The DON'T buy gold thread

sabretoothtigger

Dennis Gartman, an American economist, said: “Crude oil is rallying; and yet gold falters. The grains rallied; and yet gold faltered. The base metals have rallied, but gold is faltering. The monetary authorities have force-fed money into the system, and yet gold is faltering. In an environment where gold should be heading skyward, it is not, and when something that should be rallying isn’t, we pay heed, find our keys, call for the valet to bring our car around and leave the party quietly.”

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/4980399/The-gold-rush-Is-it-too-late-to-jump-on-the-bandwagon.html

cloud_dog

Would agree with the above; no point wearing blinkers.

Also, (for you charty type people out there)...... Any one see a possible head and shoulders formation appearing on the 12 month chart???

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gld&sid=0&o_symb=gld&freq=1&time=8&x=0&y=0

Edit: Anyone commenting on the above formation and replying "No, but I can see some VO5 just behind" will have to be thonged until their outsides are in and their insides are out :eek:

sabretoothtigger

You mean inverse head and shoulders I think.

I dont know, to call these kind of things you need to watch, spot, call it and then observe to see if you are correct. Then with a few sucessfull calls it becomes reasonable to use as a strategy.

I would say no for the moment

http://www.trade10.com/Head_Shoulders.html

cloud_dog

I was referring to the recent activity, since approx early / mid Jan 09.

If you look at the linked 1 or 2 year charts:

http://www.kitco.com/charts/techcharts_gold.html

You can see that quick rise to the shoulder, the head from early Feb to early Mar and then we are in a similar shoulder pattern.

As you say it may or may not play out, will be interesting to see.

EDIT: Actually, just looking at the longer term charts (see above) a comletion of the short-term head and shoulders may be the completion the the longer-term inverse H&S. Which, would fit in with my (and many others) idea that gold will correct back to the USD850(ish). Time will tell.

Stavros_3

Gold is at a high, or not far from it. if you want a nice coin, sov or Britannia to admire in its case go for it. Me, well my portfolio managed by my discretionary fund manager and IFA will not be including gold, thats their decision, and I trust them. My exposure to equities have risen by 30% since January and in this climate is fantastic. I'm investing for another 5 years for long term growth on my capital. If the price of G**d drops dramatically in the next few months or years then they might purchase, but now.......... no way

sabretoothtigger

What about if it retouched 2008 lows. November levels for example, that seems feasible especially if we get a false dawn from all these government measures and markets make some recovery

Which countries are you invested in Stavros?

Stavros_3

sabretoothtigger wrote: »

Which countries are you invested in Stavros?

Not Ireland pmsl. My portfolio has funds mainly in Europe and the UK. I came out of cash in late December to invest long term. They are all holding their own and look to long term growth. The writing was on the wall last summer so I bailed out toot-sweet. Only a small percentage of my portfolio is exposed to single company equities and whoever at my wealth management company picked them has certainly done their research well.

tradetime

sabretoothtigger wrote: »

Dennis Gartman, an American economist, said: “Crude oil is rallying; and yet gold falters. The grains rallied; and yet gold faltered. The base metals have rallied, but gold is faltering. The monetary authorities have force-fed money into the system, and yet gold is faltering. In an environment where gold should be heading skyward, it is not, and when something that should be rallying isn’t, we pay heed, find our keys, call for the valet to bring our car around and leave the party quietly.”

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/4980399/The-gold-rush-Is-it-too-late-to-jump-on-the-bandwagon.html

I like Gartman's commentary, he has a greeat turn of phrase.

mrposhman

I read in shares magasine that in the early part of this year there has been a massive increase in the amount of scrap gold.

In fact, it states that in Feb, there was enough scrap supply to meet worldwide demand ,

Its likely that whilst scrap supplies stay high, gold will stay at its current levels.

Once the scrap supplies are diminshed, gold could go either way really. If stocks have a rally and interest rates stay low, then investors may be encouraged to move back to equities instead of gold which could force the price much lower. If equities continue to falter then gold could start to rise.

Without knowing which way the market will go and how much scrap gold still exists (and how much gold suppliers are producing to only hold as stock) then I think its very risky to be honest.

You could invest at these levels but quitre easily find yourself at sub $700 very quickly. Likewise it could rise substantially.

If anyone thinks that gold is an easy play and will not move quickly may well have their fingers burnt badly.

cloud_dog

mrposhman wrote: »

Without knowing which way the market will go and how much scrap gold still exists (and how much gold suppliers are producing to only hold as stock) then I think its very risky to be honest.

Not sure why people think that gold investors only hold gold or have a high risk exposure to it.

Mrposhman, in these troubled times I think your statement would have been ok if you'd just said:

"Without knowing which way the market will go... any investment could be very risky"