Gold

[BigBiceps]

[ QUOTE ]
Time to attune attention to this market.

Fevered reports of a NY close over $500 (highest since 1980's) coming soon, to a TV near you.

[/ QUOTE ]

I didn't read the thread, but you are a bit late (but better late than never).

I took positions in Gold and Japan ~2 years ago, and believe that Gold is going to ~800 and the Nikkei is going to 20,000.

I am currently up 55% and 35% respectively plus annual dividends.

Easy ways to invest in these are through Vanguard due to their diversification and low fees, VGPMX and VPACX.

[Dan Mezick]

Good call on gold. It seems obvious looking back that gold would be strong after 911, hindsight being what it is.

I posted when gold was poised to assault the $500-510 resistance to instigate some debate and discussion.

What's your take on the recent price action through $538 and the current 500-510 area over the next few weeks?

[BigBiceps]

I stopped short term trading years ago. It is too much effort.

I look at the charts and the fundamentals every couple of months to make sure nothing has changed in my original analysis, when I inititated the position. Nothing has changed, those targets of 800 and 20,000 still stand, and I am prepared to wait 3-4 years or until something changes to settle the position.

For amusement, I look at the short term outlook:

3 months: http://finance.yahoo.com/q/bc?s=GLD&...amp;q=l&c=

still in the uptrend trading range, the drop below 510 could indicated a 50% retracement of the current uptrend to 495.

1 year: http://finance.yahoo.com/q/bc?s=GLD&...amp;q=l&c=

A drop below 475 could indicate danger of retesting support at 460. It is however still in the current uptrend.

[DiamondDave]

Gold sits there and doesn't do anything. And you have to pay to guard/store it.

[Sniper]

[ QUOTE ]
Gold sits there and doesn't do anything. And you have to pay to guard/store it.

[/ QUOTE ]

There are many different ways to trade GOLD, other than buying it and sticking it under your bed [img]/images/graemlins/wink.gif[/img]

[Evan]

[ QUOTE ]
[ QUOTE ]
Gold sits there and doesn't do anything. And you have to pay to guard/store it.

[/ QUOTE ]

There are many different ways to trade GOLD, other than buying it and sticking it under your bed [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]
What does what you do with it have to do with how you trade it? Gold probably has the lowest utilityrice ratio of any traded good in the world, I think that's all he was saying.

[Dan Mezick]

Money:
"Money is any marketable good or token used by a society as a store of value, a medium of exchange, or a unit of account. Money objects can meet some or all of these needs. Since the needs arise naturally, societies organically create a money object when none exists. In other cases, a central authority creates a money object; this is more frequently the case in modern societies with paper money."

The widespread influence of Internet is fueling an attendant rise in education-- including education about what money is-- and also an attendant rise in both general skepticism and general libertarian ideals.

These ideas fueling societal trends ("memes") do not work against the price of gold long term. With the rise of ETFs (GLD and eventually also a Silver ETF) it becomes a checkbox option to have a 5% exposure to gold in all financially-planned portfolios.

This trend is also well underway. Financial planners who seek diversity and a basket of "negative correlation" in client accouts are finding a 5% allocation a very easy sell to most clients these days.

Imagine just 25% of all retirement accounts waking up to diversification with ETF-based gold, and placing 5% of portfolio in it. That would have a huge impact current demand, of which investment demand has been nil up to this time.

Gold is money.

[Dan Mezick]

The recent action in gold is playing out as a classic breakout.

The price tested the 500 area several times (past 3 years) and recently busted out to almost 540. It then returned to test 500 (normal breakout action) and appears to be bouncing off that test today. This is often a low-risk spot to enter assuming you are adept at knowing where to place your risk-limiting stops.

[buffett]

Dan, I asked this once before but either I missed your reply or you missed my question.....at what spot price do you recommend people to sell?

[Dan Mezick]

It really depends on the timeframe you utilize to define trend.

If you are long term trend follower, you'd likely trade the weekly chart and use the monthly and daily to pinpoint your entry and exit.

In trend following exit prices are defined relative to trend rather than to a forecast or anticipated target. Many participants in the late 70's sold at 350, 400, 450, 500, 550, 600 etc because of strong belief that price was "too high".

Price had other plans and subsequently peaked at 850. Many trend followers started selling in volume right after that.

I assume you want to know where to exit a profitable trade in the current day.

Assuming a long-term trend following approach, any closing price on a weekly basis lower than the 50-week moving average is considered cause for concern by many long term trend followers.

How much to sell at that point is a function of your system and associated discipline in actual execution.

The current gold situation has the look and feel of a strong long term uptrend.

35 year gold chart
http://www.gold-eagle.com/charts/35yeargold.html