Gold Price - Where is it heading?

[explod]

Whats funny thow is the demand for bullion is still very strong despite the prices....

It is the flight from paper money in earnest now Ageo, the currency wars are a battle for trading competitiveness. No one is going to win this one as the printing of money to stimulate will repeat the old story of the Weimar Republic of Germany, 1919, where in the end it took a wheel barrow load of paper money to buy a meat pie. More and more in the know do not want to hold paper cash in moves to hard assets for protection.

And as Gumbylearner pointed out a couple of days ago, with references, inflation is the next problem emerging. And contrary to many pundits, this will be an inflation of necessities such as food or tangibles that have substance, ie., those means that can help put food on the table. That will not be paper money but bullion IMO.

The problem is, as pointed out by Uncle Festivus last week, we are in unknown territory this time. World economics appear so haywire compared to similar situations of the past that maybe even our bullion will be no protection, as Uncle added, "you cant eat it".

 

[Sean K]

No one is going to win this one as the printing of money to stimulate will repeat the old story of the Weimar Republic of Germany, 1919, where in the end it took a wheel barrow load of paper money to buy a meat pie.

Do you really think the US will allow that to happen? Sure Germany did, but they only make good beer, javelin throwers and cars. And Zimbabwe? Well, we really shouldn't compare should we?

I forecast that the money printing will reach a point where the US people will rise and say that's enough thank you very much, policy will change, USD will maintain supremacy and gold will tank. Tank back to USD supremacy levels post gold standard. Gold will NOT go back to being currency, or any other PMG. Gold will probably have some time to run, but once the climate changes, hold on to your golden hats.

 

[professor_frink]

Do you really think the US will allow that to happen?

Perhaps the question should be do you really think the rest of the world will stand by and allow that to happen?

 

[electronicmaster]

Do you really think the US will allow that to happen? Sure Germany did, but they only make good beer, javelin throwers and cars. And Zimbabwe? Well, we really shouldn't compare should we?

I forecast that the money printing will reach a point where the US people will rise and say that's enough thank you very much, policy will change, USD will maintain supremacy and gold will tank. Tank back to USD supremacy levels post gold standard. Gold will NOT go back to being currency, or any other PMG. Gold will probably have some time to run, but once the climate changes, hold on to your golden hats.

Gold is going to $2000.00 per Ounce by March next year or sooner. It will follow the rise of Oil to $150.00 USD per Barrel and higher (Max $200.00 USD Oil per barrel)

That is where Gold is heading

 

[Edwood]

new highs - but on serious divergence - wouldn't be buying now

 

[Sean K]

Perhaps the question should be do you really think the rest of the world will stand by and allow that to happen?

Yep, there are a couple of countries with vested interest in USD aren't there. Can they really get out of USD and convert to gold, or euro, or whatever without tanking the entire system? Maybe it's a long process that will eventually lead to USD on the toilet roll holder...

 

[Southern X]

Right now I'm holding my equities. Bought into an equity, at the Fed QE2 announcement, ie. the day the markets were in a quandary as to what direction ANYTHING was going.

I'm not chasing anything; though I firmly believe Au is going up. This seemingly contradictory view is for one reason, to wit: the markets are moving on what the Fed gurgles out, ie. they're setting the pace regardless of almost anything meaningful, fundamental, or sensible... and every dip is being bought. With no powder dry now I'll re-adjust when I see a dip. After all there's always another bus/train/ship leaving.

In the end, then, it's, for me in the very short term, not about charts, or fundamentals in whatever dynamic; it's about extraneous forces, Fed, to a lesser degree Trichet, BoJ, jawboning. Currency wars in this space will definitively raise Au, but still these gurgling interventions concern me as to being offside, or not getting as a good a price as I want for an entry nto an equity.

Now, let's ALL MAKE MONEY!

SX

 

[Ageo]

It is the flight from paper money in earnest now Ageo,

Well basically word on the street is people are uncertain with paper money especially seeing the AUD passing the USD, they are uncertain with how volatile share markets can react to news etc..... i had 1 customer buy 5kgs of gold simply because he was after some wealth protection long term against uncertain markets..... whatever the reason may be more people are talking about gold now then they have ever been which means 1 thing "demand".

This is just average people who have never looked at gold before now considering it as some form of option.

 

[Sean K]

This is just average people who have never looked at gold before now considering it as some form of option.

Isn't that bubble material?

The taxi driver was commenting on gold a couple of nights ago....

 

[MR.]

Isn't that bubble material?

You crack me up. Lets look at a graph of gold in USD's? What's that, near 400% in 10 years!


Look at it in AUD, now that's much better only a little over 100% increase in 10 years and still not higher than Feb 2009....

Wonder if the AUD will tank against the USD before it pops?

 

[Ageo]

Isn't that bubble material?

The taxi driver was commenting on gold a couple of nights ago....

Not really kennas as people are putting their money into gold for the long haul, when the same thing happened with shares in the great depression it was because people were after a quick buck.....

Anywayz i still dont think gold will go beyond $3000 p/o anytime soon simply because it will affect the jewellery consuming market which drives alot of the gold price....

My opinion of course

 

[Logique]

new highs - but on serious divergence - wouldn't be buying now

I think that's an astute comment Edwood. And in addition to that, I'd invite anyone to check the NYSE US Dollar Index Future spot price from mid-October compared to now = roughly the same at about 77.0.

To my eye there is clear divergence in the tech indicators, which ought to be viewed before getting carried away at current prec metals levels.

 

[Uncle Festivus]

I still think it's liquidity driven - just like everything else that is going up in price. When the trend stops is when the sheep get sorted, even the ones who are buying 5 kg lots at these prices? Then you have to ask, if indeed the $USD is going to be worth-less, who will be the biggest loser? The answer, China. Their only collateral and the funding of their very own form of QE to the tune of $600B, in the form of trade surplus dollars, will literally evaporate overnight. BTW, their 'stimulis' package is about to end at the end of November, so be prepared for some bubbles to come under strain, if not burst. And the ramifications for big mining hole Australia ie we rely on the strength of the US, and the currency, more than most people realise; we just can't disregard them as a dying capitalistic empire?

Also, if you look at the charts then it's about due for some retracement and reversing of trends ie the USD DX, for the '$USD is doomed short' traders and anything else that's on the other side of this thinking ie gold - all part of the game. Good trading, but I'm not adding any physical right now as a sizeable correction is imminent, in all markets? Have a look at the VIX & sentiment amongst others - getting close for reversal? Taking time, but getting closer....

VIX V INDU chart

 

[Edwood]

To my eye there is clear divergence in the tech indicators, which ought to be viewed before getting carried away at current prec metals levels.

Hi Logique - I should've said I was referring to the daily view - interestingly Uncle's weekly charts are not showing any divergence really

 

[Logique]

Hi Logique - I should've said I was referring to the daily view - interestingly Uncle's weekly charts are not showing any divergence really

Cheers, I'll add a daily chart under. Great paired charts from Uncle Festivus, who provides a much better explanation of the factors behind my growing unease, and the reason I've got some shorts atm -hedging my bets.

I hadn't realized the Chinese stimulus package ends at close of Nov, that only adds to my caution.

I notice the NYSE US Dollar Index Future was up again, nearly 1% overnight. What did the Doors sing..'..been down so goddam long, that it looks like up to me..'

 

[Edwood]

and gold daily

 

[Mr Z]

People, people, people.... don't short gold until sometime around May 2011! Seasonals, seasonals, seasonals.... it is just not worth playing against them! I told ya not to step in front of this train month or two ago... go flat if you are nervous BUT go look at the 2005-2006 chart and work it out yourself!

 

[Edwood]

Thanks Mr Z
technicals are usually more successful than seasonals in my experience - ala the general stock market rally in Sept \ Oct this year, best rally for this time of year for many years. You'd not be happy if you'd sold just because it was Sept.
Daily Technicals suggest gold is running out of steam, but weekly has plenty of room to move

 

[Mr Z]

I say as a long term T/A that trades gold for a living.... DON"T SHORT THE SEASONALS!

Take a look at the monthly... you have not seen overbought yet, this will likely hoist the bears by their !

Who sells in gold September? Never until Dec and into the New Year, in a good year as late as May. This is a good season.... you will have your jaw on the ground before its done...

JMO.

 

[Edwood]

I say as a long term T/A that trades gold for a living.... DON"T SHORT THE SEASONALS!

Take a look at the monthly... you have not seen overbought yet, this will likely hoist the bears by their !

Who sells in gold September? Never until Dec and into the New Year, in a good year as late as May. This is a good season.... you will have your jaw on the ground before its done...

JMO.

ahh yes timeframe is key - I'm short term TA. I was short last night, flat now and may be short again soon. (I'm not generally looking for long term moves fwiw and agree the long term looks sound)
cheers