Gold Price - Where is it heading?

[Mr Z]

My target has long been $1300 in round numbers, actually around the 1296 area but perhaps that is getting a little precise. It is around 50% Fibo retracetment level on the recent rally, closing in on the 200 DMA and if we bounce out of it looks like it will keep the weekly trendline intact. Failing that I think that we are looking at the 1260 area, near logical support and the 23.6% retracetment level of the entire 2008 to date rally. I would be surprised to see it much lower and I think there is a slim chance in may hold here. I'm not big on that option, I think that there is a week or twos more work to do.

 

[GumbyLearner]

Peter Schiff - I wonder if he will win yet another public debate?



At present his record stands at - 60 debates 51 by KO, 7 by TKO and 2 draws.

Here's a few samples to watch for yourself

 

[Logique]

Being hopeless at timing markets,
I thought I'd close down a few gold stock shorts this morning, only to be chased up, finding that I wasn't the only one with that idea.
Updated XAU_SPX chart attached.

 

[Mr Z]

Being hopeless at timing markets

Why get short a bull market in gold then?

Anyway... I think you are close, there maybe a better opportunity toward the end of this week... but... then again.

 

[explod]

Why get short a bull market in gold then?

Anyway... I think you are close, there maybe a better opportunity toward the end of this week... but... then again.

The word maybe as you express is interesting. I do not like it myself. I follow, "when in doubt get out" and "the trend is your friend untill the bend"

Gold is in a perfect consolidation at the moment against the financial press putting on one of their greatest efforts ever to jawbone it down. Against that you have the entire Islamic world now threatening half of the worlds oil supplies and yet Wall Street is still trying to say Ho Hum.

The dips are running out, if you need any more physical get it while it is there at these prices as they will never be seen again, IMVHO


OHIHTBH, WIPIEW.

 

[Mr Z]

Yeah look whatever... I am still looking for a test of 1300 and a possible go at the 200 DMA now we are close enough and with other things in the wings I can't discount that. You where saying similar last time I expressed that view... now we have come within $10 of the target and seen one short covering episode, they burn bright and short, I will be surprised if that was the bottom. Nothing is certain here, as you well know, but my read of the chart is still some further weakness to come... not a lot, it is mostly done. Anyway... we will see... a week or two at the most. In fact my best guess is it will be over very soon, say by the 7th Feb.

A USDX pop is on the cards here and may well mark the gold low.

LOL... never say never... the action into the mid year period may surprise... then SHOCK!

Cheers big ears!

 

[GumbyLearner]

LOL... never say never... the action into the mid year period may surprise... SHOCK!

No problems Mr Z

But you forgot Moneypenny. She deserves some recognition.

 

[Mr Z]

No problems Mr Z

But you forgot Moneypenny. She deserves some recognition.

From me? Why? I have never read a word of her posts... I don't keep up with this thread at all and I have been saying the same thing for months now.

 

[uahmad]

The word maybe as you express is interesting. I do not like it myself. I follow, "when in doubt get out" and "the trend is your friend untill the bend"

Gold is in a perfect consolidation at the moment against the financial press putting on one of their greatest efforts ever to jawbone it down. Against that you have the entire Islamic world now threatening half of the worlds oil supplies and yet Wall Street is still trying to say Ho Hum.

The dips are running out, if you need any more physical get it while it is there at these prices as they will never be seen again, IMVHO


OHIHTBH, WIPIEW.

I couldnt agree with this post more! The dips have been great but surely wont last.

A lot of talk about start of march when the comex contracts expire will signal the continuance of this gold & silver rally.

Get your physical now!

 

[Logique]

Why get short a bull market in gold then?

Guilty as charged Mr Z. You gave it some thought at least. Dear Explod is utterly unflinching in this area. But there's a couple of dollars in my pocket that weren't there before, and a few more shares.

 

[explod]

A firm break of the pennant (or coiling action as Norcinin describes it http://www.jsmineset.com/) overnight.

Hope all managed to top up on the dip. Time now to look at good gold stocks IMO, not specs but proven producers.

Cheers to bugs and back to the veggie patch.

 

[sinner]

A firm break of the pennant (or coiling action as Norcinin describes it http://www.jsmineset.com/) overnight.

Hope all managed to top up on the dip. Time now to look at good gold stocks IMO, not specs but proven producers.

Cheers to bugs and back to the veggie patch.

Just two charts from me today heading into the end of the week.

1:
$GOLD with $HUI overlay. As explod points out, proven producers leading the gold price upwards has been a traditionally bullish structural signal leading to higher highs in the yellow metal.

With the overnight breakout in 30y bond yields, longs taken around here should be considered from the macro perspective of oil prices, interest rates and the AUDUSD.

I have annotated the area of interest.

2:
$INDU:$GOLD, dow/gold ratio. As mentioned earlier on the last look at this chart the ratio appeared to be heading into the upper reaches of a large consolidation/range with a downward bent.

Since then an attempt was made at the upside of the range, imho this looks like a bearish fakeout with huge "island reversal" but will let others make up their own minds, happy for discussion on the interpretation.



:EDIT

Thought I would throw up the $INDU:$GOLD in P&F with a few horizontal lines for thought...presents a slightly different picture from the candle chart:


our veggie patch is going great and covers basically half the backyard, we eat a lot of our food from it now. Bread, cheese and a few odds and ends from the shop that's it. Silverbeet, tomatoes, eggplant, chillies, snowpeas, lettuce, beans, zucchinis, melons, pumpkins, herbs, potatoes, etc. This month we will plant some Japanese Brassicas, beetroots, burdock and others to keep the crops staggered.

 

[Mr Z]

Still not convinced that the bottom is in... I don't like the short term background... USDX & Copper etc. Nice pop though! This could be frustrating... don't be chasing parked cars just yet.... I have been buying weakness, I think that the HUI has seen its lows OR very close to them, a retest would not surprise me in the slightest. Not prepared to chase just yet... still waiting for some issues to come to me. TNX looks to have breached a line... the Fed will not be happy about that... buckle up one hell of a commodity ride is just around the corner!

 

[sinner]

Still not convinced that the bottom is in... I don't like the short term background... USDX & Copper etc. Nice pop though! This could be frustrating... don't be chasing parked cars just yet.... I have been buying weakness, I think that the HUI has seen its lows OR very close to them, a retest would not surprise me in the slightest. Not prepared to chase just yet... still waiting for some issues to come to me. TNX looks to have breached a line... the Fed will not be happy about that... buckle up one hell of a commodity ride is just around the corner!

Agreed Mr Z, especially USDX.

I think the key will be to see how they react to a strong risk off DX bounce. Will they retest and hold or fall through?

Patience is definitely key, bought my last lot of Aussie gold miners for the bottom drawer in August when XGD was peeking just under 6500. We are still well above that level, whether or not we make it back to supports/resistances below 7000 and what happens when we get there should be interesting to see.

(Aug 9)

With the Aussie dollar approaching its all time highs, as well and the gold oil ratio back around 14-15 I am once again interested in the long term accumulation of shares in Australian gold miners.

(Aug 24)

Posted Aug 09 during Tokyo. Close of that day for XGD was 6434. 14 days later and XGD closed the day yesterday at 6636, a full 200 points higher.

Having accumulated some shares in Australian gold miners over this period and armed with this small profit, I will distribute some here back into the market to reduce exposure and retain the rest as part of my "bottom-drawer" portfolio. Once the share goes into the bottom drawer, share price is mostly irrelevant, I only plan to exit this portfolio in the very far distant future or in need of emergency cash funds.

 

[andrewnz]

USD has been dumped by neighbour ..who is next to dump?

http://www.thepeoplesvoice.org/TPV3...an-government-successfully-sheds-th#more16184

 

[starman45]

Gold weekly.
Last month, the sellers had taken control of the commodity, bringing it up to 1327, area of strong support.
From there started a response from buyers, which however has not been very strong.
Risk of trading range.

 

[explod]

Gold weekly.
Last month, the sellers had taken control of the commodity, bringing it up to 1327, area of strong support.
From there started a response from buyers, which however has not been very strong.
Risk of trading range.

View attachment 41231

Yep, and as the sellers did in June 2010. Good clear chart there starman showing a nice overall uptrend.

I expect that silver may lead gold to higher levels from this week.

IMVHO

O..H..IHTBH,
WIPIEW

 

[sinner]

A little speculative here, but I am long a small amount of paper gold here 1350 before Tokyo while the Chinese are still away on holiday.

Red dotted line is proposed as support. I see resistance as 1351 and 1358 which would need to be cleared soon for a stronger move higher else we will fall back to test support again.

 

[johenmo]

Articles like this from Business Spectator today only helps to fuel the fire. Is this a commetn on more confidence in yellow metal than paper money (the greenback)?

------------------------------------------------------------------------------
China's gold tsunami by Karen Maley

Published 8:25 AM, 8 Feb 2011 Last update 10:30 AM, 8 Feb 2011

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Global inflation concerns are adding to gold’s luster, with a recent report predicting that Chinese demand for gold as an inflation hedge is resulting in unprecedented physical demand for the precious metal, which will likely push prices higher this year.

At the same time, there are signs that gold is expanding its role as an alternative currency. Overnight, the US investment bank JP Morgan Chase & Co said it would accept physical gold as collateral against securities lending and repurchase obligations. The bank explained that many of its clients held gold on their balance sheets as an inflation hedge, and wanted to use this gold as collateral for financial transactions.

The latest newsletter from Sprott Asset Management, entitled ‘Gold Tsunami’, focuses on gold’s attractiveness as an inflation hedge for Chinese and Indian investors. It argues that while western investors are content to hold paper assets, such as stocks, bonds, annuities and insurance, along with their real estate investments, the attitude of Chinese and Indian investors is very different.

"Halfway across the world, investors in China and India have never trusted paper investments as a store of value – and they’re converting their hard earned paper money into gold and silver bullion. Not that this is anything new. It isn’t. But the scale and speed with which they are accumulating precious metals IS new, and it’s driving the fundamentals that we believe will lead to higher prices in 2011."

It’s not hard to understand the growing Chinese enthusiasm for gold. Officially, China’s inflation rate was 4.6 per cent in December, but many believe the actual inflation rate is considerably higher. But Chinese savers earn a paltry interest rate of 2.75 per cent on one-year deposits, which means that they face negative real interest rates.

Faced with these dismal returns, Chinese households and businesses have been pouring money into physical assets, such as food, real estate, and commodities as a hedge against inflation. Chinese authorities are now trying to quell property market speculation by making it more difficult for buyers to get bank finance for their second and third investment properties, and have begun experimenting with property taxes in some cities.

This has caused Chinese investors to turn to gold. According to the Sprott newsletter, China, which is already the world’s largest gold producer, imported more than 209 metric tons of gold in the first ten months of 2010 alone. This compares with the estimated 45 metric tons it imported in all of 2009.

What’s more, it is clear that gold is being bought as an investment, rather than for jewellery. According to World Gold Council figures, Chinese retail demand for gold jumped 70 per cent between October 2009 and September 2010, but in the same period the demand for gold jewellery rose by a much more modest 8 per cent.

According to the Sprott letter, “There is a clear trend developing for Chinese investment in gold as a monetary asset, and China is buying so much gold for investment purposes that it now threatens to supersede India as the world’s largest gold consumer.”

The newsletter notes that total Chinese demand for gold in 2010 is expected to reach approximately 600 tonnes, just behind India’s 800 tonnes. This would mean that together the two countries would account for more than half of estimated world mine production of 2,652 tonnes in 2010.

The Chinese are also showing a voracious appetite for silver, with silver imports increasing fourfold in 2010 from the previous year. In 2005, the Chinese were exporters of silver, selling more than 100 million ounces on world markets. But by 2010, they were big buyers, importing more than 120 million ounces. This represents a huge swing in a market that in 2009 supplied a total of 889 million ounces.

At the same time, it’s also becoming easier for the Chinese to invest in gold.

The Sprott newsletter points out that Chinese citizens have only been able to purchase gold freely since the early 2000s, when the long-term monopoly of the Chinese central bank was abolished.

But last year, an initiative between the Industrial Commercial Bank of China – which is the world’s largest consumer bank, with about 212 million separate accounts – and the World Gold Council, set up a gold accumulation investment plan which made it even easier for investors in mainland China to accumulate gold. The new investment plan requires a minimum investment of either 200 renminbi ($US30.50) a month, or one gram of gold per day (worth about $US42).

The investing Chinese public has responded extremely enthusiastically. Since the plan was launched last April, one million accounts have been set up, which has already resulted in the purchase of 10 tonnes of gold.

Now, so far, the ICBC has only made the gold investment product available in some Chinese cities. Sprott Asset Management estimates that if the plan were expanded throughout ICBC’s network, and China’s next four largest banks launched similar plans, then this could result in an extra 300 tonnes of gold being bought each year, or more than 10 per cent of estimated 2010 global gold production.

It’s notoriously difficult to estimate future gold demand. However, there is a strong case that Chinese demand for gold as an inflation hedge will remain strong for as long as the Chinese authorities keep real interest rates artificially low.

And with the Chinese government worried that higher interest rates will put upward pressure on their exchange rate, and undermine the profitability of Chinese firms, it’s unlikely to take bold tightening steps any time soon.

According to Sprott Asset Management, “We believe Asian demand for physical gold and silver is akin to a tsunami. While precious metals prices have corrected on the paper exchanges, the inflation resurgence in Asia is quietly driving new, unforeseen levels of physical demand for the metals.

“While the world continues to float on a sea of paper, this massive wave of physical demand silently threatens tocrash into the physical gold and silver market, potentially wiping out tangible supply.”

 

[sinner]

A little speculative here, but I am long a small amount of paper gold here 1350 before Tokyo while the Chinese are still away on holiday.

Red dotted line is proposed as support. I see resistance as 1351 and 1358 which would need to be cleared soon for a stronger move higher else we will fall back to test support again.

View attachment 41259

A great move up in gold overnight, taking profit here before Tokyo opens at just under $15/oz...entries and exits annotated.



These sort of moves are highly speculative as stated, but sometimes they pay off and allow me to put the profits into actual gold or other hard assets.