Alf Field: Sydney Gold Symposium keynote speech

[pmbug]

...
Having locked ourselves into a big position in gold shares, we needed to have some idea of how the gold price might perform and how high it might rise. We ran into the conundrum that has confounded fundamental analysts since 1971. How do you value something that has no utility value, no earnings or net asset value, does not spoil or corrode and is not used up?

Other commodities such as copper, soya beans and corn etc., are priced using a combination of demand, supply and stocks. If demand exceeds supply, stocks diminish, shortages develop, prices rise and new production comes on stream. Eventually supply exceeds demand, stocks build up, prices decline and marginal producers go out of business. The cycle then repeats itself. Other commodities are produced for consumption while gold is accumulated.

Consequently large stocks of gold exist in official hands as central bank reserves. There are also large stocks of gold in private ownership, in vaults around the world, in homes, buried in gardens, in coins and gold jewelry. New mine production of gold is tiny compared to available stocks. In 1971 official holdings of gold were about 37,000t. Cumulative world gold production throughout history up to 1971 was estimated to be about 90,000t, so investors/hoarders must have owned at least as much as the official holdings. In 1971 world gold production was a mere 1,450t, or less than 2% of the estimated amount of gold held in the world at that time.

The fundamental conclusion was that the owners of the large stocks of gold would determine the future of the gold price. If they became net sellers, the gold price would decline. If they became net buyers, the gold price would rise. There were reasons to believe that they would be net buyers. The world had been launched into an untried experiment where all countries were subject to Government fiat currencies and, in addition, there was a latent group of buyers in the wings. Americans had been prevented by law from holding gold since 1933. With the collapse of the gold exchange standard on 15 August 1971, there was no reason for this prohibition to continue. On 31 December 1974 (another Moses generation period from 1933) the largest and wealthiest nation on Earth allowed its citizens to buy and own gold.

The obvious conclusion was that it was necessary to resort to technical analysis to find a way to predict movements in the gold price. I experimented with a variety of technical systems and then got lucky. I discovered that the Elliott Wave Theory (EW) gave superb results in predicting the gold price. I couldn’t get the same great results using EW in other commodities or markets. EW is a complicated system with many difficult rules, but I will try and explain it in simple terms.
...

Much, much more: http://www.jsmineset.com/2011/11/14...d-symposium-14-15-november-2011-by-alf-field/

The author's current forecast:

"Once this correction has been completed, Intermediate Wave III of Major THREE will be underway. This should be the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way."

 

[DSAbug]

You might want to copy and paste the whole article because Sinclair changes the direct links when articles get archived.

 

[pmbug]

I'll fix the link if it changes. Copying the entire article would go beyond fair use and incur copyright issues.

 

[DSAbug]

I'll fix the link if it changes. Copying the entire article would go beyond fair use and incur copyright issues.

Fair enough..

On topic..

Alf Fields has a pretty good track record and his pieces and "opinions" aren't updated very often because they are intermediate term in nature.

He's a 5 star analyst when it comes to gold as far as i'm concerned.. If this pans out, there is going to be a massive redistribution of wealth in the market place. In order for gold to have a move of that magnitude, the world is going to be much more screwed up than it currently is.

 

[KMS]

If this pans out, there is going to be a massive redistribution of wealth in the market place. In order for gold to have a move of that magnitude, the world is going to be much more screwed up than it currently is.

Seeing a $4,500 number makes me wonder what the hell is going to happen as well.

 

[DSAbug]

Seeing a $4,500 number makes me wonder what the hell is going to happen as well.

Obviously it's going to be a bubble at some point so it's entirely possible that not much will change and we will be in the bubble phase by then. Inflation would have to be red hot and our bond market would have to be imploding. IE. interest rates over 10% for us to get that kind of move in gold IMO.

Will it be a bubble at $4,500? That remains to be seen. We will have to watch how sentiment is. If people on average have 30-40% of their wealth allocated to gold and silver then we will know we are in the mania phase imo..

 

[rblong2us]

I was knocked out by the Alf Field speech.

Possibly the best set of words ive seen since FOFOA finally convinced me that inflation would win.

It just 'felt right' which is about as unscientific as it gets but generally works for me.
But then Alf also responds to less than scientific sources .........

and a kind of sadness that this is supposedly deffo his last public pronouncement.

I have saved it in full.

Thank you PMB