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I thought that everyone is pretty confident that Obama will make everything better again. Im expecting this move up to happen when the reality kicks in (a few weeks after his inauguration).
The resistance of $US840 in late 07 now forms part of strong support and all other indications to me say it will hold these levels. We are now looking for a weekly close above US880 to 890 for the next upleg to commence.
IMHO it will be soon and as I have maintained for eight months now, after the new administration takes over.
Jimmy Carter got the cuts for the sins of his predecessors and Obama will get the same. Stand back for the bad news after 20th instant.
The resistance of $US840 in late 07 now forms part of strong support and all other indications to me say it will hold these levels. We are now looking for a weekly close above US880 to 890 for the next upleg to commence.
IMHO it will be soon and as I have maintained for eight months now, after the new administration takes over.
Jimmy Carter got the cuts for the sins of his predecessors and Obama will get the same. Stand back for the bad news after 20th instant.
Further to the post yesterday, remembered overnight that the $US 850 area was about the closing high in 1979/80 and became resistance on two further occasions in 1980.
The US dollar index is the other point of interest. At the current .82 it sits at the same level as it did in late 2007 when gold broke above the $US 840 area. The index has hit this level in the last couple of days and is falling back. My view is that these factors, taken together, are bullish for gold going forward, and yes the new President my well herald the event.
Has anyone got some evidence that gold and copper are linear, just curious as copper is surging as we speak
I would think not boyley. if copper going because of increased demand. that would mean companies have a good economic outlook, good economic outlook means less demand for gold.
I would think not boyley. if copper going because of increased demand. that would mean companies have a good economic outlook, good economic outlook means less demand for gold.
Has anyone got some evidence that gold and copper are linear, just curious as copper is surging as we speak
Good economic outlook also means inflationary pressures = demand for gold.I think Wayne said it best in another thread, don't just check your brain at the gate. Every scenario calls for a different approach. No scenario is exactly the same as previously.
Gold prices cannot say where it is heading.
Merrill Lynch says rich turning to gold bars for safety
Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.
By Ambrose Evans-Pritchard
Last Updated: 10:32AM GMT 09 Jan 2009
Rich investors are spurning gold exchange traded funds in favour of krugerrands.
Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. "People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs," he said, referring to exchange trade funds listed in London, New York, and other bourses.
"They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands," he said.
Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.
The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value. "It's win-win either way," said Mr Dugan.
He added that deflation may prove the greater risk in coming months. "It's very difficult to get the deflation psychology out of the human brain once prices start falling. People stop buying things because they think it will be cheaper if they wait."
Merrill expects global inflation to hover near zero, with rates of minus 1pc in the industrial economies. This means that yields on AAA sovereign bonds now at 3pc will offer a real return of 4pc a year, which is stellar in this grim climate. "Don't start selling your government bonds," Mr Dugan said, dismissing talk of a bond bubble as misguided.
He warned that the eurozone was likely to come under strain this year as slump deepens. "There is going to be friction as governments in the south start talking politically about coming out of the euro.
I don't see the tensions in Greece as a one-off. It is a sign of social strain in countries that have lost competitiveness."
check out www.theinflationist.com - they subscribe to the hyperinflatino theory and are stocking up on gold too! it just seems too easy though, so many goldbugs, who is gonna lose money if everyones buying gold?
In the US, Merrill Lynch is predicting that $US Gold will hit a new all time high (above the $US 1030 intraday high it hit in March 2008) "soon" and will reach $US 1150 by June. Increasingly, customers are insisting on buying physical Gold and are shunning Gold Exchange Traded Funds (ETFs). The median prediction from US analysts is for Gold to average $US 910 an ounce in 2009. Predictions ranged from a high of $US 1200 to a low of $US 780. Given the fact that Gold closed 2008 at a spot future closing price of $US 884.30, the median is a conservative estimate.
On another front, the global hedge book of producing Gold mines had fallen to 585 tonnes at the end of June 2008. That is the lowest total since 1987, the year when Gold plummeted, falling below $US 300 by the end of the year on its way to the $US 250 lows it hit in 1999 and almost duplicated in 2001.
And then there is Gold's major "competitor", the US Dollar and US Treasury debt. Many analysts both inside and outside the US are pointing to the HUGE borrowing requirements of the US government over the coming year as the straw that will finally break the US Dollar's back. The Office of Management and Budget has already predicted a 2008-09 fiscal year deficit of more than $US 1 TRILLION, and that does NOT take into account the Obama "stimulus" package universally expected to be somewhere between $US 800 Billion and $US 1.25 TRILLION more. As far as US Treasuries are concerned, Barrons' cover story in their first issue of 2008 was headlined "Get Out Now!" Get out of what? Get out of the "bubble" (Barrons' description) which is the market for US Treasury debt. As one sign of trouble for US Treasuries, Barrons cited: "...the resilient price of gold which has risen $150 an ounce since late October despite weakness in most commodity prices."
We cannot remember the start of any year since the US Dollar and Gold were divorced in 1971 when more people were more "bullish" on the prospect for Gold over the year to come. It is disquieting, to say the least.
Given any amount of comprehension of what is now going on in global financial and political circles in general and the US in particular, it would be very difficult NOT to be "bullish" on Gold. Even if this comprehension was lacking, the mere fact that Gold weathered the commodities bloodbath of the second half of 2008 so much better than anything else is a powerful mark in its favour. On an annual basis, Gold was outperformed by only two other "investments" inside the US over the year just ended. One was the US Dollar itself. The other was US Treasury debt paper.
What is even more interesting is that there is an even bigger chorus than the one in favour of Gold circulating today. This is the chorus warning of the great danger of holding US Dollars and Treasury debt paper in the face of the unprecedented funding demands that the US government will be putting forward this year. Again, this caution is well founded.
As we pointed out here last week, 2008 was the ninth year in the past decade during which the $US "price" of Gold has gone up. But 2008 stands alone because it was the first year since the $US Gold bull market got underway in 2002 during which Gold has gone up in the face of a deflationary bloodbath with $US TRILLIONS being wiped off the valuations of "assets" of all descriptions. 2008 was the year in which Gold proved beyond doubt its quality of preserving purchasing power in the face of ANY type of financial and/or monetary chaos.
Ever since we began these reports well over a decade ago, and long before that in The Privateer, we have been urging the ownership of Gold. The fundamental reason to own Gold is not as an "investment", after all, money is not an investment. Gold should be held primarily as financial "insurance".
how are you guys buying gold?
Still looking at a bit more of a fall in the POG I think before it bottoms out this leg.
I suspect the main trigger atm is the potentially huge rescue package Obama is talking about. If it comes to full fruition it likely will cause some inflationary expectations in the short term.
The USDX still looks like it will recover .84ish in the next few weeks which seems to gel with this scenario.
I've used this chart again for clarity, as opposed to my cluttered trading chart, and also I find this one gives better big picture analysis.
On the weekly spot chart we had an evening star almost formed a few months back that didn't quite make it on my trading chart either, but this week there is an evening star on both, (although the numbers are a little different).
Obviously the evening star is not at the main peak, but even on these minor peaks we usually get at least a few candles of reversal.
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