Gold Price - Where is it heading?

kbxk508 · 14 August 2008

Most top Aussie Gold Stocks have fallen by as much as 30% in the last 30 days, e.g.

LGL was 3.40 and now 2.22
NCM was 32.47 and now 24.90
PNA was 0.91 and now 0.61

So how much has the price of Gold in A$ dropped in the last 30 days?

Answer: -6.93%

kbxk508

Sean K · 14 August 2008

Potential bottom formed there, but I couldn't be taking a LONG term (buy and hope) position until some of those resistance lines were breached. In the mean time, short term trading, for me.

The blue circle looks like a potential break of medium term down trend to me.

Broadly speaking.

explod · 14 August 2008

This from Jim Sincair's site I thought may be of interest:-

Dear Friends:

Welcome back to the Bretton Woods Agreement: Currency Bands Modernized and Revitalized.

It is so transparent that you would have to be blind not to see it. Today, Jean-Claude Trichet, the European Central Bank president, returned to his strategy statement that inflation was a more compelling issue for the ECB than the level of economic activity.

The majority of the last three generations of currency traders make their market decisions based on anticipated interest rate differentials. The Euro was muscled off the near $1.60 level by more than $10 billion in currency market intervention, along with Trichet's verbal intervention stating that the economic environment might take precedent over inflation. Today as he reverses himself by making inflation the primary concern, more intervention is taking place to make the Euro look weak in the face of a statement that should have the opposite impact.

Now you have the Euro "verbal currency band" reinstated at a low of $1.49 and a high of $1.60. Alarms have now been put in place in the Euro that will scream like a siren when violated. The Euro trading above $1.60 will clearly show that Central Bank power has been overcome by market action.

The U.S. and ECB Central Banks will change the bands to $1.55 - $1.65 but that will fall quickly as my following comments outline:

Gold will recognize that the lower band is the floor price for the Euro at which time market reactions for gold will become less violent and higher highs will be achieved. A little less violent trading range for gold would certainly make life easier for everyone - especially those companies that produce, explore and develop mineral deposits.

I have informed you many times that there is going to be a revitalized and modernized reinstatement of the Federal Reserve Gold Certificate Ratio. This upcoming monetary tool has been reviewed many times on www.JSminset.com. Go to search to review.

The Revitalized and Modernized Federal Reserve Gold Certificate Ratio will be tied to a reintroduction of M3. It will not be tied as in the pre-Bretton Woods Agreement. The treasury will have nothing whatsoever to do as the open market will do it for them.

Now I can state with total conviction that when the Federal Reserve Gold Certificate Ratio is reintroduced gold will trade $100 above and below this index gold price for many years to come. I anticipate this at gold $1,650.

Therefore, fear of a 1980 gold experience on the downside is no longer valid. I have told you that those you identify as gold's enemies are indeed gold’s best friends. As always, those close to power are going to make more on gold that the disbelievers in the gold community ever will.

With the introduction of the revitalized Federal Reserve Gold Certificate Ratio and currency bands, gold will be supported by a peg and the Euro will not. When this unfolds in front of all the meatheads in the investment world, it will be seen that gold is a better investment than any currency.

Now you see the plan unfolding exactly as it has been outlined on www.jsmineset.com for more than seven years.

Respectfully,

Jim

cuttlefish · 15 August 2008

Nice inflation figures in the US tonight supporting the theories about the effects of money printing. Hasn't helped the gold price which has gone down again as US markets open. The AUD gold price being strong helps support the case that some of the Australian gold stocks are getting into solidly oversold territory. I'm not a fan of all of them because I think cost is still going to be an issue for a lot of them, but if the AUD gold price can stave off a slump to lower levels then there are some that could be well worth picking up.

I'm still bullish on oil as well and if you believe oil prices are going to remain above the $100 mark for the foreseeable future then there is looking like good value amongst some of the newer oil producers as well.

The US has to inflate itself out of the housing slump and credit problems but try to avoid losing control of that inflation - a difficult juggling act - particularly in light of the fact that the Euro has its own problems too. Devaluing currencies = rising cost of physical goods imo hence the bullishness on oil as well - I don't buy into the demand destruction theories for oil either but that might be naive.

I bought some physical gold on Monday this week - just a small amount - something I've been meaning to do for a while anyway and thought while prices are a bit soft I'd pick some up (though the AUD price isn't really that soft). I still see better leverage via gold producing stocks so will continue to focus on them.

Whiskers · 15 August 2008

I agree cuttlefish, that production costs are inhibiting the progress of many resource stocks, particularly the juniors. But I'm getting back into selective gold, copper and nickel stocks right now.

Just had a look at the oil and gold charts. They're both in small corrective legs, only difference is oil has just about done enough to continue it's downward spiral whereas gold has just about done enough to continue it's upward run.

Similarly, the USD index looks like it may have done it's little correction and is on the way up again also... all good for the Aus market, particularly our recource stocks.

PS: Just done the maths. it may have to touch 808.3 to finish the correction.

Whiskers · 15 August 2008

Well, The USD index shot up from 76.5 to 77, a new recent high, in the last hour or so... made it a bit tough for the POG, but it's holding up so far.

Sean K · 15 August 2008

Whiskers said:
Well, The USD index shot up from 76.5 to 77, a new recent high, in the last hour or so... made it a bit tough for the POG, but it's holding up so far.

That brief rally looks done for the minute, and pressure building on $800 ish. Next stop $775 ish?

Been relentless.

Sean K · 15 August 2008

In fact, breaking 805 might send it there.

bean · 15 August 2008

kennas said:
That brief rally looks done for the minute, and pressure building on $800 ish. Next stop $775 ish?

Been relentless.

And if that does not hold (I was given number just above that a few days ago so if I see US$ 775 I might feel rather ill)

Again I shall mention this just in passing
POG on Comex has just had 8 days down
1 day up
Now 1 day down
Record is 9 down in a row (on 1 occasion)

cuttlefish · 15 August 2008

Gee the night was looking good before I went to bed - DOW down, oil up, gold started up but corrected again ... now oil down, DOW up and gold down ... .

So will gold hold this support level or not is the big question I guess. If it doesn't and heads down significantly lower it will only add strength to the eventual run when the price recovers because of the reduction in supply that will result from lower prices. But above $US 800, the current AUD gold price will still have projects moving forward here.

The AUD/USD certainly throws an added complexity to the mix - maybe the 'strong' USD (I still don't buy it) will counter the falling gold price. And when USD reality sets in the flight will be from there to gold anyway (imo) so maybe AUD gold will remain strong either way.

explod · 15 August 2008

cuttlefish said:
Gee the night was looking good before I went to bed - DOW down, oil up, gold started up but corrected again ... now oil down, DOW up and gold down ... .

.

Yep. someone on Wall Street at the open said that, "the POO would drop next year, so everyone said to themselves, "were all saved"

The campaign to tie gold in with oil has stuck firm. A campaign to take attention away from the valueless fiat currencies as was being reflected in a rising gold price can not be tolerated by the regime at this time.

I have no faith that gold will do much till the US Presidential election. However the sentimental power of wall street is something to behold and should always taken into consideration.

explod · 15 August 2008

Since my last post above notice gold this morning down a further $10.

From European trade last night gold has effectively fallen $US42 in the last 14hours. This is a typical downramp on my past observations, leading to the weekend. It can now be expected to end much lower at the US close tonight so that it has the weekend exposure for maximum psychological effect. The PPP at its best and most deperate.

Too much to record here, but the Georgia situation is one in which the US is losing a very big tactical situation. This may not make sense to some but this fact is very much tied to a worldwide loss of confidence in the US across the board and the flee out of US dollars that will soon follow will see a return to gold value that will be huge. But the volitility from the supression that can still be applied will be hard for some to bear.

Just hang on and ride the storm. The bull is bucking but on the weekly still intact and looking oversold on the indicators.

We live in interesting times

Sean K · 15 August 2008

explod said:
Yep. someone on Wall Street at the open said that, "the POO would drop next year, so everyone said to themselves, "were all saved"

The campaign to tie gold in with oil has stuck firm. A campaign to take attention away from the valueless fiat currencies as was being reflected in a rising gold price can not be tolerated by the regime at this time.

I have no faith that gold will do much till the US Presidential election. However the sentimental power of wall street is something to behold and should always taken into consideration.

explod, are you saying the market is always right, or wrong?

You have been saying for some time the the market has been wrong in regard to gold haven't you?

Confused...

explod · 15 August 2008

kennas said:
explod, are you saying the market is always right, or wrong?

You have been saying for some time the the market has been wrong in regard to gold haven't you?

Confused...

Good question. In the end the market is allways right. You will be aware that I am mostly out of the market and have been for some time. Got back into LGL the other day, but they will hold up reasonably at these levels. But my basic rules are to follow the trend.

The market is however moved first of all by sentiment. That last word is the most important. For considerable periods sentiment can be moved by the words of ecomomists and the media. It is well known that some make a living off this side of trading. Professors of Sociology out of Harvard are part of the PPP, dont' worry about that.

However in the longer term (Buffet's lifetime success is the test) fundamentals will win the day. Fiat money is in trouble because of massive developed world debt.

Back to your question Kennas, in short, the market is often led the wrong way. A report we posted only in the last week or so here indicated that the system, banks etc will be loading up on gold when the mugs have sold. What we have is a normal shake out. Short term traders may need to follow it, medium longer term I will ride it out.

Interesting times

Kauri · 15 August 2008

Never underestimate the affect of the Japanese retail investor facing margin calls... watch the XAUJPY... maybe...
Cheers
...........Kauri

Kauri · 15 August 2008

explod said:
Back to your question Kennas, in short, the market is often led the wrong way. A report we posted only in the last week or so here indicated that the system, banks etc will be loading up on gold when the mugs have sold. What we have is a normal shake out. Short term traders may need to follow it, medium longer term I will ride it out.

Interesting times

More like a severe case of the DT's methinks... after the party comes the hangover..
Cheers
..........Kauri

bean · 15 August 2008

Silver currently falling of a cliff.
POG to follow?

A bear trap for those that bought gold stocks on yesterdays opening most stocks gaped up at the open 5%
today a lot opened 5% down

If a big night down in POG and US gold Index's tonight.
Blood on the streets in Aussie gold stocks early next week?

Panic selling / Fear spreads
A capitulation of Gold stocks

explod · 15 August 2008

Kauri said:
Never underestimate the affect of the Japanese retail investor facing margin calls... watch the XAUJPY... maybe...
Cheers
...........Kauri

Of course, the PPP are only the precipitators

More like a severe case of the DT's methinks... after the party comes the hangover..
Cheers
..........Kauri

And my idea is to stay firm, a flat bottle of beer the day after sounds good but more often makes it worse.

However I am never one to make predictions but do think this action may (emphasise the word MAY) bring in buyers and turn this move into a strong reverse hammer on the daily.

BentRod · 15 August 2008

Resistance at $771 getting probed.

explod · 15 August 2008

BentRod said:
Resistance at $771 getting probed.

You probably mean suport and if it breaks down the next major support is around $US680. Near to the area Bean called some 8 or 9 months ago.

However it has headed back to 784 and silver is showing similar signs. US dollar strong at over 77 on the Index so anyones guess at this stage.

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