vespuce

One Last Decline, Then the Rebound in Gold

agreed, which is exactly what I did yesterday, sold 14.5oz gold for another 1000 silver....sweet 70:1, free money!

It doesn't matter why this is all going on, just try and keep a clear head and if you have cash to spend, there are tons of opportunites out there. PM stocks look a fantastic candiate for a bounce after yesterdays action and the fact there are at historic ratios to spot.

If you really want one more guess as to who is behind this forcefull selling, why not consider Lehmans, and the multitude of HF's desparately trying to raise cash now for redemptions. They were all long comod's short dollar and this squeeze is a vicious spiral to sell your liquid assets first just to survive.

Getting what they deserve for their greed!

Monday, September 8: Week in Review

This is the mother-of-all corrections....and who knows when it will end. Technically silver looks very weak, I wouldn't be surprised if it goes lower to sideways for a few months. Market sentiment is shattered and a lot of people are heavily underwater - but that's all just short term trading noise. As a long term store of value, I don't think anything is safer than gold and silver.

Monday, September 8: Week in Review

If you go back bit further in time you'll see. Try 1900, 1800 etc. Getting in on at an extreme panic spike high to over-vauled levels at the end of decade long boom is unlikely to yield good returns over the next few decades. However, if like me you are incredibly gifted (aka lucky) and can time the market, the returns looks far better. I bought a ridiculous amount of gold in 2001, and was quite late to the silver party with my first large physical position taken in 2005. That wealth is not just protected, it appears to be growing at about 25% pa.

Best advice, as above, it to accumulate over time, especially after the big corrections.

Time to Buy Gold and Silver

Why buck the long term trend?
Does it look like governments are adopting fiscal prudency?
Are real interest rates positive again?
Are we experiencing genuine contraction in money aggregates/credit?
Are we confident in the financial system? Never mind world peace?
Can you trust banks / governments for wealth protection?
And is the physical market suffering from over supply?

Sell paper when it bounces.

Decoupling Of Physical Gold And Paper Gold Prices

$fark$ - I've never heard of a gold bug that trades on margin - that is only for disciplined and controlled traders like yourself. Anyone who has even a remote interest in long term wealth preservation knows that physical holdings are the only option. Most articles and commentators here refer to fully paid up holdings (physical, ETF's). If you want to talk about futures and short term price movements, a day trading website might be more worthwhile.

Seacher - I reckon stocks and property are the two biggest asset classes for sucking in new investors with ever higher prices. As the current decline in metals has accelerated, retail demand has gone "off the charts" according to the biggest US dealers. I think this is very rare for any asset class. 25% and 40% declines in 6 months approx for G&S and the public are buying (or at least trying) in record quantities. Is there any historic precedence for this, in any asset class?

Decoupling Of Physical Gold And Paper Gold Prices

Under the current monetary system, the dollar and all other fiat currency are unlikely to be a good store of wealth (ie maintain purchasing power) thanks to the greed and self interests of those in control of money supply. Who doesn't like free money?

Indian buying and 'seasonal strength' may not be enough to kick start a new up leg. No one knows, and long term physical holders should not care. It may take years to reach new highs again, but that doesn't change the fundamentals.

If history is any guide, the current high retail premiums probably won't last, as there is no evidence of shortage in the OTC/physical market. It should only be a matter of time before fabrication supply meets the higher demand. Hopefully by early next year we can all get our hands on as much retail supply as we need at lower prices and lower premiums.

Decoupling Of Physical Gold And Paper Gold Prices

$HARK/Shark/Fark whatever....I read every word of your posts, maybe you are right, we will see. At least you are an excellent trader, and have a sense of humour (albeit offensive to many). It would be a good lesson for us if you tell us about your next GC trade (in advance).

However, just one pointer on the article above, the author mentioned his purhcase was in Euros, and therefore has likely not lost any capital over the last month (avg EUR 559.62 vs current price EUR 560.27). For investors like me in the UK, physical metals aren't doing too badly as the pound is falling faster (in $ terms). Average GBP closing price for gold in August is £444, vs current price £455.

The Disconnect Between Supply and Demand in Gold & Silver Markets

Chris B

#1 I think you are wrong on many levels here. Insider trading is illegal and most people are too afraid/ moral/ underfunded to act. Sensitive market moving info is kept to an absolulte minimum no. of senior people in my experience, with codenames and chinese walls etc. If a big institution were to engage in any market manipulation it could be controlled by a very small group.

#2 Gold and silver prices are not at historically high levels compared to just about any other asset class, especically when adjusted for inflation. Yes, they have gone up 7years in a row, but from a very low base. I don't understand your point here at all, as the current manipulation theory suggests prices are artifically low, not artifically high (propped up) as was the case with the Hunts Bros.

#3 I believe the majority of phyiscal precious metal investors are interested in preserving wealth from currency debasement, reducing counterparty credit risk (banks and brokers) and consider them good value at current levels (based on cost of production, historical ratio's to other assets etc)

#4 Jewellary demand accounts for about 10% of total annual demand. Investment demand is even less (for silver) and it's this growth that is driving the current retail shortages. Mine supply isn't forecast to expand much. Geologists estimate 30-40years below ground reserves for silver, which in any case is a by-product of other metals, and therefore price in-elastic. But the biggest source of demand for silver is industry at approx 70% (this may reduce, but is not showing any signs of abating so far). Any trouble the financial system runs into will lead to surges in investment demand. I believe more and more people will be drawn to gold and silver as they learn about the current monetary / debt system.