Gold Price - Where is it heading?

[Garpal Gumnut]

I expect the Hong Kongers to go quite mental when their Gold trading starts in a few minutes. Holiday time, girlfriends, sex always motivates.

gg

 

[ducati916]

View attachment 184318

I expect the Hong Kongers to go quite mental when their Gold trading starts in a few minutes. Holiday time, girlfriends, sex always motivates.

gg

Mr GG,

Are the hookers charging in gold now?

jog on
duc

 

[Garpal Gumnut]

Mr GG,

Are the hookers charging in gold now?

jog on
duc

Historically they have been the commonest exchange currencies.

gg

 

[qldfrog]

Mr GG,

Are the hookers charging in gold now?

jog on
duc

This is HK, girlfriends need gold

 

[Sdajii]

And there certainly is precedence for 4x and 8x in relatively short time. 70s, 2001-2010. We are x2 since the 2019 break up.

It seemed ridiculous nonsense to me when I first saw $10,000, but you're right, it's not at all unprecedented, and we are facing a potentially very extreme future.

Of course, gold at US$10,000 means a dramatic collapse of the USD which means very nasty global changes, and doesn't necessarily mean similar increase in AUD. If the world is going that way, sure, you might as well do the best you can in that scenario, and I'm happy to be holding some gold, but the $10,000 per ounce gold scenario is not a future I want to see.

But at least GG and ducati will be able to afford hookers.

 

[Sean K]

It seemed ridiculous nonsense to me when I first saw $10,000, but you're right, it's not at all unprecedented, and we are facing a potentially very extreme future.

Of course, gold at US$10,000 means a dramatic collapse of the USD which means very nasty global changes, and doesn't necessarily mean similar increase in AUD. If the world is going that way, sure, you might as well do the best you can in that scenario, and I'm happy to be holding some gold, but the $10,000 per ounce gold scenario is not a future I want to see.

But at least GG and ducati will be able to afford hookers.

Yes, RR has been saying similar things with why he's holding gold. It's an insurance policy and he hates to think what has happened to the overall economy if gold were to go to those sorts of levels. Ducati has pretty much outlined the narrative over many months.

 

[qldfrog]

It seemed ridiculous nonsense to me when I first saw $10,000, but you're right, it's not at all unprecedented, and we are facing a potentially very extreme future.

Of course, gold at US$10,000 means a dramatic collapse of the USD which means very nasty global changes, and doesn't necessarily mean similar increase in AUD. If the world is going that way, sure, you might as well do the best you can in that scenario, and I'm happy to be holding some gold, but the $10,000 per ounce gold scenario is not a future I want to see.

But at least GG and ducati will be able to afford hookers.

I will be able too but not sure my wife will let me, even if i offer her some gold jewellery......

 

[Garpal Gumnut]

It seemed ridiculous nonsense to me when I first saw $10,000, but you're right, it's not at all unprecedented, and we are facing a potentially very extreme future.

Of course, gold at US$10,000 means a dramatic collapse of the USD which means very nasty global changes, and doesn't necessarily mean similar increase in AUD. If the world is going that way, sure, you might as well do the best you can in that scenario, and I'm happy to be holding some gold, but the $10,000 per ounce gold scenario is not a future I want to see.

But at least GG and ducati will be able to afford hookers.

Be fearful when all are exuberant and optimistic when all are in despair.

I've had a look at some charts and this time of year is not usually a bullish time for Gold. So I've moderated my outlook and would not be surprised to see Gold retreat to $AUD 3500 ( PMGOLD at $35.00 ) which in $USD is about $2345. Barring a catastrophic fall in the $US which would send Gold ballistic I'll be next buying at about those levels.

Let us look at the toil of chasing the chaste ( is why they are called the chaste ) and not waste our time nor Gold on hookers.

gg

 

[Sdajii]

Be fearful when all are exuberant and optimistic when all are in despair.

I've had a look at some charts and this time of year is not usually a bullish time for Gold. So I've moderated my outlook and would not be surprised to see Gold retreat to $AUD 3500 ( PMGOLD at $35.00 ) which in $USD is about $2345. Barring a catastrophic fall in the $US which would send Gold ballistic I'll be next buying at about those levels.

Let us look at the toil of chasing the chaste ( is why they are called the chaste ) and not waste our time nor Gold on hookers.

gg

I was looking at a few targets in that area, but for a while I've been thinking we're unlikely to see it go that low again. 'Unlikely' isn't the same as 'I'm absolutely sure it won't' and if it does I'll be waiting for the bounce off whatever low it hits; there are several support levels in that region and if it does fall that much it's impossible to predict which one it will hit.

I doubt it'll go that low, but if did I wouldn't be surprised to see $2277, and if it hit that, I would be looking at $2145. Whatever it does, if it goes down significantly I'll be buying as soon as I'm confident the low is in. But, I expect $2530 might hold, and if not, $2500 is obviously a big one which might never again be broken.

I think it's very fun to predict which levels will and won't hold and break, but the important thing to do is have a plan for what you'll do in those scenarios, even if they're unlikely. That way, whether or not your predictions turn out to be correct, you tend to make good decisions. I can't see any scenario in which I'd be selling gold in the near future, but several in which I might buy more. And, willing to accept that I may be surprised by a scenario I hadn't yet considered, though for gold I can't imagine what that could be, other than gold absolutely crashing to $1,000 or something, in which case I suppose I'd still be holding what I have then buying when I think it has bounced.

 

[Sean K]

These reporters are about seven months behind a 'breakout' in gold and silver.

I think the only short term risk with the POG this week is that a decent rate cut is probably already baked in.

 

[Garpal Gumnut]

These reporters are about seven months behind a 'breakout' in gold and silver.

I think the only short term risk with the POG this week is that a decent rate cut is probably already baked in.

View attachment 184333

Before starting I should let everyone know that Alex Gluyas of the AFR is an undercover name of @finicky just so’s everyone is careful about what they say.

It is difficult for financial reporters to get good copy for printing and contrary to popular opinion articles are written for the benefit of the publication and the reporter, not the investor nor reader. Many are not aware of Gold’s recent rises and potential for a large increase from here.

Having said that, I still reckon that the AFR is one of the better financial journals. Unfortunately before news gets out to the public many insiders are aware of the move unless it is an exposé. So I guess many who post on this thread would be considered as insiders having some knowledge of the various factors affecting Gold.

That is not to say that ASF members will do any better at investing in Gold than others, but at least they will know where they have gone right and wrong. Hopefully the former rather than the latter.

Also something I have learnt from trading the US markets these last 2 years is that information known does not equate to a big move, rather information that is released at the appropriate time when the market is ready for the move. And this may be the case with Gold now.

Anyways, thanks @Sean K for posting that.

gg

 

[ducati916]

More:


The Saudis have joined other Asian countries in ditching their long-term sensitivity to the gold price. Evidence suggests the Saudi central bank has been covertly buying 160 tonnes of gold in Switzerland since early 2022, contributing to the current gold bull market.
Although the Saudis played a key role in the birth of the global dollar standard in the early 1970s, this time around they might even become a lynchpin for its dissolution.

Introduction​

Until recently, Saudi Arabia’s gold demand would decline when the gold price went up and strengthen when the price went south. This dampened volatility in the gold market, which for many decades was ruled by the West.

Ever since the West immobilized Russia’s dollar assets in February 2022, those with diplomatic disagreements with the West are increasingly exchanging their dollars for physical gold. Saudi Arabia is the latest country—after China and Thailand—of which I have found cross-border trade statistics showing it has shifted from being price sensitive to a price driver.

​

As the chart above reveals, when the gold price went up (2016, 2017, 2019, and 2020), the Saudis cut back imports or became net exporters. Since 2022, however, the gold price has escalated, yet Saudi Arabia continued to import gold.

During the entire rally from late 2022 until present, the Saudis have been a constant net importer which has boosted the gold price. The icing on the cake is that part of the flow into Saudi Arabia, the gold coming from Switzerland, actually goes to the Saudi central bank, aka the Saudi Arabian Monetary Authority (SAMA).

Exposing Saudi Central Bank’s Hidden Gold Buying​

Formally, any country’s cross-border gold trade statistics refer to “non-monetary” metal, meaning privately owned. Monetary gold—owned by central banks—is exempt from being disclosed in trade numbers. As I have demonstrated in a previous article, though, the non-monetary gold crossing the Chinese border is often a shipment heading for the vaults of the People’s Bank of China (PBoC) regardless.

Among industry insiders, SAMA is known for having accelerated secret gold purchases since 2022. By comparing the World Gold Council’s (WGC) estimates of total central bank buying (based on field research), to what central banks report to have bought to the International Monetary Fund (IMF), we can conclude “unreported” purchases went through the roof starting in 2022. People familiar with the matter, but who prefer to stay anonymous, told me this is largely due to the PBoC, and to a lesser extent SAMA. That’s clue number one.

​

The gap between WGC and IMF data reflects unreported purchases.

Because gold Exchange Traded Funds (ETFs) hardly exist in Saudi Arabia, we can estimate SAMA purchases by comparing net imports to local consumer demand. Not coincidentally, net imports began to consistently outpace consumer demand in the second quarter of 2022, right after the Ukraine war started. SAMA was (and is) in a hurry to get its hands on physical gold.

​

Discrepancies between consumer demand and net imports can also arise from dealer inventory changes and scrap supply, data that is unfortunately not publicly available.

A source once told me that central banks often buy gold in Switzerland and London and have bullion banks pack and ship the gold to wherever the central banks want. This way it shows up in cross-border trade data because the bullion banks have to deal with customs.

Switzerland Pinpointed as Ground Zero for Secret Purchases​

To find out if SAMA shops for gold bars in the Swiss Alps, I have subtracted Saudi consumer demand from its net imports and compared the outcome (gold imported but not sold to consumers) to gross exports from Switzerland to Saudi Arabia. The result shows a strong match since Q2 2022, confirming SAMA has quietly been buying gold in Switzerland.

​

Any differences between the blue and orange bars is mainly due to scrap supply, a draw on net imports, which likely was substantial in 2020.

Saudi Arabia Owns Way More Gold Than It Wants Known​

The data suggests SAMA bought approximately 160 tonnes of gold in recent years (and it was likely also buying in 2015 in Switzerland). How much it holds in total is unknown to me, partly because Saudi gold trade data only starts in 2015. What happened before that is up for grabs. Neither do I know how much additional gold SAMA might be buying elsewhere.

One thing is for certain: Saudi Arabia owns much more gold than it wants the world to believe.

The last time the Saudi central bank updated its official gold reserves was in February 2008, when it conveyed to hold 332 tonnes, which was 180 tonnes more than in January 2008. Obviously SAMA didn’t buy 180 tonnes in one month.

​

Past and current data indicate Saudi Arabia central bankers do not report changes to their gold holdings in a timely fashion. What will their next bulk update show?

Just like the reported gold reserves by the PBoC, the number put out by SAMA is purely political. By hiding how much precious metal the nation truly owns, the House of Saud avoids openly upsetting the United States.

But the evolution of countries in Asia storing more and more of their trade surpluses in gold—a time-tested neutral and sanction proof reserve asset—is clear. Next to 160 tonnes by SAMA, I calculate the PBoC bought 1,600 tonnes since the war in Ukraine. Both central banks, the former of the most influential country in the oil market and the latter of the second largest economy globally, must be confident in what direction the gold market is headed.

How the above ties into other concerted initiatives by Asian nations to bypass the U.S. dollar, we will discuss in the next article.


jog on
duc

 

[Sean K]

What are people's thoughts on FOMC, rates and effect on the POG?

How much of a cut is already baked in and what's an X% rate cut going to do?

 

[greggles]

What are people's thoughts on FOMC, rates and effect on the POG?

How much of a cut is already baked in and what's an X% rate cut going to do?

I'm probably wrong, but I have the feeling this will be a buy the rumour, sell the fact kind of deal. The market is expecting interest rates to come down and I think that a 0.50% cut is already baked in. So I think we are going back under US$30 after the announcement. Maybe not right away, but soon. There will need to be more catalysts to drive precious metals higher.

Precious metals is priming for a big run but there will also be steep pullbacks. Price action will be very volatile. There are powerful forces who want these metals to move in both directions and we are in for one hell of a game of financial tug-of-war.

 

[Sean K]

I'm probably wrong, but I have the feeling this will be a buy the rumour, sell the fact kind of deal. The market is expecting interest rates to come down and I think that a 0.50% cut is already baked in. So I think we are going back under US$30 after the announcement. Maybe not right away, but soon. There will need to be more catalysts to drive precious metals higher.

Precious metals is priming for a big run but there will also be steep pullbacks. Price action will be very volatile. There are powerful forces who want these metals to move in both directions and we are in for one hell of a game of financial tug-of-war.

25bps is definitely baked in, 50bps probably, so I agree on sell the fact on either of those. Might depend on what Jerome says at his presser afterwards. If he says there's another cut to come this year, even after 50bps, maybe it's a surprise to the upside.

 

[Garpal Gumnut]

What are people's thoughts on FOMC, rates and effect on the POG?

How much of a cut is already baked in and what's an X% rate cut going to do?

My feeling is that the US market is the most efficient and dynamic market bar none. Small business is suffering badly and affecting all American dynamics leading to political and social sclerosis and inflation. Having said that the market will sort it out and I would not be surprised to see

• The $USD fall.
• POG rise.
• DOW, SP 500 and NASDAQ all rise.
• Fall 50bps and Further interest rate falls flagged.
• Recession avoided.

Talk about sticking your head out !! LOL . My thoughts anyways.

gg

 

[Sean K]

Wild ride last night, glad I was snoozing.

In the end, almost back to the starting point, down slightly.

Looks like it might have been a hope for 75bps and sell the 50bps.

But, more cuts are in the winds. Maybe already factored in as well.

 

[mullokintyre]

Wild ride last night, glad I was snoozing.

In the end, almost back to the starting point, down slightly.

Looks like it might have been a hope for 75bps and sell the 50bps.

But, more cuts are in the winds. Maybe already factored in as well.

View attachment 184439
View attachment 184438

Yeah, makes so much sense.
The dollar gets devalued due to an interest rate cut, but the one thing that is supposed to hold its value, drops against the USD.
The currencies were barely moved except for small increases in the Indian Rupee and the Yen.
Weird.
Mick

 

[Garpal Gumnut]

Wild ride last night, glad I was snoozing.

In the end, almost back to the starting point, down slightly.

Looks like it might have been a hope for 75bps and sell the 50bps.

But, more cuts are in the winds. Maybe already factored in as well.

View attachment 184439
View attachment 184438

Interesting @Sean K that the USD/AUD went exactly the other way, fall then recovery.



gg

 

[rederob]

$2600 was briefly hit last night, before the Fed pulled the plug and drained off the odd $55.
Then comes along yet another state sponsored terrorist attack on the Lebanese to reverse the trend and see us heading tonight towards a possible record close.
The below 15-minute chart tracks the action over the week: