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XAU/USD & XAG/USD - Gold & Silver Traders Thread

  • #24,081
  • Jul 27, 2013 10:34am Jul 27, 2013 10:34am
Quoting Wheels
I don't necessarily buy it, but a quick end to bond buying (ripping off the band-aid), could be disastrous for long positions. http://www.reuters.com/article/2013/...96Q03J20130727

What is your reasoning here?

or why do you think ending bond buying would hurt gold longs?
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,082
  • Jul 27, 2013 11:04am Jul 27, 2013 11:04am
Ending bond buying means

less money pumped into the system and less available to buy everything including Gold

less inflation which would require less gold to hedge

dollar strength which has an inverse relationship with gold

imho

Olu
If you think you can or cannot do it you are correct
  • #24,083
  • Jul 27, 2013 11:40am Jul 27, 2013 11:40am
Yes, these are fundamentals. Yet, today Gold has a two sided play to it. As a safety net and it is seen as a risk play.

Money hides in bonds when things are unstable, as they are today, it also hides in gold and silver.

I know well about the "usual" inverse relationship between Gold and the USD, however look at the charts,
there was a period when we ran up to 1900 that clearly shows Gold moving in TANDEM upwards with the USD.

I have reviewed and posted here many an AU/ USDX correlation chart and the relationship does have breakdowns.

Now, once bond buying stops, that also frees up money to explore other assets, like gold, depending on what the desired outcome of the
purchase is.

One could also look at the relationship of bond buying and GOLD and come to the analysis that when MORE bonds are bought GOLD sinks and the USD is strong thus the equation:

- bond buying = positive gold price.

Quoting Olu
Ending bond buying means less money pumped into the system and less available to buy everything including Gold less inflation which would require less gold to hedge dollar strength which has an inverse relationship with gold imho Olu
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,084
  • Jul 28, 2013 5:58am Jul 28, 2013 5:58am
he says 1000 dollars is good buying point for short term.

http://www.cnbc.com/id/100888334
  • #24,085
  • Jul 28, 2013 6:54am Jul 28, 2013 6:54am
Quoting emirfas1
he says 1000 dollars is good buying point for short term. http://www.cnbc.com/id/100888334
Mate - the article is dated 16th July - quite a bit has happened since then ......
  • #24,086
  • Jul 28, 2013 7:04am Jul 28, 2013 7:04am
Quoting XTrade
Yes, these are fundamentals. Yet, today Gold has a two sided play to it. As a safety net and it is seen as a risk play. Money hides in bonds when things are unstable, as they are today, it also hides in gold and silver. I know well about the "usual" inverse relationship between Gold and the USD, however look at the charts, there was a period when we ran up to 1900 that clearly shows Gold moving in TANDEM upwards with the USD. I have reviewed and posted here many an AU/ USDX correlation chart and the relationship does have breakdowns. Now, once...
Hey X,

I like your analysis and agree that those taking money out of bonds might reinvest in assets like gold. I also agree that there is no clear correlation. I suppose my reasoning is that 'ripping off the bandaid' might cause a massive selloff across the board (as crashes usually do). An overwhelming part of the decade long run up in gold coincided with quantitative easing, so a lot of folks might make a correlation where one perhaps does not exist.

As I said, I don't really buy the assessment that the rug will (or should) suddenly be pulled out. Would cause mayhem. I think stability remains the mantra of most central bankers, to whatever extent they can achieve it.

I hope we will have some more clarity by the end of the month. I'm still playing it safe.
  • #24,087
  • Jul 28, 2013 7:41am Jul 28, 2013 7:41am
Quoting KADC
{quote} I think you need to re-read what I posted because it's not a very good example for demonstrating your point which I agree with in principle. You've been in this forum long enough to know that I made more money shorting gold than I did going long, riding it all the way down with full futures positions from within a couple of dollars from the top down to somewhere between $1580 and $1600 after the first bounce in March. I stopped trading (and posting) to deal with my father's illness, and subsequently, his estate; however, I'm back to trading...

I like your 7 points. Also, I learned some cultural stuff from X trade last week. So, what fundamentals affect the Xau/Usd pair the most? Is the Xau/Usd pair strongly correlated to any other market instrument.... for example Eur/Usd...etc?
Luck has no place in trading. Leave that for the poker table.
  • #24,088
  • Jul 28, 2013 8:15am Jul 28, 2013 8:15am
Quoting Wheels
......... An overwhelming part of the decade long run up in gold coincided with quantitative easing, so a lot of folks might make a correlation where one perhaps does not exist. As I said, I don't really buy the assessment that the rug will (or should) suddenly be pulled out......
Bull market for Gold started in the early 00's. QE I began in last quarter of 08'. Now I do admit price was at approx. $1000 and from there it went to its all time high of $1921. within 3 years time. But it also went back down $1181 all the while the unprecedented QE II and QE III were taking place.

So if you are going to look at QE's as a positive for Gold, how do you explain that?

I know, I know ...... maaaaaa nipulation.

Funnymentals are always such fun.

BTW I still don't think downside is done, but always willing to change course if price proves me wrong.

But XAU/XAG and XAU/SPX among others have not signaled yet.
  • #24,089
  • Jul 28, 2013 8:55am Jul 28, 2013 8:55am
Quoting cg uno
{quote} Mate - the article is dated 16th July - quite a bit has happened since then ......
yes it's little bit old article but i'm long term trader. nothing changed at last 2 weeks, only several bad datas from usa.for me article was usefull that's why İ shared
  • #24,090
  • Jul 28, 2013 9:00am Jul 28, 2013 9:00am
Quoting SunTrader
{quote} Bull market for Gold started in the early 00's. QE I began in last quarter of 08'. Now I do admit price was at approx. $1000 and from there it went to its all time high of $1921. within 3 years time. But it also went back down $1181 all the while the unprecedented QE II and QE III were taking place. So if you are going to look at QE's as a positive for Gold, how do you explain that? I know, I know ...... maaaaaa nipulation. Funnymentals are always such fun. BTW I still don't think downside is done, but always willing to change course...

I look at the early 2000s in the context of a post 9/11 world; the new normal etc...

Too many variables to make any causal associations regarding gold (goes without saying).

But if you look at the 10 year chart, you can see that a lot of the price increase did loosely coincide with QE (as you admitted).

As I said, I am not stating this is the case. Just a common perspective from "analysts".

I still maintain there is a risk of a massive manipulative sell off. (Yes, the buy ups are likely manipulated, too).

Did you guys ever hear about that 15 year old buying penny stocks years ago who started pumping them up using various aliases? He made tons of coin and the SEC let him off because what he did was basically the same thing as institutional investors paying analysts.

Although those days may be gone for the message forums, I sometimes think we need new rules surrounding analysts with an agenda. Manipulation is a huge factor, and I sit firmly in the camp that favours regulation. Everything is mucked up and there is very little objective data available for the individual investor.
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  • #24,091
  • Jul 28, 2013 9:14am Jul 28, 2013 9:14am
Quoting Wheels
.......
But if you look at the 10 year chart, you can see that a lot of the price increase did loosely coincide with QE (as you admitted).
......
And decrease too.

That is all I'm saying.

If one is to hang their hat on X causes Y but ignore that it also causes Z then what is the sense.
  • #24,092
  • Jul 28, 2013 9:23am Jul 28, 2013 9:23am
Quoting SunTrader
{quote} And decrease too. That is all I'm saying. If one is to hang their hat on X causes Y but ignore that it also causes Z then what is the sense.
Absolutely. This stuff is not statistics and it's definitely not a science. Key point in the original post was that pulling the rug could cause a sell off. But maybe it won't. lol

My position remains wait and see. Bias is bullish for my own set of reasons, but I think the naked ten year chart alone demonstrates this to be within the realm of possibility (but not statistical probability).
  • #24,093
  • Jul 28, 2013 12:45pm Jul 28, 2013 12:45pm
Quoting Pair-me-up
{quote} I like your 7 points. Also, I learned some cultural stuff from X trade last week. So, what fundamentals affect the Xau/Usd pair the most? Is the Xau/Usd pair strongly correlated to any other market instrument.... for example Eur/Usd...etc?

For the longest time the rule of thumb for gold price is the USD or USDX strength. However as I mentioned in a previous post there are clear points where this
usual INVERSE ie: (Gold up dollar down- dollar up gold down) has been CONVERSE and the two have both risen and fallen simultaneously,

I'll see if I can do a long term correlation chart.

There are other factors though to. The dollar can't just rise and fall on it's own, it has to be valued against something, and in today's case it is the USDX
or DXY whatever. The fact is this system of dollar valuation is outdated and flawed. It is a basket of currencies which exclude the pegged Chinese Yuan!!!
Just to name one issue. Here
http://en.wikipedia.org/wiki/U.S._Dollar_Index

Quote
The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.[1]

Quote

It is a weighted geometric mean of the dollar's value compared only with "baker" of 6 other major currencies which are:

[list][*]Euro (EUR), 57.6% weight[*]Japanese yen (JPY) 13.6% weight[*]Pound sterling (GBP), 11.9% weight[*][url=http://en.wikipedia.org/wiki/Canadian_dollar]Canadian...
It is also majority weighted against the Euro. So some like to think that when the Euro rises, Gold rises and thus the USDX falls due to the weight.

Now, due to gold's universal appeal as an investment, hedge and even sort of universal currency,
what happens when investors in The EU got scared with all the crap that is / has gone on!! THey too BUY GOLD!


This universal disruption or depression is what propelled gold to it's highest. I will admit a correction was due. Yet I don't feel we
are in the danger zone, 1050 yet.

1185 was tested, we bounced back, this is a very tender time. It needs to take out the downtrend line on the weekly to really flip bullish.
a close above the 200 sma on the 240 min chart was satisfactory enough for me to be optimistic this week.

Likewise should there are two major long term trend lines UPWARD on the yearly. These will offer super strong support.
Should the price decline I will be buying physical hand over fist.

Then just do intraday trading. If i have any cash.

This week should prove interesting.

XT-
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,094
  • Jul 28, 2013 12:52pm Jul 28, 2013 12:52pm
You can clearly see the support areas on this chart and precisely where resting longs were triggered.

Simple support and resistance are very powerful with long term gold and I am surprised more don't pay attention to them.

Now. I would expect if the low appx 1180 is not tested or taken out, an at least 50 % Fibo correction north will occur.
That should (just glancing some one do the chart please if u like) put the price around 1600 again.

This will be a crucial zone again. But I really need to do the chart before making an accurate assessment of price points.

We are far from out of the woods. Also the USDX does not reflect any emerging markets ie: Brazil- and IMO is not weighted strongly ENough to the GBP.
It was made in the 1970's!!! This is 2013!! it is I believe almost 40 years old. Some people don't even live to 40.
Hmmmmm- Overhaul time?
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XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,095
  • Jul 28, 2013 1:03pm Jul 28, 2013 1:03pm
Quoting XTrade
{quote} For the longest time the rule of thumb for gold price is the USD or USDX strength. However as I mentioned in a previous post there are clear points where this usual INVERSE ie: (Gold up dollar down- dollar up gold down)XT-
Here's an ugly chart... wonder where this is headed..
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XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,096
  • Jul 28, 2013 1:18pm Jul 28, 2013 1:18pm
Headin' to the trash...there's where is heading
  • #24,097
  • Jul 28, 2013 1:20pm Jul 28, 2013 1:20pm
OK I stopped being lazy,

If the fibo is pulled from the all time high zone to the new low, the price is precisely at 1550 for a 50 % retracement.
As well i didn't have to draw a support / rez line there due to the fibo, you can see in the area of 1550 + - 25 to 50 bucks for daily highs / lows there is old support turned now resistance.

I added some longer term tls quickly and just some major s/r areas using a quick line chart not using candlesticks, the line is bid and shows more where the price settled.
we can do the same using a candlestick and the top and bottom of the wicks yet it won't change much. I'll try it later.

The 4 fibos used are in the other pic.
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XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,098
  • Jul 28, 2013 1:21pm Jul 28, 2013 1:21pm
Quoting musclemike
Headin' to the trash...there's where is heading
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,099
  • Jul 28, 2013 1:29pm Jul 28, 2013 1:29pm
Quoting Wheels
{quote} Hey X, I like your analysis and agree that those taking money out of bonds might reinvest in assets like gold. I also agree that there is no clear correlation. I suppose my reasoning is that 'ripping off the bandaid' might cause a massive selloff across the board (as crashes usually do). An overwhelming part of the decade long run up in gold coincided with quantitative easing, so a lot of folks might make a correlation where one perhaps does not exist. As I said, I don't really buy the assessment that the rug will (or should) suddenly be...

Definitely play it safe. The fall was too Steep TOO fast IMO to not correct further. After and if such correction occurs I feel that price will be more of a deciding factor.
Also there is a huge possibility if money does not flow into gold the price will easily have no problem going sideways for months likely trading in a 200 to 300 USD range.

The long term trend remains up. that is just what the chart says. I get nothing out of this. So the last thing I want to see is people lose money.
Tender times. As I'm writing there is a an ad for a show on discovery about people looking for GOLD! LOL something like jungle gold.

IF the appetite is there. The price will remain stable. Safest thing is to keep your investment mind separate from your trading. If you have the cash trading futures is likely a better option than using an FX broker, especially in the US.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
  • #24,100
  • Jul 28, 2013 1:35pm Jul 28, 2013 1:35pm
Quoting XTrade
OK I stopped being lazy, If the fibo is pulled from the all time high zone to the new low, the price is precisely at 1550 for a 50 % retracement. As well i didn't have to draw a support / rez line there due to the fibo, you can see in the area of 1550 + - 25 to 50 bucks for daily highs / lows there is old support turned now resistance. I added some longer term tls quickly and just some major s/r areas using a quick line chart not using candlesticks, the line is bid and shows more where the price settled. we can do the same using a candlestick and...

Same chart with a few minor adjustments to a few lines for the sticklers. same basic areas remain.
fibos almost in same place. Using candles and wick tops and bottoms to pull.
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XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
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