Last week was thinking of buying at $21.80, waited for the Friday smackdown, got caught up in the Symposium, to find it at $22.90! WTF. Thinking of buying again. Do I wait for the smackdown, or just go ahead? This from a regular buyer. These bottoms are on the way up. Sub $21 is just a memory.
We have lost over two cents in the last couple of days on AUD-USD. While we talk in AUD, the charts and wider markets function in USD. The market makers are using USD. Looking at the longer term chart (6mth-1yr) in USD terms it looks like we may be at the beginnings of a retracing back to $14.50 or thereabouts. My gut feeling is that after the inventoreis of retail metal got smashed and premiums shot up, they let the price stay relatively stable for a month so premiums normalize and now they are smashing it again. To be honest, what the AUD (and thus what we pay) is kind of immaterial. It's go nothing to do with the PMs market, only market feelpinions. While you need to take it into account (AUD rising with XAg dropping is ideal), you sometimes will need to buy into a dropping AUD. Such is life.
Although I have no experience with AUD/USD trading pair; in my mind, I thought AUD is a currency which ties to metals; after all that's what Australia had been producing and exporting for decades. During metals' heyday, AUD must be very valuable too. That's why I think AUD rising with Ag dropping is almost an impossible combination. My long term view of gold is about US$800 area; which implies further USD strength. Maybe converting AUD to USD at a relatively better rate, and then thinking about buying physical in the future with USD; is a viable strategy.
While we are a metals producer, unfortunately this does not tie the AUD to the metals themselves. And back in the metals heyday we were pegged to the USD, we only floated the AUD in December 1983. Unfortunately the AUD pricing has more to do with interest rates than anything, and then inflation, GDP and commodities prices. With the RBA almost needing to drop the cash rate next week then the AUD is only going to drop further as the carry trade pull out further. I don't agree with your longterm view on gold but that is just two opinions butting heads. All depends on USD strength but I see going under USD$1K will be a massive psychological barrier. If it falls though $1K then it could indeed go $800 as people pile out of the paper. As for buying USD now and waiting for the AUD to drop further - it is a strategy. Whether it is a viable strategy or not depends on the market moves in both metals and currencies. Honestly I think that the currency pairing boat has sailed and you should have been into USD at >90c. I think the USD will drop in the medium term unless there is some sort of economic shock like Russia or one of the BRICS falling over, or possibly a Glencore failure / Deutsche Bank derivatives meltdown and then it's a lottery in what will happen. Noted that Deutsche Bank is sacking something like 35K employees and not paying dividends for 2 years. Surprised that didn't get a big mention here.
$21.90 now -- I think we should all wait till after SammySilver makes a silver price prediction because it's guaranteed to be lower after that
US$800 long term view of gold? I'm not knowledgeable on currencies but I would have thought that sooner or later the monumental US debt is going to catch up with it and when it does it will severely crash the USD long term. My newbie guess on the long term future of the USD is not good.
@Monsta, I agree that it might be a little late to convert AUD to USD; but shouldn't you have thought about this two years ago? AUD is your currency; it is backed by natural resources. Just like CAD, it dropped together with crude oil. One thing I can't agree with many of the replies here, is that USD will stay alive for longer than you can stay solvent. USD is the world reserve currency and it's backed by military superpower. One of the reason why USD started a strong uptrend few years ago; was that too many investors were bearish about it.
And everyone thought Jesus was returning 2000 years ago and we're still waiting. No end time apocolypse.
Not if the USD is replaced soon by the Chinese quan as world's currency. Remember our 1oz silver bet before 2020?
I would compare the US Debt to my painkillers. I take opiates and in the early days we always tried to keep their use to a minimum . After a few years the my tolerance (just like the worlds tolerance to US Debt) has become huge. Now it does not matter if i take 600mg or 1200mg of codeine a day as i passed the normal level a LONG time ago. Much the same as the US Debt , may be at 5 trillion people were worried but lets be honest now IS THERE MUCH OF A DIFFERENCE BETWEEN 18 Trillion and 30 trillion? The hump is passed and the world really does not care about this debt
It's down to trust, and people the world over trust the USD far more than the yuan and the Chinese government.
Won't happen all at once. If they tried the US could either refuse to pay or just print the money to buy back the bonds. We have the biggest military, so what could they do about it?
