Gold Price - Where is it heading?

[haunting]

Try this chart and see if you can detect any sort of pattern. DXY vs XAU. Which comes first? Gold drops first or US$ rises first? Which is a captive/derivative of the other?

 

[explod]

derty Re: Gold Price - Where is it heading?

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The bullish sentiments for gold make sense to me and I have dipped my toe into the waters.

My problem isn't that we are going to see a leap in the POG in USD. It is that I'm uncertain that we will see any real appreciation in the POG in AUD. It seems recently that as the AUD is percieved as a strong currency in comparison to the USD that as soon as their is any weakness in the USD people seem to flee to gold and AUD. Also due to Australia not undergoing quantitative easing we shouldn't see the level of inflationary pressure that will be occurring in the US further strengthening the AUD

Not so long back Aus gold price reached 1500, when currencies fall there is a general appreciation of gold against them all. If the price explodes up as some a saying on fundamentals then it will make little difference IMHO

Posted this on 30th May last

Over the last year or so a lot of posters have expressed frustration that as our dollar rises it takes the shine off the Aussie gold price. Well the Aussie dollar has continued to gain in the last 24 hours and with that our own gold price has gone up AUS$24 Silver which is my main long term play even more so.


Cheers explod

 

[explod]

So are we at a turning point? the G8 jawbone was sure to make the mighty dollar rally, which it did, and normally keeps it up for a few days at least. The movements today would indicate it may have turned a bit earlier this time, we await with interest.

With the crap being served up by Bloomberg and Co. you can be sure the pressure cooker is getting pretty hot.

 

[MRC & Co]

So are we at a turning point? the G8 jawbone was sure to make the mighty dollar rally, which it did, and normally keeps it up for a few days at least. The movements today would indicate it may have turned a bit earlier this time, we await with interest.

I think the current Summit (China, Russia, India, Brazil) is having a negative effect on the USD, considering there will be talk of a new reserve currency (of which this meeting will be highly unlikely to solve any problems or develop any new thesis).

Following, I think the USD will continue to rally in the short-term, which means IMVHO of course, gold has to go lower before it can go higher.

 

[explod]

I think the current Summit (China, Russia, India, Brazil) is having a negative effect on the USD, considering there will be talk of a new reserve currency (of which this meeting will be highly unlikely to solve any problems or develop any new thesis).

Following, I think the USD will continue to rally in the short-term, which means IMVHO of course, gold has to go lower before it can go higher.

Possibly. I think it more likely, that what they are saying may not be what they are doing, but the message buys them time to unload the toxic dollars they have onto others. With the chorus so great a behind the scenes rush for the door must be suspect. The US dollar is on the way down as we speak but fear by the sheeple will hold it up yet some.

We will soon see I feel. And also IMVHO

 

[strategist]

GOLD

H4 graph
Gold is being traded below level 944 (below the neckline of “head and shoulders” trend-turning figure), what speaks in favor of getting to target level 903 in nearest future (within the “a-a+” uptrend). Resistance is found at level 944 once again.

Daily graph
Having stopped slightly below the strategic resistance level 998 (“Z” trend line), gold eventually formed up a “double top” trend-turning figure at H4 graph (denoted as “a-a+” trend) and executed it after getting under the level 967. Such an event is a very important signal for “B-B+” daily trend’s turn. I’m expecting its lower bound to be broken shortly and, if gold goes under the level 945 (under the “B” trend line), the uptrend will be changed to downtrend and gold will set the target of lowering to support level 903.

Monthly graph

 

[explod]

Re: GOLD

Gold in fact bounced off support at 925 on the 15th. A bottom uptrend channel which was confirmed in January this year and began with the dip in October 08.

With the USIndex again looking on the weak side I don't buy your analysis. It appears as a simple head and shoulders formation playing out but if you look back over the last six years they have mostly failed. IMHO

 

[Tradesurfer]

I've been watching the weekly chart for a while waiting to either enter long or go short. Looks like we may be re-testing the uptrend line or bottom of the triangle. If it violates I may go short and put my stop back above the trendline to keep losses small.

If it doesn't violate to the downside, before going long I would wait for it to breakout above the top line resistance back above the old 1000.44 high and offcourse put a stop a little below what would now be support.

Stay tuned as this is on my watchlist.

FYI- Chart Capture is of the US Market Gold ETF symbol:GLD which tracks the price of gold. If Gold itself were at $1000, then GLD would be at $100.

cheers

Derek

 

[explod]

Thanks for the chart Tradesurfer, it does spell the situation out well. As has been the dominant, the US$ index will be the key to the situation.

The Dow is looking a bit weak the last few days and as Uncle Festivus pointed out last week the candles have been putting the tails up. A drop in the Dow will see a flight to the US$ so a good correction down may well occur before this bull takes off again. But if gold holds the bottom up channel just maybe we will be away.

Interesting times.

 

[explod]

Just thought the following from Chuck Butler's report from yesterday would be of interest. And as well the Minesite page reckons gold will make a big move up either next week or early the following: anyway here's Chuck...

Did you hear about the Gold vending machine in Germany? I saw this yesterday morning, and thought it to be a hoax... Then someone in the office brought me a print out of a story in the U.K. Telegraph... OK, so maybe it's not a hoax... Any way... Here's the skinny... In Germany, they've come up with a vending machine that can update prices of Gold every few minutes, and... Dispense 1 gram Gold wafers, 10 gram Gold bars, or coins... There's about a 30% increase in the market price! WOW! Imagine that, you need some Gold in your pocket just for GP, and you simply walk up to a vending machine and buy some, as simple as getting that Zero bar, or Snickers!

OK... What gives a guy this kind of idea to make a vending machine that disperses Gold? It's all about taking advantage of the times, folks... I may have told you this in the Pfennig before, I don't recall, but I use it in my presentation for Gold... Investment in Gold increased 427% last year... To put it into Tonnes of Gold, retail investment purchases of Gold reached approximately 108 Tonnes of Gold in 2008, up from 36 Tonnes in 2007, and 28 Tonnes in 2006!

I was talking with the Big Boss, Frank Trotter, who, by the way scored a goal from about 30 yards out in his soccer match the other day... Ty Keough, our one-time national team player, and long time pro, was quite impressed, and that says a lot, because Ty has seen some soccer in his years... You may know Ty or heard of him... But do you know his dad? His dad is a soccer legend, playing on the U.S. national team that beat Great Briton in the World Cup in the 50's, and then went on to be the winningest college coach, with multiple national championships at St. Louis University...

Oh, I digress, there, I'm so sorry... But once I got talking about soccer, of which I played a ton of in my youth, I just started typing... UGH! Any way, I was talking to the Big Boss, Frank Trotter, the other day, and Frank mentioned that he was concerned that Gold could be the next bubble... I assured him that I didn't see it that way, not until my neighbors are asking if they can buy Gold at $1,200 oz! (I tried to get them to buy it at $800 oz, to no avail!)

 

[GumbyLearner]

Just thought the following from Chuck Butler's report from yesterday would be of interest. And as well the Minesite page reckons gold will make a big move up either next week or early the following: anyway here's Chuck...

Cheers explod

Notice Chuck doesn't have a handle on the superlatives. -> winningest
But hey Kerry Packer was a dyslexic and the richest man in the country, so it's no pre-requisite for a proffering a view.

A new trend though no doubt!

 

[Nyden]

Haven't the charts, analysis, opinions, thoughts, and the stars been indicating a big move up, each and every week, for the past few months now? :

Just seems as though those that follow gold are always spouting for some big move which never seems to come. Yet, no matter what seems to happen in the world markets, in sentiment, and in the economy - gold doesn't seem to want to break $1000 again. How can any of you ignore that? How can so many people place such blind faith in a blooming unproductive yellow rock! It boggles the mind, and I despite how hard I try - I just cannot understand it. Then again, I don't understand those bible nuts either :

As horrible as it sounds, I really would just burst into laughter if gold were only at $300 in 2 years time

 

[GumbyLearner]

Haven't the charts, analysis, opinions, thoughts, and the stars been indicating a big move up, each and every week, for the past few months now? :

Just seems as though those that follow gold are always spouting for some big move which never seems to come. Yet, no matter what seems to happen in the world markets, in sentiment, and in the economy - gold doesn't seem to want to break $1000 again. How can any of you ignore that? How can so many people place such blind faith in a blooming unproductive yellow rock!

As horrible as it sounds, I really would just burst into laughter if gold were only at $300 in 2 years time

Yeah gold should have smashed like oil and every other commod. Oil was $30 bucks a barrel a few months ago.

thankyou
daytrader

 

[Nyden]

Yeah gold should have smashed like oil and every other commod. Oil was $30 bucks a barrel a few months ago.

thankyou
daytrader

Yes, oil was irrationally sold down. However, as oil, and all other commodities are productive; it only takes a whiff of a recovery, or even the potential for recovery to completely ignite those markets. As we're seeing now.

Gold just may be smashed down as well; perhaps not in the same drastic fashion as everything else we've seen - but what do you really think is going to happen when the world recovers, and gold loses its luster as a dooms-day hedge?

The reason, or excuse for holding gold seems to be ever-changing in certain circles as well, and the can-hoarding gold nuts all seem to lap it all up, without any doubt whatsoever. First, it was an "insurance policy" - for when the entire financial system collapses (when is that happening, by the way?). Second, it was a hedge against a guaranteed-to-collapse USD (how'd that go fellas?) And now, of course, it's a hedge against the imminent hyperinflation the world will face any day now.


To be fair, I don't think there's anything wrong with having a little gold exposure in a balanced portfolio. However, what seems to illustrate my point of loony blind-faithed gold bugs, is how many people seem to have most of their money, and all of their portfolio in gold, or gold stocks! What if gold doesn't skyrocket - is that a question that's even considered? Or is it pushed into the back of the mind by the seemingly endless supply of gold-supporting articles about the end of the world?

 

[GumbyLearner]

Yes, oil was irrationally sold down. However, as oil, and all other commodities are productive; it only takes a whiff of a recovery, or even the potential for recovery to completely ignite those markets. As we're seeing now.

Gold just may be smashed down as well; perhaps not in the same drastic fashion as everything else we've seen - but what do you really think is going to happen when the world recovers, and gold loses its luster as a dooms-day hedge?

The reason, or excuse for holding gold seems to be ever-changing in certain circles as well, and the can-hoarding gold nuts all seem to lap it all up, without any doubt whatsoever. First, it was an "insurance policy" - for when the entire financial system collapses (when is that happening, by the way?). Second, it was a hedge against a guaranteed-to-collapse USD (how'd that go fellas?) And now, of course, it's a hedge against the imminent hyperinflation the world will face any day now.


To be fair, I don't think there's anything wrong with having a little gold exposure in a balanced portfolio. However, what seems to illustrate my point of loony blind-faithed gold bugs, is how many people seem to have most of their money, and all of their portfolio in gold, or gold stocks! What if gold doesn't skyrocket - is that a question that's even considered? Or is it pushed into the back of the mind by the seemingly endless supply of gold-supporting articles about the end of the world?

CDS's, CDO's, Magical Mystery Tour financial instruments, Bank Bailouts, Nationalization or Semi-Nationalization of banks etc.. It really depends who you believe...

If I was to hold physical in a bullion bank or shares in a gold-producer and they threw this **** at me, without knowing whose on the end of it, fair enough., I wouldn't buy bullion. But quantitative easing is certainly something that gives me no comfort.

It's certainly not spontaneous or immediate at this juncture in time but certainly a script that will be played out in the future. JMO

So as a portfolio position I think gold and other precious metals are essential in this market. It's simply impossible to maintain the status-quo in this over-inflated, financially anabolic inflated (down-the-road) environment. To believe otherwise is a fallacy.

Sure the IMF may dump a heavy amount of their reserves, but who buys them will be stronger for longer! IMHO

If you believe for one minute that inflation is not a monetary event, you will massacred in this market 5 years from now. Just quote me on this 5 years from now. Seriously just quote me on it!

DYOR

 

[GumbyLearner]

The nature of the social contract whether you go back all the way to Hammurabi or the centuries old (recent in modern times) development of the English common law, requires that someone pays for goods with VALUE.

What concerns me and should concern everyone else is that throughout history someone must part with something valuable in order to conduct a fair exchange.

The current practices of government and central banks can only
diminish the value of the bargaining power of the unit they decide to trade in. If they decide to bargain in commodities, then of course, the value of the resource is calculated at the point of transaction. But I'm 100% certain that there will be plenty of apprehensive parties willing to take on currencies that have been replicated beyond common comprehension, in order to settle their agreements. That's business!

 

[explod]

Yes, oil was irrationally sold down. However, as oil, and all other commodities are productive; it only takes a whiff of a recovery, or even the potential for recovery to completely ignite those markets. As we're seeing now.

Gold just may be smashed down as well; perhaps not in the same drastic fashion as everything else we've seen - but what do you really think is going to happen when the world recovers, and gold loses its luster as a dooms-day hedge?

The reason, or excuse for holding gold seems to be ever-changing in certain circles as well, and the can-hoarding gold nuts all seem to lap it all up, without any doubt whatsoever. First, it was an "insurance policy" - for when the entire financial system collapses (when is that happening, by the way?). Second, it was a hedge against a guaranteed-to-collapse USD (how'd that go fellas?) And now, of course, it's a hedge against the imminent hyperinflation the world will face any day now.


To be fair, I don't think there's anything wrong with having a little gold exposure in a balanced portfolio. However, what seems to illustrate my point of loony blind-faithed gold bugs, is how many people seem to have most of their money, and all of their portfolio in gold, or gold stocks! What if gold doesn't skyrocket - is that a question that's even considered? Or is it pushed into the back of the mind by the seemingly endless supply of gold-supporting articles about the end of the world?

If gold was to lose its lustre and fall, like any other trade one would be out of it. Remember we do adhere to trailing stops my friend. Gold is a form of monetary exchange wether you like it or not, and to be frank is held by the banks of the world as a hedge and as insurance. As money loses value gold goes up and is the very reason it has gone up some 300% odd since 2002. And as debt levels of governments and banks continue to increase it has to, by supply and demand continue to go up steadily more. Yes the 1000 is taking a bit to crack but that is because the US is pretending there is still value in their dollar. If you follow the business news properly that is wearing thin.

So patience my son, it will surpass the 1000 in due course, and as it passed the 100 mark back in the 70s, away from two figures, it will never return to the three figures again either.

My self and most other gold bugs have other investments too. I still have half my portfolio in good property, and yes infltion is showing signs of happening which will push up my particular property as well.

 

[GumbyLearner]

If gold was to lose its lustre and fall, like any other trade one would be out of it. Remember we do adhere to trailing stops my friend. Gold is a form of monetary exchange wether you like it or not, and to be frank is held by the banks of the world as a hedge and as insurance. As money loses value gold goes up and is the very reason it has gone up some 300% odd since 2002. And as debt levels of governments and banks continue to increase it has to, by supply and demand continue to go up steadily more. Yes the 1000 is taking a bit to crack but that is because the US is pretending there is still value in their dollar. If you follow the business news properly that is wearing thin.

So patience my son, it will surpass the 1000 in due course, and as it passed the 100 mark back in the 70s, away from two figures, it will never return to the three figures again either.

My self and most other gold bugs have other investments too. I still have half my portfolio in good property, and yes infltion is showing signs of happening which will push up my particular property as well.

Logically, in this kind of environment, absolutely no doubt.

 

[MRC & Co]

Haven't we seen signs of a deflationary situation now Explod if you simply look at the statistics?

If the USD is ever replaced as the reserve currency and the new basket (perhaps set by the IMF) does not include a large portion of gold, then I can see a situation whereby gold will never perform to what is expected. The correlation between USD and Gold may just perhaps, break down?

Just some thoughts.

 

[GumbyLearner]

Haven't we seen signs of a deflationary situation now Explod if you simply look at the statistics?

If the USD is ever replaced as the reserve currency and the new basket (perhaps set by the IMF) does not include a large portion of gold, then I can see a situation whereby gold will never perform to what is expected. The correlation between USD and Gold may just perhaps, break down?

Just some thoughts.

Fair call MRC and I certainly don't want to come across as a condescending prick but what would it be replaced with? Corn, wheat, sorgum, cotton, wool.. they are all declining yields mate. So what else oil or gas ? Or maybe other non-precious metals?

It really doesn't matter, the reality of economic downturn is NOW! Sure people could argue about places to more safely park your cash. But then you have exploration, procurement, production and geo-political costs that are not factored in.

Gold stocks are a great place in Australia at least for the short to medium term to place your savings. Even better if you can buy physical.

The commercial network noise is just atmospheric hyperbole at the moment IMO!

DYOR