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binve (< 20)

Gold

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May 05, 2011 – Comments (18)

As I have said many times (ad naseum in fact), I hate talking about Gold when it is a hot topic on the breakout. When it is breaking out with huge momentum it conjures up all kinds of debates / advice / pronostications / arguments / name-calling , etc. Gold is emotional and when Gold gets frothy, all kinds of crazy emotions pop up. I have stated exactly this same sentiment in my last few posts on Gold.

I simply desire to avoid the fray during those times.

I have repeately posted my thoughts about Gold when it was boring, when it was consoldating, when (relatively) fewer people were talking about it.

My last post on Caps regarding Gold was several months ago on Feb 11 (see here) with a near term target of $1540 (when Gold was at $1360). It was after a large pullback and everybody was calling the "Triple Top" on Gold.

But while I make my thoughts known when Gold is relatively quiet, I know that time is not now. Gold is still being talked about vigorously (much less so than Silver however).

So why am I talking about Gold now? To say one thing: ... Relax.

Gold peaked this week at $1575, so my target was met. What did I do? I took a little profit. Nice and quietly. On Monday, in my binve portfolio I closed several profitable Gold longs. I closed absolutely nothing in my very long term binv271828 portfolio. And in real life I trimmed my total Precious Metal positions by maybe 10%. Nothing huge. But when Gold reached my target on an almost short term parabolic move, that was a nice sell signal.

Will Gold give us another entry? Yep!
Is it right now? I doubt it.

How will you know it is the right time to buy again? Because the chatter will diminish and there won't be 20 posts a day on it. Personally I think Gold is likely to test the massive support base around 1200 before it builds its next big move up (which I believe is coming).

Most of you know that I am a Gold investor, not a Gold trader. And if you are, you need to learn how to tune out the noise. Buy Gold when it is quiet. Better yet, buy Gold when it scares the sh** out of you (like I did in 2008, I added most of my positions when my stomach was lurching). Whatever you do, never buy Gold when it is 'hot' and everyone loves it (which is precisely why I don't post on Gold during those times, I don't want to add to the hype on momentum breakouts). If you are a good Gold investor, you will use the momentum breakouts to trim positions. Not exit, trim.

If you are an investor, stop looking at daily moves. Who cares! Do yourself a favor and calm down and look at a Monthly chart.



ENLARGE

See that, nice bull market, still completely intact.

Just relax dude.

18 Comments – Post Your Own

#1) On May 05, 2011 at 7:04 PM, silverminer (41.32) wrote:

+1  :)

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#2) On May 05, 2011 at 7:08 PM, kdakota630 (31.94) wrote:

binve

Will Gold give us another entry? Yep!
Is it right now? I doubt it.

Total agreement.

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#3) On May 05, 2011 at 7:22 PM, buffalonate (96.87) wrote:

Deficits are going to be getting much better over the next 6 months due to the 2012 budget, tax revenues increasing 10%, and troops being pulled out of Iraq and Afghanistan.  These deficit reductions are going to take the fear out of the market and kill the value of gold and silver.  The next time gold goes up for a few weeks I am shorting it. 

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#4) On May 05, 2011 at 7:35 PM, goldminingXpert (30.72) wrote:

I'm bullish on gold in Yen, neutral on gold in Euros, and bearish on gold priced in Dollars. The great rambling dollar death doom destruction crowd again failed to take $DXY out to the woodshed and shoot her as they've so long wished. They couldn't even get EUR/USD over 1.50.

The rest of the world (bankers, governments, businessmen and normal people) want the dollar to survive, and due to various factors (6,000 nukes, most of world's obligations priced in $, upcoming reductions in fed gov deficit and trade deficit) the dollar is sprung for a huge recovery.

Add to that tons and tons of major hedge funds and banks are naked shorting US dollars and the stage is set for a memorable short squeeze on bucky.

But -- if you live in Japan -- gold will rise, as your Yen is so bizarrely overvalued that its only possible direction in the long-run is to crash. Against that yardstick, gold will rise. 

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#5) On May 05, 2011 at 7:50 PM, Rebkong1 (< 20) wrote:

great chart binve...got one of those for SLV?? :)

 

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#6) On May 05, 2011 at 7:50 PM, portefeuille (99.78) wrote:

The price of an ounce of gold appears to be "stuck" at around 1000 EUR.

gold price in USD and in EUR (blue).



enlarge

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#7) On May 05, 2011 at 10:02 PM, portefeuille (99.78) wrote:

MDAX (green, see this post), DAX (light green), gold in EUR (blue) and gold in USD.



enlarge

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#8) On May 06, 2011 at 2:15 AM, binve (< 20) wrote:

silverminer ,

Thanks Sinch! :)

kdakota630 ,

Thanks kdakota.

buffalonate ,

Fair enough.

goldminingXpert,

From current prices, I can't say I disagree with your stance.

Rebkong1 ,

Thanks. The Silver chart looks pretty insane :). I was happy to buy in 2008 in single digits.

portefeuille,

For a couple of hours there it seemed like I was only going to get one comment. I would have been shocked! .

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#9) On May 06, 2011 at 8:31 AM, outoffocus (24.42) wrote:


So why am I talking about Gold now? To say one thing: ... Relax.

If you are an investor, stop looking at daily moves. Who cares! Do yourself a favor and calm down and look at a Monthly chart.

So so true. Commodities have been so volatile lately that if you want to really profit from these moves you have to take your emotions out of it. 

And you cant really trust every blog and article you read during these extremes.  Whenever silver and gold makes a major move, its either "a top" or "its going to [insert ridiculous number here]".   With the long history of CAPS blogs on this subject I would think that people would know by now who and who not to listen to in regards to precious metals analysis.

All these recent "top-callers" are going to make me write my blog on "bubbles".  I'm trying to be lazy and not write it but some of these people arent make it easy for me. 

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#10) On May 06, 2011 at 8:43 AM, catoismymotor (72.99) wrote:

Re: #9

Well said.

It is amazing that this simple truth is so easly forgotten or ignored.

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#11) On May 06, 2011 at 10:48 AM, lemoneater (90.51) wrote:

I have a real gold tale which I've shared before, but not recently.

When I was a little girl around kindergarten age, I lived in Arizona for a short while. While I was there, we went to the Hassayampa river for a picnic.

http://www.sangres.com/arizona/blm/hassayampariver.htm

Grown men were there using machines twice as tall as me to get gold out of the river, but my brothers and I under our mother's supervision used tin pie plates to pan for gold. It was a lot of fun. Together we got enough to fill a teaspoon. Mother tied it up carefully in a piece of cloth. When we got home, she put our dirty clothes in the washing machine including the cloth the gold was tied in. It was a complete washout except for the memory which stands apart as a perfect day by the river.

 

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#12) On May 06, 2011 at 12:02 PM, binve (< 20) wrote:

outoffocus,

Completely agreed!

catoismymotor,

yep :)

lemoneater ,

Thanks for the story! Along a similar vein (pun intended), my wife is a gem hound. Her family grew up in the mountains in western NC and there are gems and gem mines all over the place. You can go to any riverbed and ususally find tiny pieces of gemstones easily (worth a few cents apiece), and occasionally you will find something bigger :) We also once went to the Crater of Diamonds State Park in AR and spent a day digging through the ground, which with a picnic lunch and a breezy day (thank goodness) was a lot of fun :).

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#13) On May 06, 2011 at 1:50 PM, Rebkong1 (< 20) wrote:

binve can you provide your SLV chart as well??

 

thanks IN ADVANCE :)

 

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#14) On May 06, 2011 at 2:00 PM, binve (< 20) wrote:

Rebkong1 ,

ENLARGE..

 

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#15) On May 06, 2011 at 2:03 PM, anchak (99.84) wrote:

You sure did surprise me with the content of this post!!

 

Sensible - and far from the madding crowd.

 

Excellent!

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#16) On May 06, 2011 at 2:38 PM, binve (< 20) wrote:

anchak,

Thanks AC !

So was it a surprise because it was a sensible post about Gold, or a surprise because it was a sensible post from me :)..

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#17) On May 06, 2011 at 3:16 PM, anchak (99.84) wrote:

Both - LOL!

I know you are a PM bull - so I was expecting the usual fare - you didn't tread that path.

According to me - this just reverted to the mean - additionally it happened with the underlying metal - specifically Ag - not much with Au at all....

And the stocks were relatively undistrubed - so I don't really chalk this up - as the buying opportunity of the century etc.!

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#18) On May 06, 2011 at 4:43 PM, lemoneater (90.51) wrote:

@ #12 I like to say that my husband started my gem collection with a diamond. :)

That's neat that your wife is from North Carolina. It is a gorgeous state. I'm vacationing there next week so I will probably see some gems in museums although I think the mines aren't open yet for the season.

Until a geology professor here in SC told my husband about the gem mines in NC we had no idea the that the U.S had so many native gemstones. Once my husband found a pink ruby big enough to be made into two earrings--cabochon cut. I still have some uncut stones I want to have made into wearable gems sometime. The expert cut is where a lot of the cost is. Gem mining is a lot of fun. My favorite place to go is:

http://www.jacksonholegemmine.com/store.htm 

Jackson Hole is a family run business. Even the kids help customers identify gemstones and the dogs are friendly too :).

Sometime we need to go to Arkansas. What fun!

 

 

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