what happened to gold today?

Data · 03-19-08, 09:10 PM

This market has always been volatile, so such corrections should be expected. It seems that sell off started in futures at NY's open. I think that means that some slow money (funds?) moved out of commodities to stocks hoping that the rally in stocks will continue. If this theory is true then gold will bounce overnight and will climb back within a few days.

Red_Sux · 03-19-08, 11:01 PM

Originally posted by Data

This market has always been volatile, so such corrections should be expected. It seems that sell off started in futures at NY's open. I think that means that some slow money (funds?) moved out of commodities to stocks hoping that the rally in stocks will continue. If this theory is true then gold will bounce overnight and will climb back within a few days.

thanks for your imput, data. why do you think there is a huge drop today? 300pts almost. if the market bounce back at the closing trade day of this week, then you might be right about this theory.

i am just glad that the fed didn't cut 100 basis pts, that is a sign they're worried about inflation and the weak dollar. i am actually more concerned about the dollar and the inflation cuz most of my money are in CD right now.

Data · 03-19-08, 11:29 PM

Originally posted by Red_Sux

why do you think there is a huge drop today? 300pts almost.

I think it moved up on emotion and then moved back down to where it is supposed to be at.

i am just glad that the fed didn't cut 100 basis pts, that is a sign they're worried about inflation and the weak dollar.

All the evidence suggests that they gave up on the dollar.

i am actually more concerned about the dollar and the inflation cuz most of my money are in CD right now.

I am concerned about that too and I am heavily in gold. I would recommend you hedging your position by buying gold long options. Another hedge suggestion, buy short USD and later on move your money to Swiss francs and yens.

Red_Sux · 03-19-08, 11:36 PM

data, what about silver? is it better to use gold to hedge than silver?

australian and new zealand dollars seem pretty strong too. new zealand has very high interest rate, so park your money in new zealand dollar based CDs in a offshore account might be a good strategy in my mind. what do you think?

australia economy is booming because the raw material demand from china. i think this trend will last a while...at least for next couple of years. also thinking about moving some money to china as well. yuan dropped from 8 to 7. the rumor is it might reach 6 very soon.

Deuce · 03-19-08, 11:42 PM

Gold is always off his rocker.

Data · 03-19-08, 11:57 PM

Originally posted by Red_Sux

data, what about silver? is it better to use gold to hedge than silver?

Both posses similar properties yet gold is more attractive because it is much more convenient to store.

australian and new zealand dollars seem pretty strong too. new zealand has very high interest rate, so park your money in new zealand dollar based CDs in a offshore account might be a good strategy in my mind. what do you think?

It looks good up to the point when liquidity comes into play. Look that happened to high-yielding Icelandic Krona recently. The markets for these currencies are small and the liquidity is limited. That makes the sell-offs very sharp and the currencies volatile.

Red_Sux · 03-20-08, 03:21 PM

data, your theory from yesterday is holding water so far. gold dropped another 30 dollars...damn. closed at 920. silver dropped to 16.85...it was almost 20 two days ago.

stocks rallied today. so money are coming out of gold and silver now.

so what do you think the fair price of gold and silver be? i know market is irrational right now, so i doubt it'll hit the fair price before it go up again, but i just like to know what is your take on gold and silver.

i think the fair price of gold should be around 800. but i think gold will probably not fall too much below 900 because everyone i talk to are buying gold...which kind of makes me skittish about long gold right now.

Dark Horse · 03-20-08, 03:28 PM

You make it sound like gold should only go up. After its recent steep price increase that expectation makes no sense. Some major financial issues were dealt with this week. Market had been oversold for a long time. As confidence in the market returns gold will drop (because people will take their money out of gold and put it back in stocks). If you're going to play gold you have to be right on top of things. If you don't, the yellow stuff can make you look very silly.

Data · 03-20-08, 06:09 PM

Right, I should not have tried predicting the short-term moves as that is the area I am pretty much ignorant in. I do not day-trade, so that does not concern me. I hold my position in gold due to fundamentals and am not planning existing from that position anytime soon as I am not expecting economy rebound within at least couple of months, likely longer.

I do not know if the "fair" price besides the market price exist. Likely not. What we all are trying to do is to figure out where the price is going to. I think that before the economy rebounds, and that is when I am going to liquidate my position, no matter if that is going to be in a year, in two years or longer, the gold will go much higher. So, I look at today's drop as a correction and used it as an opportunity to add to my position. It may go down to $800 next week. I do not really care, I am in it for a long run.