Gold Price - Where is it heading?

[explod]

I just went in to squizzy about thought won't hurt to take a dip opp . except I get on site and WTF it's $882 knocking on $883 again , blimey didn't take long to shaft that idea , I expected to see 870's . Quicker than a claytons recession . Fritz , fritz and fritz .

Maybe we have too many trying to buy the dips now. All this talk from Bullion desk and others that gold is an alternative in hard times.

I am a confused man. Off to sleep now. being picked up at 0530 for a day of Roulette. Good to be there to greet the POET's, I mean the workers.

 

[ithatheekret]

 

[barrett]

omg .. 895 ... 900 in sight? this is nuts:

 

[Uncle Festivus]

Gold futures rallied to a new all-time high Thursday, after the dollar fell sharply as investors interpreted Federal Reserve Chairman Ben Bernanke's prepared remarks as a sign that the central bank will further cut interest rates.

Gold for February delivery soared as high as $897.30 an ounce on the New York Mercantile Exchange, a new record high that surpassed the previous record of $894.40 set on Wednesday.

It appears that gold is still aligned closest to the good ol' $US, so as long as even the slightest hint that US interest rates are going to be lowered then should be continually supportive of gold, despite the technicals calling for a retracement, but still within the now normal daily trading range of $30 or so.

In fact, it might pay to be counter contrarian - if the expectation is for a big sell-off then start buying? The poor old gold bugs are used to getting hammered after a strong rise, so were quick to offload their trade positions (as opposed to investment positions) exacerbating the correction. Only this time it is met with even more support, so the trading mantra may be changing. ( having said that, be prepared for the mother of all sell offs ???).

I think US rates are heading to both actual zero & effective negative, a mirror of that other well known basket case called Japan. Monetary debasement on a logarithmic scale now so may expect the continued opposite reaction from tangable, scarce, stores of value?

For 7 years or so I've watched the small Kitco chart as a quick sign of interest and volatility ie the scale of the Y axis, which is out to $50 these days, I remeber the old days when it would scarcely move $2. Gold down $30 - so what? We are becoming accustomed to sell offs in this range now, similar to the XJO in the later stages of the bull market. The difference here is that the gold bull may only be entering another, more 'manic', exponential phase? I liken $900 similar to the old $700 barrier, thar she blows, off and running.

 

[rederob]

omg .. 895 ... 900 in sight? this is nuts:

More importantly it traded through a $30 range, suggesting further volatility and that a $1000 figure could be reached quickly - within the month.
I refer a less rapid ascent, but take what comes.

 

[ithatheekret]

If you guys would like a giggle at my expense , would you like to know my projection for Skippy , but I don't know how long it will take yet .

Remember the septic sailing round Freo way way back , just before and around then is one historical point of reference .

 

[chops_a_must]

Actually I think Uncle Festivus might have to take the honours there Chops for placing a short within $1 of the top.. stopped out but still, it was quite a call..

Indeed!

I haven't traded Gold since it went through 660, because I can't seem to get anything lining up with the movements. And I'm certainly not going short anytime soon, reasons stated last night, because this is just a one way trade at the moment. Just brutal strength. Going to need a fair amount of effort to kill it.

I'm not thinking of selling my physical anytime soon. More or less just wondering when to buy more.

 

[barrett]

It appears that gold is still aligned closest to the good ol' $US, so as long as even the slightest hint that US interest rates are going to be lowered then should be continually supportive of gold, despite the technicals calling for a retracement, but still within the now normal daily trading range of $30 or so.

In fact, it might pay to be counter contrarian - if the expectation is for a big sell-off then start buying? The poor old gold bugs are used to getting hammered after a strong rise, so were quick to offload their trade positions (as opposed to investment positions) exacerbating the correction. Only this time it is met with even more support, so the trading mantra may be changing. ( having said that, be prepared for the mother of all sell offs ???).

I think US rates are heading to both actual zero & effective negative, a mirror of that other well known basket case called Japan. Monetary debasement on a logarithmic scale now so may expect the continued opposite reaction from tangable, scarce, stores of value?

For 7 years or so I've watched the small Kitco chart as a quick sign of interest and volatility ie the scale of the Y axis, which is out to $50 these days, I remeber the old days when it would scarcely move $2. Gold down $30 - so what? We are becoming accustomed to sell offs in this range now, similar to the XJO in the later stages of the bull market. The difference here is that the gold bull may only be entering another, more 'manic', exponential phase? I liken $900 similar to the old $700 barrier, thar she blows, off and running.

Festivus I like your line of thinking there.. there was a sudden wave of negativity coming from the gold timing newsletters yesterday and I think a 'counter-contrarian' stance could well be on the money. Just right now we have gold consolidating above the peak of earlier this week, while last night the HUI conclusively broke out to a new all time high. They're not the sorts of things I would expect to see at a top.

Given this, I am thinking that the more bullish of the two EW count alternatives is more likely to be the correct one. If so it would mean that wave 5 at the top of the two last charts I posted is in fact only wave I of wave 5.

That would be extremely bullish for gold in the short term. How bullish... wave i went from 855 to 891, that's 36. Wave III is never shorter than wave I... so from the bottom of wave 3 at 865 that at least takes us to 901. But more usually it is around twice wave I.. that would take us to 937. Then there's wave V on top of this..... and so to the rather 'out there' idea that gold will travel to over $950 within the next month or so before the interim top is in. I could be wrong and maybe we'll just bounce off 900 and game over, but the stops can take care of that!

Planning to buy more in the next hour or so at support levels.

http://www.bloomberg.com/apps/news?pid=20601087&sid=alMoNFmNY89I&refer=home

On sentiment, having a look at this article in bloomberg for example... the analysts are certainly bullish, but they're not yet saying "I think gold will be $2000 by summer", they're saying 'it's only getting started, most people don't have the asset, gold "is on track to reach $1000 in 2008"... that sort of reserved talk.... I'm just not seeing their comments as heavy enough yet to get contrarian about yet.

Anyone who thinks I'm really misguided on this, don't hold your punches
Barrett

 

[numbercruncher]

Gold is a commodity and a currency and in these uncertain times demand surely isnt going away anythime soon!

Look at all that cash in Sovereign wealth funds, all nervous at the USD.

Read a hilarious one liner today...

" The US dollar is going to fall apart faster than Michael Jackson’s face "

lol love it ...

 

[ithatheekret]

I don't have a $901 in my figures ... yet ... I do have $898/99 now , which in my view is very good . I have $902/3 & $905 too .

I've got a $937 though , $937/39 $940/1/2 and $945/48/50/53/56/58

there's another tranch above that into the $970 area , but it too has conflicting projections on the current data , which in my view is what we'd technically call exhaustion / then correction , above $956 the ratios rise quite high , to me that means higher volalitility again , higher swings and dips . I've used milder than actual inflation numbers too to acheive the product too .

So I think a lead into the $945 area will be interesting , I'll put my hand up for a pencilling in at $956 to $958 as the shake up zone .

 

[barrett]

Ithatheekret those numbers are interesting, if it breaks 900 and holds there.. a fairly steady rally up to say 945 seems within reason.

Gartman letter just in... gold has just taken out the 600 EUR milestone.. now 603 but he doubts it will take out 900 USD.. hmm.. he's still substantially long gold but says the demands on his time for gold interviews in the past week were incredible.. says that always coincides with/near tops. Since he's in the front pew I have to say I'm a bit uncomfortable fading Gartman's bearish call.. but I do note he is still long (1/2 position), and I recall in Oct he started paring back just before 800, before the top at 845.

There is fibo support at 888 that held for now, and more in low 880s, if it breaks through the 50% level at 880 I think I would start to question the short-term bull count, but if I can stay awake I'll likely try buying one of those levels with stops

 

[ithatheekret]

News of the reratings seems to coming out now , makes one wonder what rating they have for gold . There'll be a bit of reshuffling on the cards , the majority of it could be compulsory for quite a few funds .
Gartman better get a stand-in , I'd bet his interview schedule ends up with a string of double bookings this time round .

Does anyone have the latest saffron prices ?

 

[barrett]

rofl
long 2@ 890

 

[explod]

Well just look at that solid chart

You have all done a great job this week, happy to bludge in the back seat and just plod along.

 

[Uncle Festivus]

A few signs for 'big numbers' people - Gold $US900, $AU1000, EU600. Consolidation while it digests?

Even though the aussie golds were caught up with the riff raff stocks sell off yesterday, the yanks took no notice. DOW down 250, NEM up 80c or 1.5%, XAU up similar %.

Amazing how humans' think - oz gold still at $1000 but the weak hands selling with the rest??

So what will cause a sell off in gold? I think it will be purely technical/momentum style for as long as big US corporates (Citi, Merril etc) continue to play tag team billion dollar write down then the fundamentals will continue to support speculative entries.

I think there will be one more 'swapping' of momentum of the big money back to equities & out of gold in the short term as one final hurrah to the end of the equities 'bull' (in gold terms they actually went backwards, but we'll let them think it was a bull )

But the signs are there for a greater participation rate of the general public so the fat lady hasn't even entered the building yet . (yes, I got the funny looks too a few years back when I was telling colleagues to buy gold, now they want to know all about it )

 

[rederob]

Two years ago the upholders of forum virtues pretty much told me to take a cold a shower when I forecast gold would hit $850 last year, and $1000 this year.
True, POG first hit $850 on the second trading day of 2008, but it came close for 2 months from November onwards.
Which probably means I miss out on my (2006) forecast of$1000 gold in 2008!
The reality is that we never know anything for sure until after the event.
The other reality is that probabilities provide market players a better guide to good fortune than the hit and miss of "luck".
The probability of gold going markedly higher over the next 2 years needs to be balanced against the opposite probability.
We do this most simply by determining the factors that are likely to drive gold lower.
The first and most powerful factor to consider is gold destocking by Central Banks and other parties. Apart from up to $500 tonnes of annual gold sales from European banks, the present environment of a debased US currency is more likely to see banks tighten (or add to) their physical gold holdings. So I see this factor as even less probable in the next year or so than it was last year.
The second factor is gold hedging. Here we have a plus for the negatives! The likelihood that producers will hedge more forward gold deliveries at present (or future) high prices, has increased sharply. This will especially be the case for near term and marginal producers. However, the $64m question is whether or not the big players will want to again get bitten - as has been Barrick for the last 5-6 years. My suspicion is that small fractions of future output will be locked into hedges around the $900 mark.
Mitigating against hedging is the USD denomination of gold prices. The bigger players will be smart enough to know that if the greenback continues to tumble, then "real" gold prices will at best be "parity" prices and at worst junk prices.
I'll close my post here to keep it brief.
But invite the naysayers to elaborate as they see fit.

 

[josjes]

http://finance.yahoo.com/charts#cha...ne;crosshair=on;logscale=off;source=undefined

Just my humble 2 cents. Oil has just dropped from record $100 (Jan 2) to 92.7 (Jan 11). I have observed the chart of USO (Crude Oil ETF proxy) vs GLD (Gold ETF), even if they don't move up and down at the same time and value, but they strongly co-relate each other, in fact it's usually oil leads gold. Just observe the chart above, it's uncanny in their co-relation. In almost every respect, gold is now in a very similar situation as oil. You can expect that a breakout in one market also leads a break out in another. Oil has broken all time high $100, Gold quickly followed day after. So I think we are going to have a bit of healthy correction for the next 2 weeks, before the next charge to 975. Next time Oil will lead again. Watch for that space.

 

[josjes]

A picture speaks a thousand words. This is the kitco website traffic graph.
At the height of gold price in early 2006, traffic shoot up in a straight line. Look where we are now, interest is climbing but nowhere are we in a mania mood. We still have a long way to go. This chart is a leading indicator of when to sell and buy gold, if you are trading gold shares. I never sell a gram of my gold.

 

[ithatheekret]

I have a 901* now , bft ... so 901/02/03/(904*) 905/06/07/08/10 note no 909 yet

note the expansion in the numbers ........

and on the previous tranch discussed 945/46/48/50/53/58 & note new smaller tranch before 970 line 961/63/64 , also and importantly the numbers need to be repeated at least twice in all data runs or they don't pan out otherwise to date , and 898/899/and 901 has now shown up in the data twice . Eventually each tranch will meet up perfectly digits after digit in place , I have that upto a 894 so far , with very low ratios going against it , which to me tooks like the same style data I had on a very good stock , which has reacted somewhat the same to POG .

This is good in my view again , also the correllating ratios are falling whilst volatility ratios are rising , if fact the correllations are widening .

There's a few assumptions I could put forward , but would prefer to wait until I have a concise set to match up against . The Swissie is very important on the first set . It's the Swissie that has given me the secound 901 input . Soft commodities didn't get that much of a dumping , and I'd be inclined to say that wasn't a correction at all , just profit taking and shortside action .

I'll repeat that , I don't think that was a correction in POG , my ratios don't have anywhere near one , the ratios are extremely mild in fact , compared to the Indices here and stateside , we've gone off the ratio scale on our indexes , the US is showing better ratios than here , I think theve got the real pain to come yet on my figures . That's not good for American households at all , I think they're going to get solid inflation , F.A. growth and persistent inflation stoked by stimulus machinations , which is a very , very tough call for the Fed. , feed the beast or lay poison and let the wheat grow . The 'R" word just might be matched by the "H" word . Taken them long enough to say stagflation .....................

 

[explod]

http://finance.yahoo.com/charts#cha...ne;crosshair=on;logscale=off;source=undefined

Just my humble 2 cents. Oil has just dropped from record $100 (Jan 2) to 92.7 (Jan 11). I have observed the chart of USO (Crude Oil ETF proxy) vs GLD (Gold ETF), even if they don't move up and down at the same time and value, but they strongly co-relate each other, in fact it's usually oil leads gold. Just observe the chart above, it's uncanny in their co-relation. In almost every respect, gold is now in a very similar situation as oil. You can expect that a breakout in one market also leads a break out in another. Oil has broken all time high $100, Gold quickly followed day after. So I think we are going to have a bit of healthy correction for the next 2 weeks, before the next charge to 975. Next time Oil will lead again. Watch for that space.

Not sure of your correlation here. Apart from the dip in November, oil compared to gold has basically gone sideways whilst gold in the same period has gone from US$750 to almost 900.

This whole week as oil has gone from 97.50 to 92.50 gold has gone the other way by around $30. In fact it has gone up this week even as the $US dollar rose.

Some weeks ago it also seemed to follow the Dow but has decoupled from this as well. The uncertainty in the markets, in particular the concern at the impending collapse of the worlds reserve currency is clearly reflected in the growing strength of the gold price