"Heavily Overbought" Gold & Silver Due for a Major Fall

we could be in for a correction... I hope so .. I will have some major duckies in Janruary...

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

Gold may or may not be overbought.
Just a speculator with an opinion

If everyone knew it was for certain going to be $2,000 next October, then everyone would keep buying right now until there was not profit to be made and the price today would rise to $2,000 less carrying costs, a reasonable profit estimate, and transaction costs.

But we need the Prechters of the world to have an opposing view so that there are sellers at today's $1,179 price. It doesn't matter what the price is moving toward so long as you know approximately where and when it will get there. The profit is in the movement, not in the ownership, so when gold finally does top out, those of you who are emotionally involved in ownership will lose what you made from the price movement, and then may even suffer loss of your original investment.

My calculations show that in January, 2010 we will hit an intermediate price of $1,450 and then the price will pull back to $1,250 by mid April, 2010 only to be followed by a final run to a peak in October, 2010 of somewhere between $1,820 and $2,000. Too many people seem to have $2,000 as a goal so I doubt that it will fully reach that price on this run.

After October, 2010 the bull move is over and gold will march down in a fairly straight line move to under $300 by 2015, the bottom of the current deflationary spiral. There are big profits to be made from both the remainder of this bull run and then the price collapse. Robert Prechter will finally be correct and most of the people who are riding the bandwagon now will find out how difficult it is to make money trading in the market place.

Scroll down to the money supply growth rate charts at this site:

http://www.shadowstats.com/alternate_data

It is not the actual money supply, but the rate of change (rate of inflation) that is the important indicator. There was a response in money supply rate of increase to the doubling of the monetary base in the autumn of 2008, but the effect of that doubling is now over. The banks have plenty of reserves, but they are not using them to expand credit. As I type there is a news story on tv talking about the plans of most banks to raise credit card rates and cut limits after the first of the year; more indication of contraction of credit. And since banks have plenty of reserves, the Federal Reserve Bank is impotent to effect money supply by increasing reserves; they could now increase reserves by triple and there would be no noticeable effect.

Also watch the 10 year treasury rate. It is now 3.2% and should take a run to 5.5% by October, 2010 in parallel with the price of gold.

Metal Bid Ask
Gold $1,179.50 $1,180.50 ($1.60)
Silver $18.47 $18.52 ($0.02)
Platinum $1,452.20 $1,462.20 up $13.10
Palladium $360.60 $365.60 ($2.10)

Updated:11/30/2009 5:18:00 PM CST

is that within the next year gold will be at 1500.

It will hover around 1500 until the dollar totally collapses, and then will skyrocket to between 5000 and 8000 an ounce.

I ain't smart, but I know how to listen.

JIM ROGERS

Well, I own gold and I have for a while. How high can it go? I fully expect it to be over a couple thousand dollars an ounce sometime in the next decade—I didn't say the next month, I didn't say the next year, I said the next decade—because paper money around the world is very suspect. But right now everybody's bullish on it, so I don't like to buy things when that's happening. But I'm not selling under any circumstances.

What's behind the runup? Has buying by the central banks changed the equation here? Or is this still a demand story?
Certainly a demand story because, as I said, everybody's printing so much money and people around the world are worried about that. But you also have central banks, which five years ago were selling gold, now buying. So that's a huge shift in the marketplace. Central banks are like lots of other people—they just follow the crowd. There are probably better commodities to buy than gold, but you can't tell that to central banks because they've got gold on the brain.

How much of the runup is being driven by U.S. deficits and the weakening dollar?
A huge amount is about not just U.S. deficits, but all deficits. Deficits are going berserk nearly everywhere. Throughout history, printing money has led to weaker currencies and higher prices for real assets. And there are many, many pessimists about the dollar, including me. So many pessimists that I suspect there's a rally coming. I have no idea why there should be, but things do usually rally when you have this many bears at the same time. I've actually accumulated a few more dollars. I mean, it's not a significant position, but I do own more dollars than I did a month ago. And we'll probably also have a gold correction because there's so many bulls on gold.

http://www.businessweek.com/magazine/content/09_49/b41580117...

Just something to think about...

http://www.mydigitalfc.com/plan/india-plans-buy-more-gold-im...

& Kiyosaki are still buying. I've already established my positions & supplies. If anyone is considering purchasing, now may be the time before it rises anymore.

Sure, it may pull back at times... but for the next several years, it has no where to go but up considering trillions of $$$s floating around.

Gold was going for 940 or so when this thread started. The next day, it gained 20, then it fell to 930 in a couple of days. The rest is history.

By coincidence, I bought only a couple of days after this post went up. I had bought at 660 in 2006, and at 700 in '08, and I was hoping waiting for a pullback . When it fell from 960 to 930, I decided that might be as good as I was going to get, and I pulled the trigger again. Lucky me.

but what if it hits $2200 first? (and the dow hits 16,000)

nobody for sure really knows how high and how low, and the time table...

but I have a small safety net based in precious metals, and while it's nice that it's going up so fast, if it turns around and heads to $700, I'll just buy more.

and I think there are several countries who would do the same ....

which puts us in a dilemma.... what could cause countries who have already witnessed the economic carnage to NOT want to buy $1000/gold or $800/gold, or $700/gold...

fool me once, shame on you ....

get lost! how long are you gonna run this crap. i heard it at 500 750 900 100 1100 now 1200 i cant wait for a pullback i have more toilet paper around 3 million in client accounts and it going into gold my friend like it has on and off for the last 6 years..i hope we do get a correction but its looking like that may not happen for a while.

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Ron Paul Supporter Since 1997
"If people let government decide which foods they eat and medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny."
Thomas Jefferson

Over the next 2-5 years you will need these purchases for survival. Do NOT invest in Gold and Silver. Gold and Silver is your hedge. Do not purchase as an investment. This is for your family. Buy what you can and hold. Time will prove what I am saying.

I am not an investor, economist, broker, investment guru, and all the other people wanting to take your money.

What I am telling you is to buy what you can within your means. Never purchase without being able to buy food and support your family. There are many things going on in this world but just a few pieces of silver may save your life and your family. This is not, Once Again I say Not and investment.

There is going to be an upswing in every investment known to man just to steal the rest of the wealth of this country. If you buy into the recovery you are setting yourself up. Look hard at your actions. Everything is being manipulated. Sooner rather than later will all come to an end. It will happen before the fed is audited. The elitist will take theirs before you get yours.

An Oath once taken must live for Eternity!

In 1913 gold was 20.00 an oz. Need I say more.

lol... gold hits an embarassing 1194.00... prechter is wrong on gold/silver... India and other nations buying TONNS! what do they know that we don't? death of the dollar?

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

http://financialsense.com/fsu/editorials/trendsman/2009/1120...
--------------
Pete: I've always wondered, what's the devil look like?
Ulysses Everett McGill: Well, there are all manner of lesser imps and demons, Pete, but the great Satan hisself is

1st India, then Vietnam, now Russia.. why are all these countries buying huge amounts of gold at these prices? what do they know that the ignorants like jeff23456 in the USA don't know?

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

so funny... jeff34560987 said Jim Sinclair should retire.. Jim Sinclair saifd gold will be at 1200.00 an ounce on 1-1-2011.. Jeff I don't know what you do for a living.. but if you have clients and work as a stock broker, I bet you have some very mad clients right now.

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

muuuuwaaaaahhahahahahahahahhhhaaaaaaaaa........
Jeff... please make another prediction like this one.. maybe the price of gold will go up another 245.00 an ounce!

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.