gold bull/bear survey

[Fast Eddie B]

Originally Posted by kevsta

for gold? no not really....I don't know. maybe...sometimes they can take on a mind of their own, and in either direction...kinda risky...

Strip away the excess verbiage, and I think you're on the path to understanding, grasshopper.

"It is difficult to make predictions, especially about the future" - Yogi Berra

[kevsta]

Originally Posted by Fast Eddie B

Strip away the excess verbiage, and I think you're on the path to understanding, grasshopper.

"It is difficult to make predictions, especially about the future" - Yogi Berra

uh huh.. could you also have a little look through the first half of this when you have a few minutes free? FYI - I don't use the software they mention in there at all, only VSA principles in line with trading the marketmaker & SM manipulation cycles.

Quote:

Quote:
edit. I mentioned "distribution" above. those inclined can familiarize themselves with market principles, accumulation & distribution (p20) and how it all works a little better here http://vsa.pipbuilders.com/mtmv3.pdf

of special interest to you, P12 "Random Walks and other Misconceptions"

Quote:

The markets are certainly complex – so complex, in fact, that it has been seriously suggested that they move at random. Certainly, there is a suggestion of randomness in the appearance of the charts, irrespective of whether you are looking at stocks or commodities. I suspect however, that those who describe market activity as ‘random’ are simply using the term loosely, and what they really mean is that movements are chaotic.

Chaos is not quite the same thing as randomness. In a chaotic system there may be hundreds, or even thousands of variables, each having a bearing on the other.

Chaotic systems may appear unpredictable, but as computing technology advances, we will start to find order, where before we saw randomness. Without doubt, it is possible to predict the movements of the financial markets, and as technology advances, we will become better at it. There is an enormous gulf between unpredictability and randomness.

Unless you have some idea of the various causes and effects in the markets, you will undoubtedly, and frequently, be frustrated in your trading. Why did your favourite technical tool, which worked for months, not work "this time" when it really counted? How come your very accurate and detailed fundamental analysis of the performance of XYZ Industries failed to predict the big slide in price two days after you bought 2,000 shares in it?

The stock market appears confusing and complicated, but it is most definitely based on logic. Like any other free market place, prices in the financial markets are controlled by supply and demand – this is no great secret. However, the laws of supply and demand, as observed in the markets, do not behave as one would expect...

although the whole accumulation / distribution cycle with weak / strong transfer from bear to bull and back might shed a little insight if you're not familiar. .. this really is what is going on.

It is usually most clearly observed in the Forex markets where the 10 main Forex banks control 70% of global FX volume ($4 trillion) daily, and every single one of them has been charged or convicted of manipulating markets or similar criminal behavior at some point, many most recently with LIBOR.

http://www.euromoney.com/poll/3301/P...-Exchange.html

Apart from major (unexpected, like natural disasters etc) news moves, any financial data available whatsoever, you can assume that the smart money are able to process it and act upon it way faster anybody else. If indeed they dont already know days in advance (mostly) and who are completely unopposed financially in their own arena with co-located black box servers in the exchanges for millionths of a second speed advantages and ultra high speed marketmaking (trading) algorithms at their disposal. if that's not a cartel, I don't know what is.

To assume this is not used in a manipulative fashion while nobody externally, actually has the faintest idea what goes on inside these trading systems, either technically or regulatory, would be somewhat naive IMO. and especially as I have shown you results of trading figures using this knowledge.

but hey, we all believe what we see, I'm not expecting to convince you really, not unless you came and sat and watched the process for a few weeks anyway

[Fast Eddie B]

I think my position is markets are "inherently (or essentially) unpredictable", which might be a better description than "random", and probably closer to the "chaotic" in the quote.

Find a program or strategy that works in teasing out non-randomness, and it will only work until someone comes up with a better program or strategy. Then your program or strategy will have to be tweaked to compensate for that newer program or strategy. Which will then have to be tweaked, and so on.

Unless there's a perfect algorithm/program that will be so good, and produce such consistent results, that everybody will use it and everybody will profit from every transaction and everybody will get rich.

Good luck with that!!!

[Puppycow]

Nikkei is up over 2% in early trading this morning. Gold is up 1.4% too.

Seems to be shorts taking profits:

http://www.bloomberg.com/news/2013-0...mmodities.html

Quote:

While the net-long position in gold climbed last week, most of the gain was attributable to a retreat in short holdings rather than an increase in long wagers. The divergence shows that the gain in the net position may reflect short traders taking profit, rather than investors becoming more bullish, according to Stanley Crouch, who helps oversee $2 billion as chief investment officer at New York-based Aegis Capital Corp.

“Sometimes you have to peel the onion when you look at this data,” Crouch said. “It looks like that after such a big drop, people who were short were ready to take their gains. That might also be why the price stabilized, and it could mean that it’s even more vulnerable now.”
Short Holdings

Short positions narrowed 8.2 percent to 59,742 contracts, and longs gained 0.1 percent to 121,321. The short holdings reached a record 70,126 in the week ended March 12, and are still more than triple the average since 2006, when the CFTC data begins.

Assets in ETPs backed by the metal tumbled 11 percent this year as investors shunned the metal in favor of equities and inflation remained subdued. Societe Generale SA said April 2 that the metal was in bubble territory and would fall to $1,375 this year, when it was $200 higher. Goldman Sachs Group Inc. advised traders on April 10 to sell the metal. Prices may need to drop to as low as $1,050 after gold entered a “new reality,” Deutsche Bank AG said April 18.

[Fast Eddie B]

Weasel words bolded below:

While the net-long position in gold climbed last week, most of the gain was attributable to a retreat in short holdings rather than an increase in long wagers. The divergence shows that the gain in the net position may reflect short traders taking profit, rather than investors becoming more bullish, according to Stanley Crouch, who helps oversee $2 billion as chief investment officer at New York-based Aegis Capital Corp.

“Sometimes you have to peel the onion when you look at this data,” Crouch said. “It looks like that after such a big drop, people who were short were ready to take their gains. That might also be why the price stabilized, and it could mean that it’s even more vulnerable now.”
Short Holdings

Short positions narrowed 8.2 percent to 59,742 contracts, and longs gained 0.1 percent to 121,321. The short holdings reached a record 70,126 in the week ended March 12, and are still more than triple the average since 2006, when the CFTC data begins.

Assets in ETPs backed by the metal tumbled 11 percent this year as investors shunned the metal in favor of equities and inflation remained subdued. Societe Generale SA said April 2 that the metal was in bubble territory and would fall to $1,375 this year, when it was $200 higher. Goldman Sachs Group Inc. advised traders on April 10 to sell the metal. Prices may need to drop to as low as $1,050 after gold entered a “new reality,” Deutsche Bank AG said April 18.

[Puppycow]

So anything other than absolute certainty is a weasel word? This seems like an appropriate context to qualify statements with words indicating uncertainty and imperfect knowledge.

[Fast Eddie B]

Originally Posted by Puppycow

So anything other than absolute certainty is a weasel word? This seems like an appropriate context to qualify statements with words indicating uncertainty and imperfect knowledge.

Good point.

But when given without "error bars", these words just reduce what is said to speculation.

Example #1: "We may see gold rebound in the next week due to ________".

Tells me virtually nothing. Whenever you see the word "may", mentally add "may not". Gold may or may not rebound next week due to either _______ , or whatever.


Example #2: "We predict that gold prices will bottom out and begin a climb back to _______ over the next week.

This at least is concrete enough to, after the fact, allow one to determine if it was accurate. Example #1 is not.

But good point, and qualifiers can certainly be appropriate to highlight the general uncertainty of prediction.

[kevsta]

gold poking up overnight, currently £5, €9 and $17 away from a 50% retracement of the entire down move from 1550.

still contemplating shorting it around at the 50% mark because that's where the momentum funds will start piling back in short if they previously covered lower.

edit, ..people's democracy in action in Switzerland..

http://www.ft.com/intl/cms/s/0/aa177...#axzz2RBR7PTdz

Quote:

Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal.

Under the terms of “Save our Swiss Gold”, which is led by members of the ultra-conservative Swiss People’s party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.

Under Swiss law, initiatives that attract more than 100,000 signatures can be put to a referendum. On Thursday, the federal chancellery confirmed that the campaign had gathered 106,052 legitimate signatures.

Cyprus agreed last week to sell gold worth about €400m from its reserves as part of efforts to bring its public finances into order, sending the gold price tumbling on fears that other eurozone countries with debt problems might follow suit.

Governments in the eurozone’s beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold – the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal’s holding of 383 tonnes accounts for 90 per cent.

However, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs.

They insist that the SNB’s gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are the best store of value available to the central bank.

“Further gold sales, while both global currencies, the dollar and the euro, are threatening to collapse? No way. Today gold is almost the only really valuable asset left on the SNB’s balance sheet,” according to the website of the initiative.

[kevsta]

here comes 50%, "to short or not to short.." that is the question..

[kevsta]

Originally Posted by Fast Eddie B

Weasel words bolded below:

Assets in ETPs backed by the metal tumbled 11 percent this year as investors shunned the metal in favor of equities and inflation remained subdued. Societe Generale SA said April 2 that the metal was in bubble territory and would fall to $1,375 this year, when it was $200 higher. Goldman Sachs Group Inc. advised traders on April 10 to sell the metal. Prices may need to drop to as low as $1,050 after gold entered a “new reality,” Deutsche Bank AG said April 18.

Market-Making bullion banks also highlighted

there's nothing quite like independent unbiased and non-taking-the-other-side-of-your-trade-by-design advice, is there now?

not there, anyway

[kevsta]

haha, I see somebody has taken my highlighted objection below into account as well as making up another +3% of "intangibles" per annum to add to the up-to+15% imputations, they are now retroactively applying it to previous history to "rewrite economic history"

http://www.ft.com/intl/cms/s/0/52d23...#axzz2RBR7PTdz

Quote:

The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.

Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, told the Financial Times that the update was the biggest since computer software was added to the accounts in 1999.

Quote:

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,”

said Mr Moulton.

this is really very cool, I've said before it needed doing, you cant have it both ways, if the modern methods are correct, lets view the past through them, so we can now see good they really actually had it in the 70s & 80s and the great depression etc, back when they didn't understand how to count inflation and unemployment properly.

seriously, how can anybody not be skeptical of this behavior, at this point in time?

Originally Posted by kevsta

my personal view is that as usual the inflation truth probably lies somewhere between the two camps, but that for figures to be valid comparison, you have to not compare apples to oranges.

certainly the shadowstats view of real US GDP if anywhere near correct would give cause for the lack of real recovery, (as perceived by me) despite unprecedented and ongoing stimulus.

if you take the truth as right between the 2 lines now, growth is flatlining at best.

when you factor in that up to 15% of the GDP calculation itself, is actually really, made up - its called "imputations" and it may or may not be absolutely perfectly correct.

but being as it is basically made up, estimated as what they think is happening, my bet would be that it is not 100% perfectly correct.

http://www.bea.gov/faq/?faq_id=488

http://forums.randi.org/imagehosting...008872260b.png

so it seems through the bear-tinted Oakleys that I wear, that real world inflation in any meaningful comparison is a few percent higher and that there is scant room for error on total GDP "growth" with the possibility for fairly large errors to be inputted into this calculation at any level.

whether the concept is valid or not, we are talking about the difference between 0.8% or 1.2% annual growth, while relying on what is almost certainly not exactly what is actually happening in the real world, for up to 15% of the figure.

the meddling adjusting with time is done at every level.

[Fast Eddie B]

In spite of the word "may", $1,050 seems to be a specific prediction by Deutsche Bank.

It "may" just happen, though they didn't seem to give a time frame, which itself weakens the utility of that prediction.

If one had confidence in their prediction, it would be wise to short gold right now and profit from the eventual move down. Or sell one's holdings of physical gold in its entirety this morning, and wait until the magic $1,050 mark to buy back in, increasing one's holdings substantially.

Unless the charts foretell shorter term moves where you can profit by moving in and out on the way down.

Good luck with your trades either way. Hopefully interpreting all those lines on those charts accurately will give you a leg up on the herd.

[kevsta]

Originally Posted by Fast Eddie B

In spite of the word "may", $1,050 seems to be a specific prediction by Deutsche Bank.

It "may" just happen, though they didn't seem to give a time frame, which itself weakens the utility of that prediction.

If one had confidence in their prediction, it would be wise to short gold right now and profit from the eventual move down. Or sell one's holdings of physical gold in its entirety this morning, and wait until the magic $1,050 mark to buy back in, increasing one's holdings substantially.

yea, the reason I got involved with leveraged Forex trading at all was to stop me gambling with the physical stash, because I defer to the wisdom of Jesse Livermore on sitting tight and not thinking I can catch every turn in a secular bull. it doesnt happen, it goes without you.

Originally Posted by Fast Eddie B

Unless the charts foretell shorter term moves where you can profit by moving in and out on the way down.

Good luck with your trades either way. Hopefully interpreting all those lines on those charts accurately will give you a leg up on the herd.

all I can say right now is that the evidence I see thus far has me (even more) hopeful that it is indeed possible.

[T'ai Chi]

Mega bull, but not fanatic about it. Metals are simply part of a balanced investment portfolio. I'm mostly bonds > dividend stocks > metals kind of person.

[timhau]

Originally Posted by Puppycow

So anything other than absolute certainty is a weasel word? This seems like an appropriate context to qualify statements with words indicating uncertainty and imperfect knowledge.

I doubt this was even a case of 'imperfect knowledge'. It's more like story-telling to fill air time; a financial news network is supposed to talk about the market, so they'll talk about the market regardless of whether they have something to say or not.

[kevsta]

Originally Posted by timhau

I doubt this was even a case of 'imperfect knowledge'. It's more like story-telling to fill air time; a financial news network is supposed to talk about the market, so they'll talk about the market regardless of whether they have something to say or not.

exactly, except they always have something to say, whatever streams in on the teleprompter generally I gather..

[Puppycow]

Here's a specific prediction:

Gold Seen Crushed as Credit Suisse Forecasts $1,100 in Year

Quote:

Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.

Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.

“Gold is going to get crushed,” Deverell told reporters in London today. “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”

[The Don]

That's interesting. I think as I've said here before, I think there are a number of components to the price of a commodity, in particular gold:

• The underlying value of it as an industrial metal
• Its value as a jewelry metal/nice shiny thing
• Its value as a currency/inflation hedge
• Its value as a reserve of wealth in times of uncertainty
• Its value as an commodity for speculation - unlike the others, this can be positive or negative

I know it's asking the impossible but I'd love to see the current gold price broken down by someone knowledgeable into components like this.

At the $1800/oz price there seemed to be a large component of both speculation and as a reserve of wealth. With more promising economic indicators there is less economic uncertainty and money seems to have moved from gold to stocks and bonds. With demand a little less febrile, maybe the speculative money has moved out of the gold upside and either out - or to the gold downside.

For gold to decline a further 20% it would seem to me that Credit Suisse thinks that there is still a lot of "uncertainty" and hedging money to come out of gold.

For the record, I have no idea where the gold price is heading but it seems to me that pundits sometimes make some of these kinds of predictions to get their names in the paper.

[kevsta]

Originally Posted by Puppycow

Here's a specific prediction:

Gold Seen Crushed as Credit Suisse Forecasts $1,100 in Year

Quote:

Quote:
Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.

Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.

“Gold is going to get crushed,” Deverell told reporters in London today. “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”

ah the propaganda campaign continues unabated. lots of things wrong and potentially wrong with this.

1. gold traditionally does ok during deflation too.
2. CBs DID step up in Q1.
3. assumptions made that "all is now well" and will stay that way

we shall see.

the WGC came out with a funny report yesterday, (summed up by this one chart actually)

here's what's actually happening (unspun)

Quote:

WGC: 1Q Global Gold Demand Contracts Due To ETF Outflows; Jewelry Rises

This headline was immediately followed by more of Kitco’s trademark gold-bashing:

…Large outflows from gold exchange-traded funds led to a 13% year-on-year decline in global gold demand during the first quarter to 963 metric tons, the World Gold Council said Thursday.

If one actually goes to the WGC website and reads through the report, it is presented in an almost opposite manner to Kitco’s bias. But understand this is a tag-team operation. Perhaps only 1% of the gold investors who see Kitco’s “WGC” headline and (supposed) summarization will ever actually go and read the original report.

The WGC produces the intentionally misleading data, and then the spin-doctors of Kitco “present it.” The report of a “13% decline in Q1 gold demand” may have been (conveniently) buried within the WGC’s own report, but it is obviously the “headline number.” In a quarter where all the facts trumpeted a massive surge in gold-demand; the WGC reported a mythical “13% decline” in year-over-year demand:

- Total jewelry demand up 12%

- Jewelry demand in China up 19%

- Total demand in India up 27%

- Total demand in China up 20%

- U.S. demand up by 6% “for the first time since 2005”

- Demand for gold bars/coins in China up 22%

- Demand for gold bars/coins in India up 52%

- Demand for gold bars/coins in U.S. up 43%

- Global demand for “official coins” up 18%

- Demand for gold by Central Banks exceeds 100 tons for the 7th consecutive quarter

Meanwhile, on the supply side, mine-supply rose by only 4% while scrap-sales (which account for over 1/3rd of total supply) fell by 4%, meaning total supply only rose by 1%.

Obviously in a market which currently features scorching demand for real gold, a 1% increase in supply creates a totally unsustainable supply/demand paradigm – which can only be put back into balance via a massive increase in price.

This is reflected by the recent fanaticism which the bankers have displayed in trying to sell more of their paper-called-gold; at the same time that the Smart Money is ridding itself of this paper at the fastest rate in history. It is also reflected in the shameless dishonesty of the mainstream media.

[Fast Eddie B]

Originally Posted by The Don

For the record, I have no idea where the gold price is heading but it seems to me that pundits sometimes make some of these kinds of predictions to get their names in the paper.

True, though some are probably paid to make these predictions.

That said, Credit Suisse has access to all the same data as everyone else.

Maybe their insights hold some weight, but maybe not.

I'm still in the random walk camp - and neither thread on gold or silver has done anything to change my opinion to date.

[Puppycow]

Gold seems to be taking another beating today. One difference is that oil and commodities in general are actually up while gold and silver are down close to 2%. Copper is up too.

[Puppycow]

Originally Posted by The Don

That's interesting. I think as I've said here before, I think there are a number of components to the price of a commodity, in particular gold:

• The underlying value of it as an industrial metal
• Its value as a jewelry metal/nice shiny thing
• Its value as a currency/inflation hedge
• Its value as a reserve of wealth in times of uncertainty
• Its value as an commodity for speculation - unlike the others, this can be positive or negative

I know it's asking the impossible but I'd love to see the current gold price broken down by someone knowledgeable into components like this.

At the $1800/oz price there seemed to be a large component of both speculation and as a reserve of wealth. With more promising economic indicators there is less economic uncertainty and money seems to have moved from gold to stocks and bonds. With demand a little less febrile, maybe the speculative money has moved out of the gold upside and either out - or to the gold downside.

For gold to decline a further 20% it would seem to me that Credit Suisse thinks that there is still a lot of "uncertainty" and hedging money to come out of gold.

For the record, I have no idea where the gold price is heading but it seems to me that pundits sometimes make some of these kinds of predictions to get their names in the paper.

Here's what the internet says:

Industrial Demand for Gold

Quote:

Between 10 and 15 per cent of the annual gold production is used in the industry.

From 2008 until 2009 industrial demand for gold dropped by 13 per cent.

In 2010 the gold supply stood at 4108 tonnes (2659 tons from mine production, neg. 116 tons hedging, 87 tonnes central banks sellings and 1653 gold recycling). Demand from industry was 420 tonnes, or 10 per cent. This is 287 tonnes for the electronics industry, 50 tonnes for dentistry, and 83 tons for other industrial purposes. In contrast, jewellery demand stood at 2060 tonnes.

So that's sort of a rough idea. About 10%-15% of annual production is used for industry and slightly more than 50% is used for jewelry. That leaves about 35%-40% for the other uses.

[The Don]

Thanks