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

From Boston To Ferguson To Charlottesville: The Evolution Of A Police State Lockdown

Courtesy of ZeroHedge. View original post here.

Authored by John Whitehead via The Rutherford Institute,

“It takes a remarkable force to keep nearly a million people quietly indoors for an entire day, home from work and school, from neighborhood errands and out-of-town travel. It takes a remarkable force to keep businesses closed and cars off the road, to keep playgrounds empty and porches unused across a densely populated place 125 squar...



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Phil's Favorites

Trump craves good press from the 'fake news' media - just look at his White House newsletter

 

Trump craves good press from the 'fake news' media – just look at his White House newsletter

Courtesy of Joseph Graf, American University School of Communication

Mainstream press coverage of President Trump has been unfavorable. Thomas Patterson found that 80 percent of stories in the first 100 days of the administration were negative in tone.

The president has attacked the media as “fake news” and journalists as “the enemy of the American people.”

The president’s anti-press assaults are so...



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ValueWalk

Many Roads Lead To The United States

By Joe Quinlan. Originally published at ValueWalk.

The threat of a U.S.-led global trade war has exposed the earnings vulnerability of many global equity indexes. Bank of America, U.S. Trust analyzed 18 different international indexes in a new report and the results are quite telling. The U.S. ranked in the top three markets in terms of total revenue generation per each index — underscoring America’s commanding presence when it comes to global top-line growth. The region most dependent on the U.S. for revenue growth: Europe.

Q2 hedge fund letters, conference, scoops etc

Understanding the g...



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Biotech

Nanomedicine could revolutionise the way we treat TB. Here's how

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Nanomedicine could revolutionise the way we treat TB. Here's how

Nanomedicine could scupper the need for TB patients to take multiple daily tablets with toxic side effects. Daniel Irungu/EPA

Courtesy of Sarah D'Souza, University of the Western Cape and Admire Dube, University of the Western Cape

Tuberculosis is one of the world’s ...



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Kimble Charting Solutions

Are Interest Rates Peaking? Watch The Copper/Gold Ratio!

Courtesy of Chris Kimble.

If you spend time researching market relationships you can better understand money flows, rotation, and reasons why money flows rotate. This can be very helpful in identifying trend changes as well.

Today, we’ll look at the relationship between 10 Year US Treasury Bond Yield (INDEXCBOE: TNX) and the ratio of Copper (NYSEARCA: JJC) to Gold (NYSEARCA: GLD).

Interest Rates Peaking?

Looking at the chart below, we can see that treasury yields and the Copper/Gold ratio tend to peak and bottom together – this has occurred several times over the past 5 years.

Currently, the 10 Year Yield is forming a bearish head and shoulders pattern (in red) at the same time that the Copper/Gold ratio is testing important support...



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Insider Scoop

Argus Upgrades Lululemon On Multiple Growth Levers

Courtesy of Benzinga.

Related LULU Benzinga's Top Upgrades, Downgrades For August 16, 2018 3 Retailers Jim Cramer Says Are Winners In A Volatile Sector...

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Chart School

Bitcoin Update - 6000 is support

Courtesy of Read the Ticker.

Demand shows it hand at support levels, well it obvious that $6000 BTCUSD is support so far.

More from RTT Tv , Ref: Brazil bitcoin currency , Brazil New Accounts
 


 

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Digital Currencies

What is a blockchain token?

 

What is a blockchain token?

What’s this digital token good for, anyway? knipsdesign/Shutterstock.com

Courtesy of Stephen McKeon, University of Oregon

People are just becoming acquainted with the idea of digital money in the form of cryptocurrencies like bitcoin, where transactions are recorded on a secure distributed database called a blockchain. And now along comes a new concept: the blockchain-based token, which I’ve been following as a blockchain researcher a...



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Members' Corner

There Are 3 Main Theories That Explain Trump's Approach to Putin and Russia-Which One Makes the Most Sense?

What do you think?

Thom Hartmann suggests that the "Manchurian Candidate theory" is the least likely explanation for Trump's pro-Russia behavior in "There Are 3 Main Theories That Explain Trump’s Approach to Putin and Russia—Which One Makes the Most Sense?" (below).  disagrees and suggests that Putin probably has "the goods" on Trump in "Trump’s Plot Against America". (To be fair, Hartmann acknowledges that his three theories are not mutually exclusive.) Jonathan Chait argues ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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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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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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