Gold Price - Where is it heading?

Gold will probably be range bound in the short term, between 840-920 with risk to the down side, if the US$ gains. Bernankes comments are new in that the fed does not normally comment on the dollar, they leave that to the treasury. Anyone have any ideas what the fed can do to support the dollar? don't think rate hikes are an option yet.

Credit crisis is far from over and may require more rate cuts, if that happens gold will go up again, but at the cost of equity markets as we saw early this year.

Longer term the US$ will revert back to fundamentals, that is massive trade deficit and falling real estate. When this happens hopefully gold will go up again and break $1000 or more.

www.Kitco.com is useful site to stay informed, but be wary of the bias in the gold commentaries.

Not a big fan of charts as per mail above, historical data is just that

815 mid June...maybe....

Has the last low been taken out ?????

If not , I would be inclined to presume that we will have some definition at the testing of that area . Break it and cop a dumper , or watch it form a base and commit to a higher low .

Either way it will at least give us an idea of a heading .

The ripples on the pond have only just started , the US now garrisoning a defensive dollar will soon test the bolt holding the gate .

Meanwhile Clueless Inc. will start to succumb to the old affliction known as CRAFT .

In the meantime as the range bound markets try to get sorted , we can take aim at the targets hunted .

I agree with Whiskers in part , there are cheap companies out there , if you can afford to keep them running . But Bernanke going defensive on the dollar will not see the end of the crisis , which is gasping for breath before the halfway point .

The election in the US will more than likely be cast on the economy , the brawl that will errupt now the Dems have their shop tidied up should become interesting as each side dabbles with the truth debates . That time coming should send shivers down Wall Street , but if we hear Hilary starting to sound like an Obama echo ........ hehehe , watch the stampede for cover begin .

The Republicans already know Senor McCain is a loose cannon , that tends to buck party trends , so this ensuing period should be one for the record book .

I can't wait for the mud to start flying , it's just a shame we can't licence it and sell tickets .

ithatheekret said:

Has the last low been taken out ?????

I can't wait for the mud to start flying , it's just a shame we can't licence it and sell tickets .

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Get it going

Love to be your agent, and would only charge a 95% fee.

rederob said:

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.

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rederob,

you send me a PM some months back telling me why FA works, and why TA doesn't, not too dismilar to RS's posts.
In so far as Gold goes I have a lot faith in my analysis because it has worked well for me. That analysis tells me the USD will be the biggest winner this year. Now that might make you think me a fool, but I couldn't care less.

FOR ME IT WORKS, AND IT'S CONSISTANT AND MY HIP POCKET PROVES IT

I got one thing to say to you. we are on different wavelenghs
FA works for you and TA works for me. I respect your FA knowledge but it really does not interest me, that is why I rarely comment on your analysis.

So let's just leave it at that

All the best with your investments.

Wavepicker

explod said:

Get it going

Love to be your agent, and would only charge a 95% fee.

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Well for 5% , all I'll can afford to say is that I think Bens juggling act was great , but adding tug of war on the greenback during intermission will prove to be a fleeting moment in time ..........

There's only so much a buck can buy . especially when it's already been revalued by a market . So whilst it starts to climb up the cliff looking for a ledge , it could be beneficial to look at what markets policies are being directed at . here at home , wheat is ...... was a target , that one looks in the bag . Oil is on everyones radar , they're struggling to contain that one , so what's left to do ........ raise the trading taxes .

wavepicker said:

So let's just leave it at that

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Amen to that

ithatheekret said:

...I think Bens juggling act was great , but adding tug of war on the greenback during intermission will prove to be a fleeting moment in time ..........

.

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Well it did make a lower high. And all donations are siezed upon and multiplied. The Bondy parachute?

In the same period, from 2/05, gold has bounced off higher lows.

At least half the time I am wrong. Called the house edge.

For me there are 2 scenarios at play here -

1. What is the real level of US inflation?
2. Is this part of a normal 'cycle'?

1 - If inflation was still measured the same way as in the early 80's then a truer level of inflation would be over 10%. Gold then is perhaps 'behind the curve' ie undervalued, still? Gold/???? ratio's are saying this now.

2 - Is this part of a normal cycle to be worked through by the use of the usual financial alchemy mechanisms or is it the real deal period of global economic reckoning?

April 2007. GMO Quarterly Newsletter. GMO manages $145 billion. CEO Jeremy Grantham wrote: "The First Truly Global Bubble: From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips; it's bubble time. ... Everyone, everywhere is reinforcing one another. ... The bursting of the bubble will be across all countries and all assets ... no similar global event has occurred before."

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Gold will most likely be hit with collateral damage initially, but may/should emerge as the one true store of 'value'. Commodities in general will tank, so too China with the obvious negative implications for Australia (as if we need any more).

March 2006: Forbes. Economist Gary Shilling wrote: "The current housing weakness will develop into a full-scale rout ... It's clearly a bubble and is nationwide ... The house-price collapse will induce a painful recession that will send U.S. stocks into a tailspin ... China will suffer a hard landing ... and weakness in the U.S. and China will spread worldwide."

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Bernankes' rhetoric - Talk might be the only thing CHEAPER than the dollar right now.

Federal Reserve Chairman Ben Bernanke on Tuesday warned the dollar's weakness was contributing to U.S. inflation and signaled that the world's most powerful central bank would not welcome a further decline of the greenback on international currency markets.

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Boo hoo, all you nasty capitalists - please keep buying my freshly printed IOU nothings . Doomed I tell ya, doomed

Still in cash, gold, farmland & trading these fabulous swings

(Getting closer?? )

wavepicker said:

In so far as Gold goes I have a lot faith in my analysis because it has worked well for me. That analysis tells me the USD will be the biggest winner this year.

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Your still sounding very confident on the USD, wavepicker.

From a TA (weekly and monthly charts) I notice some long term extreme deviations occuring that tend to support my FA view, also that the USD will recover some lost ground.

In the bigger scheme of things the focus is starting to shift more heavily to the USD and I think there is just too much political will from a number of nations for it not to happen... despite the self interest of large traders and investment funds.

I would expect the USD reallignment to more substantial against the likes of the euro than the AUD, but none the less give us a bit of a lift in the POG in AUD terms.

I was thinking roughly mid 80's getting into the 4th quarter, based on a reasonable time for the US problems to stabalise and them starting to switch their thinking to raising interest rates again.

Wavepicker, do you have an estimate of the AUD/USD conversion and indicative time frame from a TA perspective?

I'll stand behind you and :twak: anyone who tries to shoot you down in flames.

Whiskers said:

Your still sounding very confident on the USD, wavepicker.

From a TA (weekly and monthly charts) I notice some long term extreme deviations occuring that tend to support my FA view, also that the USD will recover some lost ground.

In the bigger scheme of things the focus is starting to shift more heavily to the USD and I think there is just too much political will from a number of nations for it not to happen... despite the self interest of large traders and investment funds.

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I assume the gold price bearishness is because of a percieved imminent strength in the $USD? You would then hope that the negative corellation would still be intact. There is a possibility that we can have a rising $USD and a rising gold price, but only one will be sustainable.

Uncle Festivus said:

I assume the gold price bearishness is because of a percieved imminent strength in the $USD? You would then hope that the negative corellation would still be intact. There is a possibility that we can have a rising $USD and a rising gold price, but only one will be sustainable.

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Yes I would agree with that.

I would think that unless the US pulled a rabbit out of the hat, the longer term fate of the USD is most likely lower. But it is quite conceivable that in the medium term that the supply of gold could dry up faster and the price start rising as you say in parallel with the USD, particularly if central banks sell less reserves.

Obviously if that occurs and oil goes off the boil a bit more, easing local inflation and production cost worries, it could be a bonanza time for Aus producers in the coming months or year or so.

I was pretty sure the markets were wanting to kick on a bit higher monday our time. The fundamental no's are coming in OK, a bit better than estimates, the same with productivity and lobour costs tonight. I'd say the bit more than (my) expected fallback was just the negative karma about the re-ratings that spooked people for awhile, a dash of 'resentment' that the Fed is signalling the probable end of rate cuts and a dash of super funds manipulation.

The US market has kicked off in the green tonight and I'd expect to carry on the trend upwards, POG and oil flat to weaker and of course the USD to start being liked a bit again.

Whiskers said:

Wavepicker, do you have an estimate of the AUD/USD conversion and indicative time frame from a TA perspective?

I'll stand behind you and :twak: anyone who tries to shoot you down in flames.

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Not yet whiskers. I had posted a hand drawn chart long tern AUDUSD chart on this thread some months back. The picture painted there was that the AUDUSD price action of the last 6 months was an Ending Diagonal which is a mixture of impulsive and corrective waves. Fast moves in the opposite direction can resolve from such patterns. So the conclusion back then was that yes AUDUSD may still have some upside but it would be limited and it's currently in a finishing patern and not a continuation pattern. Mind you, the last leg of that type of pattern may also blowoff slightly to the upside before reversing.

I have done some other more conclusive cycles work of where I expect it to go, but I ain't gonna post it here because it's my IP, and what for? Not many interested in TA on this thread anyway. Might do it in another later .

MRC & Co said:

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.

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MRC, not sure I am following your logic in this post and the last one entirely regarding EW and trendline analysis.

If you don't mind, please post a chart explaining your analysis and the reasons why you think Gold may traverse this probable path. I and others here would be very interested to see you analysis.

wavepicker said:

Not many interested in TA on this thread anyway. Might do it in another later .

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Are too mate .....

I 'm waiting for an retest of the 872/3 area if it has the legs , might have seen it , but a little unconvincingly , under that is 851 , that's a nasty spot for a volatile swing . So I'll look and see if 872's can be tackled or whether the ball's been picked up . Below 851 I have 792 , horrid stuff , but it could happen . Then we have to consider whether it would sit there in a cycle range bound , but that is all presumption of where it could go .

What is missing are the drivers that could move it there . At present all I see is everyone gearing up for hyperinflation and a lot of rhetoric .

Talking about IOU's, they can't hide the real facts, as much as they would like to.

wavepicker said:

MRC, not sure I am following your logic in this post and the last one entirely regarding EW and trendline analysis.

If you don't mind, please post a chart explaining your analysis and the reasons why you think Gold may traverse this probable path. I and others here would be very interested to see you analysis.

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I think gold may traverse this trendline based on fundamentals, global macro, whatever you may enjoy calling it. Once it does, I can only then see what happens and post a chart. Until then, my eyes are elsewhere as are my positions.

Breaking of a trendline following a longer-term upward move, preferably with supporting volume, is that hard to follow? Say gold moves back up through that trendline I pointed out above, on higher upward volume, very very simple. Not saying it will mean a restart of the gold bull, or that I have more than a 50/50 chance of being correct, but if I am, it will yeild a good swing, just as the last little gold run did, which I also pointed out above, referring too your own chart.

MRC & Co said:

Not saying it will mean a restart of the gold bull, .

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The gold bull is still firmly intact, so dont' worry on that count

How about a french curve on the 10 year and you can see where we are going.

Yes, agree explod, I am still very bulllish on gold, both fundamentally and technically (as you say, larger trend is still up). I just need technical evidence an upswing may be about to occur before I will jump back on and to me, that is simply an upward break of a short-term downward tendline in this instance.

Cheers

MRC & Co said:

I think gold may traverse this trendline based on fundamentals, global macro, whatever you may enjoy calling it. Once it does, I can only then see what happens and post a chart. Until then, my eyes are elsewhere as are my positions.

Breaking of a trendline following a longer-term upward move, preferably with supporting volume, is that hard to follow? Say gold moves back up through that trendline I pointed out above, on higher upward volume, very very simple. Not saying it will mean a restart of the gold bull, or that I have more than a 50/50 chance of being correct, but if I am, it will yeild a good swing, just as the last little gold run did, which I also pointed out above, referring too your own chart.

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No, not hard to follow at all, but displayed graphically much easier to follow what you mean. I understand your logic now, but this is where something like EW analysis can be more helpful IMO than a break of a primitive trendline that ends up being another false break as in the last upwsing. Why?

Because most of the pundits thought the last upswing was the end of the correction except some(in this case mainly those following EW the same way I did) and stood their bearish stance. Using EW it was possible to come to the conclusion that the last upsing was a high probability suckers move that would eventually be fully retraced. Sure you can trade your upwing MRC, but it is a very poor strategy because the one larger trend is down at present NOT up. It's a game of nimble entries and exits. Once again trade what you see. Is that hard, why fight the trend?

You might think EW is a bit creative, I can assure you this is not the case at all. EW is one of the most objective means at looking at the pattern of trend at the market. There are quite a few rules,guidelines to help you prove/dipsrove the market analysis as the action unfolds. In the end chart reading in large is about patterns and pattern analysis. Anyone can learn it, it's a question of putting in the time necessary to study these patterns in detail and learning to take trades around them. For some that can be 2-4 years, it takes a while but worth it IMO.

Trendlines need to be dynamic in nature to be of help. Especially in blowoff and capitulation type moves whereby we can draw 3-4 ascending or descending trendlines depending on bullish or bearish market. That way one can gauge the rate of change of price and thus momentum relative to the changing slope of the trendline. The last trendline( showing where price almost goes vertical) can help one more than any other trendline analysis to help determine a possible or temporary change in trend.

Yes, the long term(secular) trend of Gold is up. But the near term trend of precious metals and foreign currencies as well as the broader stock market is down. Gold shows absolutely no evidence that this current downturn is over technically to those that keep jumping in every rally. I think one will be able to jump back on at lower prices than current levels and I am hanging out for that once my short is exited.