This discussion is about probabilities and investor psychology — not predictions.


Click for video

Source: Yahoo Finance



Note: I understand getting heard above the clutter and attracting clicks and all, but this headline is rather different than what we actually discuss on the video above:

yahoo gold

Category: Gold & Precious Metals, Media, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “Gold Bouncing Towards $1400 Creates Selling Opportunity”

  1. PeterR says:

    Shameful sensationalistic journalism. I thought Yahoo Finance was a cut above the crowd?

  2. leopardtrader says:

    I disagree here. If this bounce sustains..there is likely to be new highs in Gold. May not be as quickly but somewhere around late 2015/ into 2016. The probability for $1000 or even lower than $1200 in my assessment is less than 2%. I think the roadmap is 1200 to 1650 later this year to 1500 and then new highs eventually about 12300/400.

  3. Sisyphus says:

    Barry listed off the problems with the major currencies and said you therefore default to USD. I don’t follow. Why don’t you default to gold? Isn’t that argument for gold still valid?

  4. DeDude says:

    The only way gold makes any sense is as the Armageddon trade. I doubt that a dead cat bounce could bring it all the way up to 1400, that would require help from a global scare (maybe Chinese bank issues). Ultimately it will be a slow grinding down in price as the world economy slowly recover and the fear of Armageddon leave more and more gold bugs behind.

    • leopardtrader says:

      These are 3 Gold trades:
      1. Gold as inflation hedge. In this context inflation worries expectation in major global economies result to Gold buying. This is the traditional Gold trade.Inflation will come and is coming sooner than many expect. That is what FED is saying.

      2. Gold as safe heaven for potential currency run ( collapse). Here Gold is viewed as safe heaven per potential fiat currency collapse. Example the last parabolic rally in false expectation of Euro collapse. That premium has been removed on the understanding that Euro wont scatter after all. Right now Gold is fairly priced to traditional value.

      3. Gold as part of hard commodities assets. Gold get bid when overall hard commodities space outperform. That means that Emerging markets rebound will be solid for Gold for whatever reasons. But that is the truism.

      The next move in gold would be per (1) and perhaps (3). I dont believe (2) is realistic as many Gold bugs want us to believe.
      Downside risk here is minimal imo

      • DeDude says:

        1. Inflation Armageddon and 2. Fiat currency Armageddon. The Armageddon fears drive people into purchasing hard commodities with the (irrational) presumption that hard commodities will retain value in that case. Gold does correlate with other hard commodities when the Armageddon fears are driving trades, but many of the other commodities have real practical uses and can be driven up and down independently of where gold is going.

  5. rd says:

    Gold is the play if fiat currencies collapse. But in that case what is the value of a gold ETF traded on a stock exchange? There will always be a place for physical gold buried in your backyard along with the c
    canned goods in your cellar. But GLD is a different animal; it is really just a trading toy.

    Barry, if you want to be quoted accurately in headlines, you need to stop using phrases like “possibility” and “I don’t know if this is sustainable”. These terms are not directly actionable and tradable at the moment, so they are pretty much worthless in a media cycle.

    • Well, if ever you had a chance for Fiat Currency collapse., according to the bugs in 2008-2001, this was it!

    • PeterR says:

      rd, it seems to me that Barry’s vocabulary is appropriate for his role in the marketplace. Indeed, one would assume that he does NOT want to use terms which are “directly actionable and tradable at the moment.” Further, his spoken words in the video clip are carefully chosen IMO on the issue of the 1400 level, which makes the inaccurate headline all the more misleading.

      What is “worthless in a media cycle” is quite beneficial here, in my opinion.

      • I used to be a trader, but have moved into long term investing many years ago.

        I don’t really care about the next 15 minutes . . .

      • rd says:

        You are absolutely correct, but the healine writers need something firm and concrete. If they don’t get it from the person they are interviewing, they will just make it up!

  6. MayorQuimby says:

    I went long for a trade last Friday at the close. Flattish so far. Not interested in ‘investing’ in metals though at these prices.

  7. b_thunder says:

    BR was one of 2 bloggers that “enlightened” me about the high probability of the real estate crash, probably 2 or more years before the crash happened. Thanks to their warnings I didn’t have losses in 2008 crash.
    Recently there’s not been a 12 hour period in which this blog didn’t feature a “gold’s still in a bubble” blog post or a link to a similar article/blog post by someone else. You’ve made your point, those who have ability to hear have heard you already. You’re on record as hating gold @ $1200, but now the more you talk about gold the more it seems like some form of anti-gold Jihad… as if there aren’t other overpriced assets out there.
    Ultimately the “gold’s in a bubble” warning are 18 months too late and very much look like a trend-following exercise post April “technical breakdown.”

  8. leopardtrader says:

    I am new here but Barry provides priceless insights for his followers. This blog is not for trading calls neither is it for short term players. His views/insights must not be right all the time..just as anyone else including the FED lol

  9. Sisyphus says:

    And furthermore ! why don’t you start your trendline from where this bull market began before you say the trend is broken? Can’t seem to post the chart here but that trendline comes in at $1,100 . It has been touched more than 5 times and never been broken.

  10. Willy2 says:

    “FED printing money” ???
    The FED is is creating more credit !!! But the US is already choking in debt & credit. The FED is not literally prints banknotes. But even that wouldn’t cause (hyper-)inflation anytime soon.

  11. spudvol says:

    Barry. didn’t you make a gold bet with someone a couple of years ago? How did it work out?

  12. McDaniel says:

    Good insight here. Thanks Barry. I have been fighting @hedgeye on this bear market in gold and I have paid the price. It is easy to see now that the catalyst(s) for higher gold prices are not what they were in years past (inflation, fear trade,etc). Good action plan Barry.

    Well said leopardtrader
    July 2, 2013 at 1:17 pm

  13. Onemoretime says:

    It would seem highly unlikely for gold to delve in the $800-600 dollar range for very long sans a much more severe worldwide depression. Gold at that price would quickly bring back basic supply & demand principles since it would be so far below the break even for a majority of producers.

  14. mavery says:

    Yahoo Finance news is a yellow rag. BR, you’re better than them – don’t dilute your brand.

  15. Expat says:

    Barry, I did not know you were quite so loved over at ZeroHedge!
    The problem with the internet is that on any given day there are several thousand prognosticators who are right. They prance around insulting everyone else. Then the market changes and we get a new crowd of “I told you so’s”. The other skulk off and draw up Fibonacci charts to explain why they are still right, just wrong timing, etc. You will get shat upon or lauded by either group on any given day.

    If this stuff were merely opinion, it would not matter. But like technical analysis, it can be a self-fulfilling prophecy. If respected (or as we see in your case for some audiences, disrespected) pundits (ouch, sorry about that word choice) make a market call, it can influence the market. I doubt that BR’s 5 minutes of Yahoo headline fame will make gold bounce to 1500 and then drop to 750, but these things can be cumulative. Maybe this headline will push a few key funds to liquidate early or buy up to 1500. Who knows?

    Basically, the gold bugs need to keep the bullish message out there. Gold haters need to do the same. Since few financial instruments have intrinsic value, the price depends largely on perception, greed, and panic. Does gold have intrinsic value? Sure, why not? Same as iron, copper, wood, etc.

    It is curious, though, that if you made the same call about GE, no one would start frothing at the mouth other than GE execs and their lawyers!

    • Heh heh — When I made the Bull case for Gold at $400 in 2005 or so on TV, no one noticed. Same with Apple in 2001 (no one noticed). But in October 2012, when I said the primary trend was broken and that we could hit $500 and then possibly $350, people did notice. Same with the Gold spike and rollover warning in 2011. Now this.

      I enjoy Zero Edge, except for their circle jerk of confirmation bias. That hurts them, and they do not seem to understand the impact of their own echo chamber on their portfolios.

      “Don’t worry about Ritholtz, he’ll get his when Gold hits $5000.”

  16. mad97123 says:

    Gold at $750 is still a triple from 2000 prices, while S&P at 850 in 2015 as you predicted last summer is a loss of 45%. Which speculation paid off using that time frame?


    BR: Thank you the opportunity to teach others (Based on our prior email exchanges, I can tell you represent a special kind of investor that is unwilling to improve his investing or learn much).

    1. Many (if not most) of the investors who were in Gold in 2000 were also in Gold years and decades earlier. Much of these “investors” had a big loser on their hands, unless you adjust for inflation, in which case it was giant loser.

    2. When I recommended Gold in 2004-05, it was based on Greenspan taking rates to 1%, keeping them there too long, and whacking the dollar (down 41% from 2001-07) Once Gold went vertical, it became a pure speculation, and history teaches us these end badly.

    3. You consistently misstate the BBRG interview where I said markets could see a 30% correction if we slide into a recession. That is ALWAYS TRUE. This is simple math, looking at average market returns during recessions.

    4. You refuse to see any nuance or he context because of your a) unfortunate and costly biases; b) you are kind of an arse. Regardless this response is for the benefit of others who may not be quite as dickish as you and want some guidance and insight. Incidentally, I repeated this statement in October, only this time I had raised 25% cash. This was before QE4 was announced — at which point I reversed that trade and redeployed the cash into US equities.

    5. You are correct about one thing — Gold is a speculation. As such, it is appropriate in long term investment portfolios in small slivers (its a relatively small, non-productive asset class). But should you ever have real money invested in gold vs equities for anything longer than short periods of time? Most of the 20 Century history suggest not.

    6. Whenever one encounters deeply flawed logic, disingenuous reasoning, and just general dickishness, its a waste of time to try to convince that person of anything. They have made up their mind, and they are sticking to their story, no matter how much money they lose. But thank you aghain for the opportunity to show others by your example WHAT NOT TO DO . . .

  17. Herbert says:

    Gold is getting up, but hitting $1,400 anytime soon is not quite a possibility as the underlying fundamentals haven’t quite changed in line. That being said China is very bullish on gold and this can be quite a game changer