Gold Price - Where is it heading?

[qldfrog]

While i do charting indirectly via my systems, i believe charting is quasi irrelevant in POG ,as it is happening now:
This is what matters: https://www.news.com.au/finance/eco...s/news-story/4b2e0a67d97557a435c355cb37a1d619
Obviously POG vs AUD.. or CAD as commodity currencies does differ a bit but in summary, Biden has just f***ed the USA by destroying the USD, pushing it over the edge.
How can someone be so dumb?
No biden who is just a senile puppet but the power within?
Even short term wise the win is minimal except for screwing Europe
Should a coup tomorrow replace Putin, or peace/ defeat of the russian army happens, it will change zip
The US has committed suicide and Mr Xi is the winner of this century competition.
This is great for this thread as winners' second place is POG.
And Australia could even benefit.

 

[Ann]

I'm not sure if that top line of the wedge can be considered valid at this point. I'd like to see another touch of that line.

Good man DaveTrade, I had a feeling my line would be questioned by a good chartist and rightly so! Let me crank it up to a closer view for you with candlesticks. However, if you still disagree, I am comfortable with that as it is waving in the breeze a tad, I also would like to see a third touch to really convince me of its strength as a genuine wedge pattern formation.

 

[DaveTrade]

@Ann I'm not sure if I would call myself 'a chartist', I hold the most respect to horizontal lines as these are levels at which traders have bought and sold. I do use sloping trend lines but I like to have multiple touches to draw these lines and even then I don't give sloping trend lines as much weight as price levels or zones. I do like the way that trend lines help to paint pictures of the market, ie what the market is doing. Patterns are useful, after a pattern has formed then it gives some predictability as to where price may go next but this cannot be done until the pattern is fully formed. So in this case, if the market fully forms a rising wedge reaching the end of this pattern then I would be looking for a strong move down out of the pattern which I could measure and mark on the chart for reference.

 

[Garpal Gumnut]

Good man DaveTrade, I had a feeling my line would be questioned by a good chartist and rightly so! Let me crank it up to a closer view for you with candlesticks. However, if you still disagree, I am comfortable with that as it is waving in the breeze a tad, I also would like to see a third touch to really convince me of its strength as a genuine wedge pattern formation.

View attachment 139846

@Ann I'm not sure if I would call myself 'a chartist', I hold the most respect to horizontal lines as these are levels at which traders have bought and sold. I do use sloping trend lines but I like to have multiple touches to draw these lines and even then I don't give sloping trend lines as much weight as price levels or zones. I do like the way that trend lines help to paint pictures of the market, ie what the market is doing. Patterns are useful, after a pattern has formed then it gives some predictability as to where price may go next but this cannot be done until the pattern is fully formed. So in this case, if the market fully forms a rising wedge reaching the end of this pattern then I would be looking for a strong move down out of the pattern which I could measure and mark on the chart for reference.

Thanks @Ann and @DaveTrade. Good points.

I am primarily a chartist and an opportunist.

I use breakouts from consolidation during what I call easy times. No wars, recovery from financial fubars, extravagant madness etc.

In commodity related stocks and commodities previous long ago consolidation lines are very, very important.

However in actually making the decision to buy or sell during a war or financial catastrophe being nimble is too difficult with charts alone and I keep a close eye on The Wall St. Journal, Financial Times and Australian Financial Review.

Being a Centrist I find the WSJ gives me a financial rag's view of the Right, and the FT and AFR a financial rag's view from the Left. There are no Centrist newspapers. I also use Twitter for up to date info on any wars ( I never post ).

It is difficult being the only Centrist in the world. I am a party of one.

Just my thoughts. In summary in catastrophic times, charting and fundamental are both equally essential.

gg

 

[Telamelo]

Gold price chart update/analysis (from 21:25 onwards)

 

[signalFollower]

Gold price chart update/analysis (from 21:25 onwards)

that's a nice sentiment for my holdings in AAU which itself is still flying under the radar of many, check out a heap of anlysis I've shared over on the company thread if you're interested

 

[Ann]

Patterns are useful, after a pattern has formed then it gives some predictability as to where price may go next but this cannot be done until the pattern is fully formed. So in this case, if the market fully forms a rising wedge reaching the end of this pattern then I would be looking for a strong move down out of the pattern which I could measure and mark on the chart for reference.

I tend to watch for developing chart shapes and am foolish enough to call them early. Here in July 2012, I called a top to gold suggesting it was a megaphone top, should have actually called it a rising megaphone but I did clarify bearish. Clearly, no one was too keen to accept my suggestion but that is OK I may have been wrong!
Back to 1st July 2012

However in actually making the decision to buy or sell during a war or financial catastrophe being nimble is too difficult with charts alone and I keep a close eye on The Wall St. Journal, Financial Times and Australian Financial Review.

Too much reading there for a dyslexic GG! I do it 100% with charts.

Here is the ancient gold quarterly chart I posted back in 2012 calling a bearish megaphone top....




Edit: Here is my official call of the megaphone top in 2013

..and where I thought it would find support

I think my calls were reasonable and only derived from what I saw on the chart.

 

[Garpal Gumnut]

I tend to watch for developing chart shapes and am foolish enough to call them early. Here in July 2012, I called a top to gold suggesting it was a megaphone top, should have actually called it a rising megaphone but I did clarify bearish. Clearly, no one was too keen to accept my suggestion but that is OK I may have been wrong!
Back to 1st July 2012


Too much reading there for a dyslexic GG! I do it 100% with charts.

Here is the ancient gold quarterly chart I posted back in 2012 calling a bearish megaphone top....


View attachment 139888

Edit: Here is my official call of the megaphone top

..and where I thought it would find support

I think my calls were reasonable and only derived from what I saw on the chart.

No worries @Ann

Whatever works for you ( 4 U )

gg

 

[Sean K]

Until this support zone is breached it's going to $2700 ish.

 

[DaveTrade]

I tend to watch for developing chart shapes and am foolish enough to call them early.

Yes I look for developing patterns as well but I don't like to let myself give them too much weight in my mind at first, as they develop they become more significant for me. I've found that when I call them too early I'm too often wrong. From your writing above it would seem that you feel the same but don't care too much about calling them early anyway. Maybe some time in the future I'll be able to say to you 'good call'.

 

[signalFollower]

this one is quite interesting and IMO worth the 30 minutes watch, covering:

- Ukraine / Russia
- the USD and Interest rates
- Price of Gold
- Copper and the continued greenification of energy



so personally this ticks off a number of aspects with my main gold/silver, copper/gold and gold/copper holding with 3 back to back projects

 

[Garpal Gumnut]

The Gold Committee at the Hotel met for the early morning session and drank double rums with full strength coke at the news that Russia has fixed a Ruble/Gold price at $58 per gram.

This was translated by a Professor of Mathematics present to $1644.30 an oz.

They immediately had a zoom meeting with Anna Golubova who during a backpacker stint some years ago was a very good barmaid and had some dental work done here in The Ville. She now works for Kitco.

The Gold price immediately spilt at the open as did some drinks to $USD 1913 but has since recovered quite smartly to $ 1923.

What a kerfuffle. The markets are twitchy as they usually are during war.

Onward and upwards would be my thoughts.

Russia appears at the 1:05 mark on the zoom which Kitco captured for Youtube. For some reason our intoxicants have been edited out.



gg

 

[Garpal Gumnut]

The Gold Committee at the Hotel met for the early morning session and drank double rums with full strength coke at the news that Russia has fixed a Ruble/Gold price at $58 per gram.

This was translated by a Professor of Mathematics present to $1644.30 an oz.

They immediately had a zoom meeting with Anna Golubova who during a backpacker stint some years ago was a very good barmaid and had some dental work done here in The Ville. She now works for Kitco.

The Gold price immediately spilt at the open as did some drinks to $USD 1913 but has since recovered quite smartly to $ 1923.

What a kerfuffle. The markets are twitchy as they usually are during war.

Onward and upwards would be my thoughts.

Russia appears at the 1:05 mark on the zoom which Kitco captured for Youtube. For some reason our intoxicants have been edited out.



gg

With the fascists in Moscow having pinned their POG at $USD1644 this provides a very good target for shorters. They will need to be brave.



This 5Y chart of the POG shows $1600 was resistance and support between Sept 2019 pre-covid and March 2020 when Covid hit.

I must say that the price action in March 2020 quite resembles that now.

So when it is shorted by various Oligarchs, punch drunk vodka addled Muscovites, Global MAfia and Politicians, our own Woligarchs here in the West, UK, USA and Sydney, I anticipate a rush of short covering with a new support at $2020 above the two previous highs.

So Gold believers such as I, Julius Caesar, Queen Isabella of Spain, and HM QE2 will be all in, should those who are passed had been alive, and ready to make a huge profit.

Buy above $2020
Buy on a pullback past $1700

gg

 

[mullokintyre]

The linking of the Russian Rouble has had /will have profound effects on the world market.
From Zero hedge

Why is setting a Fixed Price for Gold in Rubles significant?

By offering to buy gold from Russian banks at a fixed price of 5000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.

We can see this linkage in action since Friday 25 March when the Bank of Russia made the fixed price announcement. The ruble was trading at around 100 to the US dollar at that time, but has since strengthened and is nearing 80 to the US dollar. Why? Because gold has been trading on international markets at about US$ 62 per gram which is equivalent to (5000 / 62) = about 80.5, and markets and arbitrage traders have now taken note, driving the RUB / USD exchange rate higher.

So the ruble now has a floor to the US dollars, in terms of gold. But gold also has a floor, so to speak, because 5000 rubles per gram is 155,500 rubles per troy ounce of gold, and with a RUB / USD floor of about 80, that’s a gold price of around $1940. And if the Western paper gold markets of LBMA / COMEX try to drive the US dollar gold price lower, they will have to try to weaken the ruble as well or else the paper manipulations will be out in the open.

Additionally, with the new gold to ruble linkage, if the ruble continues to strengthen (for example due to demand created by obligatory energy payments in rubles), this will also be reflected in a stronger gold price.
Russia is the world’s largest natural gas exporter and the world’s third largest oil exporter. We are seeing right now that Putin is demanding that foreign buyers (importers of Russian gas) must pay for this natural gas using rubles. This immediately links the price of natural gas to rubles and (because of the fixed link to gold) to the gold price. So Russian natural gas is now linked via the ruble to gold.

The same can now be done with Russian oil. If Russia begins to demand payment for oil exports with rubles, there will be an immediate indirect peg to gold (via the fixed price ruble – gold connection). Then Russia could begin accepting gold directly in payment for its oil exports. In fact, this can be applied to any commodities, not just oil and natural gas.

What does this mean for the Price of Gold?

By playing both sides of the equation, i.e. linking the ruble to gold and then linking energy payments to the ruble, the Bank of Russia and the Kremlin are fundamentally altering the entire working assumptions of the global trade system while accelerating change in the global monetary system. This wall of buyers in search of physical gold to pay for real commodities could certainly torpedo and blow up the paper gold markets of the LBMA and COMEX.

The fixed peg between the ruble and gold puts a floor on the RUB / USD rate but also a quasi-floor on the US dollar gold price. But beyond this, the linking of gold to energy payments is the main event. While increased demand for rubles should continue to strengthen the RUB / USD rate and show up as a higher gold price, due to the fixed ruble – gold linkage, if Russia begins to accept gold directly as a payment for oil, then this would be a new paradigm shift for the gold price as it would link the oil price directly to the gold price.

For example, Russia could start by specifying that it will now accept 1 gram of gold per barrel of oil. It doesn’t have to be 1 gram but would have to be a discounted offer to the current crude benchmark price so as to promote take up, e.g. 1.2 grams per barrel. Buyers would then scramble to buy physical gold to pay for Russian oil exports, which in turn would create huge strains in the paper gold markets of London and New York where the entire ‘gold price’ discovery is based on synthetic and fractionally-backed cash-settled unallocated ‘gold’ and gold price ‘derivatives.
What does this mean for the Ruble?

Linking the ruble to gold via the Bank of Russia’s fixed price has now put a floor under the RUB/ USD rate, and thereby stabilized and strengthened the ruble. Demanding that natural gas exports are paid for in rubles (and possibly oil and other commodities down the line) will again act as stabilization and support. If a majority of the international trading system begins accepting these rubles for commodity payments arrangements, this could propel the Russian ruble to becoming a major global currency. At the same time, any move by Russia to accept direct gold for oil payments will cause more international gold to flow into Russian reserves, which would also strengthen the balance sheet of the Bank of Russia and in turn strengthen the ruble.

Talk of a formal gold standard for the ruble might be premature, but a gold-backed ruble must be something the Bank of Russia has considered.

What does this mean for Other Currencies?

The global monetary landscape is changing rapidly and central banks around the world are obviously taking note. Western sanctions such as the freezing of the majority of Russia’s foreign exchange reserves while trying to sanction Russian gold have now made it obvious that property rights on FX reserves held abroad may not be respected, and likewise, that foreign central bank gold held in vault locations such as at the Bank of England and the New York Fed, is not beyond confiscation.

Other non-Western governments and central banks will therefore be taking a keen interest in Russia linking the ruble to gold and linking commodity export payments to the ruble. In other words, if Russia begins to accept payment for oil in gold, then other countries may feel the need to follow suit.

Look at who, apart from the US, are the world’s largest oil and natural gas producers – Iran, China, Saudi Arabia, UAE, Qatar. Obviously, all of the BRICS countries and Eurasian countries are also following all of this very closely. If the demise of the US dollar is nearing, all of these countries will want their currencies to be beneficiaries of a new multi-lateral monetary order.
What does this mean for the US Dollar?

Since 1971, the global reserve status of the US dollar has been underpinned by oil, and the petrodollar era has only been possible due to both the world’s continued use of US dollars to trade oil and the USA’s ability to prevent any competitor to the US dollar.

But what we are seeing right now looks like the beginning of the end of that 50-year system and the birth of a new gold and commodity backed multi-lateral monetary system. The freezing of Russia’s foreign exchange reserves has been the trigger. The giant commodity strong countries of the world such as China and the oil exporting nations may now feel that now is the time to move to a new more equitable monetary system. It’s not a surprise, they have been discussing it for years.

While it’s still too early to say how the US dollar will be affected, it will come out of this period weaker and less influential than before.

What are the Consequences of these Developments?

The Bank of Russia’s move to link the ruble to gold and link commodity payments to the ruble is a paradigm shift that the western media has not really yet been grasped. As the dominos fall, these events could reverberate in different ways. Increased demand for physical gold. Blowups in the paper gold markets. A revalued gold price. A shift away from the US dollar. Increased bilateral trade in commodities among non-Western counties in currencies other than the US dollar.

China has always been a great hoarder of Gold, so would be more than happy to play the game of destroying the western fiat currencies.
India, the other country where gold is culturally very significant, did not join the conga line of western countries to condemn Russia, but is not at all friendly with the Chinese, so maybe having a foot in both camps.
Interesting times.
Mick

 

[rederob]

The price of gold in the short term is impervious to good analysis.:

The rather narrow trading range of recent weeks defies explanation.
That said, POG remains nicely placed in a long term bull market trend.
What we know with near certainty is that pervading global events are unlikely to see POG collapse.

 

[ducati916]

Gold is performing exactly as you would expect given the macro-economic and geopolitical circumstances.



The market is pricing in 9 rate hikes in the FFR:

Which of course has driven the 2s/10s inversion:






So a recession, is on the cards if the Fed ACTUALLY hikes 9 times:



The math is pretty simple. A 4% FFR after 9 hikes = $1.4T in interest payments. A collapse in GDP from the recession decreases tax takes. Even on current GDP tax takes are $3.2T. That is 43% of tax take being paid on interest alone.

That is just the on balance sheet debt.

If you include the off balance sheet debt:




No way will the Fed be able to raise the FFR to 4%.

Add in the trade deficits:



The whole notion of 4% nominal FFR is farcical.

Summary:

The Fed will maintain the illusion of fighting inflation for as long as possible. Each raise will crush risk assets and accelerate the recession's arrival and the day of the next QE.

Add in the mid-term elections, the political pressure on Mr Powell will be unrelenting. Is he a Paul Volcker? Hardly.

Very bullish on gold/silver.

jog on
duc

 

[rederob]

Gold is performing exactly as you would expect given the macro-economic and geopolitical circumstances.

I gave you a ?for effort, but POG as a store of value is not doing what is should given the situation in Ukraine.

POG has for weeks equivocated, and on a medium term basis is trading at the lower end of its trend:


In uncertain times it is unusual for POG to be so rangebound.

 

[DaveTrade]

In uncertain times it is unusual for POG to be so rangebound.

I put this down to the fact that these are not only uncertain times but they are also very unusual times. There are so many destabilizing things happening in the world, all at the same time.

 

[Garpal Gumnut]

Gold is performing exactly as you would expect given the macro-economic and geopolitical circumstances.

View attachment 140002View attachment 140003

The market is pricing in 9 rate hikes in the FFR:

Which of course has driven the 2s/10s inversion:

View attachment 140004


View attachment 140005

So a recession, is on the cards if the Fed ACTUALLY hikes 9 times:

View attachment 140006

The math is pretty simple. A 4% FFR after 9 hikes = $1.4T in interest payments. A collapse in GDP from the recession decreases tax takes. Even on current GDP tax takes are $3.2T. That is 43% of tax take being paid on interest alone.

That is just the on balance sheet debt.

If you include the off balance sheet debt:

View attachment 140008


No way will the Fed be able to raise the FFR to 4%.

Add in the trade deficits:

View attachment 140009

The whole notion of 4% nominal FFR is farcical.

Summary:

The Fed will maintain the illusion of fighting inflation for as long as possible. Each raise will crush risk assets and accelerate the recession's arrival and the day of the next QE.

Add in the mid-term elections, the political pressure on Mr Powell will be unrelenting. Is he a Paul Volcker? Hardly.

Very bullish on gold/silver.

jog on
duc

I gave you a ?for effort, but POG as a store of value is not doing what is should given the situation in Ukraine.

POG has for weeks equivocated, and on a medium term basis is trading at the lower end of its trend:
View attachment 140022

In uncertain times it is unusual for POG to be so rangebound.

I put this down to the fact that these are not only uncertain times but they are also very unusual times. There are so many destabilizing things happening in the world, all at the same time.

Thanks @ducati916 , @rederob , and @DaveTrade

I had noticed Gold being rangebound and was attempting to post on it. I was unable to put it in context with appropriate charts.

I more or less agree with all three of you, although differences in opinions on the the direction of POG at any one time have been about since Midas began accumulating.

My gut tells me it will surpass previous highs in $USD. It is a time of indecision atm but it will not go down.

For those who have never been in a war zone a cigarette can often have value way beyond that which it attracted at source.

Gold is a commodity that has been bought to be kept. I still have the first ten ounces I purchased in the early 1980's safely buried.
Admittedly traders have predominated since online markets were established, but physical is kept. It is kept because of its value for the future in relation to other commodities such as food, shelter, fuel and safety.

That last commodity "safety" is untradable.

And that is why Gold will appreciate in the short to medium term.

Hopefully, and I say this as a holder of Gold in many forms, I hope it falls again long term.

Give me a safe and pleasant world anytime. Midas I ain't.

gg

 

[ducati916]

I gave you a ?for effort, but POG as a store of value is not doing what is should given the situation in Ukraine.

POG has for weeks equivocated, and on a medium term basis is trading at the lower end of its trend:
View attachment 140022

In uncertain times it is unusual for POG to be so rangebound.

I think that is fair comment. The market still hasn't come to a consensus on whether there is to be a secular inflation or a deflationary recession (depression).

The historical record demonstrates the flippe-floppe nature of gold vis-a-vis investors. Interest rates, nominal and real. Fed tightening cycles and effects thereof and war.



In addition we have the Ruble backed by gold, which will play havoc with DXY valuations in gold



Plenty for gold to digest.

Ultimately, gold wins in either scenario, inflation/deflation, it matters not.

jog on
duc