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Gold Price - Where is it heading?

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I'm bit confused! I've always been under the impression that when the AUD goes down, the POG goes up. Lately since late August the AUD price has been going down. The last few days the AUD has been suffering from lower highs, lower lows. The same could be said for the price of gold AU. You would think that the price of gold AU would be doing the opposite, higher lows higher highs. But not to be, just when I thought I had it mastered. What gives, what holding POG AU down?...


 
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Good morning Stockybailz,
rcw1 gets confused too. This guide helps with rcw1 deliberations and then tries to join up all the dots.


Reference ABC Gold.

Disclosure: rcw1 holds gold.
Have a very nice day, today.

Kind regards
rcw1
 

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rcw1 said:
Good morning Stockybailz,
rcw1 gets confused too. This guide helps with rcw1 deliberations and then tries to join up all the dots.
Click to expand...
Obviously there is some other fundamental's keeping the price of gold AU down. I mean what else measures the AU gold price. I understand commonity's are falling through out the market. So perhaps it's something in the bigger picture?
 
Stockybailz said:
Obviously there is some other fundamental's keeping the price of gold AU down. I mean what else measures the AU gold price. I understand commodity's are falling through out the market. So perhaps it's something in the bigger picture?
Click to expand...
Think I worked it out there only one obvious thing that come to mind and that's supply and demand. As explained in the following link;

Another reason gold prices fluctuate is due to supply and demand — a basic and fundamental principle of economics. Many experts believe that there is an inadequate amount of gold as compared to current demand. When demand exceeds supply, prices rise. When supply exceeds demand, prices drop.

Although there isn’t a sole cause for fluctuating gold prices, there are three primary culprits, including:

  • Investor behavior
  • Supply
  • Demand
These factors often overlap with each other, causing a chain reaction — for example, the gold supply frequently affects investor behavior, raising the demand. Inversely, the investor’s behavior can also affect the supply. They all work together and play a part in fluctuating gold prices.
 
Stockybailz said:
Obviously there is some other fundamental's keeping the price of gold AU down. I mean what else measures the AU gold price. I understand commonity's are falling through out the market. So perhaps it's something in the bigger picture?
Click to expand...
Good afternoon
Prices go up and they go down ...

Someone more learned than rcw1 may have the answer and or alternatively a much better contribution to this matter.

Anyways, these (4) four points interwoven come to mind as a result of an accumulation of reading, listening, experience and lastly assumption:
  • Banks maintain reserves of paper currency and gold. It is anticipated that the price of gold generally rises as central banks diversify their monetary reserves away from paper currency and towards gold;
  • Gold is commonly known as a hedge for inflation;
  • Federal Reserve (Fed) Chair Jerome Powell confirmed that the Fed is unlikely to withdraw the aggressive pace of interest rate hikes which will in effect more than likely combat inflationary economic conditions/there has been widespread media attention on this even well before Powell communicated the obvious; and
  • With a rapid rise in interest rates, traders flock to fixed-income investments and banks adhere to fiat money more so than gold.
Therefore all in all demand falls.

Appreciate further comment on this.

Have a very nice weekend.

Kind regards
rcw1
 
Ok, this is my take of the POG at this point in time.

1. USD goes up, POG goes down. So, e.g Fed interest rates, money supply, expectations of inflation etc. influence USD and thus Gold.

2. Speculators are presently massively shorting gold instruments, thus price will fall, until there is a short squeeze when it will go up.

3. War, famine, plague and pestilence increase POG usually. Why this is not increasing POG atm may be due to above first two.. A little bit of nuclear or the Chinese cousins taking Formosa back may change all that.

Trying to make any further fundamental sense apart from the above will do your head in.

Have a great weekend.

gg
 

Not sure this guide really offers the correct mental model.

What if the gold price goes up but it goes up less than AUDUSD? According to this chart it should be Quadrant 1 but it is not covered at all.

As I mentioned yesterday, OTC gold is the big mama of the market, so https://en.wikipedia.org/wiki/Triangular_arbitrage is the correct way to think about it.

AUDUSD, XAUUSD and XAUAUD make the triangle in this case.

This often tends to explain the institutional shorters that @Garpal Gumnut seems to think are directional bets/manipulation but are usually just arbs available to those with the appropriate size balance sheet.
 
Gold & Silver are "manipulated big time" is my take on thing's.. as given up trying to read/understand "potential AUD Gold price moves" however did "top up" on a whim @ AUD $2,490 the other week... so far so good lol
 
Telamelo said:
Gold & Silver are "manipulated big time" is my take on thing's.. as given up trying to read/understand "potential AUD Gold price moves" however did "top up" on a whim @ AUD $2,490 the other week... so far so good lol
Click to expand...

I mean, gold has pretty much perfectly tracked market implied US real interest rates for more than two decades now...this is not a manipulated asset class.

 
Correct, gold has been heavily manipulated since the 1930's.

Even with all of that manipulation:



Markets or rather the entire financial system is imploding and fast heading into a liquidity crisis that will drive a very high inflation, possibly even a hyper-inflation of the US dollar, to its ultimate failure.

Not only will gold save/preserve your wealth, it will potentially provide you with speculative type of profits.

jog on
duc
 
Agree with the heavily manipulated responses for gold.
As a subset to this, both China and Russia have been heavy buyers of gold over the past years.
Given the enmity between the Chief manipulator (USA) and these countries, it makes sense for the chief manipulator to bring down the price of gold to "punish" them.
Mick
 

So (you believe) your adversary is accumulating an asset and (you also believe) the 4D chess move here is to "bring down the price"...
 
InsvestoBoy said:
So (you believe) your adversary is accumulating an asset and (you also believe) the 4D chess move here is to "bring down the price"...
Click to expand...
To what are you referring when you mention "my adversary"?
The US and its allies have lots of reasons to bring downward pressure on gold.
Apart from what i have mentioned, countries that issue fiat currencies without gold asset backing need to keep gold suppressed so as the investors do not shift out of cash when the proverbial hits the fan.
The demand for USD is illogical and irrational, and at some point that irrationality will come home to roost.
Just like the irrationality that keeps the other fiat currencies such as the Euro going, or the UK Pound, or the Yen.
Mick
 
I am quite pleased with the way the POG has kept its head above USD 1700 this week and the AUD/USD remains between 0.0067+ and 68+ roughly which translates to a stable price in AUD.

Unless the cousins in London and overnight Comex panic I will sleep well this weekend.

The cousins in Russia and China will be looking forward to holiday season soon, so POG should stay stable or rise through Xmas and in to our and Chinese NY.

The Russian cousins may start falling out of high rise windows in greater numbers and any sort of turmoil is good for gold. There also may be a changing of the guard in the ranks of the oligarchs and boyars as they look for someone to blame for the miscalculation in Ukraine and with that gold bars will of course be flying.

The Chinese cousins on the other hand must be getting sick and tired of cousin Xi herding them about with RAT and PCR's. They are a patient lot, then they number a billion I am told. I would have thought it would be more difficult to herd a billion than say 25 million. But there you go. Anyways by Chinese New Year there will be a build up of cash amongst that patient pale isolated billion to spend on the yellow metal.

All gold holders have a good weekend.

gg
 
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