Gold Price - Where is it heading?

[Mr Z]

The DX is one time framing it to the recent lows....This will throw the cat amongst the pigeons if it breaks down!

CanOz

I think it is close to finding some good support. JMO. Still looking for USDX ~85 sometime soon. Maybe it will not happen but I am a little leery of putting a fork in it just yet.

 

[CanOz]

I think it is close to finding some good support. JMO. Still looking for USDX ~85 sometime soon. Maybe it will not happen but I am a little leery of putting a fork in it just yet.

Yeah, it looks like a rollover, but every dip on the intraday get bought... Glad i'm not trading it, just use it as an indi...

 

[Mr Z]

Yeah, it looks like a rollover, but every dip on the intraday get bought... Glad i'm not trading it, just use it as an indi...

In my experience the damn thing never quite dies when it looks right or rallies when it looks right. It's like a ham actor, drags everything out as long as possible. Games are played in this market, suck in and squeeze seems to be the main one!

 

[Uncle Festivus]

In some instance there apears to be an element of denial that the gold price was forming a bubble and now the bubble has well and truly burst.

In some instance there apears to be an element of denial that US equities were forming a bubble and ......outcome unknown, for now?

Several regulars have stated for a while that they have been bearish, even naming targets - I had 1500 & 1200 down side possibilities - can't be bothered finding the posts....

There's more to this than what the mainstream 'press' are espousing.....a bit of Sushi?

Oh look, CME have just announced that margins are going up 20% - absolutely no co-incidence at all?

 

[CanOz]

In some instance there apears to be an element of denial that US equities were forming a bubble and ......outcome unknown, for now?

Several regulars have stated for a while that they have been bearish, even naming targets - I had 1500 & 1200 down side possibilities - can't be bothered finding the posts....

There's more to this than what the mainstream 'press' are espousing.....a bit of Sushi?

Oh look, CME have just announced that margins are going up 20% - absolutely no co-incidence at all?

I don't see any notice on the CME website

 

[CanOz]

The DX has just made fresh lows, GC 06-13 has closed the gap with 2000 contracts over a 5 min candle.

The gap is still in play, now it either reverses, accelerates through or brackets here, accepting "value"....

CanOz

We've rotated off the low of the GAP, 1351 looks like its in for a test, then maybe the O/N low

 

[explod]

I don't see any notice on the CME website

Images are not displayed. Display images below - Always display images from bix@roadtoroota.com







The CME is raising margin requirements on silver close to 20%...right on CUE!




CME Group Raises Performance Bonds for Precious Metals


http://www.kitco.com/reports/KitcoNews20130415_CME.html

 

[sinner]

Guysguysguys!

Firstly, COMEX GC contracts can be contractually settled in shares in GLD.

GLD is not a retail vehicle. It is a bullion bank "coat checking room".

Secondly, all the contributions to this thread are the same as always, as chops said. Gold < 5SMA, traders come out of the woodwork to gloat. Gold > 5SMA, bugs come out to gloat.

Meanwhile, net producers continue to bid for gold flow with their production surplus, paying absolutely no attention to those who (read, traders and bugs and anyone else who think dollars bid for gold) believe the USD is at the bottom of Exters pyramid.

Enjoy.

 

[cynic]

Bubble talk, love it... and how do you actually come to that conclusion? Just what is it about this that makes you think it is a bubble and that it has burst? Do tell!

Mr Z,

A loaded question?!!!

Has the recent price action been a little too dull, given rise to boredom and left you itching for a tennis match?

P.S. Much as I enjoy a good lynching, I've previously experienced you as more forthcoming when sharing your knowledge.

 

[nulla nulla]

Bubble talk, love it... and how do you actually come to that conclusion? Just what is it about this that makes you think it is a bubble and that it has burst? Do tell!

I am buy a humble trader m'lord but over the last 10 years gold has risen like the dough set out overnight for the morning bake, from US$400 per ounce to US$1,900 per ounce then tracked sideways between US$1,600 per ounce and US$1,800 ounce then "pop" it took just four days to drop more than 10% to below US$1,400.00 per ounce. Call it a "correction" or call it "manipulation", call it what you like...but the bubble definitely burst.



The growth since the onset of the GFC has seen the gold price move from US$800 per ounce to US$1,900 per ounce. Sure currencies like the US$ have been devalued by Quantative Easing (QE) alongside the Euro, the Pound and lately the Yen, so by default the value of Gold should rise. However the market is never wrong and it looks likes like the market has decided that gold needed a correction.

In some instance there apears to be an element of denial that US equities were forming a bubble and ......outcome unknown, for now?

Personaly I don't think anyone can argue with that. Some journo's have pointed out that the Dow Jones is not made up of the same stocks as it was pre GFC but It doesn't really make any difference to the fact that their market is inflated like a bubble. Housing, employment and consumer confidence/spending is all negative so what is the basis of the market exuberance? Outcome definitely unknown for now and personally I would not be investing in any long term holds.

I'm surprised that non of the "International Traders" in this forum have been talking about the outcome of their ventures (if any) into shorting gold (?) in this thread. And I am not gloating or trolling for an argument, simply making observations.

 

[explod]

When the price of physical gold in the hand is becoming harder by the day to purchase and take possession of, how can anyone say that the real market is down.

The only bubble was the paper, currently about 100 to 1 gold and over 200 to 1 silver.

Some of the bigger boys began to want delivery of physical and some of the very bigger boys could/would not deliver so interestingly we saw the biggest crash in the paper game ever witnessed.

A rumour has it that JPM relinquished shorts and are going long. It is simply how the big money is made.

 

[Trembling Hand]

In some instance there apears to be an element of denial that US equities were forming a bubble and ......outcome unknown, for now?

Several regulars have stated for a while that they have been bearish, even naming targets - I had 1500 & 1200 down side possibilities - can't be bothered finding the posts....

There's more to this than what the mainstream 'press' are espousing.....a bit of Sushi?

Oh look, CME have just announced that margins are going up 20% - absolutely no co-incidence at all?

I love it when you guys BS on about margins being lifted like its confirmation of a conspiracy.

 

[Mr Z]

I am buy a humble trader m'lord but over the last 10 years gold has risen like the dough set out overnight for the morning bake, from US$400 per ounce to US$1,900 per ounce then tracked sideways between US$1,600 per ounce and US$1,800 ounce then "pop" it took just four days to drop more than 10% to below US$1,400.00 per ounce. Call it a "correction" or call it "manipulation", call it what you like...but the bubble definitely burst.

There you go again, a bubble has certain dynamics NONE of which exist in gold YET. If this where a stock it would be considered a normal correction, given a bull run and sound fundamentals. So why are you calling it a bubble? What specifically makes it a bubble? All you are citing is a price run up, that is by no means defines a bubble. Are you aware that cost have risen to the point that marginal gold production is @ around $1500 oz? What is that? A bubble in costs?

I love bubble talk, everybody spouts it yet so few have any real definition of one!

The market is constantly wrong! If it where not then opportunity would never exist, if it where not then bubbles would never happen.... seriously, you can't have that both ways, after all you are implying that the market was wrong and is now correct simply because it aligns with your view!

 

[Mr Z]

I love it when you guys BS on about margins being lifted like its confirmation of a conspiracy.

Goldbugs always struggle with that one, they don't understand why volatility would lead to a greater margin requirement, I have tried to explain in the wilds of goldbug forum land but they tend to nail you to a cross real quick! I guess it is simply because mostly they have never used leverage. It is funny that something as predictable as the sun rising angers them quite as much as it does.

Que Sera

 

[Mr Z]

Mr Z,

A loaded question?!!!

Has the recent price action been a little too dull, given rise to boredom and left you itching for a tennis match?

P.S. Much as I enjoy a good lynching, I've previously experienced you as more forthcoming when sharing your knowledge.

I'm a bubbleist, I admit it.... the media as abused the term to the point of it meaning "price rise", now everyone misuses it, makes me a little punchy

 

[nulla nulla]

There you go again, a bubble has certain dynamics NONE of which exist in gold YET. If this where a stock it would be considered a normal correction, given a bull run and sound fundamentals. So why are you calling it a bubble? What specifically makes it a bubble? All you are citing is a price run up, that is by no means defines a bubble. Are you aware that cost have risen to the point that marginal gold production is @ around $1500 oz? What is that? A bubble in costs?

I love bubble talk, everybody spouts it yet so few have any real definition of one!

The market is constantly wrong! If it where not then opportunity would never exist, if it where not then bubbles would never happen.... seriously, you can't have that both ways, after all you are implying that the market was wrong and is now correct simply because it aligns with your view!

Costs: Gold mining costs are not US$1,500 per ounce. In some mines the cost of extracting gold may be as high as US$1,600 per ounce and in others it can be significantly lower. The reality is, mines where the gold is expensive to extract are only brought back into production when gold prices are high enough for the miner to make a profit.

The market is never wrong, it is in a constant flux. The market is the market and what the market is, is the market. It is never wrong, it is the market. If you feel it is wrong then you have probably misjudged the market. Nothing personal.

My views: I don't have a view on gold. I don't trade it. I can only observe it from day to day as to what direction the market is taking it. Irrational exuberance drives gold up (as it does any other stock) and when the oportunity occurs other market factors come into play and drive it down again. Gold has come off the peak of US$1.900+ to sub US$1,400. That is a drop of over 26%. If property values in Australia fell by 26% we would consider that the property bubble had burst.

Not quite sure why we are splitting hairs here. Maybe gold will bounce again and continue the climb back toward the prophesised US$2,000.00 per ounce.

 

[FlyingFox]

Costs: Gold mining costs are not US$1,500 per ounce. In some mines the cost of extracting gold may be as high as US$1,600 per ounce and in others it can be significantly lower. The reality is, mines where the gold is expensive to extract are only brought back into production when gold prices are high enough for the miner to make a profit.

The market is never wrong, it is in a constant flux. The market is the market and what the market is, is the market. It is never wrong, it is the market. If you feel it is wrong then you have probably misjudged the market. Nothing personal.

My views: I don't have a view on gold. I don't trade it. I can only observe it from day to day as to what direction the market is taking it. Irrational exuberance drives gold up (as it does any other stock) and when the oportunity occurs other market factors come into play and drive it down again. Gold has come off the peak of US$1.900+ to sub US$1,400. That is a drop of over 26%. If property values in Australia fell by 26% we would consider that the property bubble had burst.

Not quite sure why we are splitting hairs here. Maybe gold will bounce again and continue the climb back toward the prophesised US$2,000.00 per ounce.

Not arguing against your point but just curious. Apart from the price of the metal itself, by what indicator is the price of gold high/in a bubble?

 

[Uncle Festivus]

I love it when you guys BS on about margins being lifted like its confirmation of a conspiracy.

Huh? Who said anything about conspiracy - simply mentioning the fact. Do with it what you like. Just seems odd that it (always) happens after the 'correction' lower ie why didn't they act last Friday in the first wave, or even on the 4 April. I do know how margin works.
I respect your views, there's no need to denigrate with <BS>

 

[Trembling Hand]

Huh? Who said anything about conspiracy - simply mentioning the fact. Do with it what you like. Just seems odd that it (always) happens after the 'correction' lower ie why didn't they act last Friday in the first wave, or even on the 4 April. I do know how margin works.
I respect your views, there's no need to denigrate with <BS>

Its standard practise. Its the rules that we all know. Margin is based on historical volatility. As moves in a contract become larger so to does the required margin. It will happen in wild markets and also as a contract goes from say $1000 to $1800. There is no secret that it will happen its on every futs exchange website,
http://www.cmegroup.com/clearing/risk-management/span-overview.html#works

What I find interesting is that bugs always bang on about how the paper gold is such a dangerous system and just wait till it collapse. But then when they go about their predefined rules to ensure that the market is stable in regards to counter party risk Bugs scream manipulation! Says a lot about the way some perceive the world... IMO.

The CME is raising margin requirements on silver close to 20%...right on CUE!

By the way they also lifted margin on FX and gas contracts....... right on CUE!

 

[Mr Z]

Costs: Gold mining costs are not US$1,500 per ounce. In some mines the cost of extracting gold may be as high as US$1,600 per ounce and in others it can be significantly lower. The reality is, mines where the gold is expensive to extract are only brought back into production when gold prices are high enough for the miner to make a profit.

I said marginal costs! That means that around $1500 oz the higher cost producers cannot exist!!!!! I did not say average cost, mean cost or any other such thing, I said marginal cost i.e. production cost at the margin. So I ask again, how can there be a massive over valuation, as a bubble implies, when we have been hanging around prices that offer many producers a very small margin on production?

The market is never wrong, it is in a constant flux. The market is the market and what the market is, is the market. It is never wrong, it is the market. If you feel it is wrong then you have probably misjudged the market. Nothing personal.

What a lot of rot! Sounds like you swallowed the efficient market theory whole. Seriously man if you think that the sum total of market perception is always 100% informed and correct... well... well I just can't help you. With any reasonable length of experience in the market you should be able to recall many occasions where the market knee jerked in the wrong direction short term. The very idea of it relies on the supposition of perfect communication and knowledge, complete fairyland! If there was no inefficiency there would be no opportunity! I put to you again that in an efficient market, you know one that is always right, a bubble cannot by definition exist! You are still trying to have that both ways.

My views: I don't have a view on gold. I don't trade it. I can only observe it from day to day as to what direction the market is taking it. Irrational exuberance drives gold up (as it does any other stock) and when the opportunity occurs other market factors come into play and drive it down again. Gold has come off the peak of US$1.900+ to sub US$1,400. That is a drop of over 26%. If property values in Australia fell by 26% we would consider that the property bubble had burst.

Every price rise is due to "irrational exuberance" ???????? Seriously? So now we have and irrationally exuberant but correct market? Isn't that some sort of oxymoron?

Hmmmmmmm, yes well, property is not exactly high beta now is it? Many small instruments correct large %'s in their journey upward or downward. At the end of the day gold is a small and relatively high beta market so it moves too far north and south on a regular basis... its that old inefficient market argy barging around the probable correct price by a good %. The process is call "price discovery" and it involves making lots of mistakes

Not quite sure why we are splitting hairs here. Maybe gold will bounce again and continue the climb back toward the prophesised US$2,000.00 per ounce.

Because you use the term 'bubble', this implies an extreme over valuation with little or no real fundamental support for the current price and that once burst it will not recover until the fundamentals have changed. This is not the case with gold, you or anybody else here can't build a case for a bubble in gold.... yet every time the price rises we get "talking head" prattle about a bubble.

I feel duty bound to take pot shots at bubble mongers who can't support their claims with any sort of fundamental insight. The problem is the inability to distinguish between price an value, modern "investment" seems completely price fixated... where have the value investors gone? You know the ones that back their assessment that the market has it wrong and is under pricing an asset? Warren? Warren? Are you there????