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gold and the metals

edited September 2011 in Fund Discussions

Gold just broke through 1900 in London on global economic issues. It's at 1901, silver 42.85, platinum 1883 and palladium 763 with gold being the leader today. Note that the gold/XAU ratio is an extrememly high 8.53 as bullion is diverging from the miners. Gary always talked about looking for divergences to watch for opportunities. For the record, a ratio this high is a signal to buy mining stocks - or at least overweight miners vs. bullion in your holdings.

The gold/silver ratio is 44.36 with an historic range of between 15 and 20 . . .but it's down from 80 . . .
A ratio this high is STILL a signal to overweight silver relative to gold. BTW, the XAU is at 222.79.

Bloomberg News

Last Haven Standing - Shiff

I like some of Shiff's stuff but not all. Sums up a bunch before slamming Gartman for call a top in gold. feh. Most everyone has either denied or called a top or a bubble. Warren had a gob of silver back in the beginning but sold very early on and missed 90% of the gains. By this I mean that with a low around $4, he still sold around $10 or so, if I recall correctly and so more than double his money. That's great. Silver is currently at $42. Let's admit it, everyone has made mistakes, everyone. I've made some real idiot moves (e.g. Palatin Tech ) - we all have. We just have to try and learn and not do it again.

Can We Trust the Gov't Stats on the Economy - Dorsch

Hell, if you ever look at, I believe we've actually been at zero real growth since the meltdown in 2000. Check the alt data tab. Unemployment is ~22% and inflation is now ~12%.

I'd be very, very careful good people. Very careful.

and so it goes,




  • thanks rono
    what do you think about Cu?
    Cu lowest level in more than one wk
  • Hi John,

    Copper, like silver and the Noble Sisters, is tied to the economy and with most of the world looking at an economic slowdown, it's being held down. The gold trade (currently) is Safe Haven stuff while copper is economic recovery.

    Now, if you want a play on copper, I'd look at one of the major miners that pay a dividend like BHP or SCCO or one of their competitors.


  • Starting to feel like a pig with my gold position. Over a double in 2 years for my shares GLD in an IRA. I know, a parabolic rise is due to fall but when is anybody's guess. I'm inclined to sell 1/2 or 50 shares and leave 50 shares for whatever. For about a year I wrote covered calls and then decided not to when I thought it might be called from me and that was a good decision. I'll take a look at maybe doing that again and if called, so be it. Is it really worth being a pig?
  • Hi Ron,

    What folks need to be aware of is the actual percentage of pm's in your portfolio as compared to your target percentage. If your target is 10% and you've doubled, you could be pushing 20%. At this point, you need to rebalance.

    Or, once you've doubled up, you can take your original investment 'off the table' and continue to play with 'house money'.

    good luck,

  • Thanks Rono, well, I ended up doing a covered call for a $10. premium, strike at $175 and expiration in Dec, 2011. Either I let it expire and get called, if I want to keep it, decide if I should roll it up. I'll see, if it goes to $185, I'll be even, if it drops below 175 I may write another CC or sell some or all of it.
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