Gold Price - Where is it heading?

[Mr Z]

I don't really know Prechter at all Mr Z so can't comment sorry. $200 is a bit hopeful I would've thought, no doubt it will get there someday but life is short. Better to stick with targets likely to be hit in the next 12 months imo

OK... I will remember that you have target of $865 inside 12 months. We can discuss how well it went in a year.



Possibly a bit ambitious for the big correction, not sure I'd be betting below 1K, but first higher IMO.

 

[Logique]

Since the beginning of Sept, gold is losing the race with the $USD in the flight to safety. Technically, a return to trend in range 1500 - 1600 is no great surprise, but the $USD looks to have more in this upward appreciation, so gold will be under pressure.

 

[Uncle Festivus]

Looks like pixel got his $1580 support spike down, then good follow through, for now?



On a longer timespan, expect daily ranges of $50- $100 as systemic capitulation gathers pace? $1500 still needs to be tested?



The Kitco Gold Index is up and the USD price of gold is up even more:
This would definitely mean that gold has increased in value. It also means that the USD has weakened and so the degree of the gold value increase will be exaggerated when examined strictly in terms of the US Dollar. This is the exact scenario that we’ve witnessed over the span of the early years of the 21st century.

 

[Mr Z]

1. The USD/Gold correlation has been low recently, they very much rallied together for the first part of Sep.

2. The USD looks toppy here and now, some divergence has setup, its at resistance and about as overbought as it tends to get these days.

3. Gold has come back out of its 200DMA area like a scalded cat from oversold levels that have always produced rallies in recent history.

4. It is that time of year, gold always finds a way up into year end.

 

[Uncle Festivus]

Change the scale and it looks perfectly normal . Although if you believe in conspiracy theories then they will try to break it down technically too??



(It's far too chatty in here now - can we go back to when gold was going up $100 a week and no one posted )

 

[Mr Z]

LOL...

We have near a $100 tail on that last candle! Now that is volatility, signs of what is to come?

 

[Logique]

...(It's far too chatty in here now - can we go back to when gold was going up $100 a week and no one posted )

Alternatively you afficionados could PM each other with superior and self congratulatory messages, leaving the way clear for the lesser classes to have an opinion?

 

[Mr Z]

Is that the best you can contribute?

Who let the cats out? meow, meow :

 

[explod]

Alternatively you afficionados could PM each other with superior and self congratulatory messages, leaving the way clear for the lesser classes to have an opinion?

Dont you worry about that Logique, we will just keep plodding along.

Every strong reverse candle over the last 10 years just like the one today (and its a very good one) has signalled a bottom for the next upleg.

But you never know, the powers that be may just try to change that this time.

Chucks a good read today. http://www.dailypfennig.com/

 

[aclassic]

Alternatively you afficionados could PM each other with superior and self congratulatory messages, leaving the way clear for the lesser classes to have an opinion?

Hey Logique, I am a lesser newbie, and I really don't mind at all....quite the opposite.

 

[aclassic]

Gents,

With today's futures news:
"Among commodities, crude ....l, and gold for December delivery fell $45 to
$1594.80 per ounce."

Would you be buying now anywhere above that?

cheeers.

 

[explod]

Gents,

With today's futures news:
"Among commodities, crude ....l, and gold for December delivery fell $45 to
$1594.80 per ounce."

Would you be buying now anywhere above that?

cheeers.

Physical gold in the hand yes.

 

[aclassic]

Physical gold in the hand yes.

Hello there explod, yes tempting but I couldn't look past AYN at 8.8 just now....

cheers.

 

[Logique]

Dont you worry about that Logique, we will just keep plodding along. http://www.dailypfennig.com/

Fair enough Explod, but it does concern me that this thread was as bullish gold at $1900 earlier in Sept as it is now at $1620, when I think gold and silver longs ought seriously to be considering their position.

(My bolds - some good charts at the link too.)

https://encrypted.google.com/url?sa...sejsDg&usg=AFQjCNGm8-NASMoWeHGg5nAM0tAUB30AYg
US Dollar, Gold, Silver And Violent HUI Price Swings
By John Townsend on September 26, 2011

.....At this point I am convinced that the most recent 3 year cycle low [in the US Dollar Index] was achieved on May 4th, 2011. Following that date the dollar essentially consolidated sideways for 4 months and then began its rocket launch. The first strong day after concluding the consolidation phase capped the price of gold once and for all (September 6, 2011).

The evidence on the chart suggests that the rally in the US Dollar Index is hardly over and has a long ways to go. Conversely, I believe now that gold also has a long way to go – in the other direction, that is...

If you think that's bad, you should hear the guy on the price of silver, and the possibility of a deflationary spiral capturing the PMs. What's the point of all this - investors should keep an open mind, there's a diversity of opinion out there.

 

[Mr Z]

I seem to remember calling for a correction at $1900? Funny how people remember things!

FWIW this has triggered big physical buying in the US, not the normal response when gold and silver get a beating. Just look at the last months volatility, this doesn't look to me like it will play out as slowly as this size correction has in the past. This market just feels different now, like it has moved into a new phase.

I was checking out the option OI for December, there are some 16000 calls @ $3K ---> and you think we are bullish!

Deflationists have had gold wrong for a decade now, yet they still get traction albeit at higher and higher correction numbers. IMO we simply cannot have the sort deflation they are discussing with FIAT currencies. That little fact alters the dynamic totally in dollar terms, we move from deflation more to a stagflation outcome with rapidly expanding parts of the money supply playing off against rapidly contracting parts of the money supply (the credit arena.) That creates a market in which different assets are effected differently depending on the source of the money underpinning their markets. IMO it leads to exactly what you have seen in latter years, various credit episodes damaging markets and then liquidity injections reflating them against a backdrop of all life's essentials going up in price while discretionary items fall in price. It is basically a stagnant economy with M1 & M2 growing and M3 contracting. The Fed really wants to keep the effects of the lower Ms growing under control while it tries to get M3 growing again. So far the efforts have got M3 shrinking less fast thus moderating the deflation portion of the equation while the lower Ms are growing too fast for most peoples budgets. It is a messy picture which is why I guess there is still so much debate around it with all these people feeling up different parts of the elephant and declaring their absolute faith in their diagnosis.

All I can nervously say is I don't think this is all that simple and cannot be described in terms of outright deflation or outright inflation, the net effects of this mess, at any given time are going to vary very much depending on the current state of balance between the various forces. We just saw a rebalancing exercise, just in time to get commodities lower for another round of global money creation ---> things that make you go hmmmmmmmmm. Nice timing eh? Watch this space... the first part of 2012 could be very interesting with much higher prices than the market is currently believing possible.

 

[explod]

Fair enough Explod, but it does concern me that this thread was as bullish gold at $1900 earlier in Sept as it is now at $1620, when I think gold and silver longs ought seriously to be considering their position.

(My bolds - some good charts at the link too.)

If you think that's bad, you should hear the guy on the price of silver, and the possibility of a deflationary spiral capturing the PMs. What's the point of all this - investors should keep an open mind, there's a diversity of opinion out there.

The wave idea (Elliot et al) are good in clarifying the big longer term moves but I find they do no more than that. At the end of the day the changes are made by fundamental events and moods. Seasonal, yearly or cyclical demand is more useful perhaps.

On Tounsend's US$ index we see a decline of about 25% for the period commencing 2003. However in the same time period we see that gold has risen 400%. Of course many will say too far and too fast. But many more are saying that the dollar printing has gone too far and too fast to be maintained, but hang on they mustit seems. Printing dollars for bonds this week and who knows for whom they will need to increase the pressess speed for next week. I know I am accused of oversimplifying, but how else can one really get around the magnitude and compexity of this growing financial mayhem.

Contrary to helecopter Ben's idea, gold is money and it is merely holding its true value against the deflating price of the fiat paper.

Tounsend's monthly gold chart is almost the same as that posted by Uncle Festivus yesterday. It clearly shows that the uptrend is intact. We have just hit the third upward spike since 06 and the previous two corrected down by close to 50%. This latest move has also now corrected from its beginning by about 50%. I see this as the steps and stairs in the wild wall of worry and it paints the picture on a chart of the overall fight between the believers and the non-believers. In reality, the US$ is being diluted by the printing presses and gold in physical form is being accumulated by those in fear of losing their wealth. Too simple perhaps, but that is what is occurring.

On Tounsend's overall article, his estimates and predictions may well play out. However, apart from the lines and curves, he offers no real fundamental reasons for why these moves may take place. He does not really know and nor do I or anyone else. We can only follow the trend, what the market place has told us and try to understand the fundamental reasons for why it is occurring. And on looking back over the last 80 years most would argue that the financial situation at the moment is so bad that it is new ground to us all and what starts to play out soon is not predictable in any sense. However an ounce of gold in the hand cannot be printed or created in a laboratory, it is an ounce of something that has 6000 years of sentiment behind it, it is rare and becoming more so, and there will always, till the food runs out I suppose, someone else wanting to buy or barter for it.

On the current outlook, the gold price will keep going up. And this is not directed at you Logique as you believe the same or you would not be here discussing the two's and fro's. And we will certainly be having some bigger ones on that score from now on I believe.

We live in the most interesting and terrifying times IMVHO.

 

[sinner]

Fair enough Explod, but it does concern me that this thread was as bullish gold at $1900 earlier in Sept as it is now at $1620, when I think gold and silver longs ought seriously to be considering their position.

(My bolds - some good charts at the link too.)

If you think that's bad, you should hear the guy on the price of silver, and the possibility of a deflationary spiral capturing the PMs. What's the point of all this - investors should keep an open mind, there's a diversity of opinion out there.

Gee from your portrayal I thought it was gonna be a real metals bear article, but the guy says "if silver makes it to $20, it'll be the buy of a lifetime." lol...that raises a bunch of obvious questions like "if it is the buy of a lifetime at $20, then what's $25? A rounding error?" I mean...if it's the buy of a lifetime, what's $5 per unit?

Must be a real silver bull to be willing to buy a downtrend.

 

[explod]

Yesterday an entire 12 months production of silver was traded and a lot of gold.

What do other ASR's think will happen when this paper trading collapses in on itself and how long do you think it will last?

The facts of the whole thing in my view is an unbeilvable joke and think at times I must be dreaming.

Now those last eight words ought to hit the old Plod in the guts, but who cares.

 

[Billyb]

Tounsend's monthly gold chart is almost the same as that posted by Uncle Festivus yesterday. It clearly shows that the uptrend is intact.

Exactly right totally agree. The chart doesn't lie. It's still above it's trendline so it's premature to say a down trend has begun.

We have seen huge volume on the last few days on the CME, yesterday was huge volume accompanied by a close at the high (and rejecting a break of the trend line) suggesting that this could perhaps mark the bottom for some time. Would not be surprised to see gold stuck in the 1600 - $1750 range for some time now.

 

[explod]

Well from a low of 1540 just 25 hours ago its almost back to 1700 now.