Welcome Guest [Log In] [Register]


Reply
Wake up Goldbugs, Gold Skyrocketed overnight; Who would have thought...
Topic Started: 20 Jun 2014, 06:49 AM (21,991 Views)
Mike
Default APF Avatar


Jimbo
22 Aug 2014, 10:50 AM
I am keeping this one. So now you are an expert on Gold as well.

How did your Iron Ore price predictions work out again?
That is my opinion, care to offer one so we can keep it.

Here is another one, you will be lucky if gold holds around $800 and does not head much lower. It will take a few years but the result will be the same.
http://mike-globaleconomy.blogspot.com.au/
Profile "REPLY WITH QUOTE" Go to top
 
propertymogul
Default APF Avatar


Mike
22 Aug 2014, 11:03 AM
That is my opinion, care to offer one so we can keep it.

Here is another one, you will be lucky if gold holds around $800 and does not head much lower. It will take a few years but the result will be the same.
I think if gold went below us$1,200 for more than 1 year, we'd get a huge gold bull market over the next few years. A lot of the mid tier producers are marginal under $1,300 and would go bust with prolonged sub $1,200 prices. The resulting drop in supply would cause the start of another gold bull.

I still think there is a real chance of another gold bull regardless in the next couple of years if the SHTF, which is likely. Sold my 44c tranche of PRU recently at 53c. Still holding the 33c tranche and 28.5c tranche. Also still holding BDR which is in the red. Combined they are in the black though even with the current drop, and not fussed if they drop further. Will simply re-assess periodically a big drop may be an opportunity to buy more, but will assess at the time. To be honest in hindsight probably jumped into gold a bit too early, but patience is a virtue.

My call on iron ore has turned out to be correct, I think there is still a bit of pain to go there.
Profile "REPLY WITH QUOTE" Go to top
 
Poontang
Member Avatar


Mike
22 Aug 2014, 11:03 AM
That is my opinion, care to offer one so we can keep it.

Here is another one, you will be lucky if gold holds around $800 and does not head much lower. It will take a few years but the result will be the same.
I called $1500USD in the 2014 prediction thread for this year, with a bonus for AUD gold holders with the dollar dropping. Might be next year now, $1400USD or pretty damn close this year is probably closer to the mark.



Put me down for gold breaking $2000USD before end of March 2018

Silver retesting and breaking its previous high of $50USD or so in a similiar time frame.

In short, I see Gold and Silver both rising over the next couple of years with Silver outperforming Gold but with higher volatility.
There are some people who seem angry and continuously look for conflict.
Walk away, the battle they are fighting isn't with you, it's with themselves.

The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it.
The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.

Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Profile "REPLY WITH QUOTE" Go to top
 
Count du Monet
Member Avatar


Quote:
 
Silver retesting and breaking its previous high of $50USD or so in a similiar time frame.


If the central banks become big gold hoarders like they have done in the past, then silver becomes a big beneficiary in jewelry market looking for an alternative to scarce gold.

So instead you might see silver head for $200. But this would be very short-lived. Silver is cheap at the moment and a good buy, but I would dump it at $100 - $120 and move on and forget about silver.

In the case of gold I'd expect $3,000+, but once there gold would stagnate for decades and also should be dumpeded.

That's all if the central banks hoard gold and continue with the current Basel monetary policy.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


Mike
22 Aug 2014, 11:03 AM
That is my opinion, care to offer one so we can keep it.

Here is another one, you will be lucky if gold holds around $800 and does not head much lower. It will take a few years but the result will be the same.
OK Mike, you contradict yourself.

You post about a growing middle class in China and India creating demand for resources, yet you talk of prices dropping for one of Asias most prized materials?

The Chinese love their Gold and when prices drop, they go out and buy the stuff just like you and I go and buy a new telly when it is on sale. We saw this when Gold dropped to the low $1200's. They went mental for the stuff.

A simple Gold wedding band doesn't actually weigh very much in pure bullion terms and you can make quite a few of them with an ounce of gold. An 18ct mens band will set you back about $1200 to $1500 and that is a pretty consistent price worldwide.

Holders of physical Gold don't sell on every market move. Selling is time consuming and with the premiums over spot for buying, people who buy Gold, tend to buy with a view to holding long term (my last holding was for over ten years). They are not spooked by daily market movements (much like anyone who owns a house outright doesn't give a monkeys whether houses went up or down last year).

I would not sell my Gold for a real terms loss unless I was in some sort of deep financial trouble. I would hold it for 20 years if I had to. I would pass it on to my kids if I had to. Most people own Gold. They have wedding rings, chains, lockets etc. They don't watch the Gold market. They don't rush to sell when the price gets 20% above what they paid for the metal content. They hold it forever. This is a natural restriction on the supply side of what is an already rare material.

On the other hand, if Gold went to 50k an ounce (I doubt that), we would all be flogging our wedding rings to pawn shops so there is a price where everybody would sell and therefore increase supply (which puts a ceiling on the Gold price).

Speculative buyers who jumped in too late as Gold was climbing to its record highs have been shaken out and Gold has traded in a tight range since then. Gold is seen as a nutjob investment in the west. Tell someone you own bullion and you might as well have told them you were abducted by aliens last night. Already highly unpopular assets have a greater chance of becoming more popular than less popular.

I don't make predictions on the future price of Gold but I doubt very much that it would fall too much below $1200. If it did, I would buy some more (and so would the Chinese).




Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
Mike
Default APF Avatar


Jimbo
22 Aug 2014, 12:45 PM
OK Mike, you contradict yourself.

You post about a growing middle class in China and India creating demand for resources, yet you talk of prices dropping for one of Asias most prized materials?

The Chinese love their Gold and when prices drop, they go out and buy the stuff just like you and I go and buy a new telly when it is on sale. We saw this when Gold dropped to the low $1200's. They went mental for the stuff.

A simple Gold wedding band doesn't actually weigh very much in pure bullion terms and you can make quite a few of them with an ounce of gold. An 18ct mens band will set you back about $1200 to $1500 and that is a pretty consistent price worldwide.

Holders of physical Gold don't sell on every market move. Selling is time consuming and with the premiums over spot for buying, people who buy Gold, tend to buy with a view to holding long term (my last holding was for over ten years). They are not spooked by daily market movements (much like anyone who owns a house outright doesn't give a monkeys whether houses went up or down last year).

I would not sell my Gold for a real terms loss unless I was in some sort of deep financial trouble. I would hold it for 20 years if I had to. I would pass it on to my kids if I had to. Most people own Gold. They have wedding rings, chains, lockets etc. They don't watch the Gold market. They don't rush to sell when the price gets 20% above what they paid for the metal content. They hold it forever. This is a natural restriction on the supply side of what is an already rare material.

On the other hand, if Gold went to 50k an ounce (I doubt that), we would all be flogging our wedding rings to pawn shops so there is a price where everybody would sell and therefore increase supply (which puts a ceiling on the Gold price).

Speculative buyers who jumped in too late as Gold was climbing to its record highs have been shaken out and Gold has traded in a tight range since then. Gold is seen as a nutjob investment in the west. Tell someone you own bullion and you might as well have told them you were abducted by aliens last night. Already highly unpopular assets have a greater chance of becoming more popular than less popular.

I don't make predictions on the future price of Gold but I doubt very much that it would fall too much below $1200. If it did, I would buy some more (and so would the Chinese).



Asians do like gold, but that is not the main reason or reasons for Gold's increase in price or its fall in value. Nor will it be the cause of further price falls, or at least not the main cause. So no contradiction.

I do not consider people who buy Gold nut jobs, it is just another class of asset to invest in.

http://mike-globaleconomy.blogspot.com.au/
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


Mike
22 Aug 2014, 01:30 PM
Asians do like gold, but that is not the main reason or reasons for Gold's increase in price or its fall in value. Nor will it be the cause of further price falls, or at least not the main cause. So no contradiction.

I do not consider people who buy Gold nut jobs, it is just another class of asset to invest in.
What are your reasons for a price fall to $800?

The only person I know that predicts $800 is Harry Dent and he is predicting a deflationary collapse of all commodities and housing which goes against the grain of your own predictions for commodities and housing? If Harry is right, I will lose a bit on my Gold but I will be laughing as I pay $400k in cash for a mansion (and I will spend the spare cash on even more Gold).

If we get high IO demand and high IO prices, that would indicate that industrial demand and the wealth it creates is increasing. This is good for Gold. So if you are predicting higher demand and higher prices for IO, how can Gold go lower when people are prepared to pay todays asking price for it today (considering that these same people will be wealthier in the future)?

My holding of gold is an inflation or currency crisis hedge but if we experience a deflationary collapse, my cash holdings will win out.

Either way, up or down, I should at least break even because of my balance of holdings against other asset classes and cash.

There is always the prospect of Alchemy, Lasseters Reef being found or the US towing a Gold asteroid to Earth, but I don't lose sleep over it.

I never accused you of calling me a nut job btw. That just seems to be the consensus amongst most people in the west.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
Mike
Default APF Avatar


Jimbo
22 Aug 2014, 02:07 PM
What are your reasons for a price fall to $800?

The only person I know that predicts $800 is Harry Dent and he is predicting a deflationary collapse of all commodities and housing which goes against the grain of your own predictions for commodities and housing? If Harry is right, I will lose a bit on my Gold but I will be laughing as I pay $400k in cash for a mansion (and I will spend the spare cash on even more Gold).

If we get high IO demand and high IO prices, that would indicate that industrial demand and the wealth it creates is increasing. This is good for Gold. So if you are predicting higher demand and higher prices for IO, how can Gold go lower when people are prepared to pay todays asking price for it today (considering that these same people will be wealthier in the future)?

My holding of gold is an inflation or currency crisis hedge but if we experience a deflationary collapse, my cash holdings will win out.

Either way, up or down, I should at least break even because of my balance of holdings against other asset classes and cash.

There is always the prospect of Alchemy, Lasseters Reef being found or the US towing a Gold asteroid to Earth, but I don't lose sleep over it.

I never accused you of calling me a nut job btw. That just seems to be the consensus amongst most people in the west.
You and other Gold bulls are looking at the wrong drivers of the price of Gold.

Granted Asian demand does provide extra demand and hence price pressure. This is only a minor driver of the price of Gold.

Lets use Gold's own price over the past 10-12 years as a guide.

At the start of 2004, just 10 years ago you could buy Gold for just over $400 an ounce. I am using US dollars. At the start of 2006 it was $500 an ounce. It continued to increase in price at a decent rate until a point in 2007 when the GFC started to rear its ugly head at which point Gold takes off on a huge rally.

Looking back even further, Gold start growing at faster rates from $300 an ounce in 2001 after 9/11. The instability this event created increased demand of Gold from people who wanted more security. At that point in time it seemed like the "end of times". It scared a lot of people. Over the next 4-5 years the US increased its defence spending, ran deficits to counter the effects of 9/11and provide funds for its efforts in Afghanistan and Iraq. Interest rates were also low.

The combination of these events plus rising demand from India and China provided price growth for Gold. The main driver thought was instability in the world and US economic policy.

From 2007 onwards gold took off like a bullet. This was no sudden surge in demand from India/China or other central banks, it was a direct result of panic, rush to something secure as it appeared the whole world financial system was collapsing in 2007/8. Gold was a hedge against this.

Despite claims of Chinese ascendancy the world is run and controlled from Washington, between Washington and Brussels (US/EU) control 80% of the worlds financial assets. China and the rest are small fry for now.

The one lever yet to be pulled which signals the death of the GFC is US interest rates. This is the clearest signal that can be sent to the worlds markets that the GFC is over, the US economy is growing strongly and will for along time to come.

You can quote me on this so please save it for a future which is quickly approaching. When the US Fed raises US interest rates it will be like a shot through the heart of Gold prices. Gold price will collapse. As US interest rates rise, Gold will fall further and further.

My opinion is $800 is conservative, provided the US economy continues to grow as interest rise, Gold will fall back towards it long term historical price, which is along way south of $800.

I do agree though Asian demand will provide some floor under gold, but it will be much lower then you expect.

If you disagree then explain why Gold moved from $300 an ounce in 2000 to its all time high then fell back, and why is it falling now. Why do you think it will not fall further or not as far as I think.

I understand most Gold Bulls think the US will not recover and will fall back in a heap, however data and history is heavily against that kind of gamble.
http://mike-globaleconomy.blogspot.com.au/
Profile "REPLY WITH QUOTE" Go to top
 
Jimbo
Member Avatar


Mike
22 Aug 2014, 02:49 PM
You can quote me on this so please save it for a future which is quickly approaching. When the US Fed raises US interest rates it will be like a shot through the heart of Gold prices. Gold price will collapse. As US interest rates rise, Gold will fall further and further.

My opinion is $800 is conservative, provided the US economy continues to grow as interest rise, Gold will fall back towards it long term historical price, which is along way south of $800.

I understand and appreciate why Gold increased in price which was why I bailed at $200 off the peak.

However, I disagree with your prognosis for the US economy and that is why I am back into Gold as of a month ago.

A lot of what you read about the US recovery, can be unraveled by looking behind the numbers. NFP prints showing a reduction in the unemployment rate hide a shift from full time to part time work.

I believe that Yellen will move the goalposts on interest rates to account for this just like the BoE moved the goalposts from unemployment to wage growth.

Remember the US is still doing QE, albeit at reduced levels. QE is what you do when you can't go much lower with rates. They won't consider raising rates until QE injections have finally stopped. Of course, the press refers to the taper as "unwinding", but that would involve reducing the Feds balance sheet and that is another story.

So that is where we differ. I don't believe the Fed will raise rates because the US economy couldn't handle rate rises at the present time.

If you want people to put money into your country, you have to maintain the illusion that you will defend your currency by putting up rates when the time is right. That is what the Fed and the BoE have been doing for the last few years with their "forward guidance" policies.

It's like saying I am not going to drink myself to death, because next week I am going to give up drinking. But next week never comes.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
Profile "REPLY WITH QUOTE" Go to top
 
newjez
Member Avatar


This is one of those odd scenario's when I tend to agree with Mike. It's a very strange feeling, and you find yourself rechecking a lot. But I am also not bullish on gold all things being equal, although international turmoil does spice things up. But it is a useful hedge against a US recovery. I just don't think a hedge is needed. I would prefer to hold USD or pounds. The irony is that Mike has made a prediction, but stands to lose money if he is right. Timmy was the same. Bulls without balls. What do you call that?
Edited by newjez, 22 Aug 2014, 03:48 PM.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
Profile "REPLY WITH QUOTE" Go to top
 
2 users reading this topic (2 Guests and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy