Gold Price - Where is it heading?

[Ann]

I am still playing with the concept of volume spikes as an indicator for future price movements. If I see a large volume spike at a high point I am thinking a decent fall and vice versa if a spike is at the bottom of a price fall then I would expect a rising price.

Having said that I am wondering if we will see a fall in the POG, I am not too sure about this one because it is not at either a major top to cause a fall nor is it at a major bottom for a rise. It is a very big volume spike. Interested to watch, I am thinking fall but may not be, just me amusing myself with charts folks.

 

[DaveTrade]

I am still playing with the concept of volume spikes as an indicator for future price movements.

Ann if your study of the markets reaction to volume spikes is producing statistics that your not quite happy with, you could add 'On Balance Volume' to your study to see if may help. OBV is an indication of the strength of the prevailing trend.

 

[divs4ever]

That is a very interesting chart Dave, I had a look at it for fun on Stockcharts using gold colour for gold and black for oil. In the few days since you posted this, there appears to be a divergence, oil going up gold going down. Very interesting comparison

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Having looked at what the ETFs were doing then I decided to see what the POO and POG looked like together. There is still this current divergence but here the POG looks as though it may be chasing the POO. Very, very interesting, thanks Dave!

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the main sovereign friends of gold are weaning themselves of the US dollar ( Russia , China , and India and others )

so gold LOOKS like it is declining in demand , whilst oil SO FAR is mainly bought in US Dollars ( but most commodities are rising compared to the US Dollar )

 

[Ann]

Ann if your study of the markets reaction to volume spikes is producing statistics that your not quite happy with, you could add 'On Balance Volume' to your study to see if may help. OBV is an indication of the strength of the prevailing trend.

Thanks for the suggestion Dave, most appreciated. I don't get a lot from OBV as an indicator I looked at it for a while back in the early days, it didn't speak to me. I find Twiggs Money Flow is more informative for me and looking at that it appears there is an outflow of money with GOLD ETF. My little volume spike exercise is trying to look at volume spike and chart price alone. Seeing if I can work out a reasonably reliable pattern I can use as a guide to potential price movements. I do glance at the TMF occasionally as with this example with GOLD ETF, hence my more bearish thinking.

 

[Garpal Gumnut]

It is impossible to see in to the future.

Deduction and inference assist trading.

At present the $US is so dominant it is difficult to trade Gold in $AUD with any hope of making a good profit on the upside.

Therefore I will only buy paper Gold in $AUD at close to $US 1800 no matter which way AUD/USD is trending.

If you haven't got physical Gold buried it is probably too late btw.

DDDDYYYYYOOOOOOOOHRRR whatever that means.

This advice to myself is specific and not general in nature.

gg

 

[againsthegrain]

It is impossible to see in to the future.

Deduction and inference assist trading.

At present the $US is so dominant it is difficult to trade Gold in $AUD with any hope of making a good profit on the upside.

Therefore I will only buy paper Gold in $AUD at close to $US 1800 no matter which way AUD/USD is trending.

If you haven't got physical Gold buried it is probably too late btw.

DDDDYYYYYOOOOOOOOHRRR whatever that means.

This advice to myself is specific and not general in nature.

gg

And if its not buried burry it now before its too late

 

[Sean K]

Well, I've been away for a week diving with the fishes and just checked the POG. eeeeek! Breaking the old resistance / what should have been support across $1850 is bad juju short term. Fingers crossed $1820 ish holds, but it's panic stations out there.

 

[Telamelo]

Well, I've been away for a week diving with the fishes and just checked the POG. eeeeek! Breaking the old resistance / what should have been support across $1850 is bad juju short term. Fingers crossed $1820 ish holds, but it's panic stations out there.

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Mmm diving with the fishes!? lucky you as sounds serene/blissful ??

Some comfort that at least our AUD Gold price is holding up quite well @ $2,651

 

[divs4ever]

Well, I've been away for a week diving with the fishes and just checked the POG. eeeeek! Breaking the old resistance / what should have been support across $1850 is bad juju short term. Fingers crossed $1820 ish holds, but it's panic stations out there.

View attachment 141569
View attachment 141568

you should have been looking for treasure chests and doubloons ( wink ) ( and watching out for the big NASTY fishes )

but 'they ' NEED to crush the gold price to make Treasury Bonds look safe

( if only you could get the real stuff at the futures price )

 

[Ann]

It is impossible to see in to the future.

Deduction and inference assist trading.

At present the $US is so dominant it is difficult to trade Gold in $AUD with any hope of making a good profit on the upside.

Therefore I will only buy paper Gold in $AUD at close to $US 1800 no matter which way AUD/USD is trending.

If you haven't got physical Gold buried it is probably too late btw.

DDDDYYYYYOOOOOOOOHRRR whatever that means.

This advice to myself is specific and not general in nature.

gg

Not sure I agree with you GG, I think you can potentially see into the future by looking at enough charts. As we all know the $US is inverse to the gold price. This is the reason they treat gold as such a wonderful hedge for their currency. Dollar goes down gold goes up, lovely! However, we are not so lucky, as the POG falls our $AU also falls so it is almost a lose lose situation for us and gold is certainly not a hedge for our dollar.

Some comfort that at least our AUD Gold price is holding up quite well @ $2,651

I think they are just holding hands and falling together more than holding up.


Having said the POG travels inverse to the $US, let's look at how the $US is travelling. I have been watching $US for a while, particularly as my quarterly chart for the POG was showing a bearish rising wedge, which has currently broken down, time will tell if the full quarter will still see a true breakdown.

I did a 30-year daily chart for the $US and it is looking very bullish, broken above a long term falling trendline resistance and I worked out a swing trade calc for it. Looks like it may top at around 130.00. If I am right then I would expect the POG to tank. May be quite wrong of course, let's see.

 

[Garpal Gumnut]

I'm still mulling whether to have another poke at PMGOLD before the close.

The bedwetters in London may push POG down to $USD 1800 after we close, which may be a good resistance and launch, up and over, $USD 2000 next week.

Trouble is holding it overthe w/e if it goes below that.

At that price it appears to be win/win for me, which is a sure sign I should pause and re-examine.

Don't do your own research DYOR, BTW. BTW=By the way. DYOR=Go to prison if ASIC catch you giving advice to the thousands who follow your every breath because you are such an important analyst.

Do as I do and enjoy yeselves.

And as always BYO.

A chart from some moments ago.

 

[DaveTrade]

 

[Telamelo]

I'm still mulling whether to have another poke at PMGOLD before the close.

The bedwetters in London may push POG down to $USD 1800 after we close, which may be a good resistance and launch, up and over, $USD 2000 next week.

Trouble is holding it overthe w/e if it goes below that.

At that price it appears to be win/win for me, which is a sure sign I should pause and re-examine.

Don't do your own research DYOR, BTW. BTW=By the way. DYOR=Go to prison if ASIC catch you giving advice to the thousands who follow your every breath because you are such an important analyst.

Do as I do and enjoy yeselves.

And as always BYO.

A chart from some moments ago.


View attachment 141580

I believe that Gold is a "strong buy" around current level's imho given political tensions/turmoil with ongoing escalation of Ukraine crisis unfolding as we speak - Putin going to start using more menacing firepower/weapons etc. imo as I believe war will spread to neighbouring countries around Ukraine (with NATO becoming directly involved).

Added to this rising interest rates feel that Gold will soon re-gain it's bullish momentum on the way to US$2,000+

 

[Garpal Gumnut]

Well @Telamelo I did have a poke, and the London bedwetting cousins did not disappoint.

Under an hour to go before cessation of hostilities for the weekend and POG should close close to $US 1800.

Onwards and rebound on Monday.


gg

 

[DaveTrade]

It looks to me like GLD still has further to fall but there is support just below 167.5-166 zone, the current close is 168.79, the day or two will be telling;

 

[ducati916]

The US is in a recessionary bear market. That is to say that the Fed has allowed inflation to run far to far ahead of its easy monetary policies compounded by Fiscal ease. There is now obviously high and pernicious inflation.

The reason that the market is selling off is simply that the level of derivatives to the base money supply (physical dollars) is leveraged too high. This invariably leads to a liquidity crisis.

A liquidity crisis will see a fall in SPY at 80%.

Will the Fed allow that to occur without pivoting and a return to QE? Unlikely.

If we get a pivot, then gold/silver will explode higher, simply because to avert a liquidity crash, the level of QE will need to be multiples over the existing $9T currently on the balance sheet.

So look at gold through a different lens:



In a liquidity crisis...everything gets sold.

Gold, relative to SPY, is gradually moving higher. Sure, 2 steps forward, 1 step back.

The choice is paper or physical? Paper will likely fall as there is a liquidity crisis brewing. The interesting thing is that physical prices are not falling at all. There is a 20% premium to paper.

I buy physical. I'm not interested in the paper. There is a not zero risk that in the coming storm, markets will be closed/frozen. Your paper gold, convertible only into paper fiat, by the time it is unfrozen, is only of historical interest.

jog on
duc

 

[divs4ever]

In a liquidity crisis...everything gets sold.

by those panicked or leveraged , absolutely , a FEW will have diamond hands

The choice is paper or physical? Paper will likely fall as there is a liquidity crisis brewing. The interesting thing is that physical prices are not falling at all. There is a 20% premium to paper.

yes i am watching that , closely

I buy physical. I'm not interested in the paper. There is a not zero risk that in the coming storm, markets will be closed/frozen. Your paper gold, convertible only into paper fiat, by the time it is unfrozen, is only of historical interest.

yes Buffet obliquely hints that in the 'willing to hold the stock ten years if the markets are closed '

because some stocks would carry the same risks in a crisis that big

a second bit of history was the European Jewish families that had their money trapped in Swiss banks after WW2 ( just because the bank wasn't bombed are your savings guaranteed )

 

[qldfrog]

Fyi
For silver but similar gold.
When you can get it
Silver at 30aud an oz on paper
You need to pay above $38 an once to get any metal so nearly 25%premium
Current gold metal above 2.6k an ounce..if you want to buy the real stuff

 

[DaveTrade]

The implications of the following article are far reaching and certainly for gold;

We Are Facing a Period of Incredible Change

By Tim FortierMay 13, 2022​

As we’ve outlined previously, we’re in a period of incredible change.

- Disinflation has been replaced with inflation.
- Interest rates are now rising, ceasing a 40-year trend in falling rates.
- The Fed is now removing liquidity from the economy which could push us over the edge into a recession.

These shifts are significant and will continue to have a profound impact on investor portfolios.

But as seismic as these changes may be, no change could be more important than the subtle shifts taking place in the world currency markets.

As we discussed last week, the US has benefited from the US Dollar’s (USD) distinction as the world’s “reserve currency” – in large part due to the fact that global energy markets have traded exclusively in USD, giving the USD a “petrodollar” backing.

As the “world reserve currency,” the US has been allowed to “export” its dollars around the globe, despite running enormous deficits and producing little capacity.

But recently, several headlines and stories have caught my attention… and I’m shocked I find very little coverage of these stories in the mainstream financial press.

Back in late April, this headline I came across on ZeroHedge, jarred me.



In the weeks preceding this headline, there was already news about Russia and China taking big steps to remove themselves from Western monetary systems.

But Israel? Does Israel see the writing on the wall of what may be about to happen?

Let me explain…

When the US makes a purchase of goods or services, those are “exchanged” for USD.

As time goes on if the US buys (imports) more than it sells (exports), the country the US is doing business with will accumulate a reserve of USD. As long as there is a “belief” in the soundness of the currency, it’s “business as usual.”

But, if confidence is shaken, there can be problems.

The announcement by Israel’s central bank was the biggest change to its allocation of reserves in over a decade. To understand a possible motive of why Israel would do this, we need to back up a few weeks.

As a direct result of US sanctions cast upon Russia as a result of its invasion of Ukraine, Russia made the announcement that the Ruble would be backstopped by gold.

Further, it was announced that the backstopping of the Ruble with gold can come in many forms and doesn’t have to be a direct peg from the Ruble to gold – it can also include the far more likely scenario of accepting payment for oil, the country’s most ubiquitous and valuable resource, in gold.

By doing this, it linked the Ruble to Russia’s biggest resource – oil. In doing so, Russia has created a currency similar to the decades-old OPEC USD agreement.

And following this announcement, the Ruble is back to a two-year high versus the Eurodollar.



After small shocks lower in Russian markets and in the Ruble, things have stabilized relatively quickly – except now, Russia has used the opportunity to make clear that they do not want to be participants in the global fiat system any longer.

And now it looks like China (and likely India) feels similarly situated.

When the US announced that it was seizing Russian-owned FX reserves, it sent a message that any USD FX assets were no longer safe.

This has propelled the need to find an alternative monetary system – and it seems Russia and China could be leading the charge to create a new gold and commodity-backed multilateral currency system.

If you are China, and you produce everything that the US uses – and if you are Russia, and your produce a meaningful amount of energy – then the question is how long do you sit back and take it as you watch the US-run its reckless monetary programs.

I think we’re finding out…

What Russia realizes is that it still has the oil – it’s needed.

The potential for this is the world becomes divided between those that have assets (like gold and other commodities) and those that do not.

Should the perception of the USD change, there could be an alarming disruption to the American lifestyle.

As this chart shows, the US produces less and less relative to its consumption.



What will the US trade for if not USD?

When the dollar is viewed in terms of gold prices, we get a much different view of the value.



What this chart demonstrates is the degree of monetary debasement relative to gold.

Given the amount of monetary inflation, gold would need to be $42,000 per ounce to get to the 1980 peak of 55%% coverage of M1.

As I wish to stress again… we are facing a period of incredible change.

And nothing could be more disruptive than a change in the global demand for payments that favor those countries with hard assets versus those without.


While how this plays out is far from certain, it appears for the first time in decades that we have entered a period of competition against the USD as the premier currency.

 

[Student of Gann]

There are four dates outlined on the Curve - The first date is the 18th May and if trend continues down into this date and holds above that point we could setup for Low with trend up till X for counter trend Top then down into X where Main Low is indicated . As we approach these turning dates the pattern of trend leading into these points should allow us to determine if the market is either setting up for Top or Bottom into these dates and then once the Cycle has been verified we can then trade in the prevailing direction of the market with a time based stop in place under the Cycle Low .