Posts Tagged ‘gold prices’

How Investors Get Suckered Time After Time

Dr. Paul viewed David Rosenberg’s chart picked up by Clusterstock as the "chart of the day" yesterday (posted here, with comments by Edward Harrison) and Paul concluded that this is not a good time to start buying gold.  Obviously, with the rise in gold prices over the last decade, there was a great decade-long trade opportunity. But prices go up and down, and past performance does not dictate future results.  - Ilene 

How Investors Get Suckered Time After Time

Courtesy of Dr. Paul Price at Beating Buffett

The following chart was published on Clusterstock yesterday with commentary explaining how this proved that stocks were no longer a good place to invest…

asset-class-returns-aug-2000-through-july-2010

As the S&P 500 was the only major asset class to have shown negative results over the past 10-years, they felt it was obvious that Gold, Long-term Bonds and Commodities would continue to be the best place for the next decade. In other wordsthe conclusion was that new money should be allocated to whatever had just finished going up the most!

I hear ads for gold every day shouting that, “I invested in gold 10 years ago and it’s the best decision I ever made.” “Gold has tripled since 2000. Get in now for the move to $3000 /oz.”

How many times have you made great profits buying something that just finished tripling? How did your real estate purchase in 2006 work out using that reasoning?

gold-price-charts-1975-1980-and-1980-1985 

The same ‘Gold Bug’ ads were running in 1979 – 1980 sucking people in right at the top as Gold briefly broke through $800 /oz. for the first time. The second chart shows the disastrous results for those who took the bait.

See the longer-term chart below to learn that it took about 30 years for Gold to regain its 1980 highs (without adjusting for inflation). Even at this week’s new all-time nominal high Gold is still well below the old peak. So much for Gold as an inflation hedge.

gold-price-charts-1975-2010-and-2000-20101 

gold-inflation-adjustedI look at the first chart presented and draw the opposite conclusion from the Clusterstock article. If stocks suffered through 10 years of negative returns they might be quite cheap considering all the revenue, earnings and book value growth that took place.

I’d be avoiding bonds and…
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THERE IS A HIGH PROBABILITY OF AN IRRATIONAL BUBBLE IN GOLD

THERE IS A HIGH PROBABILITY OF AN IRRATIONAL BUBBLE IN GOLD

Courtesy of The Pragmatic Capitalist 

Wrapped gift

Ben Bernanke is confused.  And no, it’s not just the monetary system that continues to confound him.  This time it’s gold prices.  During yesterday’s Congressional testimony Bernanke was asked about the surging price of gold and if that is a sign of no confidence in fiat currencies.  He responded:

“Well the signal that gold is sending is in some ways very different from what other asset prices are sending.  For example, the spread between nominal and inflation index bonds remains quite low – suggesting just 2% inflation over the next 10 years.  Other commodity prices have fallen recently quite severely including oil prices and food prices.  So gold is out there doing something different from the rest of the commodity group.  I don’t fully understand the movements in the gold price, but I do think there’s a great deal of uncertainty and anxiety in financial markets right now and some people believe that holding gold will be a hedge against the fact that they view many other investments as being risky and hard to predict at this point.”

Mr. Bernanke is no dummy.  I know I am a bit hard on him at times, but that is only because he is supposedly the Michael Jordan of the financial system so expectations are high.  Unfortunately, he has performed more like Luc Longley (no offense to the superb Aussie readers here).  Nonetheless, Mr. Bernanke understands that inflation pressures remain very low (even though he has failed to apply or promote the proper solution to our current balance sheet recession).  Aside from gold prices there are no signs of inflation in the economy.  But I believe gold prices are moving higher due to the public’s opposition to fiat currency, fiscal stimulus and what is generally viewed as continued “money printing”. This is highly irrational in the long-term in my opinion and creates the potential for gold to turn into a bubble is looking increasingly high.

Gold prices have surged this year as the Euro crisis has created increasing concerns over the viability of fiat money. I have previously discussed the great irony here.   Gold is viewed as a hedge against the potential collapse of paper currencies .  It is seen as the ultimate safe haven currency.  The Euro…
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Santelli talks about gold price suppression

Santelli talks about gold price suppression

Courtesy of Tim Iacono at The Mess That Greenspan Made

Skip to about the 7:45 mark to hear Rick Santelli say, "Central banks have to be petrified about gold going to $2,000! Didn’t Larry Summers write a paper saying that central banks have to keep a lid on the price of gold for obvious reasons?"

It keeps getting more and more interesting with nary a hint of the gold price faltering.

 


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No One is Buying Real Gold, They’re Just Betting On Higher Gold Prices

Sound familiar?  (Hint:  Goldman’s Global Oil Scam Passes the 50 Madoff Mark!, and Oil Manipulation Info.) – Ilene

No One is Buying Real Gold, They’re Just Betting On Higher Gold Prices

Courtesy of Joshua M Brown, The Reformed Broker 

buying gold - reformed broker 

Mainstreet USA

This is a remarkable story.  I am not calling for either higher or lower gold prices as this is a forecast-free blog.  I will say that depending on how you interpret the facts, your outlook, bullish or bearish, may change.

The LA Times offers us an interesting look at the divergence between the activity of gold speculators and that of the buyers of real gold, be it coins or jewelry.  The data is based on the third quarter 2009 versus Q3 ‘08…

From the LA Times:

Data from the World Gold Council show that the surge in the metal’s price to record highs ($1,146.40 an ounce as of Friday) hasn’t been accompanied by record purchases of the real thing.

The council’s report put total global purchases of gold in the quarter that ended Sept. 30 at 800.3 metric tons, down 34% from the 1,205.6 tons bought in the third quarter of 2008.

Buying was down in the third quarter versus a year earlier in every major category of gold consumption, including jewelry (the biggest single source of demand), industrial use, coins and purchases by exchange-traded funds.

Now this can be a price-demand issue, higher prices for the raw material keeping buyers away at the retail level…

Gold bought as jewelry, for example, reached 673.3 tons in the third quarter of 2008, when gold’s price was mostly below $900 an ounce. In the third quarter of this year, with the price mostly above $900 and on its way to $1,009 by the quarter’s end, the amount of the metal bought as jewelry totaled 473.5 tons, down 30%.

Surprisingly, while the US Mint is continuing to produce, some major mints around the world are holding back:

Interestingly, the Austrian government mint is betting otherwise, at least in the near term: The mint, the world’s biggest producer of gold coins, recently said it planned to cut output by 32% in 2010, figuring that an improving global financial system will slash gold demand from investors.

An analyst from Kitco Metals is calling the rally in gold entirely speculative…
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Zero Hedge

US Exposed To Immediate Impact From "Supply-Chain Shock", Deutsche Says

Courtesy of ZeroHedge View original post here.

In the last few weeks, we've provided many articles on the evidence of creaking global supply chains fast emerging in China and spreading outwards. Anyone in supply chain management, monitoring the flow of goods and services from China, has to be worried about which regions will be impacted the most (even if the stock market couldn't care less).  

Deutsche Bank's senior European economist Clemente...



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Kimble Charting Solutions

Apple Facing Very Important Breakout Test, Says Joe Friday

Courtesy of Chris Kimble

The trend for Apple (AAPL) is definitely higher. Is Apple facing a key price test to determine if the trend remains the same? Yes!

The chart looks at AAPL on a weekly basis over the past 5-years. Apple has created a series of higher lows and higher highs, which has created a rising channel (1).

Fibonacci was applied to its 2016 lows and 2018 highs at each (2).

Apple is currently testing the underside of the rising channel (1) and its 161% Fibonacci extension level at (3).

Joe Friday Just The Facts Ma’am; A key breakout test is in...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Insider Scoop

6 Industrials Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • ToughBuilt Industries, Inc. (NASDAQ: TBLT) shares moved upwards by 10.3% to $0.23 during Friday's pre-market session. The most recent rating by Maxim Group, on February 05, is at Buy, with a price target of $0.50.
  • Deere, Inc. (NYSE: DE) stock moved upwards by 6.3% to $176.29. The most recent rating by BMO Capital, on December 02, is at Outperform, with a price target of $180.00.
  • Ballard Power Systems, Inc. (NASDAQ: BLDP) ...


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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

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Comment: Wall of worry, or cliff of despair!



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Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.