Kauri
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Gold Price - Where is it heading?
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Looks like the 10 min uptrend channel has broken down somewhat, & now consolidating sideways. It appears the/my $12.50 rule is still working though, with the rise from around $642 to $655 today. See if it re-traces back to ($655-$6.30) = $648 or back to the new base of $642.
Kauri, how's it stack up with Elliot now?
Kauri, how's it stack up with Elliot now?
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Kauri
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Not a Tech perspective, however may be of interest
IMF May Sell 400 Tonnes Of Gold
Source FN Arena News - February 01 2007
By Greg Peel
To think that anyone might sell a whole 400 tonnes (about US$6.6bn worth) of gold is one very scary prospect, particularly if you are long gold and still betting on a return to the highs. But this is exactly what an advisory panel that includes (ex fed chairman) Alan Greenspan and (European Central Bank president) Jean-Claude Trichet has recommended the IMF should do.
The reason is that the IMF, by its very nature, is set up to lose money. One way to stop losing money is for the IMF to switch out of some of its vast hoard (3,217t at last count) of non-interest-bearing gold and into other interest-bearing securities.
Founded at the end of World War II as a result of the Bretton Woods Agreement, the International Monetary Fund was initially the manager of all the gold that was held for the purpose of guaranteeing currency values under the gold standard. Between 1976 and 1980, the IMF made its last major gold sales after the US forced a collapse of the gold standard and a benchmarking to the US dollar (the Vietnam War sent the US broke). Then it sold 50Moz.
Today the IMF keeps watch over the currency, trade and economic policies of its 185 members, and provides them with advice. One of its functions is to provide low-cost loans to countries who get themselves into economic strife, provided that country addresses their problem of balance of payments or rampant inflation or whatever has caused that strife.
On this basis, the IMF is on a bet to nothing. While only a low cost loan to begin with, if that country follows the Fund's guidelines, digs itself out of its economic hole, and pays the loan back before maturity, the Fund loses money. It's nice to be charitable, but it can't go on forever. This fiscal year, the IMF is projected to lose US$103m, next year US$185m, and the following year US$244m, reports Bloomberg.
The advisory panel estimates the IMF could make US$195m per year by investing the proceeds from its sold gold.
But this is a huge amount of gold – more than twice the total value of paper gold exchanged on Comex on any given day. How can it be sold without causing the gold price to collapse?
Firstly, the sales would be made over a number of years. Secondly, the sales would never see the market, but would be sold directly to central banks. There are enough central banks making noises about diversifying out of US dollars, so it shouldn't be that hard to find buyers. It is a much simpler way for central banks to buy gold, instead of in the market. As the IMF is likely to want reasonable value for its gold, central bank buying would actually prove more bullish than IMF selling is bearish.
One group that is unsurprising sceptical about the whole thing is the Gold Anti-Trust Action (GATA) committee. "The central banks must be running low on gold", is GATA's response. GATA has long maintained that the dominant central banks hold far less gold than they let on.
The aforementioned advisory panel is chaired by Andrew Crockett, president of JP Morgan Chase International, "the great gold shorter for the central banks", according to GATA, and formerly director of the Bank of International Settlements, "the great coordinator of the central bank gold price suppression scheme". The latter accusation was confirmed by one of Crokett's former BIS colleagues in 2005 (in not so many words).
Whatever the reasons, gold fans do not have a lot to worry about. Indeed, any sale would appear to have more bullish ramifications than bearish.
IMF May Sell 400 Tonnes Of Gold
Source FN Arena News - February 01 2007
By Greg Peel
To think that anyone might sell a whole 400 tonnes (about US$6.6bn worth) of gold is one very scary prospect, particularly if you are long gold and still betting on a return to the highs. But this is exactly what an advisory panel that includes (ex fed chairman) Alan Greenspan and (European Central Bank president) Jean-Claude Trichet has recommended the IMF should do.
The reason is that the IMF, by its very nature, is set up to lose money. One way to stop losing money is for the IMF to switch out of some of its vast hoard (3,217t at last count) of non-interest-bearing gold and into other interest-bearing securities.
Founded at the end of World War II as a result of the Bretton Woods Agreement, the International Monetary Fund was initially the manager of all the gold that was held for the purpose of guaranteeing currency values under the gold standard. Between 1976 and 1980, the IMF made its last major gold sales after the US forced a collapse of the gold standard and a benchmarking to the US dollar (the Vietnam War sent the US broke). Then it sold 50Moz.
Today the IMF keeps watch over the currency, trade and economic policies of its 185 members, and provides them with advice. One of its functions is to provide low-cost loans to countries who get themselves into economic strife, provided that country addresses their problem of balance of payments or rampant inflation or whatever has caused that strife.
On this basis, the IMF is on a bet to nothing. While only a low cost loan to begin with, if that country follows the Fund's guidelines, digs itself out of its economic hole, and pays the loan back before maturity, the Fund loses money. It's nice to be charitable, but it can't go on forever. This fiscal year, the IMF is projected to lose US$103m, next year US$185m, and the following year US$244m, reports Bloomberg.
The advisory panel estimates the IMF could make US$195m per year by investing the proceeds from its sold gold.
But this is a huge amount of gold – more than twice the total value of paper gold exchanged on Comex on any given day. How can it be sold without causing the gold price to collapse?
Firstly, the sales would be made over a number of years. Secondly, the sales would never see the market, but would be sold directly to central banks. There are enough central banks making noises about diversifying out of US dollars, so it shouldn't be that hard to find buyers. It is a much simpler way for central banks to buy gold, instead of in the market. As the IMF is likely to want reasonable value for its gold, central bank buying would actually prove more bullish than IMF selling is bearish.
One group that is unsurprising sceptical about the whole thing is the Gold Anti-Trust Action (GATA) committee. "The central banks must be running low on gold", is GATA's response. GATA has long maintained that the dominant central banks hold far less gold than they let on.
The aforementioned advisory panel is chaired by Andrew Crockett, president of JP Morgan Chase International, "the great gold shorter for the central banks", according to GATA, and formerly director of the Bank of International Settlements, "the great coordinator of the central bank gold price suppression scheme". The latter accusation was confirmed by one of Crokett's former BIS colleagues in 2005 (in not so many words).
Whatever the reasons, gold fans do not have a lot to worry about. Indeed, any sale would appear to have more bullish ramifications than bearish.
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The $US must be in serious trouble if the IMF is thinking of selling that much Gold
Sell Gold, drive down spot, make it a less attractive investment, keep the spotlight on the US$ as the best investment, how long can they keep it up?
Sell Gold, drive down spot, make it a less attractive investment, keep the spotlight on the US$ as the best investment, how long can they keep it up?
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Could it all be a rouse to take the spot light of a possible bullion bank blow up?
Probably one of the few assets that the central banks own that has performed well in the last 5 years!
Probably one of the few assets that the central banks own that has performed well in the last 5 years!
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Spot gold has just past my target of $659, and is starting to get some momentum behind it. The sabre rattling by central banks threatening to sell vaults of gold doesn't appear to be working anymore, gold is doing it's own thing again. You have to remember these are the same organisations that were selling gold at firesale prices a few years ago. Even the Reserve Bank of Australia plundered our gold reserves and sold at bargain basement prices, yet nothing is ever said about this. England did the same.
We are heading into the traditional peak season for gold coming up to May, so may have some legs yet, despite central banks best intentions to keep a lid on the price.
(China's Shanghai stock market is about to implode, so hold on for the ride. Turnover at the Shanghai Stock Exchange for the first 2 weeks of 2007 has reached 20% of the level of all of last year.!!! And last year it gained 130%!!)
We are heading into the traditional peak season for gold coming up to May, so may have some legs yet, despite central banks best intentions to keep a lid on the price.
(China's Shanghai stock market is about to implode, so hold on for the ride. Turnover at the Shanghai Stock Exchange for the first 2 weeks of 2007 has reached 20% of the level of all of last year.!!! And last year it gained 130%!!)
Kauri
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So what are the tea leaves telling you kauri? Is it game on?.
Kauri
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Kauri
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Dr Doom said:
Gold Forecast - Global Watch
January 31, 2007
Between the end of August and the end of November Russia, according to the I.M.F., increased its ‘Official’ holdings of gold by 9.2 tonnes, which averaged a cautious 1 tonne a week. For them to reach the targets implied by government officials as high as President Putin wanted at 10% of reserves, they will have to increase the pace of these purchases dramatically. With oil exports roaring along with the higher oil price and Russian reserves burgeoning, a gold price rise cannot, at this stage, be expected to rise fast enough to make this figure a reality all by itself. Much heavier purchases need to be made.
Other Central banks in the Central Bank Gold Agreement have just entered the market to BUY more coins [to refine existing stocks of currently owned gold coins is one thing, but to go into the gold market to buy good amounts of gold coins [the second instance now] is another thing. If this continues it will be extremely difficult to make us believe it is a ‘housekeeping’ exercise again? The much lower gold sales by the signatories of the agreement on a weekly basis shows us that the heart is leaving the gold sellers now.
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Kauri said:
Hi kauri,
As simple as it seems, the channels seem to be working. Need a pullback to around $654 to keep to form, then back to around $666?. Although at some stage it would be looking to break out of this sideways channel and revert to the previous slope, which would mean much larger incremental gains from now on. Served it's purpose 'till now though. Depends now on $US & oil?
$US at a critical juncture, so needs to make a convincing break either way from where it is now to confirm golds trend. Oil may make another attempt to get back to the mid $60's if it is to confirm the bear correction is dead? or just a dcb?. As usual, a lot of factors to influence the pog.
DD
Kauri
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wayneL
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Kauri said:Well I've closed out my positions as I see a correction coming. Will look to re-enter after theinevitable
This could be the reason the shine has come off a bit today:
Kauri
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wayneL
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Rumours of a hedge fund dealing in metals blown up.
Kauri
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wayneL said:
Have posted headlines of Red Kite hedge fund troubles (from Wall Street Journal) in the zinc thread.... unless copper/lead/zinc recover soon on
Comex/LME we might have a tad troublesome day with our miners come Monday... :fan
wayneL
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Kauri said:
I don't know whether my rumour is in addition to the red kite troubles or whether it's the same thing... but my source should have been aware of that report.
Just have to wait and see waht comes out in the wash.
Kauri
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Metals dive on report of fund losses
Fri Feb 2, 2007 5:56 PM GMT
[font=Verdana, Arial, Helvetica, sans-serif]
LONDON (Reuters) - Base metals prices fell sharply onthe London Metal Exchange on Friday on a report of heavy lossesat a hedge fund and in the absence of Chinese buyers, dealerssaid.
"The market is collapsing," a European trader said.
Three-months zinc fell by nearly 9 percent at onestage, copper was down by over 6 percent and aluminium dropped by some 3 percent in a generalsell-off.
Traders said the selling was mostly on behalf of funds,triggered by a report of heavy losses at a hedge fund thatspecialises in metals trading.
Once prices hit specific chart levels the fall for mostmetals accelerated.
"Fund liquidation...a lot of stops triggered -- a lot of thestuff on the back of the Red Kite news," the trader said.
Hedge fund Red Kite, which posted strong gains in 2006, hassuffered a roughly 20 percent loss in the first days of Januaryand is now trying to stall investors who want to pull money out,The Wall Street Journal reported.
"It is quite scary, actually, a lot of volume going throughand no one is buying the stuff," analyst Michael Widmer atCalyon said.
By 1520 GMT benchmark copper for delivery in three months was at $5,330/5,340 per tonne,down from the close of$5,600 on Thursday.
Widmer said the market was also influenced by data from theUnited States this week.
The global indicator produced by JP Morgan with research andsupply management organisations fell to 52.4 in January -- itslowest since August 2005 -- from 53.4 in December.
Global factory output growth also sank to its lowest inthree and a half years to 53.0 from 54.3.
Copper is down more than 12 percent since the start of theyear and around $3,000 below the peak it hit in May last year.
Zinc was down $300 at $3,090/3,110.
"There's no evidence of fresh buying from speculativequarters, and all the indications are that the Chinese are goingto wait until after the New Year holidays before coming to themarket," another dealer said.
In previous months, some of the investment funds that playthe commodities markets have used the first few days of themonth to add more metals to their portfolios, but that patternhas become less pronounced recently.
Aluminium was down $58 at $2,695/2,700.
The only metal trading in positive terrain was steel-makinginput nickel, up $750 or 2 percent at $37,600/37,800after inventories of metal, already low, fell another 144 tonnesto 3,222.
"General sentiment remains positive because of the currentlow stock levels," LME broker Sucden said in a market report.
Lead was down $25 at an indicated $1,640/1,655 andtin was indicated down $105 at $11,795/11,800.
[/font]
Fri Feb 2, 2007 5:56 PM GMT
[font=Verdana, Arial, Helvetica, sans-serif]
LONDON (Reuters) - Base metals prices fell sharply onthe London Metal Exchange on Friday on a report of heavy lossesat a hedge fund and in the absence of Chinese buyers, dealerssaid.
"The market is collapsing," a European trader said.
Three-months zinc fell by nearly 9 percent at onestage, copper was down by over 6 percent and aluminium dropped by some 3 percent in a generalsell-off.
Traders said the selling was mostly on behalf of funds,triggered by a report of heavy losses at a hedge fund thatspecialises in metals trading.
Once prices hit specific chart levels the fall for mostmetals accelerated.
"Fund liquidation...a lot of stops triggered -- a lot of thestuff on the back of the Red Kite news," the trader said.
Hedge fund Red Kite, which posted strong gains in 2006, hassuffered a roughly 20 percent loss in the first days of Januaryand is now trying to stall investors who want to pull money out,The Wall Street Journal reported.
"It is quite scary, actually, a lot of volume going throughand no one is buying the stuff," analyst Michael Widmer atCalyon said.
By 1520 GMT benchmark copper for delivery in three months was at $5,330/5,340 per tonne,down from the close of$5,600 on Thursday.
Widmer said the market was also influenced by data from theUnited States this week.
The global indicator produced by JP Morgan with research andsupply management organisations fell to 52.4 in January -- itslowest since August 2005 -- from 53.4 in December.
Global factory output growth also sank to its lowest inthree and a half years to 53.0 from 54.3.
Copper is down more than 12 percent since the start of theyear and around $3,000 below the peak it hit in May last year.
Zinc was down $300 at $3,090/3,110.
"There's no evidence of fresh buying from speculativequarters, and all the indications are that the Chinese are goingto wait until after the New Year holidays before coming to themarket," another dealer said.
In previous months, some of the investment funds that playthe commodities markets have used the first few days of themonth to add more metals to their portfolios, but that patternhas become less pronounced recently.
Aluminium was down $58 at $2,695/2,700.
The only metal trading in positive terrain was steel-makinginput nickel, up $750 or 2 percent at $37,600/37,800after inventories of metal, already low, fell another 144 tonnesto 3,222.
"General sentiment remains positive because of the currentlow stock levels," LME broker Sucden said in a market report.
Lead was down $25 at an indicated $1,640/1,655 andtin was indicated down $105 at $11,795/11,800.
[/font]
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Looks like the carnage spilled over to the pog. Nice re-trace to support at $642 & bounce back. Maybe looking for a healthy correction next week.
PS kauri have you seen this story on Elliot wave on gold
I closed my LHG too - wait for a better entry, though shouldn't have to wait too long this cycle
PS kauri have you seen this story on Elliot wave on gold
I closed my LHG too - wait for a better entry, though shouldn't have to wait too long this cycle
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