Gold Price - Where is it heading?

[tinhat]

It's often said that the AUD moves with the price of gold. Since mid last year however, the price of gold has been rallying and the AUD has been in decline against the USD.

Is the AUD_USD decoupling from the price of gold or is something going to give to correct the divergence?



Chart of AUD_USD (blue) with relative price of gold (USD) overlaid (blue).

 

[Smurf1976]

Is the AUD_USD decoupling from the price of gold or is something going to give to correct the divergence?

When a relationship has existed for an extended period, divergences tend to be temporary with the question being about the detail of how it resolves and when.

That said, well right now looking at international markets stocks are down, oil is down, the AUD is pretty much unchanged, gold is up so the trend continues at least for the present time.

 

[rederob]

Interested in how you see this in relation to other "physical" assets?

Oil is one obviously which directly relates to the points you make but also the other precious metals, commodities, real estate etc. At a simple level these issues would also apply to those things would they not?

Or are you seeing that it's a situation somewhat unique to gold and gold alone?

Silver tends to follow gold, but I can't see other metals affected.
Many years ago there was a tendency for gold and oil to move in tandem, and latterly that seems to be only when there is a very significant event affecting oil, as per the Aramco refinery strike. If you chart POG and POO this year there is no positive correlation.
I do not follow the property market, so have no comment on any relationship existing.
As I see it, there are global factors driving "risk" and in that market it gets tricky parking money anywhere for a reasonable time. Gold seems to outlive "risk" and becomes a safer alternative - at least from an historical perspective - so rises in price as more flock to it.
So yes, I see a current bull market for gold and not much else.

 

[rederob]

I have nipped off the tops from this chart's trend channel to show where exuberance gets curtailed:


The channel drawn above represents an $85 range, although the channel proper would otherwise have been nearer $145. A 10% range is not useful for seeing overbought in this bull market.
The instructive lesson is to now go back to gold producing equities and see how well they have stabilised albeit clearly off their August highs.

 

[qldfrog]

Something i have just been aware of and could be really big if it takes
Gold backed crypto coin by Perth Mint
https://www.abc.net.au/news/2019-10...ading-through-blockchain/11590926?pfmredir=sm

 

[moXJO]

Something i have just been aware of and could be really big if it takes
Gold backed crypto coin by Perth Mint
https://www.abc.net.au/news/2019-10...ading-through-blockchain/11590926?pfmredir=sm

Cryptos lure is that its decentralized. Backing it with gold defeats the purpose.

 

[qldfrog]

Cryptos lure is that its decentralized. Backing it with gold defeats the purpose.

Actually i think it is the gold physical location which breaks the dream
If you had that gold in an old style swiss bank, that would be perfect
But now even Swissland is not a guarantee of either anonymity or government interference
Gold issue is with storage, you do not want to dig your gold in your garden or keep it in your safe or under your bed
Gold in a bank safe is subject to government seizure, paper gold is useless not truely a match: more paper than physical gold
I naively trust a bit more pmgold that gold or other us paper versions
But still, crypto could be an option..but you still need to trust someone as gold is physical

 

[moXJO]

Actually i think it is the gold physical location which breaks the dream
If you had that gold in an old style swiss bank, that would be perfect
But now even Swissland is not a guarantee of either anonymity or government interference
Gold issue is with storage, you do not want to dig your gold in your garden or keep it in your safe or under your bed
Gold in a bank safe is subject to government seizure, paper gold is useless not truely a match: more paper than physical gold
I naively trust a bit more pmgold that gold or other us paper versions
But still, crypto could be an option..but you still need to trust someone as gold is physical

For trading it may possibly take off.
Gold bugs and crypto enthusiasts generally don't trust central authorities where govt can come in and take your gold/coins.

 

[qldfrog]

For trading it may possibly take off.
Gold bugs and crypto enthusiasts generally don't trust central authorities where govt can come in and take your gold/coins.

Neither do i indeed

 

[qldfrog]

Could be an alternative to pmgold for foreign investors

 

[moXJO]

Its been a while since I've traded any metals but depending on what platform takes up the coins it may make trading physical easier. Spread possibly reduced and instant transactions.
I think I use to do physical from phone where they would lock in the price. Or have to make physical delivery and take what they offered.
Perth mint has had a few goes at this. They had allocated storage that you could trade on account before. Blockchain may be the thing that works.
Downside is if you lose your key or someone hacks/frauds the platform.
Remember Mt gox.

 

[rederob]

Below is the 30-minute POG chart over the past 2 months:


After bottoming on 1 October it has failed to penetrate $1520 on the upside, while finding good support around $1480 on the low side.
I like the trading range - little volatility - as it is positioning nicely for another move north imho.
Although not drawn on the chart, yesterday's jump broke the downtrend in place from 4 September... so maybe an omen?
There are no indicators suggesting the gold market has soured so waiting a bit longer just strengthens the next advance.
Elsewhere at ASF there were some posts on Newcrest. Just be aware that NCM adds copper credits to its income stream, and copper's future is more predictably bright than gold's over the next few years.

 

[rederob]

Since last posting a chart, POG slipped under trend but has bounced off primary support.
I have my eyes on what's happening in the USA wrt to Trump impeachment hearings and have a suspicion that this will unsettle markets in weeks to come. How much depends on what the Democrats can substantiate and get traction from US voters - read "polling" on Trump impeachment.
It's a bit of a long bow, but having watched every minute of witness testimonies, and gaining a new respect for Adam Schiff, Trump's tenure is sinking into quicksand.
Countering my ideas are the reality that no matter how stupid we think Trump might be, the US economy is not on the rocks and the trade war with China has not turned global markets sour.
My view is if POG can push through $1485 in coming weeks then we are in for some sustainable upward momentum into 2020, where I see $1650 becoming the next medium term target.

 

[wayneL]

Since last posting a chart, POG slipped under trend but has bounced off primary support.
I have my eyes on what's happening in the USA wrt to Trump impeachment hearings and have a suspicion that this will unsettle markets in weeks to come. How much depends on what the Democrats can substantiate and get traction from US voters - read "polling" on Trump impeachment.
It's a bit of a long bow, but having watched every minute of witness testimonies, and gaining a new respect for Adam Schiff, Trump's tenure is sinking into quicksand.
Countering my ideas are the reality that no matter how stupid we think Trump might be, the US economy is not on the rocks and the trade war with China has not turned global markets sour.
My view is if POG can push through $1485 in coming weeks then we are in for some sustainable upward momentum into 2020, where I see $1650 becoming the next medium term target.

View attachment 98701

Do you really think the price of gold, or any other instrument for that matter, plays to the tune of technical analysis?

In other words, are you using technical analysis as a means of predicting price movements, or as a means setting of price boundaries for the purpose of trading? ... Vis a vis entries and exits?

 

[rederob]

Here is POG as we head into the end of the year:

A close above $1485 will bode well into 2020.

 

[sptrawler]

I think the price of gold and its direction in the immediate future, is going to be linked to Trump's China trade deal, if a constructive outcome is struck a lot of uncertainty will go out of the market.
This in turn will drive the market higher and gold should see a reversal, if the trade deal falls through and Trump gets chucked out, I would think gold will sky rocket and the market go over a cliff.
Just my opinion.

 

[rederob]

What a difference a day makes...

Bring on 2020.

 

[rederob]

Always good to get a Christmas present wrapped in gold:

The 30-minute chart for the past 30 days is heartening and unusual for three reasons.
First, the UK's Brexit election did little to move the market, in fact gold dipped a tad the Monday afterwards.
Next, Trump's impeachment did exactly nothing for POG as it meandered through an uneventful $10 range on 19 December.
Finally, we have Trump and Xi today agreeing to meet and sign off on their recent trade deal.
Looks like I will have to spend a lot more time reading across the many sites that attempt to explain this as it seems counterintuitive.

 

[gartley]

Always good to get a Christmas present wrapped in gold:

The 30-minute chart for the past 30 days is heartening and unusual for three reasons.
First, the UK's Brexit election did little to move the market, in fact gold dipped a tad the Monday afterwards.
Next, Trump's impeachment did exactly nothing for POG as it meandered through an uneventful $10 range on 19 December.
Finally, we have Trump and Xi today agreeing to meet and sign off on their recent trade deal.
Looks like I will have to spend a lot more time reading across the many sites that attempt to explain this as it seems counterintuitive.

Looking for reasons as to what moves markets especially when it does not make sense can be so annoying.
I just look at one chart which has served me well) This chart sucgests Gold continues rally into next year perhaps till early March before either consolidation or pullback

Always good to get a Christmas present wrapped in gold:

The 30-minute chart for the past 30 days is heartening and unusual for three reasons.
First, the UK's Brexit election did little to move the market, in fact gold dipped a tad the Monday afterwards.
Next, Trump's impeachment did exactly nothing for POG as it meandered through an uneventful $10 range on 19 December.
Finally, we have Trump and Xi today agreeing to meet and sign off on their recent trade deal.
Looks like I will have to spend a lot more time reading across the many sites that attempt to explain this as it seems counterintuitive.

Sometimes looking for reasons as to what moves the market can be very annoying and in a large part a waste of time.
Better to trade the market that is right in front of us)).
FWIW I only use one tool for long term investing in gold, the following chart which has stood the test of time. Suggests that gold continues to rally into Match and thereafter will either consolidate or correct.
Additionally the same analysis on other instruments traded against USD suggest likewise

 

[rederob]

Sometimes looking for reasons as to what moves the market can be very annoying and in a large part a waste of time.

I like your charts.
It's true that looking for reasons is very different to just trading the action but as a long-term investor in 4 equities exposed to gold rather than a trader I am looking for reasons that make sense to get out of gold, should they appear compelling.
My sense tells me that while global uncertainty is the underlying driver of what I consider to be a new long-term bull market, how that uncertainty manifests from discrete events is somewhat unimportant. If that "sense" is right then March 2020 might prove for you to be some form of pivot, but unless it lights the fires of global economic growth then it will continue later into 2020 to be subsumed by the lingering uncertainty.
If I can learn anything more over the next few weeks that makes sense I will certainly post it.
Until then we gold bugs enjoyed enjoyed 2019 and look forward to becoming 2020 visionaries .