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Gold Price - Where is it heading?
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explod
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Belated Present for Gold
By Jon Nadler
Dec 26 2007 2:36PM
www.kitco.com
Good Afternoon,
Gold bugs opened one last surprise present the day after Santa left town and found...an invigorated price for their favorite metal.
While spot prices opened only marginally higher in New York this morning, adding $2.40 to $814.60 on the bid side, the trade took the $1.50 (at one point $2.50) crude oil price spike and corresponding slide in the US dollar (to 77.14) on the index as tradable news and acted upon them. Spot bullion finished quite strong, rising $12.60 on the day, to settle at $824.80 per ounce -practically at the day's highs. Oil rose to $95.66 amid renewed strikes by Turkish forces on Kurdish positions within Iraq, while the greenback declined on perceptions that the holiday shopping season was, indeed, a dud, and that home prices in the US have now shown their largest decline on record for through end-October. Silver rose 15 cents to $14.67 while platinum was off to the races, gaining $13 to $1539.00 a new record, amid 10%+ lease rates seen in the market.
An integral part of today's boost for gold was the following news, as seen on Marketwatch:
"Home prices in 20 major U.S. cities were down 6.1% on average in the past year as of October, according to the Case-Shiller price index released Wednesday by Standard & Poor's. Since October 2006, prices in 10 cities fell 6.7% -- a record drop. The prior largest decline was 6.3%, reached in April 1991. "No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert Shiller, chief economist at MacroMarkets LLC and co-developer of the index."
Any wonder then, that the Washington Post reports: "A surge in [holiday shopping] spending over the weekend may not have been enough to rescue Target, Sears Holdings and Macy's from the slowest holiday spending season in five years." Indeed, a 3.6% rise in spending over last year pales in comparison to the 6.6 and 8.7 percent gains we've seen in the past two years.
Americans remain pessimistic about their economy, are lukewarm about the merchandise they find in stores, and prefer to click their computer mice for online shopping as $3+ gasoline has all but grounded their fleet of behemoth SUVs this winter. At the end of the day however, much of this reluctant behavior is probably attributable to the palpable sense of shrinking wealth which was ignited by the real estate mess. When a US homeowner looks out the window and sees a sea of "FORECLOSURE" and "LIQUIDATION" signs in the neighborhood and then looks up property values for his own McMansion on Zillow, the last thing on the list of to-dos is shopping 'till dropping.
Meanwhile, in a Bloomberg piece we learn that:
"The yen traded near a seven-week low against the dollar on speculation the Bank of Japan will refrain from raising interest rates after policy makers said risks to global economic growth are increasing."
Japan's yen has weakened against nine of the 16 most-active currencies this year as the nation's central bank kept its benchmark lending rate at the lowest among major economies, prompting investors to seek higher yields elsewhere. Japan's economic growth is slowing and policy makers need to carefully examine statistics and financial markets before determining interest rates, Bank of Japan board member Hidetoshi Kamezaki said today in a speech in Yokohama, near Tokyo.
"Global financial markets continued to be unstable and there was uncertainty regarding global economic developments," most BOJ members agreed at their Nov. 12-13 policy meeting, according to minutes released today. Some members said the risk the U.S. economy will lose momentum "had increased somewhat."
Watch for continuing volatility amid thinly-traded markets but keep an eye on closing levels for the remainder of the year as on-going strength may bode well for the first quarter of 2008.
Jon Nadler
By Jon Nadler
Dec 26 2007 2:36PM
www.kitco.com
Good Afternoon,
Gold bugs opened one last surprise present the day after Santa left town and found...an invigorated price for their favorite metal.
While spot prices opened only marginally higher in New York this morning, adding $2.40 to $814.60 on the bid side, the trade took the $1.50 (at one point $2.50) crude oil price spike and corresponding slide in the US dollar (to 77.14) on the index as tradable news and acted upon them. Spot bullion finished quite strong, rising $12.60 on the day, to settle at $824.80 per ounce -practically at the day's highs. Oil rose to $95.66 amid renewed strikes by Turkish forces on Kurdish positions within Iraq, while the greenback declined on perceptions that the holiday shopping season was, indeed, a dud, and that home prices in the US have now shown their largest decline on record for through end-October. Silver rose 15 cents to $14.67 while platinum was off to the races, gaining $13 to $1539.00 a new record, amid 10%+ lease rates seen in the market.
An integral part of today's boost for gold was the following news, as seen on Marketwatch:
"Home prices in 20 major U.S. cities were down 6.1% on average in the past year as of October, according to the Case-Shiller price index released Wednesday by Standard & Poor's. Since October 2006, prices in 10 cities fell 6.7% -- a record drop. The prior largest decline was 6.3%, reached in April 1991. "No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert Shiller, chief economist at MacroMarkets LLC and co-developer of the index."
Any wonder then, that the Washington Post reports: "A surge in [holiday shopping] spending over the weekend may not have been enough to rescue Target, Sears Holdings and Macy's from the slowest holiday spending season in five years." Indeed, a 3.6% rise in spending over last year pales in comparison to the 6.6 and 8.7 percent gains we've seen in the past two years.
Americans remain pessimistic about their economy, are lukewarm about the merchandise they find in stores, and prefer to click their computer mice for online shopping as $3+ gasoline has all but grounded their fleet of behemoth SUVs this winter. At the end of the day however, much of this reluctant behavior is probably attributable to the palpable sense of shrinking wealth which was ignited by the real estate mess. When a US homeowner looks out the window and sees a sea of "FORECLOSURE" and "LIQUIDATION" signs in the neighborhood and then looks up property values for his own McMansion on Zillow, the last thing on the list of to-dos is shopping 'till dropping.
Meanwhile, in a Bloomberg piece we learn that:
"The yen traded near a seven-week low against the dollar on speculation the Bank of Japan will refrain from raising interest rates after policy makers said risks to global economic growth are increasing."
Japan's yen has weakened against nine of the 16 most-active currencies this year as the nation's central bank kept its benchmark lending rate at the lowest among major economies, prompting investors to seek higher yields elsewhere. Japan's economic growth is slowing and policy makers need to carefully examine statistics and financial markets before determining interest rates, Bank of Japan board member Hidetoshi Kamezaki said today in a speech in Yokohama, near Tokyo.
"Global financial markets continued to be unstable and there was uncertainty regarding global economic developments," most BOJ members agreed at their Nov. 12-13 policy meeting, according to minutes released today. Some members said the risk the U.S. economy will lose momentum "had increased somewhat."
Watch for continuing volatility amid thinly-traded markets but keep an eye on closing levels for the remainder of the year as on-going strength may bode well for the first quarter of 2008.
Jon Nadler
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Happy festive season everyone
We have a potential breakout, but following Nick's post on 12 Dec, wave 2 of the current C could go all the way up to 840 before C is invalidated. So the current upside breakout could be a false one.
The breakout does improve things for the short term bulls but I still expect a pullback. Here is an interview with Marc Faber on his outlook, very positive on gold, except in the near term:
Gold price may get under pressure
http://www.commodityonline.com/news/topstory/newsdetails.php?id=4362
Audio version:
http://www.resourceinvestor.com/pebble.asp?relid=38919
Kauri , if you're around this week, I'd be very interested in your reading of the wave count at the moment.
We have a potential breakout, but following Nick's post on 12 Dec, wave 2 of the current C could go all the way up to 840 before C is invalidated. So the current upside breakout could be a false one.
The breakout does improve things for the short term bulls but I still expect a pullback. Here is an interview with Marc Faber on his outlook, very positive on gold, except in the near term:
Gold price may get under pressure
http://www.commodityonline.com/news/topstory/newsdetails.php?id=4362
Audio version:
http://www.resourceinvestor.com/pebble.asp?relid=38919
Kauri , if you're around this week, I'd be very interested in your reading of the wave count at the moment.
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Technical Analysis without true Fundamental understanding will at best break even in the long run.
Gold is going up a lot lot further. Without a true understanding of the fundamentals behind this, plus the courage of your convictions, (these convictions subject to continual testing and checking), TA will not help.
With correct FA, TA is a huge help and will greatly increase your gains.
Going short gold in today's environment is trying to pick up pennies in front of a steam roller. (Except Au has acceleration the steam roller doesn't!)
Gold is going up a lot lot further. Without a true understanding of the fundamentals behind this, plus the courage of your convictions, (these convictions subject to continual testing and checking), TA will not help.
With correct FA, TA is a huge help and will greatly increase your gains.
Going short gold in today's environment is trying to pick up pennies in front of a steam roller. (Except Au has acceleration the steam roller doesn't!)
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Well , there was the higher move ...... and dollar strength came in across a few swaps ...... I'm happified . Not impressed by the NewCrest management but that's an entirely different subject .
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Text on chart (if too small to read)
"Very impressive rally in gold today as it took out a MAJOR area of resistance near the $825 level. Gold received a huge tailwind in the form of a sharpely higher Euro as well as a further surge upwards in Crude Oil.
"While price movements at this time of year are always suspect due to thinner trading conditions and lighter volume, nonetheless, the move is very positive and will turn more than a few of the black boxes into the BUY mode. Not only did we take out the band of horizontal resistance near the $825 level, but it also broke the downtrending line that has been in place for more than 6 weeks. Both downtrending lines shown on this chart have been decisively broken.
Should gold be able to hold these gains the rest of the week, history suggests that upon their return in full force next week, funds will be re-establishing new longs as shorts cover. Let's see what the next couple of days bring us." Dan Norcini.
"Very impressive rally in gold today as it took out a MAJOR area of resistance near the $825 level. Gold received a huge tailwind in the form of a sharpely higher Euro as well as a further surge upwards in Crude Oil.
"While price movements at this time of year are always suspect due to thinner trading conditions and lighter volume, nonetheless, the move is very positive and will turn more than a few of the black boxes into the BUY mode. Not only did we take out the band of horizontal resistance near the $825 level, but it also broke the downtrending line that has been in place for more than 6 weeks. Both downtrending lines shown on this chart have been decisively broken.
Should gold be able to hold these gains the rest of the week, history suggests that upon their return in full force next week, funds will be re-establishing new longs as shorts cover. Let's see what the next couple of days bring us." Dan Norcini.
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Yes , Asian markets are the good buyers , but NY and Eur tend to take a portion off . Can we put a litmus of a $6 - $8 retracement down for those markets or a carry through ?
PS I took a mini @ $804 + change
PS I took a mini @ $804 + change
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I agree on all points, but I like to get a discount if one's coming.. On long term fundamentals for gold - I wrote my take on it here last week. On short term fundamentals, I look at what's happened to the US dollar in the early stages of every global slowdown since 1971. It's rallied strongly, as it's done this month. The reason is that liquidity contracts in the private sector - independently of what central banks are doing. This is why Faber expects gold to come under pressure in the short term.
I remain heavily long gold shares and bullion (just no futures atm).
'wait to buy more' is as negative as I get
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It is interesting to note that this date aligns nicely to Nixons shenanigans with the gold standard, so naturally the world generally would 'fall back' on the 'new' reserve currency. Yes, it has rallied, but I'm not sure it has the usual fully committed support it once enjoyed in times like these, apart from the Fed buying it's own money via some covert Cayman Island account.
Maybe it is 'different this time' as they say, to the point where the 36 year fiat money experiment may be writing it's own conclusion, having failed at being a responsible and sustainable method of value exchange?
Can they inflate their way out of this one?
So_Cynical
The Contrarian Averager
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Com on Guys...were 25 bucks away (1 good day) from record highs.
Enough with the POG doom and gloom.
Enough with the POG doom and gloom.
explod
explod
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Com on Guys...were 25 bucks away (1 good day) from record highs.
Enough with the POG doom and gloom.
As if you wouldn't guess, I'm with ya on this. I have trotted this out before but it is worth restating in more simplified form, but first a quote from Uncle Festivus earlier in the year to which I agree.
"In this gold bull run they have only just sounded the bell for the start of the game.'
Cant remember the exact dates, but post WW2 gold was becoming a bit of a problem to the US currency so Nixon (1970s) separated currency from the need to be backed by gold. They also fixed the price just before that at about US$35 an ounce. Nixon's thingo effectively allowed it to float and it did all the way up to a peak of US$895 on April 25th in 1980. So that is a pretty good increase for some savvy goldies eh.
Well in 1999 to 2001 or so gold arose again from a floor price of around US$250 to the current $800 odd. Now inflation adjusted and equation wise it has a long way to go to reach parity with 1980.
The other aspect is that the current financial fundamentals for currencies, particularly for the World Reserve Currency (THE US DOLLAR) are much worse than they were in the 1970's and some pundits are saying worse than 1929 to 31.
That is why I do not worry too much about the fine day by day fluctuations, (except for dips as buying opportunities). Because gold has intrinsic, actual value,,,, it is all go..........IMHO
numbercruncher
Beware of Dropbears
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Found a cool little tool on the RBAs website, an Inflation calculator !
http://http://www.rba.gov.au/calculator/calc.go
A 'basket' of goods and services costing 1 pound in 1901 would cost $116.77 in todays money -
So what ?
Well if you kept the Gold 1 pound (sovereign) coin from 1901 that would be worth $210 plus in bullion - let alone its numismatic value.
Gold rules Fiat is destined for failure
http://http://www.rba.gov.au/calculator/calc.go
A 'basket' of goods and services costing 1 pound in 1901 would cost $116.77 in todays money -
So what ?
Well if you kept the Gold 1 pound (sovereign) coin from 1901 that would be worth $210 plus in bullion - let alone its numismatic value.
Gold rules
Fiat is destined for failure
explod
explod
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Gold is again poised for a considerable uptick. For some time it has been following the movements of the Dow, last night it did the reverse. As commentators above point out it also boke a number of resistance points with ease in the last few days and as So Cynical postulates it is only a few bucks from the all time high.
The US dollar index has since 2001 been the mirror reflection down of the gold price rise. Of couse with the word out now that the US is wracked with debt this situation will accellerate down at a greater rate.
The last time that the US$ index was at its current level was towards the end of October, about two months ago and gold was at US$730. It then dropped and gold ran up to US$830. But this time as the US$ index is dropping from this point gold is almost back at the same high. If the head and shoulders completes, and a lot of pressure is on it to do so then gold is going to go into very high new territory very soon.
It will be interesting to see what pans out.
The US dollar index has since 2001 been the mirror reflection down of the gold price rise. Of couse with the word out now that the US is wracked with debt this situation will accellerate down at a greater rate.
The last time that the US$ index was at its current level was towards the end of October, about two months ago and gold was at US$730. It then dropped and gold ran up to US$830. But this time as the US$ index is dropping from this point gold is almost back at the same high. If the head and shoulders completes, and a lot of pressure is on it to do so then gold is going to go into very high new territory very soon.
It will be interesting to see what pans out.
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I think the short term bear arguments remain strong, but... I also agree that the way gold is behaving in the past 24 hours is very bullish, consolidating above 820.
I also notice that Gartman has now turned bullish in the past 24 hours and I've never made a cent trading against him.
from Forbes, 15 hours ago:
'The major trend remains clearly upward, and the consolidation that has taken place since early November now seems to have run its course as spot gold has broken out to the upside,' said Dennis Gartman, editor of The Gartman Letter -- a daily trading note.
from Reuters - 6 hours ago:
"We fear that the major trend against the dollar is about to reassert itself," said Dennis Gartman, independent analyst and author of The Gartman Letter. "Were this not the turn of the year, we would almost certainly be buying euros against the dollar today. We are content to be long gold instead."
I am not so convinced that the dollar will go down in a straight line.. but given the convincing breakout in gold I bought two contracts an hour ago, but with tight stop orders in case we are still in wave C. I'd rather be buying at 720.. but we'll see. This will be interesting.
I also notice that Gartman has now turned bullish in the past 24 hours and I've never made a cent trading against him.
from Forbes, 15 hours ago:
'The major trend remains clearly upward, and the consolidation that has taken place since early November now seems to have run its course as spot gold has broken out to the upside,' said Dennis Gartman, editor of The Gartman Letter -- a daily trading note.
from Reuters - 6 hours ago:
"We fear that the major trend against the dollar is about to reassert itself," said Dennis Gartman, independent analyst and author of The Gartman Letter. "Were this not the turn of the year, we would almost certainly be buying euros against the dollar today. We are content to be long gold instead."
I am not so convinced that the dollar will go down in a straight line.. but given the convincing breakout in gold I bought two contracts an hour ago, but with tight stop orders in case we are still in wave C. I'd rather be buying at 720.. but we'll see. This will be interesting.
explod
explod
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The big brockerage funds out of US have been talking up the dollar over the last few days and I think it is this noise that can lead some astray. They are some of the very funds that are getting into strife with carry trade stuff so the ramping coming from this direction says they are in bigger trouble than they are letting on and are probably going short as they say the oposite.
Info. courtesy Everbank, US
Info. courtesy Everbank, US
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Gold will hit new all time highs in USD once oil breaks $100, only other reason for POG to rise now I feel is terrorism related.
I'm still bullish on gold but I'm concerned it will stall out for now.
I'm still bullish on gold but I'm concerned it will stall out for now.
explod
explod
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Can understand your concern, this is always the case in times of uncertainty. Can you put a finger on it, I would be pleased to know why you think it will start to fall out ?
cheers explod
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The biggest reason for POG to rise is not oil or terrorism although these help. It is the downtrend of the world's reserve currency the US dollar. This downtrend is fuelled by massive Trade, Current Account and Budget Deficits which have no hope of reversing any time soon. The US Budget deficit will explode exponentially shortly as the slowing US economy dramatically cuts tax revenue while increasing govt spending. Added to this is the incredible printing of money as Central Banks all over try to liquify capital markets, seized up with trillions of toxic derivative garbage. This breakdown of the US dollar, and loss of faith in other paper assets are what will propel gold far far higher.
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Let's not forget Jan 9th sees the Shanghai exchange start trading gold futures , the reported 300 g contract is actually a 1000g contract , said to have been risen to discourage individual investors ..........
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Happy New Year '08! Every new year my thoughts turn to whether gold will finally make some serious progress towards fair value.. who knows what 08 will hold.
In the short term.. I'm kinda lost here with the EW count, trendlines etc, any short term technical views? Cheers
Every new year my thoughts turn to whether gold will finally make some serious progress towards fair value.. who knows what 08 will hold.In the short term.. I'm kinda lost here with the EW count, trendlines etc, any short term technical views? Cheers
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