Gold spot thoughts??

So i'm dragging my feet over here ahead of Wednesday's FOMC meeting trying to anticipate how low spot will go... Any one want to throw out a prediction? (NOT HOLDING YOU TO IT)

 

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I think we saw the bottom this summer. Since you aren't holding me to it, here's my view of the world.

We have a lame duck president in office and are going into the election year.

We have seen a large correction in the stock market this summer - investors are re-allocating funds and looking to seal up some solid earnings going into the election year.

Fear of the unknown will soon take hold in the masses (if so-and-so is elected, world will end - Zombie Apocalypse, etc)

We have interest rates that the government has been avoiding the entire tenure of the current president.

We have massive inflation happening due to labor and benefit costs. Healthcare, $15 minimum wage in certain cities (Do you see any more 99 cent menus at fast food? Even bigger hikes in sit-down restaurants).

We are facing a larger burden of taxes and fees (less money in pocket) - both in inflationary costs as well as higher percentages. A record number of municipalities raised sales, property and energy/utility taxes this year.

China is finally starting to show their recession, and the USA has been heavily exploiting China's expansion for profit.

We've hidden these in cheap gas and interest rates, but those will change. (Anyone ever looked at an oil vs gold historic chart?)

I am calling this "Brett's Bottom" (My little tribute to Mark Haines, who I watched daily for years and got tons of insight from).

It might break below 1100 a few more times, but not by much. And any turmoil will send it towards 1200 within the year.

Your Mileage May Vary!

 

I pretty much agree with all points. Thank you!

 

I am more of a believer in the oil/gold ratio. It got a little out of whack when the huge spike in pm happened, (huge demand for labor raised prices through the roof), but has come back down. I simply believe long term gold will follow oil all things considered, since its a commodity. Therefor, as long as oil stays down, which it probably will, I think gold will be in the doldrums. I am using it as an opportunity to buy gold coins personally, not for short term gain but simply because I want the coins and long term, (30 years), they should appreciate.

Again, just my outlook/opinion.

 

Thank you

 

I think gold is probably not going to drop much further, if at all, so if you want to buy it, maybe 20% of your disposable budget could go for some. Gold has surprisingly held up quite well compared to all other metals over the last year, or so. Just look at how the market for platinum, rhodium, and iridium has compared to gold in the last 12 month's.

 

An massive increase in the supply of glass in the Middle East may send gold to the moon.

 

Here are the first few paragraphs of a recent (and complicated) article on the amount of gold COMEX currently holds, versus, the quantity of claims on that gold. Commentary from Hebba Investments LLC on http://seekingalpha.com

The full article may be seen at http://tinyurl.com/q4ofsmq

I have no comment one way or the other, as I pay little attention to COMEX, and in the past 3 years, have bought only 90% silver. Still, there's some useful info here, especially for those who are undecided about timing their purchases.

===================
Without Much Fanfare COMEX Available Gold Drops To Lowest Levels On Record
September 6, 2015 | 2:09 AM ET

Summary
Gold available for delivery at the COMEX warehouses has dropped to the lowest levels in the data's history.

The number of contracts per available ounce has also risen to over 125, which is the highest we have ever seen.

We think this is a bullish development as less gold available for delivery means that fewer investors are willing to part with gold at these price levels.

Last month we took a look at COMEX inventory which has been reaching lower and lower levels. This week, without much fanfare, those inventories have continued to decline with registered gold inventories (gold available for delivery) reaching all-time low levels.

We do believe that keeping track of COMEX inventories is something that is recommended for all serious investors who own physical gold and the gold ETFs (SPDR Gold Shares, Sprott Physical Gold Trust, Central Fund of Canada Limited, etc.) because any abnormal inventory declines or increases may signify extraordinary events behind the scenes that would ultimately affect the gold price.

Investors should remember that the gold market is surprisingly opaque for a market that is one of the largest in the world - any data that provides insight into this market should be monitored by serious precious metals investors. [more]

 

I don't get it - increase in the supply of glass? Can someone explain?

 

He is comically referring to the latest bill passed that allows for Iran to get their goods, if you know what I mean. Ha, ha!

 

Or a much more likely preemptive strike by Israel.

 

The stock market had a correction. History tells us that after such a correction, stocks will rise. I think the stock market will continue to go up and probably set new highs. I also think PM's will continue their slow slide downward. Am I waiting to buy. Heck no! I'm buying, as much as I can, even thinking it's going to drop. I'll not wait as I know I can't buy at the bottom. I do not time markets. It's too risky.

If the Feds hikes the interest rates, the stock market will suffer and PM's will not. The reverse will happen if the rates are not raised. Everything Brett stated above is correct. Sooner or later, it will all catch-up to us. Most will not be prepared. Where is magic 8 ball when I need it?

 

The supply of gold on COMEX is related to how much people wish to use it for backing paper trades. It has absolutely no bearing on physical inventories. If it did, it would have went down went markets were spiking, and in fact it went up then because more people wanted to write paper contracts with it.

 

I'm betting it's a snoozer and we don't even see a move of more than $20 in gold.

 

Think mushroom cloud

 

???

 

Paper can go to zero. The physical market doesn't much care about that, because it hasn't budged in a while. You're going to pay $20 for a silver eagle unless you find some scratch and dent, and that's been the case for many weeks now.

It may be worth considering at this juncture that PM markets no longer react to Fed jawboning as much as they used to. Supply is backordered by months. The amount of Comex registered gold has been declining rapidly. ROI takes a back seat when supply matters.

 

1. All pm pundits have been saying "paper can go to zero" for decades. It is a red herring argument to throw out when they have nothing positive to say about pm.

2. Absent something major happening, pm premiums will come down. Weren't you around a couple of years ago?

3. Come gold stocks are down because fewer investors CARE anymore, nothing more or less.

 

The paper commodity market is intended to be at almost zero as it is a 'zero-sum' instrument. As many consignments as purchase for deliveries, as many 'Call' options as 'Put options'. The bigger players understand this and use it as leverage when appropriate, people who believe the PM anti-paper 'faith' do not, so who is this type of proposition slanted towards? Sigh.

Comex and the PM ETFs have prospectuses which state how much actual metal backing they must maintain for the paper instruments they issue, so if no one is demanding actual metal delivery ( it is VERY expensive overall considering delivery, storage, etc.), they don't so it until delivery contracts are established ( less than 3% of contracts). The principals have enough currency backing to obtain it when needed at any necessary price, so why store it and see it lose value? Before anyone else, they will see demand or lack thereof, long before the average bullion buyer will. Believing the bullion companies are doing you a favor for letting you know when to buy is like believing the flying spaghetti monster will win you the lottery.

 

Wow, now the moderator is mocking my religion.

May His noodly appendage grant you forgiveness in this life and next!