The Major Bubble That Nobody Is Talking About [View article]
It appears that most people completely missed the point of your article, in that they believe you were talking about stocks, not gold. However, I think you are off base with your belief that shorting gold is somehow the same as buying tech stocks in March 2000. Elliot Wave analysis and all other unproven mumbo jumbo aside, the fact remains that gold is only worth what the next investor is willing to pay. Notice I said investor, because nearly all demand for gold comes from investors. In gold's case, if investors cease to believe that buying gold is protecting them from anything, then the marginal demand for gold is gone, and prices crash. That is exactly what we are witnessing right now.
If you want to be a buyer of gold for the medium or long-term, you need to ask yourself, what would cause this mindset to reverse? Would the Fed coming out and saying they are increasing the size of QE3 be enough to change the 2 years downtrend in gold? Or every other central bank in the world printing money and intervening with reckless abandon?
The reason why I am not a fan of gold anymore is because investors' mindset regarding the metal has changed completely. Whereas before they bought the metal as central banks printed more money, now they do not. Moreover, the inflation outlook is getting more and more bearish. Even as the stock market powers higher, inflation expectations continue to decrease. If gold cannot rally with risk assets at all-time highs, and central banks turning the spigots on full blast, then what could possibly cause the metal to rally?
Silver: Is This The 'Last' Decline? [View article]
Elliot Wave is nonsense. Look at Robert Prechter, the supposed king of Elliot Wave. He has made nothing but wrong calls about the market for years on end now.
In my research, the gold/silver ratio is also pretty worthless too. The 2 metals have completely different demand profiles. They share the precious metals bid, but silver is much more industrially important than gold. Moreover, the size of the silver market is tiny in comparison to gold. The ratio between the two should not be used in any investment analysis.
Silver: Is This The 'Last' Decline? [View article]
I wouldn't rely so heavily on technical analysis. The way you can read sentiment in any market is response to stimulii. As Avi correctly stated in his article, metals have now failed to respond to monetary easing, not just QE. As central bank stimulus around the world has ramped higher and higher from every major central bank, gold has just gone lower.
Yet, every time a big-name manager comes out and defends gold, all he can talk about is the likelihood that the Fed will have to print money forever, etc. The reason why those managers have been losing money is an inability to admit that the positive stimulus they have been waiting for on gold has failed to achieve its objective. Indeed, the "fundamental" situation for gold is as good as it could possibly get, yet everyone is selling. Trading logic says that if everything you wanted to happen for your asset is happening, yet the price still will not rise, you had better get out because something is going on that you do not understand.
I talk about the outlook for gold at length in my newsletter each week: http://bit.ly/lS3MwR.
Gold miners (GDX -3.2%) take another beating as gold continues to lose its allure amid disclosures of reduced bets by hedge funds, a World Gold Council report showing gold demand at a three-year low, and a surging dollar. For the miners, it's an ugly world of lower production, higher costs and falling prices. At least nine miners hit 52-week lows: NEM -3%, GG -2.7%, AUY -4.8%, HMY -6.3%, AU -2.5%, BVN -1.1%, ANV -7.4%, NG -2.7%, GSS -5.8%. [View news story]
Yes that is correct. Gold ETF holdings are plummeting on a daily basis. The writing is on the wall, gold is done.
Thanks for all the kind words. I think gold failing exactly at past support ($1480-1500) is a very bad omen. I think the path is set for the metal to fall below $1000/oz within the next 1-2 years, although it could happen much sooner than that if the Fed removes support.
Also, please check out my newsletter site at: http://bit.ly/lS3MwR for more articles, I keep my subscribers informed on new trades on a daily basis.
Then why isn't Apple stock a store of value, or your house? It is still a fairly simple transaction to convert either to cash. The problem is none of them are actually cash, making them assets just like all of the others.
I like treasuries quite a bit here, and long US dollar positions. I believe interest rates have significant downside, contrary to what nearly the entire market believes. However, with the Fed buying so many bonds, and only likely to accelerate if the economy slows, there is a massive source of internal demand for treasuries that is likely to support prices.
From a passive asset allocation standpoint, rental residential real estate makes alot of sense. You can collect a current yield significantly higher than junk bonds, with likely less risk over the coming 5-10 years.
100 ounces. Thanks for being such a good samaritan. Perhaps you'd like to point out the countless amount of times you've claimed precious metals were a great thing to own over the past 2 years, and how you've been wrong every single time.
For the record, I said nothing wrong whatsoever. I said, you can buy gold at the spot price. Just because you are dumb enough to pay way more than spot does not mean that it cannot be bought for spot.
So you think MF Global customers asking for delivery is what caused them to go under?
I don't even know what you're talking about, so it's impossible for me to refute you. Pretty sure you don't know what you're talking about either though.
You are a fool if you would buy or sell gold at that price. If you really wanted to be long gold, you could buy a futures contract and take delivery upon maturity for today's spot price.
The way any index-tracking ETF works is that the administrator allows Authorized Participants (AP) to trade with it. In the case of GLD, that means that certain banks can sell gold to the GLD in exchange for shares. In this manner, when demand for GLD is high, the price of GLD in the open market is likely to go above NAV. An AP would then instantly sell GLD short and deliver physical gold to the GLD, taking newly issued shares in exchange. The newly issued shares offsets their short position, and they are flat, but the GLD now has more gold and more shares outstanding.
The exact opposite happens when there are alot of sellers of GLD. The market price of GLD goes lower than NAV, which causes GLD APs to buy GLD shares and redeem them for physical gold, which they then use to close out their short position in physical gold. In this manner, the number of shares outstanding and the amount of gold held by the GLD drops.
This is what has been happening to the GLD en masse for the past 4 months. People have been selling the ETF like crazy.
Have you ever stepped into a real estate brokerage and asked them "how tight the market is"? Pretty sure you'll get the same answer from any dealer of anything when you ask them if demand is high.
What price can you get right now for your "physical gold"? Pretty sure you get the exact same price as the "paper" market, less the ridiculous commissions you have been paying your dealer to keep him rich. Do you know where all the old subprime mortgage guys went after the real estate bubble? They went into precious metals sales.
If you feel better thinking that you own gold for the long-term because you can touch it, then good for you. Just know that you are losing money the same as everyone who holds gold in any form. Just because you don't see it being marked to market every day does not mean it is not happening.
Yes those are probably good too. I just want the maximum term and downside leverage. I am constructing a ladder of puts, starting in September of this year and stretching out to January 2015, so will likely add these as well.
The Major Bubble That Nobody Is Talking About [View article]
The Major Bubble That Nobody Is Talking About [View article]
If you want to be a buyer of gold for the medium or long-term, you need to ask yourself, what would cause this mindset to reverse? Would the Fed coming out and saying they are increasing the size of QE3 be enough to change the 2 years downtrend in gold? Or every other central bank in the world printing money and intervening with reckless abandon?
The reason why I am not a fan of gold anymore is because investors' mindset regarding the metal has changed completely. Whereas before they bought the metal as central banks printed more money, now they do not. Moreover, the inflation outlook is getting more and more bearish. Even as the stock market powers higher, inflation expectations continue to decrease. If gold cannot rally with risk assets at all-time highs, and central banks turning the spigots on full blast, then what could possibly cause the metal to rally?
Silver: Is This The 'Last' Decline? [View article]
In my research, the gold/silver ratio is also pretty worthless too. The 2 metals have completely different demand profiles. They share the precious metals bid, but silver is much more industrially important than gold. Moreover, the size of the silver market is tiny in comparison to gold. The ratio between the two should not be used in any investment analysis.
Silver: Is This The 'Last' Decline? [View article]
Yet, every time a big-name manager comes out and defends gold, all he can talk about is the likelihood that the Fed will have to print money forever, etc. The reason why those managers have been losing money is an inability to admit that the positive stimulus they have been waiting for on gold has failed to achieve its objective. Indeed, the "fundamental" situation for gold is as good as it could possibly get, yet everyone is selling. Trading logic says that if everything you wanted to happen for your asset is happening, yet the price still will not rise, you had better get out because something is going on that you do not understand.
I talk about the outlook for gold at length in my newsletter each week: http://bit.ly/lS3MwR.
Gold miners (GDX -3.2%) take another beating as gold continues to lose its allure amid disclosures of reduced bets by hedge funds, a World Gold Council report showing gold demand at a three-year low, and a surging dollar. For the miners, it's an ugly world of lower production, higher costs and falling prices. At least nine miners hit 52-week lows: NEM -3%, GG -2.7%, AUY -4.8%, HMY -6.3%, AU -2.5%, BVN -1.1%, ANV -7.4%, NG -2.7%, GSS -5.8%. [View news story]
Short Gold For The Long Haul [View article]
Also, please check out my newsletter site at: http://bit.ly/lS3MwR for more articles, I keep my subscribers informed on new trades on a daily basis.
Short Gold For The Long Haul [View article]
Short Gold For The Long Haul [View article]
From a passive asset allocation standpoint, rental residential real estate makes alot of sense. You can collect a current yield significantly higher than junk bonds, with likely less risk over the coming 5-10 years.
Short Gold For The Long Haul [View article]
For the record, I said nothing wrong whatsoever. I said, you can buy gold at the spot price. Just because you are dumb enough to pay way more than spot does not mean that it cannot be bought for spot.
Short Gold For The Long Haul [View article]
I don't even know what you're talking about, so it's impossible for me to refute you. Pretty sure you don't know what you're talking about either though.
Short Gold For The Long Haul [View article]
Short Gold For The Long Haul [View article]
Short Gold For The Long Haul [View article]
The exact opposite happens when there are alot of sellers of GLD. The market price of GLD goes lower than NAV, which causes GLD APs to buy GLD shares and redeem them for physical gold, which they then use to close out their short position in physical gold. In this manner, the number of shares outstanding and the amount of gold held by the GLD drops.
This is what has been happening to the GLD en masse for the past 4 months. People have been selling the ETF like crazy.
Short Gold For The Long Haul [View article]
What price can you get right now for your "physical gold"? Pretty sure you get the exact same price as the "paper" market, less the ridiculous commissions you have been paying your dealer to keep him rich. Do you know where all the old subprime mortgage guys went after the real estate bubble? They went into precious metals sales.
If you feel better thinking that you own gold for the long-term because you can touch it, then good for you. Just know that you are losing money the same as everyone who holds gold in any form. Just because you don't see it being marked to market every day does not mean it is not happening.
Short Gold For The Long Haul [View article]