Buying Gold Companies

[Guest]

imported post

Keep seeing all these "experts" saying "buy gold". Any comments? Four they mention are GFI, HL, ASA, and RIC.

 

[Timer]

imported post

A lot of people see the news and think we're due for 911 the second. For example, recent events on NWA flight 327 and other flights are convincing some people that terrorists are doing research (dry runs if you will). They are testing security for weak points and doing dress rehersals.

If I were to buy gold now, it would be as a hedge, betting that we will get another 911. If we get another 911 or if the 'heard' thinks we're going to get another one, gold will jump until things calm down.

Do the 'experts' give any reasons for buying gold m_m?

 

[tsptalk]

imported post

Agree. Gold is a only good as a hedge right now. The chart looks pretty bad. The market indices should do much better over the next six months in my opinion.

 

[Guest]

imported post

Timer wrote:

A lot of people see the news and think we're due for 911 the second. For example, recent events on NWA flight 327 and other flights are convincing some people that terrorists are doing research (dry runs if you will). They are testing security for weak points and doing dress rehersals.

If I were to buy gold now, it would be as a hedge, betting that we will get another 911. If we get another 911 or if the 'heard' thinks we're going to get another one, gold will jump until things calm down.

Do the 'experts' give any reasons for buying gold m_m?

Some think the markets are going to go down farther and that the real estate market is gonna crash. Gloom and doom economics I reckon.:s

 

[Timer]

imported post

Some think the markets are going to go down farther and that the real estate market is gonna crash. Gloom and doom economics I reckon.:s

Not to be argumentative but that level of pessimism sound like a buy signal to me. My area of expertise is in the construction area. The price of steel and lumber have taken big jumps in recent months. When the cost of raw materials for building go up,thevalue of buildings goes up because they cost more to replace (remember the run up in the 70's?).

It will be interesting to see what the markets do this fall. One one hand there is the uncertainty (terrorists, election suspense) and Sep-Oct are historically not stong months. But on the other hand, my sense is that stocks have been so flat through most of 2004 that money will come into stocks because we've had months of consolidation and (my sense) the time is ripe to make some money in stocks.

 

[SystemTrader]

imported post

If anyone is interested, I can post the signals of my XAU (gold stock index) timing system here. Like my TSP system, I'll have to stop once I have my paid membership site opened. After slightly underperforming the XAUin 2002 and 2003 (when the XAU gained 40%+),the system has done very well this year. It's up around 30%, versus a negative return for buying/holding the XAU. Overall, it has vastly outperformed the XAU since the late 1980s, when testing began. To be fair, it probably won't outperform the XAU by as much if we're really in a new gold bull market, but it should reduce drawdowns.

Also, the system described in the article belowis interesting. It very rarely gives "buy" signals, but when it does, it's had phenomenal results. Man, I wish I'd known about it in the early fall of 2000! Note that the article was originally written in 1999, well before the new "gold rush" began.

http://www.hussmanfunds.net/html/gold.htm

One last note: some have observed that most of the upward move in gold/gold stocks isdirectly related to the dollar's decline. If you adjustgold for currencies worldwide, it hasn't increased that much.So will we have a true worldwide gold bull market ? I have no idea, but I'll keep watching the XAU and the new gold ETF (which mimics gold bullion) like a hawk!

John

 

[pyriel]

imported post

Timer wrote:

Some think the markets are going to go down farther and that the real estate market is gonna crash. Gloom and doom economics I reckon.:s

Not to be argumentative but that level of pessimism sound like a buy signal to me. My area of expertise is in the construction area. The price of steel and lumber have taken big jumps in recent months. When the cost of raw materials for building go up,thevalue of buildings goes up because they cost more to replace (remember the run up in the 70's?).

I have to agree with you Timer. I'm into real estate and all the signs we'veseen is pointing upward. I just bought a property thatwould have cost 10k-15k less a year or two ago. Trend is definitelypointing upward.

 

[SystemTrader]

imported post

My gold timing model is "on," so I made a few gold-related purchases today. The XAU (gold stock index) was at $95.65 at the close, after a big drop. I'll post again when I sell.The XAU has been in a tight trading range from 95-100 for the last month or so. A clean break through either of those numbers may indicate a new trend, though I think it may also find support in the low 90s and have another chance to "bounce"up.

John

 

[SystemTrader]

imported post

At Friday's close,my gold timing model gavea sell signal for the XAU (gold stock index...^XAU if you look it up at Yahoo). For tracking purposes, this means I'd "sell" the XAU at Monday's closing price. As of Friday's close, the XAU was at 98.68. So right now,there's a small gain for the buy signal (below) I gave on 4 January--about 3.37%. Note: you can't "buy" the XAU, though you can trade XAU options. The XAU is a good proxy for gold stock mutual funds, though.

The XAU is quite volatile, so it could swingup or down a good biton Monday. I'll give an update on the buy/sell signal's finalgain (or loss) for the XAU and several popular gold mutual funds after Monday's close.

John



SystemTrader wrote:

My gold timing model is "on," so I made a few gold-related purchases today. The XAU (gold stock index) was at $95.65 at the close, after a big drop. I'll post again when I sell.The XAU has been in a tight trading range from 95-100 for the last month or so. A clean break through either of those numbers may indicate a new trend, though I think it may also find support in the low 90s and have another chance to "bounce"up.

John

 

[SystemTrader]

imported post

Oops...I never gave an update on my last XAUtiming signal. (The XAU gold mining index -- ^XAU on Yahoo -- is a good proxy forgold mutual funds.)

Buy:3 Jan at 95.65

Sell: 28 Feb at 98.97

Gain/Loss: +3.47%.

Not great, but buying & holding the XAU index during 2005would result in a -5.4% loss so far.

I got another "buy" signal recently...but I didn't realize it until today. :shock:

The signaloccured last weekend, which meansI should've"bought" theXAU at the3/28 closing price of92.59. The XAU has now moved to 94.01, but I'm still going to purchase some gold fund shares at Monday's closing price, whatever that is. I'll send an update when there's a sell signal...and I won't let this (late signal) happen again! :s

John

 

[SystemTrader]

imported post

Per my post over the weekend, I bought gold (Rydex Precious Metals Fund) at the close todaysince mygold fund system gave abuy signal. I'll post the sell signal when it occurs and resulting profit/loss.

Bought at 4/4 close:

Rydex Precious Metals Fund (RYPMX) at $35.00

Also, the 4/4 closing value of theGold & Silver Sector Index, XAU,was 92.46



ST

 

[SystemTrader]

imported post

The Gold Stock Timing System gave a sell signal over the weekend. This means to sell gold fund positions at the close of Monday, 25 April. Unfortunately, this trade will close with a loss, unless gold stocks have an incredible rally tomorrow. I'll update the results of the signal for the Gold & Silver Index (XAU) and the Rydex Precious Metals Fund tomorrow evening after the market's close. It's been a tough year for gold stocks...

John

 

[SystemTrader]

imported post

Results from selling at 4/25 close:

Rydex Precious Metals Fund (RYPMX) sold at $33.56 -4.11% loss

XAU sold at 88.58 -4.19% loss

Well, I was certainly hoping for a gain instead. There is a good angle on this, though. If you combine thiswith the small gain from the gold timing system in Jan-Feb,and assume your funds wereearning interest in a money market the rest of the time,you'd be about break even (or slightly below) right now. Ifyou insteadbought and held the Rydex Precious MetalsFund since the beginning of the year, you'd have a loss of about 12% right now.

ST





SystemTrader wrote:

Per my post over the weekend, I bought gold (Rydex Precious Metals Fund) at the close todaysince mygold fund system gave abuy signal. I'll post the sell signal when it occurs and resulting profit/loss.

Bought at 4/4 close:

Rydex Precious Metals Fund (RYPMX) at $35.00

Also, the 4/4 closing value of theGold & Silver Sector Index, XAU,was 92.46



ST

 

[SystemTrader]

imported post

Another buy signal for gold/precious metals funds at today's close. I'll update the prices this evening.



ST

 

[SystemTrader]

imported post

Following up from the earlier signal:

Bought at 5/10 close:

Rydex Precious Metals Fund (RYPMX) at $31.75

The 5/10 closing value of theGold & Silver Sector Index (^XAU at Yahoo Finance)was 84.17


ST



SystemTrader wrote:

Another buy signal for gold/precious metals funds at today's close. I'll update the prices this evening.



ST

 

[The_Technician]

imported post

interesting gold commodity article.....like all commodities...they are high.....

http://money.cnn.com/2005/06/24/markets/gold_inflation/index.htm

:dude:

 

[SystemTrader]

imported post

Update: the gold fund buy signal from 10 May is still "on." As of yesterday's close:

Rydex Precious Metals Fund (RYPMX)was $36.05, up 13.54% from the buy signal

TheGold & Silver Sector Index (use ^XAU at Yahoo Finance)was 95.77, up 13.78% from the buy signal.

The XAU is downtoday.Gold tends to havean inverse relationship withthe U.S. Dollar, and the USDgained against other currencies after the Payroll report this morning. Overall, though, the gold timing model is having a good year, beating the stock timing model pretty soundlyso far.

If there's any interest and if Tom and/or the moderators are OK with it, I'll keep posting gold fund timing signals here andcan also add a switching system designed for the Fidelity Select Funds. The Fidelity model is also having a good year, up almost 17% so far. It has more diversification than the TSP, as you can invest inenergy funds and othersectors with a more specific focus. It's designed to only switch funds at the 30 day point, sinceFidelitypenalizes you (via an extra fee) for switching more often.

ST



SystemTrader wrote:

Following up from the earlier signal:

Bought at 5/10 close:

Rydex Precious Metals Fund (RYPMX) at $31.75

The 5/10 closing value of theGold & Silver Sector Index (^XAU at Yahoo Finance)was 84.17


ST



SystemTrader wrote:

Another buy signal for gold/precious metals funds at today's close. I'll update the prices this evening.



ST