Gold Price - Where is it heading?

[ithatheekret]

Back to the point, the gold rise will not follow the normal charting patterns because what is happening now is different.

YES YES YES , spot on cobber , the economic fans are going to slow to a halt they will be so clogged up with the amount of (expletive) that's hitting them .

I see Asia and here at home as the only true areas with some buffering each using different sectors

We've all seen historical BAD , this is going to beat that hands down , but eventually it will have spread throughout the globe , including China one day , they'll cop it just as bad as the US now , but in the future



So make hay whilst the sunshines !

 

[agro]

thought i might like to add:
http://www.reuters.com/article/marketsNews/idCAN1463410520080114?rpc=44

NEW YORK (Reuters) - Gold prices will test a record $1,000 an ounce this year, boosted by growing investment interest, safe-haven demand and strong market fundamentals, a Citigroup metals analyst said.

"We believe gold has entered a new investment-driven phase, in a much more hospitable macro setting. Catalysts are rotating from safe-haven demand, to currencies, to the re-flation trade, as new buyers enter the market," John Hill, director, metals research, at Citigroup in San Francisco, told clients in a note dated Sunday.

However, Hill also said he believed the broader investor base was not yet involved.

Hill kept his gold forecasts unchanged at $750 for 2008, $800 for 2009 and $820 for 2010.

"Within these ranges, we fully expect a test of $1,000 ounce in 2008," Hill said.

Hill also raised the price targets for shares of Barrick Gold Corp (ABX.N: Quote, Profile, Research), the world's largest gold producer, to $62 from his previous estimate of $48, and to $67 from $54 for No. 2 Newmont Mining Corp (NEM.N: Quote, Profile, Research).

Gold's appeal as a safe-haven investment has increased due to worries of further write-downs among major financial institutions and credit market meltdown in the United States, the world's biggest economy.

In just three weeks, spot gold has jumped nearly $120 to Monday's peak of $914.00 from a bottom of $795.30 on December 21.

(Reporting by Frank Tang; Editing by Walter Bagley)

 

[Kauri]

One of those small coily things... maybe..
Cheers
........Kauri

 

[drillinto]

Gold is the new global currency
Published: January 8, 2008 (a week ago)
Financial Times, London, UK

There was a time when gold was money. In today's uncertain world, the yellow metal is back in fashion. Bullion prices rose to a record nominal high after the assassination of Benazir Bhutto in Pakistan added to nervousness about the world economy. Part of gold's allure is its traditional status as a safe haven. It is seen as a store of value when everything else seems risky. But the bigger drivers behind the rising spot price are a depreciating dollar and the prospect of negative US real interest rates.

A better way to think of gold may be as central bankers used to before America dropped the gold standard: not as a commodity, but as another currency. As long as the dollar stays weak, gold's bull run will last.

The arguments for further gains in the gold price are compelling. It looks cheap, despite climbing from a low of about $250 a troy ounce in 1999, when central banks were selling reserves. The UK's decision back then to sell 60 per cent of its official holdings looks particularly poor judgment.

Prices have a long way to go before they approach the inflation-adjusted record touched in 1980 when Soviet tanks invaded Afghanistan. At yesterday's $859, gold was trading at less than half that level. It could top $1,000 and still be at the lower end of what some analysts argue is a safe haven range.

Gold is also benefiting from diversification away from equities. Commodities have emerged as a distinct asset class, with billions of dollars poured into exchange traded funds. Physical demand for jewellery may have stalled in Asia, but consumption remains strong in the Middle East. Declining output in South Africa will help support spot prices.

But it is the relationship between the dollar and the reaction of the world's central banks to the credit squeeze that some bulls would say really makes gold an attractive bet.

The US Federal Reserve's aggressive, rate-cutting response to the credit squeeze has created a risk of a sharp rise in American inflation. That in turn creates the risk of a precipitous fall in the dollar and so makes gold more attractive as a hedge.

The world's major economies have experienced rapid money supply growth of 10 per cent plus per annum in recent years. The Fed remains the world's biggest holder of gold, yet supplies of the metal are growing at only 1.5 per cent a year. If gold is a finite currency, its value against not just the dollar, but sterling and the euro too, should rise.

Moreover, a sharp decline in US real interest rates - financial markets expect another half percentage point cut this month - means that the low yield on gold matters less. It may have been a poor hedge against inflation in the past but the combination of rising consumer prices and economic stagnation may make it a better store of value.

Gold's rise shows investors are nervous. That is an important message for central banks contemplating interest rate cuts. The Fed must show it is not prepared to allow inflation to take off. Keynes called gold a barbarous relic. It has life left in it. But it is in the interests of business and consumers that its most bullish fans are proved wrong.

 

[Miner]

http://www.asx.com.au/resources/new...15_gold_tradeable_fund_in_difficult_times.htm

Some reference from ASX site on gold ETF.

Regards

 

[Kauri]

another cross-over... another step??
Cheers
...........Kauri

 

[chops_a_must]

Got a larger count for it Kauri?

Looks to have broken down severely in a matter of minutes, on big volume as well.

Rumours of an Indian price crash or something? Not a surprise though really.

 

[Kauri]

Got a larger count for it Kauri?

Looks to have broken down severely in a matter of minutes, on big volume as well.

Rumours of an Indian price crash or something? Not a surprise though really.

nothing that makes any real sense.. inmy E/W anyways.. but I am used to that..
Indian gold buying has apparently dropped by 20% due to price.. anecdotally
Cheers
.......Kauri

 

[ithatheekret]

I managed 893.80 , plus commission , not enough margin to do much else due to a withdrawl .

a little bit of movement would be nice again ...........

 

[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.

It's not so much the amplitude of price change, but the direction of both. If you open the link above, and observe carefully the chart may have explain that better. This chart is not just over weeks, but months and years.
So, if you believe the co-relation movement, then the fall of the price of oil last week foretell a fall of POG soon if not in the next week.

Finally, market downdraught has forced Gold to a deservedly overdue correction, following oil. Down 2% on strong volume, I still think this will be just a short correction, then it will shoot up to its heavenly trajectory $975-985. As I said, watch for oil closely, it will lead again when breakout occur.

 

[ithatheekret]

It's below $890 , I only wish oil would get nice dips like this , just cost $58 to fill a Astra hatch .

Of course I had to go shopping / haircuts , dragged around Gawler retail district and missed the main dip .

Even the barbers were talking about gold in villageville , one comment was the Indians have tagged the market rumours to get the price down . It drew a smile from me , excuses abounding .

I think golds just found its own dimensions as an investment instrument , come on the pullbacks . Trading like a currency to me when I look at the live tick chart . Days of the Consols ....... ah just dreaming of fim=nancial peace that was .

Must focus on nat gas for awhile though , I think it's got great upside with its discount to oil . Cheap clean ....... lagging .


Swissie has started a bounce , I have 108.94 to 109.04 but that must be at least 4 to 5 points out , back of envelope , as my data has been coming through in patches , must be a wireless glitch . The last batch showed 108.94-96/7ish , might go on them for a shot at it .

Those minis are wild though , just watching movements , might hold off until it settles ...... lower fingers crossed .

 

[Uncle Festivus]

Thar she blows. Targets 870, 840.

 

[Kauri]

intriguing things those little coily things so they are...

 

[explod]

intriguing things those little coily things so they are...

Yes the resistance you identified on the 11th, although it broke out above, it overstretched. A good call which I did not understand at the time.

The daily gold chart and the US gold indexes were looking very overbought so this correction was certainly on. Would think that there is a lot of support round the US$840 mark.

A Fed move down by half percentage point will (although some factored in) will drop the dollar and give support to a new uptick in gold.

Of course it is also apparent that drops on Wall Street will add to the downside in the short term too.

Just my 2 cents

 

[barrett]

Explod, I liked the point you and refined silver made earlier that the smaller gold stocks are starting to look really undervalued, relative to the cash flow many of them will be bringing in the coming year or two. And there will be surprise resource and reserve upgrades as they revise their gold price assumptions up. I do worry about how some of the small early stage developers with big capex needs are going to raise any cash in this environment. Debt will probably be unavailable to most, and equity far too expensive.

Considering these ideas I've started taking a little money out of the metal with a view to putting it into two types of gold companies, and I'm interested in people's opinions here:

1. Early stage developers with 1Moz+ resources, very low Market Cap/oz resources - and probably a need for cash but also with strong attraction as takeover targets so they don't have to raise it themselves. eg perhaps Westonia Mining WEZ... anyone have a favourite undervalued junior developer in their sights?

2. Midcaps with rapidly expanding production in coming 1-2 years, like Oceana, Resolute (ASX), Minefinders, Dynasty (US) who have all the cash they need to complete development. I'm leaning towards the high cash-cost (high leverage) plays that were spurned by investors in recent years when cash costs outstripped the gold price rise - they now seem undervalued compared to the majors and compared to the gold price.

Anyone else doing a similar re-allocation of funds.. from metal into some overlooked stocks? cheers

 

[josjes]

The price drop is of little help to us who buy gold in Australian dollar. Yesterday an ounce is A$1008, this afternoon hardly move to A$1004, even when gold drops 2.8%. I just wish I could time it by buying $US when it's low sell it then buy gold when it's high. Anyone know how I could solve this currency issue ?

 

[barrett]

Possible upside channel breakout on the hourly here?

 

[barrett]

The price drop is of little help to us who buy gold in Australian dollar. Yesterday an ounce is A$1008, this afternoon hardly move to A$1004, even when gold drops 2.8%. I just wish I could time it by buying $US when it's low sell it then buy gold when it's high. Anyone know how I could solve this currency issue ?

If you expect the $US gold price to go down and the $A gold price to remain firm, but you want to get the benefit of buying eventually at an anticipated lower $US price, you could hedge by shorting the $US against the $A to the value of the amount of gold you're planning to buy. Should be pretty straightforward with most online currency trading accounts, there are many providers eg oanda.com, cmc markets but as I don't trade currencies I can't recommend one.

You can get around this by buying futures contracts on gold (denominated in $US) instead of gold itself. That way you get to buy at the low $US gold prices, but because you're only buying a contract, only your profits are exposed to currency risk. I prefer to do it this way rather than speculating on currencies as well as on the gold price.

If you prefer to buy actual bullion rather than a futures contract, I reckon you'd have to use something similar to the first approach if you wanted to hedge against a strong $A.

 

[josjes]

Thanks Barrett. Good idea, although it's probably make thing a wee bit more complicated, hedging the dollar. But I think there is no trick here,
"In strong bull markets it's of paramount importance to be invested, everything else is not more than the icing on the cake" So don't fight the trend, I've observed these past 3 months, in bull markets the surprises are almost always to the upside, one of the many reasons why you shouldn't fight the trend. Just buy it and reap the rewards. Don't be stingy for saving extra few dollars and let chance pass you by. Right ?

 

[barrett]

Yeah that's right.. in a bull market you always want to be either very long, long or rarely, neutral. You don't want to be out of a bull market. You want even less to wade in deeply to an asset class you have just discovered and barely understand, at an interim peak. I did that in late 2004. My investments remained underwater for some 18 months. It's not different this time. The gold sector historically in nearly every year has a move of 30% _in both directions_: whether that year falls in a bull, bear or bust. So it doesn't do to purchase too much at once unless you are sure a bottom is in place - or to overlook the near certainty of a 30% down move in gold stocks during 2008.

IMO the smartest gold investors are not trying to outrun the hordes to buy gold at $1000/oz+. They're buying overlooked quality deposits below ground for $10-$30/oz at the junior developers and if you're just getting into gold now I reckon that would be a great place to start.