yep, promising all right. I can live with a correction - but I am a far happier boy with a rising price especially when we crack $1900 and keep going. Bit hard to not at least sit up and take notice with gofo, trendline breaks, Bernanke comments, Europe and the states etc.. Personally I hope it keeps going and the whole lot comes to a head and we get it all over and done with and start again - there is no surety these days - as much as I like gold and silver - it is a pretty bloody sad day when one keeps writing about the durability of the things and the risks of basically all forms of investment. Anyway - here is one little trendline as promised. Gazza
afternoon, that chart that shows the 0.2 line is a bit misleading if I am correct - it says every time straight after the 0.2 line was penetrated southwards then gold rallied soon after. Well, as far as I can see it didn't ----------------- the timing was out quite a bit and the last penetration looks to be in feb 13 - and gold definitely did not rally strongly soon after that - I know, because I am poorer for its effort from what I have read we should watch the zero line not the 0.2 line --------- and that is what all the fuss was about in the last two weeks. either way to me - it looks very hopeful - probably a bit better than 50 50 now ---------- a good series of higher highs and higher lows --------------- we should be just about due for a rest ----------- that will be the next test, where will the support be? gazza
yes, well I was pretty shagged between February and at least to May, june wasn't real flash either ------------------ maybe there is more to the gofo than we know - viva le penetration. maybe it was an alien anal probe ? g
From VictorTheCleaner: Full comment can be found in comment section of ( http://fofoa.blogspot.com.au/2013/06/snapshot-day.html?commentPage=3 ).
Weird world, one flames me for figures and explanations instead of charts and goofie talk. The other praises. Sarcasm? From which side? General 'I don't like ya'? Anyway, things can be looked up: A contributor = a gold owner (ex an LBMA member) A swap = an exchange So, gold owners lend out their gold for the gold borrowers' US dollars, at this GOFO rate. http://contrarianinvestorsjournal.com/?p=530 In the light of above, what does a low GOFO / lease rate mean: that the gold owners lend their gold to borrowers at a low cost, thus cheap. What explains these gold owners' willingness to lend out their gold cheap? Simple: because the demand to borrow gold is low. They don't find many that want to borrow gold. But it's their business income, so in order to get an income, they lower the lease rate, as to make people more willing to borrow gold. The next question down the chain from last result to first cause, is then how it comes that people are reluctant to borrow gold. Why do people want to borrow gold in the first place? One reason (and maybe the primary reason) is the taking of a Comex futures market short position. A short position is selling gold at the current price, hoping for a lower price, to then buy it back at the lower price, with as main purpose dollars (accumulated on the short positions margin account over the period of the dropping price), not gold. So, since a low GOFO / lease rate means there was little willingness to borrow gold, with the lower rate having been an attempt to convince people to borrow gold, it means that few people (measured in ounces gold of course) were willing to take a Comex futures market short position. And this is also the case, as indicated by the decade record low Comex total net positions, the green or red+blue trendlines deviation from the zero [img=FluxBB bbcode test]http://finviz.com/fut_chart.ashx?t=GC&cot=088691&p=w1[/img] So that 'historic inversion' of this topics article, has actually just the same story behind it as the Comex total net positions decade recordlow. The goal could be considered obvious: an attempt to lure people in yet another cycle. Hell, sometimes the gold owners are even willing to pay people to borrow gold, as is the case with negative lease rates. Yes, a negative rate is like some1 paying you in order to make you borrow his property. Fun eh? The question now is, despite that 'fee' you get, and they don't do it for charity purposes, so if those gold owners are smarter than you, that 'gain' you receive for your borrowing of their gold, may be undone and even reverted by a subsequent loss on the margin account of your Comex futures market short position, in the case of a rising gold price. There are other reasons possible too though: http://www.firstpost.com/economy/gold-borrowing-rates-hit-2009-highs-heres-why-944323.html Read the article carefully. Yes, it's from this same july 2013 month. Highest gold borrowing rate since 2009. So in this one same month july 2013, we saw a high since 2009 and a low since 2008. It just makes clear that things can change very fast in the electronic trading world. And it also makes clear that Zerohedge, once again, tells you an incomplete story. It's advisable to wonder why. Sorry for this mega long post! Geez dozens lines! That's crap! But ohwell, if you want to read shorter stories, incomplete ones are by definition shorter.
Pirocco - low GOFO means a high lease rate, that is the mathematical formula. So currently there is high demand to borrow gold.
Your own words, another post, today. You deny here, you confirm there. To some others: try an argument. BS isn't.
The second quote was in response to talk about the high lease rates that existed before the bull market, that comment was not talking about the situation over the past few weeks. My two comments are about two completely different time periods and are thus consistent.
Isn't it funny how some name my post "BS" while yours, saying the very same, not? It says something about the critizers.
Gold should have spiked in February, if we take account of that GOFO graph. Some were waiting for it to shoot up in February 2013 already: http://www.moneymorning.com.au/20130223/the-gold-bull-market-nothing-goes-up-in-a-straight-line.html In stead, it dropped... But of course, if you have a little friend called "Gofo"... you can't just ignore his opinion
http://rt.com/shows/keiser-report/episode-477-max-keiser-741/ As always an entertaining show with a summary of the GOFO inversion and the lack of confidence in the bullion banks that this represents from Andrew McGuire. "The day you get settled in cash will be the day it gaps up 200-300 dollars" Andrew McGuire Seems to me like it is becoming more and more obvious that somethings gotta give soon, no idea what it will be though...
Here's a more interactive graph of GOFO rates: http://www.quandl.com/OFDP-Open-Financial-Data-Project/GOLD_3-LBMA-Gold-Forward-Offered-Rates-GOFO And GOFO went even lower this August 7th, just yesterday:
That chart shows a correlation between price going down and GOFO going down. Yet all the bugs are celebrating negative GOFO? Consider that GOFO goes down when lease rate goes up (which it has been) and lease rate goes up when more people borrowing gold - to short it! Any wonder gold price goes down?
I'm not celebrating, just exploring, trying to understand more about the phenomenon. For now it seems like GOFO is down and gold is down... I don't think there's enough appetite to change the trend. Too bad that much of the news about this is still so vague... I also found interesting to watch gold's movements compared to the CPI: http://forums.silverstackers.com/topic-43409-alessio-rastani-on-gold-down-to-800.html
