Gold Price - Where is it heading?

[Kauri]

Rumors are now circulating of a USD$10-20 billion write-down with one of the US investment banks and should this actualize,....

Cheers
..........Kauri

 

[Uncle Festivus]

The correlation between oil (main pic.) and gold is undoubtable.Good shot on the $950 S.C.

Um, I can't see a good enough correlation to trade with? Do you use it to trade gold? What correlation are you going by? Is it a ratio, percent rise/fall, relative?

• The gold/oil ratio has not been a constant.
• The gold/oil ratio macd is turning up (gold to outperform, oil to underperform??).
• Gold continues to break all time highs
• Oil is having a third go at breaking through $100 convincingly?????
• US Banking system is insolvent (just thought I'd add that in for Kauri's post )

 

[CamKawa]

But how it's likely to move relative to the A$ is of more interest to me.

I was wondering the other day why we don't quote the POG in AUD's here in the forum because it can rise or fall in as many USD's as it likes when it's only the POG in AUD that really counts.

Case in point is this chart. POG is up 4.26% in USD but down 1.25% in AUD. Note this chart stops at 18 Feb and hasn't taken into consideration the latest price movement so I think we may be in front in AUD terms now as well.

 

[Uncle Festivus]

I was wondering the other day why we don't quote the POG in AUD's here in the forum because it can rise or fall in as many USD's as it likes when it's only the POG in AUD that really counts.

Case in point is this chart. POG is up 4.26% in USD but down 1.25% in AUD. Note this chart stops at 18 Feb and hasn't taken into consideration the latest price movement so I think we may be in front in AUD terms now as well.

I have wondered this too, but it appears that our market (gold shares) is more aligned with the US pog for some reason??

 

[CamKawa]

Does anyone know what happened around the $926 area ?

Are you talking about the mystery plunge in the POG? Scotia Mocatta has described it as "Gold opened at 924.30/924.80 in New York. Funds sold early on responding to falling oil prices and a stronger USD, pushing the metal to a low of 913.20/913.70. The metal quickly recovered from the lows as good bids flooded the market."

Whenever the POG does a nose dive central bank intervention is always a suspect that's on the top of my list.

 

[Wysiwyg]

Um, I can't see a good enough correlation to trade with? Do you use it to trade gold? What correlation are you going by? Is it a ratio, percent rise/fall, relative?

Hi Unc. well i entered my first ever gold trade yesterday (still going) but no i didn`t/don`t use the relationship existing between the two to trade.Just noting the similarities in chart movement at times and certainly not all the time.

Have a fun day,

 

[barrett]

Those mainly buying futures will follow the USD price, the contracts are denominated in $US so $A movements don't matter.. but for following the ASX-listed gold stocks, bullion, etc. the $A gold price is the most important factor, and especially for the miners who pay their cash costs, or some of their cash costs, in $A. Our gold stocks do get their leads strongly from the US gold sector, but there is an 'adjustment' built in, eg yesterday the US gold price made a new high, XAU was up 4.9%... but $A gold price remained some way below the recent high, Aussie gold stocks up on average maybe 3%?.. so best to follow both prices and keep an eye on what the US gold sector is doing too..

 

[CamKawa]

Just wondering what Scotia Mocatta are calling for now, anything interesting there CamKawa?

Market Commentary
Gold​

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opened at 943.00/943.50 in New York and traded erratically
within a narrow range for much of the morning. It drifted lower near the
London fix, however this was short lived as funds bought responding to
the weaker USD. Oil initially rallied after the release of above consensus
weekly inventory levels, which helped gold to climb to a new high of
953.80/954.30. The metal was later dragged lower as oil prices tumbled,
finding support around 944.00. Into the close it recovered marginally
and settled at 945.40/945.90.
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Technical Commentary
Gold​

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- After yet another strong performance today it is difficult to be
anything but bullish on gold. Those worrying about overbought levels
should be reassured by an RSI of just 67 and few indications that we are
anywhere near overbought, even on the short term stochastics. The five
day commodity chart to the right highlights that on a comparative basis
gold has essentially underperformed, which should also help to shield if
there is a correction in other commodities. All in all, technicals continue
to point to further upside. Support lies at the 21-day moving average of
915.95; while resistance can now be found at the psychological level of
1,000.​

Source: http://www.scotiamocatta.com/prec/pdfs/pm_daily.pdf​

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[barrett]

Ta for that, they're very bullish aren't they..
was just looking at this potential reversal in the HUI last night, although it wasn't confirmed in the XAU so not technically so bearish I think..

The only thing troubling me about this rally, the gold price is repeatedly making new highs and the HUI repeatedly isn't... either bullion will correct sharply on its way higher, a la Dec 06, or the stocks are about to play one huge catch-up game. Just noticing on the third chart below that the HUI close today at $944 gold is only about the same level as it reached in November at $850 gold. That's not right! As if cash costs have gone up 10% in three months, I don't think so... and Anglo which got dragged down by the South African power problems, isn't even in the HUI so it's not as if that's biasing everything down.

How will it be resolved.. Fat Prophets' opinion from this Tuesday was that they think gold will reach US$1000 soon and at that point most gold miners will start to turn profits and the big money to be made will be in the stocks. I still question well why are the stocks so clearly making a series of lower highs here when gold is so clearly making new highs, but for now I'll go with the FP interpretation..

 

[ithatheekret]

Are you talking about the mystery plunge in the POG? Scotia Mocatta has described it as "Gold opened at 924.30/924.80 in New York. Funds sold early on responding to falling oil prices and a stronger USD, pushing the metal to a low of 913.20/913.70. The metal quickly recovered from the lows as good bids flooded the market."

Whenever the POG does a nose dive central bank intervention is always a suspect that's on the top of my list.

I bought the dip I had been riding down , then I got a signal at 919 to buy , so I did , then it smashed through 926 . But the 926 run was so fast and sudden . I'm suss that US data that was due to come out was already in someones hands to trade with !

Everything that says POG should rise happened the day after .

 

[barrett]

something interesting here just in on the 5min... maybe a short-term inflection point.. 948.8 the key level on the potential right shoulder..a break above that would be bullish or neutral, a strong bounce off it would be quite bearish for a day or two, target would be 926-7... hmm that rings a bell

 

[Kauri]

may affect/effect things???
The latest Turkish initiative to eradicate PKK rebels has reportedly started with a land offensive backed by fighter jets. Turkish TV is reporting, without citing sources, that some 10,000 troops had crossed the boarder and moved six miles inside Northern Iraq.

 

[ithatheekret]

Yep , claiming a hunt of PKK .

Enough tanks and troops to hold the ground by the looks after too .

 

[Kauri]

Yep , claiming a hunt of PKK .

Enough tanks and troops to hold the ground by the looks after too .

PKK today...PPT tomorrow....

 

[ithatheekret]

Bet they wished they never helped with CIA operations now .

 

[GreatPig]

may affect/effect things???

affect, FWIW.

GP

 

[CamKawa]

Turkish troops move into northern Iraq
http://www.abc.net.au/news/stories/2008/02/22/2170480.htm?section=justin

 

[ithatheekret]

Nice dip .

 

[barrett]

Three right shoulders held below 948.86 on the 5-min and now the neckline in blue looks to be broken. Revised downside target based on the head and shoulders is now 929.25... & here's the good bit.. that number is exactly the high point reached 2 days ago on the hourly close.. so it's double support. I reckon that would be the last good opportunity to buy before 1000...

 

[barrett]

whoops that was 15 min chart, same targets though, anyone else playing this move? Trying to stay awake to see if it reaches 929.25, if so I'll load up there