Archive through November 27, 2004

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rederob

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Post Number: 473
Registered: 10-2002

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Saturday, November 20, 2004 - 10:02 am:

ingot
Irrespective of gold in Fort Knox, Greenspan's comments last night put the lid on the coffin carrying the greenback:
``Given the size of the U.S. current account deficit, a diminished appetite for adding to dollar balances must occur at some point,'' Greenspan said at the European Banking Congress in Frankfurt. ``International investors will eventually adjust their accumulation of dollar assets or, alternatively, seek higher dollar returns to offset concentration risk, elevating the cost of financing the U.S. current account deficit and rendering it increasingly less tenable.''
Over the next few years world markets will firmly nail-shut the coffin and we will hunt around for the new "reserve" currency - could it possibly be the Chinese yuan?
This weekend will see world financial houses absorb the gravity of Greenspan's remarks and consensus will be a resounding off-loading of US currency going forward.
I note analysts forecasting a torrid time for gold next week due to its overbought status and desire for profit taking.
However, should funds quickly rebalance portfolios to reflect greenback weakness, they MUST add gold or other tangible assets - perhaps base metals.
Although gold has yet to crack $450/oz, the real question is how quickly will it capture $500 - it's no longer a question of "if", but "when".
Then there is the more local impact of currency conversions and POG in AUD terms: Will AUD strength outpace gold price increases going forward and stymie returns amongst our mining houses?
Certainly the trend has been for incremental increases in AUD POG this year and I would expect this will continue over the next 6 months.
Thereafter we need to see what shape the greenback is in.
As gold last night closed at 16+year highs, the probability of the pace of increases in POG now rises - fewer technical barriers to overcome.
If you were bearish on gold it might be time to reconsider.

archer

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Post Number: 367
Registered: 11-2002

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Sunday, November 21, 2004 - 12:11 pm:

http://www.schaeffersresearch.com/commentary/bernie_observations.aspx?click=home &cat=soc&page=bernie_observations&ID=11799

ingot54

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Post Number: 231
Registered: 05-2004

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Sunday, November 21, 2004 - 12:59 pm:

Thanks for the link,Archer.

You and Rederob and others already know of the Australian equivalent to this (did we lead the way?), but for the benefit of other folks on the forum, here is the Australian link. The ASX symbol is "GOLD".

http://www.goldbullion.com.au/

Go for Gold!

oib

"Successful people do what unsuccessful people won't."

archer

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Post Number: 368
Registered: 11-2002

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Sunday, November 21, 2004 - 04:48 pm:

No problemo ingot54
and yes australia did lead the way
The gold ETF in the us was in the works for a long time
but it had many obstacles thrown in its way
Gold and Silver have few friends at the moment but many large enemies

quamox

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Post Number: 117
Registered: 09-2002

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Votes: 0


Tuesday, November 23, 2004 - 10:52 pm:

Greatings GOLDers!

I have not traded gold before but I am interested in doing so. However, I am not really sure how to go about it and would like to request a little help. I have accounts with CMC and IG markets and am experienced in trading CFDs.

What is confusing me is the currency complications.

The "spot gold Vs US dollar chart" is very interesting but by buying gold in this way, through CMC or IG markets, I believe that I am exposed to a currency conversion to get my money from US to Australian dollars after the trade - adding a further complication to the trade. So, if I buy gold Vs $US, and the $US goes down relative to the Australian dollar, over the course of the trade, then gains can be negated. Of course this could be hedged buy shorting the US dollar.

Would anyone be kind enough to post how they are trading gold?? Is there a way to simplify the process or is everyone just accepting the chance of a currency movement erasing profits?

Hope that all made sense ...
Thanks,
Quamox

rederob

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Post Number: 477
Registered: 10-2002

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Wednesday, November 24, 2004 - 09:01 am:

Quamox
I only trade via long term equity investments,so am no help.
However, some years ago one of the COMSEC chat site posters, named "fraser" was a regular and he traded COMEX gold futures by the tick.
Apparently this can be the more lucrative option as you really don't have to worry much about exchange rate fluctuations, just how many points movement one way or the other. I believe "fraser" went through a broker in NY and held very tight stops - only ever traded on advice of his broker, so he said. I have no idea if he made or lost money!
Good luck

shawky

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Post Number: 432
Registered: 11-2003

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Wednesday, November 24, 2004 - 08:35 pm:

Q
You got me thinking regarding the exchange rate issue with CFDs in CMC or IG Markets. I thought that the exchange rate exposure was limited to the amount of margin that you require to open the desired position, so the impact of exchange rate movements in CMC is limited to 1/100th, and thus minimal in the equation.

Given that you asked the question, now I doubt my own understanding of the situation so will have to have a chat with the friendly dealer's at CMC.

If one had full exposure rather than the 1/100th exposure of the margin, then it would be futile to trade foreign currencies, for the conversion would negate the trade. Or would it?

regards
Shawky

P.S. I just edited this post, 1/20th should have read 1/100th as that is the margin requirement for Forex and I'm pretty sure, one is only exposed by the margin amount.

(Message edited by shawky on November 24, 2004)

(Message edited by shawky on November 24, 2004)

rederob

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Post Number: 479
Registered: 10-2002

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Thursday, November 25, 2004 - 07:09 pm:

Hard to ignore the most decisive break in POG this year: Breaching $450 overcomes a psychological barrier pervading bearish technical traders.
Better yet, US markets are effectively closed till next week, so having POG sitting above $450 thru the weekend would be great reinforcement of the golden bull:

All we need is for oil to also break back over US$50/bbl and the game is on for young and old.
That said, POG is now overbought, so a correction is a matter of days away, tho downside may be very shortlived this time round.

justice

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Post Number: 315
Registered: 01-2003

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Thursday, November 25, 2004 - 09:14 pm:

It'd the USD that's falling and all else is rising against it.

POG in relative AUD is falling.

You posted comparison charts showing the POG in various currencies rederob. Would you post such a chart again please.
Still awaiting the divorce from the EUR pegging. And that's likely to be a much longer wait.

Ice.

Faber est suae quisque fortunae.
Each man is the smith of his own fortune.~ Appius Claudius Caecus

rederob

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Post Number: 480
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Thursday, November 25, 2004 - 09:48 pm:

justice
The multi-year weekly charts still show an overall uptrend for POG in the 4 currencies.
Clearly the AUD has performed very strongly and our gold equities are not getting the upside we would like.
At some point the greenback will clawback and hopefully POG will stay high, giving our AUD POG a small fillip.
Anyhow, we should be pleased POG tonight broke $450 and is mid $452s as I write........ go go gooooold.

ps, POG in euro-terms will reclaim $350 and the technicals should push it higher from there

goldbug

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Post Number: 67
Registered: 02-2004

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Friday, November 26, 2004 - 07:02 am:

Given that there is once again record contracts on the Comex (both short and long) and that POG overnight has broken the $450 level, albeit on light volume, there should be a few nervous shorts gagging over their turkey this weekend.

Come Monday in the US will there be short covering or the chance to take some profits??

The next week is setting up to be a watershed event either way. A convincing move upwards will confirm to the undecided that the long term secular bull market is the real deal.

This is the beginning of stage 2 of the bull market. this is the stage when the general public become aware of their dire fiscal situation that their governments have put them in and a realisation that they need to diversify into anything other than a paper currency.

To all of you that own gold / gold shares you have until now been in the minority...that is all about to change.

Regards

Goldbug

rederob

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Post Number: 482
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Friday, November 26, 2004 - 07:38 am:

Goldbug
With every chance that the greenback takes further losses today, POG could close nearer $455 over the weekend - panic on Monday will be order of the day.
US policy of benign neglect of USD will see substantial long positions build on gold.
Funds in particular will need to hedge their currency concerns and gold now looks a dead cert buy in at greater than ever proportions.
We need a sharp pullback now to shake out the weak hands and kick off the next big rally - faster paced and more long-lived.

Justice
Hope the above charts are useful.
While AUD strength is taking the gloss from our gold equities, it is also true that the average man in the street hears only that "the price of gold is at 18 year highs", and jumps on board so as to not miss out on this wonderful opportunity.
So while AUD bullion prices remain relatively unchanged, there is potential for equities to outperform.

Maybe we should do the "hilarius" thing now and ask readers to post their forecast USD POG price (COMEX closing price) for the last trading day of 2004: I will maintain a tally here - all forecasts to be in by midnight AEDST 30 November : My tip is $474/oz

branchline

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Post Number: 38
Registered: 12-2003

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Friday, November 26, 2004 - 08:26 am:

Great work gentlemen, may I suggest we add silver price in there too?

Regards
Branchline

goldbug

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Post Number: 68
Registered: 02-2004

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Friday, November 26, 2004 - 08:38 am:

Count me in RR at $505

rederob

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Post Number: 483
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