Gold Price - Where is it heading?

[Ann]

gold position map shows a similar sign to what happened in early 2016
http://www.daytrade-profit.com/2019/01/gold-position-map-show-similar-sign-to.html

Similar to but different from daytradeprofit, I see C looking more like A than B. A and C have a far broader base and a slower rise and fall. B saw a very rapid fall, small base and quick rise.
A chart is easier to see of course.

 

[Ann]

I'm a gold bull for now, but I'd be happier if it could break through US$1,3000 and stay above it. It's been a good couple of months for gold but I get the feeling that we're in for some consolidation between US$1,275 and US$1,300. I think the U.S. government shutdown and Trump troubles will keep it above US$1.275 for now.

Frankly greggles I am absolutely astounded with all that is going on with Trump and the weak markets that gold is doing so poorly. It should well and truly have broken above the US$1,300 by now. This is the reason I am so very pessimistic about anything stellar happening to the POG. It is all very fascinating to watch.

 

[BlindSquirrel]

When the Fed stops raising rates, I'd expect that the USD is going to drop in value which will give a nice tailwind to the gold price as well.

 

[Ann]

When the Fed stops raising rates, I'd expect that the USD is going to drop in value which will give a nice tailwind to the gold price as well.

My thoughts.... Increased demand for government debt (bonds) price of bonds goes up, rates fall because of greater demand (possibly worried about the markets, safe place for their dosh)...why pay higher interest than you have to. People who want to buy bonds need US$. Greater demand for US$ up she rises. Swings, roundabouts and see-saws, childs play! I maybe wrong folks!

 

[Ann]

I have been pondering the weakness in the gold price. I am thinking it may all come down to supply and demand. When I started watching gold back in about 2004 and then over the years, the biggest impact which seemed to move the gold market was the Indian gold buying season. India accounts or accounted for about 20% to 25% of the gold market second after China. The $US was floundering, the Rupee was falling but clearly cushioned by the low $US. The Rupee is still falling but now the $US is rising and this may be making gold way too expensive for the Indian market, thus pricing gold out of the very important Indian market. Less demand, weaker prices.

Then there is the other scenario, the new gold is Palladium. It is also nudging $US 1300 I bet it breaks through $1300 before gold unless Platinum becomes the cheaper substitute. Both Palladium and Platinum are components in EVs unlike gold which is pretty much just a bling thing. You just have to love this stuff! Spins my wheels.

Here is the chart for the Indian Rupee/USD

 

[Triple B]

Will POG Bust through the $1300 mark tonight. Just trying to break a 1Hr chart Downtrend R now.
Might be a spike into the 1300s to clean out some short stops , then up we go again?

 

[Ann]

Will POG Bust through the $1300 mark tonight. Just trying to break a 1Hr chart Downtrend R now.
Might be a spike into the 1300s to clean out some short stops , then up we go again?

View attachment 91339

Interesting to see Triple B, another eleven and a half hours to closing will tell us! However all the market participants are flying blind as the US shutdown gives them no information about what is happening in the futures market, no COT charts to guide them.

 

[Ann]

Looking at the weekly chart for Aussie gold it appears as though it is trying to break above the all time high overhead resistance line of around $1800 again. If it fails.....?

 

[BlindSquirrel]

it seems to be on a nice little run today. My CFDs hope it continues

 

[BlindSquirrel]

it just dropped down to kiss my trailing stop then bounced back up.

>_<

(I know, I know: bulls make money, bears make money, pigs get slaughtered!)

 

[Joules MM1]

it just dropped down to kiss my trailing stop then bounced back up.

>_<

(I know, I know: bulls make money, bears make money, pigs get slaughtered!)

your 'event' highlights the primary reason i dislike and dispromote "trailing" anything

you can be right in directional terms but not price legnth

one way to consider a procedural remedy are 2:
first, reduce the position size (cfd's can be fractional too)
second, with reduced size look for the next stop level
trailing stops are arbitrary stops because they are linear when we think they are dynamic, it's the action of the trail, it's a mechanical stop-come-hit-me linear programm, is antithetic....yadda yadda = not a good idea

another suggestion is to be the trailing stop, that means, you lift the stop as support levels get get built, or put that another way, to say if this 'n' level gets taken out that the implies the move i think is underway is incorrect, that there's something else going on...again, reducing size allows you more probabilities and avoids you being chopped out of the trade too early and then missing getting back (when youre larger pattern/target ideas prove correct), you can play different levels but you need to size accordingly, afterall all sizing if not sized to the risk is arbitrary too....so combined arbitrary sizing with arbitrary trailing or arbitrary static levels = more chop-outs = more damage and less scope for gains

slow day on the $xjo in strong uptrend gives me plenty of time do this page....lots more ideas than this ...and keep in mind this is only ideas on a page and may not suit you....you need to know and be synced to trade ideas as a complete package ....if it fits you, great!

 

[BlindSquirrel]

Thank you.
Logically Gold must increase in value over the next 6-12 months markedly due to macro factors that are likely to eventuate. I'd like to be in on most of it.

As an aside, with respect to support/resistance, now that these prices are at levels not seen in 8 months or so, do the old ones still apply?

 

[BlindSquirrel]

... because I'm looking at a resistance around $1325 from May last year (and several times in April)

 

[rederob]

Logically Gold must increase in value over the next 6-12 months markedly due to macro factors that are likely to eventuate. I'd like to be in on most of it.

Markets don't follow logic.
In price (value?) terms POG in USD peaked September 2011 at USD$1895 (before falling off its perch).
In AUD terms price peaked first week of January 2019 at just over $1840.
The interesting observation was that after the 2008 GFC, gold continued to rise sharply for the next 3 years.
It does seem that now a lot of the cryptocurrency distractions are behind us, serious investors might be getting back into the safety of gold.
What is promising is that the term of POG consolidation has ripened for another pounce on a new high. However, until POG definitively crashes through $1350 methinks it's presently premature.

 

[Joules MM1]

for sure, old levels are made for a reason

first ratify what makes either support or resistance rather than a randomised level, that means, if the levels were visited several time and rotations took place it means traders will look to those same levels or tight zones in which to do business

again, ratify this, by that i mean if we have an old large round number and it gets hit and rejected (bids into heavy selling for example) there is a point when that level loses its meaning because the sense of value of that level is not the same several revisits later and different groups of traders may not be active during the next visit, not always the same players playing the same levels

so if you decide the level of sup/res are an arbitrary technical level due to something like an uptrend line that is not the same as that same level having been a meeting place to do business

then you require, i suggest, the context of previous plays, how easily they were rejected versus how persistant price revisits that level and size of the move that takes you back there...the auction may visit a level and reject it several times as one group of players offloads at or near that level, so you have two groups of liquidity at play and repeat visits to a specific level maybe telling you that one group is becoming dominant so they'll gain strength (followers with liquidity on that side) and the opposing side is switching liquidity or have completed their business therefor completing resistance or support........once a move is completed (within its own context) then it is completed....

keep in mind that anecdotal analysis or fundamental analysis is rarely if ever insync with price direction at the time you think it should be......rarely in sync with a specific price level and/or price width/length .....you cannot correctly assign, in my humble opinion, fundamental ideas to the immediacy of liquidity washing around in the auction

... because I'm looking at a resistance around $1325 from May last year (and several times in April)

 

[Joules MM1]

when banks are packing in the bars it's usually a bad sign for the bulls, more of this occurs at tops than bottoms

https://www.reuters.com/article/us-...586f&utm_medium=trueAnthem&utm_source=twitter

COMMODITIES
JANUARY 31, 2019 / 4:05 PM / UPDATED 6 HOURS AGO
Central banks bought more gold in 2018 than any year since 1967: WGC

 

[explod]

when banks are packing in the bars it's usually a bad sign for the bulls, more of this occurs at tops than bottoms

https://www.reuters.com/article/us-...586f&utm_medium=trueAnthem&utm_source=twitter

COMMODITIES
JANUARY 31, 2019 / 4:05 PM / UPDATED 6 HOURS AGO
Central banks bought more gold in 2018 than any year since 1967: WGC

Find that hard to understand Joules, the largest buying in the last three or four years has been from what were third world countries, China and India in particular and their goal to move away from the US dollar which is struggling to maintain equity due to the US overwhelming debt. The current width of the financial world is very different from the past

Interested in your rationale for it being a bad sign for bulls.

 

[Joules MM1]

Find that hard to understand Joules, the largest buying in the last three or four years has been from what were third world countries, China and India in particular and their goal to move away from the US dollar which is struggling to maintain equity due to the US overwhelming debt. The current width of the financial world is very different from the past

Interested in your rationale for it being a bad sign for bulls.

of course in the last hike into aug/sep 2011 banks were some of the biggest buyers, in 2001 banks were some of the biggest sellers

consider banks as buyers of last resort, much like governments....size matters

after the massive decline in % terms where are the bears?

bulls dont be bullish at lows....that doesnt mean we wont go a lot higher in price, but, higher prices does not mean new altime highs......in 2000 i was in a chat room in commsec and asked the question who's buying gold.....i was asked who would bother ....300$'s .....yeah, who would bother

reuters run a regular live blog on gold ......what were they observing in 2000 ? nasdaq, which soon lost 78%

 

[rederob]

n 2000 i was in a chat room in commsec and asked the question who's buying gold.....i was asked who would bother ....300$'s .....yeah, who would bother
reuters run a regular live blog on gold ......what were they observing in 2000 ? nasdaq, which soon lost 78%

There was a long lull in POG from its high in 1996 until breaching it again in 2004 at around $420.
Not many would have entered gold in 2000 because it was still trending down.
POG dipped below $300 in late 1997 and aside from an extremely brief spike above $300 in January 2000 (lasting mere days), it was another 2 years before $300 was again breached.
This thread picks up where gold was in 2004 when it broke through 8 years of resistance.
If you ascribe to lessons in the past being helpful, then there might be something in it hat makes a lot of sense.
The bit which I do not think has changed is that gold remains a store of value. The other bit is that POG is inextricably linked to the vagaries of the USD, albeit not always in short term movements.

 

[Joules MM1]

there is no endogenous benchmark for the supply and demand of PM's only the perception of value

that's what drives the price up and down in both dollar absolute and dollar adjusted terms

banks are the fundamental marker that a swing is in the latter stages of their actions
if theyre persistent bullish/buyers the uptrend is peaking (relatively) and if they've dumped or are dumping that trend is all but done too.....

the current action on a monthly basis is mid-section of a larger downtrend
the current action on daily basis is already involving constant positive postings on social media and the media itself carrying positive biased stories, non of which is typical of a trend recovery

the more cryptos declined the more defensive the late comers became....and now....tumble weed
the more gold declined the more ardent bulls argued its rise, it has a bounce and suddenly a lot of happy chatters.....the real bottom of a gold bear is usually very painful for the bulls and they remain quiet intil the next bull phase is so obvious they cannot

in the 1990's what companies were set-up to store gold? what derivatives were being traded? very few compared to today

There was a long lull in POG from its high in 1996 until breaching it again in 2004 at around $420.
Not many would have entered gold in 2000 because it was still trending down.
POG dipped below $300 in late 1997 and aside from an extremely brief spike above $300 in January 2000 (lasting mere days), it was another 2 years before $300 was again breached.


This thread picks up where gold was in 2004 when it broke through 8 years of resistance.
If you ascribe to lessons in the past being helpful, then there might be something in it hat makes a lot of sense.
The bit which I do not think has changed is that gold remains a store of value. The other bit is that POG is inextricably linked to the vagaries of the USD, albeit not always in short term movements.

"Not many would have entered gold in 2000 because it was still trending down"
you can also ascribe to: no one is bearish in a gold uptrend, no one is selling because it is still trending up

"The bit which I do not think has changed is that gold remains a store of value."
you can also ascribe to: gold has no value which is why it went down to 300 in 2000 as people did not think it was a store of value

it is is merely logic describing other players in the market (on either side of the trade) and there is no emotive logic involved