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I've sort of been watching the thread of replies to the issue of the B of E
announcing it's intentions as to a reduction in the size of it's gold holdings
and the thought that there might be an attempt to to front run the market.
I suspect that it is nothing as sinister as some might assume.
Haven't all the IMF members agreed to disclose their activity in alterations to
their gold holdings.
I was in Philadelphia last week and a friend at one of the banks there thought
he remembered a agreement amongst the IMF members to do just that.
Stig Olausson wrote:
> Your article gave some of the answers i was looking for in my question on
> goldprice versus other prices.
>
> Another article in the "Gold Eagle" compares the situation with "yen carry"
> trades last year, which resulted in an 18% drop in 4 days, when the concept
> blew up.(The "carry gold" parallell would be to borrow gold from Central
> banks at below 1% terest and sell it, ot "go short")
>
> Ira came with an interesting point of view when comparing an incident in
> the grains market involving russia (they announced they were not buying,
> which caused the price to drop to a level where they started buying), which
> made me think about Goldstocks.
> Take a look at the enclosed gif which shows four of the goldminingstocks I
> follow.
> If you plot the On Balance Volume on to the chart (in red) and compare that
> to the price of the stocks, we find that there are people who have quietly
> accumulated these stocks while prices have been falling
> Now, for the sake of argument, lets say these "carry gold" trades, above,
> will experience the same fate as the "carry yen" trades and result in a
> sudden upmove in gold (if Bonds go to 104 for instance....?).
> What do you think will happen with goldstocks?
> Applying simple charting analysis on these stocks we find rising potentials
> of more than 50% in several of these stocks. We know that Goldstocks can be
> VERY volatile and DANGEROUS. They FALL just as quickly as they rise - (I
> KNOW!!!!!!)
>
> The XAU index closed friday at 68.72.
> If you look closely you will find that we last week hit the roof at the
> neckline of an inverted Head&Shoulder pattern in the XAU index.
> If that line is broken, we have a potential in that index of 130.
> A POTENTIAL RISE OF 88%!
> Please not that the XAU has NOT made a new low!
>
> Now, lets say these shorting guys in Gold loose 20% (like the yen case) on
> their short gold trades (275->330), they still could make perhaps 75%
> on their goldstocks.
> Not a bad deal, or what do you guys think?
> Could THAT be the "conspiracy"
>
> I also found another article that could be of interest at
> http://www.the-privateer.com/gold6.html#latest
> It further explains the connection between gold and interest rates.
>
> Since my success as a trader did not materialize the way I thought, I
> suggest you take this as interesting information only and not as a trade
> recommendation.
> Make your own research on which to make decisions.
>
> ..-------------------------
>
> The following is an explanation on OBV On balance volume, copied from OBV
> interpretation in Metastock, intended for the newer trader/investor.
> It discusses the shorterm aplication of OBV although I think it cold also
> be applied to long term scenarios. (otherwise my case above is very
> doubtful....!)
> :
> On Balance Volume is a running total of volume. It seeks to show if volume
> is flowing into or out of a security. When the security closes higher than
> the previous close, all of the day's volume is considered up-volume. When
> the security closes lower than the previous close, all of the day's volume
> is considered down-volume.
> Joe Granville is the father of OBV and its analysis. We can barely begin
> to explain a simplified version of OBV interpretation here. If you want
> further information on OBV analysis, we recommend that you read his book,
> New Strategy of Daily Stock Market Timing for Maximum Profits (see
> Suggested Reading).
>
> The basic assumption, regarding OBV analysis, is that OBV changes precede
> price changes. The theory is that smart money can be seen flowing into the
> security by a rising OBV. When the public then moves into the security,
> both the security and the OBV will surge ahead.
> If the security's price movement precedes OBV movement, a
> "non-confirmation" is said to have occurred. Non-confirmations can occur
> at bull market tops (when the security rises without, or before, the OBV)
> or at bear market bottoms (when the security falls without, or before, the
> OBV).
>
> The OBV is said to be in a rising trend when each new peak is higher than
> the previous peak and each new trough is higher than the previous trough.
> Likewise, the OBV is in a falling trend when each successive peak is lower
> than the previous peak and each successive trough is lower than the
> previous trough. When the OBV is moving sideways and is not making
> successive highs and lows, it is in a doubtful trend.
> Once a trend is established, it remains in force until it is broken. There
> are two ways in which the OBV trend can be broken. The first occurs when
> the trend changes from a rising trend to a falling trend, or from a falling
> trend to a rising trend.
>
> The second way the OBV trend can be broken is if the trend changes to a
> doubtful trend and remains doubtful for more than three days. Thus, if the
> security changes from a rising trend to a doubtful trend and remains
> doubtful for only two days before changing back to a rising trend, the OBV
> is considered to have always been in a rising trend.
> When the OBV changes to a rising or falling trend, a breakout is said to
> have occurred. Since OBV breakouts normally precede security breakouts,
> investors should buy long on OBV upside breakouts. Likewise, investors
> should sell short when the OBV makes a downside breakout. Positions should
> be held until the trend changes (as explained in the preceding paragraph).
>
> This method of analyzing On Balance Volume is designed for trading
> short-term cycles. According to Granville, investors must act quickly and
> decisively if they wish to profit from short-term OBV analysis.
>
> ------------------------------------------------------------------------
>
> Name: goldstks.gif
> goldstks.gif Type: GIF Image (image/gif)
> Encoding: base64
> Description: goldstks (Paint Shop Pro 5 Image)
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