this is probably a tad early, like your other calls

So many factors working against gold right now... especialy weak physical demand.

Your claim about ETF sales is too narrow. In the wake of the March 2008 top, the GLD ETF shed 83 tonnes of gold (12.5% of the total holdings) in only about six week's time. At this point, anything is possible.

"Contrary to what you might hear in the media about the gold �trade� being �crowded� -- or about �hot money" -- the truth is that gold is hugely under-owned."

With dullards like you being the ones touting it, there is no doubt why gold is "under-owned." What kind of a silly-@ss word is under-owned anyway? I guess you're under-literate.

"In fact, according to the World Gold Council, if global pension funds decided to increase their exposure to gold by just 1.2%, it would require more than 44,000 tonnes -- or roughly 27% of all the gold that's ever come out of the ground."

What happens if they decrease their exposure by 1.2%?

under owned is the opposite of over owned, kinda like too many idiots over owned houses

duh

They probably sold futures, not physical. I doubt that they own any physical gold anyway. They day of reckoning may hit those that own these proxy companies. You want gold, buy it and store it yourself. If you don't have physical, you don't have any gold.

you obviouly have no clue about what you are talking about do you?

let's try it this way, if they own 0 they can't go less than 0, but they can add 1.2% very easily

this ain't rocket science dude

sheesh, are you falling pray to the sellers of bullion saying the GLD owns no gold...pulez

GLD owns physical gold that is stored in London. Now you can say it's a lie, but then we would have to question whether any bank really has any money, whether Google sells any ads or if you even exist...you can only take this conspiracy stuff so far

thanks for your post, now i KNOW gold is going higher!

READ what Lewis said "1 day sales of 1% +" not what it might sell over 6 weeks

2 things to note about gold:

1. ask your friends or anyone you know if they have any gold exposure...odds are they don't, so gold is way under-owned

2. gold has posted a postitve annual return every single year since 2001, including 2008 when everything else COLLAPSED

3. check out this link showing gold's outperfomance since 2002 of almost all indicies

http://stockcharts.com/charts/performance/perf.html?GLD,SPY,DIA,TLT,QQQQ,USO

Scott, you must have been sleeping in class all year long, as da perfesser has droned on ad nauseum, "Gold can only go up; it's good for inflation; it's good for deflation; it's good for rheumatism, gout, cararacts, whatever ails ye; it's good in recession, depression, and economy's ascencion; it's good for rubes, boobs, and it's as cool as ice cubes; it's more handy than candy; lancie thinks it's just dandy.
It's shiny, it's yellow, it'll make you a very rich fellow.

All we need is just a smattering of Armageddon, and won't you be happy to trade your bits of shiny metal to Mad Max for some petrol, or to Heidi Fleish for some, um , strawberries.
I think it was Daddy Warbucks Buffett who said, " Gold? You dig it up, melt it down, and then bury it somewhere else and pay men to guard it. It has no utility. "
Ok, no utility but it does have value, and to own a bit as a hedge, fine. But to be shackled to this one idea, and scribe article after boring article, up or down or all-around, is incomprehensible to me.

Now personally I am a hardcore contrarian and the only way I want to own gold is physically in the form of national one-ounce coins in my own immediate physical possession. While I think GLD is a great idea I have never owned any and probably never will. For me gold is a physical asset I control and the ultimate insurance policy against the always possible (but quite improbable) total systemic meltdown. In such a doomsday scenario all paper gold will be useless or inaccessible at best and physical will be all that matters.

I briefly examined the prospectus (very interesting reading). The trust covers expenses by sale of its gold and is a declining balance trust. The number of ounces of gold in account decreases over time; a share equals a declining amount of gold over time. Value is preserved only if the market price of gold increases over time at a rate greater than expenses. (See page 32 of the prospectus.)

It's not a perfect alternative to physical ownership, but provides a means short of the futures market of exploiting an expected rise in price.

GLD has a future LTCM (Long Term Capital Management) debacle written all over it (though the prospectus terms clearly indemnify them from all liability) precisely because its value is completely dependent upon the rationally expected value to the spot price of bullion holding steady (and in a real code red emergency crisis they would [possibly] exactly inversely correlate, i.e. the etf price would approach zero [if there were no outstanding shorts -- and even if there were outstanding shorts a piece of paper tracking gold is a piece of paper tracking gold, better to sell it and buy some real gold] while the spot price of gold bullion would go through the roof as the etf price severely lagged [even better for the government short sellers]).

I agree that owning some real gold (coins, for example) is prudent. I do. But to have a large position in something that can get lost, stolen, misplaced is never wise.

As for GLD being a future LTCM - huh? LTCM was an overleveraged hedge fund. Could there be problems with GLD? Sure there could, but if you go down that path you only need to own gold coins, guns and ammo, otherewise you have to ask if NEM really has any gold to mine, if AMZN really has any sales or if Obama is really a US citizen or any conspiracy theory nonsense.

Again, the simple exercise is to find some other asset class that has done better this decade. If so, buy it and short as much gold as you can. Lewis manages real money...you disagree with his premise, don't waste time here with this nonsense, fade him and get nice and short!

GLD's holdings suffered MANY 1.0%+ down days back during the severe correction of 2008. So, my point remains valid and correct.

Enjoy the trip down to $850 and $800 (maybe lower). There should be plenty of whining along the way from the bugs, just like every other time gold has corrected by 10% or more during this bull market.

Bradley, fear not, unlike one-note lancie, Minyanville is packed with excellent bloggers who are witty, erudite, and actual analysts. Here is today's take on gold by James Kostohyrz:

6. Due to its perceived value as a safe haven, gold may hold $850 to $1,000 for a while with intermittent rallies in the midst of the global financial crisis. However, gold will eventually suffer a major decline that will take it to $700 -- ore at least (and quite possibly) to $500 or below

I myself couldn't care less about gold, I just like a balanced view and articles that are something other than some screaming shill crying, " BUY GOLD" every freakin week, be it up, down, or sideways.

If u will remember, when stocks crashed in Oct 2008, at the time of Lehman, everything plunged.....

The Indices, oil, commodities AND Gold.

As we all know, the Dow is now headed lower, and job numbers and the like are still dismal; there is the likelihood there will be a run on the dollar someday due to the HUGE monetisation of debt. This could be a fallout of many variables, one being failures in T-Bill auctions; so when panic occurs, it is then that gold will start to rise; we have way to go.

"For the next two years, deflationary pressure is going to be dominant, and it is going to become a time bomb down the line if and when we keep monetizing large deficits. It may be too soon to hedge with gold," according to Roubini

"Unless we have high inflation, or...other risks like depression, gold looks toppy," ~
Roubini.

Genuine deflation is a sustained contraction in the total supply of money and credit, NOT a fall in the general price level

It's actually more accurate to say that gold is now an effective hedge against the loss of confidence in a currency sometimes caused by inflation or in times of panic.

Tim,
I'm not knocking gold as an investment. I bought mine in 1999 at $250.00. Bought Seabridge Gold @ $2.75, Eldorado Gold @ $3.00, Etc. I'm still long on gold until it passes $6,000.00/oz, then I'm moving into bonds that will be yielding 25% or more to retire. Been through this cycle once before in 1980 and I'm here to ride this out again.
With QE going strong globally it is inevitable that there will be inflation not deflation even with pundits talking that there isn't any money velocity. They just need to look at Germany 1923. There was plenty of money velocity and no economic activity. You could buy food with gold, not stock certificates. I don't trust the Government and the rest of those banksters. Look how the US Gov.screwed the Hunt Brothers. (don't give me the krap about how THEY tried to corner the silver market, until you read the what the CRIMEX did with the rules) A depression! I just wonder who these clowns are that call themselves economists. The USD will be a$$ wipe within 3 years, then will become supported by a gold certificate ratio to pin some value to it
Down to 72, 62, then 52 or less as the pendulum effect takes place. Gold could briefly touch $10K/oz in all the panic. USD as the reserve currency is ending as I pen this. Money is headed to commodities which are all priced in USD. China is unloading the funny money for all kinds of commodities. Commodities are useful dollars aren't worth anything.

Don't want to risk investing in the market, buy non perishable food. That will always be worth something and you can eat it too. Keep a full gas can at home incase you have to run from town, keep drinking water as well. Civil unrest will follow. Take your stock certificates with you to light the BBQ with. All financial insitutions will be closed due to emergency Gov measures or until martial law is lifted. Oh and keep some cash on hand in case that's woth anything, use it for the BBQ if not, or trade USD for GLD certificates. Both come on really nice paper.
Got gold?

I realise it aint rocket science, but someone mentioned this exotic new way of trading to me the other day which I still can't quite figure out...he called it "shorting". Well anyway, apparently it lets you hold a negative position!!! Imagine that.

But clearly only a fool would ever think of doing that with gold since we all know it can only ever go up