Both Gold and Silver remain in consolidation patterns with tightening ranges as speculative HOT money flows which are exiting are being met by value-based buying and accumulation by stronger hands.
The loss of speculative interest in the precious metals over the last few months can be seen by the steady decline in overall open interest (the number of contracts open). Generally speaking, whenever speculators are interested in establishing positions in a particular market, the open interest will rise. When they are not, the open interest will fall.
....once again demonstrates is that the driver of today's markets remains the gigantic hedge funds and the rest of the hot money crowd. Once they train their guns on a market and come in on the long side in size, it will move higher. Whenever they lose interest, it will drift lower and if they exit their longs in large numbers, it will move lower quite sharply unless it is countered by extremely large buying of commercial interests and other deep pocketed spectulative forces.
...the following chart of Soybeans and note the vast difference in the open interest and by consequence, the VAST DIFFERENCE in its price chart.
Is the Gold Rush Over?
CNBCBy Sharon Epperson | CNBC – 18 hours ago
Everybody knows the only person doing real analysis of the U.S Mint gold data is Dr. Constantin Gurdgiev
http://trueeconomics.blogspot.ie/2012/07/172012-h1-2012-us-mint-data-demand-for.html
Richard Fisher, president of the Dallas Federal Reserve and a consistent hawk on monetary policy, said the real problem with the economy, and the stubbornly high jobless rate, is Congress's lack of action on fiscal policy.
Fisher said he is not currently worried about rising prices, at least in the short term, but he has concerns about the ability to keep inflation near the Fed's 2 percent target rate once the economy picks up.
The Fed has publicly mapping out an exit plan that calls for raising rates and eventually sell securities acquired in its effort to push down long-term rates.
Fisher, however, was skeptical about the plan's effectiveness, especially if the Fed keeps adding to its balance sheet with more bond purchases.
"It's easy to say, but it may be more difficult to do," he said.
Even so, Fisher is optimistic about the potential for a sudden surge in growth, given that many companies have boosted productivity and strengthened their balance sheets since the financial crisis.
"I think the U.S. is ready to rock and roll," Fisher said, adding, "there is a throttling mechanism which is called fiscal policy."
Even if Congress acts to avert the so-called fiscal cliff of tax increases and spending cuts set to take place at the end of the year, those fixes will do nothing to boost hiring. Companies simply cannot take on new employees if they do not know what their taxes will be, Fisher said.
"If our fiscal guys could only get their act together," he said, "we could unleash enormous growth in this country."
I expect the 5th wave to be about 61% of the amplitude of wave 3, which ran from 681 to 1923, or about $1242 per ounce. If we were to apply that math, we come up with $767 per ounce of rally off the wave 4 lows. $1520 plus $767 puts us at $2287 per ounce, or roughly $2300 an ounce low end target.
In summary, crowd behavior is crucial to the next coming movement in GOLD and it could be a sharp rally that catches many off guard, much like the downdraft last fall did the same to the Bulls. Be prepared to go long GOLD once over $1630 per ounce and buy dips along the way up to $2300 into the summer of 2013.
Gold has been caught in a very tight range since the 16% rally at the start of the year and the subsequent sharp sell off in late February and March. Often when prices in any asset become compressed, they invariably break out of the range emphatically. With gold, the fundamentals remain supportive which suggests that gold should break out from its range to the upside.
Furthermore, gold is strongly underperforming relative to the rule of thumb provided by Gibson’s Paradox.
and another one.......
http://www.hindecapital.com/blog/gold-poised-for-upside-breakout-of-current-range/
Gold Poised for Upside Breakout of Current Range
August 07th, by Simon White (Head of Risk Management)
excerpts
View attachment 48534
View attachment 48535
That's a great link Joules. Thanks.
Now I'll probably spend the rest of the day looking at the very long term (30+y) daily XAU/JPY chart and as much data on real Japanese rates as I can pull (I'm guessing 1950ish?).
Why? What are you doing - investing or trading? What more confirmation do you need? Just curious......what is your strategy?
Even more short $AU/$USD & long AU-AU
lol. Here we go again
Why? Because I am interested in monetary aggregates and the hypothesis people come up with about them and their effect on gold. Like your one, which unlike you, I've actually done research on instead of just spouting what I heard on GATA.
What am I doing? Same as I've always done.
What more confirmation do I need? What the f*** are you talking about? As a net productive member of society, the price of gold really doesn't concern me when I want to buy some.
My strategy is to lol every time you post.
"the USD is going to collapse but I am long USD against the currency of a major gold producing country and also long AU-AU so the only thing I'll sell gold for is uh...gold"
Good strategy bros, almost as good as your AAPL shorting strategy
Walter Murphy @waltergmurphy
Daily Coppock Curve for $DXY on verge of breaking to a multi-month low. It suggests an intermediate -- or larger -- reversal for the dollar.
Strong correlation between rising incomes in China and India and the gold price from 2000 to 2011
The state legislature of South Carolina is currently considering a measure (H 4128) that if enacted would make gold and silver legal tender in the Palmetto State. Last week, the bill sponsored by State Representative Rick Quinn (R-Lexington) is similar to an earlier bill offered by State Representative Mike Pitts (R-Laurens). Quinn’s bill passed a House committee and is scheduled for debate by the full body of the House this week.
Although the current iteration of the bill is less robust than the previous version authored by Pitts, if passed South Carolina would become the second state after Utah to enact such legislation.
The bill on the calendar in Columbia is sponsored by Representative Rick Quinn and would allow gold and silver to be used as long as businesses agree to accept them in payment.
QE’s arrival is not certain, however. Economists surveyed by Reuters this month put the odds at about three in five. Even if it does materialize, its impact on gold may be muted.
“We’re of the view that we’re getting close to game over for gold,” RBS analyst Nikos Kavalis said. “From there (a QE related rally) onwards, I am struggling to see where the kind of volumes of investment that we got in 2009 and 2010 are going to come from.”
“Gold did rise a lot in the boom years, not just based on QE. In those days there was de-hedging, there was a shift from central bank sales to purchases, there was an increase in Chinese physical demand and a recovery in Indian demand,” Mitsubishi analyst Matthew Turner said.
“De-hedging is no longer an issue. Central bank purchases are continuing, but it’s not a question of continuing, they have to increase. Indian demand has been hit by high prices and government action, Chinese demand is quite strong, but it has limits. Investment demand is probably the real bullish case.”
“You do need to have fresh money coming in day in, day out,” GFMS research director Philip Newman said. “You need to have continual inflows, not just one or two institutional players such as pension funds to make that decision to come in.”
Confidence in gold’s ability to go up and up has been shaken by its poor performance this year, despite the still elevated levels of risk aversion that last year drove it higher.
In fact, so rapid has been the decline in gold demand since last year's record price in September that if there is a surprise, it's that the price has held up as well as it has
For gold to resume its upward trend, a few things will have to happen, and while these are possible, they are perhaps less likely now than they were a few months ago.
The first is for the European sovereign debt crisis to ramp up again, causing a flight to the safety of gold.
The next is for major central banks, and the U.S. Federal Reserve in particular, to launch further quantitative easing, thereby debasing the value of paper currencies.
And the third, and to my mind most important, is that physical demand in India and China will have to increase.
http://graphics.thomsonreuters.com/12/08/GLB_GLDDD0812_CC.gifGraphic of gold demand vs. gold price:
At 157.5 metric tons, gold buying among central banks came in at its highest quarterly level since the sector became a net buyer of the precious metal in the second quarter of 2009, data in the organization's quarterly Gold Demand Trends report show.
The official sector--central banks and other official institutions--had, by comparison, bought 66.2 tons in the second quarter of 2011.
Central bank gold purchases were a bright spot in overall gold demand last quarter, which dropped 7% globally, driven primarily by a 38% drop in consumer demand for gold in India.
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