New Trend for Gold?

[gugaplex]

Is the new long-term trend for gold bearish? Think about it, gold has gained from $250/oz from the year 2000 to a whopping $720/oz in 2006. This commodity has enjoyed a six-year bull-run. The end of the move is near. Gold may hit $800/oz, but will likely sell-off BIG shortly there after. The marginal gain to $800 isn't worth the downside risk.

Rational Investing

 

[belgiumbrit]

Hi

I disagree - probably because i'm long , but what we saw on Monday was obviously just profit taking - and who can blame the funds for taking in the rpofits after a huge upside move in recent weeks - it will and HAS always happened throughout the bull run ! Sure people are nervous - but we haven't reached the 850 USD highs of 1980 yet - theres more upside - i envisage gold peaking at that figure by the end of July or August !

Yesterday was a great buying opportunity - and i for one will sit with it and hopefully enjoy the ride !

 

[ERA]

Is the new long-term trend for gold bearish? Think about it, gold has gained from $250/oz from the year 2000 to a whopping $720/oz in 2006. This commodity has enjoyed a six-year bull-run. The end of the move is near. Gold may hit $800/oz, but will likely sell-off BIG shortly there after. The marginal gain to $800 isn't worth the downside risk.

Warren,

Why would the long term trend for gold be bearish going into an inflationary cycle, sometimes you you need to look past the technicals. As a perma bear you need a good call to make up for your blog bullish calls you made on DELL, MSFT, BRCM, GLW, which took no time at all to go T!TS up on you.

 

[anley]

gug

Who knows you may be right but it's very dangerous to forecast the long term trend of just one days action.

 

[gugaplex]

Warren,

Why would the long term trend for gold be bearish going into an inflationary cycle, sometimes you you need to look past the technicals. As a perma bear you need a good call to make up for your blog bullish calls you made on DELL, MSFT, BRCM, GLW, which took no time at all to go T!TS up on you.

ERA,

I'm not short gold, I just think that it is foolish to buy something that is as hyped-up as gold. As for my long picks for my blog, those are long-term holdings (hence the term "long"). You see, those picks are out of favor at this point, there's an old addage if you've heard of it called, "Buy Low/Sell High". Just because the move doesn't happen right away does not mean that it won't happen in a relatively short period of time. I'm sure folks who bought gold in the $300's in 2002 had some pull-backs, but they are sitting pretty now. Those that buy DELL, MSFT, BRCM, and GLW today will be sitting pretty 3-5 years from now.

 

[real1]

e - waves

http://globalgold.blogspot.com/2006/05/gold-chart-update.html

 

[The Baptist]

USD & Defecit

ERA,

I'm not short gold, I just think that it is foolish to buy something that is as hyped-up as gold. As for my long picks for my blog, those are long-term holdings (hence the term "long"). You see, those picks are out of favor at this point, there's an old addage if you've heard of it called, "Buy Low/Sell High". Just because the move doesn't happen right away does not mean that it won't happen in a relatively short period of time. I'm sure folks who bought gold in the $300's in 2002 had some pull-backs, but they are sitting pretty now. Those that buy DELL, MSFT, BRCM, and GLW today will be sitting pretty 3-5 years from now.

In an indirectly related note Gug, how do you feel about the USD and other paper assets generally (Or Florida housing for that matter) and your presidents position on spending and low taxes ref deficits etc..

 

[gugaplex]

In an indirectly related note Gug, how do you feel about the USD and other paper assets generally (Or Florida housing for that matter) and your presidents position on spending and low taxes ref deficits etc..

I feel the USD is bottoming soon. I can't put a number or time frame on it, but I think every one and their mother hates the dollar and expects it to continue to weaken. Pretty soon the dollar bears will all be on one ship, and the few bulls will reap the rewards. On Florida housing, I think the yearly gains will slow, and gradually decline in 5-10 years. The Baby-Boomers will support the market there to some degree, but there has been an over-build of investment properties and it could haunt real estate investors if they get too greedy. As for President Bush's spending/tax policies, he has the right idea of cutting taxes to spur the economy and thereby increase more tax revenues. However, I wish he would stick with his party's stance on low spending versus what we see today. As for how this affects the USD and gold, I believe that the market has already priced these factors into the values of the assets. The important thing is how much the future reality differs from expectations. With a strengthening U.S. economy, I see the budget deficit narrowing considerably so long as spending does not get out of hand.

 

[gugaplex]

The chart above shows a bubble. What happens to bubbles?

They pop.........

 

[TWI]

I still put a year end target of 1.32 on EURUSD and 105 USDJPY.
Acceleration of inflation (note latest CPI figs) combined with uncertain economic outlook and a Fed that is now lacking credibility post Greenspan is not a dollar friendly combination. Last time this set of circumstances occured was 1994 and before that 1987. Look at the stock indices during that time and you probably see what is coming. As for Gold it will just continue to trade as an inverse to the dollar so still buy the weakness mode for me.

 

[gugaplex]

I still put a year end target of 1.32 on EURUSD and 105 USDJPY.
Acceleration of inflation (note latest CPI figs) combined with uncertain economic outlook and a Fed that is now lacking credibility post Greenspan is not a dollar friendly combination. Last time this set of circumstances occured was 1994 and before that 1987. Look at the stock indices during that time and you probably see what is coming. As for Gold it will just continue to trade as an inverse to the dollar so still buy the weakness mode for me.

Markets are affected primarly by demographics and spending patterns rather than government actions (over the long-term). Another driver is technological advancements such as new drugs, faster computers, better cell phones (with Internet and such), and more fuel efficient vehicles. Good luck.....

 

[gugaplex]

http://www.bloomberg.com/news/markets/commodities.html

 

[counter_violent]

http://www.bloomberg.com/news/markets/commodities.html

A short term pull back in a longer term trend......I think thats pretty much what everyone on here has been telling you.

So have you now changed stance....cos bloomberg must be right

 

[Selbats]

The chart above shows a bubble. What happens to bubbles?

They pop.........

Gugaplex,

I think the word "bubble" is banded about far too much these days. Everything that moves up in a strong trend is described by the media as a "bubble". I just don't go along with that. Gold is in a bull market for sure, but when I think of a bubble, I think of Nasdaq in 2000. Everyone was talking about the stock market then, and I mean everyone. It was the 3rd and final phase of the bull. Gold is very different. Sure it has moved up too far too fast, exhausted and is correcting. In the UK, you mention gold to Joe Public, and they look blankly at you. The general public hasn't got a clue.

 

[gugaplex]

Gugaplex,

I think the word "bubble" is banded about far too much these days. Everything that moves up in a strong trend is described by the media as a "bubble". I just don't go along with that. Gold is in a bull market for sure, but when I think of a bubble, I think of Nasdaq in 2000. Everyone was talking about the stock market then, and I mean everyone. It was the 3rd and final phase of the bull. Gold is very different. Sure it has moved up too far too fast, exhausted and is correcting. In the UK, you mention gold to Joe Public, and they look blankly at you. The general public hasn't got a clue.

Good point. However, it is like comparing apples and oranges. The stock market is in the news every day (general market updates and such), whilst gold has never been popular. When the Nasdaq peaked in 2000, it was all over the news. When it bottomed in October 2002, it was all over the news. When gold was trading in mid 200's in 2001, there was no news about it to be found. What makes you think there will be news about gold when it peaks?

 

[anley]

gugaplex

You can bet there will be some major news about gold when it peaks because it will be at levels nobody thought possible.

Thjere's no bubble, Sel is right, anything that goes up these days is called a bubble by the media just as much that if you work for a hedge fund you must be rich hahahahahaha.

Bet nobody in Holland talked about Tulips much until the price started booming.

 

[Selbats]

Good point. However, it is like comparing apples and oranges. The stock market is in the news every day (general market updates and such), whilst gold has never been popular. When the Nasdaq peaked in 2000, it was all over the news. When it bottomed in October 2002, it was all over the news. When gold was trading in mid 200's in 2001, there was no news about it to be found. What makes you think there will be news about gold when it peaks?

Gugaplex,

I take your point. Nasdaq stocks are more widely held than gold. Gold is different and I suspect it will not be plastered all over the news until there is a financial (I mean debt related) or currency crisis (e.g. dollar collapse). In the mean time I expect gold will gain more popularity as prices rise (assuming they do).

The bottom line is that I believe gold is in a secular bull market, and the only thing that will change my mind is A CHANGE OF TREND. That hasn't happened yet.

 

[gugaplex]

Gugaplex,

I take your point. Nasdaq stocks are more widely held than gold. Gold is different and I suspect it will not be plastered all over the news until there is a financial (I mean debt related) or currency crisis (e.g. dollar collapse). In the mean time I expect gold will gain more popularity as prices rise (assuming they do).

The bottom line is that I believe gold is in a secular bull market, and the only thing that will change my mind is A CHANGE OF TREND. That hasn't happened yet.

Good point. I am not short gold, I just think it would be wise to lighten up a bit on one's holdings at these levels. I do not think the dollar will collapse, rather, I believe it will gradually rebound and regain much of the losses it has sustained over the past 5 years. Good luck, and I hope you sell at the right time....

 

[JasonC2]

gugaplex,

In all sincerity, You seem to be "bearish for the sake of being bearish" maybe you have bears as pets? maybe you were raised by a family of bears? I don't know, but you sure don't like bulls, maybe you used to be a matador until that painful accident?

Come on man, take an objective view for a change

 

[gugaplex]

gugaplex,

In all sincerity, You seem to be "bearish for the sake of being bearish" maybe you have bears as pets? maybe you were raised by a family of bears? I don't know, but you sure don't like bulls, maybe you used to be a matador until that painful accident?

Come on man, take an objective view for a change

Objective view:

Gold is down $25 today.

The bubble is popping.

Will you be left holding the bag?