Au/Gold keeps dropping
 

Au/Gold keeps dropping, When is it time to sell?

Before it starts dropping?

Everyone here has already sold. You still hanging on?

It's down 25% in the last quarter while the major indexes are up 10-20%. The economy is looking up, India is buying less because their economy is in the tank, the dollar is strengthening, shale oil is reducing oil imports, only speculators ran up the price this high and they're getting nervous.

The sound I hear is a bubble bursting. It will go lower before it goes higher. Take your profits and be happy.

Gold's price rises and falls like any commodity traded on the international market. Have you set your sale price limit ?

Well if you haven't already.....
Gold is still 50:1 over silver. But I'd rather get the 50 ounces of silver than the 1 ounce of gold.

I haven't sold any gold or silver all year. Not much fractional metal has been coming in, just the usual karat gold, sterling, and 90% coins.
I'm waiting for $1700/oz to come back, perhaps a mistake on my part. I don't have a pressing need for the money, metals are about 10% of my investments (not by design, just sort of happened).
Jim

Getting to be time to buy...

Gold will hit $1,000 before it hits $1,700 again. There are too many factors against gold value now. Demand is low, the Fed isn't planning more quantitative easing, the trouble in Europe is driving the Dollar up, and the speculators who ran prices up are taking profits and getting out. Im not saying it will never be higher than it is now, but it is down and will go down farther. It's not where you want to park your money.

Speaking as one not invested in gold, and not following the price trends all that closely:

What makes you think $1700 is coming back?

Based on historical trends, the price since '06 is a historical anomaly. Perhaps a repeat of the 1980 peak & fall on a larger scale. http://www.nma.org/pdf/gold/his_gold_prices.pdf

Imho, a lot of the price rise may have been driven to a large extent by all of the "goldbug" advertising & hype, and being of a suspicious nature, I strongly suspect the advertising was sponsored by those who were about to sell, and are now laughing at the suckers who fell for their "pump & dump" scam.

Having said that, if demand stays high, it may be worth holding onto for awhile (gold has been moving on a roughly 8-10 year cycle since '80 or so), but if you've made some money on your purchase - sell!!

The worst thing to do is hold on based on optimism (e.g. my Lucent stock ;-) ) . Sure, you may give up some potential short-term gain, but avoiding an outright loss is more important. Unless you really want/need the capital loss for your taxes.

From the goldbug's point of view . . .

“Emerging market central banks continued their gold buying spree in March. UBS Investment Research says that Mexico bought 16.8 tons, Russia bought 15.6 tons and Turkey added 11.5 tons. Additional small purchases were made by Tajikistan, Kazakhstan and Belarus. We wrote a few months ago that central banks have begun accumulating gold reserves since the Federal Reserve cut interest rates in 2007, and HSBC Global Research expects this buying trend to continue for another five years.”

“In March, China’s gold shipments grew to 62.9 tons, which is the third largest volume of gold in a decade from Hong Kong to the mainland, according to UBS. With ongoing rising demand, China may overtake India this year as the world’s largest gold buyer.

India’s government abolished the excise duty on gold jewelry. This was one of the reasons for the jewelers’ strike, which drove gold imports to decrease 55 percent in India a few months back. Getting rid of the tax should encourage the restocking of gold and bring Indian gold buyers back to the market.”

And . . .

“The bottom line is gold’s latest secular bull almost certainly didn’t climax last summer. Such major bulls need an extreme psychological event to end them. And it comes in the form of a popular speculative mania and vertical parabolic ascent. While gold was indeed overbought last August, the resulting topping looked absolutely nothing like the previous gold-bull climax of several decades ago.

And if gold’s bull isn’t over, then gold is destined to power to new all-time highs sooner or later. And once that inevitable recovery gets rolling, capital will flood back into this metal and the stocks of the companies that bring it to market. So if you can stand strong as a contrarian and fight the popular fear gold’s latest correction spawned, there is a vast smorgasbord of incredible bargains in the precious-metals realm.”

All from Kitco links . . .

Ian

Kitco wants you to buy gold.

True. But I said it was from a goldbug's point of view.

Ian

And a vid from MSNBC.

Ian

Gold is done. just let it go. retail investors just dont get it. counter cyclical to dividend stock index. look it up plot both since '29 and check out the past 10 years. I cant tell you how I know. Just check it out.

I don’t know. From our current vantage point, can we really trust historical perspective in global finance right now? This includes the bull analysis in my quote above as well, of course.

Ian

If this results in all those We-Buy-Gold storefronts going away, I won't complain. They just all too much remind me of the payday loan place. I hate leeches.

If you go to Barchart.com, Futures, Commitment to Traders, you'll see the large specs are still long gold. They're supposed to be the "smart money". When they start letting go, then I'd drop it as well.

There's also seasonality to consider. Gold typically rallies at the end of August.

So...if the large guys are long and gold 'should' rally in a few months, I'd hold on a little longer.

Just my .02

What to do, what to do...hmm? I established a position in both gold and silver over the past couple of years expecting to hold it indefinitely as a hedge (and still have some very nice gains). Now, an unexpected land purchase has crossed my path in recent weeks. I'd been planning on liquidating 2/3rds of each along with some equties but the recent correction just sucks :(. Go ahead and liquidate or hold for a bounce within the next few months? Decisions, decisions...

ps: Anyone interested in Eagles, Mapleleafs, Krugerrands, or 100 oz bars :)

How many are you talking about (other than the big silver bars)?
Jim

Sent you a PM Jim....

Now may be a good time to buy. If our idiot President gets re-elected, then that will be the "its too late" time to buy as it very well may be needed after that...

Goldman's new money machine: warehouses | Reuters
Goldman Sachs is stockpiling aluminum in Detroit warehouses using their taxpayer supplied funds. This will drive up the cost of domestic manufacturing, and may lead to a commodities balloon based on hype.

Info for those "in the know". Step cautiously.

Except the article is wrong. Aluminum is at a low. It is close to the December low of last year. I sell special metal products, including extruded aluminum.

Well, thank goodness one party in Congress is blocking regulation of investment banking and commodities trading and cutting the CFTC (Community Futures Trading Commission) so that it can't act. As MF Global and JP Morgan have proved, and Goldman proves everyday, our esteemed Masters Of The Universe don't need any regulation. And if you agree, they'll donate unlimited sums to your campaign, since that is now allowed.

If physical gold is going down in value,the chinese have it all wrong as do the Russians and Iranians and they are all very good chess players. The Hoarding Continues: China Purchases A Record 100 Tons Of Gold In April From Hong Kong | ZeroHedge

With the recent revelations about the problems the Investment Banking houses have been experiencing I now support a return of Glass Steagle and a scrapping of Dodd Frank. The REGS have been on the books but it takes someone to enforce them. Usually it is not a problem of not enough regs but a lapse of that enforcement.

Regulations and law do not guarantee good behavior either by citizens or government. Rather self-control, morality and ethical behavior are necessary. Our "friends" on the Left believe in the perfectibility of Government and forget that it is made up of people who have all of the same problems of the citizens that they seek to rule. Quis custodiet ipsos custodes? - Who will watch the watchmen?

The Secret Police

I was wondering about this. Sounds fishy.

On one hand:
-Insider trading and spreading public rumor-milling are illegal.
-But of course, a youthful exuberant reporter might be exempt from this.
-A few Detroit warehouses with scrap would not effect the worlds supply in the short term, but it could affect stock prices temporarily....

On another hand:
-The earth's bauxite reserves is supposed to be in limited supply.
-Eventually Al prices may go up depending on industry use.
-This could be manipulated by corrupt geologists and media reports....

We are officially below the December 2011 low. They may "think" the price will turn around back to last summer, which is about 30% higher than today, buying low to sell high...I'm not sure how many metric tons they are storing, but it would have to be an awful lot to affect the price. My next shipment will be about 150-200 tons.

And Au is trending cautiously higher & holding at ~$1625. Everybody is holding their breath for the Greek results.

Ian

I will predict: The Greeks will not do what is needed. The rest of the EU will try "one last time", fail and throw them out of the EU.

I fear you are right. That is the 'smart money' bet, unfortunately. Meanwhile the Swiss & German banks etc are filling with haven cash from Greece & Spain.

Ian

How glad are the Brits and the Swiss for keeping their currency???

Swiss never joined the EU.

thats my point!

What is the explanation for the weakness of the CHF to the $?
I was 'lucky' enough to spend a few days in Switzerland last September near the peak of $1.25/1.
Jim

Good question. Google knows all. ;)

"(Reuters) - Switzerland's central bank says it is determined to prevent the country's currency climbing too high against the euro, but there are doubts in the options market its resolve will hold during the latest chapter of the euro zone debt crisis. Risk reversals show investors are building up bets in the options market for a break of the floor of 1.20 francs per euro the Swiss National Bank set last year to shield the economy from the flood of safe-haven flows due to Europe's crisis.

The SNB has intervened regularly to hold down the value of its currency. The bank's Chairman Thomas Jordan told a news conference on Thursday it was ready to buy foreign currency in "unlimited quantities" and "take further measures at any time." Reuters

Currency exchange is baffling to all but the experts. And they get it wrong as well.

Ian

In 2000, it was 1.4 SF to $1USD, last year is was 0.8 SF to $1USD. Now 0.952