Gold Price - Where is it heading?

=Uncle Festivus;299516]Mmmmm...... peak gold???

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Absolutely! SA is dropping Au production so fast its not funny and has power supply issues which won't be solved before 2012/3. China the current biggest producer will run out of reserves very shortly and is not exporting anyway.

This chart's a bit old, but since 2003, there's only been one world class discovery - Aurelian's FDN project. Unfortunately it may take a while before those new discovered ounces (10+ million) will be accessible for production since the Ecuadorian government isn't exactly providing the support necessary to move things forward here. Two large gold deposits in nearby Venezuela also have just been denied production rights which isn't a big help either for future gold supply!

Majors can't replace reserves, other than to buy juniors.

Cash-rich gold miners set their M&A sights lower
http://in.reuters.com/article/innovationNews/idINN3034216520080530

Gold will go up a bit.
Then it will go down a bit.
Then it will go up a bit.
Then it will go down a bit.
Then it will go up a bit.
Then it will go down a bit.

Tell me I'm wrong.

I've nominated no targets or timeframes.

I suggest that if anyone offers a prediction it should always nominate a target price range (or target movement size) and a target timeframe (or range).


e.g. "imo will have further to run"

doesn't tell us much - next minute, next hour, next day, next week, how far? how long?

so better would be:

"imo rally will continue for the next 5 to 10 days bringing the price to a target in the range $X to $Y"

or

"break down from current levels will continue for 3 to 6 weeks bringing us down to levels around the $X or lower"

or

"The fundamentals indicate that gold is going to rally strongly over the next few years and could hit levels of $10,000 to $20,000 an oz by the end of 2010"

Note - all three of the above could be correct at the same time - from here the price might rally for 5 to 10 days but resume an overall medium term downward trend that brings it lower in 3 to 6 weeks time before continuing a longer term uptrend that brings it to new highs over the next couple of years.


If we can stick to timeframes and targets on forward looking views then we won't continue to cross wires so often on the different cycles we operate in.

It will also allow people to legitimately 'claim' their calls if they have the desire to do so.

And lets stop offering up certainty - there is no certainty in the markets - fundamental or technical. Use of words like 'definitely' shouldn't be in a trader or investors vocabulary when talking about the future.

thats my - I like the thread and enjoy both the technical and fundamental views and the views over different timeframes - if we stick to the above it might make things a little clearer for all.

"The fundamentals indicate that gold is going to rally strongly over the next few years and could hit levels of $10,000 to $20,000 an oz by the end of 2010" <end quote>


That in fact has been said, time frame and all (a few years is vague), but look back in the thread and it is there.

In my humble opinion the US$ price will hit 12 to 1,300 by October this year with perhaps a dip down (or final shakeout if you like) to 830 between now and August. I say this based on my Gann cyclical chart and the analysis of a couple of economists I have found close to the mark over the last four years or so.

Will be interesting to see if I may be dreaming.

explod said:

In my humble opinion the US$ price will hit 12 to 1,300 by October this year with perhaps a dip down (or final shakeout if you like) to 830 between now and August. I say this based on my Gann cyclical chart and the analysis of a couple of economists I have found close to the mark over the last four years or so.

Will be interesting to see if I may be dreaming.

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I have been noticing an annual gold price tipping comp on one of the mining sites I frequent... might have been MineWeb. The average of the poll got it pretty close last (calender) year. From memory this year they are tipping ending marginally above 1,000, I think it was something less than 1,100.

I have little doubt that it will eventually exceed 1,000 again on slowing supply, but I think the G7 and particularly the US... given comments by paulson again in todays press, are pretty determined to balster the USD in the short term. In that enviornment I can't see gold going ballistic in the next few months.

However, once all the credit crunch and recession worries have settled and confidence starts to come back into the wider economy, I think the lack of new gold supply will start to impact on growing demand and be the catalyst to start prices up to new highs. That may start late this year.

I just don't see the POG going through the roof on the strength of a weak USD or safe haven for alternative currency.

Gold's breakdown from $1000, came within a day of the 3/4 point Bernanke rate cut, and new Fed open windows for banks to borrow at. The spin was that the credit crisis was all under control.

With yesterday's S&P rating drops of Lehmans, Merril Lynch and Morgan Stanley, the UK bank in trouble and the mkt down on credit fears again, I wonder if this will be the reversal of the gold's reversal. (For the reverse reasons of course)

down, down, down she goes, where she ends up, no bull knows.

No recovery here I'm afraid!!

wavepicker said:

down, down, down she goes, where she ends up, no bull knows.

No recovery here I'm afraid!!

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Don't get too excited, already closed nearly half the gap. Oil presenting a hammer on decent volume on the one hour too.

The shakeout of the big speculaters in commodities... Oil in particular, I think.

The latest rating downgrades were hardly surprises but happened 'conviently' at a time when the share markets were contemplating kicking on and up.

Given the US markets have finished well off their lows monday and today, I'm considering that a sign that smart buyers are capitalising on media headlines that are causing uncertainty among some investors sitting on the sidelines or caught up in the convert to cash frenzie.

The bottom line, I suspect is a mad rush to liquidate speculative commodotity portfolios before the bubble burst in readiness to invest back in real (cheap) businesses.

As for the POG it looks to me that it ain't going to go ballistic on weak USD or economy concerns. It's gonna have to wait for real businesses to recover and discover the supply of new gold ain't there to meet increasing demand.

Whiskers said:

(cheap) businesses.

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Where??

wavepicker said:

down, down, down she goes, where she ends up, no bull knows.

No recovery here I'm afraid!!

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Well, there was a recovery.
There will be many more.

In essence the Fed fired one of its biggest salvos for the year, suggesting rate cuts were dead for the foreseeable future: And the worst it could do was knock gold down a few percent.

This Fed have unwittingly given gold a price base that will sustain it into the future. Although there is always a downside risk, within weeks it will be mostly worked through, in readiness for gold's typical price rally in the second half.

wavepicker was right in that I don't know exactly "where she ends up", only that she will.

MRC & Co said:

Don't get too excited, already closed nearly half the gap. Oil presenting a hammer on decent volume on the one hour too.

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Cr.p!! I have every right to be excited because I am short and trade going as I planned. What has been confirmed tonight is that Gold is going lower in the near future before it moves higher again. 3 waves always ubfold agianst the one larger trend, therefore the last low at 845 will be taken out.

wavepicker said:

Cr.p!! I have every right to be excited because I am short and trade going as I planned. What has been confirmed tonight is that Gold is going lower in the near future before it moves higher again. 3 waves always ubfold agianst the one larger trend, therefore the last low at 845 will be taken out.

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$845, cripes??, and I can believe that, but you were adamant a week ago about a correction to 6 or 700.

Of course I would not rule anything out till later in the year. But your bit above, "...Gold is going lower..." and "...always ubfold(sic)..." and you say others are stubborn, adamant and over sure of themselves. My comment is not about which way it it going but how you lock it all in. Markets are not like that. Tomorrow anything can happen.

And admitting to being excited, no place for that either, trading with emotion is a road to going broke

Gave you the benefit of the doubt once and I am sorry for that.

wavepicker said:

3 waves always ubfold agianst the one larger trend, therefore the last low at 845 will be taken out.

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Well I've highlighted in the post above those words that imho no trader or investor should use when making forward looking statements. There is no certainty in the markets ... of that I am certain.

I'm still patiently waiting for the weekly signals to settle down. Like I said if the POG does decisively break below USD $845, then it would definitely create quite a tremour to every gold bugs out there. But hell, it would also mean more cheap gold/silver for me to buy.

And I agree with cuttlefish, you cannot use "will" when predicting such things. Nothing is ever certain. May is a better word to use.

wayneL said:

Where??

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Now you're putting me on the spot.

For me one has to make a few calculated (guesses) judgements about where things are at. My judgement is that the worst is over for the US economy for the time being, particularly their property market. By that I think they will be able to fudge a recovery in the short term, and I'm getting the impression that domestic property values there have reached a point where they can stabalise or even start increasing a bit as soon as peoples cash situation improves.

Sure, there are still a few shakey high profile businesses out there, but even in good times less efficient businesses go down or are taken over and reformed by others.

My judgement is that significant reforms are underway all over the world to reign in the type of preditory lending, poor accountability and dubious trading practises that undermined the world financial systems and peoples confidence in the free markets.

Having established that my judgement extends that the G7 in particular will do whatever it takes to return some stability in the short term which should allow any further debt and or cash flow problems to iron in a more orderly way... effectively meaning that investers will start to regain confidence in the markets and establish a floor value to buy off. Some high profile people and firms are already noted for looking at and making new investment decisions.

Some examples of cheap businesses relative to medium to long term forcasts I think include many core retail businesses, agricultural and energy companies. On the Australian bouse for example there are many miners and relatively new companies floated in the last five years that have established good resources whose development is more hampered by a lack of infrastructure than lack of economic demand for the resources.

I've got a few minnows in particular whose resources are badly undervalued and I think we all know al least a couple of big corp's like the Walmart's and BHP's that have sound business practices and bank balances and have proven to be adaptive to changing market conditions.

The bottom line for the POG I think is the intervention of the likes of the G7 and regulatory changes have shot the wind out of the sails of the alternative currency/safety case and it's future gains will be more on traditional supply and demand issues.

cuttlefish said:

Well I've highlighted in the post above those words that imho no trader or investor should use when making forward looking statements. There is no certainty in the markets ... of that I am certain.

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yep, you are absolutely right cuttel, should have phrased that a bit better. But the 3 wave rally gives us a big clue and most likely IMO based on seeing hundreds of these types patterns we are headed for new lows.

explod, the 6-700 outlook for me has not changed. was quoting the short/medium term above

I am getting excited too (despite the criticism of such an emotion), of a break of the longer term downward trendline, as was the case in the smaller wave c of wave B in your corrective pattern. If this does break, it will most likely happen while cracking that $900 barrier.

Just as I am closely monitoring oil for it's return to form.

Can't say it will happen, but I know where my $$ will be if it does.

Ballz aren't big enough to short either one at the moment, not with the larger trend still firmly intact.

Plenty of long-term dogs out there to short.

MRC & Co said:

I am getting excited too (despite the criticism of such an emotion), of a break of the longer term downward trendline, as was the case in the smaller wave c of wave B in your corrective pattern. If this does break, it will most likely happen while cracking that $900 barrier.

Just as I am closely monitoring oil for it's return to form.

Can't say it will happen, but I know where my $$ will be if it does.

Ballz aren't big enough to short either one at the moment, not with the larger trend still firmly intact.

Plenty of long-term dogs out there to short.

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Each to their own, you do what you are happy with. Personally I don't like such trendline analysis and rarely work with them. Especially since the one you describe only pertains to a smaller degree of trend. Have been caught out way too many times in my early days. Try looking at the bigger picture first and work your way down.

The lines I prefer to work with these days are dynamic and change as cycles expand and contract.

The EW pattern analysis I posted for me is simplicity and I have found it to be quite consistant for my type of trading. This market has been churning for months now and a change trend has been brewing.

I think more traders neeed to learn to move with the ebbs and flows of the market, and not get too emotional and married to their positions. Do this and you are well on your way to becoming consistant which is what it's all about. I repeat again and again , Trade what you see not what you hope and expect. Learn how to recognize "The pattern of the trend"

wavepicker said:

I think more traders neeed to learn to move with the ebbs and flows of the market, and not get too emotional and married to their positions. Do this and you are well on your way to becoming consistant which is what it's all about. I repeat again and again , Trade what you see not what you hope and expect.

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Amen to that.

And if it moves through the trendline, it will be what I see. Until then, I have plenty of other positions open and many more begging to be opened.

I do not trade on hope, and never get married to my positions. But these cliches are starting to sound like a parrot. I have no idea why you felt the need to say it once more when my post had nothing to do with hope nor being stuck to a position. Simply stating I do not like to trade against the larger trend often, when there are plenty of charts out there I can short, of which are already heading for the bottom of the ocean.

I find the break of a trendline, even one which only pertains to a smaller degree of trend, as long as the break is in the direction of the larger trend, quiet consistent when married with a look at the effort (volume and spread) and outcome (close) and strict money management. I would say, far more than EW, which I find a bit creative for my liking.

But as you say, each to his own.