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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (104937)	11/27/2009 12:23:15 AM
From: The Vet	1 Recommendation Read Replies (1) \| Respond to of 116555

Eventually bullish, but there could be a short downturn in reaction to a stronger US dollar. For some reason the market seems to believe that whenever the US dollar index strengthens due to "safe haven" buying then gold must go down for no better reason than it is priced in USD. However demand for USD as a safe haven currency doesn't detract from the even better safe haven of gold IMO and we all must remember that the relationships between currencies are ratios, not values. In addition the only "safe" place for USD is in treasuries, and they have zero upside at the present time and really have nowhere to go other than down in the longer term. The USD up, gold down logic, only holds if you believe that nobody holding USD wants to buy gold with USD and that all gold buying originates off-shore with other than USD linked currencies, when in fact all currencies are USD linked to some extent. So in a nutshell gold is likely to dip a bit (it has already) and then resume its bull run. JMHO......

To: Little Joe who wrote (104937)	11/27/2009 12:48:56 AM
From: Threshold	1 Recommendation Respond to of 116555

Good question. The crisis last year saw a huge hit on the POG and the related stocks, but off the bottom we saw incredible gains in both. New highs in gold but not in the stocks, but good gold stock pickers made out like bandits. So does it repeat, or was there a lesson learned? I would expect a flight to US dollars, but is this a trigger for a further decoupling of gold from the US dollar? Going to be very interesting tomorrow imo, as the US markets open after two sessions of major downside in Asia and Europe (Euro futures down very hard again tonight). Good day to cash up here in Canada. Not as if they are likely to explode upwards tomorrow. TSX was only down 1.72% today on roughly one third the usual volume. Very interesting timing for that Dubai news. I have no idea what the dominos have in store, but this could be the trigger for a long overdue selloff imo. Not sure if anyone has a handle on the CDS and other derivative exposure.

To: Little Joe who wrote (104937)	11/27/2009 3:15:31 AM
From: Skeeter Bug	2 Recommendations Read Replies (1) \| Respond to of 116555

LJ, if the dollar carry trade unwinds, i expect gold to go down. that scenario means sell everything, buy dollars and cover dollar shorts. gold went up b/c of the carry trade and it will go down because of the carry trade. gold catching a bid in the low $1140s right now. you might want to hedge. i'm not sure if this glimpse of deflation occurred on jp goldman fed crew's schedule or not. i was thinking Q1, but this might change plans a bit. i think the market sells off a bit, firms up going into the end of the year and then rolls over big in Q1. gold ought to go down at the same time. the new stimulus programs designed to prop up the banks and, more than likely, hand cash out to all americans will likely cause gold to get a bid and move higher - perhaps for good as fiat instability begins to look even worse than now. it could be a rough ride, though, and you might want to hedge some or all of your gold positions.