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Sweet100, Whilst I appreciate the argument, I have been hearing the same (from the likes of King world news) for the last 5 years. I understand the Deutsche Bank derivative situation (but there is absolutely no evidence that it is mainly based in Venezuela that I can see) but the figures bandied about are total exposure. Even in the event of a full blown financial crisis, the actual outcome would likely get nowhere near this. That said, their situation is bad and I do expect Deutsche to go under in the next financial crisis. I just don't expect it to cause it. I do expect another financial crisis and I expect it to be worse that the last as Gordon Brown kicked the problem down the road rather than solved it. (I can just see the discussion now - let's do this - it won't solve the problems, in fact it will make them much worse, but the stuff won't hit the fan until we are retired!). I just don't expect it to be now or in the next year or so. As I indicated, I expect the S&P500 to exceed 3000 by quite a bit before the party stops. In the meantime I expect gold to initially struggle before it begins to gain traction. I do expect a record high in gold as well in the next 2-3 years so am positioning myself accordingly.
Daisan At the moment I would not consider putting my money into any major stock market. I would compare that to playing Russian roulette. Deutscher Bank on oxygen with 50 trillion in dodgy derivatives mainly based in Venezuela which we know has gone bust and the 10 year US Treasury topping 3% I would rather put my money in gold which we know holds its true value - in Venezuela now for just 1 ounce you can buy a house
Both up 15% in the last year and have both broken out of a wedge formation to the upside. I would not be surprised by both reaching record highs in the not too distant future and I am expecting the S&P 500 to break 3000 barring a black swan event.
Daisan - looking at the S&P and the Dow (as gold is in dollars) they seem to be in a steady decline even after 2 trillion in tax cuts didn�t stimulate the economy enough so now all US citizens earning less than 52,000 a year now getting their tax back as well. After that I guess it really will be helicopter money next - anything to keep the system going a little bit longer. It really does need to go back to a Gold backed currency you can trust and I guess this is why all central banks are stockpiling gold as fast as they can
Lots of talk of gold price coming down but if you look at the US national debt Clock you see that the price of gold is now up at a staggering $4739 per ounce Dollar to gold ratio Gold over time always holds its true value !
I am not sure what stock markets you are looking at but none of the ones I am looking at look remotely like falling over at his stage. However, the benchmark US bond yields are certainly relevant from a fundamental perspective. Technically gold could well fall from here as it is testing support and is looking weak. Equally it could bounce! I suspect that there are some central banks buying gold as they have been for a few years now (China, Russia as examples).
I�m sure the real reason why they are knocking gold so hard is because the US 10 year note is going well over 3% and with the stock markets on the point of falling over, all the central banks buying gold as fast as they can I am sure they are trying to keep everyone away from the obvious safe haven. IMO this is the right time to be buying as fast as we can.
Thanks for your reply Daisan Yes it does break down....but at 70% correlation is still a useful guide $POG at 1290 seems to be recovering https://www.bullionvault.com/gold-price-chart.do
Mick-b, The problem with that is that at the important moments this correlation often does not hold. The 2007 financial crisis was a case in point. The dollar and gold rose in tandem. At precisely the point when traditional links suggested that you should sell gold and miners you would have missed one of the best opportunities in a generation.
Ducati, I was referring to the gold price rather than the share price. There isn't enough strength in the market to challenge the all time highs of 2011. We need to see the gold price take a dip to flush out the remaining bullishness so that we can get to a base from which to rise. Patryk221, The share price has been reacting to Tanzanian policy at a point when capex was high which made the company vulnerable but a gold miner will never disconnect itself from the gold price over the longer term and a sharp drop in gold would certainly influence the price. At the very least it would blunt a rise.
This stopped following gold for a while now...the only way is up from here, don’t be fooled by market manipulation...
@Daisan, why do you think bearish gold will allow the sp to test all time highs? Don't you mean test all time lows?
There is a 70% correlation between POG and the $ as gold is a currency as well. When the $ strengthens, POG generally weakens. I watch the dollar index https://www.bloomberg.com/quote/DXY:CUR
Technically gold is at a critical juncture. I had thought that the $1300 level (give or take $10-20) would hold but it is perilously close to being soundly broken. If that is the case then we could be seeing a precipitous drop (which I had been looking for for months but which I had given up on for a rather more immediately bullish view). Such a drop could take gold down quite some way quite quickly, although there are various points along the way that it may reverse at. I confess that a sharp drop was my preferred option as it would turn market sentiment towards gold extremely bearish which we need to see for an assault on all time highs. Otherwise we could see a continued meandering.