Setharb Could you tell us more about the K-ratio? Have not found too much info on it, from what I've seen it uses a gold miner index and the spot price to time entry and exits. Any explanation would bee appreciated.
I believe in gold. I often trade with harmony Gold and made serious benefits with it. recently i sold to quickly ( i bought at 6.00 ⬠and sold at 6.66 â¬. Watch the quotes today.
im kind of skeptical about the bullishness in gold... recently i saw this huge ad in my newspaper that looked more like a yahoo hype... said now is the time to buy US Govt gold coins... not sure if anyone has seen that, but it claims that a 50,000 "might" return 250,000 very soon. and it has a neat curve fitting graph of the past 5 years showing naz down -40% and gold up 40%... lol
yes, i seriously doubt gold will quintuple very soon. igaudy ads for all sorts of asset classes - gold, real estate, stocks - have existed for years and will always exist as long as dumb money is around.
What is the relationship between gold and a gold stock like NEM. If gold goes up 1%, do gold stocks like NEM generally go up 1% or more/less? I'm thinking about buying some NEM in my long-term account. That's the only gold stock I'm aware of but I maybe some GLD instead to reduce headline risk.
have you guys checked out this thread: http://www.elitetrader.com/vb/showthread.php?s=&threadid=55680 Iran may start selling oil in Euros. Thats not good for the USD, another positive for gold. News and fundementals will follow price action.
In the end, I think it comes down to your expectation for the US economy and Fed policy. Everywhere you look right now, you see escalating prices. Basic economics teaches that if the central bank for a country "accommodates" a rise in prices (inflation) by expanding the money supply, then further inflation will ensue. Contrary to popular belief in the financial press, high energy prices do not act as a "tax" on the consumer if the central bank (Fed) accommodates the rise. The worst thing the Fed could have done today was not raise interest rates. However, they're in a tight spot. With the economy most likely at a tipping point, rising rates will choke off economic growth. If the Fed has any 'Volcker' type resolve, they will allow the country to slip into recession which in the long run, will fix a lot of imbalances. But more than likely, and as evidenced by the dissenting vote today on the FOMC, they will relent and lower rates, accommodating the price increases for everything. Inflation will become entrenched and we'll be back to the late 70's before we know it. The only bad outcome for gold at this point is that the FOMC shows some resolve, tells everyone too bad, you've had it too good for too long and continues to raise rates. Otherwise, gold has nowwhere to go but up. How much do you believe in Greenspan and company (he's no Paul Volcker). As for gold itself, the ratio referred to is the price of gold to the XAU index. If the ratio is over 5, gold stocks are good, under 4, gold stocks become expensive. But keep in mind both sides of the ratio.