Gold price to go steady, dips imminent?

sabretoothtigger

matthew74 wrote: »

Is it possible that sovereign states may sell huge reserves of gold at the current high prices to help resolve debt issues. If so gold prices will crash and the stock market will probably go sky high.

Its possible but its more likely they will print money before that. Its easier and it costs nothing but their reputation

When they have no choice because they lost all goodwill then they will sell gold and maybe even stop spending too much also

lvader

Sop wrote: »

Interesting so the gold price could plunge if central banks started selling into the market on mass. They could not do that with silver because most silver stockpiles have already run out.

Governments couldn't care less about Silver, thats why they sold it in the first place.

Ark_Welder

sabretoothtigger wrote: »

Its possible but its more likely they will print money before that. Its easier and it costs nothing but their reputation

When they have no choice because they lost all goodwill then they will sell gold and maybe even stop spending too much also

Eurozone countries can't print money. Only the ECB can do that.

Portugal and Greece are 1 and 2 in the league table of gold as a percentage of their respective national forex reserves. Italy is 5, followed by France. Haven't done any calculations re. gold price and national debt levels. Someone else can have a play at that...

http://en.wikipedia.org/wiki/Gold_reserve

sabretoothtigger

Aug. 17, 2011, 1:59 p.m. EDT
Gold settles at record, six dollars from $1,800

SAN FRANCISCO (MarketWatch) -- Gold futures settled at a record Wednesday as investors continued to seek the metal amid worries about a potential global slowdown. Gold for December delivery GC1Z +0.61% added $8.80, or 0.5%, to end at $1,793.80 an ounce on the Comex division of the New York Mercantile Exchange, handily supplanting the previous day's record. Gold posted an intraday record of $1,801 an ounce Aug. 10.

Interesting so the gold price could plunge if central banks started selling into the market on mass.

The price can always go down but its the reason why that matters. Gold is an implied backing to that currency, if they sell it that makes their paper money even more worthless.

So yea the price does go down but its fair to argue that gold would be more worthwhile then ever.
Unless the governments somehow improve the ongoing prospects of their currency there is no competition.

I'd happily sell gold to buy euros if they set interest rates to 10% and it looked like europe was able to export more then it imported, that'd be a solid safe return on my savings.

Gold would then rubbish in comparison, the price of each at that time matters less but I dont expect if that ever happened I would get back less then I paid in 2009



Been a while since I heard anyone in politics say inflation was bad:

UK Osborne: Inflation Hitting Britons Harder Than Spending Cuts
LONDON (Dow Jones)--High inflation is hurting Britons more than the U.K. government's GBP111 billion austerity program, Chancellor of the Exchequer George Osborne said Wednesday.

In an interview with Sky News, Osborne said that while any increase in inflation was "something you want to take a close look at", he said it wasn't unexpected as the Bank of England had forecast the rate would continue to rise in the coming months.

Official statistics Tuesday showed the U.K.'s inflation rate increased to 4.4% in the 12 months to July--more than twice the BOE's target rate of 2%--from 4.2% in June. The central bank said that it expects the rate will peak at around 5% this year before gradually returning to target in 2012.

"I agree with them [the BOE] that the main ingredients of this increase in inflation are temporary or external," he said.

Osborne said it was this high rate of inflation that had hit U.K. households rather than the government's austerity program.

"Although government cuts have been the thing the media has focused on more," he said.

He also rejected the suggestion that the BOE's inflation target should be abandoned or raised.

"To change the target would introduce real instability and uncertainty into the British economy," he said. "What we have going for us at the moment is stability when many other countries are experiencing instability. That stability has a real, practical outcome which is low interest rates for families and low interest rates for businesses. It keeps people in their homes, it keeps people in their jobs, and it is a platform on which you can grow the economy."

The chancellor's comments come as data released earlier Wednesday showed the U.K.'s unemployment rate rose to 7.9% in the three months to the end of June from 7.7%, while the number of people claiming the jobless benefit posted its largest rise in more than 18 months in July.

Osborne said he had a "huge amount of sympathy" for people looking for work, but said it was important people improved their skills to give them the best chance of finding jobs.

-By Ainsley Thomson, Dow Jones Newswires; 44 20 7842 9318; ainsley.thomson@dowjones.com

(END) Dow Jones Newswires

August 17, 2011 13:04 ET (17:04 GMT)

Venezuela to nationalise gold industry http://t.co/fyCGh7R

Ark_Welder

sabretoothtigger wrote: »

Gold is an implied backing to that currency, if they sell it that makes their paper money even more worthless.

Gold doesn't back the Euro. Nor the Pound. Nor the Swiss Franc.

Explain how gold sales by either Greece or Portugal would make the currency of Germany more worthless.

Geoff23

matthew74 wrote: »

Is it possible that sovereign states may sell huge reserves of gold at the current high prices to help resolve debt issues.

Not if they have any other option.

Geoff23

sabretoothtigger wrote: »

Martin doesnt want to take flak from FSA I expect. If he is seen to be promoting speculation to high street consumers its a problem.

You mean because it's too risky? You mean because it is possible to lose money speculating unless you know what you are doing?

"Speculating" on the price of gold is what the day-traders do and the genuine hedgers don't want to do. Any "high street consumer" who thinks they can beat the professionals at that game is a fool who will soon be parted from their money.

The topic of gold keeps coming up because a lot of people are getting increasingly worried about the state of the existing global monetary system, and gold has traditionally been the safest of all havens. Nobody (I hope) is encouraging anybody here to speculate on the short term (days, weeks, months) value of gold. That depends on things that most people here can't follow on a daily basis. What actually matters to the sort of people who read and post on a website like this one is the bigger questions about global politics and economics, what is happening in the world, why the price of gold has gone so high, what is likely to happen next....it's about global politics, economics, history and a whole load of other stuff too.

What would concern me is if there is somebody pulling strings here who doesn't want "ordinary" people to start thinking about these bigger questions, especially if people's financial future is likely to be influenced by the answers. We have to start thinking about them, because right now the world is in a great big monetary mess, and something has to give.

Geoff23

Sop wrote: »

Interesting so the gold price could plunge if central banks started selling into the market on mass.

Bring it on!

DiggerUK

Geoff23 wrote: »

.....The topic of gold keeps coming up because a lot of people are getting increasingly worried about the state of the existing global monetary system, and gold has traditionally been the safest of all havens. Nobody (I hope) is encouraging anybody here to speculate on the short term (days, weeks, months) value of gold......

Good post for any lurkers, or those undecided about gold.

This article from City Wire puts a good precis of those who counsel caution with gold. Not advice I would urge anybody to follow, but needs to be considered.
..._

DiggerUK

llubdlog wrote: »

Looks like that last dip is all over....but by next year these prices will look cheap.

I'm still sure that a substantial dip will happen.
To be on the safe side, I've put the pie in the freezer for now.

Haven't seen any reports of more margin hikes, anybody heard anything?
..._