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Thread: Gold to shoot up soon?

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    Default Gold to shoot up soon?

    http://www.investorvillage.com/smbd....sg&mid=7192943

    "BIG MONEY MOVING INTO COMEX GOLD & SILVER CALL OPTIONS

    In November 2005 when gold was trading about $450 I predicted the mega-move in gold up to $720/oz by noticing a very large build-up of call options in the HUI component shares. [link]

    In August 2007 I identified a massive Gold call option build-up in the COMEX DEC 2007 contract and predicted a big gold move. Gold was trading at $660/oz at the time and ran up to over $1000/oz by March 2008.

    It just recently came to my attention from two different confidential sources that JPMorgan and Goldman Sachs have been buying large amounts of Calls in gold and silver. This made me put on my gumshoes and take a serious poke around the COMEX option open interest once again. "

    Regarding the cumulative Open Interest across all strike prices for the COMEX Gold Call positions and the Put positions for the JUN 09 options:

    The ratio of Calls to Puts is 1.81 so Bulls outnumber Bears dramatically. What is also remarkable is the amount of open interest. For example, 100,000 contracts would be in-the-money if the gold price runs to $1,250/oz in the next 30 days. This is an astounding amount of option OI considering the open interest in all the futures contracts stands at only 345,000 contracts!

    Let’s take a look at Figure 2 which is for DEC 2009.

    The bets by bulls outnumber those by the bears by a 2.3 to 1 ratio which is even more bullish than for JUN 2009. The Total Call option interest is 113,663 contracts which is very similar to JUN 09. Furthermore if gold is trading at around $1600 by DEC then 100,000 contracts will be in the money!

    I consider option players highly sophisticated speculators.
    Such large bets are likely being made by some large money interests who are buying out of the money options BEFORE going into the futures market. Buying long futures in large volumes will rapidly drive up the gold price but the massive open interest in the Call Options then allow access to much more futures contracts at the same price by exercising the options and then perhaps taking delivery of the gold. This is bolstered by sources revealing that JPM and GS are buying in quantity. So on the part of JPM this is likely a ploy to try to cover a chunk of their massive short position
    ."
    I conclude that smart money is being placed for a massive rise in the gold price in the next 30 days and silver in the next 60 days (which probably means within 30 days for both metals) and again by December.

    Only sophisticated traders tend to be in the precious metals option market so when there is a huge build up betting on a particular direction that is typically a directional indicator as I have shown was the case for the last two big moves in the precious metal bull.

    The flat contango in gold and silver suggests there is a shortage developing of precious metals for delivery. We know that two large banks hold almost 100% of the commercial net short position. They need desperately to cover their exposure if the market is about to make a big move.

    It looks as if that is precisely what is happening.

    Adrian Douglas
    April 29, 2009"

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    Default Re: Gold to shoot up soon?

    obviously this says that SOMEBODY thinks that the US dollar will tank, and that precious metals will launch, in the next couple of months !!!

    As to the specifics of gold, the risk factor as always is that central banks can intervene at any time by selling off gold reserves. Thus there is a risk that this is a 'sucker bet'. Along similar lines, the US dollar remains the only 'safe haven' paradigm in times of world turbulence - and certain international tensions are rapidly rising.

    On the other side of the equation, the US federal gov't is obviously printing up and attempting to sell unprecedented amounts of new treasury bonds in order to fund Obama's stimulus spending promises. Failing sufficient demand by foreign investors, the fed will print up brand new dollar bills with which to purchase the new treasury bonds. This clearly sets an international tone that US dollar inflation is the 'only option', which creates downward pressure on the US dollar and upward pressure on precious metals (and all other global commodities).

    Personally speaking, I'm still sitting on a small stash of physical gold as well as some shares in select gold mining companies. Again personally speaking, most of my cash holdings have been moved out of the US dollar and into the Swiss Franc. But the conspiracy theorists will always tell you that economic fundamentals and logic take second fiddle to 'orchestrated manipulations' in the gold market !

    ~
    Last edited by Melonie; 05-14-2009 at 03:35 AM.

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    Default Re: Gold to shoot up soon?

    It's about $920-930/troy oz asking now. I remember getting interested when it was $270/oz.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Gold to shoot up soon?

    I've got some gold and silver, and was looking into getting a bit more gold. I made sure to buy them from a depository that buys them back as well. You have to buy a minimum sometimes though. The place I deal with had a minimum of 100 ounces in silver, 3 ounces of gold back in 2007. I think now their general minimum is a $5,000 purchase. I've read in a few places that it is recommended to have at least 10% of your total net worth in gold.

    I am currently reading Rich Dad's Guide to Investing in Gold & Silver, which is really informative and eye-opening. I sarted getting interested in 2005, and bought a year and a half later. Wish I did in '05 when gold was around $300/oz., but still have done quite well. I felt silver was a super steal. Robert Kiyosaki has written somewhere that he intends to sell his metals round 2013 when they are expected to peak.

    He has a great web site. I've also read 5 of his books and been to three of his programs. He's also writing a new book called The Conspiracy of the Rich, where you can sign up and read chapters for free as he writes it.

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    Default Re: Gold to shoot up soon?

    ^^^ now I'm sure that gold is going to sky. Part of the 10,000 pages (or whatever) of tax increases in New York is a small paragraph about gold ... which removes the NY state sales tax exemption that was previously in place for gold bullion (bars & investor coins) and now treats all forms of gold as 'jewelry'. !

    Gold rose to US $959 today ... which arguably had nothing to do with the relative demand for gold, and everything to do with accelerating depreciation of the US dollar's international 'purchasing power' as Obama et all continue to print brand new US dollars out of thin air to finance vastly increased gov't spending. Futures contracts on gasoline, wheat, corn, lumberm copper, silver etc. were all up by a similar margin for the same reason.

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    Default Re: Gold to shoot up soon?

    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Default Re: Gold to shoot up soon?

    http://www.gold-eagle.com/editorials...ini060309.html

    "I have been highlighting this upside down head-and-shoulders formation since prices turned back up in March and we are almost ready to complete the right shoulder (red arrow). The key to the future is how we complete this gap and I see three possible outcomes:

    Gold tops at or close to the 999.90 critical resistance and then turns down and stays down for many months. It could fall to 833.00 or even lower as a devastating deflation grips the world's economy.
    Gold hits 999.90 and then reacts for a period of three to twelve days, testing support at 933.50, and then rallies through 999.90 on its way to an eventual top at 1,375.00. Under such a scenario the US would probably be suffering from stagflation.
    Gold closes the gap at the right shoulder and just keeps right on going up without stopping to catch its breath. Enter hyperinflation.

    How this gap is filled will turn out to be the most important event of the year and it will tell you what is going to happen to the dollar, the bond, and eventually the stock market.

    Right now we are caught up in a battle between two opposing forces: the manipulative, deceitful forces on Wall Street who rely on a printing press but have no real wealth and produce nothing, versus China and a couple other countries that possess significant reserves as well as production facilities and are accumulating gold. The latter is going to win regardless but how the gap is filled will tell us how and under what conditions. I believe the second scenario is by far the most likely while the third possibility could also play out. The first option, painting a devastating deflation is the least likely but it is also the worst case and the one no one expects, so I naturally worry about that at 3 am."

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    Default Re: Gold to shoot up soon?

    An article I wish I'd read back in 2001!

    http://www.itulip.com/gold.htm

    "The ratio of the DOW to the price of gold approaches one to one toward the end of periods of financial insecurity brought on by excessive and prolonged inflation or deflation during which owners of capital have sold equities and bonds and purchase gold as a means of capital preservation."

    "In a recent interview on the topic of his new book The Power of Gold, author Peter L. Bernstein says, "In 1980, the value of all the gold in the world, the monetary gold in the world, was more than the value of the New York Stock Exchange. So if you had taken just a small position in gold in the 1960s and the early 1970s, it would have exploded into an enormous amount when everything was hitting the fan, so you don't have to have a big position as a hedge against an extreme outcome like that for it to pay off."

    There is an obvious price relationship between the DOW and the price of gold, but is there causation between equities and the yellow metal? The answer is yes. During extended periods of disinflation that are conducive to rising stocks prices, investors are focused on asset appreciation. The good times for equities are periods of falling, not just low, inflation and interest rates. On the other side of the disinflation/inflation cycle is a period when stocks fall as inflation or deflation and rising real interest rates reduce corporate profitability and innovation. Then investor focus shifts from capital appreciation to capital preservation, especially the purchasing power of accumulated wealth. Why does demand for gold as a means of capital preservation work in both the inflationary and deflationary case? Because in both circumstances investors are faced with a loss of principle, the first instance via a loss of purchasing power of the currency in which assets are priced and in the second case via default by security issuers."

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    Default Re: Gold to shoot up soon?

    I had a considerable holding in actual gold Eagles and gold mutual funds in the mid 90s. My ex-wife's lawyer took the actual gold and silver; I had to sell the funds to buy her out.

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