Gold, Silver and Other PMs

Top 441. Jan 6, 2004 8:13 PM

» Normxxx - Re: Re: Re: This Bull Market in Metals is Just Beginning... BELI

In response to message posted by reynosa:

If I could make predictions to the date, I would probably be able to indulge in more expensive entertainment than writing for BBs. You may want to read some of Stephen Roach's comments on the state of the international economy:
http://www.morganstanley.com/GEFdata/dig...

The value of the dollar must come down, but against the Asian currencies (most of which are pegged to the dollar). So long as it drops only against the more stable currencies, it does not help our economy that much.

I wouldn't worry too much about Mad cow disease, you've probably got a better chance of winning the lottery at least a couple of times in one year than of getting it from eating beef.

-- posted by Normxxx

Top 442. Jan 9, 2004 12:35 PM

» Normxxx - Repeat? . . . or, Rhyme?

-- posted by Normxxx

Top 443. Jan 10, 2004 12:40 PM

» Normxxx - Relative Gold, Relative Dollar

The Relative Dollar and Gold full text

by Adam Hamilton | January 09, 2004

By creating a Relative Dollar and Relative Gold, merely dividing the daily gold price and dollar price by their respective 200dmas, we can greatly increase our insight into the critical interrelationship between these two competing currencies. The graph below, introducing both the Relative Dollar and Relative Gold, suggests key levels at which short-term 200dma divergences grow so great that speculators should start expecting a short-term countertrend mean reversion back to the 200dmas.

Since Relativity is calculated by dividing a price by its 200dma, it is most useful to think of these resulting numbers in percentage terms. A Relative Gold reading of 1.15, for instance, indicates that the gold price is 15% above its 200dma at any given moment in time. A Relative Dollar level of 0.90, likewise, tells us that the dollar is trading at 90% of its own 200dma. A 1.00 Relativity reading, of course, indicates that either price is trading right at its respective 200dma.

<img src="http://www.safehaven.com/images/zeal/122..."

Today the Relative Dollar has closed as low as 0.908, right above the major short-term countertrend reversal level that has been so consistent in its bear thus far. While anything can always happen in the markets, speculation is primarily an exercise in probabilities, an odds game. If the Relative Dollar 0.90ish levels held in earlier dollar downlegs, shouldn't speculators at least give this support the benefit of the doubt today?

The ominous implications of this potentially imminent dollar countertrend rally are great indeed for short-term gold speculators. If you look at each Relative Dollar interim low above, and follow the straight yellow lines up, you will note that Relative Gold interim highs tended to happen near Relative Dollar interim lows. Indeed today we have a high Relative Gold reading of 1.153, the second highest interim extreme achieved in gold's bull market to date.

Now today gold speculators face these same short-term bearish omens once again. Gold has soared in recent months while the dollar has plummeted. Gold is approaching high levels relative to its 200dma while the US dollar is approaching low levels relative to its own 200dma. In recent years these very Relative Dollar interim low levels have heralded the negative short-term-sentiment extreme that sparked a strong countertrend bear-market rally in the dollar.

For my fellow gold and gold-stock speculators, I would be really cautious here and not add new positions. You also probably ought to ratchet up the trailing stop losses on your existing positions. The next great buying opportunity to ride another glorious gold upleg will probably not occur until gold converges with its 200dma, until Relative Gold once again approaches 1.00 parity. If the past is any indication, this countertrend move could take a few months to fully play out.

-- posted by Normxxx

Top 444. Jan 10, 2004 2:08 PM

» radiodude - Dumb Question about gold coins

.
Where on-line can I find the fair bid and ask for the American Eagle, the Maple leaf, and the Kugguarand ?

Our local paper lists these prices each day, but I can't find these prices on-line for some odd reason.

-- posted by radiodude

Top 445. Jan 13, 2004 8:05 AM

» Normxxx - Bank Credit Analyst says . . .

Gold: Getting Frothy, But More Upside

2004-01-13 08:26:00

Gold prices are vulnerable to a correction after the recent near vertical rise, but higher prices loom on a cyclical basis.

The dollar price of gold has surged, aided by the weak dollar and aggressive monetary easing around the world, particularly in the U.S. The non-dollar price of gold is also in an uptrend. The cyclical outlook remains upbeat, according to our U.S. Investment Strategy service’s Gold Indicator (GI), which includes fundamental and technical indicators designed to gauge sustained periods of rising/falling gold prices. The GI was bearish up until 2002, except for a brief period in 1993-94 when monetary policies had been very easy. The backdrop is even more bullish today given that the Fed is targeting higher inflation and the Administration is cheering the U.S. dollar lower.

-- posted by Normxxx

Top 446. Jan 13, 2004 1:57 PM

» pjstack - Re: Dumb Question about gold coins

In response to message posted by radiodude:

Here is a site that will give buy and sell prices:
http://www.golddealer.com/

It is a coin dealer in Inglewood, California.

In my opinion, owning gold coins (and I do have a few) is really numismatics in a very thin disguise!

The only place the little guy can unload a gold coin is through a coin dealer. They are not particularly liquid (in my opinion).

Phil S.

-- posted by pjstack

Top 447. Jan 15, 2004 8:59 AM

» Normxxx - INFLATION

From A Usually Reliable Source. . .

The constant mantra from our officials at the Federal Reserve goes something like this: We can keep interest rates at forty-year lows because there is no inflation. I read it as follows: The economic recovery will be in jeopardy if interest rates rise and second, they are sending the message to the European Union that everyone must participate in re-inflating the global monetary system. If the Europeans decide to devalue the euro like most other countries are already doing with their respective currencies, all it will do is slow the decline of the dollar. If currency exchange rates move too quickly it will cause too many dislocations globally. This is why currency trends tend to remain in place for a sustained period of time, usually five to seven years. My best guess says they will have to intervene sometime in the very near future. In fact, they have already begun the process by talking the euro lower. If the euro is deliberately weakened relative to the U.S. dollar, it should be a positive for the stock market and definitely a positive for the dollar.

If all currencies devalue it will be highly inflationary. The U.S. dollar still needs to fall the most in order to correct our trade deficit and our federal budget deficit. Things we need and use will cost more in all currencies, not just more in dollars. They can expand the supply of all fiat currencies by 5%, 10% or 20%. I would sure like to see them expand the above ground inventories of gold and silver by 10%. It’s physically impossible! More fiat currencies and basically the same amount of precious metals means much higher gold and silver prices along with commodities. Prices are going to move higher for everything, it’s just not here yet.

The CBS MarketWatch headlines read, “U.S. producers paying more for inputs. PPI up 4% in 2003 on energy costs; core rate rises 1%.” The 4% rise in 2003 is the biggest calendar year increase for the Producer Price Index since 1990. While the increase of 1% doesn’t seem like much to the core rate, it is the fastest increase in over two years. But there is no inflation!

In 2003 finished energy prices rose 11.5% and finished food prices rose by 7.7%. Now you know why inflation statistics are usually stated “excluding food and energy.” They are probably the two biggest things we use every day. But there is no inflation!

Core crude goods prices (goods at the beginning of production or “inputs”), excluding food and energy jumped 3.4% in December. Gasoline prices went up 5.1% in December and overall energy prices rose 1.8% for an annualized rate of 21.6%. The Labor Department said the cost of fresh and dried vegetables jumped 20.7% in December. But there is no inflation!

Prices are moving higher, it just hasn’t made it to retail yet. We are still running our factories at 75.7% of capacity, meaning we have a huge amount of excess. Excess capacity also exists overseas. I have to believe the lack of pricing power at retail will lead to deterioration of corporate earnings moving forward. That will not bode well for the stock market and in fact we will probably see margins coming down with the holiday sales reports that are forthcoming. Mr. Paul McCulley of PIMCO (managing director of $100 billion) puts it this way, “You have cutthroat competition globally and here in the United States, and there’s no ability for producers to pass along increases in commodity prices.”

Inflation is in the pipeline, it’s just not here yet due to excess capacity and excess labor. How can wages go up commensurate with inflation when we have so many people out of work? The striking grocery workers are a perfect example. They couldn’t get a better wage and benefits package because there were lots of people waiting in line to take their jobs.

-- posted by Normxxx

Top 448. Jan 16, 2004 11:05 AM

» Austrian - Re: This Bull Market in Metals is Just Beginning... BELIEVE IT!

In response to message posted by Kirk:

Kirk,
I independently verified the supply demand position of gold. I will post the links. The problem with this market, is you have to piece together the story through reliable sources.

Interestingly, if gold leasing is added into the equation, the store of gold available for sale by central bankers goes down by half.

Regards,

-- Austrian

-- posted by Austrian