Gold Price - Where is it heading?

[Bintang]

A dangerous chart pattern emerges in Gold.

http://www.cnbc.com/id/102147311#

Awesome.
The first ever technical analysis that I have found to be comprehensible.

 

[Uncle Festivus]

Awesome. I'm starting to think that US equities are at a permanently high level and will never go down! No sellers left due to share buybacks at zero percent I guess? On behalf of our descendants, we will certainly owe a debt of gratitude to our vigilant central bankers.






melt-up

 

[Uncle Festivus]

More awsomer! That would have cost them a few billion - keeping a lid on gold (fail) and pumping equities (fail, despite the as-per-usual 3.30 pump) on a miss on the NFP? Where would they be without the fudge factor of the Birth/Death guestimate? Convenient.

No manipulation??



Grab your popcorn, it look's like hitting the fan soon...........

And Greenspan capitulates? Includes the missing 3 minutes from the official video and transcript about his opinion on gold. Interesting section starts about 22m....

http://www.cfr.org/financial-crises/conversation-alan-greenspan/p33697

and

https://www.youtube.com/watch?v=Oz4-Tru_30A#t=34

 

[explod]

With the way things seem to be screwed it is hard to have faith in the markets, in my view, but

...on the gold chart we have a reverse hammer. R u there Tech/a

 

[DeepState]

CoT non-commercials Gold gross short position is at levels close to the peaks recorded over the last couple of years. Short exposure trails the movement in gold prices. Hence their behavior creates momentum effects. Importantly, the extent of associated reversionary behavior has also peaked to levels (and beyond) not seen since the high volumes of gross short outstanding at times in 2006/7 and for a short period leading into Taper Tantrum (the economics were visibly improving months prior).

These observations suggest the current move is partially driven by relatively mechanical trend following algo/concepts on the gross short side. This makes sense to me because this is not the natural position for the non-commercials. Given the peaks of gross exposure and extent of reversion noted when short activity peaks, a degree of over-selling is indicated.

Please note, I would not trade gold on this alone, although the stats and underlying rationale are there. It's just one input. Thought you might be interested.

In brief, in the absence of a fair value estimate for the metal, market dynamics in isolation suggest it is presently over-sold. Of course, there is no law of physics to suggest it can't get more oversold.


Source: COMEX, FactSet

 

[Uncle Festivus]

Looks like yet another 'conspiracy theory turned fact' event again - one more to the tin foil hat wearers

Regulators fine global banks $4.3 billion in currency investigation

(Reuters) - Regulators fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a yearlong global investigation.

HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBS AG and Bank of America Corp all faced penalties resulting from the inquiry, which has put the largely unregulated $5-trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

Still waiting for someone with morals & ethics to bring the PM market manipulators to 'justice'..............or any 'market' for that matter these days?

 

[Trembling Hand]

Looks like yet another 'conspiracy theory turned fact' event again - one more to the tin foil hat wearers



Still waiting for someone with morals & ethics to bring the PM market manipulators to 'justice'..............or any 'market' for that matter these days?

Ya reckon they always fixed the price down?

 

[Uncle Festivus]

Ya reckon they always fixed the price down?

Why not, the proof is there that 'they' can and do do it with whatever market they want. Depends which way they make the most money, but ultimately it is at the direction of The City and the Fed. While they get away with it the bosses turn a blind eye but if they get caught well, you're on your own. None of the bosses go to jail, only the minnions, and even that's not likely. No, a simple fine and abrogation of all wrongs and they are on their way again, back doing the same things that brought the system down at the start of the GFC. Only even more leveraged this time......

It's a currency war and the winner won't be fiat, especially the $USD. It's enemies are circling right now, whether you agree with their ideology or not. For all intents the global financial system collapsed 6 years ago and has been living on borrowed (literally!) time ever since. The shorters have been comprehensibly capitualised into retreat with the Draghi 'EU QE any day now' threat, more-so than the imminent next round of US QE. Rates won't be 'normalised' in my lifetime.

Equities are just about to roll over, although there's always the last gasp 'Christmas Rally', or reassuring comment from a Fed Governor, to chock top the teflon bull.

A bit closer to home, and I'm reluctant to divulge it, I will be stocking up on a bulk petrol tank and a few essentials - 'prepping' if you like.

 

[Trembling Hand]

Why not,

Come on Unc!! They are sweeping stops a few ticks away. That will be a setup that will depend on the market at the time. So up just as much as down and you would think there was far more stops higher to take out over the last 10 years than lower.

You got to look at this stuff with some common sense. They were not moving gold from $1600 down to $1200. They were moving it a $1 here or there. Thats a market. Always has been.

 

[pixel]

I am not so much "into" short-term movements of the price of gold; but I try to follow the Spot price over several years on a monthly or weekly scale. Almost 3 years ago, I started a "weekly Trend Chart", marking the first 3 attempts to break support, which was then around $1530/oz. According to Bartrade, who first described the case to the Upside here: http://bartrade.biz/trades/4th.htm , the 4th attempt will often succeed; if it does, a useful target is twice the previous range. Check out how BLD and HVN rallied after the examples given.

The same principles apply to the Downside, with spot gold a prime example. Here, the 4th attempt succeeded in April last year, and the pog fell indeed to the 200% level, where support was found two months later. It appears that the June 2013 Low represents the first attempt of a new series. I am not quite certain whether this week's break attempt is still #3 of the new series, or already the 4th in the process of succeeding. If the latter, and if history repeats, we'll be in for another helluva drop, well below $1000/oz and possibly as low as $750/oz.



Below is the same chart cleaned-up: zoomed in and without auxiliary lines and envelopes:

 

[Trembling Hand]

Pixel your chart has so much stuff on it I cannot see what you are talking about.

 

[Uncle Festivus]

Come on Unc!! They are sweeping stops a few ticks away. That will be a setup that will depend on the market at the time. So up just as much as down and you would think there was far more stops higher to take out over the last 10 years than lower.

You got to look at this stuff with some common sense. They were not moving gold from $1600 down to $1200. They were moving it a $1 here or there. Thats a market. Always has been.

I think the question is for the gold detractors as to why gold went to $1850 in the first place, having regard for the fundamentals then and now, because if anything the fundamentals for gold are more compelling now than back in say 2001 when it first started to move in earnest. I think it was base fundamentals buying (deep/smart? money) with then a general mainstream momentum trade once it caught on until it exhausted, or The City/Fed decided enough was enough and have driven it lower at convenient times ever since to knock it out technically as per pixel post. Simply unloved/no momentum right now.......gold is patient, waiting for confidence in CB rhetoric to fail.

The problem for TC/F is that it's all getting absorbed by the non $USD cheer squads for bargain basement prices who would love it to go even lower?

 

[Trembling Hand]

I think the question is for the gold detractors as to why gold went to $1850 in the first place, having regard for the fundamentals then and now, because if anything the fundamentals for gold are more compelling now than back in say 2001 when it first started to move in earnest. I think it was base fundamentals buying (deep/smart? money) with then a general mainstream momentum trade once it caught on until it exhausted, or The City/Fed decided enough was enough and have driven it lower at convenient times ever since to knock it out technically as per pixel post. Simply unloved/no momentum right now.......gold is patient, waiting for confidence in CB rhetoric to fail.

The problem for TC/F is that it's all getting absorbed by the non $USD cheer squads for bargain basement prices who would love it to go even lower?

There is probably some truth in it but where is the data showing that the The City/Fed hold even 1 contract short in PMs? I mean it is exactly what they were/are trying to engineer, Inflation. So why would they give a toss about it showing up in PMs which are a tiny bit of the equation? I mean think about the logic in that without the Zerohedge conspiracy think. They wouldn't give a toss until it shows up in real wages which is a long long long way away. They have bigger problems.

I think the silver chart shows what is happening. Started as a fundamental trade. Every prepper and two bob crazy rolled into it causing a bubble in the QE=hyper inflation = PM boom trade. As the inflation has failed to show the real money has sold into the preppers and hopeful late Johns. Now we are left with a deflating mess in PMs.

All the gold bugs who like to post bubble charts of Equities and junk as a warning now are in the ironic position of holding something they value dearly that is at the bad end of just such a scenario. Ironic!!

 

[pixel]

Pixel your chart has so much stuff on it I cannot see what you are talking about.

That's why I added the second one where I had removed all the trend and range division/ extrapolation lines.
Does that make the point clearer?

 

[Sean K]

This thread seems to evolves into a technical analysis of the gold price but I'm not sure if that was the intent.

Anywho, is there is a fundamental reason for the price to go up or down?

The reason I ask is that a few years ago a number of very well respected commentators theorised that the money printing of the Fed, and elsewhere, would create drastic inflation and paper currency would turn the USD into Weimar Republic cash of legend.

But, the money printing hasn't resulted in inflation.

Gold has gone down.

Gold stocks have been decimated.


Has a guarantee of a piece of paper, or a bit coin, replaced hard gold?

 

[Uncle Festivus]

You got to look at this stuff with some common sense. They were not moving gold from $1600 down to $1200. They were moving it a $1 here or there. Thats a market. Always has been.

'a $1 here or there'? Would you believe $50 swings now? Crowded trade short gold/long USD?

There is probably some truth in it but where is the data showing that the The City/Fed hold even 1 contract short in PMs? I mean it is exactly what they were/are trying to engineer, Inflation. So why would they give a toss about it showing up in PMs which are a tiny bit of the equation? I mean think about the logic in that without the Zerohedge conspiracy think. They wouldn't give a toss until it shows up in real wages which is a long long long way away. They have bigger problems.

I think the silver chart shows what is happening. Started as a fundamental trade. Every prepper and two bob crazy rolled into it causing a bubble in the QE=hyper inflation = PM boom trade. As the inflation has failed to show the real money has sold into the preppers and hopeful late Johns. Now we are left with a deflating mess in PMs.

All the gold bugs who like to post bubble charts of Equities and junk as a warning now are in the ironic position of holding something they value dearly that is at the bad end of just such a scenario. Ironic!!

Well obviously TC/F won't hold any trace directly, all through the subs.

Essentially they couldn't give a toss, but whilever it's an alternative currency being accumulated by the state enemies then they have to 'control' the outcome somewhat.....
I couldn't give a toss about silver.......

Not the bad end, perhaps just the beginning of the bad end for CB bubbles

And there's been plenty of inflation going around, it's just that it's not measured in the CPI correctly, for obvious reasons?

Squeeze me nice n tight.......

Betting against gold and silver prices has this month reached multi-year records on the latest data from US regulator the CFTC.

Data compiled by Reuters this morning showed open interest in US gold options was heaviest in "put" contracts – set to profit if gold falls – at target prices of $1100-1200 for both December and January.

"The gold price has increasingly become a function of the strength of the US Dollar in recent weeks," says a note from the commodity analysts at Standard Bank, saying that gold is "acting as a pseudo-currency."

"Precious metals," says Sean Corrigan at Diapason Commodities in Switzerland, "are only currently finding support from a bout of physical tightness in gold," as shown by a rising cost to borrow gold through London's wholesale market.

The annualized interest rate on bullion demanded by would-be gold lenders for 1-month swaps has risen since the start of November to 0.27%, steadily reaching the highest level since dramatic spikes to 0.5% and 4% in 2001 and 1999, caused by a rush to cover short positions taken by bearish traders.

"So far," says Bernard Dahdah at French investment and bullion bank Natixis, "rises in lease rates have reflected the difficulty of transforming [large] Western-held bullion bars to kilo bars [for Asian investors].

"But at some point, this may become more a question of the absolute volumes of gold still held in Western vaults."

With London the centre of world bullion dealing, net gold exports from the UK have now totalled 1,680 tonnes since the start of 2013 according to BullionVault analysis.

That equals more than 60% of total net imports – primarily held for investors in London's specialist vaults – over the previous five years.

 

[>Apocalypto<]

'a $1

you're up early on a Saturday Unc good to see!

I was squeezed out this morning. was short (WAS)

 

[avion]

As the inflation has failed to show...

That's something i never understood. With so much printing all around the world how's that possible?

I feel i definitely belong to the left category:

 

[DeepState]

1. Anywho, is there is a fundamental reason for the price to go up or down?

2. The reason I ask is that a few years ago a number of very well respected commentators theorised that the money printing of the Fed, and elsewhere, would create drastic inflation and paper currency would turn the USD into Weimar Republic cash of legend.

But, the money printing hasn't resulted in inflation.

Gold has gone down.

Gold stocks have been decimated.


Has a guarantee of a piece of paper, or a bit coin, replaced hard gold?

1. Yep.

Over the last ten years the price of gold (I look at multiple currency numeraires to control for the flight to safety effect of USD) has been affected by the strength of the economy in China & India in more normal circumstances. Under duress, it is impacted by distress experienced in the private sector. It was significantly affected by the expansion of the Fed balance sheet from the announcement of QE1. From late 2011, the acute phase of the banking crisis had passed, albeit the European theatre saw fragmentation before the ECB issues an edict that this was not allowed on their watch. The European developments in 2012 did not have much impact. Perhaps this was due to weakening economic performance in ChIndia. More likely, the ECB balance sheet was already contracting having pretty much peaked by end 2011. A sharp fall in April 2013 is directly attributable to the end of LSAP at the BoE.

From the end of 2012 to present day, risk premium has been compressed and the end/reversal of LSAP activity in the major printers has led to a decline in price. Through 2014, the price of risk has continued to come in and, for other major currencies and gold has not done much.

Throughout, gold has done as follows:

Performed in accordance with the ChIndian economic growth rates.
Generally risen when risk was increasing and dropped when is was declining
Risen in concert with QE or similar and fallen

It has also been subject to liquidity issues per Cyprus and associated trading.

All in all, nothing here should be surprising. It's actually interesting to see it tested. Gold retains the characteristic of an alternative currency and a risk hedge. It is moving with the fundamentals as would have been supposed 10 years ago. That is to say that changes in price have moved as might be expected. That says nothing about the price level itself.

Thankfully, hyperinflation was not tested. Outright large scale war was not tested either, although a spike in price is visible with developments in Crimea, for example.

Implications for future price movements can be tied to the above observations.


2. Weimar was very different. Weimar was not independent and financed government deficits writ large (let's ignore Japan, OK). Further, the inflation there was not the result of credit induced excess demand. There was a supply shock, namely because much of the capability to supply was rubble. What was left was subject to price controls that did not encourage available supply to the market.

In the US, the problem was insufficient demand and a busted credit mechanism which required support until it could heal.

There are some who are concerned that excess reserves still on Fed Balance sheet might suddenly be withdrawn as the bid for debt exceeds the Fed interest rate and thus expand the supply of money. If this takes place rapidly and in a coordinated fashion (they don't have to explicitly coordinate, but simply respond to market developments using price signals) you can find the money supply jumping at a time when there is (pent up) demand. If the supply response in inadequate because cap ulitization is tight, you can get inflation. It is stupendously unlikely this will translate into hyper inflation.

Why would you necessarily expect gold to rise in an environment of reduced risk premium? It seems reasonable that demand will be associated with ChIndian consumer prosperity. Perhaps, with the passing of time, gold purchases might not make up as much of investment portfolios (incl jewelry). Nonetheless, I do not know of any reason to suggest the coefficient of demand suddenly collapsed or anything even vaguely like it. It hould rise with incomes for a while, before tapering out as wealth increases....unless they are all complete gold bugs with trust issues.

The weakness in gold as priced in USD in 2014 is largely due to USD strength.

Gold has not been replaced by any means. What is the BitCoin holding in the Fed/PBoC/BoE/BoJ/RBA balance sheets? Would it be as much as 1 cent?

 

[explod]

Gold has just broken resistance to hit US1200.

recon Putin has arrived home and said "lets stickit up em. biggest gold importer over the last month or two as well.

There is no attention to the fact that it was the Ukraine control tower that directed that plane over those battle grounds. The whole show smells to me.

We live in most remarkable times