Gold just hit $400

my 2 cents

the gold mkt is not maliciously manipulated, it's manipulated in the same way any market with big players is manipulated.

the day to day action is clearly dictated by small traders whipping it around, but the long term prospects are determined by the central banks, the producers and the taste of the jewellery buying consumer.

The central banks don't want gold - but they do want it to go up before they get rid of it.

The producers want to sell it, but they are aware that they are competing with the central banks (who are also gold producers in a certain sense).

The consumers - well, I don't really claim to know whether Indians and Chinese will start buying up gold as they get wealthier. Anyway, they have to be buying a lot more gold to move the market. If 2bn people bought 0.5 oz of gold each, that's 1bn oz of gold or 31,250 tons. The central banks have 32,000 tons and the producers were mining 2,000 tonnes a year when gold was at $300. You can be sure that they'll be mining more above $300.

The demand - supply situation doesn't seem to be in any danger of imbalance unless everyone starts wearing an oz of gold on them (there's a conspiracy theory for you - AngloGold should sponsor MTV rap videos).

As for inflation theorists that look at the ratio of M3 to gold and say gold should be at $2000 or whatever - that's living in the past when central banks were more keen on holding gold as an alternative currency. The 70s was also a "cold war" period ,living under the threat of nuclear winter. Since gold is a security blanket against fear, its intrinsic value was naturally higher back then. Today's fear of a dirty bomb or a terrorist blowing up a building is trivial compared to the fear of nuclear war back then.
 
Quote from waggie945:

I'm sure that many gold producers out there are doing a TON OF FORWARD FUTURES SELLING at this level.

Should get interesting!

:)
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Actually producer hedging has been on the decline since the mid 90s.

There is a possibility that at $400, producers are keen to lock in a good price - and with all the producers rushing to the door to get their hedges off, there might be a considerable overhang to the price as bullion banks start unloading central bank gold.

I'm for gold $450 ... but not much higher than that.
 
Quote from chasinfla:



and the Federal Reserve is run by aliens who inhabit human bodies.

it's idiotic remarks like this that ruin a man's credibility.
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Lol - Lassonde compounded equity in his gold company at 38% per annum during a 20 year secular bear market in the commodity, has a net worth over $200 million made almost entirely from the gold mining, runs the world's biggest mining company, and is widely considered as possessing one of the sharpest analytical brains in the industry. I don't think he is lacking in credibility.

Just yesterday, a treasury report that foreigners were reducing their willingness to finance the US trade deficit via asset purchases sent the dollar to its biggest one day fall for 2 1/2 years. How do you explain that, given your dismissal of Lassonde's warning about America's reliance on foreign capital inflows? It's not as if he's the only person in finance talking about this - Soros and Buffett have both been saying the same thing.
 
i think there is a temptation to attibute omniscience or something near it to those who happen to have a gift for somehow obtaining money.

To argue that, because the man has dominated his industry means that his disdain for a certain very productive nation -- one, in fact, that may have had a very direct positive impact on the building of his wealth -- is correct, does not follow.

The soviet union of the history books had no end of disdain for America and the 'lifestyles' of Americans -- yet the soviet union's very existence, like any parasite, depended on the prosperity of its host -- capitalism.

It is a historic fact that the very means by which a person gains wealth often becomes the target of his own unhealthy self image after that wealth is gained.

The remark I quoted is in the same class as discussions about crop circles. 70% of the world's savings? So what do Americans do with that money after we take it, burn it? No, I think (if we do obtain it) we dump it into the world's economy. So if it is a 'lifestyle' that we sustain, that lifestyle creates jobs -- raises the standard of living -- the world over.

It's convenient to leave out the other half of the facts when you have an axe to grind but, alas, it is damaging to one's credibility.
 
The fact that he is the CEO of a mining company leads me to discount whatever he is saying completely.

I think every mining CEO who has lived through $280 gold is going to be calling up JP Morgan to sell more of his production forward.

To them its all dollars - why risk lower revenues when you can lock in $400? If it goes up more, so be it - that just means that their revenue pipeline will get even better.

I think resistance will be heavy on the upside, unless speculators come in strong.
 
right, exac - attack - ly.

Let's not forget that the guy who projects gold at $6 grand has a position.

Y' know, anything's possible. If things stay static, that is, if the US ceases to be productive and to create jobs, then perhaps there will be a drastic and permanent flight to gold. But things will not stay static.

Certainly there is also the possibility of a re-alignment in stores of wealth, etc.

Again, my issue with the remark was that it was inflammatory and left out half of the equation.
 
As a former metals trader...I've seen how crazy the gold discussion can get. However, I'm only moderately bullish on the market, as opposed to most people within the industry.

I say this even as I am a large holder of gold, not as much for investment as it is for pure security. Let's face it, gold is in a much different market now when compared to the late 70's/early 80's.

The 401k boom and general bull market in stocks wiped out much of gold's previous allure. Heck, most of the public has no idea how to acquire metals, let alone the investment aspects of holding the asset.

I see upside to 425, then a precipitous drop back down to 370. This should happen next year. I will continue to believe in holding metals for family security, but the only thing that could bring gold and its investment qualities back in to the forefront of the investing public is one thing---- disaster.
 
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