Why Gold has to go down...

[Anaconda]

Quote from Subdude:

Hmm, you are comparing the U.S. to Zimbabwe?

No, I'm comparing their monetary policies. USA government is in a heavy deficit but is pumping the economy with trillions of dollars. Since it's just fiat money, I would like an explanation what is so different this time around that it will not cause inflation whatsoever.

Name one occasion on which the government here defaulted on its debt. Once the precedent is established, we can certainly draw such parallels.

When that happens, and it will, there won't be any parallels left to draw.
But the fact that Congress has to have emergency meetings to raise the debt ceiling every couple of years is a bit concerning.

All things considered, treasuries are still a safer place for a risk-averse investor than gold.

At the current price, treasuries are not even outpacing the government data inflation.

And yes, I will be adding to my short pretty soon.

I'm asking for real gold or silver, not paper. Do you have any to sell? Yes you don't.
I actually hope you're right, I would love a gold sell off right now.

 

[sirgiyan]

Quote from PohPoh:

I smell a rat.
As I said before, I am long the physical and short the paper.
Bought more June puts today..

Goldman and other US Ibanks will need to blast their huge gold length over the next few months to cover their enormous margin calls. Watch the price fall from the sky, by a hundred dollars a day, for several days, coming soon to a screen near you.

I could be wrong of course, and will pay the price if I am (on the paper).

I totally agree, Sir.
Funny enough I'm in the same position LONG PHYSICAL/SHORT VIRTUAL
I also bought some natural GAS as a hedge. Seems extreamly undervalued compared to gold

 

[AMT4SWA]

Quote from AMT4SWA:

My next profit target for GOLD is at $986.00

Covering 10% more of my physical GOLD position today.....$986.00 target achieved. Next targets at $1026.00 and $1066.00......no targets above $1066.00 set at this time, any trading above this level I will use to cover remaining positions based upon price action. :eek:

 

[PohPoh]

Quote from AMT4SWA:

Covering 10% more of my physical GOLD position today.....$986.00 target achieved. Next targets at $1026.00 and $1066.00......no targets above $1066.00 set at this time, any trading above this level I will use to cover remaining positions based upon price action. :eek:

Nice work dude...

 

[Subdude]

Quote from Anaconda:
Since it's just fiat money, I would like an explanation what is so different this time around that it will not cause inflation whatsoever.

I never said it won't cause any inflation at all - just not for a while. See my immediately preceeding post.

At the current price, treasuries are not even outpacing the government data inflation.

Fair enough. But they do guarantee the return of your principal, which cannot be said about gold (or any other commodity, for that matter).

 

[murray t turtle]

Quote from cunparis:

Interesting thread, I'm glad to see I'm not the only one shorting gold.

I just wrote up a detailed analysis of the monthly, weekly, and daily timeframes in the Gold's Action thread, here's a link:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=127353&perpage=6&pagenumber=168

most people participating in this thread are bullish, so I'd love to get some comments from the bears.

=================
Easy to make a bearish case for gold;
1 year candle chart & 1 year barchart. And gold is a luxury[not necessity] & plenty of traders in gold. So plenty of bearish reasons. More shorts the better, from a technical view.

Bullish reasons include last 50 days/50dma/200days/200dma;
Gold/GLD,1 year peak to valley=not much.Compare GM & C peak to valley. Wisdom is more valuable than gold[standard];
i like a certain amount of paper fed reserve notes. But i like metals ,livestock/animals , real estate more...

 

[Shagi]

Quote from Subdude:

Second, in order for inflation to materialize and become a threat in the U.S., several things must happen:

• a shift in energy supply/demand
• banks start lending with reckless abandon like they used to
• unemployment rate drop
• non-negative GDP growth q/q
• asset prices appreciation (homes, durable goods etc)

These would be fairly major developments, indicative of sustained economic recovery. As you might imagine, we are not quite there yet, and 6 to 9 months will not make a tremendous difference. However, if you plan on keeping your paper gold for 5 years, you might just do okay. I would not load up even long-term at these bubble levels, though. Just my $0.02.

Yes in perfect world but then thats why banks with dozens of Phd's in economics went broke. Logic would suggest what you say is true , especially given the grim economic outlook, but logical trades can backfire severely if not timed correctly.Illogical situations can last months or years.

The idea is not to hold the bag. Investors are looking to protect their wealth with physical gold as the global economy worsens and central banks spend trillions of dollars to combat the financial crisis we are currently experiencing. So I rather be long Gold until such time the price says otherwise and it usually rings a bell to get out of the way. Holding paper is not an issue.

 

[Subdude]

Quote from Shagi:

The idea is not to hold the bag. Investors are looking to protect their wealth with physical gold as the global economy worsens and central banks spend trillions of dollars to combat the financial crisis we are currently experiencing. So I rather be long Gold until such time the price says otherwise and it usually rings a bell to get out of the way. Holding paper is not an issue.

So you are advocating putting your money in a rather illiquid, volatile commodity as a means of protecting your wealth, while attempting to avoid holding the bag? What is the "spread" on the physical bullion, anyway? I bet it's hefty enough to thwart a closing transaction within a reasonable time frame, similarly to trying to make profit by buying and selling foreign currency from a TravelEx booth at the airport.

 

[makloda]

Gary Dugan, chief investment officer for Merrill Lynch Global Wealth Management EMEA said on gold:

"The fragility of confidence is forcing investors back into safe havens, with gold the top beneficiary. Gold is benefiting from massive ETF inflows as traditional demand from areas such as emerging market jewellery has largely collapsed.

It looks as if we will see a test of the $980-990 resistance very soon. Distressed financial sectors highlight the merit of precious metals as a secure store of value, while overly successful monetisation of debt threatens sharply higher inflation down the line".

 

[Shagi]

Quote from Subdude:

So you are advocating putting your money in a rather illiquid, volatile commodity as a means of protecting your wealth, while attempting to avoid holding the bag? What is the "spread" on the physical bullion, anyway? I bet it's hefty enough to thwart a closing transaction within a reasonable time frame, similarly to trying to make profit by buying and selling foreign currency from a TravelEx booth at the airport.

Based on today's prices why should I put down almost $100 000 for 100 ounces when I control same quantity with commodity by putting down only $8000. Do the maths there. And Comex Gold is not illiquid for my trade size as I'm not the elephant in that market.

Its foolish to think just becuase you hold cash/physical commodity you are in a less risk position than a leveraged trader. If im wrong I get out , no big deal there and I guess you hold just because you have the bullion locked up in a vault.