Gold Price - Where is it heading?

[josjes]

Rate-cutting cycle may be over. Sell Gold.

I view this as another market noise that long term gold holder should ignore.
You can only make big money by holding and adding to your position. IMHO you should not be a trader (sorry no offense for the traders in this forum). If you intend to hold for a few years, by going in an out you will lose your position and miss the big move. It is difficult being patient and giving back gains; but it is the only way to big gains.

 

[Kauri]

and..... why is pog upping??? maybe because... a bullish report from metals consultancy GFMS, (Reuters) . They are forecasting gold to reach $1,100 per oz, and PMT.. (precious metals traders) ..note that this prompted a short squeeze out of London that has driven prices higher.
Cheers
.............Kauri

 

[wayneL]

I view this as another market noise that long term gold holder should ignore.
You can only make big money by holding and adding to your position. IMHO you should not be a trader (sorry no offense for the traders in this forum). If you intend to hold for a few years, by going in an out you will lose your position and miss the big move. It is difficult being patient and giving back gains; but it is the only way to big gains.

Sorry, it is one way to make big gains, a good way if you're right, but it is just one way, not the only way.

Trading is another way, if you trade right.

Just holding 1 GC contract through this retracement from the ATH is over 10kUSD of drawdown and could conceivable turn into substantially more

I can trade a lot of contracts on a short term/day trade basis with less risk than that.

FWIW

 

[barrett]

Rate-cutting cycle may be over. Sell Gold.

There is usually a seasonal weakness mid-year, but it relates to the lack of Asian festivals during that time. Since Asian festival/wedding-related buying has dropped right off during this 9 month upleg in gold, and investment demand has been what's driving the move, I'm skeptical that the usual seasonal pattern will be as relevant as what the Fed and US Govt are doing.

The US Govt has an election coming up in October and Congress are this week debating a massive stimulus package that includes bailing out mortgagees, Fannie/Freddy buying up mortgages, and a variety of other highly inflationary fiscal schemes.

Meanwhile, most significantly of anything for gold in the past 24 hours, the minutes from the last Fed meeting were released. Rate-cutting cycle over? Don't bet on it!

The most important changes relative to the previous meeting are:
1. Fed staff substantially revised down their projection for real GDP growth through 2008
2. Many of the Fed committee thought "some contraction in
economic activity in the first half of 2008 now appeared likely" [read: 'we're having a recession!']
3. "members viewed the downside risks to economic growth as having increased"
4. Payroll employment and business and consumer confidence had all declined more than they expected (and the employment data that came out since the meeting was substantially worse still - and Jan and feb payrolls were revised down).

The bottom line is, I can't find anything in there to get bullish about the dollar. The next day or so will be interesting to see whether the technicals on the dollar index confirm or contradict those fundamentals... the dollar index is almost perfectly correlated with the dollar/euro cross rate.. and Trichet won't be budging..

 

[rederob]

The IMF's balance sheet is around $400m in the hole.. basically it's broke so it's going to flog off about 10% of its gold to fill the gap. It's obliged to do that on market according to the IMF's Articles of Agreement.
Gold price suppression is a secondary goal at best as they plan on selling it gradually over a period of several years. But I'd say the US won't exactly be objecting to the sale..

The sale has to fall within the 500t quota for the central banks set up under the European Gold Agreement. From that point of view it is potentially slightly bearish because without those sales they mightn't reach their quota.

Not true in some senses, but perhaps not different from a probable outcome.
The key to IMF's action on gold sales is that they act "responsibly".
Crockett Committee recommendations will guide how they should act on gold sales.
The IMF may choose to act within the constraints of the CBGA, but it is not obliged to.
Importantly, 85% of its membership must support any decision taken.
Finally, while it is probable that the IMF would only dispose gold in the manner recommended, it is not limited to merely 400tonnes. Ultimately it has over 3,200 tonnes available.

http://www.imf.org/External/NP/EXR/faq/goldfaqs.htm

 

[Bintang]

I've read a few times how the IMF is gonna sell 400 tonnes of gold to cover a $400 million hole in its budget, for example see below. But has anyone wondered why they need to sell so much gold for this purpose. Unless my arithmetic is wrong 400 tonnes of gold must be worth around $11 billion !!!
That's enough cash to plug the budget hole 28 times over.


http://goldnews.bullionvault.com/go..._intervention_plaza_china_041020083:confused:

WHAT A BUSY WEEK for the International Monetary Fund – and it's barely half-way through as of Wednesday!

Just how busy will the IMF get when it helps host the G7 meeting of policy wonks from the world's seven richest nations in Washington this weekend?

Rumors were that the assembled finance ministers – from Europe, Japan, the UK, Canada and of course the United States – wanted to chew over joint intervention in the currency market. The plan? Buy Dollars to support the US currency's value, easing the surge in commodity prices and helping export-dependent economies avoid a race-to-debase as they try to stay competitive.

But could the G7 worthies really be so dumb...?

On Monday this week (7th April) the IMF's managing director, Dominic Strauss-Kahn, called for concerted cross-border intervention and regulation by national governments to stem the ongoing global banking crisis.

On Tuesday the IMF then laid out plans to re-organize its own finances, selling 400 tonnes of gold reserves to help cover a $400 million deficit in its $1 billion budget.

 

[Whiskers]

Rumors were that the assembled finance ministers – from Europe, Japan, the UK, Canada and of course the United States – wanted to chew over joint intervention in the currency market. The plan? Buy Dollars to support the US currency's value, easing the surge in commodity prices and helping export-dependent economies avoid a race-to-debase as they try to stay competitive.

Yes, I've been speculating for awhile that this will be on. I see Bill Evans from Westpac mention speculation of a rising USD yesterday, but emphasised they don't think so.

I think I''m prepared to take a wager on it though!

 

[Sean K]

Have we had an ABC correction here, or is it forming up to be a H&S with a breakdown projection about $800?

 

[barrett]

Yes, I've been speculating for awhile that this will be on. I see Bill Evans from Westpac mention speculation of a rising USD yesterday, but emphasised they don't think so.

I think I''m prepared to take a wager on it though!

Hi Whiskers, I really hope you're right, I'd like nothing more than to shovel the rest of my savings (and my dad and I's super funds) into PM stocks and gold and silver bullion, at a 10% discount from current prices.

But these currency interventions usually aren't attempted, or aren't very successful, if monetary policy isn't aligned with their objective. .. also, the US probably likes its dollar going down at the moment, it makes the Fed's job easier in the short term - and the G7 rumours and bullish consensus on the US dollar persist - but will the US agree to blowing money on a currency intervention that's not in its own interest?

If you're going long the USD you might want to monitor this situation closely,
cheers
EURUSD daily

 

[josjes]

Have we had an ABC correction here, or is it forming up to be a H&S with a breakdown projection about $800?

I am in the Bull case - it's ABC correction, and we are now heading to wave I of wave V up trend again. Supporting evidence ? Oil has just broken bullish symmetrical triangle on Monday and hit new high yesterday, with target of $115-$120. EUR-US has also broken symmetrical triangle, USD index chart is very weak. All this portends to a stronger Gold. Gold:Oil ratio is currently 8.43 which undervalues gold, long term average is 10. The Fed's chance of cutting another 50bp on 30 April, is not hurting gold-oil move.

I see another trend up to 960 possibly break 1024 middle of May (Wave I), April-May is strong season for Gold for the past 5 years, then Wave II down consolidation between June - August, before making upleg again from September onward.

Do we have anyone here presenting the Bear case (the $800 scenario) ?

 

[explod]

I am in the Bull case - it's ABC correction, and we are now heading to wave I of wave V up trend again. Supporting evidence ? Oil has just broken bullish symmetrical triangle on Monday and hit new high yesterday, with target of $115-$120. EUR-US has also broken symmetrical triangle, USD index chart is very weak. All this portends to a stronger Gold. Gold:Oil ratio is currently 8.43 which undervalues gold, long term average is 10. The Fed's chance of cutting another 50bp on 30 April, is not hurting gold-oil move.

I see another trend up to 960 possibly break 1024 middle of May (Wave I), April-May is strong season for Gold for the past 5 years, then Wave II down consolidation between June - August, before making upleg again from September onward.

Do we have anyone here presenting the Bear case (the $800 scenario) ?

I do not underestimate the political desperation of the Fed to secure a republican at the end of the year. Maybe not 800 but huge propaganda and stratiegic dumping will continue.

Come the end of the year gold will go to its proper inflation adjusted value of around 3000 and then the mob sentiment will take it well beyond. But in the meantime, yep floats sideway between 1024 and 880 is to be expected.

Having said that I am not game to be out of my long positions.

 

[Sean K]

Do we have anyone here presenting the Bear case (the $800 scenario) ?

I'm long term gold bull, however there's some factors that could see a breakdown.

Oil may have peaked. We could go through a period of stability, and/or a massive discovery, taking the pressure off, or a good hurricane season may pass by. Maybe.

Peace in the Middle East. LOL

Iran stops its nuclear program. LOL

There are NO MORE skeletons in the financial bear closet. he, he. Unlikely.

The intervention protective measures to fix the US (UK, Spain) housing markets actually work, creating a softer landing. Bandaide.

US rates stabilise, possibly going up a tad. Maybe.

Central banks disregard agreements and start selling truck loads of the stuff. Nope.

The world and Chindia slowdowns reduce demand. For a little while maybe.

AZM discover a 100m oz deposit! A sure thing!! LOL

 

[Temjin]

Do we have anyone here presenting the Bear case (the $800 scenario) ?

Technically on the weekly chart, the MACD signal just turn bearish, but it looks bullish on the daily chart.

Fundamentally, maybe more defaults from the banks, massive liquidations, US Fed Reserve become "sane" again and increase rate to 10+%, gold demand from jewellery suffer a massive drop because Indians now think gold is an evil object, the US government allow public audit on their gold vault with confirmed storage more than official estimate, gold mines supply increases unexpectedly because labours are willing to work 48 hours a day and equipments became 100% more efficient overnight and maybe gold reserves on all mines doubled as god decide to reward mankind for their continue faith?

That would break the gold trend back way below $800 for sure.

 

[ithatheekret]

I'm one that believes that gold has commenced another move up . The consolidation has been in process for weeks now and looks to have ground to a halt .

Inflation is the benefactor of the gold price , its persistent rising movement would be looked upon as worrisome for Asian nations , even if the US declares they are unphased by it , which I doubt , but it makes for good contradiction and spinnings .

US rates , well I certainly can't see any avenue that would allow the Fed to start raising again by say June . They have to be seen to be combatting inflation , unless sarcopenia of the brain has set in for the Fed board .

The swing in inflation to cost-push is at the forefront of the battle , as it is now at the stage where it can no longer be restained by words and personal agendas in business will add to any upward movements in inflation , especially at shelf prices on staples .

I watched the 913/914 -917/920/921 tranches with surprise , as it repeated a cycle in prices again that presented itself back in the $300 stages .

I haven't taken up any contracts lately , although I was tempted , but the funds were reserved for another instruments moves expected . I don't see the correct risk ratios for opening myself up on long term strategies in the current enviroment of volatility swings . I have a long term position / holding in physical though , that has been added to at selective times . Skips behaving lately which could well lead to being able to add once more , if the moves are in my interest .

 

[Whiskers]

POG going down, anyone?

 

[Whiskers]

POG going down, anyone?

Actually was watching the 5 min. Should have posted it.

Just filled little gap from early on the 10th. :

 

[MRC & Co]

How about Mugabe loses power in Zimbabwe and gold production increases dramatically?

 

[explod]

How about Mugabe loses power in Zimbabwe and gold production increases dramatically?

Mugabe decided not to go to the table but yes the sky could fall in. On the MACD gold looking over sold, it will probably hold these levels for awhile. Market trip will dampen enthusiasm for awhile, notice G Brown (the big drip dumper of Exchequer) demanding that something has to be done about the world financial crises. Must follow his testo levels.

 

[MRC & Co]

Mugabe decided not to go to the table but yes the sky could fall in. On the MACD gold looking over sold, it will probably hold these levels for awhile. Market trip will dampen enthusiasm for awhile, notice G Brown (the big drip dumper of Exchequer) demanding that something has to be done about the world financial crises. Must follow his testo levels.

Well its not in an extreme reading at the moment.

Interesting to note when price had hit all-time highs, MACD did not, a negative divergence.

However, positive at the moment and could be seen before the turnaround in the moving averages, is the difference between the two moving averages on the historgram, with bars becoming shorter.

Also, something I read which reminded me of the current situation in gold (though not sure how relevent as the net relative supply does not match exactly to the following scenario but still along the same lines), is the following: When George Soros was short the British pound and was told the British government had allocated around 20 billion US dollars to stabilize the currency, he shrugged and said "that will help them for 30 minutes. Then what are they going to do"? - he apparently made over a billion dollars on that trade!

 

[Uncle Festivus]

Some action on the gold front imminent? Consolidation period coming to a decision point? I notice this time the wedge is not so symmetrical compared to previous, more of a bullish bias maybe?

Stars aligning again? Central banks dishoarding gold to prop up their accounts? Willing buyers soaking it up?