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I'm calling it - we're near a low.

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Not applicable
Thanks faure, that sort of makes sense. I am aware that gold forms a very small proportion of our forex earnings, which is why I was so puzzled about this apparent correlation betw the rand and gold.
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Not applicable
CE, part of that equation is purely because the dollar gold price is measured in, wait for it, dollars. Clearly, if one goes up, the other MUSt come down.
The only real way of measuring the 'real' worth of either commodity(?) in this case is to use indices. ie. dollar vs a range of currencies, or gold costed in a range of currencies. This exercise gets hairy, very quickly . . .
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CE
Super Contributor
AvS - The word "MUST" in financial markets, wait for it......when one say this you know they have a very simplistic almost infantile understanding of how markets work. The market consists of millions of people each making their own decisions and an infinite number of outcomes are possible which means that literally anything can happen! Each market event is totally unique and while influenced by previous price action is not dependent on it.
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Asher
Regular Contributor
I understand your point CE, but surely a weakness in the rand and gold strength MUST be good for a resource heavy TOP40. yeah I know - infantile
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USERX
Contributor
Faure
Hypothetical question: My $/Zar TA indicates a mayor weakening of the rand very soon. Say from tomorrow within the next two weeks. If this should happen, how will you at that time, with the benefit of hindsight, explain it. I can see no fundamental reasons for it now. Maybe it will not be as dramatic as I picture it now, but my charts say that we are looking at a weakening rand all the way from here to Aug and R10.80 to the $ by then. I am not predicting, I see the possibility in the charts and am wondering what type of events is in the air that could cause it?
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CE
Super Contributor
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Not applicable
Maybe I didn't make my point very clearly. I didn't mean that the VALUE, per sé, of gold increase as the USD decreases - or vice versa; what I did mean was that if you use the dollar as a yardstick for the value of gold, then surely that number MUST change purely because the yardstick itself changes. It's like using a rubber band as a measuring tape.
Which is why I referred to the use of indices as a way of getting a better idea of what each commodity is doing.
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Not applicable
Ux, if I may butt in here . . .
Looking at a 2-yr weekly chart, fwiw, I see the USD/Zar in an elliot consolidation pattern right now, and we're on top of a 38.2% retracement of the 5th wave. The next few months I see as messy and volatile. Or you could say I'm playing safe . . . :-)
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CE
Super Contributor
AvS - once again you obfuscate the facts by of "amending" your statement . unfortunately you make even less sense this time round. The value of anything is always relative to something else .you cannot get away from this so "per se" "the value" of gold does decrease and increase as the dollar price increases and decreases.and this is still the predominant or most conscious way of determining the value of gold. The point you were trying to make re the inverse relationship between gold and the USD is a separate point and no longer holds and we now use the dollar index as a way of determining real value and offsetting the inherent value changes of the dollar as determined by currency markets.
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CE
Super Contributor
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Not applicable
are u able to access the spot gold price on the streamer
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faure
Frequent Contributor
I'm looking for a weaker rand and stronger gold price in the future. I don't attach much value to the reasons given by the media. The rand could fall because we have a pretty poor trade balance right now. Infact if the rand were to drop hard the trade deficit could well be the number one scapegoat besides Mugabe, or something stupid being said by the government. What's really telling is that SARB is setting up for a rate hike and the rand got pretty weak in the last few days.
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SimonPB
Valued Contributor
rim, no. You can watch GLD as a poxy.
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USERX
Contributor
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Not applicable
Thanks CE, nice link. Stuck right between figs 4 & 5 of that article is this statement:
" The gold bull market is going to occur in all currencies due to reasons mentioned above. I think the future currencies will be prices to the value of gold rather than fixed to the USD price."
Which is exactly what I've been trying to say all along.

Maybe I'm just splitting hairs, but one cannot say that just because gold is trading at say $600 on monday, and $601 on tuesday, that its real, intrinsic value has increased overnight. Such a perceived increase might be due purely to a change in the yardstick, (or a movement of the 'post'in your article) which in this case would be the dollar. If however, the price of gold increases across all currencies, THEN it's intrinic value is obviously higher.
Of course the above also means that if the intrinsic value of gold remains the same, and the dollar weakens, then there must be a perceived increase in the dollar gold price. Does this make sense to anyone at all out there??
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dilligaff
Super Contributor
Simon, a poxy Freudian sip of knote:)
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