Gyroscopic Investing

Why is gold going down since January 22? Fears of deflation in Europe?

ochotona wrote: Why is gold going down since January 22? Fears of deflation in Europe?

Anyone who claims they know why gold goes up or down in any short period of time is either lying or delusional.
Or both, of course.

+1000

I have never experienced such strongly held positions and beliefs in any other investment than gold.  There are groups at every turn spin it that it will be $600 by the end of the year, and others that it will be $2000.  Following gold is very stressful.  There is very little middle ground.

I am of the opinion that the global situation in all aspects, Greece, QE, Ukraine, Middle East, etc. should be very gold bullish.  And it seems for that fact alone that the powers of the status quo must absolutely do everything they can, up to the point they can't, to keep the price from reflecting all the instabilities in the world.

But, now in the PP, it is a double edged sword (four edged actually).  When I was all in on gold, I could easily convince myself the world was going in the crapper.  Hell, I did it for 5 years, while I watched every other asset go up.  Now that things are evenly distributed, I am slowly changing my mindset to be agnostic to the asset type, but I tell ya, it is not easy.

Maybe gold is correcting for a bit. don't know if or when deflation could show.

barrett wrote: guess the person I am holding the fund for is an older version of myself.

Also a great way to look at it.

It's interesting how I don't worry about my wife's PP at all even though it's the same damn thing. Because she's not really interested in investing,

Hah! Sometimes I feel that way with my parents' accounts even though I both have a hand in the investing and a stake in the inheritance.

Following HB's analysis of relationship between crisis, dollar, and gold.. It seems that all these current crises are strengthening dollar, so we have to wait for some kind of loss of confidence in dollar in order to see a rally in gold..

Ah! The familiar flight to the man with the least dirty shirt (USA). Risk-on, risk-off. That makes sense. That and/or deflation.

LazyInvestor wrote: Following HB's analysis of relationship between crisis, dollar, and gold.. It seems that all these current crises are strengthening dollar, so we have to wait for some kind of loss of confidence in dollar in order to see a rally in gold..

ochotona wrote: Ah! The familiar flight to the man with the least dirty shirt (USA). Risk-on, risk-off. That makes sense. That and/or deflation.

LazyInvestor wrote: Following HB's analysis of relationship between crisis, dollar, and gold.. It seems that all these current crises are strengthening dollar, so we have to wait for some kind of loss of confidence in dollar in order to see a rally in gold..

Inflation, not deflation. We will not see a true bull market in Gold unless the U.S. experiences runaway inflation to paraphrase Harry Browne. Not 2, 3 or even 4%, but 6, 8 or 10%.

We hold LTT's and Cash for deflationary purposes. Gold is an option when real interest rates are negative. At least that is my understanding.

Why would people buy gold when US stocks and bonds are doing so much better?

Well, we don't want to chase yield... last year's winners. That's a truism at any time. That being said, I just hate to think I could buy gold at $1200 and it goes down to $600 and stays there for 10 years. I know the PP together as a whole works well over a long period of time, but looking at the gold component alone makes me seriously queasy.

Reub wrote: Why would people buy gold when US stocks and bonds are doing so much better?

ochotona wrote: Why is gold going down since January 22? Fears of deflation in Europe?

Fears of worldwide recession/deflation.  Europe is heading into the abyss.  China is slowing down.  Abenomics is failing in Japan.  And USA may yet top now that we're encroaching upon or have surpassed the year 2000 stats.  I think we are witnessing the birth unraveling of the non-effectiveness of political Keynesianism to stimulate aggregate demand & confidence.

Was that enough B.S. for you?  Next week it may be some other kind of fear or greed.  What really matters is what the smart money are thinking and are positioned as: http://news.goldseek.com/COT/1423254784.php

Reub wrote: Why would people buy gold when US stocks and bonds are doing so much better?

So that we own some when it's doing better than stocks and bonds?

I'm not in a huge hurry, but at this point I hope gold keeps sinking so I can rebalance instead of just buying here and there and hoping it goes up, only to watch it drift sideways and down again.

That's why I think an asymmetric rebalance band for gold makes sense... buy it on sale, and if it spikes again, don't be buying it at the higher price. Idf that's market timing, so be it. That's also knowing which side of the ocean you're on. Right now, we are in the middle.

dualstow wrote: I'm not in a huge hurry, but at this point I hope gold keeps sinking so I can rebalance instead of just buying here and there and hoping it goes up, only to watch it drift sideways and down again.

Bonus payout 2/20. Let it sink if it must until then. Adding 60% to GLD and 40% to cash.

Nice idea thanks.

buddtholomew wrote: Bonus payout 2/20. Let it sink if it must until then.

ETFS Physical Swiss Gold Shares (SGOL) Price Crossed Below Its 60 Day Moving Average
  Alert Triggered for ETFS Physical Swiss Gold Shares
  SGOL crossed below its 60 day moving average of $119.89 with a trade of $118.60 at 9:30 AM EST, down 1.1% from the moving average. It is currently trading at $118.73, off 1.0%.

ochotona wrote:That's why I think an asymmetric rebalance band for gold makes sense... buy it on sale, and if it spikes again, don't be buying it at the higher price. Idf that's market timing, so be it. That's also knowing which side of the ocean you're on. Right now, we are in the middle.

I think we're always in the middle.  The price of anything is what it is because some people think the price will go up, and some think it will go down.  "Knowing" which direction it's going to go means "knowing" that 50% of investors are dead wrong.

In other words, if it really were obvious that gold were about to tank, then the price would be $100/oz right now.  But it isn't.

Getting close that almost all of January's PP gain is wiped out here... and it bothers me less than it has in the past at least.

But I do hate gold quite often -- in virtually every instance that it seems it should go up, it goes down instead -- it almost has to be manipulated to some extent.  Here we are with the Ukraine cease fire likely not going to hold, Greece not playing nice with the EU, more beheadings, hell, if all of these things cannot at least keep gold steady if not rise, well, it sure feels like there is a hand holding it down.

And my problem with all the gold sites that will use this and other things as excuses for manipulation, I say, ok, you can complain all you want, but I just don't see that time coming where it won't be manipulated.  Sure, it could be tomorrow, but it could also be 50 years from now, and I'll be long dead.

<<screaming and moaning off>>

Equities are the new flight to quality. Gold and treasuries are dead!

buddtholomew wrote: Equities are the new flight to quality. Gold and treasuries are dead!

Uh-oh. Don't say that to Lowe.

And cash is dead, too, right? Wireless social media and "sharing economy" IPOs! 

buddtholomew wrote: Equities are the new flight to quality. Gold and treasuries are dead!

buddtholomew wrote: Equities are the new flight to quality. Gold and treasuries are dead!

At least until the Fed changes its policy. At that point, I expect that the stock bubble will explode.

Pointedstick wrote:

buddtholomew wrote: Equities are the new flight to quality. Gold and treasuries are dead!

At least until the Fed changes its policy. At that point, I expect that the stock bubble will explode.

A policy shift is bearish for gold and equities as the current policy is monetary easing. Tightening "theoretically" should lower gold and raise interest rates. The current policy is actually the most dovish for 3/4 asset classes with cash yielding lower than inflation.

I'm starting to think Lowe is correct. This portfolio does suck!

Raising rates will be bullish for equities medium-term because the Fed is always behind the curve.  It will also attract even more capital flows here, pushing equities higher.  It's all about confidence.  Gold is simply not a big or liquid enough market to absorb all of the capital flows from negative-yielding foreign sovereign debt or no confidence foreign equity.  We are Rome!  The PP relies on this.  Don't forget it.

budd, haven't we had this conversation before?