Gold an silver prices can be quite volatile. Gold dropped 8% in 3 days and is expected to rally. However, there is the risk that it may drop much further. The drop in silver is more severe. This is an example of a speculative and volatile market. Be careful.
http://www.businessweek.com/news/2011-09-27/gold-rallies-after-biggest-three-day-drop-since-lehman-collapse.html
Here is a bearish view:
http://www.cnbc.com/id/44667027
http://www.businessweek.com/news/2011-09-27/gold-rallies-after-biggest-three-day-drop-since-lehman-collapse.html
Here is a bearish view:
http://www.cnbc.com/id/44667027
7 comments:
We saw gold prices rallied up to US$850 in the early 80s, then dropped to US$290 or so, trending down all the way till the trend turned bullish again around year 2000.
When trend turns, the drop is like falling down a slope. But then this time round we have new consumer giants like India and China to prolong the game. Beijing even sells gold bars from a vending machine, so hard to gauge gold trend now.
Sell or hold? Dunno.
There was panic yesterday for sure. Panic BUYING! All the major dealers, here in Singapore as well as major bullion distributors were sold out on their inventory.
There is a 2 tier market out there. One is the market for paper gold and silver where big institution can sell UNLIMITED amount of futures contract (hence the margin increase last Friday. the other mkt is the physical bullion mkt where buyers take physical possession of bullion.
Here's is the paradox, when spot price get taken down to low levels, it unleash huge buying demand for the physical bullion resulting in shortage of inventory and higher premium over spot price.
The huge sell off is not driven by free mkt demand and supply where physical bullion were sold in succession resulting in lower and lower prices. Prices were driven lower because speculators are selling short with no physical delivery since futures can be cash settled.
This is why price are so volatile.
Don't just draw conclusion based on what main stream media reports. They have been calling for a gold bubble since US$800/oz, US$1000/oz, US$1300/oz, US$1500/oz.
This time round is no different. Gold and silver is MONEY. Its is NOT A commodity.
The current currency war is the result of relentless printing of FIAT money (paper money).
We are heading for serious currency collapse of monumental proportion. Call me paranoid or nut case if you want. I hope I am wrong but if I am right, than really it will be what the US$ note says, "in God we trust".
It is mathematically impossible to sustain the monetary system based on creating more debt.
I leave all readers with this short video to watch and ponder. The usual disclaimer and caveat emptor. Do your own due diligence and draw your own conclusion. Read, research, reflect and REACT!
http://www.youtube.com/watch?v=b3-vwYJiD8g
Oh and if you believe this guy, than you should dump gold and just keep paper money.
http://www.youtube.com/watch?v=uB2fuZI90ts&feature=mfu_in_order&list=UL
Read, research, reflect and REACT!
The Fed has no Gold!
http://www.youtube.com/watch?v=0OkITedQrek&feature=related
Agree with above comment.
"The Fed has no Gold." They only print money.
But reflect on our own situation here. MAS allowed S$ to appreciate only for the GE11 and PE11, and after that ....
And then all "currency experts" said in the mainstream papers, when our $ is at US$1.20, that the Apple $ would depreciate to S$1.10.
Maybe the short sellers got cold feet when people bought and push it to 1.25, and to cover Sept contracts, jack it up to 1.30.
Kick ourselves in the butt, when all so called experts talk the same lines, the opposite effect is always the case, and also MAS political sneaky intention.
In retrospect, the safest economy in the world is US, all the banks are fully capitalized thru Fed printing money, but they are not lending, so no job creation results now.
US equities make the best investment bets, especially Companies that derive much profits from abroad. Bank of America is a safer bet, as it has less exposure outside America, Citibank with its large exposure in Asia is a risk.
Europe is too messy with the Euro.
So we are bullish on US$ for the longer term. Need to buy US$ to buy US stocks. Gold is too complicated, all the buying contracts, dunno whether they would translate to the same amount in physical gold stored in the vaults.
BOA is attractive, Warren buffet recently bought the preference shares at 6.00, our Temasek holdings bought the ordinary shares at US20, and cut loss at around US6 during the 2008 crisis.
so follow Warren, don't follow Temasek, they only make money on home ground out of monopolies, on foreign shores, they are beaten flat down. Temasek is a shame to all Singaporeans, is a jinx SWF.
It is very short sighted and too inexperienced to be given task to manage our wealth. Recently they bought commodity Companies just before the commodity collapse, and also at the peak of commodity prices. Just could not get the timing right.
Temasek hope that we citizens are dafts, but with the Internet, we keep track of what they invest overseas, they can't hide and hope we would forget their embarrassed losses.
Contd.
Now all the US Banks are fully capitalized, Fed would stop the printing, and allow interest rate to rise, starting slowly, now they encouraging BOA to sell their assets off, and maybe ask the Banks to buy Fed's Bonds.
For Singapore, our $ would depreciate
as US has changed tack, engaging in currency twisting game, which also means our property has peaked, with interest rate turning up next year, maybe we would have a property bubble burst. And with US$ rising, gold would drop inversely.
Time to sell our investment property? The expatriates have already cash out their Singapore
homes, and now revert to renting instead. They know better than us locals? Keep an eye on what Obama is doing. He likes to make lightning strikes.
Getting exciting in the year of the Dragon.
Gold has no value and you can not add value to it. The price is determined purely by supply and demand.
So, it is very risky to buy gold with appreciating Singapore dollars unless you are prepared to hold it for 20-30 years.
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