Gold Price - Where is it heading?

explod · 20 March 2008

explod said:
In current trade the Aussie dollar is down 1%. The old Aussie has had a strong run of late against the $US but the interesting aspect is that the move against other currencies has reversed and this has been lifting our local gold price; now $1064

And the big one, caused a great deal of reaction yesterday in the press so will probably be kept below 1000 I think behind the scenes the PPP and general US establishment will accumulated and go long, this will give it a strong break up but when all eyes are apon there will be an enormous correction, for the benefit of the new audience.

Will be interesting to see what pans out.

The birthday cake tastes nice though, thanks to the Barret Clan for that.

Gut feeling goes a long way. It is intuition, a tool based on our total experience.

The term PPP from my point of view is merely the whole US thingo trying to protect appearances, as said the other day, it's political, it's the US presidential election, it is fooling the M..gs, oops (meant to read sheeple) and US$1000 was going to be a huge stumbling block.

On my Gann chart, late April into early May is the next strong period for gold (as measured over the last 30 years), so I expect it to consolidate sideways for 3 or 4 weeks from here.

Uncle Festivus · 20 March 2008

Stick together comrades, fight the forces of evil .

FWIW, I've gone long again at these prices. Maybe the last great re-entry we may get? I see it as fund liquidation/profit stops getting taken out. Now for some base building again, and a sympathy rally, for the true believers!

And look at that, right on the lower channel support. Boll extreme too.

Gotta make some money here somehow seeing the equities will be under pressure today.

chops_a_must · 20 March 2008

Uncle Festivus said:
Stick together comrades, fight the forces of evil .

FWIW, I've gone long again at these prices. Maybe the last great re-entry we may get? I see it as fund liquidation/profit stops getting taken out. Now for some base building again, and a sympathy rally, for the true believers!

And look at that, right on the lower channel support. Boll extreme too.

Gotta make some money here somehow seeing the equities will be under pressure today.

I think you'll get some kind of fade from that breakdown UF, but with the amount of forced selling and leverage clearing, it'll have a fair bit of momentum down. Apparently there was a huge amount of options moves above 1000. Whether or not that was physical delivery or manipulation? Who knows? Probably a bit of both. But even with precious metals tanking, I'd still rather have them than cash in the bank.

Pretty scary isn't it?

But you were picking this a year ago... so it must feel pretty good. Very lucky to have intelligent dissent on these boards. Most people who read everything else but ASF, have got no idea.

I guess the important decision to be made with gold, and the market can't make up its mind, is whether we are inflating or deflating. Your stag theory versus dhukka's deflation.

Is it even possible to have both at the same time within intrinsically linked economies? And if not/ if so, what does that mean for gold?

Kauri · 20 March 2008

Japan is out today for Spring equinox holiday but looking ahead, a capitulation of Tocom gold contracts, or gold in JPY terms, when the market reopens next week will possibly continue to cap ???

from Kyodo today that Nippon First Securities will go bankrupt.

UK-based Endeavor Capital has taken losses of 25% on Japanese bond trades in the 7-yr and 20-yr bonds. It has closed out nearly all the position in recent days according to the report and the fund"s prime broker, Barclay"s was not talking...

Large fund selling was behind the commodity sell-off, and was exacerbated by reports of funds shifting back into the USD ahead of the Easter holiday.

There are rumors this afternoon of up to three hedge funds in trouble which some are loosely linking to the commodity bail out as the funds clear positions to offset losses. One of the rumors is that the funds got the Fed rate cut call wrong yesterday, having anticipated a 100 bp rate cut. Nevertheless, the commodity fall is seen fuelling further capitulation trades into the weekend and in Asia tonight and next week and this is seen keeping pressure on ...

Rumors of hedge funds in trouble have fuelled the sharp commodity and stock market fall to day with some verified reports emerging including the losses of about 25% on JGB positions held by Endeavor Capital and reported by Dow Jones. Bloomberg reports that the fund run by ex-LTCM chief John Meriwether has lost 24$ of its $21 bln fixed income fund as of March 14 with the report stating that the fund is selling holdings to reduce borrowings. Thornburg Mortgage reported today that it now needs $1 bln to survive. Reuters reports that Spanish brokerage Gaesco has reorganized to prepare for a sale due to multi-million dollar losses on its derivatives desk. Rubicon Japan Trust in Australia, who had margin calls apparently on an AUD/JPY position, paid out the margin calls but at the expense of investors with the dividend payment now delayed. However, the trust is selling off Japan commercial property assets to repay another $A200 mln short term debt.

The PPP/T comes in many forms...
Cheers
...........Kauri

CamKawa · 20 March 2008

The media are reporting this morning POG fell last night due to
1. The market wanted 100 points but only got 75
2. This caused the USD to rally
3. The Fed is talking about going tough on inflation

As for point 3 I think the Fed will have no choice but to keep lowering rates to stave off further falls in the equity and housing markets and will jaw bone the threat of inflation as much as possible. BB knows what's going on here it's just that his hands are tide. I'll be concentrating on what the Fed actually does rather than its wishful rhetoric.

PS POG has just suffered its biggest one day loss in 2 years and oil suffered its biggest one day loss since 1991. :22_yikes::22_yikes::22_yikes:

Sean K · 20 March 2008

CamKawa said:
PS POG has just suffered its biggest one day loss in 2 years and oil suffered its biggest one day loss since 1991. :22_yikes::22_yikes::22_yikes:

Were they % losses, or just numbers Cam? Remember how much they've gone up the past few months.

CamKawa · 20 March 2008

kennas said:
Were they % losses, or just numbers Cam? Remember how much they've gone up the past few months.

Commodities comedown

On the New York Mercantile Exchange, crude-oil futures were hit with their biggest daily loss since early 1991, with the contract for April delivery off $4.94 to close at $104.48 a barrel. See Futures Movers.
Elsewhere on the NYME, gold prices suffered their worst one-day drop in nearly two years, with gold for April delivery, falling $59 to finish at $945.30 an ounce. Read Metals Stocks.

Source: http://www.marketwatch.com/news/sto...x?guid={7D6BBB49-7713-4C69-8D3A-80BF97B3B706}

Aussiejeff · 20 March 2008

CamKawa said:
Commodities comedown

On the New York Mercantile Exchange, crude-oil futures were hit with their biggest daily loss since early 1991, with the contract for April delivery off $4.94 to close at $104.48 a barrel. See Futures Movers.
Elsewhere on the NYME, gold prices suffered their worst one-day drop in nearly two years, with gold for April delivery, falling $59 to finish at $945.30 an ounce. Read Metals Stocks.

Source: http://www.marketwatch.com/news/sto...x?guid={7D6BBB49-7713-4C69-8D3A-80BF97B3B706}

All of which points to a *shocker* of a day looming for most of our commodities and energy stocks. As if they haven't been hammered enough lately as it is.... then of course there is the unknown of what the DOW is going to do tomorrow (likely plunge again) while our markets are closed for easter....

Happy Easter folks!

Trembling Hand · 20 March 2008

CamKawa said:
The media are reporting this morning POG fell last night due to
1. The market wanted 100 points but only got 75
2. This caused the USD to rally
3. The Fed is talking about going tough on inflation

Come on this selling started 2 weeks ago in spite of the price rises. If you have a look at the volume about 80% has been to the down side. This started a bloody long time before the rate cute was in. It was a classic rope a dope 24 hr futures trade. Roll it up to new highs in the low vol sessions let go of your holdings in the high vol. CLASSIC!

CamKawa · 20 March 2008

Here's an interesting point of view regarding the US and inflation. Look for the audio link under the picture.
http://www.abc.net.au/news/stories/2008/03/19/2194170.htm

Kauri · 20 March 2008

Trembling Hand said:
Come on this selling started 2 weeks ago in spite of the price rises. If you have a look at the volume about 80% has been to the down side. This started a bloody long time before the rate cute was in. It was a classic rope a dope 24 hr futures trade. Roll it up to new highs in the low vol sessions let go of your holdings in the high vol. CLASSIC!

Could you possibly post up a chart showing this rope a dope trick... so we can all see how to recognise this Classic play... Thanks in advance..
Cheers
..........Kauri

Trembling Hand · 20 March 2008

Trembling Hand said:
Interesting trading last 2 weeks(if you go into such noise that is)

Most of the rising in POG has come on very little volume. Where the falls are on big volume. Whose slipping out the back door??

I posted this yesterday before the meltdown. With this chart

Kauri · 20 March 2008

Trembling Hand said:
I posted this yesterday before the meltdown. With this chart

before the meltdown from $1035 to $975 or before the meltdown from $975 to $940....
Cheers
.........Kauri

Sean K · 20 March 2008

Looking at a dead cat on NCM at the moment. Off 11%, could have been overdone.

Trembling Hand · 20 March 2008

Kauri said:
before the meltdown from $1035 to $975 or before the meltdown from $975 to $940....
Cheers
.........Kauri

Actually If you want a specific time Kauri at 12:08am Tuesday morning I posted on my blog this

In times like this when not only is the **** hitting the fan but knocking it right off the table, things that once were safe become dangerous. As the nasty reversal in Gold has just illustrated.

Price then about $1010

Temjin · 20 March 2008

explod said:
so I expect it to consolidate sideways for 3 or 4 weeks from here.

I tend to agree. I was hoping for an extended consolidation instead of a sharp drop like this, but this will be similar to the Nov 2007 to near end of 2007 consolidation/correction except with far more volatity.

The long term fundamentals are still obviously intact for now, unless Benchopper decide to increase interest rate by several percent and let the banks fail.

Silver is getting seriously hammered too, but then it was far more overbrought than gold.

CamKawa · 20 March 2008

Market Commentary

Gold

opened at 983.00/984.00 in New York. The metal tumbled as

funds sold, triggering stops and pushing gold lower until it found support
at 957.00. This level was not sustained as dealers continued to
dump gold in response to falling oil prices and a strengthening USD,
pressuring it to a low of 939.50/940.50. Gold recovered marginally
and traded sideways late in the session, closing at 945.00/946.00.

Silver

opened at 1972.00/1977.00 and quickly weakened on dealer

selling. Support was established at 1845.00, but the subsequent rebound
was short-lived and silver eventually hit a session low of
1820.00/1825.00. The metal traded in a narrow range over the remainder
of the session, finally settling at 1839.00/1844.00.

Technical Commentary
Gold

fell by more than 4% today – its largest decline since November

(bringing the 2-day loss to more than 6%). Although equities weakened,
we are reluctant to single out this factor for what happened to
gold as the two did not move in tandem during the session, and gold
fell yesterday despite soaring equities. USD strength likely played a
role, although EUR/USD did not move into negative territory until rather
late in the session. Gold and other commodities have soared in part
because of growing concerns over US inflation. However, recent encouraging
developments in this regard – benign US core CPI, a drop in
market inflation break-even rates and yesterday’s dissents by 2 FOMC
officials – could be scaring gold bulls and motivating some profit taking.
We remain bullish on a medium-term basis given our concerns
regarding the US economy and financial markets, but the near-term
technical picture has become darker. The break of support at 957.00
was bearish, and gold also violated figure/trend line support of 950.00.

Silver’s

7.0% drop today made the decline in gold look modest by

comparison. Today’s close was well below trend line support just underneath
19.00 and was therefore bearish. The next level of support
lies at 17.75. Silver’s MACD reached a new high in tandem with the
price earlier this month, but has since fallen well through the signal line
– another bearish signal. The recent out-performance by gold has
lifted the gold/silver ratio back above 51.0.

source: http://www.scotiamocatta.com/prec/pdfs/pm_daily.pdf

explod · 20 March 2008

Temjin said:
I tend to agree. I was hoping for an extended consolidation instead of a sharp drop like this, but this will be similar to the Nov 2007 to near end of 2007 consolidation/correction except with far more volatity.

The long term fundamentals are still obviously intact for now, unless Benchopper decide to increase interest rate by several percent and let the banks fail.

Silver is getting seriously hammered too, but then it was far more overbrought than gold.

Dropping further, now at US$918, I think buyers will come back at this price and it will recover faster than I earlier anticipated.

I think oversold now. But we will see what pans out. A factor I have not considred before is the dirivative/carry trade thingo that may be making big players run for cash.

Uncle Festivus · 20 March 2008

explod said:
Dropping further, now at US$918, I think buyers will come back at this price and it will recover faster than I earlier anticipated.

I think oversold now. But we will see what pans out. A factor I have not considred before is the dirivative/carry trade thingo that may be making big players run for cash.

There goes my analysis , although, a short covering rally of equal force can't be ruled out either?

Trembling Hand · 20 March 2008

Uncle Festivus said:
There goes my analysis , although, a short covering rally of equal force can't be ruled out either?

Surprising to see such a move on so little volume. Bulls hardly put in a bid!

Would be interesting to see if that's a short term low?

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