Gold Price - Where is it heading?

[rederob]

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

barret
Read Scotia Mocatta's 2008 gold forecast and you will glean all you need to put a smile on your face.

 

[treefrog]

There are some similarities to the gold and silver market in 1979 and 1980 when silver soared to around $50 an ounce. Now, as then, the oil price rose to levels not seen before. Now also the value of the U.S. Dollar has been declining. There was uncertainty in the Middle East as there is now. One major exception is that U.S. interest rates were rising then as inflation hit double digits - that is not the case now although if interest rates begin to rise the similarity to 1980 would be more complete.

The precious metals are also influenced by the U.S. Dollar. The U.S. Dollar Index (MARCH contract) closed today (Thursday) at 76.60 from 77.18 yesterday, still near the lowest price in a quarter of a century, still well below the high of 92.53 hit in November 2005 and well below its all time record high in 2002 near 120.00.


full report: http://www.kitco.com/reports/technicalindicators_dec282007.html

 

[treefrog]

sorry - didn't address the thread question - but then I'm not alone there.

A$1120 before mid 2008 according to the charts that treefrogs use

 

[explod]

sorry - didn't address the thread question - but then I'm not alone there.

A$1120 before mid 2008 according to the charts that treefrogs use

Could be right and my take on the point and figure chart is that the current consolidation appears to have features of that in 2005 prior to the jump to $721. The other clear aspect is the increasing volatilty and consolidation periods. Huge forces are now playing this bull run. I would also suggest that the breakouts are larger and would concieve that the next one could certainly go $250 to $300 to align with your view Treefrog.

What do others think?

Chart coutesy of the Privateer Newsletter.

 

[ithatheekret]

I wish I could figure this IMI file change out to post a chart here .

If we can agree that the market has already become comfortable with $840 , I think it will be as the projections I have , I note your $1120 with great interest TF , because I have that as an area which has effects elsewhere .
ie. when stag goes hyper . It also takes into account the Jan. effect . which is yet to be seen whether it is still a hinderance .

RSI is set (14) 48.18 and are based on a 20% rise in the annual price ( not the current 30% )

$820 test say $818/9 , if well breached the low will be tested , based on the last 60 days cycle , I'll use the $841.75 low , ( note back in the charts the $341 fight ) , we could see the same again , which has me prepared for a higher low test , just in case .

above the last rally , I have higher projections at $850 /$870/80 --- $905/10---$940-$950 where I see a possible stall area , then $970/$990/$1005/$1070/90 ---$1120/$1140/50/$1170/90 .

That's as far as my calculations can take it on the data available at present .

But ...... the $650 projection further back played out almost step by step after getting out of the $340's and $370's . Remembering each peak is an instant cash raiser for those with the courage or need ..........

 

[Whiskers]

I wish I could figure this IMI file change out to post a chart here .

Hi ithatheekret. I had trouble copying some files until I got some easy tips on this forum.

Try this... make a screen dump.
Press Alt and Print Screen together.
Paste into suitable program/file. I use Microsoft Picture Manager/New bitmap image. Resize it, compress to get down to Joe's attachment limit. Sometimes I have to resize again.
Then upload through 'Manage Attachments'.

Hope that helps cos I,m keen to have a look at your work.

PS: Just found a thread about posting charts that also might help. https://www.aussiestockforums.com/forums/showthread.php?t=6530

 

[rederob]

There are some similarities to the gold and silver market in 1979 and 1980 when silver soared to around $50 an ounce. Now, as then, the oil price rose to levels not seen before. Now also the value of the U.S. Dollar has been declining. There was uncertainty in the Middle East as there is now. One major exception is that U.S. interest rates were rising then as inflation hit double digits - that is not the case now although if interest rates begin to rise the similarity to 1980 would be more complete.

There are "some", but they are not useful.
The silver market was being manipulated by the Hunt's and came crashing down - only speculation kept it rising as the Hunt's were trying to buy all the world's silver, it seemed.
Middle East uncertainty has been running for 2 millennium, and last century few recall Nasser taking control of the Suez canal, let alone subsequent Israeli-Lebanon/Palestinian skirmishes.
While it is true that oil prices rose substantially back then, the cause was market manipulation again - nothing to do with fundamental supply and demand dynamics.
Presently gold supply is in deficit to the market, made up through "above ground" sales, such as through Central Banks.
Presently oil supply is in deficit, made up through refining additional consensates.
Presently there is a spectre of global recession, or at least a subprime meltdown that will impact the US severely.
Presently there is a flight to safety from funds, concerned that even "cash" may not withstand a subprime catastrophe.
Presently the benefits of going into gold, on balance, make far more sense than in the late 70s early 80s.
Top that off with a chart pattern that, as you suggest, kicks into the $1000+ range before its next period of consolidation.

 

[ithatheekret]

Hi ithatheekret. I had trouble copying some files until I got some easy tips on this forum.

Try this... make a screen dump.
Press Alt and Print Screen together.
Paste into suitable program/file. I use Microsoft Picture Manager/New bitmap image. Resize it, compress to get down to Joe's attachment limit. Sometimes I have to resize again.
Then upload through 'Manage Attachments'.

Hope that helps cos I,m keen to have a look at your work.

PS: Just found a thread about posting charts that also might help. https://www.aussiestockforums.com/forums/showthread.php?t=6530

Thanks heaps Whiskers , something new to learn , onya cobber , I must have worn a groove in my desk over this subject .

 

[Kauri]

Haven't updated my charts since last year.. friday that is.. but how I am seeing gold at the moment.. well one of the ways anyways..
Cheers
.........Kauri

 

[wavepicker]

Hello kauri,

see pretty much the same here, but is upmove close to finishing?? This looks like it might end up as a false break or even a truncation relative to wave 3 as mentioned in post #2507.

It seems to me that there are way too many pundits on this thread that are convinced that the Gold is heading for the stars. This might be a sign that more upside might be limited??

I too beleive Gold will move much higher in the long term, but not in this leg. In fact I have my eyes glued for a possible short here in what appears to be a good RR EW setup in the making which could send gold sub $700.

When I stop hearing precious metals being discussed on this thread, on CNBC and the financial print media, that will be my signal to jump in to ride the next major move upward, but that might not be this year.

Cheers

 

[explod]

Hello kauri,

see pretty much the same here, but is upmove close to finishing?? This looks like it might end up as a false break or even a truncation relative to wave 3 as mentioned in post #2507.

It seems to me that there are way too many pundits on this thread that are convinced that the Gold is heading for the stars. This might be a sign that more upside might be limited??

I too beleive Gold will move much higher in the long term, but not in this leg. In fact I have my eyes glued for a possible short here in what appears to be a good RR EW setup in the making which could send gold sub $700.

When I stop hearing precious metals being discussed on this thread, on CNBC and the financial print media, that will be my signal to jump in to ride the next major move upward, but that might not be this year.

Cheers

What is the rationale behind supposing that because a lot of pundits on this thread believe gold is heading up (and not as you say "heading for the stars") that it is a sign that it will probably go down.

Looking back over some of your posts, in particular 1st, 24th and 25th of December you tend to put down without to much substance. At least most of the pundits on this thread support thier respective thesis with a little more argument that in my humble view stands up to scrutiny.

 

[wavepicker]

What is the rationale behind supposing that because a lot of pundits on this thread believe gold is heading up (and not as you say "heading for the stars") that it is a sign that it will probably go down.

Looking back over some of your posts, in particular 1st, 24th and 25th of December you tend to put down without to much substance. At least most of the pundits on this thread support thier respective thesis with a little more argument that in my humble view stands up to scrutiny.

That is cheap talk explod and totally unecessary. From what I have seen you are always quick to attack an opposing that is not in line with your interests.

I have put forward a probable trade in Gold(as a replyto Kauri) that I might take soon based on the rationale in the chart which is accompanied by extreme bullish optimism by the majority of the crowd. I am not trying to down ramp Gold in anyway because this market is so big and I am so insignifcant that it's not possible. So don't get too stressed.

Your reaction to my last post does nothing but add to my confidence in taking a potential trade. I might take this trade soon with a stop just above the previous high $845.55

As another poster recently mentioned to me, if we had another 10 explods posting on forums around the world that in itself would be enough to make the POG continue rising.

Have nice night

 

[Miner]

That is cheap talk explod and totally unecessary. From what I have seen you are always quick to attack an opposing that is not in line with your interests.

I have put forward a probable trade in Gold(as a replyto Kauri) that I might take soon based on the rationale in the chart which is accompanied by extreme bullish optimism by the majority of the crowd. I am not trying to down ramp Gold in anyway because this market is so big and I am so insignifcant that it's not possible. So don't get too stressed.

Your reaction to my last post does nothing but add to my confidence in taking a potential trade. I might take this trade soon with a stop just above the previous high $845.55

As another poster recently mentioned to me, if we had another 10 explods posting on forums around the world that in itself would be enough to make the POG continue rising.

Have nice night

Dear Wavepicker and Explode

What a start in 2008 ! Real explosive through explode and picked up easily by wave picker.
Folks - calm down and a long way to go in 2008. Probably both of you sit down over a cup of coffee or play footy though me dummy do not mind to get free entertainment with personality clash between pundits
Just in jest and do not send me brick bat as I did have a good break and looking forward for a nicer 2008 and wish you all the same

Regards

 

[numbercruncher]

Please no arguments in this thread ....

Simple formula, Buy/Keep/Aquire gold in defiance of what central banks want, watch fiat currency and the fractional reserve banking system crumble (one day), real wealth you can feel, hold, watch shine in the sun, easy peezy ....

Happy New Year

 

[Whiskers]

I'm optermistic about the longer term of gold, but initially my gut feeling and more so the charts support the view that there is probably got to be a bit more of a correction before we go too much higher.

Further to wavepickers observation in wave analysis, which I understand, but the calc's are a bit out of my league at the moment, and his MACD observation, which I did notice and do understand... I also take note of the relative position of the DMI's.

On the weekly chart the -DMI is out on the boundary, to use a sporting analogy. From my understanding of the maths behind the formula, most trading has been outside the previous trading range on the negative side for some time. I also note that the +DMI has given some ground to cause the bit of consolidation over the last few weeks, but the -DMI has yielded little.

Taking the rest of the data into consideration, it seems to me that the probability of the market going much higher in the short term is much less than it going much lower.

In other words the momentum has slowed to a point where I think there is too much pent up low end of range trading, reflected in the position of the -DMI, which has to give sometime soon. If the top range of the market, outside the previous range collapses quickly as well, we will have a significant retracement on our hands.

 

[chops_a_must]

I'm optermistic about the longer term of gold, but initially my gut feeling and more so the charts support the view that there is probably got to be a bit more of a correction before we go too much higher.

Further to wavepickers observation in wave analysis, which I understand, but the calc's are a bit out of my league at the moment, and his MACD observation, which I did notice and do understand... I also take note of the relative position of the DMI's.

On the weekly chart the -DMI is out on the boundary, to use a sporting analogy. From my understanding of the maths behind the formula, most trading has been outside the previous trading range on the negative side for some time. I also note that the +DMI has given some ground to cause the bit of consolidation over the last few weeks, but the -DMI has yielded little.

Taking the rest of the data into consideration, it seems to me that the probability of the market going much higher in the short term is much less than it going much lower.

In other words the momentum has slowed to a point where I think there is too much pent up low end of range trading, reflected in the position of the -DMI, which has to give sometime soon. If the top range of the market, outside the previous range collapses quickly as well, we will have a significant retracement on our hands.

I'm not really sure how you are reading that indicator whiskers... It is still reading a buy to me. The adx has bottomed at indicator support and is turning, although that momentum has appeared to weaken.

The +dmi is still way above the -dmi, which is still a long signal, but the adx is not above the -dmi level. So to me it indicates gold has a bit of a way to go, but perhaps wont be anywhere near as strong as previous moves. It's one of the very few indicators I use for trend trades, and I've found it quite useful.

This is all on AUD gold by the way.

And to add weight to Wavepicker's musings, from my view, all the best R/R trades of late on these futures, is on fading the breakouts at the moment, on the markets I follow at least... There appears not to be any follow through on silver either...

 

[explod]

That is cheap talk explod and totally unecessary. From what I have seen you are always quick to attack an opposing that is not in line with your interests.

I have put forward a probable trade in Gold(as a replyto Kauri) that I might take soon based on the rationale in the chart which is accompanied by extreme bullish optimism by the majority of the crowd. I am not trying to down ramp Gold in anyway because this market is so big and I am so insignifcant that it's not possible. So don't get too stressed.

Your reaction to my last post does nothing but add to my confidence in taking a potential trade. I might take this trade soon with a stop just above the previous high $845.55

As another poster recently mentioned to me, if we had another 10 explods posting on forums around the world that in itself would be enough to make the POG continue rising.

Have nice night

Perhaps it does appear that I am attacking and I apologise for that.

If you evaluate the content of our respective posts it is justification that I am looking for. The content required to fulfill that one word makes it possible for others (and we all have different understandings) to learn why a certain statement has been made.

Not in fact saying that you are wrong in you assumptions, I am often wrong in my own but I do try to be crystal clear in my reasoning on the forum so that there is no missunderstanding and so that some of us who are less experienced will learn.

I took umbridge at the statement purporting that gold may go in a certain direction purely on the basis of others saying it would be going the other way. This same averment was repeated in another post since.

I have no interests in this business other than my own private investing for myself. The continued failure of paper currrencies is ramping the gold price more than anything ever can. I realise gold will not go up in a straight line nothing ever does but there is considerable strength at the moment for all the reasons (justifications) stated in recent posts. In my own assessments I look at every bit of material that I can get my eyes onto. In the last week for example the chart on the HUI index indicates an oversold position. The HUI has been a relieable indicator to me in the past. Silver for the big moves has also been a reliable indicator, it, as has been stated above in a recent post, has been very subdued but the chart on this indicates the POSSIBILITY (not certain) of a break to the upside.

Yes I am passionate about precious metals, for one reason, they are in one of the best trends of any of the commodities. Gold for example has risen every year for the last 7 and for 2007 it rose $US over 30%.

 

[barrett]

Kauri, Wavepicker, thanks for posting your EW outlooks.

Wavepicker, from a contrarian point of view, this wave 5 may be winning over the last converts from the short term bears, like me capitulating and going long the other night at 826.

The arguments for a more meaningful correction in gold as Marc Faber puts it, in the first half of this year are still persuasive in my view. Anyone who sees this as doom and gloom, take a glass half full look.. it costs about $5K to buy around $100K worth of gold in the futures market, so even if you're heavily invested in gold stocks as I am, a big decline in gold can be a great buying opportunity.

The current front page article at http://www.truecontrarian.com/** sums up some of the bearish arguments, but briefly a more complete list:

- contracting liquidity in financial markets greatly increases demand for cash.. central banks are fighting this but they never win at first, because of the lag effect;
- notable insider selling of gold stocks at early Nov peak.. insider buying nearly altogether absent the past 6 months;
- commercials remain heavily net short gold, speculators heavily long;
- gold stocks substantially underperforming gold (Friday night HUI still 10% under early Nov peak yet POG approx same);
- gold stocks not yet flashing conclusive buy signal (XAU:gold ratio still >0.19)
- silver lagging;
- very positive articles on gold appearing in many major newspapers, and Perth mint 'overwhelmed' with applications from individual investors in recent weeks, analysts and journalists all seem bullish on gold;
- December Economist magazine cover 'The Panic in the Dollar', marking its turning point upwards consistent with contracting liquidity and rock bottom sentiment;

I see the above as supporting wavepicker's EW chart.

For new followers of this thread, I was short-term bearish in September for some of the above reasons and was wrong as gold rallied to 845. But the time tested signals of the COT, insider buying/selling, credit crunch, and stocks:bullion ratio have strengthened greatly since that time and the message they are giving in the face of investor bullishness is that the ultimate gold buying opportunity in 2008 is yet to come.

Currently long, in case I'm wrong - with a tight stop below my entry price.


**the author, Steven Jon Kaplan, has been following the gold market for over 30 years, and advised "buy aggressively" at -and only at- each of the three major bottoms in the current gold bull market - so IMO he's one of the very few gold market timing newsletters that has proven their worth. He remains bearish until the above indicators show a bottom in place.

 

[ithatheekret]

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

I waited for a close above $810 , then the retracement , cream skimmers ...

This is why I posed the litmus test question .

I too was a short term bear , in fact nothing says this won't be retested once $841 comes up again . I think the low should be looked at as a range , not a price , due to the volatility . The greenback can hold its own and POG rise at the same time . Wait for the Dow restructuring , that will have a couple of tweaks for POG to work out too .

Physical still holds more appeal though now , the sub-prime paper mess tells me there more than likely allsorts of paper messes .................
and .... we hold all our own deeds , we've got that paper pile .

 

[Uncle Festivus]

So on balance, nobody really knows what tomorrow will bring. We can speculate & techulate (speculate on technicals????), but the holistic, big picture fundamental remains that Aus gold is trading at $950 an oz, and possibly about to break out.

It is true that the "outsiders" are now getting on the bandwagon, but this was always going to herald the start of phase 2 if you like, before the manic phase which finishes the bull.

Newspaper story -

http://www.theaustralian.news.com.au/story/0,25197,22992237-643,00.html

Mr Moffatt said the fast-rising price of the metal had not, as he would have expected, put investors off buying physical gold. Instead, it has spurred them on.
"It triggers in their mind the idea that the train is about to leave the station and they had better get aboard," he said.

There are numerous classic signs apearing, not least the wall of worry, that gold is indeed entering the phase where we may throw away the rule book(s) and just go with the flow.
Do we have to try and justify a gold price, from either a fundamental or technical perspective, when crowd momentum takes over?

Gold equities will play catch up. Buy the dips.