Gold Price - Where is it heading?

[cuttlefish]

Gold not looking too good last night. Still in a range of longer term trend support imo but possibility of it breaking down further from here in the short term I guess.

 

[prana]

well I'm happy.

Now gotta decide when to get back in. UF whats your basis for a 50cent AUD-USD? You are strong US or weak Aussie?

 

[Uncle Festivus]

well I'm happy.

Now gotta decide when to get back in. UF whats your basis for a 50cent AUD-USD? You are strong US or weak Aussie?

Just a hunch that there will be competitive currency devaluations and a worse than expected recession in Oz?? It's still stalled at 72c

Looking at gold, maybe a sign of something happening soon with a descending wedge forming, any takers? Getting into a few technical support zones too to bounce from? 50% fib, low Bol bandwidth??

 

[cuttlefish]

Gold not looking too good last night. Still in a range of longer term trend support imo but possibility of it breaking down further from here in the short term I guess.

I think I might be a reverse indicator for gold ... whenever I post a comment with a negative view the price goes up the next day lol.

Gold down to $300 by the end of the month

 

[Ageo]

I think I might be a reverse indicator for gold ... whenever I post a comment with a negative view the price goes up the next day lol.

Gold down to $300 by the end of the month

Hehe its a bit like that eh?

 

[Nero64]

Newcrest is up 5% or so at the moment. Seems a predictable pattern. As risk tolerance decreases people are heading for Gold. The down trend needs to continue for the Gold Bulls to profit.

 

[Aussiest]

Newcrest is up 5% or so at the moment. Seems a predictable pattern. As risk tolerance decreases people are heading for Gold. The down trend needs to continue for the Gold Bulls to profit.

Yes, you're right. Not just a small spike.

 

[>Apocalypto<]

Gold Bugs.....

If the equity markets really start to crumble look for Gold and the USD Index to rise.

No they can't I hear some of you cry, yes they can and they did it this year.

cheers,

 

[explod]

Gold Bugs.....

If the equity markets really start to crumble look for Gold and the USD Index to rise.

No they can't I hear some of you cry, yes they can and they did it this year.

cheers,

You are correct. The US dollar sits on sentiment, the safe haven world reserve currency.

Gold sits on fundamentals, though regarded as the relic it is solid, you can hold it in your hand so it is like land or other goods, tangible.

The dollar is a printed piece of paper, a promise of government and being held up by increasing debt.

I know which way to go for me in the longer term, but we will, see.

 

[explod]

Gold price could hit $1,500
The aggressive monetary policy of central banks around the world is playing havoc with the structure of the bullion market, creating a chronic shortage of gold that may soon push the metal to fresh records above $1,500 an ounce.
By Ambrose Evans-Pritchard
Last Updated: 12:11PM BST 20 Apr 2009

Charles Gibson, a gold expert at Edison Investment Research, argues in a new report that negative real interest rates (below inflation) in the US and beyond has upset the "leasing" machinery in the gold industry and led to a sustained market squeeze.

This is what occurred in the late 1970s, driving gold prices to $850 and ounce – roughly $1,560 in today’s terms. Gold finished last week at $870.

Mr Gibson said the powerful dynamic could lead to a second leg of this gold bull market, even though the metal has already enjoyed a torrid run over the last eight years.

In normal times, gold mining companies sell – or "hedge" – a chunk of their output in advance through bullion banks. These banks cover their positions by leasing gold from central banks. This bread-and-butter trade created excess supply of 500 tonnes each year until the start of this decade.

Low real interest rates have caused the process to reverse, creating a shortfall of about 500 tonnes. The process accelerates as rates turn negative, leading to a scramble by market players to find physical gold.

There are already reports that gold bars are becoming scarce, partly due to fears that futures contracts and other forms of paper gold may not prove reliable if there is a serious break-down in the global financial system. Pure metal ”” whether Krugerrands, Maple Leaf coins, or the "five tael biscuit" favoured by the Chinese – entail no counterparty risk.

From Jim Sinclair's Minesite today

 

[Bron Suchecki]

That article has got a lot of runs in the past few days. This statement in it caught my eye

Low real interest rates have caused the process [mine hedging] to reverse, creating a shortfall of about 500 tonnes. The process accelerates as rates turn negative, leading to a scramble by market players to find physical gold.

My understanding of what drove mine dehedging was that investors were demanding no hedging so they could be fully exposed to the gold price. I didn't think real interest rates had anything to do with it. I was intrigued that maybe Charles Gibson of Edison Investment Research had found some correlation, so I dodged up the following chart, creating the real interest rate figure from the federal funds rate less CPI.



I can't see any correlation at all between the consistent miner dehedging and real interest rates. I think there must have been some misinterpretation by the journalist in trying to simplify the report into a brief news article.

The other statement that "this is what occurred in the late 1970s, driving gold prices to $850 and ounce" I would also disagree with. As you can see from the chart, mine hedging really only got going in the late 80s. I am speaking without direct experience but I don't think there was much, if any, lease market in the 70s/early 80s. Maybe it was meant that the forwards/futures machinery was upset in the late 1970s.

 

[explod]

Gold starting a little run up tonight after consistent gains the last few days. Is this the start to the big one. Probably needs to close over US $930 to hold on for next week.

Bloomberg headlines all bad news tonight which will support gold, of note

•Banks May Struggle to Raise Money After Stress Tests as Bad Assets Triple

And unfortunately just went off the screen,

China increases gold reserves to be fifth largest holder, gold rises

 

[GumbyLearner]

This is awesome..truly awesome!

A very rare..extremely rare Jon Nadler prediction from APRIL 27, 2009

While gold bugs might view the purchases as supportive of higher prices, Jon Nadler, senior analyst at Kitco.com, says if this were truly significant news, gold futures would be trading much higher.

"If you do the math, it's not a big deal. [If] China was aggressively buying, gold should have been up more. The reason why China has been buying is that they wish to make their ratio of gold to reserves very constant ... . The amount is in line with the Chinese program to meet its allocation requirement ... no way it means that they are abandoning the dollar. [China] is not really worried, if they had been worried they would have been buying more tons over 5 years."

Cheers Jon

We will wait with anticipated breath!

 

[explod]

Nadlers comments are a very bullish sign. We must be very close to dollar capitulation as he has been one of its prime its media protectors for some time. China have been very concerned to hold the US currency up to protect thier massive holding of treasuries. Thier frustrations were very evident at the last G20 and their flight towards gold and other metals since is a clear indication that one of the last major supports to the reserve currency is falling away.

Gold may break out sooner than we expected. August we thought.

 

[GumbyLearner]

Have to agree Explod

Sooner rather than later as unseasonal as it will be.

Holding patiently for the higher spike!

 

[sinner]

How any of you can put any faith in the writings of Jon Nadler is beyond me. This is the guy who was saying "it's over for gold" when the most recent upleg from 681 began and saying investors should be in cash AFTER the crash. He will say anything to retain his prime click spot on Kitco.

From October 2008:
http://www.commodityonline.com/news/Gold-might-fall-to-$500s-Jon-Nadler-12397-3-1.html
Gold might fall to $500s: Jon Nadler

lollll

The likes of explod and GumbyLearner are still posting the same dribble I see.

Thanks Bron, at the moment you are the only reason I am reading this thread lol.

 

[explod]

How any of you can put any faith in the writings of Jon Nadler is beyond me. This is the guy who was saying "it's over for gold" when the most recent upleg from 681 began.

We dont', read what we were really saying.

Dribble, could you explain that?

Not very nice I think, have often found your posts very naive but did not ever whish to say so as we all have something even if it is dribble. Ah well it will all come out in the wash.

 

[chrislp]

Can't understand you gold bulls. This thread has been sooo quiet during this decline & few days of short covering bring this thread alive.

Better money to be made elsewhere IMO.

 

[explod]

Can't understand you gold bulls. This thread has been sooo quiet during this decline & few days of short covering bring this thread alive.

Better money to be made elsewhere IMO.

Agree, some of the gas plays have been fantastic but gold will be the big one to come, never seen such an opportunity.

 

[Aussiest]

Agree, some of the gas plays have been fantastic but gold will be the big one to come, never seen such an opportunity.

Really? Please provide evidence for your opinion.

I respect it either way, just curious.