Gold Price - Where is it heading?

[So_Cynical]

Miner just a heads up here...ive learned that prob 90% of posters on this forum are not interested in demand or consumption.

Its all waves and resistance, support, carry trade, plunge protection team,
triggers, trends and central banks, POO etc etc etc blah blah blah.

apparently supply and demand have nothing to do with it...and after
hanging around here a couple of months i sorta have to agree with em.

short term anyway.

 

[Miner]

No problem So_Cynical. You do have a point and I hear that .

 

[rederob]

In the meantime it is hard to believe how gold and silver remain so poorly understood when the fundamentals for them are so clear. Given the possibility for an unanticipated ‘black swan’ event I keep around half my assets in gold and silver stocks/bullion even when short term bearish.

barrett
I enjoyed your buying logic.
I was concerned that your other logic used the phraseunanticipated ‘black swan’ event .
It is tantamount to saying an unanticipated unanticipated event, which is therefore anticipated, mathematically speaking.
Which is to some degree my point.
Much of gold's price is based on known events that are marketwise-bearish, particularly a deflating US dollar and impending recession.
Gold's present high price has re-factored in the increased probability of gloomy global markets and geopolitical instability.
Should the "known" (once) low probability events come to fruition, we have an expectation that gold will increase more rapidly than it has in recent years.
A black swan event could swing gold either way - sharply up or down.
From a theoretical construct the more likely outcome of a black swan event would actually be to crush gold's price. That is because gold's historical price is largely predicated on it being in relatively short supply and difficult to find (apart from its intrinsic metalllic qualities).
So then, a black swan event is most likely to be one which gives the lie to gold's price base - an event such as a gold discovery that overnight renders the present mined quantum of gold pale into insignificance.
I shall therefore hold my thoughts on a black swan event in the context of gold, and prefer the increasingly more probable, less friendly, of events to deliver in spades.

 

[michael_selway]

barrett
I enjoyed your buying logic.
I was concerned that your other logic used the phraseunanticipated ‘black swan’ event .
It is tantamount to saying an unanticipated unanticipated event, which is therefore anticipated, mathematically speaking.
Which is to some degree my point.
Much of gold's price is based on known events that are marketwise-bearish, particularly a deflating US dollar and impending recession.
Gold's present high price has re-factored in the increased probability of gloomy global markets and geopolitical instability.
Should the "known" (once) low probability events come to fruition, we have an expectation that gold will increase more rapidly than it has in recent years.
A black swan event could swing gold either way - sharply up or down.
From a theoretical construct the more likely outcome of a black swan event would actually be to crush gold's price. That is because gold's historical price is largely predicated on it being in relatively short supply and difficult to find (apart from its intrinsic metalllic qualities).
So then, a black swan event is most likely to be one which gives the lie to gold's price base - an event such as a gold discovery that overnight renders the present mined quantum of gold pale into insignificance.
I shall therefore hold my thoughts on a black swan event in the context of gold, and prefer the increasingly more probable, less friendly, of events to deliver in spades.

Hi red, are u bullish or bearish on gold?

thx

MS

 

[Uncle Festivus]

Miner just a heads up here...ive learned that prob 90% of posters on this forum are not interested in demand or consumption.

And 65% of posters in this thread make up statistics out of thin air .

China and India will be spared because of they have a huge domestic consumption which insulates the recessionary effect.

I wouldn't hold my breath over China being the 'saviour' - big, big problems beginning to emerge....
https://www.aussiestockforums.com/forums/showthread.php?t=8962

barrett
So then, a black swan event is most likely to be one which gives the lie to gold's price base - an event such as a gold discovery that overnight renders the present mined quantum of gold pale into insignificance.

Assuming that such a discovery would need to produce in the order of several tonnes per year to have any meaningful negative impact, such is the supply/demand equation at present?

Over the years I have found that gold is the answer, so what is the question?

The question - What is money? When you work that out you can see that these consolidation periods that gold goes through are just breathers for the next advance, thanks to the past & present incumbents of the US Fed, and other central banks playing 'me too'. Unless someone like Paul Volcker assumes control of the Fed, in which case then gold would essentially be worthless in a society that had responsible fiat money controls, and or let the market find it's 'natural' levels. But, we don't, so we now have raging debasement of currencies (ie the money in your pocket is buying less & less eg property) in a race to the bottom of currency exchange rates in an effort to be globally competitive. (take out resources & what has Australia got to export - food we need for ourselves?, do we still have a manufacturing industry?) etc etc all said before in this thread...

I like Barretts' methodology for helping to pick when the time is right. Then, buy and hold.....

But for now it's wait & see?

 

[ithatheekret]

I think we are already witnessing such an event .

Consequentialism , naaaah .

More akin to a Latin tale .........


corruptio optimi pessima
( corruption of the best is the worst of all )

 

[chops_a_must]

You have to stop and think sometimes .........

3 days ago at 5.45am there was a massive downturn in just about every currency the USD is crossed with , all the majors stumbled , Cable held up until last night , then was pushed back with enormous effort .

This is no mere happening .

Banks have seen their lenders close shop and head for the sand and sun .
That means they need cash to keep up the rent payments and can only get from a reluctant market or at a Fed auction , neither the keen approach for them .

So where can they get that sort of money ?

Simple , go into the smaller markets and smash down the futures prices with puts and shorts , thus giving them ample liquidity in an immediate cash raising . You know gold etc. ..

Then we have a group of Central banks creating digital money at predetermined positions in exchange rates . That's the liquidity they are injecting ..... digital dollars . The USD strengthened miracluously over a few days , just afterwards we have a PPI report and a CPI report and a plunging market .

One hell of a repatriation if you ask me , fuel to the fire , watched one two years ago ........... I know what's going to happen .... naa nu nan naaa naaa

Staples are going up .


The COTs reports will be an interesting viewing , if the numbers have made it onto it yet !

But that's another problem . Especially if dust covers it up like the last round of hidings ...............

What get's me though is that everyone seems estatic about this Central Bank group injections/ interventions .......... I call it abracadabra .

But , this is a debasing , forget the unit price , it's the effect that's worrying , that debasing of the dollar unit , sends the widgets up in price .

So , the Grand Plan #2 Team have just created another inflation monster !

Their nightly prayer.......... ceteris paribus ..... ceteris paribus ..... ceteris paribus ........ aaaaameeeen .

Brilliant post.

Just a potential critique: if everyone is expecting gold to dip and then take off, will it follow that path which everyone expects? Maybe it wont dip, or wont dip as much as expected before taking off? Or perhaps it wont come back at all as everyone waits for everyone else to buy back in.

Just thinking out loud...

 

[rederob]

Hi red, are u bullish or bearish on gold?

thx

MS

Have you been hiding MS?
I am a gold bull.
I believe gold is at the lower end of its present cycle - certainly not half way there........ yet.

Uncle Festivus
My "black swan" event would see hundreds of tonnes of gold hitting the streets in a year.
I can't believe it would happen.
But the Swan River gave new meaning to what was believable, so improbability clearly does not equal impossibility.
Otherwise I am a gold bull for the reasons many have posted above.

 

[barrett]

Rederob, by 'black swan' I mean a surprise event, something like the US or Israel striking Iran, a really bad terrorist attack, a sudden announcement by OPEC to reprice oil in a basket of currencies, a nuclear explosion of some kind. Black swan's maybe not quite the right term as a number of people do expect those to happen. But I think the gold price would jump substantially on any of the above.

When heavily leveraging gold in the futures market, the thing I worry about most is a really big move, say with gold moving $50/oz or more in a night (daily limit is $75!).
I think the chance of a upper 'lock limit' surprise is much greater than a lower one, & it's enough to make me unwilling to short gold even when short term bearish.

 

[barrett]

once again, I am no chartist.. but I just noticed something interesting on the Comex Gold monthly candlestick. Nov 07 candlestick looks much like May 06.
After making these bearish posts I expect the gold price will turn and make a fool out of me as it does anyone who gets too sure about its short-term direction!:

Just a potential critique: if everyone is expecting gold to dip and then take off, will it follow that path which everyone expects? Maybe it wont dip, or wont dip as much as expected before taking off? Or perhaps it wont come back at all as everyone waits for everyone else to buy back in.

Just thinking out loud...

Although this forum isn't the whole gold market (I think!), that's a good point.. we should expect to be surprised, one way or another.

 

[ithatheekret]

Brilliant post.

Just a potential critique: if everyone is expecting gold to dip and then take off, will it follow that path which everyone expects? Maybe it wont dip, or wont dip as much as expected before taking off? Or perhaps it wont come back at all as everyone waits for everyone else to buy back in.

Just thinking out loud...

It's good to think out loud cobber , at least everyone else gets to understand your logic , even if they can't manage the concept .

I believe the size of the market itself is the main detractor , because for years the banks etc. have been able to control the price via the hedge systems they had in place . That went topsy turvy the moment the miners retreated from hedging positions . This one event was the first dollar raiser taken away from the banks etc. , then in the face of this Central banks under instruction by the likes of Gordon ( bennett ) Brown , sold down their gold reserves , some saying it was for the better good of the planets poor .

Unfortunately his speech writers must have deleted a word or two , because after poor , should have came banks . The WMF were gagging with laughter at his proposal , because they know the metals market is at the whim of the financial markets , who can write a put or short based on paper and not delivery . Then the paper is shuffled along through a series of entries and exits , many at huge losses as the last round did . This directly affected the poor that Brown is so desperate to be seen helping , yet his plan would have seen larger jobs losses , than which was already underway . The Rand was the measuring stick they all forgot about , miners were leaving African shores and boarding up mines enmasse , now they're heading back , as the Rands fluctuations can now be booked against a rising commodity price that can be locked in at more appropriate levels than the banks hedge books would have ever allowed .

This is what the miners at the big end of town are constantly fighting , Newmont took the lead , Pierre Lassonde , showed the world there was to be a major shift in metals pricing and the financial markets laughed , they laughed loudly last week , but those snickers will end in growls as the shorts are once again reeled in . The big mining houses are the problem the finanacial markets have to face upto ............. they have more cash than the financial markets to splash about at present , just like the oilers , who are despised for the huge profits they are making , whilst everything else goes sideways for a few more years , but shock and horror , banks are losing money .

Well we haven't seen any big mining houses buy banks yet , or any of the big oilers buying a bank ............. but it will happen , if not a bank , then they will create their own financial insitutions , just like the car industry did many many moons ago . Miners have in the past taken over banks , oilers have taken banks over in the past also ......... it's just so far back in history , that half the analysts on the markets would need to get their history books out .
To be frank I wouldn't be surprised to see a major miner takeover a shovel supplier if you know what I mean , just to ensure a constant supply of parts .

The price fight has got absolutley nothing to do with supply and demand , that would mean the market has gone to fundamentals , if we were trading on fundamentals there would be very few game to short the gold price .

A quick look across the takeover sheets shows that miners , think the market is cheap !

Swings in the gold price will get larger and larger , and we will get use to it , but it will edge its way up for the next 10 to 15 years .

I have $880 notched in as my target , many have heard this stated before , but ............ it will get pushed into every resistance level it has to offer , but by Feb./ March 08 it will restart its climb .

The first cab off the rank to wait for is the rate rise by the ECB , you see this is one Central Bank that , although it has a complaining provincial at its helm , will not take its eye off the inflation monster it helped create , they know what they have released and they want it back in its cage .

The Reserve bank knows the monster that is on the loose , they have been handed an empty leash and now have to get the animal back in its box .
This being the case I believe we will see a rate hike come Feb./March as well . They are not waiting for a lead from the US , they have their own target and are not interested in the spin from across the pond , only the effects the spin is having .

 

[Kauri]

Still trading the smaller swings and round-abouts... look after the swings and the rounds will take care of themselves..
Cheers
.......Kauri

 

[ithatheekret]

There's obvious taboo subjects tied to POG .

Black Swan Events , was mentioned earlier .

I have one that I would like to predict .

Goverments across the globe are changing , swings everywhere , troops will pullout of Iraq and focus on Afghanistan . The US will be left holding the fort .
The new President will pull troops out and leave skeleton posts , but with the Turkish Army to its flank .
All the prisoners the Iraqi Government release will go home and tell everyone of the atrocities that have happened and whip up a fury , that will be leased by those with vested interests in chaos . They'll all meet chat , get angry , plan , wait and arm up .

Skeletons posts will pull back to the Northern oil fields and annex them .
From the consolidation of that position , the US will have enough reserve forces to commit to any threat or front they feel the urge to . This will enable the military to secure the oil , with a close ally at hand with reserve troop capabilities to ensure the annexation . The annexation will come under the pretence of securing Iraqs national interests .

The premium in oil will return and so too gold to some effect , the minute those angry little meetings turn into street gun fights , the neighbouring countries will be forced into action ..........

The next President better be good at kissing backsides , babies are out for this decade .

But , I must admit , I was thoroughly impressed by the capture of Sadmatt , unimpressed when they didn't leave straight away and annex the fields , to concentrate on Afghanistan , where our troops have been stoically performing their duties , under constant attack when rebuilding outposts and permantly under the threat of attack in the field .

Saddmatts oil sponsored terrorism period , whilst he trucked it out under the globes satellite pictures , giving us all the finger and whilst I never liked the chap , he had put into motion assasination attempt on George Bush Snr . , no matter my dislike of the man , he was the President of the United States any retaliations are within my guidelines , to cease the perpetrations and conspirators .

But anarchy will return to Iraq .

I know my view is highly critical , although I welcome any other views on the matter . I always approach any subject with an open mind , and will be the first to admit when I'm wrong .

 

[Uncle Festivus]

Still trading the smaller swings and round-abouts... look after the swings and the rounds will take care of themselves..
Cheers
.......Kauri

Hey Kauri, check your inbox.

Gold stalled at 799 - bounce off lower trendline or will the CB's drive it down in a last ditched effort to bury gold from a technical perspective?

Ominous pennant -

http://www.the-privateer.com/chart/gold-pf.gif

 

[Kauri]

If the count is correct...big if... then the W2 was shallow at 38%!! a strong bearish signal maybe??? anyways this may now be a W1/W2 of the following W3 ... or something...
Cheers
........Kauri

 

[Kauri]

If the count is correct...big if... then the W2 was shallow at 38%!! a strong bearish signal maybe??? anyways this may now be a W1/W2 of the following W3 ... or something...
Cheers
........Kauri

Got what seems to be the W1/W2 in, but will wait now and see if a swing low comes in,(or a swing high) before re-committing... everything says down to me, but the W2 at 38%ret has me cautious...
Cheers
..........Kauri

 

[barrett]

Yeah it's weird, the gold stocks are really taking a bath, I thought they might at least pause for breath but last night the XAU down another 4.00%, HUI down 3.09%.. even while gold didn't conclusively break down out of it's wedge (referring to the chart Festivus posted).

And how badly have the Aus-listed (mainly Aus-operating) gold stocks been smashed up in the past week, even as the gold price in $A has _rallied_ more than $20/oz!!

The past 3 years I have watched this happen in the stocks before every major sell-off in the metal.. it doesn't mean the metal will certainly sell off but it ups the chances.

 

[Uncle Festivus]

It's always good to keep an eye on the fundamentals - aussie gold miners still making money with record prices. FWIW, I've been buying gold stocks, mostly LGL, more this morning. Blood in the streets?

The correlation between gold and stock sell offs does not appear to be happening this time. Either gold stocks are oversold or indeed gold is lagging?

 

[refined silver]

No problems here.

 

[refined silver]

Likewise gold stocks looking good. Re-testing the 375 long-term resistance which if it holds will be the bottom in for the next upleg. If it doesn't hold, there is more strong support just underneath. Last night HUI hit 375. Sell strength, buy weakness in a bull market, not the other way round.