Bumble

Anyone interested in guessing the price of gold as at 31st Dec 2023? Or is that too far out?

Last year's predictions from Saxo didn't work out all that well.

A summary of this year's predictions is:
1. A fund set up by billionaires will create a trillion dollar project to develop new technologies for energy production.
2. President Macron will resign.
3. Gold will rise to $3000 per ounce and GDX will quadruple.
4. The EU will create its own unified armed forces.
5. A country will ban all meat production by 2030.
6. The UK will hold a referendum to reverse Brexit.
7. Price controls will be introduced to curb inflation.
8. OPEC+, China and India will withdraw from the IMF and create their own international trading currency and reserve asset.
9. Japan will fix the USD/JPY exchange rate at 200 while it overhauls its financial system.
10. OECD countries will clamp down on tax havens.

The big drop in cryptos appears to be fallout from the crash in the FTX token, which is down 80%.

As to a breakout... one person's breakout is another person's resistance. The gold price has now punched through the upper Bollinger band, and this is likely to trigger algorithmic selling.

I think there must be more to it than just employment figures, since these were available at the end of last week. It's also perhaps relevant that cryptos were crushed today: BTC down 12% and ETH down 17%. Maybe there was a panic sell out of crypto and into precious metals, though I'm not sure why. The other factor is the US elections, though the results won't be known for a few days. Sometimes market participants will react to exit polls.

Yes, that's a $650 million dilution, hence the drop in price. Probably a good long-term deal though. All depends on whether they can get value out of it.

This chart compares the cost of some common energy storage solutions (CAES is compressed air). For comparison, a Tesla Megapack currently works out at about $500 per kWh. What charts like this often don't show is that the cost of storing oil, which only requires a steel tank, works out at less than 1 cent per kWh. Astonishing: I had to check the numbers. Storing energy in batteries is about 30,000 times more expensive than storing it as oil. Or, to put it another way, one $2.4 million Tesla Megapack stores 3,900 kWh, which is the same as about two and a quarter barrels of oil, which can be stored for about 35 cents. 

Interestingly, the UK is one of the worst places in the world to try to generate solar power. Just too cloudy. For the benefit of Scottish readers, the sun is that yellow thing that occasionally appears in the sky and hurts your eyes when you gawp at it. 

On 19/07/2022 at 15:20, Bumble said:

 

This diagram is taken from an official report of the Office of the Comptroller of the Currency, which is a bureau within the US Treasury Dept. The figures for Q1 2022 show a sharp increase in the size of precious metals contracts. These are mostly paper contracts and derivatives, and are what banks use to control the price of gold.

According to Alasdair Macleod, the increase in Q1 2022 is due to the rule changes under Basel 3, and is not of major significance.

This shows that Wall Street is constantly expecting inflation to revert to the 2% that we have had since the 1990s.

This diagram is taken from an official report of the Office of the Comptroller of the Currency, which is a bureau within the US Treasury Dept. The figures for Q1 2022 show a sharp increase in the size of precious metals contracts. These are mostly paper contracts and derivatives, and are what banks use to control the price of gold.

Report available here: https://www.bgs.ac.uk/download/uk-criticality-assessment-of-technology-critical-minerals-and-metals/#

This chart flatters gold somewhat, because at the start of the century the dotcom boom was close to its peak.

The Fed curtailing its purchase of US bonds is leading to a major reduction in the liquidity of the bond market. The US government bond market is one of the largest and most liquid in the world, so if it seizes up, the consequences will be serious.