Gold Price - Where is it heading?

chops_a_must · 21 November 2008

explod said:
Not able to run utube on my speed so will have to sit out till I get a clearer answer. However reading between the lines, few economists, even those who predicted the current play are able to say where to now and what will occur. All I know is that in the longer term, gold has been going up whilst the markets are going the other way. It is preserving my stake at the moment.

I tried finidng a transcript for you but no luck. I'm sorry explod old chap.

It basically expolored the contradictions in monetary policy from central banks, in a satirical way. In the end when Shaun Micallef points out to him that when currencies are valued against each other, not on the basis of gold, they are ultimately worthless. The spokesperson is then seen in camera after a cut away, with only his legs and feet in shot. He's obviously hung himself after having this said to him. Therefore... hilarity.

I hope that captured most of the humour for you.

cuttlefish said:
Just watched the newstopia thing chops posted ... that does pretty much sum it up too doesn't it.

Indeed.

Basically... my thoughts from here. We are deflating... I'm not convinced that is bullish for gold. We are almost certain to inflate at some stage, but that looks a way off as there is no velocity in the application of money into assets.

Therefore, any rise in gold, or bullish stance here, is a play on currency destruction. Which is why the clip sums up my position nicely.

Cheers.

Ageo · 21 November 2008

sinner said:
Whoever said they are picking stuff up at spot, please let us know how you are doing this!

Well i actual buy below spot but i buy alot of 2ndhand jewellery (otherwise known as scrap gold). I come across alot of 24ct but i mainly send it off to get remodeled into new jewellery as sitting in my safe doesnt earn me any income. Remember any gold (including 9ct, 18ct jewellery etc..) has value.

sinner · 21 November 2008

Thanks Ageo, if you get below spot and have remodelling service access how about you remodel some of that 24ct into bars/coins for us and sell at spot + $20 remodelling fee?

Forget jewellery, you'd make a killing on ebay.

I'll take $200 of spot silver in bars and 1 oz of gold thanks. Promise to come back for more

CFDTrading · 21 November 2008

Well, here is what our analysts think the spot price of gold is off to. And its mixed news, depending on your wishes. While it did break above the recent downward channel, it is not clear whether in the near term this will be sustained.

Here is the short term outlook.

Short-Term Technical Forecast for Gold

COMEX Gold prices briefly broke above clear trend channel resistance, but the contract quickly reversed and now trades below said resistance level. The false break is similar to the one we saw just a week ago, and gold prices have thus far remained within their recent downtrend channel. Our bias subsequently remains to the downside, and gold currently trades near relevant support levels at the 730.00 mark. A break below would confirm that the shorter-term trend remains to the downside, and we would subsequently target previous spike-lows near 725.

Ageo · 21 November 2008

sinner said:
Thanks Ageo, if you get below spot and have remodelling service access how about you remodel some of that 24ct into bars/coins for us and sell at spot + $20 remodelling fee?

Forget jewellery, you'd make a killing on ebay.

I'll take $200 of spot silver in bars and 1 oz of gold thanks. Promise to come back for more

Hehe sinner lets say i purchase 1kg of 9ct gold for below market (market is around $14.73p/g) but i can pick it up for around $13p/g if i look hard enough) Now lets say to remodel into new italian jewellery plus shipping etc.. it will cost me another $5p/g ($5000 all up) So we would have a total of around $18000 invested, lets say i sell that 1kg to a buyer this is how alot of jewellers do it now....... they would give me 1kg of 9ct scrap gold (or equivalent the gold content plus 5% for wastage) and that would cover the gold so you dont worry about price fluctuations. Then we would trade on the labour and usually i would get around $10p/g, so i would make around $5p/g profit ($5000 on a kilo) and i could easily do that in a month (we did it just 2 weeks ago) so your return on that money outlayed is around just under 30%.

Then you send off the gold to be remodeled and so on..... (at the same time benefiting from the rising prices of gold if it goes up).

So as you can see it would be a waste of time for me to sell to you hehe (plus i have a buyer for the rest of my scrap who pays very handsomely).

Sorry for the slight off topic just wanted to show you how else gold can be traded etc...

sinner · 21 November 2008

Ageo said:
Hehe sinner lets say i purchase 1kg of 9ct gold for below market (market is around $14.73p/g) but i can pick it up for around $13p/g if i look hard enough) Now lets say to remodel into new italian jewellery plus shipping etc.. it will cost me another $5p/g ($5000 all up) So we would have a total of around $18000 invested, lets say i sell that 1kg to a buyer this is how alot of jewellers do it now....... they would give me 1kg of 9ct scrap gold (or equivalent the gold content plus 5% for wastage) and that would cover the gold so you dont worry about price fluctuations. Then we would trade on the labour and usually i would get around $10p/g, so i would make around $5p/g profit ($5000 on a kilo) and i could easily do that in a month (we did it just 2 weeks ago) so your return on that money outlayed is around just under 30%.

Then you send off the gold to be remodeled and so on..... (at the same time benefiting from the rising prices of gold if it goes up).

So as you can see it would be a waste of time for me to sell to you hehe (plus i have a buyer for the rest of my scrap who pays very handsomely).

Sorry for the slight off topic just wanted to show you how else gold can be traded etc...

Thanks again for some insights Ageo, I was only being half serious

I am picking up silver at spot in the form of pre WW2 sixpence and crowns (0.83-0.84 troy oz per coin) and managed to find a small amount of gold sovs at $250-280 compared to the $3-400 most others seem to be paying if they can even get them, I am happy to pay it at this point. A few more oz's and I will have accumulated my desired amount, hope to get this in bullion bars trading at spot, so the effort has been a lot more just to accumulate than if I went and got 200-300 ZAUWBA and tried to redeem it (who knows how long it would take for Perth Mint to deliver physical these days? almost everything on their site is sold out!)

Thanks for the charts CFDTrading, I also noticed the two spikes you describe as fakeouts, in my opinion this is the issue with only analysing the trend rather than specific events occuring. The massive spike which took us shortly out of the downward trend was a very large buy near open which is more indicative to me of massive accumulation by big parties who are **** scared rather than examining the trend. I am happy and willing to be wrong, I would much prefer my gold holdings to languish and the stock market to resume its lovely funny money trend.

explod · 22 November 2008

I have been scrounging 1966 50 cent coins for around $5 each, they contain 80% silver and approx 3 coins for a whole ounce of silver (currently $14.40 Aussie) so consider that a good deal.

And the HUI index up 25% in one session. That is unprecedented.

cuttlefish · 22 November 2008

Nice moves in gold overnight, will be interesting to see if they are sustained.

bankit · 22 November 2008

Hi All,

Great move in Gold at last.

From what I can gather Gold has officially gone into backwardation which resulted in the shorts falling over themselves to cover last night.

For those who are unfamiliar with the term backwardation, it is a market condition in which the spot price exceeds the future price, or a nearby futures price is greater than a more distant futures price. Gold very rarely goes into backwardation (last time was in 1999) and it can occur when there is a threat to take delivery of Gold.

Hopefully we will see an explosion upward in price but knowing how much the US has been trying to suppress the price of Gold I don't think they will give in easily

This move will probably be the catalyst for the breakdown of the USD too.

Bankit.

Uncle Festivus · 22 November 2008

bankit said:
Gold very rarely goes into backwardation (last time was in 1999) and it can occur when there is a threat to take delivery of Gold.

Hopefully we will see an explosion upward in price but knowing how much the US has been trying to suppress the price of Gold I don't think they will give in easily

This move will probably be the catalyst for the breakdown of the USD too.

Bankit.

The suggestion, if not fact, is that the December futures counter parties will be called apon to deliver!!! The link to oil is dead, the link to the USD is about to be? Gold set free......watch NCM fly, and the rest of the goldies for that matter!

Sean K · 22 November 2008

Uncle Festivus said:
watch NCM fly, and the rest of the goldies for that matter!

Looks pretty prospective for a decent rally doesn't it.

But, up is down and down is up at the moment.

Some 'positive' gold related news could come out and it will tank....

Uncle Festivus · 22 November 2008

The train has left the station if you want physical.................

Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.
He said Europe was leading the demand, with Russia, Ukraine, Middle East and US all buying -- making up 80 per cent of its sales. One European client purchased 30,000 ounces for $33 million.

The quarter also witnessed widespread reports of gold shortages among bullion dealers across the globe, as investors searched for a haven. Overall, quarter three saw Europe reach an all-time record 51 tonnes of bar and coin buying. France became a net investor in gold for the first time since the early 1980s.

http://www.theaustralian.news.com.au/business/story/0,28124,24687337-643,00.html

rederob · 22 November 2008

FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.

With retail and wholesale clients around the world stocking up on the precious metal, the Perth Mint has been forced to suspend orders.

As the World Gold Council reported that the dollar demand for gold reached a quarterly record of $US32 billion ($50.73 billion) in the third quarter, industry insiders said the race to secure physical gold had reached an intensity that had never been witnessed before.

Perth Mint sales and marketing director Ron Currie said the unprecedented demand had forced the Mint to cease orders until January, with staff working seven days a week, 24-hour days, over three shifts to meet orders.

He said Europe was leading the demand, with Russia, Ukraine, Middle East and US all buying -- making up 80 per cent of its sales. One European client purchased 30,000 ounces for $33 million.

"We have never seen this before and are working right at capacity. And we are seeing it from clients in the shop buying one ounce, right up to 30,000 ounces from overseas clients," Mr Currie said.

Robert Jaggard, manager of bullion and rare coins dealer Jaggards, said business had picked up strongly and he expected it to increase further.

"All around the world there has been a heavy run on physical gold and there is a shortage of supply," he said.

Linked from http://www.theaustralian.news.com.au/business/story/0,28124,24687337-643,00.html

rederob · 22 November 2008

Sorry UF - you were first!

chops_a_must · 22 November 2008

Looks like a confirmed break, so I'll be looking to set up some plays on the options come Monday.

rederob · 22 November 2008

Jewellery demand accounts for about 60 per cent of total gold demand. China has already reported an 18 per cent increase in gold demand for the third quarter, bolstered by its increasingly affluent population.

China is now the world's largest gold producer, although it is still a gold importing country.

Jewellery demand in India also remains strong into the fourth quarter. Some 50 tonnes of gold were sold in the first two days of the Diwali festive season alone.

Physical gold aside, market-watchers said gold exchange traded funds are also growing in popularity.

Sammy Yip, head, Exchange Traded Funds Asia Pacific, State Street Global Advisors, said: "I think with the recent credit crunch, investors are looking for an asset class to diversify their risk in their portfolio, and I think gold always performs as a very consistent diversifier in a lot of investors' portfolios."

Exchange traded funds, gold bars and coins were the highest contributor to the spike in gold demand for the third quarter, bringing some US$10.7 billion worth of gold investment to the table, or double on-year.

Another link: http://www.channelnewsasia.com/stories/marketnews/view/391369/1/.html

>Apocalypto< · 22 November 2008

Looks like decent short term weakness creeping in on the USD. this cont pattern is now starting to suggest topping patten. the rally with the question mark is just pie in the sky. For now concentrating on were it may drop.

as well as gold going up (refer to my last gold post) I think that the AUD and EUR will rally to the USD for the short term. nice finish in the us market show appetite for risk is slowing rising again.....

USD Index 4 hour chart

>Apocalypto< · 22 November 2008

wont a rising AUD force the aud physical price down???

subi1 · 22 November 2008

>Apocalypto< said:
wont a rising AUD force the aud physical price down???

AUD rose against the USD last night but Gold went up and therefore the Australian dollar Gold price is $1268 now.

DYOR

sinner · 22 November 2008

explod said:
I have been scrounging 1966 50 cent coins for around $5 each, they contain 80% silver and approx 3 coins for a whole ounce of silver (currently $14.40 Aussie) so consider that a good deal.

And the HUI index up 25% in one session. That is unprecedented.

Hi explod, I hope you are not one of those many people on ebay currently paying above spot for those coins from that Adelaide coin dealer. There ia frenzy!

By my rough calculations each coin 0.34 troy oz of 0.92 silver = 17 ounces per fifty coins = ~$250-260 at spot price, people have already bid up to $315 with 20h to go!

Like you said, unprecedented.

Just go look at the MACD for HUI.

Gold Price - Where is it heading?

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