esting and like an internationalthriller book a la Le Care.Respectfully yours, OvS David Linkley (1/12/06; 19:08:06MT - usagold.com msg#: 140406) @humanity & psychology A friend of mine remarked back in 2002 that Americans will dislike gold at $300 - $400 but will love it at $600 -$700 and higher. Many of my clients who thought I was nuts back then are beginning to ask questions now. Clink! (1/12/06; 18:46:11MT - usagold.com msg#: 140405) vanity, nothing but vanity "Vanity - my favorite sin !"Al Pacino as John Milton aka The Devil in The Devil's Advocate TownCrier (1/12/06; 18:13:37MT - usagold.com msg#: 140404) Sundeck, I love tomatoes, but... "The same trick doesn't work with products that aren't percepted as having 'value'."As superficial as it may be, it nonetheless bears upon the case that no-one would think to impress anyone with a crate of tomatoes rotting a week hence, regardless of price paid.R. TownCrier (1/12/06; 18:02:57MT - usagold.com msg#: 140403) Belgian msg#: 140396, humanity and psychology Fortunately, every single one of the many USAGOLD-Centennial Precious Metals clientele are blessed with superhuman attributes of being both wise enough and prosperous enough to load up their personal vaults and safes with gold coins and bullion. They know, almost as second nature, that "low value" can be held in paper form as reasonably as in any other (simply because there is little risk in having not much to lose), whereas "high value" (high net worth) demands the accumulation of gold metal because a paper representation of one's wealth is simply not good/reliable enough.However, while this happy situation is certainly true of Centennial's clientele, unfortunately, it's sad to say, NOBODY ELSE can afford to have, and take action on, that same degree of wisdom/instinct.R. David Linkley (1/12/06; 17:36:07MT - usagold.com msg#: 140402) @Belgian Hi Belgian,I just wanted your thoughts about why is the COT so heavily short gold. If gold is going up and countries are MTM their currencies to gold then why stand in front of a speeding train? On one hand you and TownCrier maintain that gold sales help raise the price but on the other hand you mention the need for an orderly rise. Is the COT gang shorting at the behest of the central banks or are they on their own? I ask because $550 is being defended aggressively and I know several hundred thousand gold calls are in the money now not including calls on the gold stocks. Goldman Sachs is covering on COMEX but shorting aggressively on TOCOM.What gives, any thoughts? Sundeck (1/12/06; 17:21:22MT - usagold.com msg#: 140401) Of gold, chocolate and tomatoes... TC, Belgian et al.,Mmmm....careful...That is an old grocers' trick as well...a wholesale consignment of tomatoes (say) is divided into two parcels and placed upon the shelves with different price-tags...$3 per kg and $4.50 per kg, say. The grocer finds that sales of the more expensive lot are comparable with (or may exceed) the less expensive lot.This jiggery-pokery is not so simple though. There are limits to every trait that "the market" exhibits...gullibility being one such trait. Had the grocer placed the more expensive lot on sale for $25 per kg it is unlikely that he/she would have made any sales from that lot. In fact, the whole think may have backfired when customers see through the attempt to swindle them and leave the store en masse...On the other hand, if some prominent person (say) is seen to be "conspicuously" buying the $25 tomatoes, a rush may ensue...cleaning out the store of every tomato in sight...even the squashed ones on the floor!..."la nature humaine" indeed, Sir Belgian.Lesson: Retail marketing of gold, like tomatoes, must be handled deftly...:-) Smeagol (1/12/06; 17:19:28MT - usagold.com msg#: 140400) Wizard's poser "The Question is: WHEN AND WHY, do you sell your one ounce of Gold ?" - Gandalf the WhiteWHEN? When sselling It is the only option left.WHY? To get more options.S. Flatliner (1/12/06; 17:12:53MT - usagold.com msg#: 140399) @Belgian Then a Zimbabweian would have not bought gold in the first place? ??? Knowing all along that "burglers from the East-block come down" to take everything but silver? I wonder if TC's chocolates are wrapped in something that will have value after they are consumed. Beer bottles just don't cut it. :( Hopefully, the demise of the dollar will be slow and painless. Belgian (1/12/06; 16:57:28MT - usagold.com msg#: 140398) @Flatliner Let me tell you some simple present fact : Many organised burglers from the East-block come down to central Euroland and do steal systematically almost...ALMOST...everything...except "silver" (included old coins) !!! Sorry, mate. Sundeck (1/12/06; 16:56:22MT - usagold.com msg#: 140397) ...and Hallelujah! "Narrowing" trade deficit saves The Dollar.. ...from #140390..."...the country's trade deficit narrowed 5.8% to $64.21 billion in November..."Man-o-man, now that's truly impressive...it "appears" we are not overspending quite as fast as we were in October! Definitely worth a dollar-kneejerk... Notice gold's blink was followed by a continuation of its concerted stare...More a "wink" than a "blink"...;-) Belgian (1/12/06; 16:52:45MT - usagold.com msg#: 140396) @Towncrier I saw the experiment some weeks ago. The same trick doesn't work with products that aren't percepted as having "value". But the Belgian pralines are valued. We even have chocolat with finegold leaves on it.I could have doubled the sales of the expensively priced boxes, simply by suggesting delicately that the interested person cannot afford these valuable delicacies.The same, but opposite, psychology was used by the goldmanagers during the old old regime. But one day gold-observers are going to have tell the general public that gold-wealth is not affordable anymore for modest folks. Oooooh, la nature humaine...vanity, nothing but vanity. Flatliner (1/12/06; 16:50:29MT - usagold.com msg#: 140395) @Question http://www.infomine.com/investment/metalschart.asp?c=silver&u=oz&x=zwd&r=1y&submit1.x=25&submit1.y=8 "IF you were a Zimbabweian and had one ounce of Gold" you would have also bought a hand full of ounces of silver. Every once in a while, you sell an ounce of silver to live. Then, you remain a Zimbabweian MILLIONAIRE !!!! Gandalf the White (1/12/06; 16:35:55MT - usagold.com msg#: 140394) PS: <;-) That QUESTION is a -- "NO PRIZE" -- Question !(For educational purposes only !)Sorry<;-( TownCrier (1/12/06; 16:34:53MT - usagold.com msg#: 140393) The Belgian chocolate theory of the dollar http://news.ft.com/cms/s/165f8838-839c-11da-9017-0000779e2340,_i_rssPage=af37e996-cbfd-11d7-81c6-0820abe49a01.html (FT) January 12 2006 -- A few weeks ago an interesting experiment was undertaken at the Brussels food fair, a yearly affair where food lovers wander around among the many stalls stuffed with all imaginable delicacies.A shop was put up selling boxes of Belgian chocolates. The first day the price was set at €9 for each box. Sales went well.The next day the price was raised to €15 per box. Steeped in economic theory, you might think that demand now declined. Wrong. Demand doubled.On the third day the price was lowered to €2 for each box. Demand for chocolates collapsed. What went wrong with the law of demand?^---(from url)---^If you can get your mind (and your mouth(?)) around Belgian chocolate, you will have a useful insight into the price-wranglings of the gold market. To wit, you will understand the utility of a 20-year gold-price decline (1980-1999) during the long deliberate build-up to euro launch, followed by a sudden turnaround that has the "Belgian chocolate phenomenon" among the assurances that even as the price goes higher, the market will gain fundamental support through a greater depth of participation.In other, simpler, words... when it comes to gold in particular, there is no such thing as a price that is "too high". (That is, especially when viewed in isolation. Only when cross-currency prices are compared does a rational basis for RELATIVE price levels come into play. But even then, when viewed globally as a general price level in all currencies, we can still gain insight from the above-referenced €15 versus €2 price per box phenomenon.R. Gandalf the White (1/12/06; 16:32:40MT - usagold.com msg#: 140392) Question --- http://www.infomine.com/investment/metalschart.asp?c=gold&u=oz&x=zwd&r=1y&submit1.x=54&submit1.y=8 Late last May, IF you were a Zimbabweian and had one ounce of Gold, YOU were a Zimbabweian MILLIONAIRE !TODAY, IF you still have your one ounce of Gold, you are a forty-eight times over --- Zimbabweian MILLIONAIRE !!!!The Question is: WHEN AND WHY, do you sell your one ounce of Gold ?<;-) Sundeck (1/12/06; 16:30:07MT - usagold.com msg#: 140391) Russian CB gold MTM...New Year resolutions...New World (financial) Order?? http://en.rian.ru/russia/20060112/42975245.html Ref Rimh #140388I just love that "official" wording:' The CBR said the change in its calculation method was due to "the need to bring published data in line with current market realities." 'As if some junior official in the CBR went to work one morning thinking: "I really must fix up that little, nagging oversight that has been around soooo long. I'll do it as part of my New Year's Resolutions!"Perhaps (in regard to the suspension of M3 publication in March) the FED might have said something similar, like:' The FED said the suspension of M3 publication was due to "the need to bring published data in line with current market realities." '....cruel financial satire from the FED...;-) USAGOLD Daily Market Report (1/12/06; 15:54:53MT - usagold.com msg#: 140390) Page Update! http://www.usagold.com/DailyQuotes.htmlThe Daily Gold Market Report has been updated.If you are considering investments in gold we invite you to request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.THURSDAY Market ExcerptsJanuary 12 (from DowJones) -- Gold futures recovered from early weakness to finish with only tiny losses in New York Thursday. Speculative buying returned after an early profit-taking pullback that was blamed largely on a stronger U.S. dollar.February gold settled down 80 cents to $549.30 but well up from a low of $543.20."The original fall was in response to the trade numbers and the strong U.S. dollar," said Bernard Hunter, director of precious metals at Scotia Mocatta.The U.S. currency was boosted by news that the country's trade deficit narrowed 5.8% to $64.21 billion in November, compared to a consensus forecast of $66.5 billion and a revised $68.13 billion in October.Forex analysts said the dollar also got some help when the European Central Bank left interest rates unchanged."Underlying the market is still very, very good investment demand," said Hunter. "The overriding trend of the market remains positive."A trader commented that a pattern seems to have developed in gold over the last week in which profit-taking pullbacks are met by renewed speculative buying. "There has been a lot of speculation going back and forth," he said."Somebody will be taking profits while somebody else gets in. Net, it really hasn't moved that much over the last week, although you've had some pretty big ranges each day."---(see url for full news, 24-hr newswire, market quotes)--- TownCrier (1/12/06; 15:51:27MT - usagold.com msg#: 140389) Fed buying bills, adding permanent reserves http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh22487_2006-01-12_15-40-05_n12258235_newsml NEW YORK, Jan 12 (Reuters) - The Federal Reserve said on Thursday that it was buying bills in the open market, adding permanent reserves to the banking system.The Fed said it was buying bills with maturities ranging from February 23, 2006 to May 4, 2006.The benchmark fed funds rate last traded at 4.25 percent, the Fed's current target for the overnight lending rate.^---(from url)---^The size of the operation was $1.249 billion. Given the targeted maturities, the 'permanence' of this reserve injection is mostly jargonistic; with respect to money supply this effectively translates into something more akin to a 1.5 - 4 month repo operation.Speaking of which, the Fed today conducted two. Seven billion dollars was temporarily injected via overnight repos, and ten billion dollars was added through 14-day repurchase agreements.R. Rimh (1/12/06; 11:33:00MT - usagold.com msg#: 140388) Russians revalue to market price http://en.rian.ru/russia/20060112/42975245.html Following the ECB's lead, Russia shows how much stronger the balance sheet looks with appropriately priced gold reserves. Hark, is that a trend I see developing.....? Flatliner (1/12/06; 10:33:05MT - usagold.com msg#: 140387) @miner49er – just a snip. Historical Miner, thank you. I have been searching for a while in order to try to find an understanding to Another's comments of old that the price of gold is low because no one is selling. Then, your comment came along today "Sure, at those prices do the math, and it will take years for such an accumulation to be successfully obtained." … That, is very insightful.Maybe I'm seeing things backwards, but Another always talked about "Big Trader" having cornered the market years ago. Basically, those that want to acquire large amounts of gold to represent the real wealth of the dollars that they hold – cannot. As everyone here knows, their simply isn't enough gold in the world. Any action to try to acquire large amounts of gold – in public – also, can not be done as "Big Trader" demonstrated years ago. The affect is that "Big Traders" of the world have been locked out of the public markets. Miner49er's comment seems to support this by looking at the process by which a "Big Trader" must go through publicly to acquire gold. "it will take years" for such a big trader to fill a huge order in a public way!Now, let's go back to Another's point of view that the price is low because no one is selling. From my point of view "You may never sell your gold again" puts me in that "no one is selling" group (and no, I'm not a Central Bank!). So, it seems interestingly backwards that because no one is selling physical in the paper markets "Big Traders" do not shop there. Thus, the price is low – Real demand does not go through the paper markets. Miner49er's comment sums it up really nice! If "Big Trader" had to go through the paper market, it would take them years (and years and years) to accumulate what they really want because the supply is not there.Reflecting on Another's comment from ’97 (ID#60253) "Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves.Oil would explode in price!"What happens if the world bids up the PoG? It's simple, more sellers enter the market. If the price is bid up far enough, LOTS of sellers enter the market. At some point, "Big Trader" will find enough sellers in the market to fill his big order!What about "the world" in Anothers comment? Well, look around you! "The world" seems to be interested in gold again! There is a ‘mood’ about it that the gold market has not seen in many, many years. It seems, that "the world" is bidding up the price. "The world" is overwhelming the gold market's ability to supply physical. Unlike how they treated "Big Trader", ‘the world’ CBs can not say to ‘the world’ – stop! You are going to blow up the system!It seems to me that the CB's of the world have been selling piddly little amounts into the public system in order to satisfy the OLD world's thinking. They had the ability and desire to maintain the system as long as people valued Dollars over gold. Times have changed. "The world" is involved now, the end is near. You may never want to sell your gold again! USAGOLD / Centennial Precious Metals, Inc. (1/12/06; 08:19:56MT - usagold.com msg#: 140386) Convert the seasonal 'fruit of your labor' into enduring value! http://www.usagold.com/gold-coins.html
Permission to reprint is hereby granted where the USAGOLD name is cited along with our web address, mailing address and phone number. For electronic reproductions, citing the post heading and the http://www.usagold.com/cpmforum/ website address as the source is sufficient.