Gold Price - Where is it heading?

[explod]

He has been calling for gold correction for a couple of weeks now, so wrong on that count. But his basis is the HUI:GOLD ratio, which indicates gold has been outperforming gold stocks for the last two months. This is generally not bullish for gold. His charts still have a little bit of room to move before being right or wrong.


The HUI is also in a bearish rising wedge.



i.e. something will either happen, or it won't

The HUI weekly is actually very bullish with the latest action hitting the 200day t/a. the MACD is also very bullish.

Goldies got a hell of a hiding with the October crash and they remember for a long time. With the Dow and other markets falling to new lows this previous experience is making the nervousness. We need a bit more of a rise in the gold price against continued falls in general stocks to shake this out. I think we a near.

 

[Trembling Hand]

Respect your take, I have none, just go with the flow. But would be interested in why you think 3 most likely?

However I do think there is some momentum in this move and eyes are looking at opportunities and to where the only show in town is at at the moment. At the end of the day we really are only followers.

Because the odds are on my side. markets spend most of their time filling in from where they have just come. Which is the basis of most of my trading.

On your following theory you want to have a look at FrankD's work. You may change your mind about us all just following. Ain't nothing new under the sun and that includes the metal used to symbolise the sun - Gold.

 

[explod]

There was some discussion a month or two ago on this thread about the safety of bonds, the following is from Bloomberg today:-

Auction-Rate Bonds Claim Victims Year After Collapse (Update1)
Email | Print | A A A

By Michael McDonald

Feb. 20 (Bloomberg) -- Mike Stelzer expected to retire after selling his cattle ranch south of Bakersfield, California. Instead, the 73-year-old is raising Holsteins on leased land, unable to quit because a chunk of his $2 million nest egg is stuck in auction-rate securities paying next to nothing.

“I have lost all faith in bankers and Wall Street,” said Stelzer, who invested the proceeds from the sale of his ranch in the securities through San Francisco-based Wells Fargo & Co.

A year after collapsing, the one-time $330 billion market for debt with rates typically set every 7, 28 or 35 days is still claiming victims. Investors are stuck with as much as $176 billion of the securities even after regulators forced banks to buy back more than $50 billion of auction-rate debt that was marketed as safe, cash-like instruments.

The market’s meltdown, the result of the seizure in credit markets, initially left investors with bonds they couldn’t sell, though the securities paid interest at rates as high as 20 percent. Now, rates on securities auctioned every seven days pay an average 1.36 percent, according to an index from the Securities Industry and Financial Markets Association, after central banks slashed borrowing costs.

Investors are stuck because interest on auction-rate securities is lower than what issuers would have to pay on new borrowings, giving them little incentive to refinance.

The article continues but you have the meat of it. T Bonds appear headed for the same fate as the yields decrease by the day. (happened in the great depressionbut the lessons are forgotten in good times) Gold will soon be seen as the only alternative to paper money backed by no promise anymore because most of the banks and governments are broke.

 

[Glen48]

Ex Plod
Good detective work ..Gold is the only thing shining other than sell on the Dow.

 

[>Apocalypto<]

Because the odds are on my side. markets spend most of their time filling in from where they have just come. Which is the basis of most of my trading.

On your following theory you want to have a look at FrankD's work. You may change your mind about us all just following. Ain't nothing new under the sun and that includes the metal used to symbolise the sun - Gold.

Th i am not really up with the convo you're having.... but from what i see Gold after 1000 could be hard to stop. risk aversion is in the air so much so, u can actually smell it. Yen in tatters eastern Europe causing hell for the euro there is nothing good out there GOLD USD are the safe havens... USD is a T note / bond bonanza that had a crack come in on Friday but that means little right now as the reasons for buying are totally different.

now the 1000 mark has made head lines here come the retail crowd i think it got some more highs to make.

for the record, since the usd is moving with Gold I have no idea on how to judge this thing apart from it's in the headlines, in a clear trend and that could mean anything in terms of a top.

I watched the euro come off to Gold going up with the USD. crazy times, going to be fun to watch....

enjoy it gold bugs......

have a look at that chart is that a great place to park your money?

 

[>Apocalypto<]

There was some discussion a month or two ago on this thread about the safety of bonds, the following is from Bloomberg today:-



The article continues but you have the meat of it. T Bonds appear headed for the same fate as the yields decrease by the day. (happened in the great depressionbut the lessons are forgotten in good times) Gold will soon be seen as the only alternative to paper money backed by no promise anymore because most of the banks and governments are broke.

nice post... you have to ask yourself right now, would u trust the US Gov to pay u back on a T bond??? ha ha ha

 

[sinner]

Hi again guys,

I can't be bullish on the HUI until it breaks above this wedge it's been stalled in. Admittedly, the HUI:GOLD ratio has placed this index at extremely undervalued compared to historical norms and for us to see a return to these norms it would need to almost double!

If you are interested in the gold sector, the mining stocks are definitely showing more value now than POG itself because of this underperformance.

Very interested in the performance ratios of various gold indices to the gold price so I quickly ran these charts. The only one I could not make a chart for was ASX XGD:GOLD because stockcharts.com doesn't have data for ASX XGD. So if anyone can provide charts for XGD.AX:GOLD that would be excellent!

XGD.TO is heavily invested in the top 4 gold producers (57% of holdings)
GDX is more diversified across the sector in terms of %.
i.e. both hold mostly the same companies but at different proportions.

I will leave the interpretation of the charts up to you.

1 year daily:

EDIT: Here is the best I could do to highlight XGD.AX position compared to other gold sector indices. So OZ gold sector not doing so bad at all really.

 

[Whiskers]

I'm gonna have a stab at 'pin the tail on the donkey' by my amateurish EW that I basically only use for range finding, ie to guestimate price targets. I prefer FA and a few momentum and trend indicators for my main trading signals.

I'd earlier been working on a range of 1,200 to 1,500 for the end of the next intermediate wave (1)... but on refining my analysis I'm lowering my sights a bit to a max of 1,190 in a couple of months or so, based on wave (1) being an Expanded Flat ABC and the max possible length of C.

That being the case I can't see any massive explosion in the gold price within the next couple of years. At this stage I think I'd be surprised to see wave (5) ie Cycle 3, whenever that comes, exceed 2000.

Certainly can't see the sometimes bannered 10,000, 5,000 or even 3,000 being a realistic target within the next few years.

But, I'll concede to a different target and or EW count if anyone can put a more plausable/probable case.

C'mon all ye Ellioticians... here's a challenge for ya.

 

[sinner]

What happened to 781 Whiskers!

Forgot to include this chart, last one for the day, I promise.

Gold weekly priced in Yen. Take from it what you will.

 

[Whiskers]

What happened to 781 Whiskers!

From memory that was back in January... target for wave 2 retracement. Damn... missed by 20, only got to 801... but I've adjusted, er, refined my EW count a bit since then... so if I knew then what I reckon I know now, I probably woulda got a bit closer.

Interesting turn in POG in those other currencies. How much is just currency conversion as opposed to a genuine persuit for the metal though.

Btw I'm growing in confidence in my AUD/USD EW count as well. Got the AUD firming to about 75 USD in the near future... rather than plunging to the 50's as some 'economists' and pundits have been suggesting.

If I'm right there, it will dampen the rise in the AUD POG to some extent, but in the long run I think it'll be a good thing to settle our economy in so far as imports, particularly production costs like oil will get a bit cheaper and the consumer dollar will go a bit further.

I'll post the chart for screuteny in the AUD/USD thread later.

PS: I referred my AUD/USD EW count to OzwaveGuy in the EW analysis thread a little while back and I got a big ""... but I'm not phased as it seems he doesn't follow it much and just had a quick squiz at the weekly chart.

Man... I've worked the count over and inside out every which way and I reckon it's the most plauseable scenerio.

 

[Trembling Hand]

Man... I've worked the count over and inside out every which way and I reckon it's the most plausible scenerio.

And if it doesn't play out like that?

 

[Whiskers]

And if it doesn't play out like that?

Well, since I'm not a total convert to EW because from what I see even from so called experts like EWI, there's a lot of subjectivity and adjustment in the count even after the fact, so I go with a bit of 'intuition' and ocassionally I get the urge for a bit of fun and provoke a bit of a challenge on target range finding.

'Pin the tail on the donkey' is probably a bit harsh on EW, but good for a bit of provocation.


But as I say, it's basically only my target range finder for longer runs. I rely more heavily on a number of trend and momentum indicators not all shown on post chart (including the humble Bollinger band in multiple time frames for swings)... but at the end of the day if it fails...Practise, review, practise, review, practise, review, practise, review, practise, review, practise, review.....

 

[Ageo]

So how do you set/get a selling price for your gold - spot, futures??? Could you outline a typical cycle you go through for the scrap you get eg buy scrap for $???? based on ??? price then melt it down?? then sell it to ??? for $?????

Sorry for the late reply, been real busy.....

The only way to get day to day pricing is of course through comex.

When i buy it would go something like this

* Test gold
* Weigh
* Pay based on karat value

I do many things with the scrap (refine to make new jewellery, onsell to refiners etc...)

 

[Dangerous]

nice post... you have to ask yourself right now, would u trust the US Gov to pay u back on a T bond??? ha ha ha

Exactly!... that's why i've been buying physical stuff.

Freak the charts I think that as the Eastern European banking crisis emerges over the next few weeks gold is going to go nuts.

Sept when the gold charter that the central banks signed expires could see some interesting times. Further to this, surely the gold producers have been gearing up for this the last few years working hard to get production costs down.

My summary, demand for gold will only get stronger.... Supply could emerge

 

[sinner]

Gotta love those crazies at GATA:

Swiss populist party wants gold recalled from U.S.

http://www.gata.org/node/7189

 

[Uncle Festivus]

Very interested in the performance ratios of various gold indices to the gold price so I quickly ran these charts. The only one I could not make a chart for was ASX XGD:GOLD because stockcharts.com doesn't have data for ASX XGD. So if anyone can provide charts for XGD.AX:GOLD that would be excellent!

Does this chart make sense? XGD:GOLD (GOLD is GOLD X 10 ie XGD/(GOLDX10))

 

[sinner]

Thanks UF. Great chart. Is that gold priced in USD or AUD? Either way looks like we are pretty much in the same boat as the other gold indices.

We are at an important point I would say. The new trendline needs to be respected or this was probably a fakeout. My guess is if we fall through here we could go to fill the gap at 960 and possibly lower from there.

The gaps really bug me. Here is a chart snippet from Brian Bloom highlighting the gaps. (One at 850 also)


From http://www.321gold.com/editorials/bloom/bloom022309.html

He also notices the HUI:gold wedge but reckons this could be the one that didn't behave like it should (i.e. wants it to go up rather than down like normal analysis would suggest).

Comments?

 

[Uncle Festivus]

To me it looks like it just broke up through a rising wedge (bearish?), then again I've given up on the tech analysis of gold, just sit back & enjoy the ride?

Thanks UF. Great chart. Is that gold priced in USD or AUD? Either way looks like we are pretty much in the same boat as the other gold indices.

We are at an important point I would say. The new trendline needs to be respected or this was probably a fakeout. My guess is if we fall through here we could go to fill the gap at 960 and possibly lower from there.

The gaps really bug me. Here is a chart snippet from Brian Bloom highlighting the gaps. (One at 850 also)


From http://www.321gold.com/editorials/bloom/bloom022309.html

He also notices the HUI:gold wedge but reckons this could be the one that didn't behave like it should (i.e. wants it to go up rather than down like normal analysis would suggest).

Comments?

The GOLD instrument is ASX:GOLD in $AU X 10

 

[sinner]

Markets these days, they've just go no respect for the pretty lines we like to draw!

 

[Whiskers]

Markets these days, they've just go no respect for the pretty lines we like to draw!

Nor my on the run EW count, often.

But nobody can say I haven't tried plenty of options by the time I settle on one.