Gold Price - Where is it heading?

[stefan]

Re: GOLD Where is it heading

Wayne,

Excellent posting. I'm not after proofing that T/A is crap. I'm taking the view that there are too many T/A done on stocks who simply don't work that way. One of it is gold. Now there is of course also the simple fact that things work because so many people believe in it.

This is true Stefan, but this is also true of any form of analysis. There is no analysis that can predict the future. We can only make projection/educated guesses.

Wayne, this is not what I'm trying to say. Of course there is no form of analysis that can predict the future. However, if the US is on terror alert, then I as a human being with some sort of intelligence, can take that into consideration. I will therefore go and buy gold. Simply because gold is s save heaven and tends to rise in troubled times. Charts on the other hand won't see anything like that. So you may get a sell signal based on historical data when in fact the price is about to rise considerably. Regardles of any point of resistance or trading pattern. So if you're saying that we can only make educated guesses, then that's exactly my point. An educated guess for gold has nothing to do with a chart. It has to do with the current situation on this planet rather than historical figures and trend lines.

The aim is not to be right 100% of the time. The aim is to maximise gain as a % of dollars risked.

I agree. And that's again exactly why I'm questioning a T/A on gold. I for one prefer to maximise my gain by looking at critical factors that may influence a price. I let you in on a secret, too:

I'm not here to damn T/A or to proof that it doesn't work. I'm here to question it's method on certain stocks or commodities. Why? Because as far as I can see, this board is full of people who use charts. So it's time that somebody takes a different view. Not for the sake of it but to fire up a discussion just like the one we're having here right now.

I most enjoy reading other people's opinion. People like yourself who actually know why they are doing certain things are well worth my time. There are just too many traders out there who believe in something just because they read a book or just because they visited a seminar.

Happy trading

Stefan

 

[ghotib]

Re: GOLD Where is it heading

This feels like stupid question, but anyway...

When you buy or sell metals, you're dealing in ingots right? So what's the physical process at settlement? i.e. how do the ingots get from seller to buyer?

I love gold, but not in the form of ingots. We bought Newcrest at 1.90 ;D

Ghoti

 

[wayneL]

Re: GOLD Where is it heading

Ah Stefan,

I am beginning to see where you are coming from.

>>I'm not after proofing that T/A is crap. I'm taking the view that there are too many T/A done on stocks who simply don't work that way. <<

I'm right with you here. I am very selective of with charts I trade. They have to have a history conforming to my particular brand of t/a. For instance NAB: A complete waste of time with my method! Never went near it when trading the ASX.

>>One of it is gold.<<

We wil just have to agree to disagree here

>>Now there is of course also the simple fact that things work because so many people believe in it.<<

Yes is can be a self fulfilling prophecy, particularly in the futures markets. I don't use what most people use, but, I still look for what most people use cause I want to be in the market *before* the rest of the world ;D

>>Wayne, this is not what I'm trying to say. Of course there is no form of analysis that can predict the future. However, if the US is on terror alert, then I as a human being with some sort of intelligence, can take that into consideration. I will therefore go and buy gold. Simply because gold is s save heaven and tends to rise in troubled times. Charts on the other hand won't see anything like that. So you may get a sell signal based on historical data when in fact the price is about to rise considerably. Regardles of any point of resistance or trading pattern. So if you're saying that we can only make educated guesses, then that's exactly my point. An educated guess for gold has nothing to do with a chart. It has to do with the current situation on this planet rather than historical figures and trend lines.<<

There are quite a few strong hands that discount this view. These people/institutions have relegated gold to just another bloody commodity. However there still are a lot of people who take the same view as yourself. I'm on the sidelines for an opinion atm....but I believe fiat money will be in for a hard time in the future, so leaning towards the "gold is currency" view I suppose.

I do maintain that technical signals will get me into the market at an appropriate point. However, in the case of a shock event and gold spike, I keep a permanent contingency order in the market to catch it if I am sleeping or otherwise engaged.

>>I'm not here to damn T/A or to proof that it doesn't work. I'm here to question it's method on certain stocks or commodities. Why? Because as far as I can see, this board is full of people who use charts. So it's time that somebody takes a different view. Not for the sake of it but to fire up a discussion just like the one we're having here right now.<<

Fair enough too. It is from robust discussion that we all can learn from each other

 

[wayneL]

Re: GOLD Where is it heading

This feels like stupid question, but anyway...

When you buy or sell metals, you're dealing in ingots right?  So what's the physical process at settlement? i.e. how do the ingots get from seller to buyer?

I love gold, but not in the form of ingots. We bought Newcrest at 1.90  ;D

Ghoti

Hey Ghoti,

My charts above are gold futures. 1 contract is 1000 troy ozs. Hardly any futures contracts ever go to actual physical settlement.

http://www.nymex.com/jsp/markets/GC_spec.jsp

 

[stefan]

Re: GOLD Where is it heading

We wil just have to agree to disagree here

So be it then. ;D

These people/institutions have relegated gold to just another bloody commodity. However there still are a lot of people who take the same view as yourself.

I know. Due to the many gold related things one can trade these days, it would appear that gold is coming in line with other commodities. But while it has lost a lot of its former glory during the tech bubble where everybody was crying about its slow performance, things and times have changed. We are back in uncertain, unstable times and that's when people tend to remember the old values like gold. It has a magical touch to it and it won't go away that quick.

I've never traded gold, but I sure wish I did

Happy trading

Stefan

 

[ghotib]

Re: GOLD Where is it heading

Thanks Wayne,

I noticed your post about the settlement fails over on propertyinvesting. I gather that you agree, as I do, with the comment from Gary North that systems fail "at the margins" i.e. where attention is not focussed.

As a trader, your whole business would be dependent on settlements systems yes? I'd be interested in your thoughts about the probabilities and impact of failure of one or more of those systems, and what protections you have in place for yourself.

I'm happy to read about them in a website article if that's easier for you.

Cheers,

Ghoti

 

[wayneL]

Re: GOLD Where is it heading

Thanks Wayne,

I noticed your post about the settlement fails over on propertyinvesting. I gather that you agree, as I do, with the comment from Gary North that systems fail "at the margins" i.e. where attention is not focussed.

As a trader, your whole business would be dependent on settlements systems yes? I'd be interested in your thoughts about the probabilities and impact of failure of one or more of those systems, and what protections you have in place for yourself.

I'm happy to read about them in a website article if that's easier for you. *

Cheers,

Ghoti

I must admit that it is a source of alarm. I am still investigating the ramifications of settlement failure for my business.

If the system did fail, how long will it take to restore? This is an unknown!

The article suggests having enough gold and silver coinage to get by until sytems were restored. I havn't gone to this length, though I know a few people who have.

You will have noticed a few have poo-hooed this as a measure over at PI.

This makes me think it's not a bad idea.... hmmmmmm.

 

[Redwing]

Re: GOLD Where is it heading

"GO FOR THE GOLD" Not just at the Olympics huh??

My father was going to purchase aprox $400-500k of Gold certificates at the Mint, back when it was $320 (hmmm - 2 years ago?) anyway, he thought it would hit $400. Mum talked him out of it and he's kicked himself since ;D

hindsight is a great thing huh

REDWING

 

[Jett_Star]

Re: GOLD Where is it heading

Au is solid. My guess is that people will see some very nice returns for awhile I think.

 

[RichKid]

Re: GOLD Where is it heading

Gold is on the retreat again but the bottoms are getting higher and higher. It should really start to test those resistance levels above USD400 in the next few months. (currently looking to break below 400).
Anyone out there still very bullish on gold? I'm hoping to get leverage via some of the smaller gold stocks.

RichKid

 

[RichKid]

Re: GOLD Where is it heading

Link to Kitco 24H Gold chart. Currently trying to breach 400 after a sharp rise following Greenspan's higher US interest rates statement:

http://www.kitco.com/charts/livegold.html


RichKid

 

[RichKid]

Re: GOLD Where is it heading

Nudging towards $420 but it looks like it'll retreat again instead of breaking past $430. Mainly going up on oil price spike IMO. Technically I'm still with the bulls for a breach of $430 late this year or early next year- but you never know what might happen before that.

Currently at about $419.

The second chart (1975-2004) shows why I'm bullish on Gold, note the congestion around 400.

 

[RichKid]

Re: GOLD Where is it heading

Is anyone going to add to this thread or do we have to wait till the oil spike blows over?!! ; )

No point getting into gold once all the gains have been made. Some of the golds stocks are reviving already.

Gold is attempting to get at this year's high again, currently at 422.

 

[wayneL]

Re: GOLD Where is it heading

Well I'll chuck my iron in the fire then Rich

Happens to be at an interesting point.

Looking at the chart, it has been in this channel since the May low...and Fridays action just touched the upsloping resistance line (depending on where you draw it)

So I'm betting on a retracement from this point before further upward moves. Gold has been liking the 61.8% retracement since the low, so that would indicate about 408. The bottom of the channel would be around 405-6.

Of course it could bounce from any level above that which would be VERY bullish IMO.

Now that I've said all that there is a high probability that Gold will completely ignore my retracement scenario altogether and continue straight up and wreck my neatly contructed channel lines!! LOL

Cheers

 

[still_in_school]

Re: GOLD Where is it heading

Hi Waynel,

Last friday, sold off all my gold positions, not due to any real technical reason, but due to seasonal change... my main real concern is that, for the last 23 years (except for last year) Gold, has always fallen from higher highs, after the first few weeks of October and some February Months, after some very nice appreciation,

though i could be wrong for this year, i've noticed already in some gold stocks, a slight selling off last friday afternoon... yet with today's market rally (its seems, my precious words have turned on me)

though if gold, does go heading south, other attractive commodities such as nickel, copper and silver, are looking attractive.

Cheers,
sis

 

[RichKid]

Re: GOLD Where is it heading

Thanks a million folks for contributing to one of my pet topics!!

Gold is currently tickling 421 so it has retreated from the weekend high.

Thanks Wayne for the great chart, I'm a beginner at TA so I just use the free charts and I'm unable to show trend lines or detail so you've done a great job.

My personal view (from the charts I posted earlier) is that this attempt at piercing the next longterm resistance line (since about 1990 from memory), being the fourth upswing so far this year, will see another retreat towards 400 (to or through the boundary you show on your channel support). Without the oil spike gold would have struggled to come this far so soon.

BTW, if oil would retreat obediently this week (before attacking $60 again) then gold could retreat with it (this is just my guess) and then gold can regain the attack on the resistance afresh. I'm trying to work out a timespan by the length and duration of each go at the $430 mark (or thereabouts). The higher tops and higher bottoms are ominous for the 'gold bears'. I expect gold to go to at least $500 in the next year or two, going by the charts.

Of course all I say above could be wrong but $430 will fall sooner rather than later IMHO. Oil is high, the US economy is running into trouble and Iraq isn't getting any easier and terrorist attacks are less likely to decrease than increase. only odd thing is that the US$ to my mind is going south, that appears to lower the US$ price of gold but I've heard analysts say that they aren't as closely related as they used to be. Think I'll get some charts at somestage and compare gold to the US$ over time...

I'm only just getting the hang of TA so I can't really understand fibonacci and gann patterns but I hope to get my head around it at some stage.
BTW, do you subscribe to TradingTutors (free) Wayne? If nothing else you'll find it interesting (they use Gann methodology- David Bowden's mob) and show a lot of trades using swing charts, and they also look at US stocks. Bowden's products were too complicated and expensive for me so I just stick to basics.

 

[wayneL]

Re: GOLD Where is it heading

Hi Waynel,

Last friday, sold off all my gold positions, not due to any real technical reason, but due to seasonal change... my main real concern is that, for the last 23 years (except for last year) Gold, has always fallen from higher highs, after the first few weeks of October and some February Months, after some very nice appreciation,

though i could be wrong for this year, i've noticed already in some gold stocks, a slight selling off last friday afternoon... yet with today's market rally (its seems, my precious words have turned on me)

though if gold, does go heading south, other attractive commodities such as nickel, copper and silver, are looking attractive.

Cheers,
sis

One of the advantages of playing futures SIS, is the ease of short the SOB!

Gold having a big selloff tonight...been down to 414.something...just as I had hoped it would Mwahahahaha.

But you are right! other metals are going great. Particularly copper! (one of the commodities I trade) from 85c to 145c per/lb in the last 12 months...but being sold off tonight along with gold and silver.

Cheers

 

[wayneL]

Re: GOLD Where is it heading

Thanks a million folks for contributing to one of my pet topics!!

Gold is currently tickling 421 so it has retreated from the weekend high.

Thanks Wayne for the great chart, I'm a beginner at TA so I just use the free charts and I'm unable to show trend lines or detail so you've done a great job.

My personal view (from the charts I posted earlier) is that this attempt at piercing the next longterm resistance line (since about 1990 from memory), being the fourth upswing so far this year, will see another retreat towards 400 (to or through the boundary you show on your channel support). Without the oil spike gold would have struggled to come this far so soon.

BTW, if oil would retreat obediently this week (before attacking $60 again) then gold could retreat with it (this is just my guess) and then gold can regain the attack on the resistance afresh. I'm trying to work out a timespan by the length and duration of each go at the $430 mark (or thereabouts). The higher tops and higher bottoms are ominous for the 'gold bears'. I expect gold to go to at least $500 in the next year or two, going by the charts.

Of course all I say above could be wrong but $430 will fall sooner rather than later IMHO. Oil is high, the US economy is running into trouble and Iraq isn't getting any easier and terrorist attacks are less likely to decrease than increase. only odd thing is that the US$ to my mind is going south, that appears to lower the US$ price of gold but I've heard analysts say that they aren't as closely related as they used to be. Think I'll get some charts at somestage and compare gold to the US$ over time...

I'm only just getting the hang of TA so I can't really understand fibonacci and gann patterns but I hope to get my head around it at some stage.
BTW, do you subscribe to TradingTutors (free) Wayne? If nothing else you'll find it interesting (they use Gann methodology- David Bowden's mob) and show a lot of trades using swing charts, and they also look at US stocks. Bowden's products were too complicated and expensive for me so I just stick to basics.

Thats a pretty workable analysis Rich. The tough thing about gold is this question: Is it true currency, or just another bloody commodity? I wouldn't have a clue. But I'm getting more and more convinced that the Krugerands my old man gave me aren't a bad thing...may even add to them.

As far as Gann and Fibonacci. I see these as two independant analyses.

Gann I don't have much time for. I've never seen anyone trade it successfully real time with any advantage over anyone else. It still comes back to successful moneymanagement more than anything. So why spend big bucks on a complicated style of analysis when you can learn simple momentum techniques for free, and get similar (I think better) results?

Fibonacci works because everybody is looking at the same levels...a self fulfilling prophecy to some extent. The only tricky part is guessing at which level the herd is going to tun at.

I very much like the KISS principle when trading. And that was probably the toughest thing for me to learn...complicated is not better.

When I look at my trading method, it is almost embarresingly simple. And I listen to no one when I trade. No newsletters, websites, mates...no one!

But you have to learn stuff, so in the beginning you have to listen to somebody and therein lies the trap. Most people doing the teaching aren't traders.....otherwise they would be trading not teaching.

Cheers

 

[RichKid]

Re: GOLD Where is it heading

But I'm getting more and more convinced that the Krugerands my old man gave me aren't a bad thing...may even add to them.

So why spend big bucks on a complicated style of analysis when you can learn simple momentum techniques for free, and get similar (I think better) results?

Fibonacci works because everybody is looking at the same levels...a self fulfilling prophecy to some extent. The only tricky part is guessing at which level the herd is going to tun at.

I very much like the KISS principle when trading. And that was probably the toughest thing for me to learn...complicated is not better.

When I look at my trading method, it is almost embarresingly simple. And I listen to no one when I trade. No newsletters, websites, mates...no one!

But you have to learn stuff, so in the beginning you have to listen to somebody and therein lies the trap. Most people doing the teaching aren't traders.....otherwise they would be trading not teaching.

Cheers

WWW- Wise Words Wayne!

Do you know why I mentioned Gann? Because the levels on your charts looked like what I'd seen in that Bowden newsletter- just check it out for curiosity if you like, it looked like it had the types of levels you use.
But I agree with your KISS principle, less stress too when things aren't complicated.

As I'm starting out I have open ears while trying to work out a proper system of my own based around TA and good money management skills in general. Hope it turns out to be as simple as yours!

Did you know of any Fibonacci books that you can recommend?

Have you seen what GLI (GoldLink IncomePlus) do?- they make money out of gold price fluctuations, on lease rates I think. It's more of an income stock so I don't invest in it but I just might put a bit away in it later. I found it through this portal, lots of good info on Gold including proper reports, but obviously it's biased in favour of gold as an investment http://www.australiangoldinvestment.com

 

[RichKid]

Re: GOLD Where is it heading

Wonder if this recent pattern is turning out to be a head and shoulders reversal? My guess is it is. Or maybe a double top.

We'll know next week!