Gold Price - Where is it heading?

[Uncle Festivus]

Is it just me or is everything eerily too quiet? Posting a chart out of boredom, descending wedge intact still, still to test lower lows??

 

[wavepicker]

descending wedge intact still, still to test lower lows??

looks like this might just be the start of the acceleration phase down? Looked like a pretty weak rally from day 1 (as expected "a bounce"). IMO a very tough next few months coming up for the precious metals.
We have heard many times before the "the long term fundementals are intact" and the "the dollar is doomed". The reply to these comments has been: Trade what you see, not what you expect or hope for.

 

[Uncle Festivus]

looks like this might just be the start of the acceleration phase down? Looked like a pretty weak rally from day 1 (as expected "a bounce"). IMO a very tough next few months coming up for the precious metals.
We have heard many times before the "the long term fundementals are intact" and the "the dollar is doomed". The reply to these comments has been: Trade what you see, not what you expect or hope for.

WP, what is your view on the descending wedge formation, and the usually accepted outcome from such formations ie a break up & out?

This is a 'slow' period of the year for gold as well so most don't expect too much anyway, unless of course we get the resumption of the 'correction' in general equities, which is looking a possibility by the action in the FTSE tonight, and would tie in with the ascending wedges I see for the DOW & FTSE.

I am patiently waiting in cash for the fall in gold shares too (watching LGL & SBM get into oversold), then the real action begins!

 

[wavepicker]

WP, what is your view on the descending wedge formation, and the usually accepted outcome from such formations ie a break up & out?

This is a 'slow' period of the year for gold as well so most don't expect too much anyway, unless of course we get the resumption of the 'correction' in general equities, which is looking a possibility by the action in the FTSE tonight, and would tie in with the ascending wedges I see for the DOW & FTSE.

I am patiently waiting in cash for the fall in gold shares too (watching LGL & SBM get into oversold), then the real action begins!

My view is unchanged, BEARISH. With a low expected betwen 541.90 and 730.20. This is the span of the previous 4th wave of one less degree, a common area of support. This is not a certainty only a guideline. Also statistically speaking cycle wave 2's which is what IMO is being traced out at present, usually find support at approx 38.2-50% of the entire impulse advance from 1999 to this year. 38.2% coincides with approx $730 and 50% with $650 which is where I would be looking specifically. The 50% mark is the one I favour.

Bet to keep your cash in favour of gold bars at this juncture IMO.

 

[Temjin]

Anyone got an explanation to what happened in the white circled area? Big sell off then big buying again, makes no sense?

View attachment 20834

It's called manipulation.

It's the usual "8 or less" traders massively shorting contracts to depress the gold/silver price. They have been doing it for many years and almost always do it at around 9-10am in New York time. Apparently, this is the time when volumn is usually low and thus, allow them to move the price that much.

Nothing unusual given the same pattern has been going on for years and years. One can even trade this particular pattern!

 

[explod]

My view is unchanged, BEARISH. With a low expected betwen 541.90 and 730.20. This is the span of the previous 4th wave of one less degree, a common area of support. This is not a certainty only a guideline. Also statistically speaking cycle wave 2's which is what IMO is being traced out at present, usually find support at approx 38.2-50% of the entire impulse advance from 1999 to this year. 38.2% coincides with approx $730 and 50% with $650 which is where I would be looking specifically. The 50% mark is the one I favour.

Bet to keep your cash in favour of gold bars at this juncture IMO.

Well I THINK you will be proven wrong.

On 25/04/1980 gold closed at its high back then at US$850. It breached this level at the close of 2007. It proved to be a support in late Jan this year and again 8 trading days ago. It bounced off that area again last night. This level SHOULD hold now.

 

[Temjin]

Well I THINK you will be proven wrong.

On 25/04/1980 gold closed at its high back then at US$850. It breached this level at the close of 2007. It proved to be a support in late Jan this year and again 8 trading days ago. It bounced off that area again last night. This level SHOULD hold now.

That $850 is definitely a super strong support level. It almost coincidence with the daily 200 MA as well. That's a lot of confluence here.

It would be a massive psychological impact if that level is breached. I am sure the Cartels are aiming for it but it seem there are tons of buyers set at that point to buy back in as soon as it dips to that level.

Will have to wait and see who will win the day.

 

[explod]

It's called manipulation.

It's the usual "8 or less" traders massively shorting contracts to depress the gold/silver price. They have been doing it for many years and almost always do it at around 9-10am in New York time. Apparently, this is the time when volumn is usually low and thus, allow them to move the price that much.

Nothing unusual given the same pattern has been going on for years and years. One can even trade this particular pattern!

Yeh, spot on, 9am NY time and they are into it again. The efforts now are in the extreme to say the least. If they fail in the next day or so we could expect a big twang of the spring. My guess is that it will remain sideways to down in the medium term but hang onto that physical because the jump when it comes will be, as they plan, unexpected.

US$ dollar up as usual, same time. The manipulation must be close to running out of legs.

 

[Trembling Hand]

It's called manipulation.

It's the usual "8 or less" traders massively shorting contracts to depress the gold/silver price. They have been doing it for many years and almost always do it at around 9-10am in New York time. Apparently, this is the time when volumn is usually low and thus, allow them to move the price that much.

Nothing unusual given the same pattern has been going on for years and years. One can even trade this particular pattern!

Yeh, spot on, 9am NY time and they are into it again.

If ya going to sprout the conspiracy at least try to link it to some basic facts. Its not 9 am in New York until 11 pm Sydney time!

And for your benefit I have pointed to the 9 - 10 am NY time period on the chart to show your low volume manipulation is actual the TWO HIGHEST volume hours of the day. In fact that two hour period counts for about 80% of the contracts traded.

And as for the 8 high volume "manipulators" that is a feature of all markets a small amount of parties trade 80% of the volume. Ain't nothing unusual in that.

 

[explod]

If ya going to sprout the conspiracy at least try to link it to some basic facts. Its not 9 am in New York until 11 pm Sydney time!

And for your benefit I have pointed to the 9 - 10 am NY time period on the chart to show your low volume manipulation is actual the TWO HIGHEST volume hours of the day. In fact that two hour period counts for about 80% of the contracts traded.

And as for the 8 high volume "manipulators" that is a feature of all markets a small amount of parties trade 80% of the volume. Ain't nothing unusual in that.

Apologies, was looking at the London market, and time. Just seems to move on Mondays, Fridays and low volume hours down, and up at the other times, mostly.

 

[Temjin]

If ya going to sprout the conspiracy at least try to link it to some basic facts. Its not 9 am in New York until 11 pm Sydney time!

And for your benefit I have pointed to the 9 - 10 am NY time period on the chart to show your low volume manipulation is actual the TWO HIGHEST volume hours of the day. In fact that two hour period counts for about 80% of the contracts traded.

I need to dig out the articles again. But from what I have read so far, the
Carters always do it at that particular time because the market is "low on volume" (or activities) from other players who are on the opposite side. And obviously, to move the price at such a magnitude, you can't do it without significant volume.

And it's no conspiracy that gold/silver prices are being manipulated. It's very well known amoung the "bugs" and they have evidences for it. Of course, one can easily dismiss it simply because the bugs have their own agenda as well to prop up the prices. If you search hard enough, even Helicopter Ben has admitted that it was "necessary" to suppress the price of gold for certain reasons.

Ted Butlet is easily the most well outspoken guy who have been voicing against the manipulations. Somewhere in his archives you will find out more about the 9-10am sell pattern. http://www.investmentrarities.com/tb-archives.html

Ed Steer from Casey Research also mentioned the manipulations in his daily resource newsletter. http://caseyresearch.com/archives.php?pubId=8

A random article, http://www.marketwatch.com/news/sto...x?guid={537BB029-B47F-46F0-8537-BD170ED0B224}

And as for the 8 high volume "manipulators" that is a feature of all markets a small amount of parties trade 80% of the volume. Ain't nothing unusual in that.

Tell me which markets have only 8 or less traders that control 80% of the volume?

The COT report for gold/silver obviously indicate that these "8 or less" traders are holding 80%+ of the short contracts. And has stepped up the concentration ever since gold was in bull market.

Why would these traders, or rather, the central banks and investment banks, are holding such a massive concentration of shorts? What are their reasons for it? Obviously, those holding the longs are the commercials (producers!), hedge funds and private individuals.

 

[Trembling Hand]

I need to dig out the articles again. But from what I have read so far, the
Carters always do it at that particular time because the market is "low on volume" (or activities) from other players who are on the opposite side.

But its not the low volume time its the HIGH volume time. Asia is the low volume time.

And obviously, to move the price at such a magnitude, you can't do it without significant volume.

Now I don't follow. This contradicts your above statement. If you are going to "manipulate" something, which you said happens during 9 am NY time, you would surely try and push it around during low volume which is not NY open??

Butlet is easily the most well outspoken guy who have been voicing against the manipulations. Somewhere in his archives you will find out more about the 9-10am sell pattern. http://www.investmentrarities.com/tb-archives.html

Ed Steer from Casey Research also mentioned the manipulations in his daily resource newsletter. http://caseyresearch.com/archives.php?pubId=8

A random article, http://www.marketwatch.com/news/stor...D170ED0B224}.

yeah right I'm going to search through all that gumpf. Patterns come and patterns go. If the big guns ran the same game every day how long before they are going to get cut up by other players front running them?

eCOT report for gold/silver obviously indicate that these "8 or less" traders are holding 80%+ of the short contracts. And has stepped up the concentration ever since gold was in bull market.

Why would these traders, or rather, the central banks and investment banks, are holding such a massive concentration of shorts?

Have a look at all the data. DYOR don't copy other peoples rubbish. Think of the logic to this one. How are you able to hold 80% of the short open interest on highly leveraged contracts that have ran 300% higher?? And Not be blown out of the water?? They are arbitrage trades. Option market makers and spreaders.

Tell me which markets have only 8 or less traders that control 80% of the volume?

Like I said a small number of participants do most of the volume. I didn't say 8 traders. examples,

TransMarket Group Sydney do about 10 % of the SPI.
The MF Global Prop desk does WAY more than that and they have 20 traders.
Kingstree Prop does 5% Of the most liquid Fut out there, the ES
Optiver does MOST of ASX & SFE options.

 

[Whiskers]

Wow, the ultumate precious metal, Rhodium has just flown the coop to new highs.

I wasn't expecting POG to emulate in the near future, but maybe... or is it a commercial supply, demand issue perculiar to Rhodium more than investment?

 

[Temjin]

comments

The gold/silver manipulation theory is quite extensive not to mention being quite sensitive as well. It would take more than several posts just to answer your questions. I don't claim to know EVERYTHING about the theory nor do i have any real hard evidences that the manipulations are real.

However, the facts remain that the "8 or less" traders in the COT are holding 83% (latest figures) of the silver shorts. That's over 50,000 contracts or over 200 days worth of global production. These are pure numbers taken from the COT report. You asked how come they could hold so many contracts and not blown out of the water yet when the silver prices ran a lot higher several weeks ago? Good question, but I have no idea. The central banks and investment banks have been doing it and they are still definitely in the water. That's billion of dollar on paper lost. Is it logical? Not really, it doesn't make sense to me either but it is still a fact.

Another funny thing is that the exchange imposed a position limit of 1500 contracts per trade on the long side only. But the limit for short contracts is essentially unlimited. Why set up such a restriction? Yes, this is pure fact as well, go and ask the exchange.

As for the volume / 9-10am issue, yep, there is no solid proof that "some ppls" are massively shorting to suppress the price at a particular time for a particular reason. However, the pattern have continued to exist for quite some time now.

At the end of the day, we just want to make profit from whatever opportunities that we can take advantage of. The "manipulation" is something I would like to use a small portion of my wealth to bet on. (unlike the real bugs who use their entire net wealth on it, so obviously could be biased) Whether you view this as an opportunity for a trade or not, it's up to you.

 

[Trembling Hand]

Another funny thing is that the exchange imposed a position limit of 1500 contracts per trade on the long side only. But the limit for short contracts is essentially unlimited. Why set up such a restriction? Yes, this is pure fact as well, go and ask the exchange.

That is not a funny thing that is how Futures work. Market makers who sell options need to hedge. if they had restrictions on short positions there would be no options market. It aint a conspiracy its how arbitrage works!!

However, the pattern have continued to exist for quite some time now.
Whether you view this as an opportunity for a trade or not, it's up to you.

Actual I test these intraday Fut patterns more than most. I ran a back test on the intraday data and that pattern you are so convinced is there just isn't. Will post the data later when I run a longer test.

 

[professor_frink]

The gold/silver manipulation theory is quite extensive not to mention being quite sensitive as well. It would take more than several posts just to answer your questions. I don't claim to know EVERYTHING about the theory nor do i have any real hard evidences that the manipulations are real.

However, the facts remain that the "8 or less" traders in the COT are holding 83% (latest figures) of the silver shorts. That's over 50,000 contracts or over 200 days worth of global production. These are pure numbers taken from the COT report. You asked how come they could hold so many contracts and not blown out of the water yet when the silver prices ran a lot higher several weeks ago? Good question, but I have no idea. The central banks and investment banks have been doing it and they are still definitely in the water. That's billion of dollar on paper lost. Is it logical? Not really, it doesn't make sense to me either but it is still a fact.

Another funny thing is that the exchange imposed a position limit of 1500 contracts per trade on the long side only. But the limit for short contracts is essentially unlimited. Why set up such a restriction? Yes, this is pure fact as well, go and ask the exchange.

Had you considered that the market for Silver and gold isn't just a place for speculators Temjin?

 

[Temjin]

Had you considered that the market for Silver and gold isn't just a place for speculators Temjin?

Obviously, the commercial producers/users will use future contracts to hedge themselve against price risks. Now have you considered that every posters in this thread is technically a speculator? I don't get what you are trying to imply here.

Look, I'm not going to have enough hard evidences to back up my claims. I will admit that I have been referring to these bugs instead of doing my own indepth research. They have been doing so for many years and have obviously linked to unbiased sources as evidences. It is simply unfeasible for me to try to further prove their claims. If you feel their conspiracy theory is utterly nonsense and the evidences they put forward are pointless, go ahead and dismiss it.

Yes, I am biased and I may be skeptical. It is going to take some work to convince me that the governments / central banks are NOT ACTIVELY manipulating the silver/gold prices at any way to prevent the lost of public confidence of their unlimited fiat money. I based my beliefs on the history of the fiat money and the "actions" that these central banks have taken to shape the world to what it is today. But then how could anyone prove this is not true anyway? Call the officials and ask if they are manipulating prices?

So I guess it's a matter of faith and beliefs in this conspiracy issue. It's the same for those who believe UFO exist but have little hard evidences to show off. (to those who do, let's not go further in this topic. heheh)

As for Trembling Hand, yes, please show me the data if you are willing to dig into it and try to disprove the theory. If you don't mind, I would like to show it to these "bugs" and see what they have to say about. I'm quite interest to know their answers to these counter-arguments against their manipulation allegations.

Here is what the ex-director of the CTFC have to say about these manipulations.
http://www.cftc.gov/files/opa/press04/opasilverletter.pdf

The last part of his letter is interesting. He talks about how one should be careful about taking advises from someone who is biased for the opinions they give. But likewise, how do I know if he is telling the truth and is completely unbiased from his side from working for the government?

This can go on forever.

 

[MRC & Co]

Central banks manipulate money supply, exchange rates, I see no reason why they would not manipulate the POG. Infact, I can probably find out personally.

Though, every single move in POG cannot be put down to them.

Either way, it is a market, if that is what happens, so be it, learn to trade it. For the long-term F/A guys, take it into consideration.

The arguement is not really going to help anyone investing or trading gold or any of it's related instruments. Unless of course someone can proove patterns, but as said above, it would be assumed if one did exist, many would be riding the coat tail.

Only thing I have observed but not tested (or perhaps my memory is letting me down ), is over the last 3 or so months, when New York opens for trade, the POG falls over the first hour, more often than not, and by larger %s.

 

[explod]

That $850 is definitely a super strong support level. It almost coincidence with the daily 200 MA as well. That's a lot of confluence here.

It would be a massive psychological impact if that level is breached. I am sure the Cartels are aiming for it but it seem there are tons of buyers set at that point to buy back in as soon as it dips to that level.

Will have to wait and see who will win the day.

The line continues to hold. The US Gold Market report notes (today) that the dips are met with srong buying from Asia and the Middle East.

 

[professor_frink]

Obviously, the commercial producers/users will use future contracts to hedge themselves against price risks. Now have you considered that every posters in this thread is technically a speculator? I don't get what you are trying to imply here.

In regards to the part above I put in bold, think about how that could be linked to some of the comments below you are saying is manipulation.

However, the facts remain that the "8 or less" traders in the COT are holding 83% (latest figures) of the silver shorts.

how come they could hold so many contracts and not blown out of the water yet when the silver prices ran a lot higher several weeks ago?

Another funny thing is that the exchange imposed a position limit of 1500 contracts per trade on the long side only. But the limit for short contracts is essentially unlimited. Why set up such a restriction?