Not for gold but for silver. I don't think this will happen with Gold

still tanking. now only 10% up.

Gold is going to go up against what.

I look at Gold staying at the same price but currencies falling against it.

The financial markets are screwed and the price of Gold will go back up very close to US2,000 by the end of the year. US$2,000 being a resistance point.
Once it breaks this point it should continue up.

Technical points in a market that is probably 50 pct overvalued from emotional buying don`t work.

I started this thread and if you read it from the beginning a lot of people made such comments.
Have a look at the price rise since July 2009.

Lets see if you prove me wrong !

isn't gold about to break through its 200 day MA for the first time in 2 years or so? i wonder if the eurozone bank problems could precipitate a gold liquidation event.

anyway, i decided i was out a while back, so just watching from the sidelines now...

I know it is trivial amounts to you Expats but:
My clients have a total of over 50 Kgs of Gold so I am watching with interest as it was my idea !!

i think it was a good idea, but one that is maybe approaching it's sell by date. i was long gold from 2006 but sold recently after a short last hurrah in silver (managed to catch a 100% return in 6 months ).

while gold could have a long way to run yet, the risk/reward doesn't make sense for me right now. while the crisis to date has been characterised by a flight to safety (gold, commodities, yen, chf, usd) - i wonder if the next phase will get much uglier and we will see bad debts being realised and positions in gold and commodities being liquidated - in which case i expect things to get very ugly, very quickly.

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Phil, can you explain the part around bad debts being realised? Would that not led to effective hyper inflation and hence an increase in the gold price?

if we see a scenario where gold positions are liquidated, this would increase the supply of gold and therefore decrease the price. while i am wary of the risk of hyper-inflation, i see this coming later as a result of currency revulsion and it will be preceded by an upwards spike in the velocity of money.

as ugly as the USD is, it's still really the only effective reserve currency and i think we'll see a flight to USD before we see a flight from it. similarly, i would expect to see some deflationary effects from credit destruction before seeing hyper-inflation arising from money-printing and currency revulsion.

it's these huge opposing forces that makes it hard to invest right now due to timing problems. sure, if you're a trader and can watch the screen all day, why not go long in USD and USD bonds and sell to a greater fool.

i prefer to look at broader long term trends which means i can take a position and not have to check it constantly. in the last decade, my themes have been: long china, long gold, short gbp, long chf.

recently, i unwound all these positions and took a gamble on buying swiss property and hoping that the CHF mortgage will be inflated away over the next 10 years (a bit of a risk, since with a strong currency status, you could see debt deflation).

i want to be long real assets, but not at current prices. with the next leg down, i see leveraged assets taking a beating (e.g. real estate) in the mid-term and so waiting for an opportunity to jump in (in particular, looking at munich real estate - stable rents, possibility of euro mortgage being inflated away).

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has anybody used these guys?

http://www.goldmoney.com/how-it-works.html

Phil,

I think that Europe is pretty much screwed for a long time and unemployment will go up. This will mean that employees will end up on minimum wage and therefore contribute little to the skint governments. This means that the governments will have no option but to tax capital as a way of getting revenue. This will end up being on property as it is registered and can be found and taken possession of.
This is another reason that I believe Gold will go up.
I even believe that European Governments and possibly the USA will pass laws preventing people drawing say more than Euros 500 out of banks in cash.

With regard to gold, there is certainly a resistance point of US$2,000 as there was at US$1,000 before but once it goes past this point I think it will continue to rise. There will be large demands for gold from the Chinese public when they realise that their will be a property bubble.

With regard to property in Switzerland; having owned a block of apartments for 6 years in Ticino, I would not say it is producing a great return on investment (probably 6% net) but better than a bank and kind of inflation protected.

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Until you sell your flats in Tichino , you won't know the return on the investment. The value you place is an opinion rather than fact .

Passing laws on people taking out 500 at a time? This isn't Argentina quite yet.
And that property bubble is something else. Most of those new builds are vacant, what are they going to pull their money out of if no one has bought them yet to begin with? Plus that is a lot of gov't spending propping up the GDP, which isn't a true GDP. Sure that'll implode, but money won't be swooning anywhere as it's not money being made right now on demand.
Gold could go up, but I think there is more value in US stocks right now, regardless of the roller coaster ride it currently has been.

Actually, i am seeing around 25% return on investment in my property which is pretty amazing. The tenants will pay off my investment in 4 years and my mortgage in another 16!

Pretty amazing return in Switzerland !!

One looks at rent being a 13th of cost of building with 100% occupancy but it generally doesn't work out that way.
You also find that tenants expect new kitchens, bathrooms every 7 years which has to be factored in.

BUT back to Gold.

The return on investment to me is the rent received as a percentage to capital.
I would rather have my capital tied in Swiss property than FIAT, bonds or shares at this moment.

well it's been tanking hard for a while now all the way back to the trend so the question is will it bounce back or crash through?

I think there is no excitement for gold right now. I think for the moment, or at least until we get some robust earnings and manufacturing orders, commodities are a bit worn out. I think it's a side ways trade leaning lower for the next couple of months.

Gold is US$1,629 at the moment

I am pretty sure it will go up; in fact I don't understand the reason it is so low.

Could it be hedge funds having to sell it to cover losses on trades etc. ?

I see no reason for Gold falling otherwise.