Conditions Pretty Perfect for Gold for Now But Stay Cautious

Soros says condition ‘pretty perfect’ for gold

by Pav Jordan & Aaron Pressman

Billionaire investor George Soros may be cutting back on his gold bets, but he says the precious metal still has some kick to it, as long as conditions like low interest rates prevail.

“The conditions for [high] gold are pretty perfect,” he said at a speech in Toronto on Nov 15 to accept the Globalist of the Year award from the Canadian International Council. “The big negative is that too many people know this and a lot of hedge funds are very exposed…Gold has a tendency to go parabolic,” he said of its tendency to fall as quickly as it rises.

Soros reduced some of his big bets on gold in 3Q, trimming positions in miners including Barrick Gold Corp, Great Basin Gold and Newmont Mining. He left large positions in NovaGold Resources and Kinross Gold unchanged.

Soros has said several times this year that gold is “the ultimate bubble”. “I called gold the ultimate bubble, which means it may go higher,” Soros explained in September ar a Reuters Newsmaker event in New York. “But, it’s certainly not safe and it’s not going to last forever,”

Gold has risen sharply this year, with the SPDR trust up 23%. Spot gold hit a record of US$1,424.10 recently, without adjusting for inflation. Gold would still almost have to double in price to reach its 1980 record after including inflation.

Of late, the metal retreated from its record price on concern the market had become overbought as talk of a poetential interest rate rise in China knocked commodities sharply lower. Last quarter, as gold was approaching record highs, more of the best-known hedge fund managers were placing bets on the precious metal.

Former Goldman Sachs trader Chris Shumway’s fund added 2.1 million shares of the SPDR Gold trust and Dan Loeb’s Third Point LLC bought 115,000 shares in 3Q, according to securities filings on Nov 8. Highfields Capital added call options on 1.6 million shares of the gold exchange-traded fund and calls on 200,000 shares of the Market Vectors Gold Miners ETF. At the same time, Eric Mindich reduced his Eton Park Capital’s stake by two million shares to 4.6 million. John Paulson maintained a 31.5 million share holding of the ETF through the quarter. - Reuters

Source:

The Edge Singapore

Week of Nov 29 - Dec 5 '10

Quantitative Easing Explained Hilariously

Confused about QE2? Don't be. This video will help clear any doubts.

Humour always helps learning.

~K

P.S. Special thanks to Hendra for sharing the video in the forum.

Singpost Rebounding Strong

I get mail; therefore I am. 
~ Scott Adams

Four days ago, Singpost erased all gains falling back to where it was during the Aug-Sept period. However, the last two days showed a strong rebound with price closing above the 14 day moving average today.

The OBV, RSI, Parabolic P&S indicators have all turned up today. Stochastics have advanced higher but have not reached overbought levels while the MACD is giving a strong buy signal as well, both by cutting the signal line as well as by heading back to positive territory. This probably caused a lot of people to buy in today. MFI and the ADX dipped a little though but this doesn't look like it'll cause any fallbacks on the price. Furthermore, the -DI is starting to dip downwards, looking likely to cross the +DI indicating that there could be more buying in store. However, with the ADX hovering around 20, this shows that there isn't a strong uptrend just yet leaving a little room for uncertainty. There should probably be clearer signals tomorrow in this area but you could start nibbling if you've been eyeing this stock. 

Personally I had expected prices to bounce back by early next week. Didn't expect the strong price bounce today. With a yield of 5.3% and not much volatility in price, Singpost is best thought of as an income stock. Do not expect to make mega-bucks on this one but it certainly looks like it will go higher.

~K


Edit: As pointed out by JW, Singpost does look like it's in a downtrend. (Thanks JW! =) Sorry everyone else for the misleading title & analysis. Am still learning.) To break out of the channel, prices must close above $1.19.

I Thinketh! - Stuff in My Room & the Need to be Financially Free

This is the true joy of life, the being used up for a purpose recognized by yourself as a mighty one. 
~ George Bernard Shaw

As I sit up on my bed typing this post with my future wife lying fast asleep cuddling up next to me, I’m reminded how important and what being financially free really is to me from just observing my surroundings.

In front of me stands my library. Three 2m high bookshelves cluttered with books.  These books from a wide range of categories – literature (classic and modern), contemporary fiction, finance, philosophy, travel, history, arts, science and language – lie dusty, in need of wiping, and quite a number in need of being read. It’s been a nagging thought of mine to start. Instead, I find myself constantly being distracted by something else that needs looking into causing me to put down the book I intended to read.

The last I had any proper time to really start and concentrate on my book was on a holiday to Krabi in September. That was a beautiful and relaxing trip. I finished the book too - all 300 odd pages of it - in the 4 days I was away. Just like I used to in the past. It helped that it was a page-turner. The Fight Club by Chuck Palahniuk.

Today, I find my eyes constantly drawn to my guide on Italy. The breakfast chatter with my brother has got me longing to travel once more. I love Europe and want to visit it again. Backpacking around for a month wasn’t enough. England, France, Germany, Czech Republic. That was more than four years ago. The mini-trips since then never quite matched up to the experience. Let's Go, the words on my travel guide to Italy says on the cover. I want to. It’s been a dream of mine.

My future wife rolls over in her sleep and my thoughts turn to her. In another year, we should be married. A wedding. Honeymoon. A house. And then kids. I’m not quite sure that they’re always in that order though. But I am sure that I want to be capable no matter the order they come in, and not handicapped by that piece of paper constantly changing hands called money.

I’m also sure that eventually we’ll have a dog. A dog that will provide love to and will be loved by the family. A dog that will be annoyed by the kids, but will play with them all the same. But eventually dogs too, grow old, and a lot faster than us. And at the end, we’ll wish we had spent more time with it before the inevitable. I’ve experienced this before. And I never hope to experience it again, let alone wish it on my children. The mat in the corner of my room ensures this. It belongs to the past.

Old age, illness, they go hand in hand. Personal calamities that need dealing with. The medicine bottle lying on the shelf serves as that reminder.  Zoom out. The world is a lot larger than our own personal problems. Wars, famine, poverty. Animals ill-treated. Species threatened. Dying. People suffering, children homeless. Uneducated. Sometimes all they need is a bit of helping hand. Isn’t that what humanity is all about? A dollar goes a long way. Involvement goes even further.

In short, being financially free opens up options, giving one more time to do the things that really matters to oneself and in that way, living and eventually dying without any regrets.

Able to do what one wants to do, when one wants to do it. The long awaited freedom.

~K