Gold Price - Where is it heading?

Uncle Festivus · 13 December 2014

......as he pushed the old, spider web covered door open, revealing a damp, dark, cavernous room, he thought to himself that it wasn't how it used to be. Where had they all gone? And more importantly, why? It wasn't as if all the posters were gold bugs as such, or that the gold detractors very rarely had valid points either. So he bravely started to type, and perhaps, if even with just a glimmer of hope, that he could bring the gold thread back to life.......

And so, the CIA has waterboarding, and the equity markets have waterfalling........even after the closing bell....big falls from big round numbers - this time blamed on (spin the wheel of blame) oil!

US politicians pound democracy into the ground even further with the dismantling of Dodd Frank and cowtowing to banks for a taxpayer insurance policy on derivatives......

Elizabeth Warren puts up the (losing) fight....

Warren exhorted fellow Democrats to defeat the spending bill because it repealed a key provision of the 2010 Dodd-Frank Wall Street reform law. The change would allow big banks covered by the Federal Deposit Insurance Corporation to trade in derivatives, which Warren said would increase the chances of a financial crisis and bailout.

Collars??? Coincidentally timed with the gold bank cartel hauled in front of a U.S. Senate committee and given a "please explain"

With little fanfare or notice, the CME Group has notified the CFTC that they plan to institute trading collars for Comex precious metals trading. At present, these collars are planned to go into effect on Monday, December 22. Gold trading will now halt for five minutes after an intraday move of $100 from the previous close. The same for silver after a move of $3.

Interesting set-ups for gold equities?

Uncle Festivus · 22 December 2014

Hey look, equities back to near record levels again, this time it only took em 2 days. Not sure why though, why not just go straight to {insert new, overbought, central bank funded record level here} and be done with it??

Russia may have to sell their gold coz they're in sooo much trouble. Nyet....

Cap still there at $US1200, although in anything but the fakest fiat it's doing ok

Thin holiday trade now - perfect for another 'fat' finger sell......

Uncle Festivus · 23 December 2014

End of year predictions?

Gold will fade the close, possibly last decent chance to buy in $US?

Dow will hit 18k, high fives and bonuses all round - equities will have 1 final surge then purge in '15

USD will initially continue to be well bid, but the continued trade implications will finally resolve when those who peg their currency to the USD can no longer afford to do so. This will mean the US will have to start paying it's creditors, which it cannot - ushering in the final stage of the GFC........

notting · 23 December 2014

Why can't they pay their creditors?
They have just printed about 1.5 trillion and the US$ is higher on just about everything!

DeepState · 23 December 2014

Uncle Festivus said:
USD will initially continue to be well bid, but the continued trade implications will finally resolve when those who peg their currency to the USD can no longer afford to do so. This will mean the US will have to start paying it's creditors.......

Why does it follow that those pegged to the USD defaulting in some way, associated with breaking of the pegs and depletion of foreign reserves (presumably), results in the US sovereign being forced to repay its debts (presumably you mean having to reduce the stock of debt rather than rolling it)?

Ann · 1 January 2015

Uncle Festivus said:
Interesting set-ups for gold equities?

View attachment 60711

Interesting chart you have drawn there Uncle Festivus! Looks like a textbook inverted flag on a flagpole enormously bearish and very dangerous for anyone not wearing shorts!

....and now a not so interesting chart from me. This is set in Log scale to show the real support and resistance lines. Gold failed its 14 year old supporting trendline quite profoundly which may well have lost it a lot of supporters. It is now under the influence of an overhead resistance trendline coming from October 2012.
Happy New Year to all!

Bintang · 2 January 2015

Ann said:
....and now a not so interesting chart from me. This is set in Log scale to show the real support and resistance lines. Gold failed its 14 year old supporting trendline quite profoundly which may well have lost it a lot of supporters. It is now under the influence of an overhead resistance trendline coming from October 2012.
Happy New Year to all!

Ann, I beg to differ with you profoundly. Gold has not yet failed its long term supporting trend line. According to my chart which is set in linear scale that will not happen until it drops under $1000/oz.

Ann · 4 January 2015

Bintang said:
Ann, I beg to differ with you profoundly. Gold has not yet failed its long term supporting trend line. According to my chart which is set in linear scale that will not happen until it drops under $1000/oz.

G'day Bintang, if you set a chart in linear it makes little difference for most of the charting years you would be looking at, even longer term. However if you want to look at a very long term historical chart you need to set it in log to see the contours of the chart in the very early stages. Linear scale flattens all the very early information and creates a distorted view. This is what I was talking about on this post about the All Ords.
https://www.aussiestockforums.com/f...=4888&page=467&p=836245&viewfull=1#post836245
(For anyone interested here is a recent update on that chart. https://www.aussiestockforums.com/f...=4888&page=472&p=855148&viewfull=1#post855148 )

Any very long term historical charts will always be set in log or semi log and levels need to be taken from log/semi log scale in order to draw a true line from the past. http://stockcharts.com/freecharts/historical/img/100-200.png This is an historical chart from Stockcharts and you can see all the contours. This would not be possible if it was set in linear.

You are handicapping yourself if you try to look at an historical long term chart through a linear view.

Cheers and all the best in '15

Ann

Bintang · 4 January 2015

Ann said:
Any very long term historical charts will always be set in log or semi log and levels need to be taken from log/semi log scale in order to draw a true line from the past.

Ann

Ann, this is esoteric nonsense. What is long term, 1 year, 5 years, 10 years, 6000 years?
If only log/semi-log lines from the past are 'true' then other data from the past must be 'false'.
Besides what point are you trying to make with your chart and the statement 'gold failed its very long term support line quite profoundly". What does that mean in terms of 'where the gold price is heading'?

CanOz · 4 January 2015

Bintang said:
Ann, this is esoteric nonsense. What is long term, 1 year, 5 years, 10 years, 6000 years?
If only log/semi-log lines from the past are 'true' then other data from the past must be 'false'.
Besides what point are you trying to make with your chart and the statement 'gold failed its very long term support line quite profoundly". What does that mean in terms of 'where the gold price is heading'?

She's trying to express her opinion about the market, she is bearish, with good reason. She is also correct about the log scale, textbook explanation. Yes, they write textbooks on Technical Analysis of of price.

CanOz

Bintang · 4 January 2015

CanOz said:
Yes, they write textbooks on Technical Analysis of of price.

CanOz

Textbooks are also written on how to analyse tea leaves:

Ann · 4 January 2015

Bintang said:
Ann, this is esoteric nonsense. What is long term, 1 year, 5 years, 10 years, 6000 years?
If only log/semi-log lines from the past are 'true' then other data from the past must be 'false'.
Besides what point are you trying to make with your chart and the statement 'gold failed its very long term support line quite profoundly". What does that mean in terms of 'where the gold price is heading'?

G'day Bintang, let me answer your last question first ''where the gold price is heading'' I feel probably down, and I say probably down because I never like to be adamant about anything in the future, there are too many unknowns. My strengths are in TA not FA however, will the fall in the oil price give a boost to industry and keep the Dow moving up? Will Russia start selling off its gold reserves to compensate for lost oil revenue? Will big money swing away from gold as an investment into the rising US$ I can't say, nor do I particularly care but I watch my long term charts and watch my support and resistance lines set in Log as well as linear ...I have been studying charts and drawing them on a daily basis well into my second decade....with charts you can see probabilities evolving.

Your first question is much easier to answer....when you want to draw a long trending support line from way back when, no matter how many years, 5, 50, 500, 5000..set it in Log!

Waaaay back in June 2012 I called a potential top for gold from what I saw on my charts. On this particular chart I had it set in Linear and it told me what I needed to know. I copped a lot of flack from folks here probably along the lines of 'esoteric nonsense' although I am not sure it was quite as polite back then!

Here is the old quarterly chart I put up here with the call in the top for gold with a rising megaphone pattern. I am neither a bull nor bear for gold or anything for that matter...I simply call the charts as I see them.

Ann · 4 January 2015

Bintang said:
Textbooks are also written on how to analyse tea leaves:

View attachment 60991

Awww bugger, I just spilled my teacup all over my runes! *cackles and moves away to stir the cauldron, avoiding my black cat on the hearth!

Bintang · 4 January 2015

Ann said:
Awww bugger, I just spilled my teacup all over my runes! *cackles and moves away to stir the cauldron, avoiding my black cat on the hearth!

Funny you should mention the cauldron. I'm still waiting for your $8.40 prediction for TLS.
Of course in this case you only mentioned a target price without being so bold as to state when it would be reached. You are more wise than Harvey Organ.

Ann · 5 January 2015

Bintang said:
Funny you should mention the cauldron. I'm still waiting for your $8.40 prediction for TLS.
Of course in this case you only mentioned a target price without being so bold as to state when it would be reached. You are more wise than Harvey Organ.

At a wild guess around 2019. Does Mr Organ draw charts or just fuff around with sweet FA?

Bintang · 5 January 2015

I think sweet FA based on his blog posts but maybe he also takes advice from his parrot. He should get a black cat instead.

Ann · 5 January 2015

Bintang said:
Ann, I beg to differ with you profoundly. Gold has not yet failed its long term supporting trend line. According to my chart which is set in linear scale that will not happen until it drops under $1000/oz.

View attachment 60950

On reflection, you may well be right! If there are enough amateur chartists following gold using the default setting of Linear scale then another massive reaction down, if it fails, may well happen at that level. Charts are merely reflecting the reaction of the majority. You have convinced me to watch the trending support line on a second chart set in Linear!
So...my question will then be, will $700 offer support if there is a massive bailout of panicked believers who have lost their faith and need to cover their leveraged gold buys ?

Interesting, thank you for making me think harder Bintang!

MARKETWINNER · 5 January 2015

I believe this could be very important year for gold. Any further fall in gold prices especially below $500 will create gold crisis in Asia. Some emerging countries such as China and India will hit hard.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11366711

Swiss reject gold hoarding plan

DYOR

Bintang · 5 January 2015

Ann said:
On reflection, you may well be right! If there are enough amateur chartists following gold using the default setting of Linear scale then another massive reaction down, if it fails, may well happen at that level. Charts are merely reflecting the reaction of the majority. You have convinced me to watch the trending support line on a second chart set in Linear!
So...my question will then be, will $700 offer support if there is a massive bailout of panicked believers who have lost their faith and need to cover their leveraged gold buys ?

Interesting, thank you for making me think harder Bintang!

Ann, it doesn't matter whether you use linear scale, semi-log scale, log-log scale or squiggly scale the lines are meaningless and have no predictive capability. If you draw straight lines on a semi-log scale you are simply applying an exponential trend. There is no intrinsic reason why any trend should be constantly exponential. I think vomitting camel pattern analysis has much more credence. http://www.cnbc.com/id/102147311

explod · 6 January 2015

Bintang said:
. There is no intrinsic reason why any trend should be constantly exponential. I think vomitting camel pattern analysis has much more credence

Camel feeling better today thank you.

Those relying on charts to trade the current east west currency wars are on treacherous ground in my humble view.

Good to have my silver stack and vegie garden.

Oh, and NST will keep plodding along

Gold Price - Where is it heading?

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Ann

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