Gold Price - Where is it heading?

[bigdog]

Who are the major Gold producers on Aust Stock Exchange?

Newcrest, Newmont and Lihir

Are there any others?

 

[reece55]

Well, they are diversified, but put OXR in the mix here too.....

With Prominent Hill and AGC bedded down, they will be a majority gold producer from memory.....

Cheers

 

[Sean K]

Well, they are diversified, but put OXR in the mix here too.....

With Prominent Hill and AGC bedded down, they will be a majority gold producer from memory.....

Cheers

Surprisingly, going to be Zn and Cu actually. But, yes, lots of gold too.

 

[bean]

Gold Bulls what has happened when the various stock market indexes get in a blow off top and eventually crash. Does gold and gold shares
Rise
Fall
Fall then Rise

maybe its time to check and be prepared

 

[bean]

I suppose those that will show charts with gold breaking out and above $690 will be back in force over the next few days and bringing there buy buy sounds ringing.
The only reason it will be up is the DOW will (should) be up most probably the next three to four days in a row as it blows (pop)
So far the DOW lately has been 8 up 1 down 7 up 1 down we ar now 2 up and through a magic 13000.
Gold bugs apart from being in gold because inflation (caused by M3 money supply) US$ a fiat currency (so is ours and most of the other western countries) the US economy is going into a recession, housing and Asset bubbles the list goes on and on.
We also know it will end badly and investors will flock to gold as a save haven. But we also know any market 'Crash' gold stocks and gold will be sold as well. The only thing is our recovery will be quicker and larger as our Bull resumes.

Those who think the DOW is in a bubble (blowing its top) do you hold your gold stocks? What size of a correction initially on the DOW do you expect when this top is reached . 10% 15% 20%
Then Maybe a bear for a few years after as well.
Me personally I hope its the 3rd and in quick time.
If it is some gold stocks 20% to 50% cheaper (why such a large drop? You have seen how quick gold stocks % wise) The price of Gold?? $580? I don't know I will take each day as it comes (I will know when to buy for me).

 

[bean]

Now I did say gold may be up last night as the DOW would finish up
Well the DOW was up the S&P 500 was down (admititly just but down none the less) Gold indexes did drop a bit more so follow the S&P they did.
On monday when I mentioned possible drop in gold price tuesday or wednesday I was out by a day can't help bad luck. But it doesn't matter to me I am cashed up waiting for when I know to get in. Off course Gold may be up tonight but how much longer does the DOW rise before the sell off stars and that includes Gold

I also have my own programs on US gold stocks indexes and they had showed signs of weaking, but I only use it as a guide and see if I am getting a similar picture to the sites I follow.

Don't worry about China it is the top in the DOW you worry about.
Off course China may drop and could force a top in the DOW but it would have to be soon

 

[Kauri]

As far as the E/W count goes I have no idea where gold is at currently, but the channel is proving a good guide to trades at the moment.

 

[bean]

Right I have told where the price of gold is going. I would now like some stocks that may be good buys in the coming weeks to do research on before I buy I would Like some Juniors and medium cap stocks that are non hedged could be liable for a takeover ane can increase there reserves. Lets out some suggestions up before the botton is in for gold so we know which stocks may be bargains.
I am leaving myself open to the so called gold bulls at the moment who will mock me if gold shots past $700.
But to those that thought I might be right lets look for good gold stocks that will fall but will be excellant value (lets put Gold dropping to say $580-$620 in next few weeks) maybe we can be prepared.
I cannot put charts and more charts because I visualise I look at numbers and I see patterns I read and I see patterns. For example Elliot wave how many times have they called a top (AH but they always have an alternative count how many of those have we had over the last ten years !!! I am not mocking them but neither should they know me because I could say I have an alternative count to.)
Look sometimes logic comes into an equation as well. COT's had risen over the last weeks.
I posted from elliot wave the $US has it not rallied the last few days when everyone was calling it stuff.
Gold bulls we are impatient because we know we are right at that is why we invest in gold but if the market goes so do we.

 

[bean]

For gold bugs I post the following on Imminent and severe market correction thread.

As you Know I have been saying we will follow the broader market

Re: Imminent and severe market correction
More on my earlier post THE TOP IS IN ????

My program is showing a small down day will turn this market.
If I entered a small down day on previous days this market has been rising my signals for the next five days remain positive.
If I enter a small down on Nasdaq the first two days drop to neutral reading and next three out a negative.
For the DOW and NYSE the first two days are still positive third is neutral four and fith are negative.

What does this show, It shows as this market has been rising its internals have been weakening.

The top may not be in of course if it rises monday.
But who can say when a top is in?
The day after!!!

Will it be a short term top or the final.
I do not know yet.
Reply With Quote

 

[bean]

First the market well the NASDAQ oblidged last night I only watched the first half and the we had the DOW wanting to go up and the Nasdaq down.
By the end of the day the NASDAQ won.
I did quote that the Nasdaq if it had a down day Monday would be set up for a 2-3% down day Tuesday.
All I can say is if tonight is down and any major weekness come in the answer is still YES
And if weakness continues into Wednesday I would expect the Dow to join the party fully then.

Gold and golds were down last night. I hope over the last week or two you have seen what I have said about Gold and Gold stocks following the general direction of the Stock Market (DOW).

Here on earlier posts I mention US $ may rally. I also said Nasdaq above 2550 would be back in its bubble territory. I am also looking for Gold and Gold stocks to crash but they have to do it along with the general market, so they can eventually break free and start up (Elliot wave 3).

Was that the final Top?

If the first part of what I mentioned pans out yes.

However, yes however there is still strenght in the DOW & NYSE it still wants to go higher although it has weakened slightly a number of indicators are still quite strongly positive and may require what I have mention above.

Tonight and tomorrow hold the key as to whether this is the start of a severve correction or not or a breather before the Dow advances and it has to advance with strenght because the ‘Nasdaq needs help’

 

[bean]

Gold bugs you have several questions I need to give answers to
otherwise
you will start to discount what I have been saying. (The bears will
agree the bulls may still need convincing)
.
Gold and gold indexes dropped last night while the general market was
up. True
However they moved up from there lows when the market rose.
Nasdaq did not drop 2-3%. True but I did say we needed weakness and
also
mentioned the DOW still had strength and wanted to rise. The Nasdaq at
one stage was 15 point down but the was want to go higher.
The TOP IS IN - TRUE
Believe it or not it is
NYSE closed last wed 9746

I called the top Friday
Friday NYSE 9705 today 9640
S&P 500 1494 today 1486
Nasdaq 2557 today 2531

The only one is the DOW and what will be said the Dow has made a new
record.
The DOW is carrying the market.

All US markets internals are at a danger stage and dropping each day
My Nasdaq reading today is neutral the the trend next 5 days all
negative (and the negativity is increasing)
The question to ask is how longer can the DOW hold up the market.
Are the market internals positioning themselves for a “CRASH”
Yes a CRASH.. If it is indeed a ‘crash day’ then I may only pick it up
one or two days before

Gold nothing has changed it may move up if the Dow advances and the
indexes follow.
BUT remember it will fall with them as well.
US $ is it trying to rally or get traction?

I have also started to see a few gold writers come up and turn short
term bearish on gold.
Pity how they didn’t mention it a few weeks ago

It all depends if any advance the Dow makes the rest of the market has to move with strength then I will be wrong/delayed

 

[BlueDaze]

Price Targets for Gold, HUI, XAU Bottoms

Hi bean,

I've been reading your gold postings with great interest. Do you share wavepicker's view that gold will bottom below $500?

Wavepicker (7 Dec 06): "From a technical stand point, my target is approximately $490 which is 50% of the entire range from the low of $250 to the high of $730. It could go as low as $430. My guess it will take a good 2 years, before finishing, and then the secular bull resuming (in 2009). Don't think this correction is quite over, with more sideways/downward bias till the 8.5 year cycle bottoms in 2008/2009."

I've read other EW views that the HUI and XAU indexs will decline 30-40% over the next 2-3 months. And gold to decline to its long-term trend line at the $470-500 level. I view these as major buying opportunities.

Look forward to your comments. Tks and regards.

 

[bean]

Hi bean,

I've been reading your gold postings with great interest. Do you share wavepicker's view that gold will bottom below $500?

Wavepicker (7 Dec 06): "From a technical stand point, my target is approximately $490 which is 50% of the entire range from the low of $250 to the high of $730. It could go as low as $430. My guess it will take a good 2 years, before finishing, and then the secular bull resuming (in 2009). Don't think this correction is quite over, with more sideways/downward bias till the 8.5 year cycle bottoms in 2008/2009."

I've read other EW views that the HUI and XAU indexs will decline 30-40% over the next 2-3 months. And gold to decline to its long-term trend line at the $470-500 level. I view these as major buying opportunities.

First the correction in the indexs, I have been showing over the last few weeks how gold and the gold indexes have been following the Market.
On 16th April the closing price of HUI 368.28 and XAU 148.11
Last nights close 337.07 and 136.27
They have already corrected 8% only about 30% to go????
Hard to believe that they have already dropped that much. cosidering they have been following the market
However the next 30% will be quicker my timeframe is less it was 1-2months

The last part of the jigsaw is falling into place and that is the Stock Market
The fall required by Gold stocks needs the Market to participate because there is no valid reason for Gold and the stocks to drop.
Every reason that Gold Bugs hold Gold and Gold shares stills exits and more reasons are added each day.

This final correction in Gold is going to be brought about by the US market

I knew I needed a top to come in the Markets it was the only way to justify the drop that is about to occur in Gold.

The % drop in the Market take your pick but if we are dropping 30%
what are they going to drop.

The volume in the US markets has increased... I think everyone is in wait till they try and get out.

Gold stocks have dropped 8% gold has dropped just over 3%
I put a range a few posts back $580-$620 no reason just a number.
However based on the % of drop if shares drop 32% more gold 12%
price today approx $670 could take it to $590

Gold won't drop as much as shares but it will pick up % ratio put it half drop 16% (half of the 32% the share drop) round number $560 say

If it were to drop same amount 32% is $455

So the $500 line may well be reached this move, and the time frame is the only thing I disagree with wavepicker I think it will be now 2007 not 2009

and probably not $500 but I won't know till it starts.
only a guess for most bearish $535 but I do not know as I only know what prices I am looking for in the Gold indexes
$535 is a price in my memory from about 6 months ago, and I can't remember why.

I hope that bit on the % and ratios made sense

 

[BlueDaze]

Know Only When It Starts

First the correction in the indexs, I have been showing over the last few weeks how gold and the gold indexes have been following the Market.

They have already corrected 8% only about 30% to go? Hard to believe that they have already dropped that much cosidering they have been following the market. However, the next 30% will be quicker, my timeframe is less it was 1-2months.

The last part of the jigsaw is falling into place and that is the Stock Market. The fall required by Gold stocks needs the Market to participate because there is no valid reason for Gold and the stocks to drop. Every reason that Gold Bugs hold Gold and Gold shares stills exits and more reasons are added each day.

This final correction in Gold is going to be brought about by the US market.

I knew I needed a top to come in the Markets it was the only way to justify the drop that is about to occur in Gold.

Gold won't drop as much as shares but it will pick up % ratio put it half drop 16% (half of the 32% the share drop) round number $560 say

If it were to drop same amount 32% is $455

So the $500 line may well be reached this move, and the time frame is the only thing I disagree with wavepicker I think it will be now 2007 not 2009

And probably not $500 but I won't know till it starts.

Thank you for sharing your thoughts. It is much appreciated.

 

[BlueDaze]

Gold Stocks' Leverage (or lack thereof)

Gold Stocks' Leverage (or lack thereof)
Steve Saville
email: sas888_hk@yahoo.com
May 1, 2007

http://www.321gold.com/editorials/saville/saville050107.html

Most people involved in the gold sector would realise that over the past few years gold stocks, as a group, have failed to live-up to their reputation as leveraged plays on the gold price. They provided substantial leverage to gains in the gold price during 2001-2003, but during the most recent 3.5 years of the gold bull market an investment in gold bullion has out-performed an investment in the AMEX Gold BUGS Index (HUI). Given that gold stocks are much riskier than gold bullion, this begs the question: why invest in gold stocks?

Before answering the above question we'll take a look at why gold stocks have performed relatively poorly since late-2003 and see if the historical record offers any clues as to what might happen in the future.

We think the following chart-based comparison of the yield-spread (the 30-year interest rate divided by the 5-year interest rate), the gold/GYX ratio (gold relative to a basket of industrial metals), and the HUI/gold ratio contains the reasons for the relatively strong performance of the gold sector during 2001-2003 and its relatively weak performance thereafter. The chart shows that as the yield-spread widened (as short-term interest rates fell relative to long-term interest rates), gold trended higher relative to industrial metals and the HUI provided substantial leverage to gains in the gold price. However, the ability of gold stocks to leverage gains in the gold price evaporated when the yield-spread began to contract and gold began to under-perform the industrial metals.

The crux of the matter is that during 2001-2003 the financial markets were responding to economic weakness, falling liquidity and aggressive rate-cutting on the parts of central banks. In this environment the yield-spread widened and counter-cyclical gold did well relative to cyclical commodities such as the industrial metals, causing the profit margins of gold miners to expand. However, by late-2003 the markets had begun to discount stronger growth, leading to increased financial market liquidity and strength in cyclical commodities relative to counter-cyclical gold. The rising liquidity tide ended up lifting all boats including the golden boat, but in this environment the profit margins of the major gold producers contracted as the cost of mining gold increased faster than the gold price. As a result, gold stocks performed poorly on a relative basis.

It is also worth mentioning that whereas the aboveground supply of gold increases at a slow and steady 1.5-2.0% per year, year-in and year-out regardless of what is happening to the gold price, a gold bull market invariably leads to a rapid increase in the supply of gold shares. As the gold bull market becomes more widely recognised the rate of increase in the supply of gold shares tends to accelerate due, firstly, to the arrival on the scene of many new gold mining companies and, secondly, to most managers of small gold mining companies being embedded with a gene that prevents them from saying "no thanks" when presented with the opportunity to raise money by issuing more shares. In other words, the supply of gold bullion is severely constrained whereas the supply of gold shares can be - and usually is - expanded rapidly in response to rising demand.



Interestingly, the performance of the gold sector relative to gold bullion during the current bull market is not dissimilar to its performance during the bull market of the 1960s and 1970s (the gold price was fixed at $35/ounce prior to 1971, but the performance of the gold sector of the stock market indicates that a gold bull market actually began in the early-1960s). Specifically, the following chart of the BGMI/gold ratio (the Barrons Gold Mining Index divided by the gold price) shows that relative to gold bullion the major gold stocks peaked in 1968 and then trended lower for the next 12 years.



The above chart should give pause to those who believe that a drop in the HUI/gold ratio or the XAU/gold ratio to a particular level automatically means that it's a good time to aggressively buy gold stocks. Today's secular gold bull market is probably going to continue for many more years, but if it follows a similar pattern to the previous secular bull market then the major gold stocks will move much higher in nominal dollar terms over the next several years while moving lower in gold terms.

We'll now return to the question: why invest in gold stocks?

As we've said numerous times in TSI commentaries over the past few years, we don't think there is a good reason to favour the MAJOR gold stocks over gold bullion. There will be periods when the large-cap gold stocks trend higher relative to the metal, especially those periods when the yield-spread is widening and gold is out-performing industrial commodities. Such periods will offer opportunities to go 'long' these stocks for intermediate-term trades, but we think long-term investors will be better-served by the bullion. In our opinion, the large-cap gold stocks do not offer enough upside potential, relative to gold bullion, to warrant long-term investors taking-on the additional risk inherent in the stocks.

However, junior gold stocks in general and exploration-stage gold stocks in particular are a different 'kettle of fish'. Despite their risky nature, there are plenty of stocks at this end of the market that have sufficient upside potential relative to the bullion to enable a good case to be made for accepting the risk. Of course, speculators in these stocks must be emotionally equipped to handle high volatility and must diversify to mitigate the effect on the portfolio of a big problem with any single stock.

 

[yachty7]

Mr Bean,
I also have been following your postings, and thanks for sharing the considerable work you do. I'm new at this game & the more research I do the more confused I get. I hit the panick button a month or so ago, sold shares that I shouldn't have & bought Gold!! Now I'm getting nervous again & when I panick I lose. I try to analyse both the Tech Analyst's views, the Fundamentalyst's views & the Gold bug's views. An article by John Ing, May 1 on Safe Haven http://www.safehaven.com/article-7471.htm, argues (like many on that site) Gold is about to take off - a short extract follows;

$1,000 Gold Is A Certainty
Gold is the ultimate safe haven against inflation and falling stock markets, and it is a hedge against a weaker U.S. dollar. Indeed, gold is a good index of currency fears. Given our expectation of continued favourable supply-demand fundamentals, we expect gold to retest the January 1980 high at $850 an ounce this year, with a new target at $1,000 an ounce. While $1000 may appear overly optimistic, it is important to remember that gold rose nearly 3,000 percent from 1971 to 1980 and is only up 166 percent from its low in 1999.

I hear what you say about cycles, waves, history repeating etc. I also thought the arguements presented in John Ing's article were plausible. Maybe wishfull thinking on my part, but I would really appreciate your views on those arguements.
Many thanks.

 

[bean]

Is tonight going to be the second night in a row where gold and golds stocks finish in a different colour to the market
Currently Dow up 42 ,Nasfaq 7 ,S &P 4 while gold down $6.50 and indexes in the red.
Market been opened 10 minutes, I wonder if in the morning all four are the same colour why I check

 

[BlueDaze]

Gold Bottom In Late June 2007

McClellen's Report:

http://www.investorshub.com/boards/read_msg.asp?message_id=19306350

We keep seeing additional confirmations that this uptrend has more room to run. Breadth is still about as strong as it can be, and we are starting to see the right sorts of “leadership” stocks taking over and leading the way higher. The Nasdaq 100 was tentative earlier this year, but is now acting strong, and bellwethers IBM and GE are leading the DJIA higher with no loss of momentum. These are the kinds of signs that promise us higher highs, even if we see minor stumbles along the way. We look for this uptrend to reach a terminal top around mid-July, and the market should start to have some real trouble beginning in late August. This autumn is when we should expect ugliness to arrive. Bond prices have paused their normal seasonal decline here but should start downward again aggressively in June.

Gold prices are headed downward from here to a May 30 bottom, but that will not be the end of it. Gold should see some more ugliness along with stocks into a bottom due roughly June 20.

Stocks are still in an uptrend, and due to remain that way into summer. There will be bumps along the way, but the uptrend is not done yet. As it appears now, the blast to the final price high of the summer should commence from a low at the end of June, and presumably that price blast will be accompanied by the sorts of telltale divergences we count on for clues that momentum is lost. Bonds don’t show us enough in these signals to divine an expected trend direction, but we still view the overall structure as being a downtrend for bond prices.

Gold looks weak now, and has broken its correlation to stock prices. Look for gold stocks to see a bottom at the end of May, and then a more important one in late June.

 

[bean]

O/K first last night post and why did I post it.
The result first Gold did finish down but only $1.20 nearly made it to
green
The gold stock indexs XAU and HUI finshed up 2.68% and 1.39%

If they had finish down it may have brought into question the comments
I
have been making about them following the General market.
And may have also started thinking are the gold stocks going to correct
by themselves for some other reason not a severe stock market collapse.

My readings for my program on the indexes I follow are showing
nutural-slightly negative-slightly negative. They want to drop further
but appear to be waiting for the market.


----------------------------------------------

mentioned the DOW still had strength and wanted to rise. The Nasdaq at
one stage was 15 point down but the was want to go higher.
The TOP IS IN - TRUE
Believe it or not it is
NYSE closed last wed 9746

I called the top Friday
Friday NYSE 9705 today 9640
S&P 500 1494 today 1486
Nasdaq 2557 today 2531

The only one is the DOW and what will be said the Dow has made a new
record.
The DOW is carrying the market.

Strength is still in the DOW and it is carrying the markets (new high
in
the DOW)
Todays close
NYSE 9718 still below last Wednesday high 9746
S&P 1496 just above 1494
Nasdaq 2558 just above 2557

Watch each day as it comes and look for weakness to give a signal

I follow several people that give analysis. One such person is Jeff
Kern
(ski )who updates every three or so weeks on 321gold. He has his own
subscription site. I do not subscribe to his site however know his
system (partly)

One of his subcribers showed gold bottoming topping in months of MAY
and November.
Give or take aday or so. They are looking for a bottom and a run pattern.
If you go to his site and read last few updates (he gives partly free
updates every three weeks or so)

The other site I mention Martin Goldberg who does updates each Thursday
on financial sense does gold updates every now and then and I have been
watching what he picked up that gold indexes have been following the
general market.


We just have to watch the DOW
Some strength came into my Nasdaq reading to all the negatives dropped
to nuteral so action of the next few days interesting to see if more
strength appears if it does then others market will give strength to
the
DOW and what 13500 -14000???
“I don’t think that will happen” but???

 

[Uncle Festivus]

This weeks price fluctuations are probably distorted because the usual large gold trading countries are having numerous holidays. Next week should be back to a more normal trading pattern and back to the real direction, whether that be up or down.
The trading range so far this week is within 'normal' trend settings & the ascending triangle is still intact (so far!).

The DOW - end of reporting season this week, resumption of other markets next week. Maybe consolidation or 'sell in May'?