Smarty_Pants

Holiday Shopping Tips for Gold Stocks

There's a simple approach that works. Hold gold stocks and cash in whatever proportion you feel comfortable with.

When the prices on your stocks go up, sell a few shares. When the price goes down, buy a few shares. Over time you will build the number of shares you own and if the stock is in an uptrend your account balance will grow too.

What price change you use is your choice, as is the amount you buy/sell each time. There are many different ways to proceed and none of them are 'wrong'.

Inflation Under Control, Despite the Rise in Gold

The gub'mint is borrowing money hand over fist so they can give/lend it to the big, insolvent Wall Street banksters for use in patching bottomless holes in their balance sheets. The only collateral the gub'mint can point at backing these loans/purchases to/of the big banks is an enormous pile of toxic assets whose true market values (approaching zero) are being ignored in favor of 'guesstimates'.

The giant swirling black hole of bank insolvency is swallowing every dollar the gub'mint can borrow or print. That's why price inflation is minimal. All that extra money is given to the banks who in turn give it back to the FED as 'excess reserves'. That money is the only "asset" the banks can point at in order to maintain the minimum reserve levels required by law.

Does anyone actually think that it's simply a coincidence that the increase in the Adjusted Monetary Base is almost exactly matched by the increase in excess reserves? Check out the graphs from the St. Louis FED and see.

Adjusted Monetary Base:
research.stlouisfed.or...

Excess Reserves:
research.stlouisfed.or...

The true reality is that the FED is the "Bailer-Outer of Last Resort" for the insolvent big banks.

Risky Opportunity Awaits in Junior Gold Sector

For those without the time to dig into all the details there is also the Market Vectors Gold Miners ETF (GDX)

finance.yahoo.com/q?s=...

Simple approach would be to put a percentage of your money in now and use the rest to buy on dips and sell on rallies to increase the long term base position. There are also options available for those who are willing to tolerate the extra risk they entail.

As always, you are responsible for your own investment decisions.

Gold - Not the Safe Haven People Think it Is

Gimme a G!
Gimme a O!
Gimme a L!
Gimme a D!

What's that spell?

A millenia long consensus on a mutually agreeable store of value around the world. In a word ...

MONEY. The most desireable commodity.

It may not be perfect, but it's the closest thing humans have found for use as an honest medium of exchange (or store of value) throughout their entire history.

While you are free to ignore that history and its implications, you do so at your own risk.

Comparing Volatility of Gold to Its Price

"Hold gold in your hands and you have value" - RealityvsPaper

Agreed. This is why I use a portion of my trading profits to buy physical. However, the article makes points about ways to trade gold and is authored by FP Trading Desk so it would seem discussions about ways to trade in paper gold would follow. 'Trading' in physical gold would be quite difficult as you would need huge swings to overcome premiums and transaction costs and we really aren't seeing that sort of price action at the moment.


"By the way, just try to get physical gold this month and see what happens, THERE IS NONE. Mining expansions and operations are cut back, supply is sold out in the entire USA for physical gold, and you cant find it for less than 5% above comex, if you can find it at all." - RealityvsPaper

Not true. I routinely buy or sell physical gold near spot through a second hand dealer who is an acquaintance of mine. He buys scrap gold off the street (others have ads on tv for the same sort of thing) and is happy to sell anything he buys to me at spot. That's more than he gets for sending it off to a smelter.

Granted my physical gold isn't a coin or bullion bar. It's broken chains, pins, and rings in different carat weights, but it IS gold, and I can convert to cash just below spot by having my friend send it to his smelter. Again, he is happy to do so as the 'extra' gold I give him increases the rate the smelter pays for his gold (send in more weight and they increase the rate they pay). My buy/sell spread is probably around 2% of spot.

I would think anyone out there can do the same as I do and buy scrap gold from local pawn shops or jewelers who buy it from the public every day at a price very near spot. My friend buys thousands of dollars of scrap every week in a modest sized city of around 100,000 people.

One word of caution however. I have known my friend for over 6 years and have no doubt that he is completely honest and won't try to cheat me in my purchases. If you are dealing with people you just met, you need to be able to figure out whether you are getting what you pay for when you buy scrap gold. Can you test gold to verify what the proper carat weight is? You better be able to if you want to get your money's worth in this sort of purchase. Being 'not sure' can cost you a lot of money.

Comparing Volatility of Gold to Its Price

Most tradable swings in gold last about a month or so. You can use options on GLD that are 3 months or more from expiration to trade them in the short term.

The options give you the same profit potential for a smaller cost. Just don't hang on to them too long or they will lose too much value in time decay.

If you don't understand what all that means, then you have some studying to do before attempting anything. You can lose a lot of money in a hurry if you don't know what you're doing in the option market.

You can also use a delta neutral position with GLD shares and options on GLD. That's even more complex and it requires a lot more money to establish. In theory the downside is limited and solid profits are possible with strong moves in the price of gold in either direction

Again, study and learn before you attempt anything.

Gold Prices Finally Catch Fire

Do they trade $Zimbabwe on the forex?

I'm thinking that there may be some good profits to be made buying the $Z/$US cross.

OK. Seriously.....

Mr. Hill thinks gold might get all the way up to $950 in 2009 and maybe even as high as $1000 by 2010?

Gosh, all the way back up to the July highs in only another 15 months?

That's really sticking his neck out there. I wish I could be that sure.

@GMiki. LOL. Good one.

Gold Is Set to Regain Its Shine

What's this? Gold currently passing $810/oz?

Say it isn't so. Up over $30/oz just this morning.

If you're desperate to buy physical gold but can't find any in your local coin shop, try a local pawn shop. They buy scrap jewelry every day. Offer them spot for the gold content and they will probably be happy to sell. If you're careful about the purity of what you buy it's a good way to 'find' gold when it's scarce. Avoid most 10 carat stuff, stick with 14 carat or 18 carat. It's not a Kruggerand, but it's better than nothing.

Gold Is Set to Regain Its Shine

"After it's spike to $785, Gold immediately fell $20 to the Friday close."

And several hours later it was right back up to $780 again where it stayed for much longer than it 'stayed' at Friday's close.

And this ignored little tidbit of foreign news doesn't imply much in the way of support for the dollar either:

"China held $447.5 billion of US agency bonds as of June 2008....(and are) likely to reduce the portion of reserves in dollar assets from the current 60 percent by purchasing more non-dollar assets with new reserves."
China Daily, Sept. 15, 2008

Gee, maybe the Chinese are going to buy a little gold with the billions of trade surplus dollars we send them every year.

Even if they just trade their dollars for Euros or Swiss Francs it will push the dollar down.