Gold Price - Where is it heading?

Ann said:

I am expecting it to progress downwards over the next few months and then spill out of the megaphone shape on its way down.

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Hey there. Nice shooting. Since POG has changed daily trend, do you think 1307 - 1310 will be resistance for any reversal after this support break? It looks like a reversal on the daily of yesterdays definitive support break.

Wysiwyg said:

It looks like a reversal on the daily of yesterdays definitive support break.

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It looks no more. Time for some fast profits.

Taking profits on gold shorts. US gold at 1256
Inflation not exactly out of the bag just yet.
Draghi is backing down from taper talk and the Pound got a fat finger this morning so Brexit may start to get real with respect to uncertainty and the British financial system health and so forth
There's gotta be some demand for gold still given how much cash there is in general and nothing safe is gonna be paying much for a while, still, it seems.

Porper said:

You misunderstood. It isn't a triangle. You only have 1 swing in it. Take a look at Bulkowski's chart pattern site, he is very good at defining most patterns.

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Ahh, I see your problem Porper, you are trying to fit a seven year EOD chart into three month OHLC chart, doesn't go!

OK, for those not familiar with Bulkowski he wrote a computer program which analyzed the percentages of which direction a specific chart shape would resolve within the parameters of up to a three month period. He trades within a two to three month time frame using OHLC bars (open-high-low-close) which takes in all the trading information of that day or week. This makes for a very 'noisy' chart with a lot of information to cloud the actual direction of a chart. As it is only over a very short time frame up to three months there is plenty of room for stops to be enacted and profits quickly taken. This 'fills' a chart with lots of swings.

Bulkowski's book is an interesting read and as with most books on charting it has something to offer. It also looks impressive on my bookshelf along side the other large tomes of charting such as 'The Encyclopedia of Technical Market Indicators' by Colby and Murphy's "Technical Analysis of the Financial Markets". Not forgetting Stan Weinstein's 'Bull and Bear'....and the other dozens! Enough name dropping, you are probably getting the idea that I don't just rely on web sites for my information!

I have put up two charts one of them in the Bulkowski style with OHLC bars. This is a weekly chart over a three month period. I find it hard to read any real direction in it and without the last bar or any other indicators, I would be hard pressed to suggest its eventual outcome before it broke below support. However take note of the three touches on the upper falling trendline and the two touches on the bottom support.

Now the second chart is a daily chart over six and a half years with a closed EOD line. This has nowhere near the noise or swings and therefore the path/direction is far easier to follow. This is one reason I prefer long term charts. (There is no litter all over the path! ) Notice how the long term chart also displays three touches on the falling trendline and two touches on the bottom support.

These touches are the vital aspect of creating the shape of a chart which then can give you a good indication of where something is traveling. Long term charts have a massive impact on short term trading with potentially unseen overheads slamming the short term trader.

If I was going to buy a gold stock, which I wouldn't, 'cos I don't buy miners, I think I would wait a little bit to see if gold bounces off this young rising trendline that I drew by resting the start point on an untested price level back in February this year.

I believe if this rising support trendline fails there may well be a rapid fall to perhaps 1200? If it doesn't fall through support there could be a ride back up again to give the very long term falling resistance another bang with its head to see if it can break through.

One of the indicators I watch is Money Flow, currently it is showing as really, really low, lots of money has left gold, so far very little money is coming back in. The big question in my mind is gold becoming exhausted from its massive recent efforts to break above the long term overhead falling resistance?

Is it now a toy for the little boys in shorts or can the bugs still push it uphill?

.....and the chart

When I read charts sometimes I can find something which tells me a 'secret' about what may be happening to a chart. Often looking at the daily or weekly chart can tell me a 'story'. When I looked at the daily XGD I was struck with the possibility it may actually be a cup and handle developing. Very tempting to draw it thus with its lovely rounding bottom. Before I commit to a particular line of thought I take a look at the longer term charts and often I find a little hidden secret.

The XGD was just such a situation. I can see a potential failure to the daily cup and handle shape as shown by the monthly 20 year chart. There appears to be an overhead trendline about to block any further upward moves of the gold stocks overall.

For anyone not familiar with the XGD it has twenty constituents which form this chart.

Alacer Gold Corp AQG
AngloGold Ashanti Ltd AGG
Beadell Resources Ltd BDR
Dacian Gold Ltd DCN
Doray Minerals Ltd DRM
Evolution Mining Ltd EVN
Gold Road Resources Ltd GOR
Metals X Ltd MLX
Newcrest Mining Ltd NCM
Newfield Resources Ltd NWF
Northern Star Resources Ltd NST
OceanaGold Corp OGC
Perseus Mining Ltd PRU
Ramelius Resources Ltd RMS
Regis Resources Ltd RRL
Resolute Mining Ltd RSG
Saracen Mineral Holdings Ltd SAR
Silver Lake Resources Ltd SLR
St Barbara Ltd SBM
Tribune Resources Ltd TBR

...and the chart

Wysiwyg said:

Hey there. Nice shooting. Since POG has changed daily trend, do you think 1307 - 1310 will be resistance for any reversal after this support break? It looks like a reversal on the daily of yesterdays definitive support break.

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$1300 resistance holds for now

I have no doubt Gold will soar to $5000 or higher in the next few years due to the one of the most important key factors: Confidence collapse in Governments as they mess up the economy more and more. Consequentially, unprecedented record amount of capitals will rush into buying gold and silver.

But, on short term Time frame (as expected - refers my last Blogs), Gold continues to weaken/ on correction due to 2 main reasons: 1.The fear of Rate hike 2. More time needed to complete the correction.

1300-1305 finally was broken and the current decline might bring gold down to 1180-1220 for the corrective low as flagged out 3 months ago. Could it drop below 1180 or to 1045 again or even lower? Nothing is impossible but is less likely based on the current price and time analysis. We will update regularly for the paid subscribers.

So, it is still not the time yet to fully invest in Gold and Silver if you believe that they still need more time to complete the correction based onTiming Cycle and Technical analysis. So when is the time to start buying aggressively? Find out from me!

See Charts below

barney said:

I suspect you are right Ann ... about the flogging I mean:

Just for the fun of it .... I'm happy to have a small wager that the POG will hit $1400 before it hits $1200 ... Loser donates $50 to Joe. PS If it does hit $1200 ... $50 is all I will be able to afford Cheers.

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Is Joe $50 richer yet?

I guess you have all been expecting me back. Well, it is not good news for gold.

On the first chart, I see a potential resistance level at $US1210 to any return to higher prices. The next major support level is $US1080.

Just to put Gold into perspective for Australians, using Aussie dollars I am putting up a second chart for the POG in $A

There is a rising support coming from November 2014. If this fails, I am seeing levels of support at $A1450. If this level fails, I am seeing support at around $A1300 to $A1330.

Ann said:

Is Joe $50 richer yet?

I guess you have all been expecting me back. Well, it is not good news for gold.

On the first chart, I see a potential resistance level at $US1210 to any return to higher prices. The next major support level is $US1080.

Just to put Gold into perspective for Australians, using Aussie dollars I am putting up a second chart for the POG in $A

There is a rising support coming from November 2014. If this fails, I am seeing levels of support at $A1450. If this level fails, I am seeing support at around $A1300 to $A1330.

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If I may add on this thread even if my investment on NST, REGIS, AND EVN are looking depressed, that we all know India and China are the two major buyers for Gold. India imports more gold than Australia produces
The current Indian Prime Minister has recently done demoetisation which means he has cancelled currency notes of 500 and 1000. So what ?
The people with lots of black money trade on gold exchanging big currency notes.
The press report says that the god sale has reduced by 80% since demonetisation started.
Logic is simple. THe demand of gold will further reduces meaning Gold could reach $1100 in next 5 months time.

Funny how lines on a chart can look, 10 year chart long term trend continuing, 10 year chart pretty much the start of the gold bull over the last decade, the tremendous debt from 10 years ago has probably doubled, the Great Recession continues in many parts of the world.

Interestingly i have started coin collecting this year, silver coins are my favorites and having no idea i always have a google of coins i come across that are of interest to me on ebay etc, up until the late 60's early 70's high silver content coins for general circulation were common, minted in the 10's of millions in all western country's and subsequently horded in the 10's of millions.

Thats where all that silver went, and a lot of the gold, horded, collected and now stacked.
~

Miner said:

If I may add on this thread even if my investment on NST, REGIS, AND EVN are looking depressed, that we all know India and China are the two major buyers for Gold. India imports more gold than Australia produces
The current Indian Prime Minister has recently done demoetisation which means he has cancelled currency notes of 500 and 1000. So what ?
The people with lots of black money trade on gold exchanging big currency notes.
The press report says that the god sale has reduced by 80% since demonetisation started.
Logic is simple. THe demand of gold will further reduces meaning Gold could reach $1100 in next 5 months time.

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Hi Miner, I don't worry about who buys what, I am purely a 100% chartist and leave the fundamentals to others. I watch the Kitco live gold chart for fun. (no wisecracks please folks!) I noticed out of the corner of my eye, a video the other day and I thought, geez that will cause havoc if it happens.

India is facing a potential ban on gold imports, which could cause a potential, one-day $200 drop in gold prices, Peter Hug comments. Some analysts are saying that if it unfolds, it could be the biggest bombshell to the industry since 1971, when President Nixon took the dollar off the gold standard. December Comex gold futures settled the trading session slightly higher at $1,211.20 an ounce, up 0.12% on the day.

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http://www.kitco.com/news/video/sho...bshell--India-Faces-Potential-Gold-Import-Ban

So_Cynical said:

Funny how lines on a chart can look, 10 year chart long term trend continuing, 10 year chart pretty much the start of the gold bull over the last decade, the tremendous debt from 10 years ago has probably doubled, the Great Recession continues in many parts of the world.

Interestingly i have started coin collecting this year, silver coins are my favorites and having no idea i always have a google of coins i come across that are of interest to me on ebay etc, up until the late 60's early 70's high silver content coins for general circulation were common, minted in the 10's of millions in all western country's and subsequently horded in the 10's of millions.

Thats where all that silver went, and a lot of the gold, horded, collected and now stacked.
~

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G'day So Cynical,

Yes, I think I have a heap of very old Australian pre-decimal silver currency stashed somewhere myself. Lawd only know where it might be!

With those wee charts they have on Kitco, they are in Log scale and squished up small making them slightly distorted. Good for a quick overview, just hard to draw reliable lines on them. I have drawn a quick 10 year chart in Log for you, without the distortion of a minimized chart. You will see a bit of a different story, without the distortion.

Ann said:

Is Joe $50 richer yet?

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LOL .... That'd be right ..... come back to accept the wager AFTER you've already won the wager ...... How come you didn't accept the wager when I first suggested it .... I bet you were scared I was going to win weren't you Miss Ann:

All good ... I will accept your gloating and have contacted Joe to sort out my punishment

All jokes aside, once Gold broke $1240 in such a vicious way I knew I was in trouble ... I agree with your downward target possibilities but if it works down to around $1070 over the next few months I think we will be in for one heck of a rally higher after that.

My major holding is still in Pantoro (PNR) at the moment and given its current performance with a falling Gold price I cant wait to see what its going to do when Gold moves up

Ann said:

G'day So Cynical,

Yes, I think I have a heap of very old Australian pre-decimal silver currency stashed somewhere myself. Lawd only know where it might be!

With those wee charts they have on Kitco, they are in Log scale and squished up small making them slightly distorted. Good for a quick overview, just hard to draw reliable lines on them. I have drawn a quick 10 year chart in Log for you, without the distortion of a minimized chart. You will see a bit of a different story, without the distortion.

Click to expand...

...and then I thought, stop banging on and let's do a double check and see what is happening on non log. Your 10 year support is just as the squished chart says, so just go away Ann and shut your mouth! I am not going to add a chart as I have lines in place and it will be just too many lines to be reasonable. However, if you take that same long term 10 trendline and lie it on a support level from 2005, instead of 2007, the support is now well out of play and acted as an overhead trend resistance line in July 2016. We shall see what we shall see!

What we have on the 10 year chart is an upsloping head and shoulders almost complete.

A cleanout at around US$1100 would complete it and then would look bullish from there. Maybe Trump's installation will be the trigger.

barney said:

LOL .... That'd be right ..... come back to accept the wager AFTER you've already won the wager ...... How come you didn't accept the wager when I first suggested it .... I bet you were scared I was going to win weren't you Miss Ann:

All good ... I will accept your gloating and have contacted Joe to sort out my punishment

All jokes aside, once Gold broke $1240 in such a vicious way I knew I was in trouble ... I agree with your downward target possibilities but if it works down to around $1070 over the next few months I think we will be in for one heck of a rally higher after that.

My major holding is still in Pantoro (PNR) at the moment and given its current performance with a falling Gold price I cant wait to see what its going to do when Gold moves up

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The wager was always on, because I stood by what I said about the POG. I was calling another top, and got the normal bashing, of which we spoke, from the normal culprits. Well not all of them, I think a few thought better of it, this time around.
Not gloating though, I hate to see money being lost. And I have been right often enough with my charts, over the years, it is no novelty anymore, more, meh! There are going to be solid levels of resistance to a rise I am thinking, particularly if India's gold ban goes ahead.

I am still going to be watching that local chart closely, our currency may give buoyancy to the local POG, something to watch.

explod said:

What we have on the 10 year chart is an upsloping head and shoulders almost complete.

A cleanout at around US$1100 would complete it and then would look bullish from there. Maybe Trump's installation will be the trigger.

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I thought a move to gold would happen too. Maybe after the first Trump sabre rattle spooks the market. All know he is a compulsive liar so that may not even do it. Place your trust in Trump.

Ann said:

Hi Miner, I don't worry about who buys what, I am purely a 100% chartist and leave the fundamentals to others. I watch the Kitco live gold chart for fun. (no wisecracks please folks!) I noticed out of the corner of my eye, a video the other day and I thought, geez that will cause havoc if it happens.

http://www.kitco.com/news/video/sho...bshell--India-Faces-Potential-Gold-Import-Ban

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Hi Ann
Point taken. However I am a person who sees things and feels when metal comes but naive to read the charts.
But charts only based on past and then extrapolates. It important but can not work alone without fundamentals.
So let us see what your chart predicts today on gold price in next 6 months and see what the real price.
I will do the same to see how my fundamental analysis works. Of course environment changes and quoting 1971 is too far a shot.
Personally my four gold stocks are going south so I will be happier if your charts foretell better gold prices for sure

explod said:

What we have on the 10 year chart is an upsloping head and shoulders almost complete.

A cleanout at around US$1100 would complete it and then would look bullish from there. Maybe Trump's installation will be the trigger.

Click to expand...

Hi explod, I have been caught with H&S shape before. I find unless it is at the highest pinnacle or very lowest bottom for an inverted H&S it tends not to resolve as expected. Having said that, your call of $1100 may have a real potential if it bounces off So Cynical's 10 year trending support. I am seeing a falling channel also drawn on his chart. Gold may want to test the lower trend line of the channel under the 10 year trendline at $950ish.

Now I have so many lines all over my chart, it is almost unreadable, and looks more like I am drawing a cat's cradle. Better go and clean it up