Gold Price - Where is it heading?

[wayneL]

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

Make them big fat and ugly... see if that works. :

(I suspect not)

 

[sinner]

Make them big fat and ugly... see if that works. :

(I suspect not)

Hi guys,

I am sure you know I was only kidding! Sometimes my internet communication skills are poor. Was actually expecting the breakdown from my own trading rules for gold (price rejection at 20MA [or middle boll band] from a bounce which you can see in both charts I posted), what I did not expect was the resulting bounce upwards? A bit too large of a bounce to be a short cover rally, no?

Maybe it's time to join Uncle Festivus "no TA for gold" club? Benefits include a nice simple gold chart with no horizontal, vertical or diagonal lines allowed :

Glad I was not playing tonight! But plenty I know have placed puts on gold @ 1000! The question which keeps ringing in my ears is, if even Barrick is not hedging anymore, do we need to be?

Several goldbugs have noted the "golden cross", when the 50MA crosses above the 200MA, the last 4 or 5 rare occasions this has occured has led to large upleg in gold. This has yet to occur on gold valued in JPY, so not sure what to make of it.

Also, someone mentioned you have to wonder about gold priced in JPY how much is just currency crosses and how much is Tokyo buying, well we had 2 occasions this past week where gold rose significantly during the Tokyo session, even managing to give an intra-day boost to ASX gold sector on these days, where-as usually we have to wait for an overnight move from London or US.

 

[wayneL]

Hi guys,

I am sure you know I was only kidding!

Yep, just kidding along too.

Cheers

 

[Wysiwyg]

Well I`ve pulled back to the wider angle lens of a yearly chart and the bearish divergence on the MACD/Histogram suggests the retrace is near.

The price continues to rise while the histogram fails to make new highs (see note on chart).Chart is a daily.Also note the peak in July last year was 988.75 -- where we are now.

Well the suspense is killing me BUT, the indicators are still indicating.

So even though the MA is still skewering seagulls (and notice it is trying to level out) the histogram (which indicates price momentum) has not made new highs and if I look closely I can see a wee decline there too.

It will come off eventually and then it`s a matter of how much.One more spike to begrudge maybe.

 

[explod]

Maybe it IS time to rethink:-

What's blowing the golden bubble?David Hirst
February 25, 2009
WHEN Lord Keynes made his celebrated comment about gold being the "the barbaric relic" he was referring to events as far back as Gutenberg.

With movable type, paper money became feasible. But the Gutenberg revolution also led to the spread of learning, the Renaissance and an explosion of world trade.

Gold became an unsatisfactory medium of exchange as the world entered the modern age. Cash, banknotes and cheques were far superior to gold, especially when backed by gold.

It is in the US where the great gold debate is centred.

America is a gold-loving nation. Gold could well be added to the "three Gs" that kept the Republicans in power in recent times: God, gays and guns.

Fear of fiat or paper money goes back to the Civil War, when the currency of the Confederacy was rendered worthless, and to the "wildcat banks" that printed their own money and were dubbed "wildcat" because only a wild cat could find them. Gold and silver were preferred.

Indeed, gold has been the best wealth protection scheme for much of the past 3000 years and might just be a better place to be than in currencies controlled by the cash-in-helicopter-loving Ben Bernanke or Timothy Geithner, the Treasury Secretary who didn't know about filing taxes.

As gold heads out the window and down the path, with great media attention after years of oblivion when the commodity was barely mentioned in polite society, there are whispers of a bubble.

Was not gold at $US1000 a year ago?

In the past decade, gold has risen steadily but not dramatically ”” showing nothing like the drama in the rise and fall of oil and with housing and the tech stocks.

Given world instability, this is hardly a bubble.

While gold has traded steadily upwards, we have descended from celebrating the BRIC nations ”” Brazil, Russia, India and China ”” to contemplating the terrors that lie in store for banks with stakes in the PIGS ”” Portugal, Italy, Greece and Spain.

Gold's worth is also determined by supply and demand and the desire of central banks to cap gold.

On the supply side, as shown by the latest figures from Australia ”” but also evident around the world, production is faltering. There are many reasons, but principally there isn't much of it in the ground and the easy stuff was dug up by the Romans.

But demand is also on the skids. India and the Middle East, the main users of gold for jewellery (practically gold's only use), are in severe doldrums.

Given all this, why are prices so high and why is the dreaded "B" word being used in connection with gold? Gold was high a year ago, but no one called it a bubble.

LA ladies aren't selling their gold rings, old cufflinks and gold plate (as reported in the Los Angeles Times) to take advantage of the gold price.

They are selling gold because they are broke.

The principal force driving gold is the transformation of the world economy. When gold last reached $1000 (for a day) those same people never dreamed of raiding their closets and drawers for old trinkets.

Fear is driving gold. But where?

Let us assume we are entering a hyper-inflationary period when truckloads of dollars will be required to buy an egg. Will the person with eggs part with them for gold or, assuming the egg holder is as desperate as the buyer, would they not be swapping the egg for bread? One can't eat the gold. If currencies collapse, barter might become the new means of exchange. Thus, rather than buying gold, we should be buying hens. Or geese. Preferably geese that can lay golden eggs.

The gold buff's best argument is that we should never have departed from the gold standard. But then we would never have had derivatives or hedge funds or any of the exotic schemes that allowed a small proportion of the world's population to enjoy a few decades of unrivalled wealth.

To miss that Ponzi scheme would have been tragic.

But remember the words of the man who saved us from the Great Depression, or is credited with doing so. By a so-called executive order, President Franklin D. Roosevelt declared on April 5, 1933, that:

"All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve Bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them."

Who is to say that such an order won't be issued in co-ordination by governments around the world some day?

Everyone that can should own some gold. But be wary of the Norman May approach of "gold, gold, gold".

The Devil doesn't hand out easy choices. He wouldn't be the Devil if he did.

David Hirst is a journalist, documentary maker, financial consultant and investor. His column, Planet

Wall Street, is syndicated by News Bites, a Melbourne-based sharemarket and business news publisher.

 

[Dangerous]

the latest central banks' figures show that china has a gold to foreign currency percentage of .9% and were looking to increase it.... Now what will that do to price?

Great article though and very valid points. However, remember the resources boom argument - "but this time it is different". I will never forget that.... Another thing i learned in 08 was how powerful sentiment is, and how much sentiment is behind gold at the moment?

 

[sinner]

the latest central banks' figures show that china has a gold to foreign currency percentage of .9% and were looking to increase it.... Now what will that do to price?

The Chinese government has others ways to access gold without buying it on market. For example, most foreign gold miners and even local ones must cough up a cut to the PRC government. This makes no dent in the market supply/demand dynamics.

Plus they have huge stockpiles of silver from the currency that was locked up as anti-Communist during the revolution.

 

[Whiskers]

Well the suspense is killing me BUT, the indicators are still indicating.

So even though the MA is still skewering seagulls (and notice it is trying to level out) the histogram (which indicates price momentum) has not made new highs and if I look closely I can see a wee decline there too.

It will come off eventually and then it`s a matter of how much.One more spike to begrudge maybe.

Yeah she's getting pretty high... maybe I'm just getting a bit cocky and blase... but I'm still looking for it to challenge 1030 before a significant retracement... maybe back into the low 800's.

 

[sinner]

Hi guys, now that the main gap I mentioned earlier has been filled we will see whether the current price is justified by market demand (rebound) or was "smart money" selling into strength followed by not much left to hold us up (retrace).

We could still go to fill the 850 gap. Just over 100USD down from where we are right now.

 

[Whiskers]

Hi guys, now that the main gap I mentioned earlier has been filled we will see whether the current price is justified by market demand (rebound) or was "smart money" selling into strength followed by not much left to hold us up (retrace).

We could still go to fill the 850 gap. Just over 100USD down from where we are right now.

850 will keep for later sinner.

Just had a bit of a kick... looks like a minor wave three surge on way back up again. Please Mr market, don't make me wrong.

 

[sinner]

850 will keep for later sinner.

Just had a bit of a kick... looks like a minor wave three surge on way back up again. Please Mr market, don't make me wrong.

Hi Whiskers and everyone,

I have included a chart of the gold daily.

Market indecision is the name of the game. The current daily candle resides directly on center of the previous trendline, and the distance between the buying (lower) and selling (upper) wicks are almost exactly identical length on both sides (11 points). I derived this using 979-968 and 961-950.

There are about 4 hours left on the COMEX for the market to make up its mind. I will not know what to think if we end up in the current position or with a centered Doji.

 

[joeyr46]

Reminds me of 1980 Hit $850 then after retracing hit $700 again this time hit nearly same high but still a retracement or B wave in Elliot terms and as gold is an inflation hedge can't see it taking off anytime soon when we are entering deflation in America (other currencies could still see it go higher POG that is)
At the very least it should come back to $680 Wave A low

 

[Glen48]

A bit more of a tease :
3K an oz???

So the bottom line is that the little bit of good news out there comes from the mining camps of the world. In particular, the gold and silver miners. Hey, there’s no fever like gold fever. Right now, we are on the cusp of a great run-up in gold. I believe that there’s still time to get into some excellent stocks. The gold miners have room to grow. They should benefit from rising gold prices. And we might see higher dividends down the road.

Is there a caution? Always. Could gold prices tumble? Well, yes. That would hurt us. But for gold prices to tumble would take a lot of investor dishoarding. That is, people would have to hit the “sell” button en masse. And that would require some tectonic shifts in worldwide tax, fiscal and monetary policies by a host of socialist-leaning governments. For the moment, I think we’re safe from any counterrevolutionary antics like that. As Charles de Gaulle once noted, “People get the history that they deserve.”

Until we meet again,
Byron W. King

 

[GumbyLearner]

A bit more of a tease :
3K an oz???

So the bottom line is that the little bit of good news out there comes from the mining camps of the world. In particular, the gold and silver miners. Hey, there’s no fever like gold fever. Right now, we are on the cusp of a great run-up in gold. I believe that there’s still time to get into some excellent stocks. The gold miners have room to grow. They should benefit from rising gold prices. And we might see higher dividends down the road.

Is there a caution? Always. Could gold prices tumble? Well, yes. That would hurt us. But for gold prices to tumble would take a lot of investor dishoarding. That is, people would have to hit the “sell” button en masse. And that would require some tectonic shifts in worldwide tax, fiscal and monetary policies by a host of socialist-leaning governments. For the moment, I think we’re safe from any counterrevolutionary antics like that. As Charles de Gaulle once noted, “People get the history that they deserve.”

Until we meet again,
Byron W. King

I will patiently wait for Inflation!
Dont mean any mantra by this but repeat the same above at least 12 times!

DYOR

Cheers
Gumby

 

[Uncle Festivus]

So far the reaction has been fairly tame at about $10 a day from the high, but still 'normal' in the scheme of things and timing of the stimulus rhetoric from BO & BB Ltd (in administration, liquidators appointed?).

Issuing bonds at the rate of $100B A WEEK now, yields rising. Getting closer to when all that hope & goodwill that was expected from spending all that money evaporates when China & Japan say "thanks, but no thanks" for any more US debt.

Feb. 26 (Bloomberg) -- Treasuries fell for a third day as the government sold $22 billion of seven-year notes in the last of three auctions this week as it issues an unprecedented amount of debt to spur the U.S. economy.
Declines were led by 10- and 30-year securities. President Barack Obama’s administration forecast a budget deficit of $1.75 trillion in the fiscal year ending Sept. 30. That’s 23 percent higher than a forecast by economists at primary dealer Goldman Sachs Group Inc., and equivalent to about 12 percent of the nation’s gross domestic product.

Possibility of Default
The U.S. is borrowing so much that it may have trouble paying the money back, said Jaemin Cheong, a bond trader in Seoul at Industrial Bank of Korea, the nation’s largest lender to small- and mid-sized companies.
“Yields are headed higher,” Cheong said in an interview. “More issuance will be needed to support the economy. The possibility of default is more and more as time passes.”
The government is depending on overseas investors to help fund its $787 billion economic plan. China is the largest overseas holder of Treasuries, with $696.2 billion, followed by Japan, with $578.3 billion.

China’s top banking regulator said today the country will pay attention to safety, liquidity and profitability when deciding whether to buy more U.S. debt.

Another retrace, another opportunity to add to positions. Although I think this gold bull is closer to it's end now than to it's beginning all those years ago? But what an end it will be

 

[explod]

Weekly gold chart forming a large pennant, top is March 08 at US$1,000 and bottom Aug 06 at $640. Will have to break out within 20 weeks from here which is just about the time the new US admin takes the helm and causes one hell of a problem, or at lest the blame for it.

Posted back on 7th October,... the 20 weeks is here now. This thread is so quiet now that something must be in the wind. News over the weekend (confusion supreme) and gold strong on the start of trade today could cause the audience to tune in.

 

[Dangerous]

Posted back on 7th October,... the 20 weeks is here now. This thread is so quiet now that something must be in the wind. News over the weekend (confusion supreme) and gold strong on the start of trade today could cause the audience to tune in.

receiving

over

 

[Glen48]

What is going to drive POG up? Inflation when we have deflation now or fear?

 

[explod]

What is going to drive POG up? Inflation when we have deflation now or fear?

Matter of fact just na hour ago on ABC 774 Vic financial report stated there a signs of inflation now in the economy.

But at the end of the day the answer is simply value, everything else is as you aver, losing it.

 

[sinner]

Hi guys,

I am back. Hope you didn't miss me too much

Don't have too much to say at this point as I'm very tired, but just a quick recap of the action I missed.

HUI continues to lead the gold price if anyone was watching. I did not expect a break up of the rising wedge and we did not have one.

Unfortunately this break down has left the daily HUI below my intermediate trendline and more importantly, closing consistently below the 50MA with selling pressure above this point.

Even though it may have been hard to call on a daily basis this POG correction was definitely "on the cards" from a technical perspective. The HUI 50MA and 200MA came close to crossing but it would be rediculously bullish to expect this occuring on the first try. Not to mention the break-neck run up in gold without a lack of support from the miners.

I had originally planned to leave an open short on gold during my absence to hedge positions against something nasty. Seems this would have been profitable, but unnescessary. My main gold exposure atm (aside from long term physical) is in ASX:IAU, which has been moving nicely against the correction, closing up again today.

Have a nice day guys.