Gold Price - Where is it heading?

[Whiskers]

Looks like we've got another pop in the gold price across all currencies. Could be ahead of tomorrow night's decision perhaps. But by my guesstimate, this is perhaps going to be the last run we see, if we see it, for a while.

I presume you mean the fed interest rate decision, chops.
Is that tomorrow night or the night after?

I'm inclined to think the fed's decision is pretty well factored in... unless they pull something out of the blue.

My interest is on the Consumer Sentiment number which I think is tomorrow night and what effect that will have on the fed.

 

[Whiskers]

Good call kennas!

Gold looks like it has peaked for now. Failing to hold above $785.

Where to now?

I'm tipping the fed won't cut rates again, just yet. But in the total scheme of things, what will this mean for POG?

 

[explod]

Good call kennas!

Gold looks like it has peaked for now. Failing to hold above $785.

Where to now?

I'm tipping the fed won't cut rates again, just yet. But in the total scheme of things, what will this mean for POG?

If the fed dont' cut then the dollar will rally and gold will drop down as it has been all day. Felt that the Dow and NYSE overnight look to be about to tip over too which will put further pressure on gold in the short term. I took profits on 70% of holdings today as something is just not right. The FTSE and Nikkei not looking right IMHO either. We will see what pans out.

This might be the correction that Bean has been tipping the last 3 weeks or so.

 

[GreatPig]

Has this now formed a diamond reversal? Similar outline to the one in early September.

And maybe a double top to boot?

GP

 

[Kauri]

Having missed most of this run, only having joined in on the daily triangle, am now tightening up as she is now at what I consider to be the normal area for a W5...
Cheers
.........Kauri

 

[bean]

unfortuanatly can't write to much, as subscribe to a site in US (not gold).
So am in and out of market each day.
And what I said before may be influenced now.
However knowing what US markets may drop too (i have bottom figures to look for). I am long POG no stock but 'gold' and Oil may be very short term however Ben has definetly tried his hardest to save the banks/financial institutions. a couple of sites have mentioned owing physical gold in US and even that they fear.
Why because they expect banks and financial institutions to crumble.
And the government to eventually confiscate physical gold.
Inflation well ask them the ones on the chat lines.
Gold stock in the US - beware the POG is rising however the price extracting gold is rising. NEM for example gold rose US $70 per oz there cost rose about US $70 per oz.
In Australia our $ is not helping the cause for Australian gold stocks.
Everyone wants the US$ to tank but do we (Australian) gold bulls.

As far as POG dropping to US$550 yes from a different site someone mentioned gold being hit for 50% but the price at that time would be US$1050

 

[Kauri]

However knowing what US markets may drop too (i have bottom figures to look for). I am long POG no stock but 'gold' and Oil may be very short term however Ben has definetly tried his hardest to save the banks/financial institutions. a couple of sites have mentioned owing physical gold in US and even that they fear.

Good timing Been..
Cheers
........Kauri

Nov. 1. A slide in gold this morning is adding to the reasons that the currency is under pressure this morning though the primary catalyst remains the Citi downgrade and write-down rumors that has Citi stock down over 4% in pre-market opening trading. The gold price is down to $788.30 this morning from highs above $796.00 overnight. Analysts are also closely watching the Baltic Dry Index which reflects commodity demand and had the largest one day loss for the year yesterday, down 230 pts to 10,656 after reaching record highs in the last week, and may bode for a broader commodity correction.

 

[Whiskers]

An interesting read, to say the least.

POG just keeps coming back from the low 780's to the 795's.

The COT's are Running!

By Peter Degraaf
Oct 26 2007 4:39PM

Margin calls hurt, but when margin calls run into the millions of dollars, they really hurt!

The commercial traders have been shorting gold since the market last dipped, with gold at 660.00. Imagine covering margin calls when the price has run 15% against you!

The problem with short selling during a bull market, is that no matter how many times it works, there comes that one time when your timing is wrong. If you can be wise enough to cut your losses quickly, (very few do so), you may live to trade again.

The market action we are watching now reminds me of the trading we saw in the late 1960’s. The central banks of the London Gold Pool were desperately trying to hold the gold price down at 35.20/oz. To allow it to rise would be detrimental to the confidence level of western currencies in general, and the US dollar in particular. People might realize that money was being inflated.

Most of the gold at that time was being supplied by participating countries, to the gold users via the London Gold Market. Normal turnover was about 5 tonnes per day. Suddenly volume began to increase to 20, 30 and 50 tonnes per day. During most of 1967, the London Gold Market officials kept having to sell gold faster than they could replace it with freshly mined gold from South Africa and Ghana. In 1968 US central bank officials re-affirmed their commitment to hold the gold price to 35.20 – “down to the last ounce!” Gold was being flown in from the US to London, to help meet the demand.

On Friday March 8th 1968, 100 tonnes were gobbled up, almost 20 times the normal volume. By the middle of the following week the demand rose to 175 tonnes, then on Thursday the total rose to 225 tonnes.

On Friday March 15th 1968, Queen Elizabeth, after a meeting at Buckingham Palace the evening before, declared a ‘bank holiday’.

The London gold market was officially closed for two weeks, and when it re-opened 2 weeks later, we were introduced to ‘two-tier’ gold prices. One for banks, and one for the private sector.

Once the banks threw in the towel, gold rose to 850.00 in February of 1980. A rise of almost 2400%. It took Paul Volcker and interest rates of over 20% to finally halt the price rise.

The situation today has a lot of similarities to the scenario of the 1960’s. Thanks to Frank Veneroso and Gata (www.gata.org), we know that the banks are trying to play the same game again. Anyone who ‘shorts’ gold at this time is counting on the banks to be more successful than they were in March of 1968.

I am well aware of the fact that the commercial short position is currently larger than ever, but if you turn that around, it means that every one of these contracts will have to be covered!

And the day will come when they burn there fingers! Is this the time? That is the 64$ question.

As for me and my subscribers, WE’RE ALL LONG!

For you chart lovers, feast on these charts.

http://www.kitco.com/ind/Degraaf/oct262007.html

 

[explod]

An interesting read, to say the least.

POG just keeps coming back from the low 780's to the 795's.

Yes a very good article and the charts say it all. Now what about this the last few minutes. If we end the week here we may have a thrust at the all time touchdown in the next week or so.

 

[Sean K]

Yes a very good article and the charts say it all. Now what about this the last few minutes. If we end the week here we may have a thrust at the all time touchdown in the next week or so.

Futures cracking $800. DOW looks to be recovering after the better than expected jobs data, although it's only midday. Oil up, USD another low. Might be enough for gold stocks to push further ahead on Monday.

Still waiting for $540 beanster?

 

[Damuzzdu]

Futures cracking $800. DOW looks to be recovering after the better than expected jobs data, although it's only midday. Oil up, USD another low. Might be enough for gold stocks to push further ahead on Monday.

Still waiting for $540 beanster?

Spot Gold closes at $806.

Nymex futures contract closed at $808.50

Aussie Gold shares on monday should have another surge, likes of NCM, LGL, DOM.

Cheers

 

[explod]

Spot Gold closes at $806.

Nymex futures contract closed at $808.50

Aussie Gold shares on monday should have another surge, likes of NCM, LGL, DOM.

Cheers

Probably the more significant development for bullion overall last night was the weekly close of silver now at a 26 year high. We will now enter what is know as stage two of the prescious metals bull, where the general investment community begin to take it on board. This investment community is 100s of times larger than in 1980 and the metals production and availability is less also.

We are now poised for very interesting times indeed.

Oh.................. and stage three is when the taxi driver tells you to buy, which will be the sell signal. I will keep you posted on that (on my way back from the casino)

 

[rederob]

1st-March-2006, 08:59 AM
ducati916
Re: GOLD Where is it heading?
________________________________________
rederob

At least we got an answer, so waiting another 5 years won't be too hard now!
Of course, what will ducati do if if gold reaches beyond $770 this year, or next (and I firmly believe it will be "next" year into the $800s)?
No doubt he will revise his figures - but that's just speculation.

And as is the want with speculators, they are wrong, as often as they are right. You are wrong. The figures are there, and I have no intention of changing them nor defending them. You see they are a speculative range, and as a speculative range they are as likely to be wrong as right.

If you are right in this case, and they do reach $800+ in whatever timeframe, then you will increase your profits and can claim to be a genius.

I undertook to leave this thread until POG hit $800.
Now I’m back.
Some interesting posts in the meantime.

 

[Nick Radge]

Nice rederob.

The article above regarding the margin call on the Commercials is slightly inaccurate. Commercials can sell until the cows come home and gold travels to $1500 or how ever higher. They are not 'naked' short gold. They are 'forward' selling the stuff, in other words they already 'own' it and they're selling it because they believe its a damn good price here to be selling it. This is normally taken as a sign that prices have risen too far, but it doesn't necessarily mean the Commercials are correct.

What one should be aware off is that the other side to the Commercials trades are large speculators, specifically the large CTA funds that follow trends. When they decide to exit there will be a sizable, if not brief, selloff. We've seen this in more recent times so we should expect more of it in the future. (PS: this same thing happens with all commodities - not just gold).

Regards
Nick

 

[explod]

Nice rederob.

The article above regarding the margin call on the Commercials is slightly inaccurate. Commercials can sell until the cows come home and gold travels to $1500 or how ever higher. They are not 'naked' short gold. They are 'forward' selling the stuff, in other words they already 'own' it and they're selling it because they believe its a damn good price here to be selling it. This is normally taken as a sign that prices have risen too far, but it doesn't necessarily mean the Commercials are correct.



What one should be aware off is that the other side to the Commercials trades are large speculators, specifically the large CTA funds that follow trends. When they decide to exit there will be a sizable, if not brief, selloff. We've seen this in more recent times so we should expect more of it in the future. (PS: this same thing happens with all commodities - not just gold).

Regards
Nick

Michael Covel in his text "Trend Following" Prentice Hall 2002, explains that the large investment funds stay with the trends whilst they last, sometimes for many years. The uptrend in gold from 2001 is firmly intact with the support line at US$640. A correction for a down trend needs to go 5% below that line on the weekly chart for such a confirmation.

I think at this time the bulls have it.

 

[rederob]

Nick
I only trade equities, so the niceties of futures are left to active traders.
Nevertheless, the themes of accumulation and distribution are important across the board.
So when a long term price trend is supported by other fundamental price drivers - in the case of gold it's the oil price and USD values - through a robust period of consolidation, we should expect a new high price of significant magnitude above the former.
Accordingly, we should be looking for this run to peak around $900.
Could we get continuation to $1000 without a major retrace?
I doubt it for now.
Unless a US-led recession shoots gold to a 1980-like parabolic spike that collapses equally as quickly on itself.
What I will be looking for is a possible disconnect of POG to the USD, and a tied bond to POO, instead. Should this happen the likelihood of more protracted and less volatile price rises could continue - well over $1000.
For equity traders the usual question is "is it too late to get on"?
Like any trading or investing question, the answer should depend on your trading style and strategies.
I have personally traded KCN and LGL a few times over the past 5 years, but never sold EQI or DIO. And I originally bought into OXR for its gold exposure and have never sold any of its shares since.
I expect Lihir will be the most profitable of my goldies because there are very few cheaper producers that will match over the long a term. Now that LGL is unhedged, its upside will be significantly greater than previously.

As for ducati on gold, yet again his incredibly expansive missives purporting as analysis, are shot to pieces. It is one thing to claim good luck based on "speculation". It is quite another to foresee the more likely impact of key price drivers and weave these into this thread, so that others may profit.

 

[Sean K]

I expect Lihir will be the most profitable of my goldies because there are very few cheaper producers that will match over the long a term. Now that LGL is unhedged, its upside will be significantly greater than previously.

Still has major country one mine risk and Ballarat is an unknown. But, if the locals stay at work and Ballarat comes in on sched, then I agree.

 

[rederob]

Still has major country one mine risk and Ballarat is an unknown. But, if the locals stay at work and Ballarat comes in on sched, then I agree.

Kennas
It's an issue.
But then there is the Grasberg mine in West Irian which has a host of more significant risks, and major cost issues (especially if environmental issues ever come to the fore).
Even the Telfer mine has major issues, but more through geology and ore composition (high arsenic levels), apart from energy costs.
I have spread my gold risks through 6 different equities - EQI has significant political risk as it moves to mine Bonikro in Africa, and others have probably less risks attached.
But while POG is climbing significantly faster than AUD increases over USD, there will be big profits in the offing.

 

[explod]

Kennas
It's an issue.
But then there is the Grasberg mine in West Irian which has a host of more significant risks, and major cost issues (especially if environmental issues ever come to the fore).
Even the Telfer mine has major issues, but more through geology and ore composition (high arsenic levels), apart from energy costs.
I have spread my gold risks through 6 different equities - EQI has significant political risk as it moves to mine Bonikro in Africa, and others have probably less risks attached.
But while POG is climbing significantly faster than AUD increases over USD, there will be big profits in the offing.

Why would you look any further than Avoca. Good company, plenty of good grades near surface. But with our strong dollar, offshore is the go at the moment, AND and NEM

 

[Sean K]

Why would you look any further than Avoca. Good company, plenty of good grades near surface. But with our strong dollar, offshore is the go at the moment, AND and NEM

Hooly dooly, first time I've looked at AND. Might have missed it?