Stocks, futures, precious metals, commodities and currency trading
22 April 2013
Bullish arguments in favour of a continuation of the secular bull market in gold were laid out in this post.
This post will lay out the bear case. But first, some charts to consider and form the backdrop of our discussion. The first set of charts are 3-year weekly charts of gold, silver, and the ETFs GDX (gold miners) and SIL (silver miners).
3 year chart of gold (weekly)
17 April 2013
In the next post, I intend to describe what I personally deem to be bearish arguments against gold, and make out a case why the secular bull market that began in 2001 probably ended in September 2011. Undoubtedly, there will be many believers in gold who will vehemently disagree. My bullish arguments FOR gold are laid out in this post (but as my next post will explain, I think the bear case outweighs the bull case).
First however, I will need to devote one post to describing a little bit of history to set the context for the discussion. We need to understand how the current monetary system evolved, as well as its flaws.
Post World War II, the Bretton Woods system fixed global exchanged rates to the US dollar, and the USD was in turn pegged to gold at a price of $35 per ounce. The US Federal Reserve guaranteed USD-gold interconvertibility between central banks at this rate, and the free market for gold was naturally tied down by this arrangement.
16 April 2013
The honest answer to the above question is “I Don’t Know”. The most I can do is to list out the long-term factors for or against gold, and evaluate the probabilities accordingly.
1. Central bank money printing
Central banks continue to print money and expand their balance sheets in order to fend off what they perceive as deflationary forces and prop up the economy. There is even talk of the US central bank headed by Ben Bernanke moving to a single mandate — combating unemployment.
While the money printing is not immediately inflationary due to the deleveraging process still underway, the slow velocity of money, and global excess capacity, money printing eventually leads to distorted asset prices, and should ultimately be beneficial for gold as people start to find ways to defend against the depreciation of purchasing power of fiat money.
Many in fact have argued that the current stock market rally especially in the United States has been a result of money printing.
16 April 2013
In a previous blog post last month, I ascribed a greater than 50% chance that gold and silver will break down below long term support. This prediction has come to pass.
Take a look at the short and intermediate term charts of gold and silver respectively.
One year (daily) and Three year (weekly) charts of Gold
02 March 2013
Let us revisit the long term charts of gold and silver. I contend that since the early stages of the secular bull market, both precious metals clearly exhibited an alternating pattern of 6-9 month upswings followed by 15-18 month consolidation phases.
01 March 2013 Gold and silver are at critical multi-month support. Attached below are the 3-Year Weekly charts for both the gold and silver spot price. As can be seen from the charts, gold is near the critical support band of 1540-1560 per ounce, … [Continue reading]
John Mauldin, 23 Jan 2010 When I was at Rice University, so many decades ago, I played a lot of bridge. I was only mediocre, but enjoyed it. We had a professor, Dr. Culbertson, who was a bridge Life Master at an early age. He was single and lived … [Continue reading]
By Paul Kedrosky It rarely pays to be contrarian. For the most part trends go in the same direction for some time – that’s why they’re called “trends”. Whether it’s real estate prices, credit card debt, Treasury issuance, or Croc … [Continue reading]
By Arne Alsin RealMoney.com Contributor 11/9/2009 11:30 AM EST URL: http://www.thestreet.com/p/rmoney/investing/10623575.html Count on it. For the next several years, the stock market belongs to the bulls. You're going to see periodic pullbacks, … [Continue reading]
Source: ST, 09 Sept 2009 What is Men In White all about? How different is it from previous books on Singapore's ruling political party? Let me clarify what the book is not. It is not a re-telling of Singapore's transformation from Third … [Continue reading]
Source: ST, 09 Sept 2009 IT WAS a historic moment with friends and foes gathered together under the same roof where they last met more than four decades ago - at the Old Parliament House. The occasion was the launch of a new book on the … [Continue reading]
Source: ST, 09 Sept 2009 MORE than one for the album, this was a picture for the history books. If not for the numerous photographs capturing the moment, many would have scarcely believed what took place yesterday in the Old Parliament House - … [Continue reading]
Source: Straits Times, 08 Sept 2009 A COLLEAGUE remarked to me the other day that something had struck him as he read Temasek Holdings' updated charter released last month: Nowhere in the 200-word document is there a mention of Singapore. There … [Continue reading]
Source: Straits Times, 25 Aug 2009 This group was affected most by food and housing prices in first six months By Joyce Teo SINGAPORE's poorest 20 per cent were hit twice as hard by inflation than better off households during the first half … [Continue reading]
ST Letter by Ignatius Lourdesamy, 31 Aug 2009 WE REFER to the letters, 'High HDB prices: Squeezed even harder' and 'Two shortcomings: Public housing too correlated to private market, and HDB has not regulated supply' (both Aug 22); and 'Flat … [Continue reading]
ST Letter by Chew Kim Cheer, 22 Aug 2009 THE HDB resale price index has surged relentlessly since 2007. Since the first quarter of 2007, the index has increased 35.3 per cent and is now at a record high, even though the economy is still recovering … [Continue reading]
By Doug Kass RealMoney Silver Contributor 8/26/2009 8:41 AM EDT URL: http://www.thestreet.com/p/rmoney/marketcommentary/10590587.html This blog post originally appeared on RealMoney Silver on Aug. 26 at 8:11 a.m. EDT. Back in early March, … [Continue reading]
Source: Straits Times, 26 Aug 2009 SEVERELY mentally disturbed patients at the Institute of Mental Health (IMH) now spend far less time strapped to their beds or in straitjackets. They also spend less time - 21 days, down from the previous 27 - … [Continue reading]
Written by Ng E-Jay, for the Online Citizen 06 Aug 2009 Original TOC link What does it mean to be “one united people”? Does it mean forging a national identity that can be shared by all Singaporeans regardless of race, language or creed? … [Continue reading]
