This is a mobile optimized page that loads fast, if you want to load the real page, click this text.

Gold Price - Where is it heading?

Jump to new
Change in net longs overt the week was from 185k to 224k positions:



Just a year ago net shorts held sway, so momentum has swung strongly positive.

The Gold Bugs Index, below, suggests a lot more room headroom is available:

 
Momentum continues: immediately the New York Globex market opened this morning, gold jumped $8 higher before settling back to around US$1405:

 
POG continuing to break higher:



Yesterday was a day of strong consolidation, and the overnight rise will shake off more shorts. It's hard to see players betting against the trend right now as political and economic indicators are not suggesting the markets are in for a good time.
 
The G20 outcome in Japan was uneventful, and the USA and China will continue their talks, rather than actions, on trade. That uncertainty is likely to keep POG over $1400 for the time being.
Looking at the chart below, net longs added strength to future upside:



Looking for the next technical barrier for POG is a bit tricky as it ran strongly for 10 years, declined for 4 years, and since 2016 been meandering through a series of higher lows. Looking at quarterly data for POG I see $1600 as the next hurdle and see it jumped in 2020. The monthly chart suggest $1560 as the next hurdle. Either one, if US bond rates are lowered again, I suspect these will be breached a lot faster.

Of the many likely winners on the ASX, my favourite is always the biggest producer with the least hedging. Quite a few mid-tier and smaller producers have large hedge books to unwind - most well under AUD$1900 - and will need the next year to rebalance their forward sales so as to maximise profits rather than constrain them.
 
Please note that the chart I posted on June 25th 2019 seems to be auto hyperlnked, so is showing updated and immediate gold prices, plus those of the 2 previous days.
Anyway, I was going to add that recent support is $1383 and has been steady thereabouts for 2 days before POG jumped $40 again this morning. It has been stabilising above $1425 at time of posting.
You do not need to be a rocket scientist to work out the big swings are presently happening during New York Globex afternoon market hours (especially at open/close).
I guess for gold bugs the best news to date is that POG never tested $1350 after smashing through that level of long term resistance.
 
Looks a bit like a break of resistance and a little test to see if support will hold.



Looks pretty bullish to me.

jog on
duc
 
Another week passes and POG remains firmly above $1350 support, plus has not fallen below $1383 since racing to recent highs.
I have always preferred a progressive rise in POG, rather than a dizzying spiral that quickly topples, so am happy this week closed near $1400:



With craziness in global trade and politics prevailing I cannot see too much downside near term for POG, and we probably just need Trump or the Iranians to light another fuse to kick it into a new ballpark.
 
The Chinese government is accumulating gold. I suppose to offset the inherent weaknesses in the Yuan given that you can't use it to buy property or state-owned resources domestically, nor most commodities internationally. Without capital controls China's citizens would swamp the exits to get out of their own currency. You can't risk having that sort of pressure against the dam forever without addressing it. I doubt they can accumulate enough to ever form even a partial, gold-backed currency but sizeable gold reserves can be an important hedging and psychological tool for traders and citizens alike. I don't know how effective it would be if the Yuan got into trouble. You'd have to expend the gold assets to defend any peg and its supply is limited.
 
I have borrowed this from elsewhere:



The dark blue line on the bottom right of the candlestick chart is the 200 day moving average. It's important because it has been a long time since it appeared in charts like this with a clear upside trend.
The other reason I borrowed the chart is because it is offers incontrovertible evidence that we are in a new price action paradigm for gold. Daily movements are now greater than some that unwound over a fortnight, and these will keep shaking out the weak hands dealing in gold.
The one thing I learned when posting about gold around 20 years ago is that is a game of infinite patience. I have a conservative price target of over $2000 within 3 years and expect some massive bumps along the way. It's conservative because this bull run starts from a significantly higher platform, and is driven by producer costs which even at today's high price sees some mines barely profitable.
Add the tendency for many Central Banks to accumulate gold holdings, plus overall market uncertainties, and the recipe is complete.
 
Gold 4H USD - We have broken the trend that started this move and we are still holding over a level that qualifies this as a high level consolidation. An upward break of this pennant pattern would target the 1595 area. On a break down I'd say we are looking @ that mid 13 level for the first hope of solid support.

2c FWIW. JMO etc

 
Gold USD Daily - On a potential break out here, remember that the last candle needs to complete. Ideally it does so with a clean vault over the 1425 level... 1440 for confirmation then we are on another up-leg by the looks of it.

 
Gold 4H USD - Still in the pattern. On higher support right now. If this holds the next swing upward could be the juice. For now we are still consolidating.

 
You must log in or register to reply here.

Similar threads

M
Investing in Gold
3 4 5
Replies
81
Views
12K
qldfrog
SGD - Siguiri Gold Corp.
Replies
1
Views
768
Dona Ferentes
GMIN - G Mining Ventures Corp. (TSX)
Replies
1
Views
520
mullokintyre
US Election 2024 : Stock and Economic Comment
7 8 9
Replies
171
Views
10K
divs4ever
  • Sticky
Resources Rising Stars 2024 Conference Gold Coast
Replies
7
Views
2K
Garpal Gumnut
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more...