Gigem77

Option Trader Friday Outlook: Is the Dollar Going UUP?

Untrusting:
10 years ago GE was a 60 dollar stock. 5 years ago it was 36 bucks. Today it is 15 bucks and change. During that time, gold has run from 255 to 1100. So your GE example shows how gold beat a blue chip stock over 1, 5 and 10 year periods. There have been no stock splits since 2000 and the dividends have varied from 10 cents to 31 cents, in no way compensating for the devastating drop in price.

The same thing is true of the dow, the nasdaq or the amex. Over the past 1, 5 and 10 years gold has outperformed by a large margin. GE is priced where it was in 1997 showing that buy and hold investors like you are getting killed. I bet you still own Oracle from 80.

Option Trader Friday Outlook: Is the Dollar Going UUP?

"but the price of gold collapses like quite the house of cards as soon as anyone tries to unload their shiny bits of metal." This is hyperbole without any evidence. .

The eurobanks have been selling 500 tonnes a year for at least a decade and the price of gold has risen 400% over that time frame. The IMF just sold 200 tonnes to India and the price of gold went higher.

The rest of the piece can be likewise shredded.


Meanwhile, the dollar shorts are covering fast and the DXY is less than 100 pips above the year's low. www.reuters.com/articl...

Has the Dollar Hit a Major Bottom?

Since this article was written on 17-August the dollar has tanked from over 79 to a new yearly low of 76.46. Gold has risen from 930 to 1011. Silver ran from 14 to 17. The S&P 500 has risen from 975 to 1048. Prechter is wrong again. Everybody who took his advice and bought the dollar, shorted gold and shorted stocks, has lost money.

How to Trade Natural Gas, Crude Oil and Gold ETF Funds

UNG is issuing more shares per their late Friday announcement. Their share price fell to 10 bucks in the after hours. The 2-3 day short covering rally is over. The spot natgas price at the Henry Hub went below 2 bucks last week, rallied a bit this week and then dropped Friday. It will be below 2 again soon.
The UNG rollover process takes about 4 days during the last 2 weeks of the contract. The October contract terminates in 2 weeks on the 25th. They will close roughly 20% of the front month futures contracts. Who will buy? Storage is already over 90% full with another 10-12 weeks left in the injection season. Demand in September is the lowest of the year.

Four Keys to Gold’s Next Move

Gold as a trade has had a good run and the COT data shows a near term top. But from a macro view gold is insurance. www.youtube.com/watch?...

Has the Dollar Hit a Major Bottom?

Prechter was bearish on stocks through the 90's, ouch! He was wrong about gold in 2001, 2002 and 2003 and still is. He was wrong about interest rates in 2004, clinging to the notion that falling stock prices would cause higher rates when in fact just the opposite happens. Is it so hard to imagine that he is wrong now about the dollar and deflation?

Inflation with Gary North or Deflation with Mish?

Economics occasionally resembles religion more than science. It has denominations, Keynesians, Austrians, Monetarists. The adherents argue and attack each other. They use the same words with very different definitions. It is not a science like physics or chemistry and references to "rules" begs several questions. The primary value of an economic model lies in it's predictive ability. So use whatever model you like and get on the record with some useful predictions.

Commodity Roundup: What To Be Bullish On Now

Oil demand is going to be further curtailed due to the large number of refiners shut down by Ike. We will likely see the price of oil drop. But we will enter the high demand winter quarter with low inventories of heating oil and gasoline. Natural gas injections have been cut in half by Gustav and will remain shut in for some time. So we enter the winter season with storage near the 5 year avg and 200 bcf below last year. The MMS publishes a weekly report on shut in production. www.mms.gov/ooc/press/...

Short-Term Correction in the Commodities Bull Market

First you say, "... smart investors should take advantage of currently depressed prices to aggressively accumulate shares in select precious metals and energy companies."
Then you add, "The next few months might continue to be painful for commodities." So which is it? If commodity prices are to remain "painful" for months, then why buy now?

And at the end we see that you have no disclosures, apparently not long any of the things you advise others to aggressively buy. That speaks volumes about your confidence in your own analysis.

De-leveraging, redemptions and writeoffs are not done. Unless and until some big buyers come back to the commodity sector, prices will remain moribund. Who might these big buyers be?

Inflation has two components, money supply and the velocity of that money. You correctly note the increase in supply but completely neglect the velocity. Wages can't grow as unemployment rises and productivity falters. Americans are being forced to clean up their individual balance sheets, paying off or defaulting on debt and and reducing spending. Retail investors aren't going to be the buyers.

Metals Manipulation - Or Simply Deleveraging?

It's a gutsy call to say buy gold today. Hurricanes in the gulf don't help oil. The dollar is rocketing higher. Money is flooding out of commodity funds as redemptions hit. Financials are attracting the speculative money. Mining shares were sold today on heavy volume. Many hit new 52 -wk lows and ended on those lows.

Dichotomy in W. European Gold and Silver Prices

Los Pepes, let me suggest another possibility. Dealers were buying silver at 17.50 at the end of July. Then the price cratered very quickly. Nobody with inventory wants to sell it for 13 bucks. So they are waiting for a bounce. The large dealers will find sources of supply and begin selling again. Tulving, Apmex, and others are selling again today. The smaller local guys have to buy at these new lows before they will sell again.

Equity Markets, Forex and Precious Metals

Central banks in western countries have dishoarded several thousand tonnes of gold over the past 30 years. This has postponed the day of reckoning for the fiat currencies. It also effectively controlled the price for that time.

Mining is increasingly more expensive and production is not keeping pace with demand. As the bank dishoarding slows, the price of gold will move inexorably higher.

Central bank selling is not some vast conspiracy, it's a move away from a non-interest paying asset with storage costs to paper assets that pay interest. And the selling is controlled by treaty. The Eurosystem banks are agreed to sell up to 500 tonnes per year with weekly statements published.

Last year and this, they have not reached the limit of 500 tonnes. More banks are either not holding any gold (BOE) or they don't want to sell (Germans).

All of these factors are positive for gold over time.

The negatives now are economic slowdown and de-leveraging among hedge funds. It's a calculus problem that won't be solved with tin foil hats.

Dichotomy in W. European Gold and Silver Prices

The gold and silver markets are made by large dealers in 100 ounce bars (gold) and 1000 ounce bars (silver). The bars have to meet standards for weight and purity. A comex contract for gold is 100 ounces. For silver it's 5000 ounces. There is no shortage in these markets. Anyone can buy a contract and take delivery.

The retail market for things like eagles or krugerrand depends on fabricators taking delivery of bullion and then turning it into the k-rands or eagles or bars. A shortage at the local coin store or on ebay is not the same thing as a shortage at the comex. It just means that the retail demand has temporarily outstripped the ability of the fabricators and they have a business opportunity to ramp up their operations.

EBAY by itself is not evidence of anything. EBAY USA has plenty of gold and silver at high prices.

The comex has over 8 million ounces of gold and 138 million ounces of silver on the books as of yesterday.

When you can verify that the comex refuses to deliver gold or silver against a contract, then you have a shortage.

Gold Is Nocturnal Too: Daytime vs Overnight Performance

Your 4 articles are interesting and informative. I hope that you will keep contributing.

Sorry, There Is No Silver Conspiracy

A better explanation of the silver trade is offered here: news.silverseek.com/Si...