Whichever one holds, LOL! Seriously, if I had to hazard a guess I'd say the 950-1000 area is stronger than the 1100 level, especially with all the recent amateur and public attention focusing on gold recently. It won't take much for the general public and amateurs to really start piling in to blow right through 1100, although whatever move it has would likely be a blow off top.
z-boy Our views are identical. Waiting for the push to 1150 to put on short options positions (1100-1000 spread, etc...) Have been watching the divergence in gold and miners with interest. Either miners are very undervalued, or... one way or another it will come back in line.
Yep. Some large cap miners are still trading at levels they were when gold was around 400. Something's gotta give.
can you give the stock symbols for these key miners?...thanks...do you then compare to GLD, as far as stocks go?
In addition to the amateurs and general public, countries are investing their declining US dollars into gold: http://www.ft.com/cms/s/0/7110a75e-c85c-11de-a69e-00144feabdc0,s01=1.html In fact, only a minority of the general public (in the US, at least) is buying gold. When I talk to non-investors about gold, they have no idea what is happening with the US dollar and gold. Although gold will certainly have declines, countries and funds are waiting for pullbacks to buy more gold, so I doubt gold will go too low. Despite the US saying it plans to cut back on US dollar printing, the presses are still going as fast as they can according to recent St. Louis Federal Reserve reports. The US has no way to resolve our unpayable debt other than with fresh new dollar bills, which is inflating our economy and devaluing the dollar. Real assets like metals, oil, agricultural products, etc. are the way to preserve your wealth. And while all those new dollars are ending up in the stock market, stocks are a good way to keep up with inflation as well.
In the long term you are absolutely correct. But as much money is currently being printed or borrowed by the government and Fed right now, it is not truly inflationary yet, because it is being sucked up by the strong deflationary forces that still persist in the economy and will likely do so for at least another 12-24 months (deleveraging, debt defaults, writeoffs, etc.). After that, I agree that massive inflation, possibly hyperinflation is inevitable and that will be the time when precious metals and mining stocks have their truest explosion. Right now though, from a contrarian perspective (which is how I mainly invest), there are many indicators that are starting to point to a looming top for gold. All sorts of hedge fund managers and pundits are only now jumping onto the gold bandwagon, after it has made new all time highs, despite the fact that they were nowhere to be found when it was $300, then $500, then $700, then $900, etc. Harrods, the U.K. retailer, just started selling gold bullion and coins off the shelf, a first for them in their 160 years. When department store shoppers are able to start filling their shopping bags with gold, you know it's time to start looking at taking the other side of that trade. Media stories on gold have increased greatly in recent weeks, and will likely do so further if the rally continues. And the more the media (particularly the nonfinancial media) picks up on a market story, the closer the move is to resolving the other way. Even all those cash for gold commercials and gold party advertisements I was seeing every 5 minutes have all but disappeared (at least in my viewings), indicating that all those investors who were busy buying up scrap gold cheaply aren't doing so quite as aggressively, and are turning into sellers as much as buyers. And then there's silver. The fact that silver is not participating in this breakout is a strong negative divergence indicating this move is not fundamentally based. If this was truly about the impending collapse of the dollar right now and inflation, silver should be making new all time highs along with gold. Yet it has been unable to recapture its 2008 high of $21, nevermind its all time high of $49 from 1980. Meanwhile, gold has shattered its 1980 previous all time high, as well as last year's all time high. In a true inflationary environment, both gold and silver should be responding in tandem, and the fact that they're not is a significant indicator that should be considered. I've been bullish on gold and silver since 2001, and I still am from a long term perspective (several years out). But right now, there are too many indicators showing this current run is unsustainable and quickly approaching a top. I still believe gold has a date with 3000 or higher eventually, but not until after a significant sustained pullback during the remainder of the deflationary forces we are still facing.
NEM and AU are a couple to start. Both are examples of miners that are still trading at levels they did when gold was at 400. You can also look at GDX, a basket of gold miners, which is still trading at a discount to the level it did last year when gold made its previous all time high. You could compare these prices to GLD, although I simply use the spot price of gold itself. You can also watch the XAU/gold ratio, which is currently approximately .155. Its historical average is .225. During last year's nadir, it had fallen to .0923. So mining shares aren't quite as undervalued relative to gold as they were then, but they are still significantly undervalued relative to gold based on its long term average.
thanks guys...hey, I've check everywhere cmegroup.com etc...where can I find the initial and overnight margin for mini Gold?...please help...thanks...
Looks like CME is still getting their shit together with closing down the NYMEX site. Probably best to get the info directly from your broker. I know IB (which I use) has the margin requirements posted on their site, although your broker may vary: http://www.interactivebrokers.com/en/p.php?f=margin