Gold Discussion

Because all the metal products are tied together. When silver tanked that thursday a few weeks ago it dragged all the rest of the metals down with it. Granted they didn't fall as fast or as hard, but they fell.

A good part of the reason gold is up as much as it is relates to the perceived notion that there is a commodity bull market in place. When something occurs to alter that perception, the price of gold will start falling off.

If you don't like that answer, you could look at it from the inflation side. Part of the reason for golds runup is the perceieved notion that it will be a good inflation hedge. The only definitive excuse for inflation corcerns is the rising commodity prices. Were they to come off, there would be less belief that inflation is a sufficient concern to warrant hedging.

Ofcourse it may have absolutly no effect at all...

Thanks for giving us a heads up. It seems to me with both Gold and Silver is watch and be prepared for any corrections that will come. But be patient to wait for these larger moves.

Wow, what about those gold prices? A 26 year high...

crazy huh? looks like i exited too early on that one, but im not complaining, made a good chunk of change on gold and silver moves during first quarter...

Man you are quick I just went to move the thread and it was done... thanks scott

I think I will add it to the other one though..

Amazing, what do you think this means? Inflation? A blowoff? What?

i think it means china and india are BOTH three times bigger than the US and they are BOTH going through the same growth the US saw in the 60's. its not just metals that are soaring, its all commodities.

and the reason i think that (china and india) is because i STILL cant find a better reason for the commodity boom

So you don't see it ending anytime soon? I get nose bleeds at this dizzying height.

I even heard the news saying that people in China stole some road sign and sell the metal.

I know gold is not strictly forex, but has anyone been watching the gold charts of late? I am finding them very interesting. Now I know that due to the large intraday price swings it is easy to lose a considerable amount even only trading one lot, but there has got to be a really good long coming up, I 'll elaborate -

Huge move upwards from 10 Mar to 12 May, almost 40% increase. Met resistance at approx $640 19-27 Apr, the initial pullback from this resistance almost made a 38.2% retracement of the move up to that point, actually stopped $4 short (35%) but you get the idea.

After a short, could we say, consolidation period? The upward move continued in earnest, until reistance was met on Friday (12/05) around $725. Thursday and Fridays high almost made a tweezers top, not quite perfect though, but obviously after todays moves the bearish implications were validated.

We are now seeing the start of the next retracement, now based on the entire move since the beginning of this sharp uptrend, a 38.2% retracement should bring us down to around the $655 mark. If this level holds we should see a bounce maybe after a short consolidation period and the trend will continue. If the price moves below this level, we have the resistance turned support (hopefully) around $640, or the 50% retracement around $632.

I fully expect this trend to continue onwards and upwards, as does the rest of the world I guess, seems to be common opinion the gold is going sky high, it's just a question of how far. With the weakend dollar and the Chinese threatening to buy up vast quantities of gold to hedge the dollar depreciation of the US trade defecit, the only way the long term price is going is up. Then there is the Iran situation, all the factors are just wood for the fire!

The challenge is to now find the bottom of this retracement before the uptrend continues, as I fear once the momentum builds we will see drastic price increases intraday again and it will be easy to miss out on a large percentage of the initial move back up.

In case you were wondering my analysis is based mainly on the daily charts. My interpretations are as with most chart reading subjective, and maybe I should be measuring the latest retracement not of the whole move? The is just my view. I would like it if any one would share their views on my analysis, flaws etc and maybe share their own thoughts.

If all this comes to pass I will be looking for an entry around $655-$660 depending on chart patterns, market activity indicators etc, stoploss around $637 (area of short term resistance on the way up) and profit targets of $701 (61.8%), $730 (100%) and longer term $776 (161.8%). I would view this a short to medium term trade with a good and achievable risk:reward ratio.

I had a feeling at close on Friday that the bearish implications of the 'tweezers' were ominous for the price level of gold, but instead of watching the asian markets last night, I had an early night, shame, could of quite easily caught a nice piece of the downward move. Never mind.

Let's see how the chart develop in the coming days, maybe I'm being over optimistic and this retracement was just a result of gold being overbought the last few days.

Anyways I've ranted for long enough, maybe someone else should have a go!

Bye

I think you missed on this one my friend...The perception is not that the whole world are convinced that gold is going sky high...Look at how many retail & novice traders who keep shorting gold and you will know what I mean...Look at how many people who think that gold have risen too far too fast & that they are at historical levels, which leads them to go shorting it because it have become so expensive & they think they can ride it back down to the $400s...

This of course is low thinking...If we compare gold prices in the late 70s with gold prices now, and taking inflation of the dollar into consideration (Since gold is valued in USD), we will find that gold prices right now are far away from their value at the late 70s...This of course is because the $850 that used to buy the 1 ounce in the late 70s are not the same as the $850 of today, so the price of gold today is far far away from it's top....


Thanks,

Nader

Second time lucky, just typed a lengthy response and lost my connection typical.

Anyways back to what I wanted to say, thanks for your opinion Nader, to an extent I actually agree with what you say. Gold prices have risen too far and too fast, much faster than they should. But not without reason I believe, maybe my theories are a bit narrow minded, not looking at all the angles?

But IMO The weakened dollar also makes gold more attractive. As I said in my first post, from what I read, and sensibly so it would seem, the Chinese will continue to increase their gold reserves to hedge against the depreciating dollar, so as to protect the value of the trade defecit. This in itself will cause an increase in demand for gold, as we all know the commodity markets are driven by supply and demand. Although if overbought conditions currently exist - as they quite easily could due to the rate gold has increased I suppose - this will lead to excess supply when people begin shorting. The fragility of the situation in the mid-east is never going to help the price of gold come down, as gold along with the greenback is the fallback currency in time of uncertaintity. Maybe that situation is not as fragile as it appears though, maybe a stalemate would better describe the current state of affairs. It's a difficult call, all I can do is wait it out.
As I said you opinion is valued highly Nader, I am here to learn everything I can as are a lot of others! I value everyone opinions, anyone else care to share any?

Thanks

I missed a bit off of that last post, regarding the price compared to late 70's, taking into account inflation and basing the price on that of the late 70's, gold would be over $3000 per oz, unbelievable? The mind boggles. On that basis we are getting good value at $680 per oz, wouldn't you agree!

Anyways bye for now

That's exactly what I was talking about my friend...People are missinterpreting gold prices right now, while institutions & hedge funds are not, that's why I am convinced we are still far from the top...One of the rules I follow is that anything can happen & prices can rise more than anyone can imagine & can go down below anyone can imagine...Taking this into consideration I won't be surprised if gold reaches $2500 per ounce in the next 2-3 years...This is not an expectation, it is just an assumption that those who really know the real current value of gold will pay more than the current $700 per ounce, far more actually while everyone else will be watching with disbelief & astonishment...


Thanks,

Nader

Well said, I think I would agree. Let us see what the future holds!

The futures (not the future) are heavy long in gold. When you look at the last COT-reports the large traders are 176 long and 42 short. So I keep my gold-shares.

Is anyone short on the Gold? What I see Gold going down to 550. Although USD seems falling too which should be positive for the gold but charts dont support long gold.
Any comments?

Just today I was looking at gold on Oanda but since one unit of gold is much more higher priced than one unit of currency pair I can't trade it, I would be way overleveraged .

-soso

http://www.alpari-idc.com
http://www.northfinance.com

Both have Gold, silver and several futures contracts for the major indeices