Gold Price - Where is it heading?

[GumbyLearner]

Gold May Resume Advance on Concern Global Economic Recovery Is in Jeopardy
By Nicholas Larkin - Jul 5, 2010

Gold may advance after some investors deemed two weeks of declines to be excessive and as renewed concern that the global economy is faltering helps boost demand for the metal as a means of protecting wealth.

Gold last week dropped the most since the week ended May 21 after trading on June 28 within 0.2 percent of a record. Growth in Europe’s services and manufacturing industries slowed for a second month in June, a report showed today. UBS AG analyst Edel Tully said the bank’s physical bullion sales to India on July 2 were the most since early January.

“We have seen a nice correction and people think that the market has bottomed out,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “Bargain-hunters are in the market. The situation in Europe and the U.S. continues to be jittery.”

http://www.bloomberg.com/news/2010-...-global-economic-recovery-is-in-jeopardy.html

 

[skcots]

Gold and Silver not looking good at the moment at $1186 and $17.55.
Any thoughts?

 

[electronicmaster]

Gold and Silver not looking good at the moment at $1186 and $17.55.
Any thoughts?

Yes. Get ready to buy some more, or buy the Gold/Silver mines at a cheaper price

two or three things may be happening:-

1.
People might be getting out of derivatives because they wanted physical delivery but had to settle in cash. Or the governments or Central Banks are selling out to keep the markets going sideways.

2.
A lot of experts have been expecting a massive sell off due to possible COMEX, ETF, SLV, GLD defaults. Perhaps this is one of them moments.

3.
The rest could just be speculators/traders panic selling as result. Could this mean the markets are in trouble?


I suspect you won't find it easy to buy cheap Silver or gold at the new lows. Most Mints or brokers will hold back supply or keep the Physical prices high I reckon.

They did that in October 2008

In other news:-

 

[electronicmaster]

1.
People might be getting out of derivatives because they wanted physical delivery but had to settle in cash. Or the governments or Central Banks are selling out to keep the markets going sideways.

imf-engaged-in-gold-swaps-to-about-380



European banks use gold reserves to raise cash


And the DJ is up over 10000 points all the sudden?

 

[Ageo]

Yep snap up everything

 

[explod]

Paying $19 a gramm for 24 carat down at our local shopping centre today. Now that is thievery and these stalls are getting about everywhere.

Would one have to be licenced Ageo to advertise in local rag for 1966 Silver coins at say half price?

 

[Ageo]

Paying $19 a gramm for 24 carat down at our local shopping centre today. Now that is thievery and these stalls are getting about everywhere.

Would one have to be licenced Ageo to advertise in local rag for 1966 Silver coins at say half price?

Explod yes The Gold Buyers stores are theives alright but stupid people that sell are asking for it.

Technically if you buy and sell more than 6 items a yr (NSW) then its classed as trading so you would need a license. But Ebay is your friend here, just list them and you will be surprised how much people pay for them.

 

[explod]

A solid recovery for gold overnight. US$1200 per ounce is becoming a strong support area now. Gold has generally travelled inversely to the gold price but there have been some tandem moves over the last 12 months. The $UD index has moved down more that 5% over the last month so feel that from the current consolidation point, gold should soon move and consolidate above $US1300 Of course the little Aussie has moved up from around .82 to above .87 over the last 2 weeks which will continue to hold our gold price, but does not drop it greatly. So the value overall is still greater for us, reading Chuck Butler (Everbank), currency traders are accumulating Aussie dollars. WE are still the lucky country.

Gold is being used as a curency again by central banks. Who says gold is an ancient relic. Faith in ability/or not, to repay means gold is very much on the agenda. The following article I picked up via the Gata wesite on this subject:-

http://news.goldseek.com/GoldForecaster/1278723600.php

 

[Southern X]

I'm patiently awaiting gold's seasonality, ie. weakness in July followed by strength through August to October-Novenber. It's happened most years, with the glaring exception of 2008. A 2008 repeat is possible though, with the USD restaking its claim as safe haven du jour, thereby making me all the more cautious.

It seems on the physical side Indians are picking everything up under $1200, then waiting for a drop, repeat. Interesting news from the BIS, where banks are swapping gold for cash to settle. The points here being: that they're not selling, therefore they believe the price is going up, and; that lo and behold gold is on the same plane as currency. The tonnage is unsettling, with the thinking (rumour-mongering) being that it's not a bank but an Euro-nation -- remember the CBGA.

Clearly seasonality is no guarantee, and no one, except a liar, can pick the bottom or top. It looks like support is around $1185, while resistance is around $1225. From this dollar value coupled with this being mid-July, I've got powder dry to buy equities on a decent dip; and hope I'm neither whip-sawed or jumping into a sucker's rally.

Disclosure: Holding: PRU, IGR, looking hard at, and dd'ing: AZM(?), GRY(?), CAH(?), AMX(?)... Good luck and happy hunting!

SX

 

[explod]

Clearly seasonality is no guarantee, and no one, except a liar, can pick the bottom or top. It looks like support is around $1185, while resistance is around $1225. From this dollar value coupled with this being mid-July, I've got powder dry to buy equities on a decent dip; and hope I'm neither whip-sawed or jumping into a sucker's rally.

Disclosure: Holding: PRU, IGR, looking hard at, and dd'ing: AZM(?), GRY(?), CAH(?), AMX(?)... Good luck and happy hunting!

SX

When you say equities, are they gold related?

Gold has been on a very good uptrend of consistent steps over the last 12 months. Overall it is a very finite part of the financial market but is gaining increased support due to fear on currencies and stocks across the board. If one is following the world financial news this state of affairs is only going to continue in my view.

India has been a long time traditional accumulator of gold and this continues. However, increasingly their percentage of purchases overall have been decreasing to the point where they now account for no more than 15% of the world gold market. Many central banks are now buying, South East Asia, Europe and though they try not to assert it, (to protect the value of US treasuries, of which they hold a huge number) China.

Seasonality I feel is out the window. Gold as it has risen steadily over the last 12 months (see the chart) will in my view continue to do so assertively.

 

[Southern X]

Seasonality is just one forward looking sign post.

With regard to the BIS I continue to puzzle the implications of Au being "legitimately" accepted as a currency substitute. This fact would muddy the prospects of the USD being the de facto safe haven for billions of euros, etc.

Though I still believe the USD will be the, "go to," liquidity choice some money will now seek Au. Even a tiny inflow will shoot the price/oz UP, creating a spike/bubble (I don't believe we're yet in a bubble scenario).

Still, the USD will (may?) survive this imminent crash, Au may well thrive, but if Au crashes as well, eg. late 2008, I'll sell at least 50% of my holdings with the full intention of buying all of it back and then some! Simply, I believe, a financial holocaust is nigh, a prologue soon followed by the whole Wagnerian opera; wherin the USD will collapse if it hadn't already.

This is frightening in the extreme, so get your ducks in a row, cans of tuna stocked, and God forbid, bullets.

SX

The aforementioned equities are all ASX gold. I omitted ALK:ASX, because I think of it as a REE stock (HREE heavy (pun intended)), but it has a pile of growing gold too!

 

[sinner]

Friday was an extremely interesting day for those of us intently watching the gold silver ratio.

The price gapped up big and went down all day. A smaller replay of the 1st July and 4th Feb. Horizontal lines have been drawn for S/R and the weirdness in RSI has also been highlighted.

The historical ratio for gold:silver was always 16 silvers buys 1 gold (this was the Queens standard and also the standard in many European banking countries). In Asia and especially China, silver was even more precious, with only 5-6 silvers required to buy 1 gold.

 

[skcots]

The historical ratio for gold:silver was always 16 silvers buys 1 gold (this was the Queens standard and also the standard in many European banking countries). In Asia and especially China, silver was even more precious, with only 5-6 silvers required to buy 1 gold.

Speaking of gold to silver ratios. I am quite interested in Islamic law and although I am pretty sure there is no set ratio for gold to silver I found it interesting that the mandatory poor tax (which can not be changed) on silver and gold works out be 7:1. e.g. the poor own a portion (2.5%) of your:

gold (held for a lunar year) if it exceeds 87.48 gram (1)
silver (held for a lunar year) if it exceeds 612.36 gram (7)​

 

[sinner]

Speaking of gold to silver ratios. I am quite interested in Islamic law and although I am pretty sure there is no set ratio for gold to silver I found it interesting that the mandatory poor tax (which can not be changed) on silver and gold works out be 7:1. e.g. the poor own a portion (2.5%) of your:

gold (held for a lunar year) if it exceeds 87.48 gram (1)
silver (held for a lunar year) if it exceeds 612.36 gram (7)​

Great find skcots! Got a link or reference for those of us who are curious (Quranic notation is fine I have one handy)?

 

[skcots]

Great find skcots! Got a link or reference for those of us who are curious (Quranic notation is fine I have one handy)?

Hi Sinner,

In a nutshell, laws are usually taken from the works of the early scholars as self interpenetration of the texts can lead to the crazy fatwa we unfortunately see today. If I come across the evidences I will post them.

There are four valid schools of law in Sunni Islam. The figures I quoted are from the largest school. Link: http://qa.sunnipath.com/issue_view.asp?HD=1&ID=1531&CATE=5

Interestingly, I had a look in my Shafii text (another of the schools) and found that the weights differed but the ratio was still the same. [see below]

The difference is not surprising as the two schools flourished in different parts of the world (Baghdad vs Makkah), in different generations and the rulers were permitted a little bit of leeway when producing the dinars.

One of the Shafi'i law texts (Reliance of the Traveller) states:

h4.2 The zakat-payable minimum for gold is 84.7 grams, on which 2.1175 grams (2.5 percent) is due.
The zakat-payable minimum for silver is 592-9 grams, on which 1408225 grams (2.5 percent) is due.
There is no zakat on less that this.
(N: One must pay zakat (n: 2.5 percent) on all money that has been saved for a year if it equals at
least the market value of 592.9 grams of silver (n:that is current during the year). While there is a
considerable difference between the value of the gold zakat minimum and the silver zakat minimum, the
minimum for monetary currency should correspond to that of silver, since it is better for the poor.)​

Theres is info on the Dinar here if you are interested: http://www.islamicmint.com/islamicdinar/index.html

A place in Dubai sells them but they know how to charge for shipping.

 

[sinner]

Theres is info on the Dinar here if you are interested: http://www.islamicmint.com/islamicdinar/index.html

A place in Dubai sells them but they know how to charge for shipping.

A very interesting read hehehe I loved this line:

"A chicken at the time of the Prophet, salla'llahu alaihi wa sallam, cost one dirham; today, 1,400 years later, a chicken costs approximately one dirham.

In 1,400 years inflation is zero."

 

[sinner]

I disagree. This latest upmove seems to me that gold is showing weakness - not strength. A gain in price does not equal a gain in strength. 1252 if not the high is very close to it.

Well, it has been a fun ride down on gold shorts since $1250. I am booking some shorts here during Tokyo at $1181 - just under $70 per ounce profit - the risk reward working out roughly as 1:2.4.

The red line shows support I am interested in. I exit my gold shorts here because really, I don't like being short gold. I would prefer to take a short position on silver if we go below support on the weekly, as there is some fundamental aspect of that trade - silver still being a strongly industrial commodity.



On that day explod claimed that gold price was showing "strength" as it moved into 1250. He also admonished me for using gold as "short term trading" - I guess a >6% decline since the 9th of June doesn't really fit into the thread title "gold price - where is it heading"...

 

[Southern X]

Gold breaking solid support at $1185, making that now resistance; with support in the mid-low $1170s makes for either bargain hunting or attempts at catching a falling knife.

I think I'll wait until the 27 July options expiry, as they and low liquidity may be contributing to this fall. Therefore, plenty of powder dry -- sold PRU this morning -- to pick up an equity or two, or put it in the bank, or move to dividend/utilities/green/more REEs???

SX

PS Anyone know the the price of that golden egg laying goose?

 

[explod]

On that day explod claimed that gold price was showing "strength" as it moved into 1250. He also admonished me for using gold as "short term trading" - I guess a >6% decline since the 9th of June doesn't really fit into the thread title "gold price - where is it heading"...

Sorry for the admonishment Sinner; and very well done on your trading. For the experienced, no problems. However for the unwary the gold and silver sector in the short term is a risky business IMHO. Many of the moves are often counter to fundamentals and chart programms, the following is worth a read on just that subject:

Via the GATA web page http://www.caseyresearch.com/articl...ative-easing'-on-a-massive-scale:-marc-faber/

 

[explod]

-- sold PRU this morning -- to pick up an equity or two, or put it in the bank, or move to dividend/utilities/green/more REEs???

SX

PS Anyone know the the price of that golden egg laying goose?

As I said, fundamentals etc hard to pick on gold, your PRU rallied well into the close today.

On that latter, goldman saxes for the Federal reserve;

the paper fairy tale.