who is stepping on gold? - Business, Finances and Investing Forum

The markets are crashing, confidence is low... yet gold is still about to touch 750? This can't be just profit taking. It seems that someone is stepping on gold. Does this make the play more profitable or less profitable for a long term play?

( I would normally say yes, but it seems whoever is stepping on it has great power and is relentless, aka US government)

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10-22-2008 , 03:58 PM

Borodog

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Nobody is stepping on gold. We're in the midst of a gigantic DEflation. People buy gold during INflation. This deflationary period is the last great gold buying opportunity before all of the Fed/Treasury craziness drives inflation through the roof.

Look at the price of gold in the 70s.

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10-22-2008 , 04:06 PM

Borodog

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The circumstances are not identical, but I believe that it is essentially going to go something like this:

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10-22-2008 , 04:48 PM

cheer

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great graph borodog. thanks.

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10-22-2008 , 04:50 PM

DogsBrekky

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Borodog, please to be showing the future ?

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10-22-2008 , 05:14 PM

discspinner1

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It's simple. The dollar is appreciating because market anticipates ECB to cut rates a lot. Also, demand for foreign currencies will weaken as world economy go into recession. Dollar is inversely correlated with gold. The reason gold shot up in mid-september was because people actually feared the markets were going to crash. That fear has now largely dissipated, and is replaced by the fundamentals of dollar vs gold relationship.

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10-22-2008 , 05:23 PM

SenorKeeed

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Quote:

Originally Posted by DogsBrekky

Borodog, please to be showing the future ?

Do you think his analysis is wrong? I know you think gold is going down at least in the short term, but given the placement of "you are here," so does Boro.

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10-22-2008 , 05:32 PM

ArturiusX

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Borodog, that looks more like the peak to me than a dip but w/e.

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10-22-2008 , 05:42 PM

tolbiny

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The reason gold shot up in mid-september was because people actually feared the markets were going to crash. That fear has now largely dissipated, and is replaced by the fundamentals of dollar vs gold relationship.

So since the dow drops 5.7% today, Nasdaq 4.8% and the s&p500 drops 6.1% and gold trends down at the same time, you must be saying that 5+% drops are no longer big deals to the market since they haven't increased their fear of a crash buy pushing up the price of gold.

The deflationary argument explains how the dollar is rising with the markets and gold falling without having to switch explanations.

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10-22-2008 , 07:00 PM

#10

Borodog

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Quote:

Originally Posted by DogsBrekky

Borodog, please to be showing the future ?

Anybody who's read my posts knows my theory. You either subscribe to it, or you don't.

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10-22-2008 , 10:15 PM

#11

Jimbo

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Quote:

Originally Posted by Borodog

Anybody who's read my posts knows my theory. You either subscribe to it, or you don't.

Since your theory doesn't include a Russian invasion of Afghanistan I suppose I can't subscribe to it.

Jimbo

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10-22-2008 , 10:18 PM

#12

Borodog

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10-22-2008 , 10:23 PM

#13

Jimbo

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Quote:

Originally Posted by Borodog

Invasion of Afghanistan and Jimmy Carter, the two primary causations of the 1980 gold spike. I don't think Carter will be reelected so that leaves another Russian invasion.

Jimbo

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10-22-2008 , 10:26 PM

#14

SenorKeeed

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Are you really saying that inflation fears didn't impact gold prices in 1980?

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10-22-2008 , 10:34 PM

#15

Borodog

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Quote:

Originally Posted by Jimbo

Invasion of Afghanistan and Jimmy Carter, the two primary causations of the 1980 gold spike. I don't think Carter will be reelected so that leaves another Russian invasion.

Jimbo

Mmmk.

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10-22-2008 , 10:35 PM

#16

Jimbo

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Originally Posted by mjkidd

Are you really saying that inflation fears didn't impact gold prices in 1980?

In a sense I am, it was actual inflation that caused the gold spike, not just the fear. Inflation was 13% and the prime rate was over 21%, I don't see either scenario in our immediate future and it would take both to repeat the gold rush of 79/80.

Until you see kiosks with scales in shopping malls and a 4 hour wait in lines to sell your gold and silver we aren't in much danger of getting there. By then the top will be in so you better sell it all yourself, four hour wait or not.

Jimbo

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10-22-2008 , 10:45 PM

#17

SenorKeeed

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If inflation was 13% and the prime rate was low then wouldn't that drive gold prices higher? High interest rates are what stopped inflation, right? And in 1980 it was both the past inflation and the fear of continuing and perhaps worsening inflation in the future that drove up gold prices; I believe gold prices rose higher than other commodities.

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10-22-2008 , 10:46 PM

#18

ArturiusX

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I love the logic: "I think there will be high inflation thus I'm throwing all my money into gold, I'm going to be rich!".

If only market trends were that simple!

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10-22-2008 , 10:52 PM

#19

Borodog

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Quote:

Originally Posted by Jimbo

So it wasn't Russians invading Afghanistan and Jimmy Carter?

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10-22-2008 , 10:53 PM

#20

Borodog

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And I had my graph all ready to go.

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10-22-2008 , 10:54 PM

#21

Jimbo

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Quote:

Originally Posted by mjkidd

Supply and demand, plenty of gold available, not enough demand.

Jimbo

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10-22-2008 , 10:54 PM

#22

Borodog

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Quote:

In a sense I am, it was actual inflation that caused the gold spike, not just the fear. Inflation was 13% and the prime rate was over 21%, I don't see either scenario in our immediate future and it would take both to repeat the gold rush of 79/80.

Me either. Which is why I want to buy gold now.

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10-22-2008 , 10:57 PM

#23

Jimbo

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Quote:

Originally Posted by Borodog

So it wasn't Russians invading Afghanistan and Jimmy Carter?

Jimmy allowed the invasion by being a weak willed liberal, his policies encouraged inflation and demanded higher and higher interest rates. You are trolling a bit too much but I understand why, you must own gold and hate losing your shirt, you have my sympathy.

Jimbo

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10-22-2008 , 10:57 PM

#24

SenorKeeed

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Quote:

Originally Posted by Jimbo

Supply and demand, plenty of gold available, not enough demand.

Jimbo

I don't understand your point. Unless all you're trying to say is that currently gold supply is too high/ gold demand is too low for 2000 dollar gold.