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Gold & Precious Metals

GOLD: What's It Going To Be: A Dash to $15,000 - Consolidation HERE - or a Float to $2500


Posted by Various Authors

on Friday, 28 September 2012 00:00

CBANK
 
Peter Grandich: A technical look at gold for a moment is worthy at this time:
 
daily-gold1
 
Gold’s incredible rally after breaking out from a nearly one-year corrective/consolidation phase brought us to a quite overbought state on the daily charts noting by point A. MACD (Point C) has also turned over and the space between price and the 200-Day M.A also suggests consolidation.
 
weekly-gold
 
I depend far more on the weekly charts since I don’t usually trade gold in and out. Here, we see a much more constructive picture with RS (Point A) not even reaching overbought in this move up. The $1,800 area is key resistance (Point B) and spending some time under it shall only benefit us bulls over the longer term. MACD (Point C) has only begun to move up in earnest.
 
While some more backing and filling is actually good for those of us who see $2,000+ gold in our future, the “mother” of all bull markets should continue to limit most of its surprises to the upside.
 
dol
 
Back in the early part of 2011, I suggested the U.S. Dollar could rally and cause the U.S. Dollar Index to reach the 83-84 area (Point A) but would consider such a move a mere “dead-cat-bounce” in a secular bear market that should eventually lead to new lows below 70 (Point B). With the Euro the single biggest component of the Index and it continues to have its own turmoil, it would come as no surprise to me that the Index stay fairly close to its key moving averages (Point B) for the near-term. Longer-term, there’s only one song to sing for the dollar.
 
Ed Note: If you want to read about a mining stock that has become Peter Grandich's "single largest holding ever (by far now) go HERE and scroll down to the chart of Oromin Explorations
 

$15,000 GOLD

by Value investor Jean-Marie Eveillard
 
Jean-Marie Eveillard who overseas $60 billion was quoted in King World News yesterday saying:
 
There are people who have figured out that in view of the enormous amount of money printing, which has taken place over the past three or four years, a price of $15,000 an ounce for gold would not be absurd.” “I’m not sure they are right, because I have not studied how they came to that conclusion, but I think what is true is there has been gigantic money printing, which will of course help the price of gold.”
 

"It's been a fairly quick move over a shortspace of time"

by Citi technical analyst Tom Fitzpatrick

Tom Fitzpatrick has long argued that gold prices could surge. Indeed, he sees prices rallying to $2,500 within the next few months.

However, he cautions that prices are unlikely to see a straight line up, especially considering how quickly prices have surged lately.

"It's been a fairly quick move over a short space of time," Fitzpatrick says. "We also get a bit of a push on the backs of the announcements of additional QE, but we do look to be losing a little bit of momentum short-term.".

"Given where we've come from, gold has risen from almost the $1,500 level to the $1,800 area, could gold retrace back down to $1,675? It's not at all impossible (see chart below). In the overall scheme of things it would just be a decent backfill."

citi-gold
 
 

The Simple Case for Gold

by Charles Goyette
 

Charles Goyette is the author of the New York Times bestselling book, The Dollar Meltdown and the recent blockbuster release, Red and Blue and Broke All Over.

Charles case for Gold is this: Unlimited money printing means only one thing: Unlimited gold prices! 

As Charles says, just connect the dots:

As the U.S. Fed prints dollars in unlimited amounts, it devalues the dollar.

As the European Central Bank prints unlimited amounts of euros, it devalues the euro.

As the Bank of Japan jumps in to print unlimited quantities of yen, it also devalues the yen.

And as these three major currencies go down, so do virtually all other paper currencies in the world. "There’s only ONE kind of money they cannot devalue: GOLD.  As paper currencies fall, gold surges. No two ways about it."

 

 

 

 


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Bonds & Interest Rates

The Central Bankers could End Up Killed , Hanged or Crucified


Posted by Marc Faber - Gloom, Boom and Doom Report

on Thursday, 27 September 2012 16:24

We have the money printing today which we did not have before and so it is very difficult to predict because it is always a political decision. Conventional wisdom went wrong because it has been brainwashed by the media and the policy makers. What's happened is not the failure of the free market,  but the failure of the interventionists with monetary fiscal policies and regulation.

All I can say is if you look at history the most powerful people were usually in the end killed or hanged or crucified, and the central bankers today are the most powerful people. So you can imagine what I am thinking about the central banks, and what will eventually happen to their leading employees.

 More below in an interview with Australia Financial Radio:

 

About Marc Faber:

Dr Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude. Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, which acts as an investment advisor and fund manager. You can read and watch more at his MARC FABER BLOG which tracks Faber's Investment Strategy , Market analysis & Outlook.



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Energy & Commodities

Markets still have big downside risk – be careful!


Posted by Josef Schachter: Schachter Asset Mgmt.

on Thursday, 27 September 2012 12:16

Hold large cash reserves. Buy late October through mid-December during upcoming tax loss selling season.

Joschachter



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Currency

HOUSE OF SAUD STARTS TO UNRAVEL - OTHER DEATH KNELLS FOR THE DOLLAR & THE POTENT REASONS GOLD'S SET TO EXPODE HIGHER


Posted by by Jim Willie CB Editor of the “HAT TRICK LETTER”

on Thursday, 27 September 2012 11:04

More loyal Jackass wannabee followers will recall a story (repeated often) that on the Easter Sunday weekend of April 2010, a secret gathering of over 200 Arab billionaires convened in Abu Dhabi. They arrived in unmarked jets. My source was one of only two or three white faces in the crowd, invited by his clients. One result of the meeting was an accord struck between the Persian Gulf oil producers, led by the Saudis, to work toward a pact with Russia and China as protector of the gulf in return for financial cooperation, economic construction, and forward progress. The implicit message was that the Untied States would be phased out in the protectorate. In the balance would lie the Petro-Dollar defacto standard as victim. Events continue to this day in movement toward that end.

However, since the Syrian uprising, a new lethal element has entered the mix. Account will be kept brief, since so volatile and controversial. Just some bare notes. The Assad family in Syria has suffered some assassinations. Apparently, the Saudis had a hand in the killings. HezBollah has vowed retaliation. Their ties to Iran might be longstanding, but perhaps are exaggerated. My view is their home is in Lebanon. In August, Prince Bandar was assassinated. He was the Saudi head of security, and long-time ally to the USGovt. The Saudi regime is concealing his death, with outdated photos and false statements. They are working toward a transition. The House of Saud has been unstable from threats to the south in Yemen. It is unstable from internal threats tied to the fundamentalists. Although cooperation and respect has been shown between Riyadh and Tehran, the Bandar hit has created an entirely new environment. The Saudi regime with high likelihood is in its final months.

More importantly, the Petro-Dollar is losing its all important Saudi leg. Implications are vast. The US public takes the USDollar for granted, with almost no concept of FOREX exchange rates. If the House of Saud falls, when it falls, the impact crater will include the entire waistline of the USEconomy and its financial dog tail that wags it. The USGovt and its banker handlers have relied heavily upon the Petro-Dollar in general, and on the Saudis in particular, ever since Henry Kissinger signed an accord that governs over the grand surplus recycling back in the 1973-1974 era. Watch the Saudis convert USTBonds to Gold, then bug out of the desert to their new mansions in Southern Spain

The recent decision by the US Federal Reserve to contaminate the financial body until it responds favorably was the last straw in my book. Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilized. The USFed is essentially admitting failure. The signal serves as the loudest death knell for the USDollar among many in a sequence. On a similar parallel note, lighter and more humorous, one might be reminded of the pirate swash buckling style of yelling at the swabbies that the beatings will continue until morale improves. The QE bond monetization of USGovt debt has turned viral and entrenched. It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure. The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin.

....read the following headlines HERECHINA AS INTERMEDIARY AGAINST PETRO-DOLLAR, MONEY VELOCITY,  MEXICO CUTS A DEAL WITH CHINA FOR OIL,  STRIKES HINDER GOLD OUTPUT, THIRD WORLD THREAT, GOLD PRICE READY TO EXPLODE UPWARD

gold-dollar image004

gold-dollar image002

 
 

 



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Energy & Commodities

Oil is Not Looking So Hot


Posted by The Mad Hedge Fund Trader

on Thursday, 27 September 2012 07:47

9-27-12-tmhft-3-OIL2-resize-380x300

I received another one of those scratchy cell phone calls from my friend in the West Texas oil patch. You could almost feel the dust coming through the ether. He said that while Ben Bernanke his committed to buying $40 billion a month of mortgage-backed securities as part of QE3, he has not promised to buy a single barrel of oil. This is bad for oil.

That means Texas Tea has to take the full brunt of collapsing demand caused by economies in free-fall like Europe, China, and Japan. There are no bailouts here. On top of that, Saudi Arabia wants to whip some discipline into its fellow OPEC members.

Saudi Arabia does this by permitting its own production to surge, dropping prices, and inflicting pain on recalcitrant cartel members, especially Iran. Around $80 a barrel is thought to be a price they would be happy with, some $15 a barrel lower than today’s price.

Last week rumors were rife of a “fat finger” trade that drew in high frequency traders and triggered an almost instantaneous $4 plunge in the price of oil. But notice how it has failed to bounce back. This generated chart sell alerts more than you can count.

The break of the 50-day moving average on the charts is thought to be particularly significant, reversing an uptrend that has been in place since June. Notice that the “fat fingers” always seem to hit the “Sell” button and are oblivious to the location of the “Buy” button … maybe they don’t have one.

On top of all this is the never ending threat of a Strategic Petroleum Reserve release by the administration that would cause prices to immediately gap down. It is safe to say that energy is not Obama’s favorite industry. He is essentially sailing “Buy those $100 calls on oil at your peril, because I will render them worthless.” That is what he did with his jawboning campaign in the spring when crude threatened $107. Substantially tougher margin trading requirements for many commodities by the main exchanges quickly followed.

RELATED: Exxon & Rosneft Plan to Drill for Oil in Old Soviet Nuclear Dumping Ground

One factor that no one appears to be watching is the dramatic ramp up in Iraqi oil production. In recent years, we have gone from zero to 3 million barrels a day, and appear to be headed toward 5 million barrels a day by 2015. That is half of Saudi Arabia’s total annual output. Norway and Canada are also increasing production.

Back in the US, conservation is making a dent on the consumption side in a thousand different ways that are impossible to quantify in the aggregate. Every time someone trades in a gas guzzler for a hybrid or electric vehicle they are cutting US consumption by 24 barrels of oil a year. Toyota will sell 2 million hybrids in the US this year, about half in California. That works out to a total oil savings of 48 million barrels a year, 132,000 barrels a day, or 1.3% of our total imports.

Energy savings are going on every day in a myriad of ways, from better building design, to industrial recycling of heat, and conversion of light bulbs from incandescent to fluorescent. It has become a major cost-cutting issue for US corporations. I just checked the specs on my new 80 inch 3D flat screen TV and it uses a quarter of the power of its cathode ray tube predecessor now headed towards the recycling center (notice how all the actors have suddenly aged 10 years). I have always said that this will be the big sleeper on the American energy front.

RELATED: Big Oil Funding U.S. Politics

The final argument is that in the wake of QE3, there is a sudden death of “Risk Off” positions to trade against. Oil is almost one of the only ones out there. So an oil short will partially hedge out downside risk in the substantial “Risk On” positions we have built up in (GLD), (AAPL), and (GOOG).

The extra turbocharger on this trade is that the hedge fund community is still hugely long oil, betting an attack on Iran by Israel that never came. As we move into yearend, the pressure on them to dump their losers will be overwhelming. So I am quite happy to buy the United States Oil Fund (USO) December $32.50-$35 put spread at $1.07 or best.

The (USO) in particular is a great instrument to play from the short side because it has one of the worst tracking errors to the underlying in the entire (ETF) universe. (Only the natural gas ETF (UNG) is worse). Notice how it always goes down faster that it goes up. This is because of the enormous contango in the oil futures market, whereby far month futures trade at gigantic premiums to the front months. The (USO) has to take the hit on the rollovers; hence, its terrible track record.

....view charts and page 2 HERE



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