Gold Price - Where is it heading?

[ducati916]

So one of the issues in the gold and silver markets, particularly now, or rather specifically now post Basel III is the split between the physical OTC market and the COMEX futures market. The OTC market is opaque and difficult to get a read on. It is however crucial because the historical tamping down of the gold and silver prices was essentially an arbitrage for the Bullion banks (BB) using paper gold: ie. they did not need to hold physical gold for delivery. Now they do or pay margin for the paper, which makes the whole exercise rather pointless.

The BB are still active in the OTC market, but nowhere as near active as they need to hold physical deliverable to hold a hedged position if short on the COMEX. This is the reason for the halving of OI.

Central Banks have been consistent buyers in the market:



In chart 1, look at the last reason provided for purchase. This is being driven by China & Russia. China in particular have under-reported their physical holdings for decades.



Looking at production data:



China does not export gold. It does however import gold. Estimates of PBOC holdings range up to 20,000 tonnes.

The selling pressure in Gold (and Silver) has evaporated.




If you track the data, which I do in silver (but not in gold) you can see that the selling pressure is as about as low as it gets. Essentially the games boil down to bid pulling and some spoofing at EMAs etc.

The continuation in the bull market in gold/silver is probably just round the corner in Q2.

jog on
duc

 

[Sean K]

It's going to be interesting to see how the big traders respond when gold goes back through $1830 again. Do they let it go, or go into sell mode? There're buyers just under this level waiting for the answer. Maybe Ash Barty wining tonight is a sign for gold.

 

[rederob]

Nice rise overnight with a breakout to the upside looking likely:

 

[Garpal Gumnut]

The perfect setup for us Gold mavens would be for POG to push through $USD1850 at the same time as Bitcoin dives below $40,000 on volume.

gg

 

[Sean K]

The perfect setup for us Gold mavens would be for POG to push through $USD1850 at the same time as Bitcoin dives below $40,000 on volume.

gg

Nice break through 1830, need a weekly close above that level I think for a good run at the last high of 1865. Agree on the crypto issue, I think a lot of PM money has gone into that World that might have been going to gold speculation and hedge.

 

[Garpal Gumnut]

Nice break through 1830, need a weekly close above that level I think for a good run at the last high of 1865. Agree on the crypto issue, I think a lot of PM money has gone into that World that might have been going to gold speculation and hedge.

Agree.

If I were a proper crook, I mean big-time, Mafia, Calabria, Politician, Financial Adviser, I would be working full time trying to steal everyone else's crypto. BIT, ETH the whole lot. It can be done with a few taps on a keyboard or will be soon.

I have no doubt that Gold is the pre-eminent hedge against Plague, War, Famine and Tempest.

Not to mention another Krakatoa.

gg

 

[CityIndex]

The close above $1835 is a positive sign for gold, and can keep pushing upwards if investors continue to fear the erosion of fiat currencies amid record high inflation. However, the precious metal still needs to break above downtrend resistance near $1850 in order to sustain a larger move higher.

All trading carries risk, but it's definitely worth keeping an eye on how gold prices move in relation to the yield curve leading up to the first rate hike by the Fed.

 

[wayneL]

Agree.

If I were a proper crook, I mean big-time, Mafia, Calabria, Politician, Financial Adviser, I would be working full time trying to steal everyone else's crypto. BIT, ETH the whole lot. It can be done with a few taps on a keyboard or will be soon.

I have no doubt that Gold is the pre-eminent hedge against Plague, War, Famine and Tempest.

Not to mention another Krakatoa.

gg

As long as it's physical hanging by a bit bailing twine in a sock in your septic system where nobody can find it (and no one wants to look anyway lol)

Electronic or etf versions are subject to the same risks as crypto, really.

 

[wayneL]

As long as it's physical hanging by a bit bailing twine in a sock in your septic system where nobody can find it (and no one wants to look anyway lol)

Electronic or etf versions are subject to the same risks as crypto, really.

BTW, if I ever get doxxed, that's not where it is.

You'll never find it

 

[Garpal Gumnut]

BTW, if I ever get doxxed, that's not where it is.

You'll never find it

Haha.



Gold has had a good build up for those accumulating, it will be found.

gg

 

[divs4ever]

BTW, if I ever get doxxed, that's not where it is.

You'll never find it

usually the problem is greedy relatives ( sometimes working with 3 rd parties )

sorry to disappoint you but i won't be looking unless we descend into civil unrest , and then i'll be after food , water , and weapons/ammo

cheers

 

[wayneL]

usually the problem is greedy relatives ( sometimes working with 3 rd parties )

sorry to disappoint you but i won't be looking unless we descend into civil unrest , and then i'll be after food , water , and weapons/ammo

cheers

I have some wizzened string beans in the garden and an expensive rounding hammer, but you must be able to withstand a greasy eyeball look from my front door first

 

[Greynomad99]

I'm afraid I'll never quite understand why a lump of metal is so highly valued, however, from a charting perspective the gold sector has started to show signs of life and the sector chart is a technical buy having broken a technical downtrend and making higher weekly troughs and peaks.


Not surprisingly, physical gold is also bullish but needs to break and hold above about $1,860 to get above a long term line of resistance.


And RRL has finally made a 2 week break (unless it collapses tomorrow) above a very long downtrend. Coming off a level of support that has held for 14 years and making higher weekly troughs and peaks it would seem very likely to be a good long term hold. Apart from the trend break which wasn't in play then, the other points are why I picked RRL in the 2022 tipping competition.

The only thorn in the side of gold is higher interest rates - which tend to devalue assets like gold that don't generate an income.
I hold EVN and have a conditional buy in for RRL tomorrow.

 

[wayneL]

I'm afraid I'll never quite understand why a lump of metal is so highly valued,

Perhaps I could go some way in answering that question:

1/ Cost of production - cost of production varies of course depending on the resource, but the actual cost to produce 1 ounce of gold is somewhere between 1000 and 1200 USD. Add-on minting cost, storage and all that sort of thing, plus profit margin, and you have it marketable value somewhere north of that

2/ Rarity - despite it being on every brides finger it is actually quite a rare metal. I read somewhere that all of the gold ever mined, ever, would fit in the base of the Eiffel tower. That may be apocryphal but I think the basic premise still stands.

3/ Inertness - gold does not corrode and is not chemically active. That means if someone lost a gold coin 500 years ago and somebody finds it today, you still basically have the same gold coin absolutely intact.

4/ it has traditionally been regarded as a store of value, for all of the above reasons and more. If central Banks go on a tear and cause hyperinflation, if the internet goes down, or if the whole electric grid goes down. There it is.

Gold is still there.

5/ Central Banks - I think we all have noticed that this waxes and wanes, but Central banks and governments do have a store of gold for all of the above reasons.

there are probably other reasons I'm not thinking of off the top of my head but...

FWIW

 

[Dona Ferentes]

1/ Cost of production - cost of production varies of course depending on the resource, but the actual cost to produce 1 ounce of gold is somewhere between 1000 and 1200 USD.

2/ Rarity - despite it being on every bride's finger it is actually quite a rare metal. I read somewhere that all of the gold ever mined, ever, would fit in the base of the Eiffel tower.

3/ Inertness - gold does not corrode and is not chemically active. That means if someone lost a gold coin 500 years ago and somebody finds it today, you still basically have the same gold coin absolutely intact.

4/ it has traditionally been regarded as a store of value, for all of the above reasons and more.

5/ Central BanKs

Had to look it up. Eiffel Tower is not my go-to measurement. Some do swimming pools. ...... From the Gold Council:

The best estimates currently available suggest that around 197,576 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950. And since gold is virtually indestructible, this means that almost all of this metal is still around in one form or another. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure around 21 metres on each side.

 

[Sean K]

Had to look it up. Eiffel Tower is not my go-to measurement. Some do swimming pools. ...... From the Gold Council:

The best estimates currently available suggest that around 197,576 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950. And since gold is virtually indestructible, this means that almost all of this metal is still around in one form or another. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure around 21 metres on each side.

That sounds pretty rare to me.

 

[wayneL]

Had to look it up. Eiffel Tower is not my go-to measurement. Some do swimming pools. ...... From the Gold Council:

The best estimates currently available suggest that around 197,576 tonnes of gold has been mined throughout history, of which around two-thirds has been mined since 1950. And since gold is virtually indestructible, this means that almost all of this metal is still around in one form or another. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure around 21 metres on each side.

For me, that's actually acutely more imaginable.

A dressage arena is 20 m wide and if anyone has ever tried to turn a 3 year old 17:2 warmblood inside that, knows it's not a lot of room.

 

[divs4ever]

That sounds pretty rare to me.

the important question is who ( how many ) desire some of that hoard

if the mound was a nice sandstone .. would many desire that ( i suspect not many )

 

[qldfrog]

Perhaps I could go some way in answering that question:

1/ Cost of production - cost of production varies of course depending on the resource, but the actual cost to produce 1 ounce of gold is somewhere between 1000 and 1200 USD. Add-on minting cost, storage and all that sort of thing, plus profit margin, and you have it marketable value somewhere north of that

2/ Rarity - despite it being on every brides finger it is actually quite a rare metal. I read somewhere that all of the gold ever mined, ever, would fit in the base of the Eiffel tower. That may be apocryphal but I think the basic premise still stands.

3/ Inertness - gold does not corrode and is not chemically active. That means if someone lost a gold coin 500 years ago and somebody finds it today, you still basically have the same gold coin absolutely intact.

4/ it has traditionally been regarded as a store of value, for all of the above reasons and more. If central Banks go on a tear and cause hyperinflation, if the internet goes down, or if the whole electric grid goes down. There it is.

Gold is still there.

5/ Central Banks - I think we all have noticed that this waxes and wanes, but Central banks and governments do have a store of gold for all of the above reasons.

there are probably other reasons I'm not thinking of off the top of my head but...

FWIW

Shiny and gold colour: this is a bloody beautiful lump of metal ?

 

[wayneL]

Shiny and gold colour: this is a bloody beautiful lump of metal ?

Yep ... And there's that too