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Chris weighs in on the Greek vote.

Big Al
January 26, 2015

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34 Comments

    GOLD looking good…………….

      WALLSTREET can not make a commission on the physical…………storeage and a watchdog cost money……………….and a watchdog might bite you on the arce….

        Jan 26, 2015 26:18 AM

        I have heard that dogs also bite boy’s little thing off in many occasions.

      Jan 26, 2015 26:36 PM

      I agree. I actually expected gold to pull back from the middle of last week (pre ECB announcement), PMI numbers on Friday, and the Sunday Greece vote. I didn’t expect the Greece vote to cause gold to spike (yet), and expected further continuation of the correction the beginning of this week.

      However, I do think Gold is looking good into February, and expect the uptrend to begin by the end of this week and continue for 3-5 weeks to test 1323 and 1347, and just maybe 1382 before the March weakness causes it to correct.

      Great thoughts from Chris about Greece, the relevance to the Euro, and for pointing out the reasons that Gold was rising prior to this week still being in place fundamentally and mid-term technically, and the last week has been news overload and just gave Gold a reason to correct temporarily.

    Jan 26, 2015 26:56 AM

    ‘Those whom the gods (God) would destroy, they first make mad’…Euripedes of the fifth century BC. If we let the powers that be drive us mad then we become complicit with their wishes. So go on thinking outside the box, however wearisome that feels!
    For if Syriza (now forced into a coalition) remain in Europe by hook or by crook then OK that’s not the black swan as such. But like the Swiss failing to get the gold vote for the SNB, it the SNB announced out of the blue its own black swan by de-coupling the franc from the euro . Greece is the preliminary for the inevitable. Besides, as has been said on this site black swans, by their nature always blindside what the pundits are thinking.
    Keep the faith folks and don’t let the madness overwhelm you!

    Jan 26, 2015 26:03 AM

    Not sure if this belongs here but here goes anyway–;-}

    Elsewhere on the web someone has said that the price of gold has to be kept down by the powers that be to keep interest rates low. That kind’a makes sense to me but wonder what other folks think –

    I’ll poke around a bit to find where I heard the idea –

    As always thanks to all for the constant reality checks –

      Jan 26, 2015 26:06 AM

      The theory has been worked out by Larry Summers during the 80s and 90s. At least they consider there is strong relationship between gold price and interest rate. I am not sure it is correct or not.

        Jan 26, 2015 26:19 AM

        I mean the theory is correct or not.

      mwfolsom……..you are on the right track…………..

      Jan 26, 2015 26:59 AM

      The theory is 100% correct in my strong opinion.

        Jan 26, 2015 26:16 AM

        Matt, I have no time to investigate. Can you share the basics or any link?

          Jan 26, 2015 26:11 PM

          In a nutshell, the price of obtaining the use of capital (interest rate) will rise if it is in tight supply. A rising nominal (fiat currency) gold price indicates that demand is outstripping supply. Since gold is the foundation of the monetary system, rumors to the contrary notwithstanding, its price —particularly price stability or lack thereof, reflects the health of the system. A rising gold price indicates rising systemic risk and, therefore upward pressure on interest rates and downward pressure on the currency as the market tries to reflect the growing risk. So, a rising price for the real thing shows that the paper substitute for capital (the dollar) is priced too low (due to artificially low interest rates). This is why rising nominal interest rates are meaningless but a sufficiently high real rate (net of inflation) will stop gold in its tracks. We know that there is little risk of sustained and significantly positive interest rates anytime soon, but I digress.

          Printing money does not increase capital, it divides existing capital just as cutting a pie into more slices does not increase the amount of pie. As the gold price resumes its uptrend, it will take exponentially more currency creation to keep interest rates down as investors flee the dollar in search of adequate compensation for the risk. Pushing the gold price substantially lower isn’t nearly as important as keeping it as stable as possible.

          Sorry if the above is more confusing than helpful, but I’m keeping one eye on my trading platform…
          http://maxlevelgeek.com/wp-content/uploads/2014/02/crazyeyes1.jpg

          GSV is halted… anyone else own it?

    Jan 26, 2015 26:24 AM

    I’M SORRY, IT’S PLAIN AND SIMPLE AS TO WHO IT IS………………..IT’S THE CARTEL !!!! Again keep a close eye on the PRICE in a few minutes when the comex closes at 1:30 EST, and then watch how the price will rise a little afterwards, and then tomorrow after options expire, they will let the price slowly rise…………………CRIMINAL !!!!

      Jan 26, 2015 26:49 AM

      I guess gold will rise tomorrow after option expire and may move up more after contract roll over day. I think it is either 28 or 29. Not I care much

      Mark………….Catherine Austin Fitts…….is at Gregg hunter Watchdog usa…..great listen to ….and is a complement to your statement………………………..j

    Jan 26, 2015 26:06 AM

    Boy’s What you think off ? The currency exchange will be manipulated 1 to 1 to 1 us DOLLAR EURO and SWISS FRANC ! What you think ?

    bb
    Jan 26, 2015 26:13 AM

    When is the fomc?
    Think it was zerohedge? saying to expect an attack on the metals price.

      Jan 26, 2015 26:58 AM

      FOMC is tomorrow and Wed…as for an attack on the metals, if the Fed talks up the economy again, and implicitly the dollar,t hat could be a little bearish.

        bb
        Jan 26, 2015 26:06 PM

        thx temple

    Jan 26, 2015 26:23 AM

    stewart thomson referred to by some as the best gold analyst has been predicting gold goes up when rates do….could be token raise in increments.. 321gold

      Jan 26, 2015 26:00 PM

      I think it would depend on why rates were rising. Today is much different than, say, the 1970’s in that sense. Back then, gold rose as rates did because rates rose too slowly to tamp down inflation. Only when Volcker put rate rises into overdrive did gold peak.
      Today, of course, the same pattern would be true. Even if the Fed did start to raise rates, real rates would likely remain negative, supporting gold just as back then.

    Jan 26, 2015 26:25 AM

    Big Al
    If you truely believe your own words and gold is a hedge and it wouldn’t bother you if gold was to go down from here.
    Then answer this question Al.
    Why do you feel comfortable buying gold here at a higher price, instead of when it was CHEAPER back in Dec. when you were advocating the sideline was the place to be.
    I clearly remember asking you Al back in Dec. If your reason for buying gold is so you can sleep at nights, why are on the sidelines, instead you were insisting the sideline was the place to be.
    I would really like to hear your answer because your position today is contradictory.

    Peter

    Jan 26, 2015 26:25 AM

    Al,
    people are hungry in Greece… and worse.. why or why is that crazy that the leftists won…???

      Jan 26, 2015 26:30 AM

      Democracy is prone to majority stupidity.

        bb
        Jan 26, 2015 26:10 PM

        Guess that’s an argument for dictatorship.lol

          Jan 26, 2015 26:19 PM

          No. It is only say democracy is not a safeguard. Poeple need to be alert and educate themselves. Dictatorship is always a bad system except when you run into great leaders. But is a gamble.

            Jan 26, 2015 26:20 PM

            That is why I say some degree of civil disobedience is good to keep government and even majority in check.

          bb
          Jan 26, 2015 26:09 PM

          I was making a jockularity Lawrence.
          Yet, people are pretty ill informed, and they do get to choose the leaders.
          We get the government we deserve.
          Not sure if democracy is the best we could do.