When the pall bearers and grave diggers start dancing on gold’s grave, it’s usually a good time to buy.
Here are a few articles that will have contrarian ears perking up.
Barron’s proclaims The End of a Golden Era
Gold is struggling. The election of Donald J. Trump as U.S. president was supposed to increase market volatility and push investors to safe assets. Volatility has risen, but investor sentiment has shifted toward hopes of better economic growth through fiscal stimulus, tax breaks, and infrastructure investing.
Adding further pressure on gold prices, the Federal Reserve cited a recent uptick in various U.S. economic measures as justification for raising interest rates in mid-December, just its second hike since 2006. Because gold doesn’t pay interest or dividends, it was already having a hard time luring investors from assets whose yields were increasing, even before the central bank made higher rates official policy.
With one of Trump’s central economic themes being the need to increase infrastructure investment, industrial metals and the stock market in general have fared better. In contrast, gold is this year’s worst-performing metal.
Outflows from exchange-traded funds focused on precious metals have reached levels not seen since the 2013 gold plunge. Gold funds experienced $700 million in outflows from Dec. 8 to Dec. 14. During that period, equity funds attracted $21 billion, their ninth-largest total ever.
Modestly stronger U.S. economic expansion and the potential for a rise in inflation propelled by Trump’s spending plans already are setting the tone for more Federal Reserve rate hikes next year. Translation: more downward pressure on gold prices.
Pain for Gold and Real Estate
Last month the Financial Times reported Death of India’s big bank notes spells pain for gold and real estate
Bell Tolls for Gold
Today, Financial Times writer “Lex” gave this morbid headline Gold: For Whom the Bell Tolls. (Premium Content)
Peter Atwater, not even a gold bug, caught the sentiment, announcing “This death of gold story suggests a major low is near.”
His comment seems far more likely than not.
Atwater is author of Moods and Markets.
Mike “Mish” Shedlock
Finally, a bullish indicator…
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Yeah that is a good contrarian indicator. So is the bond market pricing in future inflation? Hence the fall in gold price. Do people think Trump is that great for the economy?
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“Do people think Trump is that great for the economy?”
Logical impossibility. Those who think, realize he’s not. Those who believe he is, don’t think.
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I would not be surprised if gold drops to $400.
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That 2 of them did it is a sure indication that the bottom is very near. We’re still short but our Early Warning System just began showing signs that the downturn is easing.
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See you at $900.
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$400 … strongly disagree. $750 maybe.
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How about $30. Gold has to go below $20 to turn into a bear market. Charts say up since 1900 and $20 per oz.
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john chew,
gold for the long run. Hat tip to a master. But then again, maybe I have a question … Assume a poor fellow who bought a couple of years ago when the gold market looked a little randy … questions like this must be why I’m so unpopular at the lunch table. Really old guys are safe until $30. Yuppies not so much? Good call on your part, though.
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I would agree with $750 or so, and possibly $400. Historically an ounce of gold will buy a good suit, and I’d say you can get a good one for $750. At $2000 gold was historically very high. I sold my gold and silver a bit early, when silver hit about $34. Gold and silver will be back, though. I’m expecting another huge bull run in the 2030s, and I expect that sometime between now and then there will be a good time to buy.
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“2030s”
lolol!
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The historical norm is about 30 years between cycles. The last two bull markets began in 1976 and 2001. A guess that the next one will begin sometime between 2026 and 2036 seems pretty safe.
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You should short the crap out of it. With as much leverage as possible.
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You should buy as much leverage as possible.
http://www.indexmundi.com/commodities/?commodity=uranium&months=360
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and you can store Uranium for free in Ur-anus.
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The problem with people like you, Pierre, is that you are all talk. You show some chart and make a bold statement, but I bet you won’t risk one dollar on it.
Gold will be back to $400 when dollar’s purchasing power is back to 1990 levels.
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That chart made me curious and, sure enough, it isn’t in constant dollars. Looking it up elsewhere, gold hit a high of $850/oz in 1980 which, using an on-line inflation calculator which undoubtedly understates inflation because it uses government figures, is $2,490/oz today.
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But, then again, in order to get $2,490, you’d have to sell the gold for paper dollars. The dollar is the fictitious element, but if you took a file and took about 2 or three swipes across an ounce of gold, you could use that to represent the dollar… for a little while.
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I think minimum 10% of your portfolio value in gold is the right strategy, when gold drops you buy more until it is 10% of your portfolio value and this with one cut of point during the year where the rebalancing is done.
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Nobody knows which way it is going to go right now but since I predict dollar going up another 10% against soon to be crisis hit Euro I think Gold probably has another 10% to drop before it starts going up again.
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People expecting gold to drop to 400 dollars are as clueless as the dudes preaching 5000 dollar gold some time ago.
You can’t eat gold and transacting in it is a hassle so going full-goldbug is NOT a good idea but likewise not owning any gold is a stupid decision too.
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Transacting it is absolutely not a hassle. For heaven’s sakes, nobody is expecting you to walk around with a leather satchel. Just look at BitGold as an example.
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Gold is more important, more supple and more politically manipulated than you think. Graphical analysis might just be useless as gold is officially not a currency – but it remains more reliable in the fearful minds of the carper baggers that provide the fiat that you trust.
http://www.inflationdata.com/inflation/Inflation_Rate/Gold_Inflation.asp
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Your charting skills are like no other, but …
… do you promise to come back to this blog and apologise if the low of $1,035 from 12 months ago proves to be the lows for this decade?
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If larger denomination cash notes get banned, I can’t imagine private ownership of gold not being banned as well. TPTB know the score.
All it would take would be a .gov PR campaign to mark gold as a terrorist tool or the like.
That said, before gold ownership was made legal again, around 1975, there were two prices for it,,,,the official .gov price of $44 an ounce and the street price of $110.
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you mean like this?
http://www.zerohedge.com/news/2016-12-27/europe-proposes-confiscating-gold-crackdown-terrorist-financing
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Wow… an assault against Trump. Everything he owns is at least gold plated.
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Almost fell of the chair laughing.
Thanks for the laugh.
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Thar’ ’tis!
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Congratulations, I think you nailed that one. I would have guessed 20 years ago that we would have been at that end point right about now. Timing is everything though.
PS: I’m long lead
Reason: The liberals are trying to ban it and are getting help from the liberal government:
July 7, 2016 — Andrea Goodnight knows firsthand what lead poisoning looks like. A veterinarian at the Oakland Zoo, Goodnight treats endangered California condors when testing shows dangerous levels of the toxic metal in their blood.
If blood lead levels get too high, condors, eagles and other raptors “regurgitate everything and can’t hold anything down, so basically they’re starving to death,” Goodnight says. “A very clinically ill bird is very distressing. They’re weak, they fall over, they just can’t feed themselves at all and eventually they die. To me, it’s an absolutely horrible way to die.” Ammunition is the main source of lead that poisons condors…” (and the bullshit story goes on and on).
Liberal trash makes market opportunities.
Ammunition is the main source of lead that poisons condors.
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Gold isn’t a religion. It’s a precious metal. Long ago when it was money, it drove people crazy because they could actually pick it up off the ground sometimes. Then some nutty theories came about that conflated gold with a natural universal law of something or other. This attracted the gold sales people who figured out all kinds of ways to sell it, sometimes as paper that represented gold. On the other hand, it’s worth more than Barons, as is Charmin.
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Nah, gold was always the most valued currency, then administrative currencies based on accounting and obligation took over and gold was diluted out. The latter worked under one admin. to an extent, but gold remained as main, if not only, international currency. Later administrative conformity between nations, global finance, allowed/forced fiat as replacement.
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http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold LT USD.gif
Short of it is gold holds its value better.
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Top link broken, have to copy whole text.
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You must be referring to gold … the precious metal that serves as an investment which fluctuated wildly in value over time, both up and down unpredictably except over very long time periods. In which case it’s up unless you bought when it was up a lot and now you have to wait a lifetime to get your money back. Too bad you didn’t sell at $1800. But when to buy back? Ask chart science as all chartists are exceedingly rich because they can foretell the future..
PS: love the chart cherry picking. It makes me thing how great the stock market must be to put your life savings into now if you were 100% cash yesterday. Or maybe not. Chart cherry picking makes millionaires of us all, in theory, unless real money is involved. Ask a chartist.
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Wasn’t the point. Fiat inevitably loses if held , chart just about all fiat in inflation adjusted terms and the results are the same, very occasionally to near 0 overnight. If you are paper invested in paper hopefully returns beat inflation. If your fiat is straight through wages to expenses, hopefully your wages keep up.
Gold fluctuates more but maintains a reasonable value always.
You know, I don’t recommend what people should invest in. I would not invest in gold for profit, no way. I do keep some physical gold as reserve. It is a good medium for storage, liquid enough not to lose big or have trouble converting, but awkward enough not to bother using without a bit of thought. For me that is real money, something that has an obvious and unquestionable value that is spent of necessity. There is no debt or accounting or admin. attached. Very simple really.
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To be more fair, out of some stoned out curiosity, between dipping Doritos in Ice Cream, I decided to run the dollar using a more logical assumption of it receiving short term interest. Since it was really good weed, I even decided to ding interest income for taxes. I figured this might be less sensationalist than your chart, but seemed nonetheless fair. Then again I was really high. The dollar actually held up reasonably well. Maybe more like 70% of its value. I’m not sure though, or maybe I’m just imagining I did this. I’d run it again, but those aliens are knocking on my door and the government is trying to steal the future determining program that I am hiding for Martin Armstrong, so I need to sign off.
If no one ever hears from me again. My last words are. Long Live Martian(sp) Armstrong!!
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🙂 🙂 🙂 . Because of inflation i am sure. Soon our resourcefulness will be tested when cash i banned and we would have to resort to barter. A4 paper, napkins, oak leaves etc.
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Best to compare gold to something real,,,,Certainly not the dollar 😉
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I like to compare it to holding part of the political financial system and all that represents – fiat is like wearing a badge that says ‘I love and agree with my masters’. With gold they are not in the picture, and if they want to be, they will have to stand naked in the sights of all first.
Wrldtrst – go figure (properly) why government and central banks own tons of gold and then apply that to any theory. Hint – they don’t need gold sat there to create profits for selves.
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Me never said it be no value. Just me say it notin’ speshil. I advisd em ta stor kokane but dey sayd last time dey tried dat was durin Kennady emenstruation n’ he dun burn thru half da gubmint treshury wit hookrs n stuff.
Ain’t no wun dum nuff ta trust o’bama wit a rum ful a dat stuff. Bruther love da rock an’ he be hangin wit Marriun Barrey n dat not gud.
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:-). Until earth cools and the centre can be mined we have a 60 ft cube of the element. It is indestructable, created only in the most destructive cosmic events known, not to forget its profound relationship with the human psyche and tradition, but as you noted before once, we are maybe ‘arguing religion’.
http://www.zmescience.com/science/how-gold-is-made-science-064654/
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In all fairness, it’s not religion. I do agree with what you are saying. Gold is a physical store of value. I just get nutty with people that see it as a special store of value. To me it is simply one of thousands if not millions of items that qualify for that. Be it collectible cars, artwork, antique furniture, erotic moche pottery, nikon camera lenses, bull semen, property… and on and on. Basically all of which probably hold relative value to one another rather well despite what currency they are traded in or what country they are maintained in. So why so fanatical about gold. Fanaticism over Ferrari F-250’s I understand… gold..nope.
And for the record, I have bought and sold some in my life, so it’s not like I don’t get it. Just one of many many assets. I also share similar paranoia about papa gov’t that you do. My diversification of risk policy was just different, and doesn’t include gold. In the end I don’t think the gubmint ever wins.. I agree with cdr, mobs are gods answer to government. When they push too far, the guillotine response is what thousands of years of history tells us.
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Bob Moriarty, the owner of the 321 gold web site with an excellent long term record of forecasting highs and lows has never been more bullish on gold and gold shares. And he is no permabull to put it mildly advising caution near the 2016 peak.
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We all need to keep n mind that if interest rates keep rising, it will hurt gold but very few care about that.If the yield on the 10 year note goes thru 2.75 on its way to 3 percent IMO we will begin to c systemic problems all over the place! This would push up the dollar even more and shut down the US housing mkt. and our trade deficit would increase slowing growth of exports just the opposite of Trumps promises here. Of course the LDC’s r going to have a hard time paying back huge amounts of dollar loans made with commodities as collateral. Meanwhile our equity markets will stop making new highs each week as China financial system crashes. Much more here but must stop.
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The fundamental arguments against gold are laughable, right now. Sharply rising U.S. rates will just crush the global economy, China in particular, but also cause a default wave at home given private sector indebtedness. People who imagine Trump’s policies (assuming he can enact any of them) will magically ‘trump’ the 800lb debt gorilla are, frankly, grade ‘A’ morons. Even Trump’s ‘new best bro’, Carl Icahn, is now furiously kicking out his long position in stocks. What a surprise!
Gold is very technical and patience is required to allow the technicals to play out.
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Obama doubling government debt from 10 trillion to 20 trillion was the final hurrah of debt based government spending.
Trump cannot double it again to 40 trillion so government spending has to be cut and earnings increased by getting more AMERICANS to work and sending illegal immigrants back to their home countries.
US government debt is now well over 100% of GDP with GDP being 17.9 trillion and government debt being 20 trillion.
This is southern europe style number…
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Don’t watch gold in USD, watch gold in foreign currencies. It’s still in an uptrend, one that started in 2014 when USD began its bull market. Also, figure out why yen and gold are almost exactly the same asset right now.
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True. Always was. Marginal purchaser of gold is not an American. So X bid in Yen remains X bid in Yen. Now inadvertently, by doing this, you are looking at the dollar.
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Watching it closely myself and I am still out. Still have the many ounces I bought at 250 and 334 back in the day so no loss. Trump could be bad for gold and until he is sworn in staying out for now.
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When each and every paper gold contract is required to be fully backed by real, unencumbered and owned metal – or cash in the case of gold shorts – and the Comex playpen is out of business, THEN you can start pronouncing “$400 gold”.
The manipulation is SYSTEMIC.
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You mean, make it unlike every other commodity traded?
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Once the world came off the gold standard Gold became a commodity based on societal anxieties. It is the cave you run into when you get scared. The long term return sucks unless you can time it’s rise or fall. It has become a similar investment to oil which also rises and falls based on events.
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#5 – Thomas Edison, 1911 – “Bars of gold will become as cheap as bars of iron”. @3:00.
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Reminds me of the old gag t-shirt:
Nietzsche: “God is dead”
God: “Nietzsche is dead”
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How about this. Something horrific happens somewhere n the world that shatters all confidence n financial assets. So I call my broker and say sell all my bonds starting with the 30’s first. He says there r no bids. What? Then sell the 10’s, the 5’s, the 2’s, and the 1’s! Sorry there r no bids, absolutely no liquidity. What, then sell all my stocks! I’m sorry the market is closed. Now u do have some 4 week treasury bills we could sell if u want to do that but where r u going to put your money? What r people buying? Well they started buying gold at first. Ok let’s buy some gold. Well u probably won’t believe this but there is absolutely none for sale n any currency-Far fetched u say but just think about it! What do u think Mish?
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Gold outlived the Egyptian pharoes, Roman emperors, Myan rulers, Spanish monarchs, Chinese emperors, Russian czars, British monarchs… not to mention the Soviet Union and the US government (the one that used to pay its bills).
Not a gold bug, but quite certain gold will also outlast the click bait farms like FT and Dow Jones
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Wow – Catalan politician says not to listen to constitutional court on matters Catalan, gets accused of sedition and fails to appear in court to answer to that, gets arrested for disobedience and they want to take his passport. Duh – looks like he will need a new country to get another, guessing that would be Catalonia.
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Sometimes saying less means more https://www.youtube.com/watch?v=lgNVNTvlpFY
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