Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation
Reply
 
Thread Tools Display Modes
  #121  
Old 07.10.2010, 16:50
Uncle GroOve's Avatar
Forum Veteran
 
Join Date: Feb 2008
Location: Mendrisio
Posts: 994
Groaned at 5 Times in 3 Posts
Thanked 548 Times in 306 Posts
Uncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputation
Re: Gold Buying

Quote:
View Post
That depends on whether you believe we have reached a top in government and central banking madness? I doubt it. But the volatility in gold will certainly increase.
OK. I'll be serious now.
I would probably call it a "bubble" if there weren't some seriously disturbing developements in the foreign exchange markets... everybody and their dog is trying to devaluate, but this cannot happen simultaneously.

As you correctly state, *volatility* will be the name of the game. My ex colleagues who still work in forex are all pretty much white haired now, and their nerves are badly frayed (well, worse than historical typical standards for the game).

We could easily see 60-80 dollar swings in bullion day-to-day as the buildup in gold positioning eventually turns into some kind of pileup (end of year positioning, EURUSD falling back to 1.25, stupid craziness in the ETFs, etc). It's never smooth at the top, after parabolic rallies...
I guess the best thing is just to be long volatility (expen$ive) and to have them iron marbles well on display

P.
Reply With Quote
  #122  
Old 07.10.2010, 17:20
Uncle GroOve's Avatar
Forum Veteran
 
Join Date: Feb 2008
Location: Mendrisio
Posts: 994
Groaned at 5 Times in 3 Posts
Thanked 548 Times in 306 Posts
Uncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputation
Re: Gold Buying

MArton: LOL to that...
however counterinuitive that may be, when the news is all over the street (the famous shoeshiner of the '29 crash) it is a sign that all participants are in the market and that the chances that it may decline have increased.
So yes - it does make sense to try to gauge just *how* far the news has travelled.

I agree that it does not indicate levels of actual gold ownership - but the aforementioned "market wisdom" would probably suggest that as the last investors enter at these levels, hedgies, long time metal owners, miners start to sell or hedge. At that point the net contribution to further rises would be really limited and some kind of equilibrium would need to be reasserted (just how violently, needs to be seen)...but where?

A $100-150 correction from current levels woldn't surprise me the least, and it could even be brutish and short lived, followed by aftershocks to and fro as the remaining market participants gauge the extent of their P/L, the upcoming Xmas holidays, window-dressing needs, etc.... and adjust their positions consequently.

FWIW, the goldmining operations hedge books have been almost totally closed now. Any resumption of hedging would imply several m.oz. selling via futures / options/ swaps, something that could add to scrap sales, and to any position adjustments mentioned above.
A serious pick up in the jewelry market would need to materialize in order to counterweight, at least partially, some of the potential headwinds mentioned above.

Ciao

Paul
p.s. All caveats apply re. this not being a solicitation to invest, etc., but jsut random musings of someone who is in touch w/ gold bugs and market participants (industrial). Take with a pinch of salt and a cuppa tea ...
Reply With Quote
  #123  
Old 07.10.2010, 23:24
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Zürich
Posts: 5,406
Groaned at 90 Times in 77 Posts
Thanked 4,226 Times in 2,353 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Gold Buying

Paul

All true but while everybody is desperately trying to devalue their currency where else to go except gold?
I could also see a few violent swings but less likely a large sustained fall (or large sustained growth) - the central banks seem to have stopped selling so the supply side is anyway reduced. Anyway on the CHF gold price there was already a significant fall; as I remember 46K/kilo to 41K/kilo.
Dollar prices changes per kilo at the moment, in my view, are more a reflection of peoples view of worth of the US dollar rather than a reflection of gold worth?

Maybe gold will still be a good long term investment.
BTW, you know the definition of a long term investment?
It is a short term investment gone wrong
Reply With Quote
This user would like to thank marton for this useful post:
  #124  
Old 08.10.2010, 09:52
Uncle GroOve's Avatar
Forum Veteran
 
Join Date: Feb 2008
Location: Mendrisio
Posts: 994
Groaned at 5 Times in 3 Posts
Thanked 548 Times in 306 Posts
Uncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputation
Re: Gold Buying

Dear Marton,

your post deserves a good reply - I'll get to that later today.
In the meantime here's an interesting link thrown at us via Alphaville @ FT.com.
The article refers to another one that links the value of gold to real interest rates, and at the very bottom, before the commentary there is an interesting intellectual proposition...
http://econompicdata.blogspot.com/20...e-of-gold.html

Ciao for now,

Paul
Reply With Quote
  #125  
Old 08.10.2010, 10:23
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Zürich
Posts: 5,406
Groaned at 90 Times in 77 Posts
Thanked 4,226 Times in 2,353 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Gold Buying

Quote:
View Post
Dear Marton,

your post deserves a good reply - I'll get to that later today.
In the meantime here's an interesting link thrown at us via Alphaville @ FT.com.
The article refers to another one that links the value of gold to real interest rates, and at the very bottom, before the commentary there is an interesting intellectual proposition...
http://econompicdata.blogspot.com/20...e-of-gold.html

Ciao for now,

Paul
Interesting article but based on correlation rather than causation (you can see I used to be a physicist)

Even more interesting comments to the article.
Reply With Quote
  #126  
Old 08.10.2010, 10:43
Uncle GroOve's Avatar
Forum Veteran
 
Join Date: Feb 2008
Location: Mendrisio
Posts: 994
Groaned at 5 Times in 3 Posts
Thanked 548 Times in 306 Posts
Uncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputationUncle GroOve has an excellent reputation
Re: Gold Buying

Quote:
View Post
Interesting article but based on correlation rather than causation (you can see I used to be a physicist)

Even more interesting comments to the article.
Excellent point: correlation IMHO is one of the main rotten ingredients in the financial sector's cake.

P.
Reply With Quote
  #127  
Old 08.10.2010, 13:01
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Zürich
Posts: 5,406
Groaned at 90 Times in 77 Posts
Thanked 4,226 Times in 2,353 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Gold Buying

Quote:
View Post
Gold was discussed in Blick as well -
Easy job at UBS Just read the newspapers
Now the news has reached The Telegraph

Must be time to sell & run
Reply With Quote
  #128  
Old 10.10.2010, 17:34
porsch1909
Guest
 
Posts: n/a
Re: Gold Buying

Quote:
View Post
Dear Marton,

your post deserves a good reply - I'll get to that later today.
In the meantime here's an interesting link thrown at us via Alphaville @ FT.com.
The article refers to another one that links the value of gold to real interest rates, and at the very bottom, before the commentary there is an interesting intellectual proposition...
http://econompicdata.blogspot.com/20...e-of-gold.html

Ciao for now,

Paul
You never replied Marton properly
Reply With Quote
  #129  
Old 12.10.2010, 20:23
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Anyone interested in gold might like to consider subscribing to the Financial Sense Newshour podcast:

http://www.financialsense.com/financial-sense-newshour

The 9th of October series of interviews are from a gold conference. Some of the interviewees are promoting their products, but it's interesting.

Jim Puplava, the presenter, is pretty much a gold bug, but he has been recommending gold for many, many years.
Reply With Quote
  #130  
Old 12.10.2010, 20:29
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Quote:
View Post
Please can somebody tell me where to buy physical gold bars in Switzerland and how does one find the price of them?
Cashboy, I see that your location is 'Ticino & London'. If you are a UK taxpayer, note that sovereigns & britannias are CGT exempt in the UK because they are sterling currency.
Reply With Quote
  #131  
Old 12.10.2010, 20:48
Newbie 1st class
 
Join Date: May 2010
Location: Pfäffikon, Schwyz
Posts: 16
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ktm_paul has no particular reputation at present
Re: Gold Buying

Gold has no significant utility. Buy it because others will want to buy it more. Visa versa for selling. Game of lemmings.

If you believe in hyper inflation or financial instability - borrow money and buy useful things. Value of debt will deflate away...(see USD).
Reply With Quote
  #132  
Old 12.10.2010, 21:05
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Quote:
View Post
Gold has no significant utility. Buy it because others will want to buy it more. Visa versa for selling. Game of lemmings.

If you believe in hyper inflation or financial instability - borrow money and buy useful things. Value of debt will deflate away...(see USD).
Isn't it possible that appetite for government debt will decline enough for interest rates to be forced upwards, making high levels of leverage a risky proposition?
Reply With Quote
  #133  
Old 12.10.2010, 21:21
Newbie 1st class
 
Join Date: May 2010
Location: Pfäffikon, Schwyz
Posts: 16
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ktm_paul has no particular reputation at present
Re: Gold Buying

Quote:
View Post
Isn't it possible that appetite for government debt will decline enough for interest rates to be forced upwards, making high levels of leverage a risky proposition?
borrow fixed rate today if that is your concern... if rates go up - you win again as the present value of your outstanding debt will be less. and if inflation - well - the things you bought are worth more too compared to that debt.

gold is for lemmings. but you can still get rich playing it...

http://en.wikipedia.org/wiki/Lemmings_(video_game)
Reply With Quote
  #134  
Old 12.10.2010, 21:34
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Quote:
View Post
borrow fixed rate today if that is your concern... if rates go up - you win again as the present value of your outstanding debt will be less. and if inflation - well - the things you bought are worth more too compared to that debt.

gold is for lemmings. but you can still get rich playing it...

http://en.wikipedia.org/wiki/Lemmings_(video_game)
If financial instability forces rates up, the value of assets bought with debt could well fall as the majority who are on variable rates default.

Higher IRs would also kill gold, but it took over 20% for Volcker to do it last time around.
Reply With Quote
  #135  
Old 12.10.2010, 21:51
Newbie 1st class
 
Join Date: May 2010
Location: Pfäffikon, Schwyz
Posts: 16
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ktm_paul has no particular reputation at present
Re: Gold Buying

Quote:
View Post
If financial instability forces rates up, the value of assets bought with debt could well fall as the majority who are on variable rates default.

Higher IRs would also kill gold, but it took over 20% for Volcker to do it last time around.
note I said (useful) 'things' rather than (financial) assets ... so im not sure I would agree with you.

http://en.wikipedia.org/wiki/Inflation
Reply With Quote
  #136  
Old 12.10.2010, 21:56
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Quote:
View Post
note I said (useful) 'things' rather than (financial) assets ... so im not sure I would agree with you.

http://en.wikipedia.org/wiki/Inflation
I'm all ears - what kind of 'things' are you talking about?

Houses are the only thing that it's easy to get large amounts of debt to buy, and it seems their market value would be very adversely affected by higher IRs.
Reply With Quote
  #137  
Old 12.10.2010, 22:42
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Good grief. Intermediate top approaching:

Goldman Tells Clients To Buy COMEX Gold At $1,364.2, Raises 12 Month Gold Forecast From $1,365 To $1,650, Silver To $27.60
Reply With Quote
  #138  
Old 13.10.2010, 07:24
Newbie 1st class
 
Join Date: May 2010
Location: Pfäffikon, Schwyz
Posts: 16
Groaned at 0 Times in 0 Posts
Thanked 2 Times in 1 Post
ktm_paul has no particular reputation at present
Re: Gold Buying

Quote:
View Post
I'm all ears - what kind of 'things' are you talking about?

Houses are the only thing that it's easy to get large amounts of debt to buy, and it seems their market value would be very adversely affected by higher IRs.
Useful things... base metals, wine, diesel generators, fuel, ... really depends on your view on world stability and inflation rates. 'Things' that people will want/need at 0% inflation or 20% inflation.

I would imagine people buying gold bars own their house so they have a basis to borrow against - and currently cash in hand to buy the shiny yellow bits. Can always max out mortgage.

Failing that - unsecured rates are nothing compared to 20% rate fears ... in terms of house values - well - if rates go from now 2% to 20% then the liability of your outstanding fixed rate debt of 5yr:

exp(-5*0.02) = 90.5%
exp(-5*0.2) = 36%

So the house price would need to drop to about 40% of current level. At that point - the bank wont want it back. they will own all the houses from folks with floating rate mortgages.

FYI - I don't buy gold and i'm not borrowing to buy 'things'. It just seems a smarter approach if you believe in hyper inflation or instability.
Reply With Quote
  #139  
Old 13.10.2010, 12:15
carver's Avatar
Senior Member
 
Join Date: Dec 2007
Location: GB-CH moitié-moitié
Posts: 296
Groaned at 0 Times in 0 Posts
Thanked 97 Times in 72 Posts
carver is considered knowledgeablecarver is considered knowledgeablecarver is considered knowledgeable
Re: Gold Buying

Quote:
View Post
Useful things... base metals, wine, diesel generators, fuel, ... really depends on your view on world stability and inflation rates. 'Things' that people will want/need at 0% inflation or 20% inflation.

I would imagine people buying gold bars own their house so they have a basis to borrow against - and currently cash in hand to buy the shiny yellow bits. Can always max out mortgage.

Failing that - unsecured rates are nothing compared to 20% rate fears ... in terms of house values - well - if rates go from now 2% to 20% then the liability of your outstanding fixed rate debt of 5yr:

exp(-5*0.02) = 90.5%
exp(-5*0.2) = 36%

So the house price would need to drop to about 40% of current level. At that point - the bank wont want it back. they will own all the houses from folks with floating rate mortgages.

FYI - I don't buy gold and i'm not borrowing to buy 'things'. It just seems a smarter approach if you believe in hyper inflation or instability.
I stopped buying gold years ago. There is no way I'd mortgage my home to buy wine (bid up anyways, esp. 2009) base metals (hitting all time highs - spreads for physical & storage - unless you're talking about financial instruments) fuel (does not store - unless you're talking about financial instruments). But each to their own.
Reply With Quote
  #140  
Old 13.10.2010, 12:49
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Zürich
Posts: 5,406
Groaned at 90 Times in 77 Posts
Thanked 4,226 Times in 2,353 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Gold Buying

Interesting, but are they forecasting gold rising or the dollar falling?

I would be interested to see an authorative view on the future of gold/CHF; as I mentioned before this rate is currently circa 10% below its recent high.
Reply With Quote
Reply

Tags
gold, swiss franc




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
GOLD - Int'l recognition of swiss gold coins? Uncle GroOve Finance/banking/taxation 19 19.08.2011 18:04
Buying gold in Zurich Tiger Other/general 27 07.11.2010 14:21


All times are GMT +1. The time now is 21:06.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0