Gold Price - Where is it heading?

[Bintang]

.......... Its never just natural price action that happens in other markets .....

You are absolutely right TH. I was starting to get a bit carried away myself by all the conspiracy theory crap until I saw your chart showing all that natural price action from start to finish. And to reinforce my new found wisdom I decided to take a look at some of those other markets guided by this piece from Bloomberg [bold emphasis is mine]:

Commodities Join Global Stocks Falling in Week as Gold Drops 7%
By Whitney Kisling & Debarati Roy - Apr 20, 2013 7:28 AM GMT+0700
http://www.bloomberg.com/news/2013-...-stocks-falling-in-week-as-gold-drops-7-.html

Commodities Retreat
The S&P GSCI Index fell to the lowest level since July during the week, led by silver, gold, lead and copper amid signs of surplus in the commodities and concern that China’s economy will slow. Silver, down 24 percent, is the worst performer this year. Gold slid 13 percent over April 12 and April 15, the biggest two-day retreat since 1980. Both of the precious metals entered a bear market this month joining sugar, soybeans and coffee.
Commodities are on the brink of a great rotation in price performance and market leadership, Barclays Plc said in a report on April 19. Gold and silver will be among the weakest over the next few years, according to the London-based bank.
“Excess supply is the biggest issue so this was a necessary correction like we saw in gold,”Michael Strauss, who helps oversee about $25 billion of assets as chief investment strategist at Commonfund Group in Wilton, Connecticut, said in a telephone interview. “It will take a strong economic cycle to push prices higher.”

So it all make sense now. Gold being just another commodity has dropped in price like sugar, soybeans and coffee which are in their own bear markets due to excess supply. And below are some price charts for comparison:
I mean it's just so obvious now. Even a kid with kindergarten level pattern recognition skills can see the incredible similarities in the natural price action between these charts.
I'm so convinced that I need to quit blethering on here and get myself down to the supermarket before they all run out of sugar, soybeans and coffee. After all there have recently been big queues at the gold bullion dealers because people are taking advantage of the low bear market prices in gold and silver to stock up. And if this can happen to commodities like gold and silver I bet it's also going to happen to commodities like sugar, soybeans and coffee. I might also drop into Starbucks on the way and see how big the queue is there. I mean this natural price action observation is just brilliant. It explains everything.

 

[Uncle Festivus]

Some reading for you - here.

In fact, however, a lower gold price is making the problem more intractable, not less. The Fed is diving from the frying pan into the fire. This is the point missed by almost all observers and market analysts. They ignore the underlying flight into physical gold that continues unabated, in spite of (or, better still, because of) the panic in the paper gold market. The Fed’s intervention in bankrolling short interest is going to back-fire, for the following simple reason. The Fed’s strategy is inherently contradictory. A lower price for paper gold makes it easier, not harder, to demand delivery on maturing futures contracts.

(Note: the delivery process at the Comex is not free and efficient. The exchange can and does set redemption limits and other special situations without having to declare force majeure. A minor point but will tend to make one look elsewhere for shortages first. And if in fact there is a control fraud in price setting and the futures markets are the locus, then we would anticipate that the data coming from such a private source would be increasingly less reliable. - Jesse)

The more paper gold Bernanke sells, the lower the cost of acquiring physical gold in exchange for paper gold becomes. The price of the nearby futures contract will drop to hitherto unimaginable depths, relative to the cash price, making backwardation worse, not better. Ultimately this will make backwardation irreversible. Welcome to the world of permanent gold backwardation.

If Bernanke thought that his attacks on the gold price would stem deflation, well, his efforts were counter-productive, to put it mildly. They have, in fact, made the flight into physical gold accelerate. Permanent backwardation of gold, and its concomitant, the re-invention of barter – the ultimate in deflation – will be the result.

Anyone else who is interested in trading. Have a look at the set up and see what happens with all markest after the china GDP data on Monday. Then its very easy to see why PM's took it in the neck and equities quickly rebound.

Which rebound are you referring to?

 

[nulla nulla]

You are absolutely right TH. I was starting to get a bit carried away myself by all the conspiracy theory crap until I saw your chart showing all that natural price action from start to finish. And to reinforce my new found wisdom I decided to take a look at some of those other markets guided by this piece from Bloomberg ..........."The S&P GSCI Index fell to the lowest level since July during the week, led by silver, gold, lead and copper amid signs of surplus in the commodities and concern that China’s economy will slow. Silver, down 24 percent, is the worst performer this year. Gold slid 13 percent over April 12 and April 15, the biggest two-day retreat since 1980. Both of the precious metals entered a bear market this month joining sugar, soybeans and coffee.
Commodities are on the brink of a great rotation in price performance and market leadership.........Excess supply is the biggest issue so this was a necessary correction like we saw in gold...... “It will take a strong economic cycle to push prices higher.”

So it all make sense now. Gold being just another commodity has dropped in price like sugar, soybeans and coffee which are in their own bear markets due to excess supply..........I'm so convinced that I need to quit blethering on here and get myself down to the supermarket before they all run out of sugar, soybeans and coffee. After all there have recently been big queues at the gold bullion dealers because people are taking advantage of the low bear market prices in gold and silver to stock up. And if this can happen to commodities like gold and silver I bet it's also going to happen to commodities like sugar, soybeans and coffee. I might also drop into Starbucks on the way and see how big the queue is there. I mean this natural price action observation is just brilliant. It explains everything.

But daddy, we don't like soy beans...

Curious though, if the price of all the comodities are dropping due to oversupply, why is physical gold in short supply. Slightly contradictory?

 

[Mr Z]

If you guys need to justify the smack down in gold after looking at this chart as manipulation there aint anything I can say to help you.

So tell me how a chart actually tells you the motivation of the participants? I do this for a living, have done successfully for over a decade, with all due respect I don't really need your help. Now I fully accept that markets move as they do, my constant line to the goldbug community is "learn to live with it, when it happens" and "a good deal of this is natural market action". Naturally they hate me for that ... Anywhoooo by the same token if you look closely at the arguments from the "manipulation crowd" you can see that what they are talking about is entirely possible and indeed when you fully appreciate golds role in the system the means suddenly acquires motive and indeed starts to look probable. Do I beleive it is all manipulation all the time as many goldbugs have it? No, however when you get your head around the dynamics of it you realise that it doesn't take much to train the pack of Financial Pavlov's Dogs to behave in a certain fashion when you ring the bell. I could go on.... but I know you have probably stopped reading, are certainly not listening and have not got an open mind on the subject. In some respects I can't say I blame you, goldbugs can be their own worst enemy in the way that they put forward their case.

I was going to post a long rebuttal of that crap blog post someone linked to with their "proof" of bots taking out Gold longs but it would of been a waste of time.

That is tantamount to saying that you can't, not a great tactic on a forum! I have not read Chris's article, he is quite a smart guy. You called bull**** on it so really to retain credibility you need to give at least a basic explanation. If you do I might even go read it

We all know Gold only breaks support and takes out the weak leveraged dreamers because of the evil manipulators who run the world.......... Its never just natural price action that happens in other markets... :1zhelp:

What I know is it is never that simple one way or the other, perhaps you'd be better served laying off the sarcasm and speaking about what it is you think you know.

Anyone else who is interested in trading. Have a look at the set up and see what happens with all markest after the china GDP data on Monday. Then its very easy to see why PM's took it in the neck and equities quickly rebound.

Hmmmmmm.... but, Gold is not just another commodity, the metal and the market have quite distinct characteristics.

Can you venture an opinion as to why on a busy day gold trades around 70 times global annual production in a day while the likes of WTIC trades 1 times global annual production.

Could you also venture and opinion as to why the ownership of the short side of the gold contract is very often concentrated in the hands of less than four bullion banks.

I am open to hearing any valid opinion and I will also do you the courtesy of not lumping you in with the small spec's, you know the idiots that are almost a perfect contra indicator, if you will refrain from lumping me in with the goldbugs.

TH, there are very many intelligent people that believe that all is not well in these markets. They are spending good money trying to prove it in the US courts, even prominent officials in the CFTC have come out and said they feel something is wrong here yet they have not got the resources to prove it in a court of law. Intent is difficult to prove to the satisfaction of a court of law, unfortunately the data available only supports "chronic and repeated suspicious coincidence" and doesn't prove intent

You insult a lot of people with your dismissive "it is because it is damn obvious to me and I can't be arsed to explain it to you idiots" approach. I'd venture a guess that you have never really delved into it.

Cheers
Z

 

[Mr Z]

But daddy, we don't like soy beans...

Curious though, if the price of all the comodities are dropping due to oversupply, why is physical gold in short supply. Slightly contradictory?

It is a supply chain issue, investment demand for the small gold and silver product swings around more wildly than for most all other "commodities". It is not a metal shortage per say, it will probably always be that way, nobody will gear up to supply peak demand because it falls away as fast as it appears.

However physical demand is off the Richter scale at the moment, the dealers I talk too say they have not seen this level of demand since the low before the parabolic spike in the 70's bull market.

Take that for what it is worth.... these guys buy major peaks and troughs hard, this ain't a peak and they quite reliably get it wrong and right in the respective cases.

 

[Uncle Festivus]

Not sure if this has any relevance?

 

[Mr Z]

I wish I had someone to buy all my crap assets @ costs The last car was a lemon, do you think the Fed will have it?

 

[cynic]

I wish I had someone to buy all my crap assets @ costs The last car was a lemon, do you think the Fed will have it?

Well that depends!

Are you too big to be allowed to fail?

 

[Trembling Hand]

Bintang maybe this will help you, Ever seen this pattern before,



Uncle F the point I was making that everything got hit after the China GDP data. Most things rebounded intraday or flopped around like it usually does. But PMs entered an area where there was YEARS of longs stops who were clearly leveraged and so it entered into a cascading sell down as more and more stops got hit. Equities and other commods were not so weak.


Mr Z that article showing a few grabs of the Time & Sales to "prove" that it was a HFT Bot manipulating the price is hardly worth a reply. Especially on a Sunday. But really the shame is punters believe anything and anyone that sounds like they are a bit more knowledgeable than themselves. HFT bot are always present in our markets - all of them. Thats not the reason for moves, especially the recent one. There almost certainly was a bot Stuffing the ask but there were not butter quotes (melt as soon as you apply heat) They were people doing serious business. "GET ME THE F OUT OF HEAR". Type of action.



Dudes I just don't know why you are so upset with GOLD. Its a friggin bull market that been going on for 13 years. If there is manipulation its pretty Sh!te. It will get to 3000 one day its just dumb trading and use of your money, IMO, to cry that its not at $10,000 and we are all looking for a dry cave to live in.

But Just look at the chart. The GOLD chart utterly STINKS! Maybe that is your proof of the manipulation I personally don't care. Its just poor trading and investing to be taking heat on something thats not at the mo, going in your favour.

Frankly I'll leave you all to it.

 

[Mr Z]

Well that depends!

Are you too big to be allowed to fail?

Nope, failure is part and parcel of my success! Errrrrr and that is a good thing.... I think?!?

I wonder what lessons a "big failure" actually learns when they are bailed? Do more of the same, it works? If in trouble lever yourself up to the point that they have to rescue you? I wonder what all this chit translates to in "big bank exec land"? I can't see that is good for any system long term to short circuit the feedback mechanism. Can we say "moral hazard" kiddies? Certainly words that confuse most of the street.

 

[Bintang]

Bintang maybe this will help you, Ever seen this pattern before,

Thanks for your concern TH but your previous post about natural price action was all the help I needed.

 

[Mr Z]

Dudes I just don't know why you are so upset with GOLD. Its a friggin bull market that been going on for 13 years. If there is manipulation its pretty Sh!te.

Manipulation is not the same a complete control, the motive and objectives are different, if you bother to look into why you can profit from it. Who is upset? This is a great opportunity!

It will get to 3000 one day its just dumb trading and use of your money, IMO, to cry that its not at $10,000 and we are all looking for a dry cave to live in.

You just can't say that, all depends on how it unfolds and how you play it..... JEEEEEZ Louise!

But Just look at the chart. The GOLD chart utterly STINKS!

LOL, it always looks like that at the point of greatest opportuntiy, we are acustome to

Maybe that is your proof of the manipulation I personally don't care.

No it is just a chart... it is just what happened, yes we can see you don't care. So why bother with it then?

Its just poor trading and investing to be taking heat on something thats not at the mo, going in your favour.

What would you know about investing? You seem to do FA research and are flat at the end of the day/week? Value buyers would strongly disagree and often quite happily average into an investment that is well below what they consider good value despite short term moves against them.

Frankly I'll leave you all to it.

Pity, I hoped you had more!

CYA

 

[Mr Z]

Bintang maybe this will help you, Ever seen this pattern before,

View attachment 51869

Invert the screen, it may help...

 

[explod]

Strewth Z, why could I not see that.

An upside down reverse hammer and if support at 1600 dosn't hold could fall all the way to 1900.

 

[Bintang]

Invert the screen, it may help...

Like I said to TH I don't need any more help. I'm already convinced that the recent take down in the Gold price was just 'natural price action' like in any other market. How silly of me to think otherwise?
I feel chastened for entertaining the idea that it was all orchestrated by a few big bad bullion banks.
And as for the documentary "Secret World of Gold" http://news.goldseek.com/GoldSeek/1366397576.php that is obviously just pure propaganda unlike the news item from Bloomberg http://www.bloomberg.com/news/2013-...-stocks-falling-in-week-as-gold-drops-7-.html which provides such deep and learned insight into why gold is merely another commodity that has crashed in price because it is in oversupply.

 

[skyQuake]

This could be of great benefit:

https://www.coursera.org/course/criticalthinking

 

[CanOz]

I posted this in the SI thread...

Perhaps if you intend to use eBay as an approximation of an auction market, you should also give an idea how long bids stay alive for, you need to factor in TIME. An efficient market discovering a fair price should do slow and steady heavy volume at the fairest price. A price lower than a fair value price should do less volume (as buyers scramble to purchase at what they perceive to be an "unfair" value") and the inventory at that price should move quickly. Obviously, vise versa for a high price as sellers rush to unload inventory at a profit in what is perceived to be an unfair price.

The eBay exercise could prove to be an value discovery process, as it would provide an auction market for the physical at the "retail" level.

Perhaps you could track both gold and silver Explod?

In regards to the Comex silver price, you would not expect that the current price to necessarily be the fair value price after a move like we saw...the price should return to the mean to test that fair value within a reasonable period of time...According using a monthly & weekly VWAP we can attempt to visualize where that "value" area lies at the moment...for GC as well as SI.

Here are the monthly and weekly Volume Weighted Average Price Channels. The center of the channel is fair value according to THIS market.

Let see if the market can test this price in the coming days/weeks. Price can be manipulated temporarily, but not permanently, just ask the Japanese...


CanOz

Here are the VWAPs for GC...we should test the VWAP, upon that test we should discover whether or not that value is fair or not.

 

[Bintang]

This could be of great benefit:

https://www.coursera.org/course/criticalthinking

That looks like too much effort. Think I'll just wait instead for the planned sequel to the documentary "Secret World of Gold". Am really looking forward to it. It will be called "The Secret World of Sugar, Soybeans and Coffee". Will post a link as soon as it becomes available.

 

[CanOz]

Lots of bullion for sale at the spot price here....

Low bullion prices lure shoppers
Author: Hu Xiaocen
SHOPPERS swarmed into gold jewelry shops in Shanghai over the weekend lured by the two-year low of bullion price after global gold prices plummeted.

China National Gold Group, the country's biggest gold producer, slashed the bullion price from 313 yuan (US$50.55) per gram to 298.50 yuan per gram in its flagship store in Shanghai on Saturday, the lowest level in two years.

Global gold prices tumbled to the lowest since July 2011 on Friday after the Cypriot authorities made a commitment to sell excess reserves of gold. Spot contract for 99.99 percent purity gold on the Shanghai Gold Exchange shed 7.17 yuan per gram last week, tracking losses in overseas markets.

"Many customers came to shop due to bargain prices," said an assistant at the China Gold store. "The 10-gram and 20-gram bars are sold out, and we don't have many stocks left for the 50-gram and 100-gram."

Another salesperson at Shanghai-based jewelry retailer Lao Feng Xiang said "the number of customers doubled" and gold bars were selling like hot cakes at its shops over the weekend.

$1350 USD per Oz.

CanOz

 

[Mr Z]

Slashed?!? to $1488 oz????? WOW BARGAIN!