Gold Price - Where is it heading?

[ducati916]

The 'missing' element in the calculation, not shown (demonstrated) by the charts is the rate of inflation which provides the real 'return' on a Bond's yield and confirms the 'why/how' of this relationship of Bonds/Gold.

jog on
duc

 

[rederob]

@peter2 As you can see from this chart, POG in AUD terms - green & gold trend channel - is going gangbusters:



While we are up over 16% since January, POG in USD is down over 2%.

As for that wall of worry being hit - not yet, and as I post POG is now at $1512 and has been rising nicely in the past 2 hours.
Good luck with your EFTs, but on my reckoning the worst is behind us for a while.

 

[rederob]

The big ticket item in the chart below is the massive surge in trading volumes.
The chart is too small to pick up the cause, but it's associated with regular, huge selloffs after gold peaked over $1700/oz.
Despite these splurges that wall of worry I posted earlier has not been broken down. I admit to being surprised, but it's only been 2 weeks and still remains possible.
My suspicion is that US sentiment towards COVID-19 effects over the weekend will weigh heavily on markets early in the week. Thereafter I reckon many of us will be inured to the goings on be less inclined to play with fire.

 

[wayneL]

@peter2 As you can see from this chart, POG in AUD terms - green & gold trend channel - is going gangbusters:



While we are up over 16% since January, POG in USD is down over 2%.

As for that wall of worry being hit - not yet, and as I post POG is now at $1512 and has been rising nicely in the past 2 hours.
Good luck with your EFTs, but on my reckoning the worst is behind us for a while.

That says more about our shekel than it does about POG. In the store of value equation gold does do what it says on the box at this point in time, at least as far as our dollar is concerned.

However several commodities could actually fulfil the same function, maybe with a bit more volatility to add in but still ...

Caveat, I like to adding some sort of minimum value analysis to commodities.

Opportunities are rare but it is consistently the best and most consistent way to profit.

Which begs the question, what is the minimum value of gold at this current time?

 

[InsvestoBoy]

That says more about our shekel than it does about POG. In the store of value equation gold does do what it says on the box at this point in time, at least as far as our dollar is concerned.

Come on give the gold some credit man, it was trading 1150 in USD or whatever and it's certainly a lot higher than that now. The bull run in XAU/AUD was not all AUD/USD driven.

 

[rederob]

Come on give the gold some credit man, it was trading 1150 in USD or whatever and it's certainly a lot higher than that now. The bull run in XAU/AUD was not all AUD/USD driven.

None of it was.
The previous chart simply shows how significant exchange rates are.
That’s why I believe most Australian gold producers are presently undervalued in the market.

 

[InsvestoBoy]

None of it was.

lol, what? Are you saying that none of the bull run in XAU/AUD was driven by a fall in AUD/USD?

 

[wayneL]

Come on give the gold some credit man, it was trading 1150 in USD or whatever and it's certainly a lot higher than that now. The bull run in XAU/AUD was not all AUD/USD driven.

No, of course not. but it is a factor that cannot be ignored for us as Australians having to buy gold in the Australian shekel.

There is a reason I have always had some holdings in physical gold though , admittedly fairly modest. There is also a reason I added to those holdings last year at roughly the $1,250 USD level, still admittedly modest, compared to some other folks.

Elsewhere I have detailed some edition of silver at roughly around the $12 USD level.

So, yes, I do give the precious metals a fair degree of credit.

Goddammit, I wished I had bought an absolute crapper load more at around 1250.

 

[rederob]

lol, what? Are you saying that none of the bull run in XAU/AUD was driven by a fall in AUD/USD?

The definitive breakout of POG in AUD terms occurred on 31 May 2019 when it closed at an all time record high.
Two months later XAUAUD had increased by over 10% yet there was only a fractional change in the AUD:USD. Curiously, during most of this period both POG and the AUD were rising in value.
The initial XAUAUD bull run's closing peak occurred on 3 September as per the chart below, by which time XAUAUD had increased by over 23%, yet the AUD:USD exchange rate had only declined by 2 percentage points.

There is no doubt that declines in the Australian dollar typically lead to increases in POG in AUD terms.
However, the first few months of the actual breakout of the XAUAUD were typified by the reverse of this relationship.

 

[rederob]

Apologies to artists for my smiley face, but at least gold began trading on a happy note this morning.

ps: it's supposed to be a golden-haired boy, and not a Trump likeness.

 

[rederob]

Three points:

1. Support at $1450 held
2. Uptrend has resumed
3. Trading volume step-changes suggest bull market is confirmed

Although a larger chart is needed to pick up on prior month trading volumes it is no coincidence that it overlaps COVID-19's large-scale spread beyond China's walls.

COVID-19's initial big move was into Korea, followed by Europe largely via Italy, and now the USA and everywhere else.
Markets generally are still in "panic" mode so it's impractical to think that gold is unlikely to crash merely because it has survived to date.
I am a believer in buying the dips, but right now the roller coaster down is scaring the bejeebers out of everyone and it's anyone's guess what they will sell in order to preserve fiat money.

 

[sptrawler]

I wonder if this current crisis and the resultant unbelievable injection of cash around the World, will cause a further disconnect with the POG, the historical significance of gold as a form of currency seems to be diminishing when one would think it should be increasing.
If indeed the Governments are heading toward a 'cashless' system, where would gold fit in? Might we be at 'peak gold'?
I've never followed gold and don't hold.
Just my pondering.

 

[rederob]

Gold bulls appear to have decided that the Fed's money printing response to COVID-19 is the signal they needed to jump back on board - probably for the long haul.
The 5-minute chart below shows that gold was fickle as it consolidated above its recent lows.
Once that phase was over POG took off, launching itself on NY Comex open to race from $1484 to $1584:

Volumes have tailed right off now and POG settled back.
$1600 just a session away - not sure which one, but likely soon.
At a equities level we haven't seen any disruption to mining operations so this rebound will prop up the producers significantly. I have no idea how susceptible, if at all, the producers are to FIFO workers and flight disruptions, so that would be a consideration for anyone looking to park their money in gold mining shares.

 

[finicky]

Looks ok so far for the W.A miners.

First COVID-19 case confirmed in the Goldfields
Tegan Guthrie Kalgoorlie Miner
Sunday, 22 March 2020 4:26PM

https://www.kalminer.com.au/news/ka...se-confirmed-in-the-goldfields-ng-b881496347z

"Unless exempted, all arrivals from interstate to WA will be ordered to self-isolate for 14 days.

Exemptions will apply to essential services and workers, including health and emergency services, defence and policing, mining industry workforces, flight crews and freight of essential goods, via ports and trucks – with strict guidelines in place to monitor and manage this.

“We have come to this decision after wide consultation, and to ensure the new border controls do not impact essential services, our fly-in, fly-out workforce and the delivery of goods and services to our State,” Mr McGowan said."

 

[finicky]

@sptrawler
So called 'Peak Gold' is just a term adapted from the idea of peak oil. The idea was that the peak of production has passed due to all the easy resources having been found and exploited. No matter what the demand, price or technological advances the old peak would never be passed. Nothing to do with its relevance in finance.

Goldbugs would say that gold is showing itself to be as relevant as ever, being increasingly stacked as a central bank reserve and resorted to as safe haven by individuals, fund managers and Asian citizens .

Gold isn't a legal tender currency, so in a cashless society it could still be converted to electronic money just like it is today (presumably). Gold is a monetary asset, or just real money to some, but it is not a currency even though it might be traded at a currency desk in some bank.

 

[rederob]

Looks ok so far for the W.A miners.

Good to know - thanks.
That covers a few big mines.
NCM's Cadia mine is pretty isolated from the COVID-19 regions in NSW and I believe most of its workers are based in and around Orange, so that's handy for Newcrest. However, its FIFOs into Lihir have ceased and they have not clarified what impact that will have on their March 11 total group guidance of approx 2.1-2.2moz.

 

[peter2]

I seem to have noticed an anomaly I'm unable to solve.
Two MT4 platforms show the POG (XAUUSD) near $1600 while futures charts show me it's much higher $1675.



Has the POG risen by over $100/oz today?

 

[peter2]

This may explain the anomaly in the POG.

 

[frugal.rock]

POG. Where I think it's going.

Short term, UP.
Medium/ Long term, down like explosive diarrhea. Investors will be lucky to get to the toilet in time.

Staples will be the new safe haven.

F.Rock

 

[peter2]

The conspiracy thickens.


If this is true then the ETF administrator (Direxion) for NUGT, JNUG may have difficulty also. Both of my positions are profitable and I might tighten the TS on both and may even consider selling half to ensure a BE result at worse. The worst outcome would be a trading halt.

ps: I noticed that near the US close last night that both NUGT and JNUG fell significantly when the POG didn't. Luckily my TStops were not in the market at the time. Maybe the virus is spreading to the miners and they're having to close some shifts. Worth keeping an eye on this possibility.