Gold Price - Where is it heading?

ducati916 · 3 April 2020

This chap...

Hello All:

Let's break it down really quickly for those that don't get it. As I have been trying to tell you all, what has happened to the stock market and other markets (for that matter) has been a function of GOVERNMENT INDUCED RECESSION. Have you ever heard of that? No, most of us in the markets are dealing with the fact that government is a by-product of the consequences of what happens in the markets NOT a major factor in the development of it. RIGHT?

Well, what do you think has happened in the last 3-4 weeks? The government has told you to stay home. The government has told you that you JUST lost your job. And the government is the solution to all your problems. RIGHT?

The only analysis that you should do today is has the SILVER market acted correctly in times of CRISIS? No, it has not. In times of crisis, the silver market RALLIES IN A BIG WAY.

NOW, We have some idiots in the field being bullish GOLD. WHY? Has Gold had a good time at 1700 level?

NO, ABSOLUTELY NOT! The Gold market has suffered profusely at the 1700 level. It won't sustain that level in any major way. SILVER IS ONLY A LEADER WHEN THINGS ARE REALLY BAD! What is Silver doing now? floundering between 12-14 levels. That is NOT a power move. GOLD is a weak sister to SILVER.

Unfortunately he does not provide any reasoning for his position other than this chart.

jog on
duc

rederob · 3 April 2020

ducati916 said:
This chap...

Was there a reason to post that?
Here's the trend channel from the beginning of this bull run (from the longer term perspective):

Interestingly, the present price is dead centre.

rederob · 3 April 2020

Here's the longer and shorter term bull market channels:

Whichever way you look at it, the trend remains firmly in place for now, despite the biggest shock to global markets since 1929.

ducati916 · 4 April 2020

rederob said:
Was there a reason to post that?

An alternative viewpoint. This alternative viewpoint is provided widely on a public site that has a fair market reputation, in other words they don't entertain analysis from any Tom, Dick or Harry.

Unfortunately (rather unprofessionally) he did not provide any reasoned argument (apart from offering a chart, which I guess he holds to be self-explanatory) as to why he sees this scenario in a bearish light.

jog on
duc

rederob · 4 April 2020

ducati916 said:
Unfortunately (rather unprofessionally) he did not provide any reasoned argument (apart from offering a chart, which I guess he holds to be self-explanatory) as to why he sees this scenario in a bearish light.

Begging the question as to why bother posting work from elsewhere that is not worth a cracker!
Gold has massively outperformed silver from the onset of its bull market trend. Yet we got this gem: "NOW, We have some idiots in the field being bullish GOLD. WHY? Has Gold had a good time at 1700 level?"
Here's what the comparison looks like since 2018:

Who can see this: "In times of crisis, the silver market RALLIES IN A BIG WAY."
About the best truism I could add is, "buy the dips."

ducati916 · 4 April 2020

rederob said:
1. Begging the question as to why bother posting work from elsewhere that is not worth a cracker!

2. Gold has massively outperformed silver from the onset of its bull market trend. Yet we got this gem:

3. "NOW, We have some idiots in the field being bullish GOLD. WHY? Has Gold had a good time at 1700 level?"

4. Who can see this: "In times of crisis, the silver market RALLIES IN A BIG WAY."
"

1. Why is it worthless? Simply because it does not confirm your position? I say position rather than thesis as you seem to be overly emotional re. any analysis/opinions that oppose your position.

2. Yes it has. I look on Gold and Silver in much the same way as the Dow Industrials/Dow Transports. I like to see confirmation in both metals, they are after all both 'money'.

Look at this chart:

So either:

(a) Silver needs to outperform Gold to close the ratio and confirm the so called 'bull market' that you are calling; or
(b) Silver is sending a warning that all is not well in this move higher for Gold

3. As you see, in the past, Silver has confirmed the bull moves. Currently, it isn't. Is that a concern? It would be to me, at least until I could explain why it was not/is not an issue currently under these conditions.

jog on
duc

rederob · 4 April 2020

ducati916 said:
1. Why is it worthless? Simply because it does not confirm your position? I say position rather than thesis as you seem to be overly emotional re. any analysis/opinions that oppose your position.

2. Yes it has. I look on Gold and Silver in much the same way as the Dow Industrials/Dow Transports. I like to see confirmation in both metals, they are after all both 'money'.

Look at this chart:

View attachment 101971

So either:

(a) Silver needs to outperform Gold to close the ratio and confirm the so called 'bull market' that you are calling; or
(b) Silver is sending a warning that all is not well in this move higher for Gold

View attachment 101972

3. As you see, in the past, Silver has confirmed the bull moves. Currently, it isn't. Is that a concern? It would be to me, at least until I could explain why it was not/is not an issue currently under these conditions.

jog on
duc

Response to your points:

There was nothing of merit to your copypaste: even you indicated that was so! As to my position, you have offered many counters and I seldom see them relevant. I have explained why on numerous occasions.
Here is the long-term position of both precious metals:

While you say "I look on Gold and Silver in much the same way as the Dow Industrials/Dow Transports," the basis of that relationship does not comport with the above chart.
You add these points:

(a) Silver needs to outperform Gold to close the ratio and confirm the so called 'bull market' that you are calling; or
(b) Silver is sending a warning that all is not well in this move higher for Gold

However, there is no rationale to (a). Silver lagged gold after the GFC and has diverged in the present bull market trend. Your idea of confirmation is a dubious after effect at best.
In regard to (b), if that is your thesis then it was wrong in respect of the GFC trends, noted in the
chart above.

3. You are concluding on a contradiction which you, yourself, acknowledge.

I do not regard your analysis as sound and have stated why, again. And to claim my stance as "overly emotional" is gilding your wilting lily.

ducati916 · 4 April 2020

My responses in Red.

There was nothing of merit to your copypaste: even you indicated that was so! As to my position, you have offered many counters and I seldom see them relevant. I have explained why on numerous occasions.

1. I didn't indicate that it was without merit. I actually said that it was unfortunate that it came sans an argued position. With regard to 'my arguments', that you consider them irrelevant is interesting in the fact that (the majority of) your responses are essentially have a look at this 4hr chart of Gold.

Here is the long-term position of both precious metals:

2. Your argument above is essentially the chart posted by myself (from a 3'rd party) is wrong. Well there are actually two arguments there:

(a) That Gold will fall; and/or
(b) Silver will rise.

Time will tell as far as that goes.

While you say "I look on Gold and Silver in much the same way as the Dow Industrials/Dow Transports," the basis of that relationship does not comport with the above chart.
You add these points:

(a) Silver needs to outperform Gold to close the ratio and confirm the so called 'bull market' that you are calling; or
(b) Silver is sending a warning that all is not well in this move higher for Gold

However, there is no rationale to (a). Silver lagged gold after the GFC and has diverged in the present bull market trend. Your idea of confirmation is a dubious after effect at best.

2(a). Incorrect. If Silver starts to rise at a faster rate than Gold, the ratio will start to fall. That does not require Gold to fall, only to rise more slowly than Silver, thereby restoring the ratio. The rise of Silver would also confirm (at least to me) that the current move higher in Gold had legs. Of course the ratio could be closed through Gold falling (at a faster rate) compared to Silver, which would have the same effect. That is the 'rationale'.

In regard to (b), if that is your thesis then it was wrong in respect of the GFC trends, noted in the
chart above.

2(b) Incorrect (again). In 2008, as demonstrated in your chart and my chart, in 2008, Silver went higher with Gold, confirming the bull (market) move. That Gold went slightly higher is irrelevant. The ratio in 2008 was 69, which is not an 'extreme' level. The current ratio is 95, which, historically, is high.

3. You are concluding on a contradiction which you, yourself, acknowledge.

3. Nonsense.

I do not regard your analysis as sound and have stated why, again. And to claim my stance as "overly emotional" is gilding your wilting lily.

4. Unfortunately your criticisms are simply without merit as you have not addressed my arguments at all. Rather you have sought to conflate my arguments (in part) with a 3'rd party's position and simply failed to address my arguments at all re. 2(a)(b).

Given your chart, which demonstrates Silver confirming the move in Gold (in 2008), you have provided no comments or arguments as to why Silver is (currently) so absent in this current environment.

My 'position' is (previously stated earlier in thread) that Gold is tied currently to the Treasury market as that market is the risk free benchmark.

Gold, if it was tied to increasing government debt, as you have previously argued, (already demonstrated as incorrect) should with all the new money created, be exceeding its 2011 highs. It is not. Why not?

jog on
duc

rederob · 4 April 2020

ducati916 said:
My responses in Red.

There was nothing of merit to your copypaste: even you indicated that was so! As to my position, you have offered many counters and I seldom see them relevant. I have explained why on numerous occasions.

1. I didn't indicate that it was without merit. I actually said that it was unfortunate that it came sans an argued position. With regard to 'my arguments', that you consider them irrelevant is interesting in the fact that (the majority of) your responses are essentially have a look at this 4hr chart of Gold.

Here is the long-term position of both precious metals:

2. Your argument above is essentially the chart posted by myself (from a 3'rd party) is wrong. Well there are actually two arguments there:

(a) That Gold will fall; and/or
(b) Silver will rise.

Time will tell as far as that goes.

While you say "I look on Gold and Silver in much the same way as the Dow Industrials/Dow Transports," the basis of that relationship does not comport with the above chart.
You add these points:

(a) Silver needs to outperform Gold to close the ratio and confirm the so called 'bull market' that you are calling; or
(b) Silver is sending a warning that all is not well in this move higher for Gold
However, there is no rationale to (a). Silver lagged gold after the GFC and has diverged in the present bull market trend. Your idea of confirmation is a dubious after effect at best.

2(a). Incorrect. If Silver starts to rise at a faster rate than Gold, the ratio will start to fall. That does not require Gold to fall, only to rise more slowly than Silver, thereby restoring the ratio. The rise of Silver would also confirm (at least to me) that the current move higher in Gold had legs. Of course the ratio could be closed through Gold falling (at a faster rate) compared to Silver, which would have the same effect. That is the 'rationale'.

In regard to (b), if that is your thesis then it was wrong in respect of the GFC trends, noted in the
chart above.

2(b) Incorrect (again). In 2008, as demonstrated in your chart and my chart, in 2008, Silver went higher with Gold, confirming the bull (market) move. That Gold went slightly higher is irrelevant. The ratio in 2008 was 69, which is not an 'extreme' level. The current ratio is 95, which, historically, is high.
3. You are concluding on a contradiction which you, yourself, acknowledge.

3. Nonsense.

I do not regard your analysis as sound and have stated why, again. And to claim my stance as "overly emotional" is gilding your wilting lily.

4. Unfortunately your criticisms are simply without merit as you have not addressed my arguments at all. Rather you have sought to conflate my arguments (in part) with a 3'rd party's position and simply failed to address my arguments at all re. 2(a)(b).

Given your chart, which demonstrates Silver confirming the move in Gold (in 2008), you have provided no comments or arguments as to why Silver is (currently) so absent in this current environment.

My 'position' is (previously stated earlier in thread) that Gold is tied currently to the Treasury market as that market is the risk free benchmark.

Gold, if it was tied to increasing government debt, as you have previously argued, (already demonstrated as incorrect) should with all the new money created, be exceeding its 2011 highs. It is not. Why not?

jog on
duc

Blind Freddy could have posted a chart with reasons/explanations as to expectations, but you want to argue that what you posted was useful because it was a different point of view. That's the yes it is no it's not argument, and it is of no merit.
Yes, I provide a regular update on gold's "heading" because it is in keeping with the thread's title.
I regularly state that I have no idea where gold is heading in the short-term as there is no reliable predictor that I have seen through several decades of closely following the market.
I regard physical gold as a store of value that is not destroyed in market crashes, so see it as more likely than any other commodity to outperform.
I am not going to address all your points, as here's just one showing you are not good at analysis:

Given your chart, which demonstrates Silver confirming the move in Gold (in 2008), you have provided no comments or arguments as to why Silver is (currently) so absent in this current environment.

First, I have little to say about silver generally, except that the charts do not support your contentions.

Leading in to Lehman Bros collapse, (circled above) the gold:silver correlation was tight. There emerged, however, a significant divergence and it was contrary to a suggestion that silver does better than gold in times of crisis. The 25 percentage points price difference in favour of gold by 2010 apparently means the opposite in your book.

ducati916 · 4 April 2020

rederob said:
1. Blind Freddy could have posted a chart with reasons/explanations as to expectations, but you want to argue that what you posted was useful because it was a different point of view. That's the yes it is no it's not argument, and it is of no merit.

2. Yes, I provide a regular update on gold's "heading" because it is in keeping with the thread's title.
I regularly state that I have no idea where gold is heading in the short-term as there is no reliable predictor that I have seen through several decades of closely following the market.

3. I regard physical gold as a store of value that is not destroyed in market crashes, so see it as more likely than any other commodity to outperform.

4. I am not going to address all your points, as here's just one showing you are not good at analysis:

Given your chart, which demonstrates Silver confirming the move in Gold (in 2008), you have provided no comments or arguments as to why Silver is (currently) so absent in this current environment.

5. First, I have little to say about silver generally, except that the charts do not support your contentions.

6. Leading in to Lehman Bros collapse, (circled above) the gold:silver correlation was tight. There emerged, however, a significant divergence and it was contrary to a suggestion that silver does better than gold in times of crisis. The 25 percentage points price difference in favour of gold by 2010 apparently means the opposite in your book.

1. A different point of view is important, even if it is without a reasoned argument. Arguably your posts using 4hr charts are circular and without any reasoned argument to support your assertions. A different point of view highlights the fact that (if any were needed) there are different viewpoints away from the mainstream view.

2. Well I demonstrated one to you (Treasury Yields) which you don't like but cannot disprove.

3. As a 'store of value': Gold is money and is not an immutable store of value. Money (gold/silver) will fluctuate against the goods and services that it purchases, thus altering its 'value' at any given point in time.

4/5.

Do I really need to comment? Surely this is self-explanatory.

Why is Silver lagging so badly in this current (crisis) environment? Does that not strike you as odd? The ratio is at the highs, suggesting that this relationship cannot hold...something will give: either Silver will start trading higher, confirming the Gold price, or, Gold will sell-off, returning the ratio to a less extreme reading. Given that we are a month into the COVID crisis already, what is Silver waiting for (or for that matter gold)?

Entering into an economic recession, while unpleasant, isn't exactly unknown territory compared to a pandemic. Do you think a recession will be a positive catalyst for Gold to move higher? If so why? (Which rather infers that I take the opposite view)

There is also a new variable that is introducing itself into the market.

The Fed's Balance Sheet is increasing 'debt' of a different type, in that individuals and small businesses are receiving a 'bailout' of sorts, whether this plays into an inflation expectation in the markets. It has run into some snags.

https://www.barchart.com/story/news/4647685/small-business-relief-program-launches-hits-snags

jog on
duc

finicky · 4 April 2020

ducati916 · 5 April 2020

ducati916 said:
3. As a 'store of value': Gold is money and is not an immutable store of value. Money (gold/silver) will fluctuate against the goods and services that it purchases, thus altering its 'value' at any given point in time.

jog on
duc

qldfrog · 5 April 2020

ducati916 said:
View attachment 102004

jog on
duc

Interesting duc, ends in 2010?

rederob · 5 April 2020

ducati916 said:
Do I really need to comment? Surely this is self-explanatory.

If it was, then it would need to show something other than a positive correlation which we all agree upon.
I have posted numerous charts that show that silver has not acted as was proposed by your earlier 3rd party, and that silver diverged from gold at the time of the 2008 GFC and moved in opposite directions during the current bull market trend.

ducati916 said:
Gold is money and is not an immutable store of value.

Show us where gold is used as money.
Show us how gold can be turned into something else.

ducati916 said:
The Fed's Balance Sheet is increasing 'debt' of a different type, in that individuals and small businesses are receiving a 'bailout' of sorts,...

It's still debt, and bailouts were a common feature of the GFC.

ducati916 · 5 April 2020

qldfrog said:
Interesting duc, ends in 2010?

Yes, just looking back through some of my older stuff on file.

jog on
duc

ducati916 · 5 April 2020

rederob said:
1. If it was, then it would need to show something other than a positive correlation which we all agree upon. I have posted numerous charts that show that silver has not acted as was proposed by your earlier 3rd party, and that silver diverged from gold at the time of the 2008 GFC and moved in opposite directions during the current bull market trend.

2. Show us where gold is used as money.

3. Show us how gold can be turned into something else.

4. It's still debt, and bailouts were a common feature of the GFC.

1. Silver mirrored Gold all the way from 1973 through 2018. From 2018, Silver has diverged from Gold. As already stated, I use Silver & Gold in the same way as Dow Theory uses Industrials/Transports.

As to the 3'rd party, who cares, unimportant. I just posted his 'opinion' for the reason already stated.

The point is: Silver is not confirming the move in Gold. That is a break (divergence) of some 40+ years. To me that is important and calls into question the sustainability of the current Gold move. If Silver suddenly starts to move higher, I'll be far more interested in the combined move.

2. Gold would be accepted anywhere as payment, except as payment of your taxes. I would happily accept payment in gold or silver.

3. Don't understand the question.

4. Yes it is still 'debt', but the effects could be very different.

jog on
duc

rederob · 5 April 2020

ducati916 said:
1. The point is: Silver is not confirming the move in Gold. That is a break (divergence) of some 40+ years. To me that is important and calls into question the sustainability of the current Gold move. If Silver suddenly starts to move higher, I'll be far more interested in the combined move.

2. Gold would be accepted anywhere as payment, except as payment of your taxes. I would happily accept payment in gold or silver.

3. Don't understand the question.

4. Yes it is still 'debt', but the effects could be very different.

You are confusing correlation with confirmation. The positive correlation has merely weakened more significantly in 2020. So if silver moves higher, so will gold. The only issue is which will move with greater comparative magnitude.
Gold is not money in the everyday sense. My gold coins are legal tender with a face value of $100. However at an ounce each they have a store of value that is significantly greater.
Gold is immutable, contrary to your claim.
So debt is different to debt because its effects can be different? All debt has a counterparty, so a lot will depend on how the debt is expunged.

Gold has no debt.

ducati916 · 6 April 2020

rederob said:
You are confusing correlation with confirmation.

The positive correlation has merely weakened more significantly in 2020. So if silver moves higher, so will gold.

The only issue is which will move with greater comparative magnitude.

Gold is not money in the everyday sense. My gold coins are legal tender with a face value of $100. However at an ounce each they have a store of value that is significantly greater.

Gold is immutable, contrary to your claim.

So debt is different to debt because its effects can be different?

All debt has a counterparty, so a lot will depend on how the debt is expunged.

Gold has no debt.

1. Incorrect.

2. The positive correlation is currently not present. Silver is (currently) not confirming the move in Gold. That doesn't mean that it won't moving forward, or that Gold confirms Silver and trades lower, but, currently the correlation is broken. That is one of a number of reasons that I am not convinced that Gold is actually in a bull market (either continued or a new one).

3. Really? I can see more than a single issue. However your confidence in your chart is inspiring.

4. Well I never. Learn something new everyday.

5. Where did I ever say otherwise? Or are you referring to a 'store of value'? If so, the chart actually demonstrates that when gold is money, the money is very stable (good store of value). It still fluctuates, but far less so.

6. It really helps when you don't misquote. Debt is debt. Agreed. Debt's effects can be very different as to who holds that debt, which ought to be blindingly obvious. Why? See point 7.

7. How that debt is expunged is exactly the point, for the value of gold. There is however a second important point: how that debt is used. Previously the new debt went into the financial system with tremendous asset price inflation. Currently, the little guy is actually a recipient of a part of that new debt. That is different. Is it a material difference? Possibly.

jog on
duc

rederob · 6 April 2020

It is one thing to say something, and another to show it. So I will show you have erred, yet again:

With regard to your 7th point at post #12178 you are separating the issue of debt from "price." These factors affect the economy in different ways. We are heading into a recession (shaded areas charted below) and gold is likely to do ok. However, it's the out-years where gold comes into its own:

ducati916 · 6 April 2020

rederob said:
It is one thing to say something, and another to show it. So I will show you have erred, yet again:

You are seriously trying to prove your point using a 2hr chart?

I'll have to come back to your other points.

jog on
duc

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