Kitco.com contributor Clive Maund provided an interesting Gold Market Update on August 9, 2009.
Gold’s technicals have been looking very promising in the recent past, but there have been two worrying developments over the past couple of weeks which suggest that we may be about to see a vicious shakeout rather than the breakout to new highs that so many are anticipating. One of these developments has been the very high number of advisors calling for an upside breakout on public websites, as many of you will be aware, and the other is the trend of COT data, with the latest figures being at levels that have in the past almost always signalled a reversal to the downside.
As of late, many analysts seem to be calling for a collapse in the dollar and a massive upswing for gold. While this may very well be possible, especially considering the doom & gloom expected to hit in September, perhaps there will be one last hurrah for the dollar and a final buying opportunity for gold before it goes, as bugs like to say, to da’ mooooon.
At SHTFplan, we advise that any pullback in gold will most likely be temporary, and therefore, should be used as a buying opportunity to stock up on gold assets. We’d love to see a short-term, temporary drop to under the $850 level! Since we’re daydreaming, let’s shoot for $750 and make it really cheap to jump into some opportunities like we saw last November. We’d shy away from shorting gold here and leave that to traders with elephant-sized cojones.
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Any comment on the potential selling of IMF gold and how it will effect the price? Also, I believe that silver is a much better, albeit volatile, play here.
I like silver much better as well, strictly looking at the silver/gold ratio.. I think when gold goes to da moon, silver will go even faster. I have spent some time checking out research from Matt Badiali at Stansberry Research, who also likes silver, especially stocks in China. I am hoping for a dollar bounce here and a possible last chance to pick some of these Juniors up before a massive move up next year into 2011.
In regards to IMF, it looks like they are going to actually do it this time. I have heard/read reports for the last couple years about this. But if it is a central bank to central bank sale, i am not sure if we will see it effect gold too much. Perhaps for a short time, but I am not sure if they unload a bunch of it to China if it will affect retail investors. I have heard both sides of the argument, and I tend to lean to the ‘no effect’ camp on this.
Another concern in regards to gold, not so much in the near-term though, would be COMEX gold delivery. I haven’t posted too much about this, but there is a genuine concern about gold availability. COMEX has never failed to deliver, but up to this point, there has not been a high level of delivery demand, from what I understand. But, if the figures are right, there is much much more gold traded on COMEX via paper than is available for delivery, so if we have a SHTF scenario where the people lose confidence in governments worldwide, we may see more investors taking delivery putting serious strain on the COMEX and rocketing the price of gold higher, especially if there is a potential risk of default on the COMEX.
I have too read about how the IMF sale most likely would be “private” and how they “guarantee” that it would not affect the gold market. However, I wonder why Jim Rogers cites the potential IMF sale as a reason that he is not presently buying gold. He definitely believes that the price will have a significant pullback once the IMF begins a massive selloff. Usually I never even question JR on matters, but why would he think that?
yes, you make a good point about Jim, here is an excerpt from a Feb 2009 Interview:
“If the IMF sells their gold then gold could go down a fair amount. But that would be the bottom. I hope the IMF does sell their gold because we would get a low price for gold and then we could get rid of the IMF because then noone else is going to give them any money and they would have to dissolve.”
Link: https://www.shtfplan.com/jim-rogers/jim-rogers-cnbc-february-10-2009_02112009
So, contrary to my statement above, Jim does believe a large IMF sale could lead to a decrease in gold price, at least temporarily.
Man, i would love to see hold shave off 30% for about a month! that would be a solid money maker!
In my opinion, if gold goes under $880, it may be time to start accumulating.. perhaps it would continue to slide down to 800…750…. 650??!?!?  perhaps i am only dreaming. But, with the gold suppression schemes that I have read about out there, i wouldn’t be surprised at all. Silver would drop along with it and I’d be loading up on GDX and El Dorado at 50% off current prices!