Gold Price - Where is it heading?

[Mr Z]

That's right, I forgot.

Well, you know, when you can get a good rate of return over inflation safely why would you own gold!

Once the safety factor and the return diminishes then people get nervous and stock up a little.

Inflation, deflation, it doesn't actually matter much it is the integrity of the system and the underlying health of the economy that underwrite a gold bull.

 

[CanOz]

Wow, you gold bugs are a touchy bunch

Armchair economists and food hoarding conspiracy theorists as well....oh no!!!

Just kidding folks...i'll go back to short term trading and listen to your banter,only. Sorry if i ruffled some feathers...

CanOz

 

[CanOz]

Beautiful trend day in the O/N session, putting on $50!

Surprised TH hasn't had a go at it yet!

CanOz

 

[Mr Z]

Wow, you gold bugs are a touchy bunch

Armchair economists and food hoarding conspiracy theorists as well....oh no!!!

Just kidding folks...i'll go back to short term trading and listen to your banter,only. Sorry if i ruffled some feathers...

CanOz

Dats it! Cleatus is gunna come vist wid ya boy!

 

[Mr Z]

I wonder how much of this is going on...

http://www.alcyone.com.au/images/alcyone---aishooghip.pdf

 

[CanOz]

We could see 1404.3 shortly,if it fails we could see GOLD return to test the lows...if we can find initiative buyers then we could accelerate through higher as shorts run for cover...1395 now...

CanOz

 

[CanOz]

Somebody likes Gold at this level...

 

[CanOz]

Gold tested 1402 in O/N trading, we're now headed lower and i reckon if we break 75 then we could head for the low...

 

[skyQuake]

Gold tested 1402 in O/N trading, we're now headed lower and i reckon if we break 75 then we could head for the low...

Its spent so long stuck between 1363 and 1402, then in the Asian session we crack through to the downside, triggering stops, BUT theres no follow thru. The retest of 1402 obviously saw weak hands bail, but i would be really surprised if we go straight back down again.

imo can pick a low around here or US open in 10min.

Anyways, just food for thought.

See attached:

 

[CanOz]

Its spent so long stuck between 1363 and 1402, then in the Asian session we crack through to the downside, triggering stops, BUT theres no follow thru. The retest of 1402 obviously saw weak hands bail, but i would be really surprised if we go straight back down again.

imo can pick a low around here or US open in 10min.

Anyways, just food for thought.

See attached:
View attachment 51831

Yeah i agree, that's why i specified 76.6 (75), if it pushes below there then i would expect the low to be tested again...although it is an excess low...so perhaps at least the spike high at 46.2

CanOz

 

[skyQuake]

Yeah i agree, that's why i specified 76.6 (75), if it pushes below there then i would expect the low to be tested again...although it is an excess low...so perhaps at least the spike high at 46.2

CanOz

Why 75? I have a line in the sand at 82 (50% of channel)
thnx

 

[tinhat]

The 24 hour chart seems to be following the same script these past three days - down during NYMX to recover during Hong Kong and London.

 

[Whiskers]

Probably range to abt 1410ish before the final led down... test upper 4 hourly bollinger band and bollinger squeeze which coincides with EW 'c' in next couple of days.

I'll maybe post some charts later.

Where have all the EWers gone?

 

[CanOz]

​

Why 75? I have a line in the sand at 82 (50% of channel)
thnx

76 was the area where the highest volumes were traded overnight...that's all.

Bullish above 1428

Let's see what tomorrow brings, will post a chart or two in the morning as well.

CanOz

 

[Mr Z]

Options expiry next Thursday, be watchful.

 

[nulla nulla]

​

76 was the area where the highest volumes were traded overnight...that's all.

Bullish above 1428

Let's see what tomorrow brings, will post a chart or two in the morning as well.

CanOz

Hi CanOz

Three questions:

1. Where do you source your charts?
2. Swinging between US$1,360.00 per ounce and US$1,402.00 per ounce, is this to tight a spread to trade? and
3. Is any one in the forum trading gold atm?

Currently US$1,388.00 per ounce.

 

[craft]

What do you gold folk make of this research from GMO?

Last year we argued that relying on conventional wisdom to analyze gold price movements is naive. Conventional wisdom would lead us to believe that gold price movements are driven solely by the actions of developed markets’ central banks. We believe this view is misinformed and that the available data does not support it.

In that paper, we argued instead that the key driver of the significant rise in gold prices since 2000 has been the emerging markets consumer. Between 2000 and 2010, consumers in emerging markets accounted for 79% of total demand. Conversely, ETF purchases accounted for only 7.5% of demand and central banks in aggregate were net sellers.

This expanded framework demonstrates that gold is also positively exposed to pro-cyclical factors in the emerging markets. Moreover, given the cyclical challenges gold’s key consumers may be facing, the value of gold as insurance should be questioned.

https://www.gmo.com/Asia-Pacific/CMSAttachmentDownload.aspx?target=JUBRxi51IIAs8wlv%2fbfj2VVyryvI2XYb6on3to6ZUEG%2bop1M7ainSHY2Fli%2bgOFdGKOukKZ6MwvCgjyc1AQECM4co%2fKso7pTqY%2bRoRTz4vc%3d

 

[Mr Z]

I just scanned it quickly, will try and read later. On first blush it seemed to over look Chinese official demand which is soaking up all domestic production plus some. If we are to assume that the Chinese want their currency to be in contention for reserve status at some point (granted way of in the distance for now) they will want to have gold reserves that rival the first world economies. The evidence appears to be in the process of doing this as stealthily as they can, they are not big on announcing official purchases until after the fact, they seem to hold back until they really have to announce the obvious then reserves leap by a healthy chunk.When you work out what they need to get to first world reserve standards it is a gobsmacking amount at todays prices, and it dwarfs private demand.



The other thing is the assumption that it will remain a cyclical asset in the emerging economies, really it is more a counter cyclical asset in the first world, at some point this pattern should emerge in the developing countries so I don't really know how valid it is to tie Chinese recession with soft gold.

You also have to consider that China doesn't have to lay down and accept recession, they have a 40 year plus "kick the can" play book to follow, written by the Americans, they have the resources and a higher degree of direct control. This new regime will do all it can to foster growth at whatever expense because the alternate is a likely regime change that I for one don't think they are ready or willing to face just yet. Knowing the Chinese there is a plan.... as the saying goes the Chinese play chess while the west plays checkers, far more tactical and long term. To be honest I don't think much western analysis really understands China.

India is more of an open book, gold really is money there, why they think that existing wealth in India will not use gold for protection if needs be is beyond me. Yeah sure maybe the smalls buyer will not have the extra resources to save money in the form of gold, they no doubt will become net sellers, but there is big money in that country as well.... so.... Bottom line is I'd not be willing to bet that unfolds as they predict, maybe but... past performance etc the world is a different place this decade... just sayin!

 

[Mr Z]

http://www.bloomberg.com/video/gold...e-bursting-norman-Y5aCj~6wRfqi2PNVJlyz8Q.html

http://www.bloomberg.com/video/cftc...oves-chilton-says-rOV~19vGRN2g7HM2UJTgAQ.html

"Massive Passives" sounds like some elicit under the counter DVD.

LOL... yet it gets better... we are at a "dysfunction junction" with "analysis paralysis" !

 

[craft]

I just scanned it quickly, will try and read later. On first blush it seemed to over look Chinese official demand which is soaking up all domestic production plus some. If we are to assume that the Chinese want their currency to be in contention for reserve status at some point (granted way of in the distance for now) they will want to have gold reserves that rival the first world economies. The evidence appears to be in the process of doing this as stealthily as they can, they are not big on announcing official purchases until after the fact, they seem to hold back until they really have to announce the obvious then reserves leap by a healthy chunk.When you work out what they need to get to first world reserve standards it is a gobsmacking amount at todays prices, and it dwarfs private demand.



The other thing is the assumption that it will remain a cyclical asset in the emerging economies, really it is more a counter cyclical asset in the first world, at some point this pattern should emerge in the developing countries so I don't really know how valid it is to tie Chinese recession with soft gold.

You also have to consider that China doesn't have to lay down and accept recession, they have a 40 year plus "kick the can" play book to follow, written by the Americans, they have the resources and a higher degree of direct control. This new regime will do all it can to foster growth at whatever expense because the alternate is a likely regime change that I for one don't think they are ready or willing to face just yet. Knowing the Chinese there is a plan.... as the saying goes the Chinese play chess while the west plays checkers, far more tactical and long term. To be honest I don't think much western analysis really understands China.

India is more of an open book, gold really is money there, why they think that existing wealth in India will not use gold for protection if needs be is beyond me. Yeah sure maybe the smalls buyer will not have the extra resources to save money in the form of gold, they no doubt will become net sellers, but there is big money in that country as well.... so.... Bottom line is I'd not be willing to bet that unfolds as they predict, maybe but... past performance etc the world is a different place this decade... just sayin!

Thanks for your response Mr Z

This is the aggregate demand chart from their first paper



I think you are saying that the counterbalance to their argument is that the demand distribution has/will change significantly since 2000-2010 in such a way that any reduction in the emerging Asian consumer will be soaked up elsewhere – ie China Central Bank. And also that emerging Asian consumer will stay robust in the face of economic head winds or perhaps a bit of both.


Personally I suspect the recent downturn is basically a rational reaction to fears over the prospects of Emerging Asian economies and hence gold consumption – but that is just soooo boring in contrast to 99% of the commentary.