Gold Price - Where is it heading?

[Temjin]

I think we are at a pivotal moment this week, and now is the time to put your money where your mouth is.

It's already in my mouth for a long while now.

Though I'm still slightly cautious because there are way too much technical damage done on the POG and there are still signs of massive liquidation/deflation everywhere. Not to mention guys like Jim Roger, while like gold, is still predicting USD may produce a further rally until next year before it is all over.

Of course, he may be wrong too!

 

[explod]

It's already in my mouth for a long while now.

Though I'm still slightly cautious because there are way too much technical damage done on the POG and there are still signs of massive liquidation/deflation everywhere. Not to mention guys like Jim Roger, while like gold, is still predicting USD may produce a further rally until next year before it is all over.

Of course, he may be wrong too!

Agree. We only have to observe the US system trying to hold together the banks and the Dow to know that they will not give up the US dollar dominance as reserve currency without an enormous fight. They will print money till the machines melt down.

As has been said on this thread many times in the last 8 months, it will hold out to at least the change to the new Presidential team.

The lack of supply however will cause a rally of sorts in my view, they may well let it run up to break the high of last March to say $US1,100, then when all eyes are watching smash it down again to current levels. (remember, SENTIMENT, SENTIMENT) Demand from now into January has been traditionally strong for the last 25 years, so we will see what pans out. But after March next year economic numbers are going to be very grim indeed when we can expect the US dollar to go into free fall IMHO.

 

[cuttlefish]

and now is the time to put your money where your mouth is.

I've got my money where my foot is ... does that count.

(as in have been suffering from foot in mouth over gold optimism so far this year ...)

Long and loaded as always

 

[CFDTrading]

Short-Term Technical Forecast for Gold

COMEX Gold's break above its short-term price channel caused us to flip our previously bearish stance in favor of gains, and our bullish targets have now been far surpassed on an incredible multi-day rally. Gold prices next eye potentially important resistance levels at the 61.8 percent Fibonacci retracement of the 935-680 move at 840. Said 61.8 percent Fibonacci retracement is often referred to as the make-or-break level for an existing trend, and a break higher would suggest that a move towards 935 is likely. Our short-term bias remains bullish, and near-term support can be found at previous resistance of 808 and the psychologically significant 800 mark.

Wednesday, 26 November 2008 21:32:25 GMT
Written by David Rodriguez, Quantitative Analyst
Click Here for the full article.

 

[bankit]

Hi All,

Like most of us I see Gold moving up strongly in the coming months.

The current chart pattern from the recent higher low is very bullish and prices holding near the high of the 25th November is another bullish clue as to the direction Gold will take.

Support should hold above the $800 mark as indicated on the chart below.

Normally I would expect to see this leg (starting on the 20th) to extend to the red 161.8% level at $860 and then we would have the support levels of $835 and $800 coming into play. If by chance Gold ignores the $860 level then we will have a very high momentum move up

Further up we have very solid resistance in the $900 region and we should expect a pause or pull back in this area.

Other resistances on the way to the previous high in March are also marked on the chart.

Bankit.

 

[sinner]

Ah another Friday nightshift, watching the US markets and the gold price.

I will let this chart just made (at US market open) speak for itself:

Bollinger bands, moving average, MACD and slow stochastic metric (PKS):

 

[explod]

Emerging As A Clear Winner
In a most interesting development, Mr Ambrose Evans-Pritchard writing in the UK Daily Telegraph newspaper has reported that Citigroup has sent out an "internal client note" predicting that Gold is poised for a "dramatic surge" and could "blast through $US 2000 per ounce by the end of next year". There have, of course, been no shortage of predictions for Gold to go to "$US X thousand per ounce" in the not too distant future. This one is especially interesting because of the source. Given the fact that the Fed and the Treasury just this week agreed to guarantee $US 306 Billion "worth" of toxic assets currently held by Citigroup, one would have thought that this type of prediction was not part of the deal.

Nonetheless, there it is.

As you know, Gold peaked on a spot future closing basis back in March this year. At that point, it had risen by 300 percent (that's actually a quadrupling in price) since its 1999-2001 lows. At its spot future close of $US 816.20 on November 28, Gold had risen by about 226 percent (or about three and a quarter times) since those lows. There is nothing else in the way of financial (paper) assets, or for that matter real assets like other commodities, which comes close to that record.

This quote from this weeks "Privateer" newsletter.

 

[GreatPig]

its 1999-2001 lows. At its spot future close of $US 816.20 on November 28, Gold had risen by about 226 percent (or about three and a quarter times) since those lows. There is nothing else in the way of financial (paper) assets, or for that matter real assets like other commodities, which comes close to that record.

Nothing else?

Let's see:

PDN, a paper financial asset, averaged around 8 cents between 1999 and 2001. It closed today at $2.50, or 31.25 times the price, which is over 3000%.

TOL, another paper financial asset, was around 71 cents at its 1999 low. It closed today at $5.60, or nearly 8 times the price, which is nearly 700%.

There are plenty of other stocks with higher gains than gold over that period.

Just because the index hasn't averaged those gains doesn't mean there's nothing else that did. If he can isolate gold out of all commodities, then I think it's fair to isolate individual stocks out of the index by way of comparison.

GP

 

[Uncle Festivus]

Are the planets aligning for gold, finally! Is this the last chance for a decent entry ($770)?

Not sure if it's been posted, but here is literally a goldmine of broker research and interesting facts about gold, gold equities & golds relative performance, if you can believe JP Morgan . Either that or they just need some bunnies to take their short trades and bump up open interest?

http://www.gata.org/files/JPMorganGoldReport-11-25-2008.pdf

To me gold looks like it wants to go organically higher but the 2 bullion banks are still in control at most opportunistic times, along with trigger finger nervousness from the hedgies & fundies.

The data suggests there is in fact a sizable increase in the amount of futures deliveries for the Dec contract.....could be explosive......geopolitical issues about to make their mark again (India/Pakistan plus nukes = )

 

[Whiskers]

Yeah uncle, I've been tossing around as many different scenerios as I can think of but still pretty much come up with a pretty sharp rise in gold any time from the end of the year into early next year.

There is the supply (or growing lack of) issue in the face of most likely higher inflation forecasts as these big interest rate cuts and gov spending programs kick in.

I think the main reason the share markets kicked lower is because Bush failed to deliver on his early rhetoric to improve the regulation and transparency of the markets. .. ie to say investers would have gained more confidence about the true position of the markets much sooner. So instead of getting the zig zag abc I was initially expecting it seems we'll get a huge Expanded Flat.

I haven't seen any EW count's here for some time, so I'm putting mine up, with my two main alternatives for critique.

Basically I'm seeing gold hit a high sometime probably in the first half of next year about 1,500+. I wouldn't be surprised if it was only a (3) wave leg 3, forming a Diagonal Triangle.

I cannot see it continuing on to 3,000 or 5,000 levels in this run up. It sounds reasonable to me that once gold gets over 1,000 again substantial new production will become viable and kick in to take advantage of the high prices and flood the market again and the price will then fall back considerably to below wave 1 1030, for wave 4 .

I did consider that the recent low was wave 5 down, in which case we would need 3 up before 5 down again for wave 2. But, for the life of me I just can't imagine any circumstance that might cause that to happen... but open for discussion.

 

[mazzatelli1000]

I haven't seen any EW count's here for some time, so I'm putting mine up, with my two main alternatives for critique.

Whiskers, correct me if I am wrong as I am still tinkering with EW

Where you have labelled wave (ii) and (i) - if this is part of a motive wave - wave (ii) shouldn't retrace more than 100% of wave (i)?

 

[Whiskers]

Whiskers, correct me if I am wrong as I am still tinkering with EW

Where you have labelled wave (ii) and (i) - if this is part of a motive wave - wave (ii) shouldn't retrace more than 100% of wave (i)?

Hi mazzatelli. I'm pretty new to EW too.

Maybe I should have labled (1) as (a) and (2) as (b), as I am anticipating (for lack of other realistically foreseeable alternatives) an Expanded Flat for wave 3, consequently making the larger cycle a Diagonal Triangle where wave 4 would retrace most if not all of my anticaped wave 3 by late 2009 or 2010.

Of course, as I mentioned, if the latest low is a fifth wave down, we must be in the corrective abc now and ultimately headed lower still towards (I think roughly) mid 400's. I just can't imagine any circumstamce where that might happen, yet.

So, assuming that count isn't right it seems we're pretty much left with an Expanded Flat leading off the next leg 3... unless someone can enlighten us to another count alternative... or the ar*e falling right out of gold too in the near future.

 

[wayneL]

Hi mazzatelli. I'm pretty new to EW too.

Maybe I should have labled (1) as (a) and (2) as (b), as I am anticipating (for lack of other realistically foreseeable alternatives) an Expanded Flat for wave 3, consequently making the larger cycle a Diagonal Triangle where wave 4 would retrace most if not all of my anticaped wave 3 by late 2009 or 2010.

Of course, as I mentioned, if the latest low is a fifth wave down, we must be in the corrective abc now and ultimately headed lower still towards (I think roughly) mid 400's. I just can't imagine any circumstamce where that might happen, yet.

So, assuming that count isn't right it seems we're pretty much left with an Expanded Flat leading off the next leg 3... unless someone can enlighten us to another count alternative... or the ar*e falling right out of gold too in the near future.

The market is punting on deflation for the medium term... not good for gold on the face of it.

 

[Dowdy]

anyone here try to order physical gold from the dealers.

My brother called up yesterday and there's a wait til FEB!

If you want immediate delivery they put a 35-40% premium on the spot price!

 

[Whiskers]

The market is punting on deflation for the medium term... not good for gold on the face of it.

anyone here try to order physical gold from the dealers.

My brother called up yesterday and there's a wait til FEB!

If you want immediate delivery they put a 35-40% premium on the spot price!

Quite so... these are the contridictions in the market signals. Not too unlike oil before it tanked.

I guess the significant thing with gold in the near term is the level of physical demand for jewellery etc and any Reserve Bank's buying/selling activity.

Now would be a good time to have a crystal ball.

 

[Temjin]

anyone here try to order physical gold from the dealers.

My brother called up yesterday and there's a wait til FEB!

If you want immediate delivery they put a 35-40% premium on the spot price!

That is only true for silver, but not gold. There are still plenty in stock I believe.

An interesting report released by JP Morgan just last week. I thought they were a net shorters of gold, but this report seem to indicate they are bullish on gold.

http://www.gata.org/files/JPMorganGoldReport-11-25-2008.pdf

 

[sinner]

Managed to get a couple of oz's at spot.

**** the dealers! Better to buy shares in their company than their bullion :

You can buy physical gold on ebay right now (upto 50 ounces) at 1400 which is 15ish% premium on todays spot. Of course the same price looked a lot closer to a 10% premium last Friday before the price dropped again, so up to you on that count I guess.

If you want sovereigns expect this 15% to be built into the price.

Silver is trading at 100+% of spot price.

You could always try holding ZAUWBA (100 warrants = 1 ounce) but who knows if you will ever be able to redeem it? Examining the PMG fine print does not look very promising, redemption being in a timescale of their choosing.

Then there is services like goldmoney.com, not sure how these guys go as I signed up only to see the entire interface is blocked off until you send in some paperwork or something! But the gist of the idea is you give them money and they can buy/store your gold at spot because they are a large player. Pretty much identical to holding GOLD etf I guess.

Basically, physical gold is still out there, but unless you are buying in large amounts (at COMEX 50,000 ounce levels I assume), or don't need the physical, don't expect to be paying the COMEX price.

 

[Ageo]

Hmm looks like alot of people are finding it hard it seems (with spreads blowing right out).

If people are interested in buying @ around 10% above the spot then let me know.... i might be able to get my hands on some.

 

[MRC & Co]

The market is punting on deflation for the medium term... not good for gold on the face of it.

Exactly.

And that daily above is all LHs and LLs after a long uptrend. From memory, most times I see that pattern, on most timeframes, it always ends up falling off a cliff.

 

[joeyr46]

The chart above shows overlapping waves and best count I can give it is A B C X A B now needs another low for C probably around $600 or so and then it might be time for a rally or if deflation really takes hold could go a lot lower imo
Also most of you seem bullish which is not good for a rally of any size
am not trying to say you are wrong just that when most people think something is going one way it usually goes the other