Gold Price - Where is it heading?

Trembling Hand · 25 April 2009

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

Explod what happened to the, forgive me if I'm mistaken, explosion to gold prices after the US elections? March wasn't it when you had gold taking off to $2000000000000000000000000000000.01

lookout · 25 April 2009

Hi everyone, I've been following various economic commentators for about 18 months now, watching how markets act and trying to figure out who's on the ball. I'm a novice to gold investing but it seems that fear is currently providing the main support. When credit markets settle (how ever long that takes) the price of gold will collapse. I've recently taken a position in gold based on thoughts that there is a lot more fear to come which will support gold and drive our currency lower against the $US. My two favourite sites:

http://globaleconomicanalysis.blogspot.com/2009/04/gold-continues-to-act-well.html

http://market-ticker.denninger.net/

explod · 25 April 2009

Trembling Hand said:
Explod what happened to the, forgive me if I'm mistaken, explosion to gold prices after the US elections? March wasn't it when you had gold taking off to $2000000000000000000000000000000.01

yep, that's what I called and I was wrong. Did not count on the new administration being held by the Wall Street scamers. The delay will only make the break out greater when it does happen. IMHO and if you read back I have always qualified it as, we shall see, and we shall

jackson8 · 25 April 2009

explod said:
yep, that's what I called and I was wrong. Did not count on the new administration being held by the Wall Street scamers. The delay will only make the break out greater when it does happen. IMHO and if you read back I have always qualified it as, we shall see, and we shall

hi all
just watching the nightly bussiness report on SBS

an interveiw with Mark Leibovit from VRTrading.com

his prediction is gold is starting to make a breakout run and he expects it to hit 3000 range over the next 2-3 years

i know....... probably heard it all before

SGB · 25 April 2009

I'm with you explode.

Its interesting to note that gold actually went up overnight with an up DOW day as well. Is the focus now back on a US dollar tank and not so much on an equity crash?

One also still has to remember that at the current gold price of 913 its only 14% away from its all time high. Look at some of the risers in equity plays of late. Its not rocket science.

SGB

sinner · 25 April 2009

I would rather be wrong on gold and see it go to $200 and keep my job, bank account, etc. Than see everything collapse and gold jump to a jillion dollars.

Still watchin the gap at 850.

Still not sure how any of the gold bugs here expect to be believed when they themselves are willing to invest in paper stocks.

explod · 25 April 2009

sinner said:
I would rather be wrong on gold and see it go to $200 and keep my job, bank account, etc. Than see everything collapse and gold jump to a jillion dollars.

Still watchin the gap at 850.

Still not sure how any of the gold bugs here expect to be believed when they themselves are willing to invest in paper stocks.

I agree, I have children and grandchildren with jobs at risk, some are already on benefits unfortunately. Hoping that gold will not go up is not going to change anything. Being prepared and investing so that when needed I can help them may help. "perhaps"

We all wish this downturn would go away, there are no winners in a bad downturn. My hedge in my super fund with gold is merely that, some insurance, and it is doing that. When it looks like it will no more I will seek something else.

explod · 25 April 2009

sinner said:
Still watchin the gap at 850.
.

A close of the gap to 850 would still see the price above the long term trend. Have a look at the 10 year kitko gold chart and you can observe the french curve which began from the lows of 2001 is below 850, in fact it is around 800. If we are talking technical, the 880 mark after the recent fall has been confirmed as a strong support area.

However, we shall see.

sinner · 25 April 2009

Mish

The idea that gold does well in periods of inflation and deflation is easily disproved. Gold fell from over $800 to $250 over the course of 20 years with inflation all the way. The reality is gold does well in periods of high economic stress (deflation, stagflation, hyperinflation, and periods of prolonged credit stress).

When it comes to trading, it's frequently a mistake to look for reasons, because they are often not known until it's far too late. In this case, there is no doubt we are in a period of extreme credit stress. Moreover, nearly every country on the planet is attempting to debase their currency simultaneously.

By those measures, gold should be acting well, and it is. Seasonals be damned.

http://globaleconomicanalysis.blogspot.com/2009/04/gold-continues-to-act-well.html

Clicky de linky for nice chart and Telegraph article.

MRC & Co · 25 April 2009

SGB said:
I'm with you explode.

Its interesting to note that gold actually went up overnight with an up DOW day as well. Is the focus now back on a US dollar tank and not so much on an equity crash?

One also still has to remember that at the current gold price of 913 its only 14% away from its all time high. Look at some of the risers in equity plays of late. Its not rocket science.

SGB

Ah, good to see you back SGB, a top post as always. I also noticed that big up move in the US overnight coincided with gold rising. A break well through the high could surely be in play here over the coming months.

explod · 25 April 2009

sinner said:
Mish

http://globaleconomicanalysis.blogspot.com/2009/04/gold-continues-to-act-well.html

Clicky de linky for nice chart and Telegraph article.

Thanks for the link sinner. Talking fundamentals is an endless task, knowing them requires a full research team, it is out of our depth here.

I think that this financial crisis being global and the first stage in October being so brutal may make things different to the past, maybe 1929 to the 30,s bears some resemblance. But certainly time to batten down and try to hold onto the equity value of investments.

I have trotted this out before but it is a long way back in the thread. I look at the 1970/80 gold run as a rough ruler of where it may go this time. In 1970 gold began its run from a low of US$35 (yes 35) to its blow off peak of 800 in 1980. This new gold bull-run began from its low of about 260 in 2001.. The multiple of 1970/80 is about 25 to one so I look to 25 times 260 for the next run up.

This is just a rough comparison, only time will tell.

ducati916 · 26 April 2009

explod

The price of Gold at $35 was the convertibility price fixed by FDR in 1931 when he devalued the dollar during the Great Depression. It stayed at that price until 1971, when Nixon took the US dollar off convertibility, due to systemic inflation created by the 1944 Bretton Woods creation of the IMF.

jog on
duc

SGB · 26 April 2009

MRC & Co said:
Ah, good to see you back SGB, a top post as always. I also noticed that big up move in the US overnight coincided with gold rising. A break well through the high could surely be in play here over the coming months.

Thanks MRC,

I have been quietly churning over chart patterns, and past trend behaviours avoiding the doom and groom euphoria that has been present around the financial markets of late. We can all get caught up in the perceptions that might occur without understanding the core values of why we are in this game in the first place. Trade what is actually happening rather than what might happen.

As mentioned by other posters the importance of salvaging and protecting our financial worth, not just for ourselves, but for our children as well but not being overly focused on the fear factor. Yes fear is a good cautionary tool but it also limits opportunities for forward planning and growth.

Key measurement areas for me now is the DOW at the 8000 mark (equity markets) and gold trading now within this channel. If the channel is broken down from here there will be a possibility that this wave extension will be thrown down to a 1-5 down range and my opinion will be based on a monthly double top pattern which also occurred in 1980. Long positions in LGL and NCM bought at the end of Nov 08 will be liquidated. But if the channel is broken on the upside, the high could be broken quite easily with a pause at the 1000 mark. We’ll know within a couple of weeks. Trailing stops are in place.

SGB

MRC & Co · 26 April 2009

Cheers for the reply SGB.

A fail of the pattern to the downside could well put gold into a choppy range IMO.

A break to the upside (which looks more likely to me), due to the change in the trend structure and I particularly like the area of support we just bounced out of, so my bet would be for a push through the high, but as you say, stops in place just encase.

Equities are rallying, but futures are still trading at a discount, so it looks like a fall from grace is still being priced in, perhaps the sign of a rise in gold at the same time as an equity rise, shows the guys doing this pushing really know what's about to be...........just my conspiracies of course!

>Apocalypto< · 1 May 2009

No surprises with this little fact....

As the Gold price drops off so does Explod

Spot has a decent strength trend down on 1 hour... it's holding up now on a low could show a minor double bottom but overall still in a selling move.

Uncle Festivus · 1 May 2009

Inverse head & shoulders? Short bias until support neckline @ $865? Green shoots or weeds?

SGB · 1 May 2009

Just playing around with time frames atm so it will be interesting to see if this little scenario plays out.

Both charts display the fib starting point at $252, at the end on 1999 and the start of the bull run.

In the first chart the fib was set at the original high back in 1980 at $873. Apart from the uptick in 2006 it shows a 13.5 month time span (blue)between the 61.8% and 38.2% before the breakout. The pink represents 38.2% to the breakout of the high in approx 12 months. A difference of 1.5 months.

The second chart shows the same resemblance but longer periods towards the breakout. The blue 61.8% - 38.2% took 21 months. Now taking 1.5 away from 21 months leaves the pink area to breakout in 19.5 months or the end of May.

SGB

We'll see how this pans out... the interesting thing to note though is the importance of these support and ressistant points from the fib retrace and how they can measure up to any trading style.

acertv · 1 May 2009

Some people are saying gold is heading to $2000 but it doesn't seem to be doing that successfully.

Where do you think it will be in 12 months time?

>Apocalypto< · 2 May 2009

acertv said:
Where do you think it will be in 12 months time?

where ever it is

lookout · 2 May 2009

The severe deflation due to collapsing asset bubbles should cause gold to drop in price, with everyone running to cash.

Governments are attempting to stop deflation by dramatically increasing debt levels to the point that governments themselves may become unstable, rather than simply letting insolvent companies/individuals go bankrupt: the fear that cash may not be safe amidst such instability provides the opposing force pushing gold prices up.

I have 3% of my wealth invested in gold as insurance against government stupidity/corruption.

Gold Price - Where is it heading?

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