Gold Price - Where is it heading?

[Magdoran]

Magdoran..
Just found the chart/commentary by Wavepicker, impressive.
First off, I am relatively new to the E/W principles and post charts mainly as an aid to improving myself in it, (can't change the counts etc mid trade when they are out there ).
I've estimated (hoping for) around the $650 level for the minor 5, before dropping back and starting the next impulsive push, but whatever transpires my stop will keep me on the right side of the trade.
Have tried working with the time dimension but have not really had much success with it, I take my hat off to you for fitting it in with the price projections.
Regards,
Kauri.

Hi Kauri,

Indeed, I see “time” sometimes as more important to setting up my exit and entry rules than price (although of course price is the key in terms of profit, and it is price action and the pattern that is central of course).

But in this case we’ll just have to see how the market pans out. There may be a long entry on one of the key dates… provided the pattern is not invalidated.


Regards



Magdoran

 

[Sean K]

Gold hit $638 almost before profit takers came in. The oldd story about China diversifying out of $US gave it a boost, then brought it back when stated they could move into a basket of commods and foreign currencies. This would make more sence, but certainly just lifting their reserves just a few % into gold will significantly effect the markets. Over the next few years China will have trillions in the bank.

Gold bounced very well from $620 now providing some short term support. I like this consolidation above this previous resistance line. Looking good for gold.

(ignoring EW count for the minute. Will be very interested to see how we fit the count to the final chart, whenever the 'final' chart is?)

 

[greggy]

I tend to agree with you. I hope that gold can reach new highs during the next four months or so. I'll only start to worry when everyone in the press begins predicting that gold will be going through the thousand dollar mark.

 

[Sean K]

I tend to agree with you. I hope that gold can reach new highs during the next four months or so. I'll only start to worry when everyone in the press begins predicting that gold will be going through the thousand dollar mark.

I think half the press already think the $1000 mark is possible. The other half say it will crash. :

I'm in the $1000 pack, based on US economy and geopolitics.

I can not put a time frame on this. I think that's futile, and embarrassing when it ultimately fails. Check Jemma's predictions months ago on where EXT was going. Funny reading.

 

[greggy]

I think half the press already think the $1000 mark is possible. The other half say it will crash. :

I'm in the $1000 pack, based on US economy and geopolitics.

Good morning Kennas,
I can not put a time frame on this. I think that's futile, and embarrassing when it ultimately fails. Check Jemma's predictions months ago on where EXT was going. Funny reading.

I hope you're right. I will just worry when everyone in the press agrees with the one thousand prediction. I must say that I laugh whenever I see the Storm's next gloomy prediction on gold or anything else that is making shareholders money. Maybe he's short on gold.

 

[Kauri]

(ignoring EW count for the minute. Will be very interested to see how we fit the count to the final chart, whenever the 'final' chart is?)

Ah, but that's the easy part that most people do, to be really usefull try doing it before the right hand side of the chart is complete..

whenever I see the Storm's next gloomy prediction on gold or anything else that is making shareholders money. May be he's short on gold.

Gold is not all he is short on....

 

[coyotte]

10 year log chart of spot

suppose it depends on if you take the upper trend line as the top channel or the spline ?

Cheers

 

[greggy]

Ah, but that's the easy part that most people do, to be really usefull try doing it before the right hand side of the chart is complete..



Gold is not all he is short on....

Good morning Kauri,
Liked the comment abouth the Storm....Very accurate indeed.

 

[Sean K]

For those that like Peter Grandich, this is a cracker of an article commenting on gold, oil, uranium, US economy, amongst other things.

Grandich Letter Special Alert: GOLD - Ready to Shine Again

By Peter Grandich
October 31, 2006

The power of accurate observation is commonly called cynicism by those who have not got it.” - George Bernard Shaw

There will be enough pundits commenting on what the U.S. election results mean, but IMHO, voting this year is really in the end picking your own poison. The results can only lead to more division at a time when the world no longer wishes it had an Uncle Sam. Rest assured the “talking heads” on Tout-TV (CNBC-TV) will spin the elections to satisfy the “Don’t Worry, Be Happy” crowd on Wall Street. But, like the Roman Empire, the beginning of the end of the United States’ reign as the #1 world power is well under way.

Economic Overview –

I’ve used one sentence to paint the picture I see in the U.S.: “Americans have been robbing Peter to pay Paul but Peter is tapped out.” Not a week or so goes by when I don’t meet another family that has been caught on the treadmill of keeping up with the Joneses on the false Madison Avenue/Wall Street tale that more money equals more happiness. These poor souls have been hit hard by engulfing their family in a sea of mounting debt. They’re watching their ATM machine (known as home) now flashing “See Branch Manager” thanks to the bursting of the real estate bubble.

Continues......

http://www.kitco.com/ind/grandich/nov062006.html

 

[Sean K]

Finding Value In Australia's Gold Sector
FN Arena News - November 14 2006

By Chris Shaw

Barclays Capital suggests technically the outlook for gold remains positive and the price of the metal is still likely to move higher. Trading guru Dennis Gartman of "The Gartman Report" is long and suggests weakness should be bought rather than strength sold, all of which looks positive for Australian gold stocks.

How positive? According to Gold Report Australia (GRA) the Australian listed gold sector is undervalued by as much as 50% at the larger end of the market and potentially as much as 100% at the smaller end, with a re-rating expected to start in the current quarter.

The GRA outlook is based on a view the gold price still has substantially further to run, as if the price can remain above US$618 per ounce it could potential set a new high by the end of the calendar year. This means a move above US$787 per ounce in little more than a month, something that would certainty bring renewed interest to the sector.

The move is unlikely to end there in the group's view, as it sees potential for the gold price to test US$1,000 per ounce if managed funds return to the gold market. This would be beneficial for margins for gold producers, resulting in higher earnings. The group also expects further corporate activity in the sector, which again is something that would attract interest from the trading end of the market.

So assuming gold has higher to go, where should investors look for the best value in the sector or the best bang for their buck? Austock Securities has come to the rescue by providing a summary of the sector, allowing for a comparison of the various gold stocks the broker covers.

A review of the list shows the broker rates Newcrest (NCM), Sino Gold (SGX), Oceana (OGD), Resolute (RSG) and Perseverance (PSV) as Buys, while Austindo (ARX) is a Speculative Buy. Lihir (LHG), Bendigo (BDG) and Tanami (TAM) are rated as Hold.

In terms of valuations, the broker estimates Bendigo is trading at the largest discount to valuation at 68%, though given the company's recent issues and the resulting negative sentiment this is balanced by its Hold rating.

Leaving aside Tanami, which is at the speculative end, Oceana is at a 54% discount to the broker's valuation of $1.64, Resolute at a 61% discount to its $3.88 valuation, Newcrest a 29% discount to its $32.88 valuation and Perseverance a 16% discount to its valuation of $0.56. Sino is the exception among the Buys, trading at a 35% premium to the broker's valuation of $4.04. In contrast, Lihir Gold is trading at a premium of almost 50% to the broker's valuation of $2.00.

Another valuation measure in the gold sector is how much the market is willing to pay for the company's reserves, so the broker has estimated the market capitalisation per ounce of reserves, which gives another insight into where the value lies.

The broker has based this analysis on forecast gold prices of US$625 per ounce in 2007, US$550 per ounce in 2008 and US$500 per ounce in 2009. Using this method Resolute and Oceana appear cheapest, the former's market cap/oz of reserves measure coming in at $95 and the latter at $99.

In contrast, Sino is on a market cap/oz of reserves measure of $354, while for Bendigo the measure is $2,921. Newcrest and Perseverance look reasonable on this measure, coming in at $132 and $149 respectively.

Given the difference between the broker's forecasts for the gold price and the current spot price the broker has also incorporated some valuation measures based on the current market price for gold of about US$629 per ounce, carrying this price forward for the next couple of years.

 

[Sean K]

Gold moment of short term truth. To hold above $620, or not?

Medium term direction could hinge on this.

 

[Freeballinginawetsuit]

Finding Value In Australia's Gold Sector
FN Arena News - November 14 2006

By Chris Shaw




In contrast, Sino is on a market cap/oz of reserves measure of $354, while for Bendigo the measure is $2,921. Newcrest and Perseverance look reasonable on this measure, coming in at $132 and $149 respectively.


Hmmm, that ones not right, sounds like a crab analyst to me!.

 

[Sean K]

Finding Value In Australia's Gold Sector
FN Arena News - November 14 2006

By Chris Shaw

In contrast, Sino is on a market cap/oz of reserves measure of $354, while for Bendigo the measure is $2,921. Newcrest and Perseverance look reasonable on this measure, coming in at $132 and $149 respectively.

Hmmm, that ones not right, sounds like a crab analyst to me!.

Seems unusual doesn't it. Is there a number too many in there?

Crab analyst?

 

[Freeballinginawetsuit]

Crab Analyst........He should join BDG'S Managagement. Thier Market Cap vs Total reserves is not as he has calculated .

 

[Magdoran]

I think half the press already think the $1000 mark is possible. The other half say it will crash. :

I'm in the $1000 pack, based on US economy and geopolitics.

I can not put a time frame on this. I think that's futile, and embarrassing when it ultimately fails. Check Jemma's predictions months ago on where EXT was going. Funny reading.

Hello Kennas,


How are you?

I do hope that you were not suggesting by implication that my use of time was futile too, with your comment above, were you? Certainly if you are not a time cycle based trader/investor trying to put a time frame is problematic, agreed.

However, several recent time based forecasts I have made to some ASF members privately have been accurate to the day (the discipline allows 1 trading day plus or minus - one was also right on the forecast price increment too).

The time points I have posted recently could be highs from here, or lows… or both highs, or both lows, or one high and one low… if the cycle is correct (which has been valid so far – but anything can happen in the market).

Based on the current pattern, I assumed a pull back, but it is quite possible that gold rallies into these dates, and they become resistance, as opposed to gold falling into these dates, and them becoming support. Why I was so confident the recent high would have a pull back was time and pattern based. The high was right on a key increment in time. Hence a high probability of resistance…

It is of course possible that pitch is so great that it screams through these dates, quite possible, but I’m certain that there is a cycle running through Gold which I have been tracking for some time now.


Regards


Magdoran

 

[Sean K]

Hello Kennas,

How are you?

I do hope that you were not suggesting by implication that my use of time was futile too, with your comment above, were you? Certainly if you are not a time cycle based trader/investor trying to put a time frame is problematic, agreed.

However, several recent time based forecasts I have made to some ASF members privately have been accurate to the day (the discipline allows 1 trading day plus or minus - one was also right on the forecast price increment too).

The time points I have posted recently could be highs from here, or lows… or both highs, or both lows, or one high and one low… if the cycle is correct (which has been valid so far – but anything can happen in the market).

Based on the current pattern, I assumed a pull back, but it is quite possible that gold rallies into these dates, and they become resistance, as opposed to gold falling into these dates, and them becoming support. Why I was so confident the recent high would have a pull back was time and pattern based. The high was right on a key increment in time. Hence a high probability of resistance…

It is of course possible that pitch is so great that it screams through these dates, quite possible, but I’m certain that there is a cycle running through Gold which I have been tracking for some time now.

Regards

Magdoran

Hi Mag, I'm good thanks!

How are you?

The above comments were really made in regard to particular people claiming 'this stock will go to 20 cents by Friday!!!' when it's sitting on 5 on Wednesday...

I must say I am a sceptic. It seems convenient for EW/time based practitioners to just use certain stock charts that do fit in to the theory but then ignore the rest. I would like to know what % of stocks actually do follow EW or cycles. I would hazzard a guess to say very few.

I would also like to compare ALL of Yogi's predictions to see what % actually make it? I hazzard a guess not many. I know Gann's a different game, and I'm not comparing it directly with wave theories, but I just raise that as another example of certain practitioners clinging on to the few examples that fit the profile and disregarding the multitute.

I'm still trying to fit the XAO into an EW count and it's impossible. This to me would tend to suggest that as the XAO is a summary of many stocks, and it can't fit, then it doesn't work.

So, I'm sticking to probabilities on basic charting for the minute. Until I see the light!

 

[Kauri]

I'm still trying to fit the XAO into an EW count and it's impossible. This to me would tend to suggest that as the XAO is a summary of many stocks, and it can't fit, then it doesn't work.

So, I'm sticking to probabilities on basic charting for the minute. Until I see the light!

Food for thought...

 

[Sean K]

Food for thought...

Thanks Kauri. You have managed to manipulate that count to the chart quite well. I mean really, get 10 EW practitioners in a room and you'll get 15 different opinions. (I stole that)

I am really WANTING to believe in EW, but I'm really struggling. I think it could be a very valuable tool to add to all the other analysis, but aaaahhhhh!

 

[Kauri]

I am really WANTING to believe in EW, but I'm really struggling. I think it could be a very valuable tool to add to all the other analysis, but aaaahhhhh!

Fair enough... by the way, what tools have you used in your charting package to try to apply E/W??

 

[Sean K]

Fair enough... by the way, what tools have you used in your charting package to try to apply E/W??

I don't have any. I just use the basic theory and massage it to the chart.