Gold’s near future
I just though of something that might be a bigger influence on the goldprice then i thought.
The high gold price combined with fewer jobs, lower incomes, higher debts is forcing people to sell their gold. In Asia the price is a record high, forget about the dollar price in this instance. The Chinese, Indians, and what i know fur sure Thailand are selling their gold for a profit. Lines are forming in front of the shops. Some shops even stop buying as their cash is running out.
These sales combined are hundreds of tons that come into the market.
Sold all positions @ $950/oz here is what I plan next:
Just my HO
Well, the commodities went up a bit today but seems early for those three to me. I’ve got RJA, MOS, UNG-down but not out.
But we are in a inflation cycle, just not a hyper one, least that’s how I see it. Oil is the only thing of value that’s come down in price in my real life, and its only back to 2006 prices. Not concrete, not galvanized metal products, wood some, definitely not food. Manufacturer’s are lowering prices, but they are also substituting lesser goods in their merchandise. The only things deflating are artificially inflated housing prices, and "breaks" on automobiles, which are hard to determine their true price anyways. Stocks are deflating, again from artificial highs, so our deflation is really just a real price adjustment. That includes gold too? I dont know about credit, I dont use it.
Yes, I am in paper gold, and now the winds seem to have suddenly shifted to where I am supposed to take my losses and go the other way until the dollar inflates to everyone’s satisfaction? There is herd mentality detected here, its the same old market. Some SHTF…
Be careful with the 2x funds and ETF’s and be prepared to watch them like a hawk. Volatilty is what eats up any profit from the 2x leveraging. I’d recommend 2x funds only for the short term (less than a week).
A good lesson on how 2x leveraging can hurt you in times of volatility, is check out the histories of the ETF’s DUG and DIG. I bought DUG (2x short oil) when oil was $120 a barrel and despite a short spike (literally only 2 days), the share price is roughly the same now at $40 a bbl. Volatility in the price of oil on the way down ate up all my profit. Nearly all 2x leveraged funds work this way so prepare to hold them less than a week.
I put in a stop every day; hopefully, it won’t blow through it. You can’t know about sudden shocks like someone bombing Iran or some other big event.
I have had a tough time watching my several oil stocks lose $$$ thinking it was temporary. I misjudged the deflationary effects occurring.
But we are in a inflation cycle, just not a hyper one, least that’s how I see it. Oil is the only thing of value that’s come down in price in my real life, and its only back to 2006 prices. Not concrete, not galvanized metal products, wood some, definitely not food. Manufacturer’s are lowering prices, but they are also substituting lesser goods in their merchandise. The only things deflating are artificially inflated housing prices, and "breaks" on automobiles, which are hard to determine their true price anyways.
That was my mentallity until the guy above convinced me differently.
I messed up the link I posted above, but if you’ll cut and paste you can find this entire article from Forbes:
*****Dell is offering 20% to 30% discounts on new notebooks. Nearly empty
Hawaiian hotels give free drinks and all sorts of discounts. Retailers
like Crate & Barrel have gained pricing power over vendors and are
getting 10% to 25% lower prices to pass on to customers. Kohl’s is discounting Christmas merchandise up to 75% to attract shoppers.
Toys are being discounted 50% to 60%, and sellers are emphasizing
low-priced merchandise to attract frugal buyers. Just look at Wal-Mart.
are also gaining pricing power over suppliers of branded goods, as
consumer zeal for house brands gives retailers more leverage with
producers of national labels. Upscale retailers are unloading excess
inventory on discounters who then offer designer apparel for 45% to 70%
off list prices. And luxury goods makers themselves are slashing prices
on apparel, shoes and handbags sold in the U.S. Of course, the strong
dollar makes that easy for eurozone-based firms. Don’t forget that
recent auctions were disappointing and saw prices of contemporary,
modern and impressionist art drop 30%.
The Fed worries that in
deflation, offsetting monetary policy is difficult since its target
rate has to stop declining when it reaches zero. Of course, the Fed has
other tools, like quantitative easing (juicing the money supply).
Nevertheless, all these measures amount to leading the horse to water,
but he may not drink.*****
We are in a deflationary cycle!
I got stopped out of my GLL and am looking to reenter if gold seems to take a dive for a while which, historically (whatever that means anymore) is the next few months.
Will put my modest profit towards another Eagle.
Well, gold didnt collapse, now what???
If I could predict the future I wouldn’t be spending my time here, LOL.
There’s no good news anywhere so gold is the haven. Maybe fear will overcome past cyclical trends. A few down GLD days, though, and I’ll try GLL again. A $100. here, $100 there, pretty soon you have…inflation! I wouldn’t mind inflating my trading account.