Federal Reserve is preparing a trap, a golden trap to lower price of gold
- Thread starter Labor
- Start date
I'm sorry but what I spoke about are not little things, I mentioned briefly the two major variables in the gold market the end users, and the market participants.
I agree with you that the debt load on world economies are growing to a point where sustainability is more of a concern and to answer your question I really don't think US/Japan/EU will ever pay back debts or at least if we do it will be a long time from now after you and I are gone. Typically through devaluation, forgive of interest, war, or more debt has been the answers to bring economies back from the brink are we there yet in utilization of these tools? To some extent yes. Just two years ago Germany finally paid back their WW1 debt now if they like Japan were carrying such massive debt loads why is gold not at $10,000 or higher?
If I am incorrect in your argument please let me know but your main premise is that gold SHOULD be trading at higher levels due to multinational debt piling up here and across the pond and the reason itâs not is because THEY (central banks, Morgan) are intentionally suppressing prices? I donât know what your time frame is or where in gold you plan to get out at a profit or loss but the points I am trying to make is the market as it stands right now does not support a higher price and perception always drives markets which can switch from month to month.
Here are some points that neither I nor a lot of other investors/traders consider little:
1. The chart right now is broken. It has broken key support levels and until it shows some solid volume the consolidation or downtrend will continue.
2. QE for right now is not on the table either due to an election year or EU causing most of the uncertainty. If QE is not on the table than inflation is not the main concern of the market but liquidity takes over in the minds of investors.
3. India is the biggest end user of Gold in terms of consumption but their currency and their economy is in shambles right now which is making incomes and demand lower.
4. It has been a difficult year for hedge funds and institutional traders trying to hold onto miners, futures, Etfâs so their lightening up or going flat all together which is causing liquidations and further price declines
5. Money flows. CHF there is talk of a tax just to hold money in francs because of the demand. Germany just had an auction this week where they Sold Eur 4.555 bln of new zero coupon June 2014 Schatz bonds, yield 0.07 % (from 0.14%), cover 1.7 (from 1.8) Lowest on record. People would rather just get their money back and put it with a perceived safe haven than invest right now in volatile markets like gold.
You and I come from different worlds I believe (again if I am wrong correct me) I am a trader focusing on the perceived actions of what the market is telling me now and you are an investor looking at a longer time frame of a point when all out anarchy comes in and currencies go bust and gold is the way of the future.
I agree with you that the debt load on world economies are growing to a point where sustainability is more of a concern and to answer your question I really don't think US/Japan/EU will ever pay back debts or at least if we do it will be a long time from now after you and I are gone. Typically through devaluation, forgive of interest, war, or more debt has been the answers to bring economies back from the brink are we there yet in utilization of these tools? To some extent yes. Just two years ago Germany finally paid back their WW1 debt now if they like Japan were carrying such massive debt loads why is gold not at $10,000 or higher?
If I am incorrect in your argument please let me know but your main premise is that gold SHOULD be trading at higher levels due to multinational debt piling up here and across the pond and the reason itâs not is because THEY (central banks, Morgan) are intentionally suppressing prices? I donât know what your time frame is or where in gold you plan to get out at a profit or loss but the points I am trying to make is the market as it stands right now does not support a higher price and perception always drives markets which can switch from month to month.
Here are some points that neither I nor a lot of other investors/traders consider little:
1. The chart right now is broken. It has broken key support levels and until it shows some solid volume the consolidation or downtrend will continue.
2. QE for right now is not on the table either due to an election year or EU causing most of the uncertainty. If QE is not on the table than inflation is not the main concern of the market but liquidity takes over in the minds of investors.
3. India is the biggest end user of Gold in terms of consumption but their currency and their economy is in shambles right now which is making incomes and demand lower.
4. It has been a difficult year for hedge funds and institutional traders trying to hold onto miners, futures, Etfâs so their lightening up or going flat all together which is causing liquidations and further price declines
5. Money flows. CHF there is talk of a tax just to hold money in francs because of the demand. Germany just had an auction this week where they Sold Eur 4.555 bln of new zero coupon June 2014 Schatz bonds, yield 0.07 % (from 0.14%), cover 1.7 (from 1.8) Lowest on record. People would rather just get their money back and put it with a perceived safe haven than invest right now in volatile markets like gold.
You and I come from different worlds I believe (again if I am wrong correct me) I am a trader focusing on the perceived actions of what the market is telling me now and you are an investor looking at a longer time frame of a point when all out anarchy comes in and currencies go bust and gold is the way of the future.
In the interest of fairness I will agree with you that gold will go higher if these things take place.
1. China is going to take over by next year in terms of demand for gold as last quarter was the biggest on record for import of gold to their country. This should come into the playbook soon as discretionary spending over there is still robust.
2. In India, Demand could improve in September as people would start purchasing gold for the upcoming festivals and weddings/
3. If Greece should leave this year and Europe, UK start another round of Quantitative Easing than gold will be in vogue.
4. If our unemployment and ISM comes out worse than expected this month (ISM up three straight months) than a question of easing will be the chatter and prices can grind higher in anticipation again.
5. Finally if you start to see the trend line breakdown in Dollar (new high set this week since 2011) than naturally correlation will play the opposite direction and you will see people piling into commodities again like gold.
So either you picked a great level to get in as the dollar has trouble at these trading levels or the trend is just starting and gold will be at 1400 or lower only time will tell.
1. China is going to take over by next year in terms of demand for gold as last quarter was the biggest on record for import of gold to their country. This should come into the playbook soon as discretionary spending over there is still robust.
2. In India, Demand could improve in September as people would start purchasing gold for the upcoming festivals and weddings/
3. If Greece should leave this year and Europe, UK start another round of Quantitative Easing than gold will be in vogue.
4. If our unemployment and ISM comes out worse than expected this month (ISM up three straight months) than a question of easing will be the chatter and prices can grind higher in anticipation again.
5. Finally if you start to see the trend line breakdown in Dollar (new high set this week since 2011) than naturally correlation will play the opposite direction and you will see people piling into commodities again like gold.
So either you picked a great level to get in as the dollar has trouble at these trading levels or the trend is just starting and gold will be at 1400 or lower only time will tell.
Joe 6pack and his mates all knew about the tech boom bubble, many of them were probably playing it.
All the girls down at the Salon also knew about the tech bubble, many of them no doubt bragging how their man has made a killing.
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Joe 6pack and his mates all knew about the housing boom, many of them were probably flipping.
All the girls down at the Salon also knew about the housing bubble, many of them no doubt bragging how much their property had increased.
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So that's 2 bubbles where everyone knew.
Now, next time you see Joe or pick up your girl from the Salon, ask about the price of Gold, where it is, where it was last year and what's happened over the last few months. Do that and I think you'll get loads of funny looks.
That's why Gold is far from being in a bubble and that's one of the truest tests of a bubble, when people who shouldn't really know, know.
All the girls down at the Salon also knew about the tech bubble, many of them no doubt bragging how their man has made a killing.
-----------------------------------------------------------------------------
Joe 6pack and his mates all knew about the housing boom, many of them were probably flipping.
All the girls down at the Salon also knew about the housing bubble, many of them no doubt bragging how much their property had increased.
-----------------------------------------------------------------------------------
So that's 2 bubbles where everyone knew.
Now, next time you see Joe or pick up your girl from the Salon, ask about the price of Gold, where it is, where it was last year and what's happened over the last few months. Do that and I think you'll get loads of funny looks.
That's why Gold is far from being in a bubble and that's one of the truest tests of a bubble, when people who shouldn't really know, know.
JPM is shorting paper as they're long OTC swaps and physical. It's called a hedge.
Gold has in intrinsic value?
Macho,
Thank you I used to be a prick a long time ago when it came to markets and arguing them now I just see both sides of the argument and who ever is proven right will make to money. No need anymore to go back and forth about buyers vs sellers If i am proven correct I will quietly collect my profits and if I am wrong on this analysis I will admit it and go long.
Best of luck.
-Jplazard
Thank you I used to be a prick a long time ago when it came to markets and arguing them now I just see both sides of the argument and who ever is proven right will make to money. No need anymore to go back and forth about buyers vs sellers If i am proven correct I will quietly collect my profits and if I am wrong on this analysis I will admit it and go long.
Best of luck.
-Jplazard