Gold Price - Where is it heading?

[josjes]

60 min charts clearly breaking resistance. Targeting 947 plus then 960 ?

 

[barrett]

It is looking bullish... there are a few hurdles just overhead - see channel resistance in purple and particularly, the blue resistance. If there's a break through to 955 in the coming week or so, from there it looks like blue sky to 1033.
[lines coming from underneath are 200 and 300DMA]

 

[Sean K]

It is looking bullish...

Yep, GLD, HUI and XAU all looking like potential breakouts, or approaching, but there is a pile of resistance sitting there, as you say. POG breaking $950 might be the catalyst. If they break through.....

 

[Sean K]

$950 looks important to others too. Pretty obvious though.

0918 [Dow Jones] Spot gold last bid US$945.40/oz, extending sharp rise that has seen it rise US$18 from NY opening, although off high around US$948. Host of factors helped gold higher, including stronger crude oil price, as supply concerns worry traders; Iran missile tests increase tensions in Middle East; weaker USD; mortgage market concerns in U.S., equities volatility. ScotiaMocatta says move "very bullish", eyes US$950 as significant resistance. "The stars may be in line for a move through US$950," although breach of this needs some conviction for trend to stick, as weak tests in past have led to nothing but subsequent decline, it says. (RCB)

 

[josjes]

Just to add to my previous post re:Gold:Oil ratio.
This is the long term chart back from 1990.


Could be a big double bottom in there,second low higher than first,looks like the POG action in 2000-2002.

Lots of gold out there swimming naked,so that chart really compares POO to an entity that is of a fuzzy nature.

So the market are now starting to the rude awakening we are in the cusp of the mother of all bear market, what do you think the ratio will go from here onwards ?
From the end of 2000 till 2002 when we are in the midst of bear market, the ration shoot up from 7 to 15.
So now it's been cooked,in other words,and it will return to the mean,at around 15

But first it went overshoot downward, because it always happens that way.
And I am saying we have seen this bottom of gold to oil.

Let's see Oil 100-110, Gold 1500-1600 ??

 

[Sean K]

Just to add to my previous post re:Gold:Oil ratio.
This is the long term chart back from 1990.


Could be a big double bottom in there,second low higher than first,looks like the POG action in 2000-2002.

Lots of gold out there swimming naked,so that chart really compares POO to an entity that is of a fuzzy nature.

So the market are now starting to the rude awakening we are in the cusp of the mother of all bear market, what do you think the ratio will go from here onwards ?
From the end of 2000 till 2002 when we are in the midst of bear market, the ration shoot up from 7 to 15.
So now it's been cooked,in other words,and it will return to the mean,at around 15

But first it went overshoot downward, because it always happens that way.
And I am saying we have seen this bottom of gold to oil.

Let's see Oil 100-110, Gold 1500-1600 ??

What?

 

[explod]

I am not convinced with the gold oil relationship.

Some of the eastern states, Iran in particular, are refusing $US for oil, accepting Euros or gold only, so that is having some effect.

Oil is a commodity, and at the moment a necessity.

The gold price is more sensitive to the US dollar as it is an alternative form of exchange and a hedge against the risk of stagflation (money shortage) and the devaluation of money as they print more to try and stay afloat.

Over the last 7 years the exact mirror reflection of the US dollar and the gold price is very convincing.

It would be good if someone technical could post a $US index and gold chart for the last ten years.

It will then hit home like the proverbial.

In the short term, gold could go anyway, but post US election make sure you are on the train as it leaves. IMVHO of course.

 

[barrett]

Great stuff.. the Gold : Dow ratio chart over the past century is already a bit of a forum favourite.. gold : oil is another example of ratio analysis, with a nice trendline support in there as well suggesting that the ratio has reached or is approaching a lower extreme. It appears likely from the chart that gold has a lot of catching up to do relative to oil. The very brave (or slightly crazy) may even like to trade the spread (long gold, short oil)

What exactly do you mean by gold that's 'swimming naked'?

BTW stockcharts don't have data for this pre-1990 do they?

Just to add to my previous post re:Gold:Oil ratio.
This is the long term chart back from 1990.


Could be a big double bottom in there,second low higher than first,looks like the POG action in 2000-2002.

Lots of gold out there swimming naked,so that chart really compares POO to an entity that is of a fuzzy nature.

So the market are now starting to the rude awakening we are in the cusp of the mother of all bear market, what do you think the ratio will go from here onwards ?
From the end of 2000 till 2002 when we are in the midst of bear market, the ration shoot up from 7 to 15.
So now it's been cooked,in other words,and it will return to the mean,at around 15

But first it went overshoot downward, because it always happens that way.
And I am saying we have seen this bottom of gold to oil.

Let's see Oil 100-110, Gold 1500-1600 ??

 

[josjes]

What the ??? I just left the screen for a few hours and the price is flying $20.
Whoohoo, $80 in 10 days, now this is what I called Large Wave III of Major Wave Three (of Alf Field's count). $1033 doesn't seem too far away.

 

[Sean K]

What the ??? I just left the screen for a few hours and the price is flying $20.
Whoohoo, $80 in 10 days, now this is what I called Large Wave III of Major Wave Three (of Alf Field's count). $1033 doesn't seem too far away.

I thought this was a wC down through $845 into the $700s.

 

[Sean K]

Interesting that the HUI is up 4.5% as the market crumbles. Gold stocks moving with POG. Nice, but is it time for a decoupling? I expected gold stocks to move with the market for a while for some reason. Perhaps this is just an anomaly?

I was thinking it might break through 460 with POG through 960, pending general market conditions. Maybe it's happening. Intra day, too early to call.

 

[Sean K]

GLD maybe breaking up.

 

[explod]

I expected gold stocks to move with the market for a while for some reason. Perhaps this is just an anomaly?

Most general stocks are down around the 20 to 30% mark (Banks etc). Many of the gold stocks have been pummelled 60 to 120% of recent times. A lot to do with financial press jawboning and talking up the US dollar.

So I believe gold stocks will run back quickly and this time when gold breaks the high of $US1030 the decoupling will be clear and the alternative for investment seekers picked up on more generally.

The US dollar dropped below support overnight and with the Dow continuing to weaken on the flood of continued financial carnage I expect gold to find its feet soon now. Had always said after the US Presidential election but I think they are losing it now.

Notice the one denomiator that is clear, oil did not move much overnight but the UD dollar dropped.

 

[rederob]

Notice the one denomiator that is clear, oil did not move much overnight but the UD dollar dropped.

Very wrong!
Oil hit a record intra-day high overnight, but failed to hold the strong gains.
In fact oil has had a stellar few days, as the chart below indicates.
In percentage terms the week's rally of oil - from its lowest to highest price -has outstripped that of gold.

If you are going to make a point, it's a good idea to get it right.

 

[explod]

Very wrong!
Oil hit a record intra-day high overnight, but failed to hold the strong gains.
In fact oil has had a stellar few days, as the chart below indicates.
In percentage terms the week's rally of oil - from its lowest to highest price -has outstripped that of gold.

If you are going to make a point, it's a good idea to get it right.

Fair enough, I look more at closing price. The jump in oil was greater the previous night and tapered off last night, whereas gold ploughed right on.

As a long term investor I do not measure to the inch, so apologies Red

 

[rederob]

Fair enough, I look more at closing price. The jump in oil was greater the previous night and tapered off last night, whereas gold ploughed right on.

What I believe is important is that the link between gold and oil remains in place. One may lead or lag the other on a daily basis, but their short term strongly positive correlations are regularly responsible for large price movements.

From a hedging perspective sharp movements in the greenback will precipitate similarly sharp movements in oil in the present environment; and seems a more reliable play that speculating on gold. Whereas gold seems better played against movements in the DOW.

In both cases the weakness of the greenback, which will continue for a considerable time, shall ensure that gold and oil plays are amongst the safest medium to longer term investing approaches.

 

[cuttlefish]

Fannie and Freddie are coming home to roost. This is something I was anticipating but had started to believe (with all the positive spin around) wasn't going to happen. The most obvious inflation hedges are gold and oil. Oil will be the early winner but when the tectonic shifts occur gold will show its colours imo.

 

[M34N]

Gold now at $965~, broke through the $950 resistance and held near the session highs, where to now? I vaguely remember $980 being mentioned as the next resistance level, then I guess it's the all-time high of $1030?

Personally I feel this will be the next leg up and we'll easily hit the all-time high, given the Dow keeps up its free-fall, the US dollar index looks doomed too, lost over 0.8% Friday and nearing its 52 week low of 70.7, look at the pattern that happened in Dec-Mar, very similar to Apr-Jul:

 

[Uncle Festivus]

What I believe is important is that the link between gold and oil remains in place. One may lead or lag the other on a daily basis, but their short term strongly positive correlations are regularly responsible for large price movements.

From a hedging perspective sharp movements in the greenback will precipitate similarly sharp movements in oil in the present environment; and seems a more reliable play that speculating on gold. Whereas gold seems better played against movements in the DOW.

In both cases the weakness of the greenback, which will continue for a considerable time, shall ensure that gold and oil plays are amongst the safest medium to longer term investing approaches.

A link between gold & oil or a link to the common unit both are valued in? There's not been much correlation between the 2 for the last 6 months at least going by a cursory glance at a comparison of the 2.

Oil is or will be irrelevant as far as gold is concerned as we are near generational event(s) which will see gold go up & oil go down due to deteriorating global dynamics.

A nice cup forming, ready for August? Back to bed.......when will things not be 'valued' in depreciating world currency $USD? When will the world capitulate?

Looking good for the ultimate pairs trade - long gold, short $AU??

 

[CanOz]

I heard on the Bloomie the other week that the correlation between gold and oil was indeed alive and well, although gold was in effect lagging oil. The interviewee was a gold bull and was expecting gold to make a run to basically catch up to oils run.

Cheers,


CanOz