Gold Price - Where is it heading?

[stockGURU]

During recent falls in the U.S. markets over the last week or so it seemed that the price of gold was following it down. However, last night the trend changed and as the DOW plunged gold rallied about $US7 to $US672.70.

Any explanation for this change? And if the DOW continues to fall does anyone expect to see continued strength in the price of gold?

 

[Uncle Festivus]

During recent falls in the U.S. markets over the last week or so it seemed that the price of gold was following it down. However, last night the trend changed and as the DOW plunged gold rallied about $US7 to $US672.70.

Any explanation for this change? And if the DOW continues to fall does anyone expect to see continued strength in the price of gold?

One week doesn't make a new trend but interesting that the tentative rebound in the $US failed, and the gold price strengthened in the face of universal capitulation in most other markets.

Gold still bullish, $US bearish, BB band contracting, explosive moves ahead? 12 months of accumulation ready to break out, & coming into a traditionaly bullish part of the year for gold. Not sure about gold shares as they may be caught up in the contagion?

 

[Sean K]

As with above comments I am getting a little bullish on gold. An added kicker comming up is the fed decision on interest rates. If helicopter Ben agrees with Jim Cramer and decides that interest rates must be lowered to save their housing market, the $US will slide further and gold will go up. The degree to which it goes, is another question. I'm with Uncle F on the wind up over the past 15 months, but it might depend on who wins the battle between the manipulators and the speculators.....could be a time to get set with some gold longs. However, I still think that in the very short term, that individual gold stocks will be influenced by the overall market moreso than POG. There's also talk of industrial action in Sth Africa, which could influence production. Add to all that the Middle East simmering and Iran being forced into a corner...mmmmm. Lot's of 'ifs' in this paragraph though. Gosh, I'm sounding like bean....LOL.

 

[bean]

Won't say to much been to the big smoke last week catch a few games. Even saw a draw. And took no notice of the market. But its good when you come back and can even buy 10% more of the stocks you had prior to selling and can even buy another

Please read the whole article.
http://www.321gold.com/editorials/kern/current.html

I have just finished all my buying!!!
But I will know and be ready to sell if I have to, but may have picked up some good bargains In fact I am showing green already.

 

[Magdoran]

The $540 low in Gold is dependent on when the markets tank.
Will have more idea on the timing then. within 2-4weeks of falling.

Where is the Bullish there. I have been completely right being a bear.

So, Bean,


Are you sticking with your earlier forecast that Gold will follow the US market down within 4 weeks or not? (It sounds like you’ve changed your mind on this one again, and have become bullish on Gold despite the falls on the equity markets).

I thought your thesis was that Gold and the US market were trading in lock step. Have you now abandoned this theory? If so, what was your reasoning in the first place, and what has changed so substantially to make you reverse your thinking?


Regards


Magdoran

 

[Sean K]

So, Bean,


Are you sticking with your earlier forecast that Gold will follow the US market down within 4 weeks or not? (It sounds like you’ve changed your mind on this one again, and have become bullish on Gold despite the falls on the equity markets).

I thought your thesis was that Gold and the US market were trading in lock step. Have you now abandoned this theory? If so, what was your reasoning in the first place, and what has changed so substantially to make you reverse your thinking?


Regards


Magdoran

Mag, see post 1541.

Bean, what's the theory?

Gold and gold stocks down with equities, or not?

Or ??

 

[Magdoran]

Mag, see post 1541.

Bean, what's the theory?

Gold and gold stocks down with equities, or not?

Or ??

Hello kennas,


Absolutely, your post is spot on. I’m glad it’s not just me who is seeing glaring contradictions, and continuous arbitrary back flips.

But I want to pin him down as to why he is chopping and changing in such a whimsical fashion. In good faith even when assuming that there is some good reason he is posting maybe there is some method to his madness, but so far it’s eluded me.

In my view such inconsistency in thinking is not helpful to investors and traders that may be staking real capital in the markets.


Regards


Magdoran

P.S. How is South America treating you?

 

[bean]

So, Bean,


Are you sticking with your earlier forecast that Gold will follow the US market down within 4 weeks or not? (It sounds like you’ve changed your mind on this one again, and have become bullish on Gold despite the falls on the equity markets).

I thought your thesis was that Gold and the US market were trading in lock step. Have you now abandoned this theory? If so, what was your reasoning in the first place, and what has changed so substantially to make you reverse your thinking?


Regards


Magdoran

Did you read all the article??
Once you have there is no need for me to answer

 

[bean]

The link again
http://www.321gold.com/editorials/kern/current.html

I know what is required over the next few days to enter or exit.
I have re-entered but if I do not get numbers I will exit in the next day or two
I know what the gold indexes have to do tonight. what range to stay in. and what is required the next night. If they don't stay within this range I may exit tomorrow.

 

[Magdoran]

Did you read all the article??
Once you have there is no need for me to answer

Bean,


I find it difficult to conceal my scepticism for people who chop and change from championing one “guru” or another and reprinting someone else’s work without understanding it.

I find it supremely ironic that you are lecturing me with an article which is based on a rudimentary style of cycle analysis.

If you’d actually bothered to read my works on this site you’d know that I have developed a sophisticated time cycle approach, but one I’d argue which has performed quite satisfactorily, and in my current estimation would significantly outperform the approach ventured in your article.

You obviously haven’t got the message, have you? I posted a forecast on the S&P 500 challenging you to match my forecast, which you ignored. This was in response to your thesis that Gold was tied to the US market, and you made a prediction that gold would follow the market down 2-4 weeks from the fall, or have you forgotten?

The $540 low in Gold is dependent on when the markets tank.
Will have more idea on the timing then. within 2-4weeks of falling.
Where is the Bullish there. I have been completely right being a bear.

If you bothered to actually look at my S&P 500 projection, it was spot on to the day despite the price being wrong (I did this also for the XAO for the Feb 23). Now you fob me off with your latest flavour of the month article and think this is even remotely an equivalent response.

S&P 500 projection

So, in direct contradiction to your assertion that all anyone needs to do is to read the article you posted, I don’t think it measures up at all.

You seem to think that if someone sets up a website and waxes flowery financial terms, that they must be wise and know what they’re talking about, and lap it up uncritically like it’s gospel. This is incredibly naïve in my view, and also very lazy to flit from article to article in order to formulate financial strategies, let alone the lack of analysis of the articles. Now if this was just for your own financial decisions, I wouldn’t have an issue, you have every right to determine your own criteria.

Where I have a problem is that there are fairly inexperienced players joining ASF hence people like kennas and I feel obliged to address posts like yours and challenge them. If you were sufficiently capable of mounting a well formulated argument, or coherent logically argued case yourself rather than just relying on “articles”, fine. But this random “spin the bottle” style of guru selection and link pasting runs a poor second to many of the more experienced posters on this thread. At least make the effort and come up with something original.

 

[bean]

Martin Golberg link posted a few weeks ago

A closer look at the corrective Wave 2 is in order as illustrated in the 3-year weekly chart below. You can see the $HUI’s four attempts at breaching the 370 barrier, each of which was turned back with a sharp and painful correction. Each of these corrections brought the index sharply below the 10 and 40 week moving averages. What is particularly bullish is that with each correction, the $HUI made a higher low before again trying to challenge 370. The consecutive higher lows suggest that when the existing trading range resolves, it will resolve to the upside. Also, in 5 consecutive weeks in May and June, the $HUI tried to break below 318 and this level held thereby forming a strong support level.

The HUI is currently at 339.73 made a low about 6 days ago 338.00 rose then last wednesday 339.65 and fridays 339.73
Is the 338.00 level holding and will it be a higher low. Ready for an assault on the 370.00.
Thats another reason why I know the action reqired for next day or two.
My own Gold indexes are holding they are also on the edge but!!!

The US stock market indexes are all negative I would be out the market...
Only for...
But the gold indexes might be holding for a reason, but I am also taking a risk as I think it may just hold. I can afford to take the risk as I was over 10% ahead if I had held my stocks.
If the gold indexes do fall gold will follow.

MAG do I read your stuff yes and no
Yes always interested to see what other people have.
But must say take them with a grain of salt after your E-WAVE fight.

 

[Magdoran]

Martin Golberg link posted a few weeks ago

A closer look at the corrective Wave 2 is in order as illustrated in the 3-year weekly chart below. You can see the $HUI’s four attempts at breaching the 370 barrier, each of which was turned back with a sharp and painful correction. Each of these corrections brought the index sharply below the 10 and 40 week moving averages. What is particularly bullish is that with each correction, the $HUI made a higher low before again trying to challenge 370. The consecutive higher lows suggest that when the existing trading range resolves, it will resolve to the upside. Also, in 5 consecutive weeks in May and June, the $HUI tried to break below 318 and this level held thereby forming a strong support level.

View attachment 12087

The HUI is currently at 339.73 made a low about 6 days ago 338.00 rose then last wednesday 339.65 and fridays 339.73
Is the 338.00 level holding and will it be a higher low. Ready for an assault on the 370.00.
Thats another reason why I know the action reqired for next day or two.
My own Gold indexes are holding they are also on the edge but!!!

The US stock market indexes are all negative I would be out the market...
Only for...
But the gold indexes might be holding for a reason, but I am also taking a risk as I think it may just hold. I can afford to take the risk as I was over 10% ahead if I had held my stocks.
If the gold indexes do fall gold will follow.

MAG do I read your stuff yes and no
Yes always interested to see what other people have.
But must say take them with a grain of salt after your E-WAVE fight.

Huh? What "E-Wave fight"???

 

[Ageo]

Hi guys, i dont like repeating posts but this is what i wrote from another thread and reflects this subject well. So this is for those of you that missed it

Guys im not sure on the production levels and how everything else is going but i am in the Gold market (jewellery wholesaler) and can tell you how its affected the world in Jewellery.

We import gold (9ct & 18ct) from Italy and ive been to many jewellery fares around the world such as Hong Kong, Switzerland, Italy and many other places. Basically the jewellery industry especially gold has taken a bit of a hit simply because gold prices have risen alot in the last 10 yrs and the problem is manufacturers, wholesalers and retailers realise this but the customers dont and think prices are still the same as 10 years ago. So alot of people have held off buying gold in many ways (only for special occasions mainly) and the reason we know this is because retail shops tell us all the time (worst year in business for mostly all of them) and people want 18ct gold for 9ct prices. Manufacturers in Italy have large stockpiles of gold jewellery simply because they cant move it as fast as they did in the past. So basically if the demand for gold is decreasing then dont expect the price of gold too shoot up anytime soon (i could be wrong of course) but demand isnt high and prices tend to stagnate and thats what the current prices are doing atm. Could you imagine if gold hit $800+ per ounce? People wouldnt buy because cost of living is rising and people cant afford to buy luxury goods.

Gold is a long term investment where inevitably like most precious metals will go up in value since its a commodity that will only last so long.

Just thought id give you a perspective from supply and demand area.

 

[boiler]

Gold's time is coming: Lassonde

Rebecca Lawson
Monday, 6 August 2007

THIS year's recipient of the 2007 Diggers & Dealers G J Stokes Memorial Award, Newmont vice chairman Pierre Lassonde, believes the resources boom will last a whole generation.



Pierre Lassonde

Kicking off the annual mining forum held in Kalgoorlie, Lassonde warmed up the packed house by telling his tale of lost luggage and the hardship of trying to buy a "polyester" suit in the town on a Sunday afternoon.

Peppering his presentation with entertaining anecdotes, Lassonde got down to business, paying particular attention to the "super cycle" the resource sector is enjoying and drawing comparisons to the last super cycle between 1966 and 1980.

Lassonde said that just like the last super cycle that was propped up and prepared by the baby boomers, this cycle was the work of China and India's booming economies.

He said the external factors were also strikingly similar, including wars in both cycles, for example, the Vietnam war in the past and the current war in Iraq and on Al Qaeda.

Inflation was also high in both eras and gold in the past shot up 2300% while currently it is up 170%.

"Gold's time is coming," he said.

However Lassonde said the similarities ended there and the difference between the two super cycles was that more companies – paying particular homage to the oil sector – were increasingly government controlled.

He said profits were not going into exploration, hence discoveries have decreased, and permitting, political and environmental responses have become more challenging.

Building on the differences, Lassonde said the gold sector was not coming up with the big discoveries made in the past super cycle, although this time around exploration budgets were bigger.

"The big discoveries – the Yancochas, the Super pit – they were all made back in the 60s, 70s and 80s," Lassonde said.

"Look at the past 20 years, [discovery is] coming down and down and down.

"When is the last time you had a 30 million ounce discovery in the world? Not in this decade I can tell you that."

Lassonde also said demand for gold jewellery is at an all time high, with advertisements placed by the World Gold Council – which Lassonde is a member of – in China, India, America, Europe and the Middle East having a profound effect.

Wrapping up the presentation, Lassonde gave several predictions for this current super cycle, based on past events.

"This bull market in natural resources will last a whole generation, that's 20 years plus and, yes, China and India will have hiccups, but while they have crisis situations they will not stop growing," he said.

"The $US dollar over the next five years will plunge against [China's] RMB."

Lassonde predicts the Canadian and Australian dollar will grow a further 5-10% against the US dollar, with the Canadian dollar reaching a high of around $1.06.

Based on history, Lassonde said copper and moly producers have been unable to withstand prosperity. He added that we have probably seen the metals' price reach its peak.

Commodities to perform well in this cycle are nickel, platinum, gold and oil, and in his mind the last two commodities will perform the best in this cycle.

Lassonde also brought in the Dow Jones index into his prediction, saying the gold price and the index will come down to a 1:1 ratio.

This would be similar to the path taken in the last cycle in the 1960s when the ratio was 28:1, and in the 80s when it was a 1:1 ratio.

Lassonde said in 2000, the ratio was 42:1 and that the ratio has decreased to 20:1.

Sure to leave a good taste in the mouths of gold investors, Lassonde's final prediction was that gold would have three zeros in its price, however he conceded he had no idea what the first number could be.

 

[>Apocalypto<]

But must say take them with a grain of salt after your E-WAVE fight.

LOL now that is classic,

Mag was supporting or attacking EW in this fight bean? You sure it was not a dream?

Bean,

Mag's points are very vaild, I think you need to adress them.

Reports in my experience are to be taken with a grain of salt!

 

[numbercruncher]

Gold sales jumped 22.4 per cent to a record $65.3bn last year in spite of a 10 per cent fall in demand in tonnage terms, according to the World Gold Council, which released its fourth-quarter report on the market on Thursday.

http://http://www.ft.com/cms/s/6ff2a310-bceb-11db-90ae-0000779e2340.html


Selling less for more ... Sounds good to me! My personal favorite is Australian Gold Sovereigns, Numismatic value and a Intrisic value for the .2354oz in each coin!

Long live gold!

 

[bean]

The countdown begins
A make or break couple of days
Was that the bottom last night in the gold indicies?
I mentioned 338 in my last post as low
If you saw the attachment you would have seen the previous higher low was 320

 

[explod]

The countdown begins
A make or break couple of days
Was that the bottom last night in the gold indicies?
I mentioned 338 in my last post as low
If you saw the attachment you would have seen the previous higher low was 320

From a charting perspective, last nights action on the HUI index completed a candle reverse hammer. However such a signal is not confirmed till we get a white candle rising above that. At the moment, and as you have said, these indexes are moving with the overall markets so we should not get too excited yet.

For a real move we need a break out on the gold price itself. I don't, after much coaching seem to be able to post charts, perhaps someone will be kind enough to do so in support of the following.

If we look back to about May last year, gold made a new 20 year high of US$725 an ounce, six weeks later it fell to $540 an ounce. If you imagine lines from this top and bottom till the present we can see the formation of a flag or pennant shape. From a technical perspective a strong break up or down out of this pennant signals the next move. In my view it can still move sideways for 3 or 4 weeks before a break has to occur. As this is a well known formation the break here will have a strong phsychological effect on gold traders. From a seasonal perspective the end of the US summer period has been on average over the last few years the beginning of strong uptrends in the gold price. I also believe that the Central Banks will do all they can to retard the movement of the gold price for some time.

In essence, yes I believe a strong up move is coming but we need to look at the overall picture, not just the HUI in isolation

 

[Uncle Festivus]

For a real move we need a break out on the gold price itself. I don't, after much coaching seem to be able to post charts, perhaps someone will be kind enough to do so in support of the following.

Something like this explod?

 

[explod]

Thank you Uncle, that is perfect. My step Grandson when he has time is going to coach me up on chart select and past. With care I have followed the guidlines offerred by the forums but I still cant' get it


As we ponder I notice gold and silver being pushed down and the US dollar index up. Time and again week after week this occurs between markets when there is little active trading. Again it is a clear indication of how strong the gold price really is and how easily the general investment community is being fooled.