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Gold Price - Where is it heading?

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explod said:
A joke perhaps

In 1946 a floren was 2 shillings, today $5, up 2500%, but agree, everything is a punt
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http://fofoa.blogspot.com.au/2015/06/silver-dollar.html


...

 


I do not want the price of gold to go up, it just makes accumulation more difficult.

But this does not exactly look bearish. To me it looks more like a 4 year long accumulation pattern, unless we are heading back towards ~1350 from here.
 

Agree on both points.

It is a very volatile chart but as you say the direction is clearly up. But a real break to the upside could be a fair way down the track yet. Good stacking weather.
 
explod said:
It is a very volatile chart but as you say the direction is clearly up.
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What I said is that it looks like an accumulation pattern (to me). That's a type of range.



But looking at the above diagram, perhaps the entire period 1982-2002 was the accumulation and this is just 're-accumulation'.


(h/t goldprice.org)
 
I follow and trade gold with great interest. Here I want to look at gold from various angles and methods to see if the different forms of analysis can show some sort of confluence. The 3 forms of analysis I like to look at are pattern, price and time.

Firstly pattern.The first chart is a long term EW chart which I have labelled together with various alternates. At this juncture the 3 alternates that I am looking at do not conflict with the primary impulse wave count. All 3 suggest gold is coming into a low or some sort of low (not necessarily THE low) in the months a head. It's been a long and brutal bear market the last 5 years especially for the gold miners. It does not look like it's quite there yet. Regardless which wave count is chosen it has to be quantified by other methods which we will look at later in order to be the most probable count.

From an EW perspective IF supercycle wave 1 completed in 1980, then what followed was supercycle wave 2 which lasted 19 years(in delta terms a metonic cycle- more on this in later posts). This second wave was classified as a sharp correction as it was very deep. IF supercycle wave 3 completed in 2011, then the subsequent fourth wave ( if we are in fact dealing with an impulse here) should be sideways relative to wave 2 if one follows EW guidelines. It most likely will take the form of a contracting triangle, flat or irregular flat ( we can't tell yet).

For those who are Ellioticians, my apologies for not following the standard EW Nomeclature. It was impossible to do with Motivewave software and I have differentiated the varying degrees of trend by different colours and font sizes with Red being Supercycle degree. In the next post I will attempt to drill down to a lower timeframe.

Ultimately in the end what we hope to do is plan to build a case or not for entry possibly by years end
 

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In post #11328 we looked at spot Gold on a monthly basis and tried fit our best EW count into the pattern. From and EW perspective the pattern looked incomplete. I did say in that post that we would try and zoom into the smaller timeframe next to try and quantify this wavecount because it's only that a "wave count" and it's my opinion.

It's not enough information to build a case for entry so before we zoom into the lower degree wave count we want to look at Spot Gold from a Cycles viewpoint to try and quantify that wave count and it's alternates to either keep it or discard it.

I have attached a monthly cycles analysis in Spot Gold. Taking these charts at face value, by every measure in this analysis Gold has either bottomed at these levels OR is in the process of bottoming before a major countertrend rally to the upside starts. The 86 Bar cycle is rock bottom relative to previous extremes and the 22 and 43 bar cycles have been already trending up since last year. The momentum divergence cycles show divergence to the upside.
Most important the price projection targets have already been met and the FLD( Future lines of Demarcation) are at opposites suggesting a reversal is imminent.

So exciting times ahead and we should be closely looking at the gold miners for reversals here IMO
 

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gartley said:
So exciting times ahead and we should be closely looking at the gold miners for reversals here IMO
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Already started? NCM up 7% yesterday, 20% off the lows, with volume.

Move along, nothing to see here.........?

So the biggest 'macro event' of the century crashed & burned? No normalisation of US rates, as predicted? They have now admitted that things are not as rosy as they have previously portrayed, only they have not had the fortitude to blame it on themselves, instead citing concerns about everybody else's worsening predicaments.

And so the formerly all powerful US Fed has now been reduced to the laughing stock that it really is, only that now the sheeples are beginning to catch on that they don't have a clue about what to do from here. They are financial eunuchs now (you too Janet ) with ever reducing credibility, at the mercy of the bond markets who will start to make the decisions for them.

Along with the Comex 'not a problem', it will be an interesting next few weeks/months for gold.
 
I liked the price action in gold last week and I will start buying some GLD on Monday. I believe the US Fed made a mistake not raising rates and soon inflation will pick up and they will be forced to move. But I am not going to risk more than 5% total on gold.
 


If your hypothesis about inflation is correct, we should have seen the short end of the yield curve spike higher, not drop lower....or are you the first person on this trade?
 

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CanOz said:
If your hypothesis about inflation is correct, we should have seen the short end of the yield curve spike higher, not drop lower....or are you the first person on this trade?
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Should we have? Not sure how you came to that conclusion.

The short end of the curve is controlled by the Fed.

The long end of the curve is marginally controlled by growth and inflation expectations.

Yes, yields went down on the long end as well. But I think reading too much into short term moves in bond markets for the type of inflation that is coming would be a big mistake.

The inevitable "inflation recognition moment" (as the inflation [of the global reserve reference point, i.e. US base money] has already actually happened over decades) will not occur in the financial plane (cash v bonds) but rather in the physical plane (USD vs real goods and services which make up the US trade deficit) as the ever expanding volume of marginal deficit dollars finds fewer and fewer foreign sector bids, requiring an ever expanding volume of base money to make up the difference and thus leading to the worst kind of feedback loop.

Those looking to financial markets to try and time this recognition moment, at least personally I feel, will be sorely disappointed as it is likely to be a rather sudden phase transition from "USD, global reserve asset" to "US Peso vs gold" (along with most currencies probably). My opinion being that it's best to deleverage and lay claim to stuff in the physical plane while the music is still playing than attempt to find a chair once it stops.

If only there was a discrete, durable and portable wealth asset which could fulfil this role :dunno:
 
Good points Sinner. I guess my point was that when and if (a big if) inflation is thought to appear, then why would bond yields not reflect this at some point on the curve? They always have before have they not? Yeah, short term on the front end its all fed.
 
CanOz said:
Good points Sinner. I guess my point was that when and if (a big if) inflation is thought to appear, then why would bond yields not reflect this at some point on the curve?
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As FOA once said:


In case the above is too cryptic for you:

debt == US bonds
fiat == money supply
cash == base money

Bond yields live in the financial plane. In the financial plane, the Fed dominates and is undefeatable. They do after all, control the supply of the global reserve asset.

Now, if the financial plane controlled the real/physical plane, then that would be that and the MMTers would be right. But I guess by now you know that I think that's rather silly, merely an illusion caused by recency bias of ~50 years of foreign sector support for the USD.

The physical plane controls the financial plane. In the physical plane, the Fed + USG is a kitten, only able to ever expand the USD in volume, not value. All that matters here is what medium the marginal producers/savers of the world choose to do their saving (read, reserve asset) in.

They always have before have they not?
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define always? define inflation? We've had essentially 100 years of "good inflation", so I guess most could be forgiven for assuming we'll never see "bad inflation" ever again or even knowing that such a thing exists.
 
n case the above is too cryptic for you:

debt == US bonds
fiat == money supply
cash == base money
Click to expand...

Thanks for pointing that out....

Yeah, i get that this time is very different. Thanks.
 

Depends on which inflation you are referring to? With the emergence of an alternative reserve global currency Asian Infrastructure Investment Bank (AIIB) the US will fight to the last to maintain the USD role in support of it's financial & political agendas enabled by having the global reserve currency?

As Sinner points out, I'm not sure the 'flip' point will be a gradual affair, and they will have to 'inflate' to pay the for the shortfall as 'others' decide they no longer need USD's?

I think there will be some good returns to be made from gold but more leverage from gold companies, as usual?
 
That's a lot of question marks there UF...

Uncle Festivus said:
Depends on which inflation you are referring to? With the emergence of an alternative reserve global currency Asian Infrastructure Investment Bank (AIIB)
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Why would the world ever adopt another currency as the global reserve when all the marginal producer blocs have all been moving towards using gold as the reserve asset and setting their currencies free?

A: they wouldn't, they won't.

http://fofoa.blogspot.com.au/2011/07/euro-gold.html?m=1

You ask

the US will fight to the last to maintain the USD role in support of it's financial & political agendas enabled by having the global reserve currency?
Click to expand...

Nope. Why would they do that?

A: they wouldn't, they won't.


You ask

I think there will be some good returns to be made from gold but more leverage from gold companies, as usual?
Click to expand...

This was not logically congruent before when I asked you and it is no more congruent today. Gold mining companies will underperform not outperform physical gold. More likely they or their output will be nationalised.
 
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