Gold Price - Where is it heading?

[Joules MM1]

scratch that post ....most of it was written last night and i forgot the page saves the scrip...i should stay out of emotive laden threads...learning curve....back to the show...

 

[BlindSquirrel]

for sure, old levels are made for a reason

That just happened. The line I noticed at 1325 from early last year was reached again last night.

 

[rederob]

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

Your ideas are not reflected in the real world.
When I was bullish on POG 15 years ago it was purely on fundamentals. The metric of AISC was not around back then. However the reality for Australian producers was that it was costing more and more to get gold out of the ground, and the trend was going to get worse (and it did). Newcrest, which took out 2.3moz in FY2018 had an AISC of $835, and this was lowered by the exceptionally low AISC of $171 at their Cadia site.
Next, you should look at palladium and platinum which derive fundamental price shifts from use in vehicle emission systems.

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

In logic, that is a trivial sense.
The market has investors and traders, not mutually exclusive. Central banks continue to hold gold reserves because like it or not, their is a perception the value of their gold cannot be diminished. That is not the case with fiat currency.
You look at POG from a trading perspective which is fine. I look at what is likely to carry it in a particular direction over the longer term, and I am here talking many years out.
Our paths don't really cross.

 

[noirua]

How gold could make a big comeback
https://www.ii.co.uk/analysis-commentary/how-gold-could-make-big-comeback-ii507607

 

[BlindSquirrel]

a support looks to be around 1317. When the price smashed through 1315 on wednesday, it has since bounced off 1317.5 or so 3 times, including just now.
Last time it looked like taking note of this level was May last year.

I think I'm starting to get the hang of this... now watch me lose it all!

Long term I'm bullish on gold as well due to hearing from and reading Jim Rickards. Jesse Felder was also on TIP recently with good things to say about gold and gold miners (such as Newmont).

 

[explod]

Your ideas are not reflected in the real world.
When I was bullish on POG 15 years ago it was purely on fundamentals. The metric of AISC was not around back then. However the reality for Australian producers was that it was costing more and more to get gold out of the ground, and the trend was going to get worse (and it did). Newcrest, which took out 2.3moz in FY2018 had an AISC of $835, and this was lowered by the exceptionally low AISC of $171 at their Cadia site.
Next, you should look at palladium and platinum which derive fundamental price shifts from use in vehicle emission systems.

In logic, that is a trivial sense.
The market has investors and traders, not mutually exclusive. Central banks continue to hold gold reserves because like it or not, their is a perception the value of their gold cannot be diminished. That is not the case with fiat currency.
You look at POG from a trading perspective which is fine. I look at what is likely to carry it in a particular direction over the longer term, and I am here talking many years out.
Our paths don't really cross.

Very well put Rederob, it's been a solid form and source of security for 5,000 years and in times of growing financial stress it will only bump along in an upwards direction.

 

[rederob]

Very well put Rederob, it's been a solid form and source of security for 5,000 years and in times of growing financial stress it will only bump along in an upwards direction.

That's what central banks think, as well:

31 January, 2019
Annual gold demand gained 4% on highest central bank buying in 50 years
Gold demand in 2018 reached 4,345.1t, up from 4,159.9t in 2017 and in line with the five-year average of 4,347.5t. A multi-decade high in central bank buying (651.5t) drove growth. Demand was bumped up in Q4 by 112.4t of ETF inflows, but annual inflows into these products (of 68.9t) were 67% lower than 2017. Investment in bars and coins accelerated in the second half of the year, up 4% to 1,090.2t in 2018. Full year jewellery demand was steady at 2,200t. Gold used in technology climbed marginally to 334.6t in 2018, although growth ran out of steam in Q4. Annual gold supply firmed slightly to 4,490.2t, with mine production inching up to a new high of 3,364.9t.
4% growth in annual gold demand driven by highest central bank buying in 50 years​

 

[ducati916]

Another good reason for gold:

The downsides of digital security. From CoinDesk:

Troubled Canadian crypto exchange QuadrigaCX owes its customers $190 million and cannot access most of the funds, according to a court filing obtained by CoinDesk.

The problem: The exchange kept its digital ducats in a so-called cold wallet, which is not connected to the internet and accessible only by private key. Following the death of co-founder Gerald Cotton, investors were left with no way to access their cryptos.

In a sworn affidavit filed Jan. 31 with the Nova Scotia Supreme Court, Jennifer Robertson, identified as the widow of QuadrigaCX co-founder Gerald Cotten, said the exchange owes its customers roughly $250 million CAD ($190 million) in both cryptocurrency and fiat.

She later added that she has no business records whatsoever for QuadrigaCX or its affiliated companies. While she does have Cotten’s laptop, the device is encrypted, and she does not have its password or recovery key. While a consultant has been retained to try and recover the laptop’s contents, he has had limited success to date.

jog on
duc

 

[BlindSquirrel]

While she does have Cotten’s laptop, the device is encrypted, and she does not have its password or recovery key.

 

[Ann]

I was wondering why the central banks have been buying gold. Here is one article as to why. Maybe they are concerned with worldwide inflation? Dunno, just musing. I will put up a chart for Aussie gold price a bit later hopefully.

Some Central Banks Have Gold Fever, and It Might Be Sensible

Gold bugs aren’t always rational. That’s not the case for central banks, whose purchases of the yellow metal last year were the highest since the United States broke the link between gold and the dollar in 1971. For these institutions, it’s less a short-term gamble that prices of the precious commodity will rise, and more a concern that dollar dominance could gradually be eroded.

Central banks bought 651.5 tonnes of gold in 2018, the second highest annual total on record and up 74 percent from the year earlier, according to the World Gold Council. As in the past three years, Kazakhstan, Russia and Turkey were significant buyers, but were last year joined by the likes of Hungary, India and Poland.

 

[BlindSquirrel]

I was so sure that it had broken through the 1315 resistance last night.

Damned hubris got me again.
All morning it's been shrugging off my stops that have been just past the 1305 levels before reversing. I'm out for a bit I think.

 

[explod]

The Aussie gold price breaking into all time high territory. Should soon impact Aussie gold stocks:-

"

 

[rederob]

The Aussie gold price breaking into all time high territory. Should soon impact Aussie gold stocks

Always best to check how each stock is "exposed" to such price movements.
I hold a few goldies, so checked RMS and was not overly impressed. Deep down at page 96 of their Annual Report is their sensitivity analysis. Unfortunately about 75% of this year's output is forward sold at AUD$1719/oz, so that's potentially around AUD$15m down the gurgler over the financial year.
Cannot really complain as at the time it was forward sold, it was a good price.
Anyhow, as is seen from RMS, there are quite a few factors which can impact profitability from goldies, so don't blindly assume that strong rises in POG will be reflected in a producer's share price.

 

[explod]

Do not disagree rederob. Posted on the MOY thread here at the same time. MOY have sold forward also but will not have a lot of effect in the bigger scheme IMV

 

[BlindSquirrel]

well that was a rollercoaster ride overnight! I had two CFD positions open offsetting each other and the first limit got hit near the top then the second got hit near the bottom - all while I was asleep!
This brings me back to break even after my last snafu!

I'm only playing with $100 while I'm learning.

 

[greggles]

Gold consolidating nicely above US$1,300 and finding good support at US$1,304. I expect it will continue to consolidate in this area until a catalyst causes it to break out of its current range.

There is still a lot of geopolitical uncertainty out there and tensions with Russia and China remain high. My feeling is any strong move with be to the upside.

Time will tell.

 

[Ann]

Always best to check how each stock is "exposed" to such price movements.
I hold a few goldies, so checked RMS and was not overly impressed. Deep down at page 96 of their Annual Report is their sensitivity analysis. Unfortunately about 75% of this year's output is forward sold at AUD$1719/oz, so that's potentially around AUD$15m down the gurgler over the financial year.
Cannot really complain as at the time it was forward sold, it was a good price.
Anyhow, as is seen from RMS, there are quite a few factors which can impact profitability from goldies, so don't blindly assume that strong rises in POG will be reflected in a producer's share price.

Thanks Rob, this is really interesting stuff I remember you talking about it many years back. Sadly again your link to 'RMS' didn't work for me, could I trouble you to repeat it please?

Could this forward selling also be the case for some of the oilers as well?

 

[greggles]

Gold's golden run continues and its V-shaped recovery from its September lows is now very clear on a longer term chart.

US$1,350 is gold's next challenge and it's a big one. A break above that level would be very bullish. But let's not get ahead of ourselves. There's still US$24 to go before we're there. Anything can happen between now and then, but I remain a gold bull.

 

[rederob]

your link to 'RMS' didn't work for me, could I trouble you to repeat it please?

https://www.rameliusresources.com.a...MELIUS-2018-ANNUAL-REPORT-LOW-RES-8.11.18.pdf

US$1,350 is gold's next challenge and it's a big one. A break above that level would be very bullish. But let's not get ahead of ourselves. There's still US$24 to go before we're there. Anything can happen between now and then, but I remain a gold bull.

Usually a high US dollar and low gold price go together. That was not the theme last week, nor this... so far.... That, to me, is a very positive sign that POG will run well above 2018 highs, and carry through a bull run for several years - with the usual blips (or dips).
So I am tipping POG to breach $1500 this year with my usual certainty (ie. there is no such thing).

 

[Miner]

https://www.rameliusresources.com.a...MELIUS-2018-ANNUAL-REPORT-LOW-RES-8.11.18.pdf

Usually a high US dollar and low gold price go together. That was not the theme last week, nor this... so far.... That, to me, is a very positive sign that POG will run well above 2018 highs, and carry through a bull run for several years - with the usual blips (or dips).
So I am tipping POG to breach $1500 this year with my usual certainty (ie. there is no such thing).

With gold price going to breach $1500 I will tell my wife to make her jewelleries in this week itself with her flying to India tomorrow. Hope the breach does not happen in this week