Gold Price - Where is it heading?

[explod]

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?

Maybe back in now, it has recovered $12 since the low an hour ago.

Cheers explod

 

[CamKawa]

I hope it's found some support now.

My POG thresh hold is as follows

1000 - 980 soft drink
979 - 940 light beer
939 - 920 full strength beer
919 - 900 single shot of sprits
899 - 800 double shot of sprits
799 -700 prescription drugs
699 - hard drugs

 

[ithatheekret]

Postion shuffling of allocations and call requirements have added to the correction , volatility still strong , the first $100 swing on the boards .

You folks are happy ...... aren't you ?

You will note every commodity , soft and hard got hit .

An unwinding of positions ?????

For myself this is an opportunity to buy again . I have a range of 887 -912 as possible low areas and I believe that would still have the metal in a bullish trend . The annoying point is the falls in the AUD which will add to the cost of purchases , thanks Kev.

If I we're to believe the US was not in a recession and quite possibly worse , I would be selling ever ounce of physical we owned .

But what we are seeing is a needed rush for cash by funds , banks etc. , this is a textbook preservation move and it has presented an opportunity .

 

[Young Gun]

Went long at $936 US an ounce, with a stop loss just under $900. I belive this is just a minor correction and will form a base for later run. I dont think that the fundmentals have changed and as long a there is volatility in world markets gold will continue an uptrend.

 

[kransky]

bought my first gold future last night at about 958.. out at 950

i would love to be able to go long long from below 900 with the cr@p that will likely be hitting the fan in the coming months...

 

[chops_a_must]

The problem is, to trade gold, you have to be leveraged. And right across the board, leverage has distorted the value of just about everything.

Leverage is currently being unwound. Gold to a certain extent will have to come down with it...

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?

Why don't you take these position trades more often?

Are you able to tell me, from experience, when a contract tanks on expiry... what it actually does to the trend? Just from unverifiable observation from me, it seems to do irreparable damage to the existing trend... Has that been your experience?

 

[Uncle Festivus]

An interesting excersise in human emotion - can you spot the period of panic selling and the period of steady accumulation from the lows in the chart? Those who were long time set in the trend have been willing to wait for the weak hands to jetison and stand ready to top up again.

That's for todays action anyway - wait and see how deep the pockets of the accumulators are or whether the central banks will use their bottomless pit money printing machines to time another tank event??? All very sus is the timing of things this week - 25 pt interest rate 'emergency' cut, then a 75 pt one. As if they didn't know what the plan would be - they are not complete idiots - or are they?! Beware the power of the Fed, they still control it!

 

[Kauri]

an interesting exercise... for those who think that the $US Index may tentatively have bottomed..... or not....

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

 

[>Apocalypto<]

an interesting exercise... for those who think that the $US Index may tentatively have bottomed..... or not....

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

to early to call that Kauri...

If the gold bugs thoiught it would just keep rolling with no serious hic ups, well then they had gold in there ears!

Explod thoughts on this?

hell of a short missed o well!

 

[GreatPig]

can you spot the period of panic selling and the period of steady accumulation from the lows in the chart?

I hope they didn't accumulate too much.

Looks like more panic selling...

GP

 

[explod]

I hope they didn't accumulate too much.

Looks like more panic selling...

GP

As the bull gains momentum it has been well documented that we need to prepare ourselves for increasing volatility. It is said, you climb a wall of worry. It is at these times that I go back to the big picture, and first that is the chart. The gold trend is clear enough and a correction to the mid US$750 would be required to break that. A very big correction is well overdue and it is hard to credit that we were at US$700 an ounce a mere 8 months ago. Against the other retracements that have occurred in this gold bull we could expect to go down to around US$850 and on the past 12 hours or so we are well on the way.

However in my observations it has been the US$ index as the indicator. The reason is simple, US$ are not backed by productivity, only debt and so much of it that the Fed must let its value fall to lessen the IOU to the productive nations from whom they buy their goods. They are heading for default, the sheeple dont' know it yet but the trading nations do.

I think that the gold bull is well and truly intact and the current correction was probably overdue. I do not believe the period of consolidation will play out as long as the one in 06/07 and that commensurate with this move down the next upleg when it comes will be the one to be on.

I am fully loaded in my holdings. From my position I cannot afford to miss the train so for that reason am happy with my lot. Having been with this trend for some years my position is probably different to others.

Just from my gut, I think this move down may have more to it but will be short lived. Those who can trade the wipsaw I take my hat of to, but not for this old fellar.

 

[refined silver]

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?

Hi Chops,

Yes you can have both inflation and deflation at the same time in the same economy (which we WILL have) and both are good for gold.

In the 70s there was huge inflation of commodities -hard and soft/oil/gold etc, at the same time the Dow was range bound from '66-'82, but given the inflation rate the stocks lost approx 75% in real terms over the time period.

Sad to say its like a giant vice. Debt-deflation - in assets build on debt especially housing, but also paper assets like bonds and many stocks reliant on economic growth. Inflation in food, petrol, commods, etc.

Gold benefits from both sides - in the rush from paper and debt asset deflation and from the commodity inflation - similar to the 70s.

 

[cuttlefish]

To me the main inflationary indicator is wage inflation as this is the biggest devaluer of cash and drives inflation in other areas. It also has the biggest impact on business and puts the 'worker' at the forefront. From the housing front this translates into rental increases and possibly house prices rising as well - but in real terms they may be falling. In an inflationary environment growing the cash value of your investments isn't enough - they have to grow faster than cash devalues. (i.e. growth in 'real' terms is whats important).

On the gold front, I'm no technician but see support in the 870-920 sort of range and think it could consolidate around here for a while (without another iceberg).

 

[cuttlefish]

I can even convince myself on the 5yr chart lol. (whats it called when you chart what you want to see).

 

[Kauri]

Gold extended losses below $910 with forecasts now for the yellow metal to fall to $850 or even below $700. In addition, crude oil has lost $3 this morning, adding to the commodity bail out. There is ongoing talk of margin calls, similar to yesterday and new talk that hedge funds are reducing their leverage, adding to the commodity sell-off and also fuelling AUD/JPY selling as well. Further pressure is a concern too with the quadruple witching today in the futures that could add to the sell-off.

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

 

[MRC & Co]

Interesting to see gold open in New York and not plummet..........yet..........

 

[refined silver]

To me the main inflationary indicator is wage inflation as this is the biggest devaluer of cash and drives inflation in other areas.

Sadly, again for the average worker this is not going to happen. China/India etc will cap wages in western countries for decades to come. There might be wage increases but it will be under the true ratye of inflation. There are short-term exceptions to this of course where we have labour shortages in trades etc but these will be short-term not long term.

Traditional Keynesian economics says wages drive inflation but that is a load of crock, inflation comes from one thing and one thing only and that is an increase in the money supply faster than an increase in economic output. Since all Central Banks have the spiggots open full and will do for a long time to come, monetising bankrupt OTC derivatives.

 

[cuttlefish]

I just saw the comsec market report - its always amusing - people are selling down commodities and stocks to go to safe assets like .... wait for it ... government bonds lol lol lol. Get yer NINJA bonds here, we'll throw in some falling knives.

 

[refined silver]

Gold extended losses below $910 with forecasts now for the yellow metal to fall to $850 or even below $700. In addition, crude oil has lost $3 this morning, adding to the commodity bail out. There is ongoing talk of margin calls, similar to yesterday and new talk that hedge funds are reducing their leverage, adding to the commodity sell-off and also fuelling AUD/JPY selling as well. Further pressure is a concern too with the quadruple witching today in the futures that could add to the sell-off.

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

Since this sell-off is totally manipulated -part of the spin that all is ok. 3/4 point rate cut, stocks up 400, gold down, yet even that fell apart 2 days later, I can't see it lasting that long.

Admittedly hedge funds are getting margin calls, while the commercial shorts who sell gold down never do, since they operate on behalf of the Fed and as such never have to cover but just keep adding shorts. However countries and SWF with trillions who want to diversify away from the dollar will provide more than buying to make up for any hedge funds bailing out.

JMHO

 

[cuttlefish]

Sadly, again for the average worker this is not going to happen. China/India etc will cap wages in western countries for decades to come. There might be wage increases but it will be under the true ratye of inflation. There are short-term exceptions to this of course where we have labour shortages in trades etc but these will be short-term not long term.

Traditional Keynesian economics says wages drive inflation but that is a load of crock, inflation comes from one thing and one thing only and that is an increase in the money supply faster than an increase in economic output. Since all Central Banks have the spiggots open full and will do for a long time to come, monetising bankrupt OTC derivatives.

good comments - I'll have to digest them, especially in the context of a regulated international labour market. In a country like Australia where there appears currently to be a labour shortage I could see labour shortages driving real wage growth and affecting business profitability and capacity in the short term, in the longer term not necessarily so.

The Chindian labourers will possibly experience a level of real growth as their currencies climb in relation to the USD and because part of their economic growth is driven by an increase in affluence as a result of internal productivity but I haven't really thought that through yet.

The US government giving out money for debt backed by questionable productivity is likely to devalue their currency and a devalued currency one would think would result in an inflationary impact though deflation still isn't out of the question either (is it?).

Either way, a devaluing USD will cause rises (in USD terms) for USD priced commodities and also a flight away from USD based assets, and given other world currencies are effectively USD based assets (due to the USD being the world reserve currency) then a flight away from all currencies seems likely to safer assets (like commodiites, oil, gold etc.(even property at some point? - I'd rather hold unencumbered property than cash in an inflationary environment.).