Gold Price - Where is it heading?

We're walking, walking and......stop.

This is really funny now - the Fed apparently are divided on how to tell 'the market' when they will start to 'normalise' rates. Considering that this time last year they were predicting rates to rise about right now, because the recovery was so strong etc, we get the perpetual moving goal posts on rate rise(s)? I dare them to do it! But they won't.

It's not as if they don't know what's in the data - Japanese CB'ers had the numbers on the 'surprise' recession when they unleashed the beast again 2 weeks ago to mitigate the fallout. The Fed knows as well that the US economy is exceptionally fragile too and simply can't tolerate rates higher than a big fat zero. Too much leverage with borrowed debt.

Nothing for gold while ever the counter trade is the (second to) last trade in town?

Uncle Festivus said:

The Fed knows as well that the US economy is exceptionally fragile too and simply can't tolerate rates higher than a big fat zero.

Click to expand...

Why is there a need to raise rates Unc?

Trembling Hand said:

Why is there a need to raise rates Unc?

Click to expand...

Well that's the point - as far as the real economy is concerned, there isn't. As far as the bubble sectors are concerned, well, how far will they let them go before they will be 'too big to pop'? The Fed created the monster, but how will they try to contain it? More hollow Draghi-rhetoric? (Can't wait for the pop tomorrow night when he promises nothing, again)

But 'the market' is getting hysterically obsessed about 'when' rather than 'if'. Can you imagine what the market will do when they realise there won't be a rate rise? But then again, the cycle will have rolled over and we'll soon be back to a normal recession, except this one will be the doozy coz they is out of ammo.....start prepping

Uncle Festivus said:

Well that's the point - as far as the real economy is concerned, there isn't. As far as the bubble sectors are concerned, well, how far will they let them go before they will be 'too big to pop'? The Fed created the monster, but how will they try to contain it? More hollow Draghi-rhetoric? (Can't wait for the pop tomorrow night when he promises nothing, again)

But 'the market' is getting hysterically obsessed about 'when' rather than 'if'. Can you imagine what the market will do when they realise there won't be a rate rise? But then again, the cycle will have rolled over and we'll soon be back to a normal recession, except this one will be the doozy coz they is out of ammo.....start prepping

Click to expand...

? Not sure what you position is. If the Fed raises rates, markets crash. If the Fed doesn't raise rates, markets crash. If the real economy turns, there is no room left for monetary support and it will thus be severe...markets crash. The Fed can't lower rates any further to support markets but leaving it fixed inflates the financial asset bubble even further which must eventually pop/crash?

Are you basically saying that asset prices are completely unjustifiable and it is an inevitability that they will have a substantive correction at some stage regardless of the activities of the real economy?

DeepState said:

Are you basically saying that asset prices are completely unjustifiable and it is an inevitability that they will have a substantive correction at some stage regardless of the activities of the real economy?

Click to expand...

The real economy is awash with cheap money that is sustaining a weak recovery...the fragility is probably a good thing, the fundamentals for Gold are as compelling now as they ever were.

i hope up atm, opened a long looking for a higher low continuation. after this current rally broke a short term down trend.

>Apocalypto< said:

i hope up atm, opened a long looking for a higher low continuation. after this current rally broke a short term down trend.

Click to expand...

You are very brave, though a gold bull myself for the longer term the volatility could wipe you in a heart beat.

Do not put it past a drop to the suggested US$1000 before the capitulation, in my view.:-*

But wish you well with the trade :-*

DeepState said:

? Not sure what you position is. If the Fed raises rates, markets crash. If the Fed doesn't raise rates, markets crash. If the real economy turns, there is no room left for monetary support and it will thus be severe...markets crash. The Fed can't lower rates any further to support markets but leaving it fixed inflates the financial asset bubble even further which must eventually pop/crash?

Are you basically saying that asset prices are completely unjustifiable and it is an inevitability that they will have a substantive correction at some stage regardless of the activities of the real economy?

Click to expand...

I am saying that asset prices are merely a function of money shuffling trend followers who would rather gamble at a computer screen than to go outside and build a factory and make something? That is, if there was organic demand there in the first place as we go into debt today and borrow from the future ie humanity has been living beyond it's means for several decades now? Refer previous charts re margin debt and negative credit balances to fund an ever reducing volume equity bull? Share buybacks mask deteriorating revenues?

The Fed's problem, and every CB's problem, is using the blunt interest rate setting as a jack of all markets cost of debt. Once they hit the zero bound there, they then move on to (mortgage) bonds to 'be' the market there too.
In the meantime there's an equity bubble blowing, a new property bubble created by Wall St hedge funds, etc etc

In the real economy, the one where people get paid to do things, there is no money velocity, at least not enough to sustain a normal recovery as measured by GDP. Which is the other problem - data is now so convoluted and adjusted it's hard to get a real idea of anything anymore. Not that it matters as the market rises or falls on the utterances of Central Bankers ie they are the markets?

So does anybody really think everything is fine & dandy or is it just a few tin foil hat wearers who think the emperor has no clothes, yet again? Put it this way, I think we are closer to the next leg of the GFC than we are to the start of it?

>Apocalypto< said:

i hope up atm, opened a long looking for a higher low continuation. after this current rally broke a short term down trend.

Click to expand...

Does the DXY come into your considerations or is the trade purely technical? I'm a gold bear at the moment, while ever the USD is king? If you have deep pockets and time it could be a fabulous trade??

explod said:

You are very brave, though a gold bull myself for the longer term the volatility could wipe you in a heart beat.

Do not put it past a drop to the suggested US$1000 before the capitulation, in my view.:-*

But wish you well with the trade :-*

Click to expand...

Thanks X, i have been watching Gold for a week on the daily took the punt once todays low failed at yesterdays low.

Uncle Festivus said:

Does the DXY come into your considerations or is the trade purely technical? I'm a gold bear at the moment, while ever the USD is king? If you have deep pockets and time it could be a fabulous trade??

Click to expand...

Hi Unc, pure tech trade. ent 1183.12 at BE now sitting to see how it handles the high. also tried a short looking for a trust down but changed long once the low was rejected. Happy to be at BE going to let it roll and see how it goes over night.

Also short the dow now as well. been watching and waiting for a sell on the dow all week. i'm hoping tonight is the panic down followed by a hard rally up lower high that starts the real correction.

see how we go.

>Apocalypto< said:

Also short the dow now as well. been watching and waiting for a sell on the dow all week. i'm hoping tonight is the panic down followed by a hard rally up lower high that starts the real correction.

see how we go.

Click to expand...

I've always found short ops after any central banker has a yada yada -
Draghi tonight with more bazooka talk........set your alarm for 7pm :rippergun

Central banks response to shorters :ald:

Quoting an excerpt from EWI

On September 2, 2011 Gallup poll showed Americans considered gold to be the best long-term investment, beating out real estate, stocks/mutual funds, savings accounts/CDs and bonds. We forecast the following: "it is surely a sign of exhaustion and perhaps the strongest sign of a gold top." The issue added, "Gold's wave structure is consistent with a terminating rise." Prices peaked two trading days later at $1921.50 on September 6, 2011. Despite record monetary stimulus in QE3 and QE4, years of political crises in the Mideast and Russia's invasion and annexation of part of its neighbor Ukraine, EWT and EWFF have maintained a bearish stance toward gold. Now, for the first time in three years, the wave structure can be labeled a complete five waves down from September 2011, which indicates a significant countertrend gold rally at hand.

... [there has been] a recent sea change in sentiment toward gold. [It] does not reflect the breadth of bearishness that existed in 2001, but it's negative enough for an intermediate-term low.

Other measures of investor psychology concur. Two weeks before gold's September 2011 peak, the 5-day Daily Sentiment Index (trade-futures.com) rose to 96% gold bulls, a record optimistic extreme that dates back to April 1987, when the data start. Last week, on November 5, the 5-day DSI fell to just 5%, a record pessimistic extreme. So far, that is the day of the daily closing low for gold at $1140.52.






The chart also shows the position of gold traders who use futures and options, as compiled each week in the CFTC's Commitment of Traders report. Small Traders hold positions whose size is under the minimum reporting requirements to the CFTC. In October 2012, as gold was making a lower wave (2) high at just under $1800, small traders were so convinced that gold would continue higher that they held their biggest net-long position in over 11 years. Now, with gold down 36% since then, Small Traders are so convinced that gold will continue lower that they hold their biggest net-short position in 15 years. Current levels of sentiment are consistent with the end of a Primary-degree decline and the start of a rally.

Chart shows that gold has traced out five Intermediate waves down from September 2011. It is also possible to label five waves down within Intermediate wave (5), terminating at the closing low at $1140.52 on November 5 and the intraday low at $1131.85 on November 7.



If these lows are wave A, wave B will carry gold higher into 2015. A reasonable target range is $1433-$1500. Even if wave (5) down isn't over yet, this will remain the ideal target range for wave B when it occurs.

With apologies to the Bulls, who in their right mind wouldn't be a gold Bear atm?

$USD going nuts, chart fundamentals apalling..it's not pretty.

Markets are volatile, the gold price is one of the the best demonstrations ever.

kennas said:

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?

Click to expand...

Yep, good post. In the absence of a credible explanation, we can only go by the chart, and that says - down.

If the POO manipulation scenario plays out as talked about in the oil thread, Russia, Iran and a few other vulnerable non western friendly states in the firing line...the pressure builds on the Russia and Iran etc to dump Gold into the market as a way of raising money to pay the bills and keep the lights on.

IF these guys start to seriously dump then POG could see 800 very quickly...the perfect storm seems to be building.

Without the Swiss referendum, gold may have been a lot cheaper a lot sooner.
As the referendum got defeated 23:77 (I believe, 25% would have been sufficient) sub-$1000/oz becomes ever more likely.

Implied gold price fall given oil price fall covered most of the gold move over the weekend - but not all. Data is based on the most recent 5 years, but the shape of the relationship exists for a longer time frame.




This is just a simple univariate analysis. Please don't read too much into it. Personally, I am somewhat puzzled why falling oil prices, which increase the chances of further QE in EZ and Japan, aren't having the opposite effect on the gold price. Perhaps the gold bugs now believe QE doesn't necessarily lead to inflation and that the banking systems aren't in a state of imminent collapse (it's still fairly delicate in EZ depending what you make of sovereign risk). Perhaps the US can also serve as the reserve currency again and be a reliable store of wealth.

In any case, Gold in AUD terms for the physical holders out there has really not done much and is about in line with prices since Bernanke first mooted an end to QE in the first half of 2013. This highlights the alternate currency behavior that gold can have. Of course, currencies have their own supply and demand dynamics which includes moving downwards.

Well RT the oposite has hit. A huge whiplash overnight where as I write gold has jumped 64 dollars from its low 1152 to its current 1204. After dippingback to the long term low support line the gold bull is back in place. With other matters distracting me, forgot to get my NST in the stock tipping too.

Servere backwardation (see Zerohedge) in the last months, shorts are being slaughtered and attention will now focus back to the only real safe place in this current world market, and that is by holding physical in the back garden among the vegitables LOL.

As it is mentioned in previous technical analysis of this metal in 17.11.2014, according to the symbols that were formed in the chart, it was possible that the price in this metal decreases and finally it happened(max=1220.872). Price during the downfall with reaching to the Up Trendline(made of 2 bottom prices) and support level (R=S) of Andrews’ Pitchfork has stopped from more descend and has formed a bottom price(Hammer patterns) in the level of 1132.765.

As it is obvious in the picture below, price with formation of AB=CD harmonic pattern with ideal ratios of 76.8 and 127.2 has prepared the field for ascending of the price from bottom price of 1132.765 that finally happened.RSI indicator in weekly time frame is in saturation sell area and in divergence mode with the price chart that with the next cycle confirms the current bottom price and warns about the potential of ascending during the next candles.The first important warning for descending of the price is breaking of Up Trendline. Generally until the bottom price of 1132.765 is preserved, there is the possibility of increase and ascend of price.

Gold Chart 2014.12.02

It looks like the disconnect between reality and just about everything else will continue for another month or so at least - Santa will get his wish for a big number of 18k for the Dow, 10k for the Dax, and 2100 for the sp500? Time to scale out of my longs I think, perhaps take a short or two?

With the genuine euphoria amongst the retail crowd over the NFP 'massive beat', you'd think it was all sunshine and lollipops from here on? Except for one glaring anomaly - full-time jobs (the ones that really matter?) declined back to June levels and possibly rolling over - is this 'peak recovery'?



At least gold still doesn't believe all is fixed - the gold bears will have to explain why the gold price isn't a lot lower?

The counter trade - gold equities are bargains, again?

Gold in $AU is up 6% for the year.