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FourthAxis (< 20)

Gold Bubble Popping?

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March 20, 2008 – Comments (5)

Maybe it's just a pullback, maybe the speculators will push it up more, but that chart is starting to look ugly.  I mean...if you're looking for somewhere to stash your greenbacks...I get it.  I'm just not so sure the shiny shiny is the place to be.  Perhaps something with an intrinsic value other than electrical conductor?  I took my +40 on GLD and ran today.  Cheers.

5 Comments – Post Your Own

#1) On March 20, 2008 at 12:43 PM, goldminingXpert (29.55) wrote:

hedge fund implosions... see ya, it's over. gold $700 this summer.

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#2) On March 20, 2008 at 12:56 PM, camistocks (< 20) wrote:

Yes it looks scary. But that's good, because it's driving out the speculators... Gold was clearly ahead of itself.

Gold at $700? No way! It should find support at $800 or so and then go slowly higher. I have raised my ultimate target to $5000 or so from $2500.

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#3) On March 20, 2008 at 2:51 PM, XMFSinchiruna (27.12) wrote:

First, gold is not a bubble... bubbles are fundamentally weak markets that gain lofty valuations through idle speculation and then come crashing down to earth.  The housing bubble was a bubble because the equity people presumed as real was but illusion.

Gold is the opposite... it is fundamentally strong, and is enjoying a 6-year secular bull market as a response to the housing bubble and everything else that's broken in the U.S. economy.  The billions of dollars that the Fed is printing to prolong the inevitable de-leveraging of the financial markets is the strength of gold going forward.  To presume an end to the gold bull we would have to see a meaningful reversal in the dollar, and the puny little recovery there in the past few days is wholy unconvincing.  Show me meaningful technical and fundamental support for the dollar, and I'll concede the run is over.  But I'll save you the trouble.. there is nothing supporting the U.S. dollar!

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#4) On March 20, 2008 at 3:15 PM, FourthAxis (< 20) wrote:

Sinchiruna,

I know we all have differing opinions and I can't expect you to agree with mine.  However, you don't do much to back up what you're saying (neither do I really).  I mean...You're talking about fundamentals.  What fundamental can you give me for gold?  There's no underlying anything.  It's gold, unless you're using it for one of its elemental usese, the price is just based of the "greater fool" principle.  I agree with your dollar ideas, but I haven't tried looking at historical gold prices in euros or barrels of oil so...  I guess what I'm worried about are those guys who do trade in euros backing out of gold as the idiot americans ALL run there to hide.  

Best of Luck!

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#5) On March 26, 2008 at 7:26 PM, XMFSinchiruna (27.12) wrote:

FourthAxis,

I can stack up evidence for the fundamental indicators for higher gold prices until the day is done.  Please see the discussion beneath this CAPS blog post as well.  But don't take my word for it if you don't want to.  Legendary commodities trader Jim Rogers has forecast $3,500 gold, as has Goldcorp founder Rob McCewen.  And for the first time today, an investment firm, UBS, has joined the fray with a call for gold to double from here.  Jim Sinclair is probably the world's leading expert on the gold markets, and he is calling conservatively for $1,650 gold.  His formula is probably the best summary out there of the fundamental case for higher gold prices.  We're not just guessing... there are mountains of evidence on which these conclusions are being drawn.   For another example of some good recent research, check out Clive Maund's gold discussion from his website.

Take a good look through my blog if you get a chance... there are some great charts that help to build the case as well.  Here is a housing discussion with charts, a look at alternate inflation estimates here.  If you get through all this and are hungry for more, CAPS member ATWDLimited's blog has some good gold and silver discussion as well.

I'm happy to agree to disagree if that's here we end up, but not without considering the evidence.  :)  I'll be happy to review any evidence that points to a decline for gold and silver.  Fool on! 

Best of luck to us all!

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