Australian (ASX) Stock Market Forum

Gold Price - Where is it heading?

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qldfrog said:
Based on the macd, time to sell?
Click to expand...
rcw1 got some decisions to make mate....

The ball is bouncing higher.... mostly anyways, the barrier has lifted. For mine, wait and see.. Nothing to lose, reckon, more to gain. Patience without procrastination weighs heavily on rcw1 mind... The thing is rcw1 got plenty of time. A gold believer from way back. At the end of the day and when the dust settles, with respect to your question:
qldfrog said:
Based on the macd, time to sell?
Click to expand...

Not yet.

Have a great day bloke. Hope the North Coast is treating you just dandy.

Kind regards
rcw1
 
Sean K said:
Must be some consolidation soon, it's looking unhealthy. I daresay some traders will be putting their short pants on shortly. Or, maybe everyone's pants are off and they're just going to ride the wave until it topples over.
Click to expand...
Thanks @Sean K

I believe Gold has further to rise in tandem with the NYSE bullish sectors. The AFR sums it up nicely as Gold being a safe haven against the prospect of falling interest rates and Bitcoin not.

Gold prices began their latest ascent amid hopes that the US central banks was on the verge of cutting interest rates, which would push US bond yields and the US dollar lower. Gold, which offers no yield to investors, tends to rise when interest rates fall.

But the precious metal continued to climb sharply this week as investors fretted that the strength of the US economy, along with rising oil prices, would entrench inflationary pressures, limiting the scale of Fed rate cuts. Investors, it seems, are now seeking out gold as an inflation hedge.

There are other factors propelling the gold price higher, including buying from some countries which are keen to diversify their financial reserves, and reduce their exposure to the US dollar.

The most prominent is China, where the country’s central bank, the People’s Bank of China, has been steadily increasing its exposure to gold. This has encouraged buying from Chinese consumers, who are purchasing record levels of gold.

At a time when China’s property market is under severe pressure, and its share market is languishing, Chinese households are increasingly funnelling their savings into gold.

Bitcoin lags​

In contrast, bitcoin and other cryptocurrencies have largely moved in tandem with the US share market.

Bitcoin, the largest digital currency, hit a record high near $US74,000 in mid-March but struggled to consolidate at that level. Instead, the cryptocurrency has endured a series of volatile corrections, followed by abrupt recoveries.

Bitcoin’s weakness has coincided with declines in other risk assets. The US stock market has faltered, with both the Dow Jones Industrial Average and S&P 500 retreating from their own all-time highs as US bond yields have climbed to their highest levels in months.

This suggests that rather than acting as a safe haven, cryptocurrencies are extremely sensitive to investor risk sentiment, which has been dealt a blow this week as rate cut hopes have dimmed.
Click to expand...

gg
 
rcw1 said:
rcw1 got some decisions to make mate....

The ball is bouncing higher.... mostly anyways, the barrier has lifted. For mine, wait and see.. Nothing to lose, reckon, more to gain. Patience without procrastination weighs heavily on rcw1 mind... The thing is rcw1 got plenty of time. A gold believer from way back. At the end of the day and when the dust settles, with respect to your question:


Not yet.

Have a great day bloke. Hope the North Coast is treating you just dandy.

Kind regards
rcw1
Click to expand...
Honestly, I have been a gold bug since GFC and the less the trust in government, the more so.
I do have some tactical paper gold and silver open to medium term trading ..I would sell these in a view to buy again cheaper within 3 months..but on the other hand, zelenski is getting flogged, Biden desesperate and the EU under puppet control so I expect worsening of geopolitical situation to a dramatic height before the US election.
So probably keep..but not top up yet
 
There are many factors that support a continued rise in POG, but there will be pullbacks along the way. I've put some price levels on my weekly chart below and I'll be paying more attention to how price reacts at these levels. Price is coming up to a significant level right now (approx 214.5) after a good run up and this is the time when emotions of fear & greed are at full strength, but I'm sticking to my predetermined trading plan of waiting for my exit indicator to raise it's hand. I don't see it yet.
1712191859865.png
 
qldfrog said:
Honestly, I have been a gold bug since GFC and the less the trust in government, the more so.
I do have some tactical paper gold and silver open to medium term trading ..I would sell these in a view to buy again cheaper within 3 months..but on the other hand, zelenski is getting flogged, Biden desesperate and the EU under puppet control so I expect worsening of geopolitical situation to a dramatic height before the US election.
So probably keep..but not top up yet
Click to expand...
nice

and gold is continuing to reveal just how precious a commodity it is ... oh the joy of it all.

Have a very nice day, today

Kind regards
rcw1
 
Screen Shot 2024-04-06 at 6.30.04 AM.pngScreen Shot 2024-04-06 at 6.29.42 AM.png

The two markets are inextricably linked by Mr Putin willing to sell oil in Yuan (and increasingly other currencies) outside of the petrodollar agreement.

(i). China prints CNY to buy gold
(ii). Which means that gold rises as against CNY
(iii). As gold rises settlement of oil net net balance of trade deficit settled in gold, means China can buy more oil

(iv) As China buys more physical gold, the West is drained of physical gold
(v) Less physical gold forces a reduction in the paper leverage employed by JPM et al to control the POG


(vi). As POG rises the Gold/Oil/USD ratio will stabilise as Gold/USD rises
(vii). Until the Gold/CNY and Gold/USD balance, gold will continue to flow to China

Ramifications:

If China controls the gold price, China controls US inflation.

Why?

Because Yellen needs a lower USD and higher Yuan to prevent the UST market from blowing-the-fuc*-up. A weaker USD is inflationary.

The US is reliant on cheap Chinese imports as there is no US manufacturing base. China can allow the CNY to rise (to a point) as essentially they have a captive market.

A stronger CNY/USD allows even further buying of gold priced in USD. Allows greater oil purchases. Higher oil prices in USD increases inflation in USD.

Now, the Fed has 'promised' to control inflation. LOL.
The Fed are 'talking' about lower interest rates. LOL

If the Fed ceteris parabis lower rates, inflation will explode. It will explode because the Fed will have to move to YCC at the long end of the curve. Which is why the ISDA proposal has been put in place. The Banks will be required to buy all Treasury paper issued at the long end. Of course it is off balance sheet, yada, yada.

But of course, all else is far from equal: the higher rates are driving inflation anyway, as the debt is compounding so fast now that interest payments are creating the need to issue more debt to pay the interest.

Currently the debt is expanding at $1T every 100 days. WTF?

I saw the thread a few days ago re. the miners and why they are lagging.

They are lagging because:

(i). China is draining the West of physical first and foremost
(ii). There is a fear of nationalisation and/or an excess profits tax (should miner profits move much higher).

JPM is not stupid. They will be well aware of the issues, hence they have removed a significant amount of physical gold from the GLD ETF and taken custody of it from the LBMA in London to New York.

The miners will run when Joe Sixpack finally wakes up to the secular inflation. He will not worry about mines being nationalised, excess profits tax, WTF is that. All he knows/cares about is he can afford the cheap price and he 'knows' that the miners run in inflationary times.

The market caps are so small, that Joe Sixpack will move these stocks. As they move, trend traders jump in, etc, etc.

The 'correct' play (IMO) this time is physical. Physical gold is the oil market. The oil market is 15X the gold market. $2300 x 15 = $34,500/oz

Add in an inflation premium and you'll have your POG.

I think the miners get hit with an excess profit tax at some point and that will cap their gains. Some will be nationalised.

jog on
duc
 
Good morning
rcw1 found this AFR article most interesting. Plenty of information being placed on the table. All good stuff really.


Gold has hit a record high as investors seek insurance against stubborn inflation, but bitcoin has been dealt a blow this week as rate cut hopes have dimmed.

Karen MaleyColumnist
Apr 4, 2024 – 9.31am

Bitcoin enthusiasts often argue that one of the digital currency’s many virtues is its ability to act as a safe haven asset, fulfilling the role that gold has traditionally played. But bitcoin’s claim to be the equivalent of digital gold, which holds its value as government-issued currencies lose their purchasing power, has been thrown into question by the events of the past month.

Gold prices soared to an all-time high of $US2295 a troy ounce in trading on Wednesday night, as investors hunted for ways to protect themselves against stubbornly high inflation and the risk of escalating conflict in the Middle East.
Gold’s allure as a safe haven has seen its price climb 11.5 per cent so far this year. The latest rally – up more than 4.3 per cent over the past five days – comes as US share- and bond markets have faced selling pressure while investors worry that stubborn inflation will prevent the US Federal Reserve from delivering three interest rate cuts this year.

On Wednesday, Fed chairman Jerome Powell struck a cautious tone, arguing that robust US economic data hadn’t changed the US central bank’s broad expectation that falling inflation would allow for interest rate cuts this year.
Still, he cautioned that the Fed’s job of taming inflation was “not yet done”, and the central bank needed “greater confidence” that price pressures were ebbing before it cut interest rates.

What’s been remarkable about gold’s latest rally is that it has taken place during a period when investors have sharply revised their expectations of extensive rate cuts. Gold prices began their latest ascent amid hopes that the US central bank was on the verge of cutting interest rates, which would push US bond yields and the US dollar lower. Gold, which offers no yield to investors, tends to rise when interest rates fall.

But the precious metal continued to climb sharply this week as investors fretted that the strength of the US economy, along with rising oil prices, would entrench inflationary pressures, limiting the scale of Fed rate cuts. Investors, it seems, are now seeking out gold as an inflation hedge. There are other factors propelling the gold price higher, including buying from some countries which are keen to diversify their financial reserves, and reduce their exposure to the US dollar. The most prominent is China, where the country’s central bank, the People’s Bank of China, has been steadily increasing its exposure to gold. This has encouraged buying from Chinese consumers, who are purchasing record levels of gold.

At a time when China’s property market is under severe pressure, and its sharemarket is languishing, Chinese households are increasingly funnelling their savings into gold.

Bitcoin lags​

In contrast, bitcoin and other cryptocurrencies have largely moved in tandem with the US sharemarket.

Bitcoin, the largest digital currency, hit a record high near $US74,000 in mid-March but struggled to consolidate at that level. Instead, the cryptocurrency has endured a series of volatile corrections, followed by abrupt recoveries.


Bitcoin’s weakness has coincided with declines in other risk assets. The US sharemarket has faltered, with both the Dow Jones Industrial Average and S&P 500 retreating from their own all-time highs as US bond yields have climbed to their highest levels in months.

This suggests that rather than acting as a safe haven, cryptocurrencies are extremely sensitive to investor risk sentiment, which has been dealt a blow this week as rate cut hopes have dimmed.

All the same, bitcoin enthusiasts point out that although the digital currency may be volatile, it has significantly outperformed traditional safe haven assets such as gold and US government bonds over the past four years of turmoil, which have witnessed a global pandemic and an inflationary surge.
 
ducati916 said:
View attachment 174157View attachment 174158

The two markets are inextricably linked by Mr Putin willing to sell oil in Yuan (and increasingly other currencies) outside of the petrodollar agreement.

(i). China prints CNY to buy gold
(ii). Which means that gold rises as against CNY
(iii). As gold rises settlement of oil net net balance of trade deficit settled in gold, means China can buy more oil

(iv) As China buys more physical gold, the West is drained of physical gold
(v) Less physical gold forces a reduction in the paper leverage employed by JPM et al to control the POG


(vi). As POG rises the Gold/Oil/USD ratio will stabilise as Gold/USD rises
(vii). Until the Gold/CNY and Gold/USD balance, gold will continue to flow to China

Ramifications:

If China controls the gold price, China controls US inflation.

Why?

Because Yellen needs a lower USD and higher Yuan to prevent the UST market from blowing-the-fuc*-up. A weaker USD is inflationary.

The US is reliant on cheap Chinese imports as there is no US manufacturing base. China can allow the CNY to rise (to a point) as essentially they have a captive market.

A stronger CNY/USD allows even further buying of gold priced in USD. Allows greater oil purchases. Higher oil prices in USD increases inflation in USD.

Now, the Fed has 'promised' to control inflation. LOL.
The Fed are 'talking' about lower interest rates. LOL

If the Fed ceteris parabis lower rates, inflation will explode. It will explode because the Fed will have to move to YCC at the long end of the curve. Which is why the ISDA proposal has been put in place. The Banks will be required to buy all Treasury paper issued at the long end. Of course it is off balance sheet, yada, yada.

But of course, all else is far from equal: the higher rates are driving inflation anyway, as the debt is compounding so fast now that interest payments are creating the need to issue more debt to pay the interest.

Currently the debt is expanding at $1T every 100 days. WTF?

I saw the thread a few days ago re. the miners and why they are lagging.

They are lagging because:

(i). China is draining the West of physical first and foremost
(ii). There is a fear of nationalisation and/or an excess profits tax (should miner profits move much higher).

JPM is not stupid. They will be well aware of the issues, hence they have removed a significant amount of physical gold from the GLD ETF and taken custody of it from the LBMA in London to New York.

The miners will run when Joe Sixpack finally wakes up to the secular inflation. He will not worry about mines being nationalised, excess profits tax, WTF is that. All he knows/cares about is he can afford the cheap price and he 'knows' that the miners run in inflationary times.

The market caps are so small, that Joe Sixpack will move these stocks. As they move, trend traders jump in, etc, etc.

The 'correct' play (IMO) this time is physical. Physical gold is the oil market. The oil market is 15X the gold market. $2300 x 15 = $34,500/oz

Add in an inflation premium and you'll have your POG.

I think the miners get hit with an excess profit tax at some point and that will cap their gains. Some will be nationalised.

jog on
duc
Click to expand...


Internets are abuzz:

Screen Shot 2024-04-06 at 11.33.01 AM.pngScreen Shot 2024-04-06 at 11.33.15 AM.png

Totally miss the point.

The US can no longer 'cap' the POG. They have lost control of it to Mr Xi and Mr Putin.

Clowns.

See earlier post.

jog on
duc
 
Sean K said:
Can't help but think, why didn't I buy more Kangaroos under $3K? :(

...
Click to expand...
Just taking a quick break from rcw1 punting regime ...

We might be in a position in about 12 months' time asking this question:
... why didn't I buy more Kangaroos at $3.5K? ;)👍👍👍

Have a very nice day, today.

Kind regards
rcw1
 
Gold has made a habit of running exceptionally hard from time to time, so below I set the Fibonacci channel at zero where the uptrend kicked off again in 2001. POG Weekly below:
1712464292553.png

That puts $2400 in sight with a possible $2650 by year's end.
Pauses and retraces are typically 4 weeks minimum with nearer 8 weeks the norm when reviewing the 10 year run to 2011's peak. Each of the previous retraces turned around to hit a new high.
The global investment climate is a bit weird in that some stock markets are reaching all time highs at the same time gold is. Maybe that has more to do with market composition nowadays as I personally don't see the makings of a global economic recovery out there.

Deferring to Ducati's previous post concerning gold mining equities, so long as there is no major near term retracement to POG, the massive profits possible on each ounce of gold sold will see some glowing company announcements later this year.
 
Selecting the gold producers that will more likely to go higher in this gold rally is more art than science (luck?). I initially thought that the low cost high margin producers would be the ones to buy. Heard recently, Rick Rule mentioned that the gold miners that would profit more from this gold rally would be the low margin miners. This is likely because the low margin producers will see larger percentage increases in their margins when compared to the high margin producers.

The easiest method to make sure we're holding some of the faster rallying stocks is to buy lots of different gold miners. ;)
 

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