Mr. G

How to Predict the Price of Gold

The fundamental analysis predicting the doom for the dollar and increase in gold prices seems to be based on the current outlook from the recent global collapse. I would be cautious on longer term predictions if the resilience of the USA GDP recovers.

Although the FED has been printing money in response to the current bank and lending fiasco, one should ask whether resolution of this pattern will have a longer term benefit for the US. If so, the dollar may start a longer uptrend which could dampen the enthusiasm for gold an d other commodities unless supply and demand equations create a different market picture.

I only write this as a word of caution to gold bugs because nothing in economics is fixed in cement. The markets can be fickle and good investment requires diversity to weather rough spots in investing. About two weeks ago I advised buyer beware in gold because of familiarty with trading behavior of institutional traders.

I would not touch gold presently unless the dollar index resumes its downtrend as confirmation of its futher downtrend. If your currently in the money, I would reduce the position by 50%. Longer term fundamentals would suggest more dollar downtrend, but the change in economic patterns may not confirm this downtrend. GI

Gold vs. the Dollar: Paper Still Beats Rock

All the fundamentals are in place for a longer term rise in gold. Trading futures belongs to the institutional players and the recent selloff is traditional in this market. When people trade, they post stop losses, and the difference between the market price and the stop loss is liquidity for the institutional trader. You must think like a trader in the short term to avoid the loss.
Gold has been trading inverse to the dollar for some time. Once the dollar resumes its downtrend below 75 on the index,one may find another buy point. GI

A Golden Thanksgiving

Does anyone remember when the DOW was 800 and gold was 800? I do, I am that old. GI

The Case for Depression, Part 4: Dollar Collapse

The current FED policy of maintaining a .25% LENDING RATE is designed to assist business growth, and recent statements from the FED indicate this rate will be with us for awhile. I think the only way out of our current economic mess is to promote capitalistic growth.

While the above comments focus on the US in isolation, the picture around the world is not as rosy either as all govts fight global recession. The pegged rate of the yuan is going to cause China the first inflationary mess as their middle class grows. Failure to allow the yuan to float will destroy their global status. Their selfish approach to competitive export prices will ultimately be destroyed by inflation that may become internally rampant.

Our global exports have not significantly declined notwithstanding the pegged yuan rate. At present, the Eurozone has had a diminishing share. With an unprecedented 6 billion people on the planet and growing, I would expect larger money supplies to grow to accomadate the medium of exchange.

The current account deficit in the US presents a major risk to the dollar. With globalization a new phenomena, the comparisons of deficits and govt funding will take on a new observation as GDP comparisons may be enlarged in global thinking. Our problem is that we have the largest GDP and the largest debt.

It is going to take more bank interaction to promote capitalism in credit based economies if we are going to reduce our debt structure,create more employment, increase the total tax receipts from employed citizens, and rebalance our govts relationship to its citizens.

How the value of the dollar fares in the global restruturing will be based more on our economic resilience to overcome debt.GI

A Look at George Soros's Recent Trades

One of the underlying considerations stressed by Cramer is management. Smart people tend to make smart decisions. The inverse is true as well.
Soros made huge money on the sterling as a currency trader. Wish I could trade with him to learn.
When Buffet and Soros trade, they are looking for places to park huge sums with longer upside value. This is trading on a much different level, and emphasizes "it takes money to make money". GI

Is the Local Top in Precious Metals Stocks Already Behind Us?

There was a time in history when the DOW was at 800 and gold rose to $800 the ounce. If this correlation is any predictor, gold could rise above $2000 the ounce. GI

The Inverse Relationship Between Gold and the Dollar

Gold is heavily entrenched in the culture and subconscious of the Indian peoples. The recent purchase was unusual and affected the supply demand equation more than the anticipated inflation hedge. I believe the inverse relationship between the dollar and gold will return to normal once this aberration passes. The unemployment rate to be reported may have an influence on gold's direction, particularly if job loss keeps rising. . I always fear the huge downside gold exhibits when the institutional players sell off. Keep your eye on the Friday report for a short term read on gold's direction. GI

Gold Stocks Slide as USD Index Strengthens – Should You Be Concerned?

I have traded the forex for some time and watched the gold bugs predict $2000 gold over 2 years ago only to see it go much lower. When gold drops, it tanks. Notwithstanding the current account deficit we can see, the US economy has unbelievable resilience. Just ask Gates and Buffet when they lost a billion or so from a previous current account read..I admit the situation is not bright, but caution is always advisable when playing real money. Keep your eye on the unemployment rate next friday. It is a heavy hitter and if it drops, you might be surprised. If it goes higher, I would say the long in gold is still on the table.

Gold Stocks Slide as USD Index Strengthens – Should You Be Concerned?

It is fairly obvious that gold and oil are trading inverse to the dollar index. Looking at the dollar index, It is still in its downward trend technically, but if it goes higher this week, gold and oil could break more to the downside, and the dollar could be bottoming which would be be a bigger reason to wait on the sideline till a more positive direction for the dollar is determined. The key is to watch the US fundamental readouts this week. The chopiness in the market may be resolved if the US economy committs to one side or the other.

The Case for $1300/Oz Gold

I agree with the author, but the overlooked reaction is the hedgefunds and big money boys reaction when the US keeps falling into recession. The market psycology of these players may push gold to well over $1500 the ounce.

Get Out of Commodities - Barron's

At least, the author recognizes that commodities are dollar denominated. If you believe the US treasury wont be printing any more money to devalue the dollar as the FED tries to bailout the massive institutional crisis, then I could agree with the author. However, I think this is another example of eternal optimism seen on CNBC as the pundits try to control market sentiment. I see more downside risk as the CDO and debt writedowns keep appearing.

Global Precious Metals Correction: Healthy and Overdue

Profit taking and the rise of the U.S. dollar (5 cents against the EURO) is probably responsible for the markt perception that gold should be corrected to reflect market risk. I havent heard any fat ladies singing that all is well in the U.S. The same factors supporting commodity increase and dollar devaluation are still in place except the Fed didnt print more money to solve the Bear Stearns failure. Will the treasury have to print more money to solve the liquidity crisis in the US banking system? Will the FED have to continue to lower the FED rate to cope with the recessionary risks?

A Warning for U.S. Dollar Bears and Commodity Bulls

ANYONE WHO THINKS DOLLAR DEFLATION IS OVER MUST BE WEARING BLINDERS OR ROSE COLORED GLASSES. I AGREE WITH THE AUTHOR ABOVE. NOT MUCH CAN BE FORECAST FROM A TEMPORARY MEASURE BY THE FED. AS THE MARKET ONLY FOCUSES ON ONE FED MOVE, DONT FORGET THE NEXT WAVE OF FORECLOSURES AND BANK WRITEOFFS TO CONTINUE THE DOWNWARD SPIRAL FOR THE DOLLAR AND CONTINUED COMMODITY INFLATION

Gold/Dollar Ratio Goes Parabolic

As long as the commodity market designates hard assets in dollars, the dollars demise will continue to lift their value. Coupled with global growth, hard assets have a long way to run due to unpredented DEMAND. Selecting the right asset markets to invest in to protect yourself from a severe recession is at a premium in todays market.

Gold's Golden Rule

Until the FED stops printing money to support the banking crises in the U.S., gold should remain in an upward trend notwithstanding the ups and downs in its channelling pattern.