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

weekly chart

hi Ssm,

exactly, that document helped me better understand the different forces acting on different types of currency. It's not just one effect across the board, instead there are contextual forces that are at play - and sometimes more than one context applies to the same currency! So, a great framework for analysis and understanding.

I don't think the framework translates well to commodities, here we are dealing more with raw psychology and ever-present demand that waxes and wanes with the level of hope and fear in the market.

I forgot to mention it before I left but my secondary analysis for the thin Thanksgiving day was if 1245 doesn't go the price will likely flatline around that area and move sideways into AusAsia session. Which is exactly what happened. See chart below.

Yet, I mention it after the fact because Even though the Typical "day off" in the US is today's holiday, many take the Friday off as well, due to traveling,

making a long weekend, shopping, etc. Depending.

Thus, I really don't see too much movement until next week. The market is tight as hell on shorter time frames, even on the H4, concerning the past several days it is still tight. Eventually we will get a breakout north or south... Yet, it may not be into Jan. 2014. The PA will tell us.

So, with the holiday behind us, and many likely off again tomorrow, as well as it being Friday with no substantial longs to flatten or shorts to cover, it will likely stay between AT MOST 1355 to 1335 - more likely an appx 10 USD swing. Yet, anything can happen.

Short term chart below.

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I finally had a chance to do some brief weekly/daily analysis before then stepped on my power strip while cleaning my desk and there went my chart.

So I am going to redo it now and post it. (and save it) ----

Point being, there is a lot brewing right below the area we are now. A lot of people assume that it will be a piece of cake to slide back to 1180 and below.

I think it is a possibility, yet as the year and quarter draw closer, even with a downside mid term bias it could become a harder task to achieve as well as a

potential bear trap. There are likely, (especially in the physical market), some powerful longs standing by waiting for such a dip to be bought up, and held, closing the books ((for certain long only funds, other funds, as well as managed money and diversified safer accounts)) in some kind of profit, especially if some power is added afterwards.

This is not to say that the sideways range will break and downside risk will be eliminated. If such a move does occur, and there is no steam to push it up past 1350 with some time, then, the high it would create would likely get dumped come the new year returning us to the sideways range of 1200 to 1400.

Going to do the chart.

On the topic you and Ssm are discussing,

Interest rates are key to currency valuation/ strength and weakness, but I'll say valuation first. The reason why, there are many different things central banks can do
to debase or try and increase the strength the countries currency. The last resort and most obvious, usually hinted to and awaited by the market is direct intervention where a central bank will go into the FX market and deliberately buy or sell their currency to try and halt a trend in the market that is moving too far for too long in one direction. Here's a good news article on BOJ intervention around the Earthquake and Fukushima Nuclear Disaster.

I remember years ago they moved the pair 800 pips in an hour when the yen was too strong against the USD (appx somewhere in the high 70s.xx / low 80's

In any case the bank or overnight rate, (broker will call it swap) is what the other country will pay as interest for you holding their currency overnight, (and indeed over a certain amount of hours.)

So, Aussie/USD for instance used to be the highest swap and when the Aussie was in an uptrend it was a great buy and hold, not only gaining on the upmove,
yet getting paid daily just for holding Aussie Dollas! Although it was after the bull run - when the RBA cut the rate (now it is = to KIWI) the pair fell.

If the US were to raise rates it would likely strengthen the buck and increase demand, yet, with increased demand and a stronger currency, US exports can be hurt, etc.
plus more USD has to get shelled out to meet the higher rate.
In a good economy this would not be as big of a deal as it would be now. Everything is interrelated.

We sort of have discussed this whole thing already but here is an article about the EUzone / USD/ and affects on Gold which points out a reasoning as to why with QE three we have not rallied. I think it's a bit deeper than simply than the re-strengthening of the EU economy - such as the lack of LARGE CAP SPECS.
but..................



Improving European Economy Has More Impact On Gold Than U.S. Dollar - Analyst

"(Kitco News) - Gold prices are struggling because of a shrinking money supply in Europe and an improving economy and less from fluctuations in the U.S. dollar, said an analyst.

Colin Cieszynski, senior market analyst at CMC Markets published a report Thursday and said he has been wondering why gold prices have struggled this year as the Fed continues to pump money into the economy. He added he found a strong correlation between Europe’s monetary policy and the yellow metal.

“This change has become increasingly clear over the year or so. The QE1 and QE2 programs sparked major rallies for gold, but since the launch of QE3 gold has been in a steady downtrend which seems odd. An analysis of European money supply, however, indicates that rather than responding to QE3, gold has been responding to the ECB’s stealth tapering,” he said in the report.

Cieszynski said although the ECB cut rates at the start of November, the central bank has actually been reducing its money supply. He added that the reduced money supply is probably why the bank had to cut rates.""""

Hey Buddy,

Good thoughts. I don't think there are as many Gold bulls here as you think. Perhaps long term bulls but on short an mid term most are either trading the sideways range or just selling the rally tops as you have pointed out below.

I agree that there is a possibility that before Gold is to reverse, the price may have to move further down than 1200. There isn't much going on through the 1100s and a low was already printed down at 1180 so if the move has enough legs and is not stopped by buyers or flipped on fundamentals or other such economic turmoil,
than I am looking at simple round numbers. like 1175/50/ maybe 1110/ 1100 - Then if 1100 goes the next major bearish target is 1050 area which is strong support.
As it took time to cross, it should take time to break. 1000 is basically the same. It was tested years ago, then the price fell back into the 700s tested 1k again, and took some time to break. So, if this is test of 1000 area is what it will take then maybe it will happen, yet, if and when, I would certainly expect the emergence of a new super cycle in gold resulting in a high well above 2000. Physical demand remains strong, so the lower the price gets, the more attractive the discounts become, increasing buying in the physical and jewelry producer sectors. Making it tougher to push too far down. BUT another KEY factor that is hurting the price follow throughis the lack of investment demand and large cap speculators.

1230 and 1200(&1180) would have to go altogether be tested and rejected before even considering a fall from here to 1000 neg.

Part of the problem here is the equities rally which has sucked up money from entering the Gold market. BUT, I would be reluctant to start entering DOW or S&P at these highs and feel a pullback / correction phase is due. If one is holding from a great southern position then great. The higher they get, the more downside risk becomes real IMO. Sort of like entering Gold longs at 1800 after the high of 1920.

A lot lower than 1000 an ozt is wishful thinking at this point. First get to 1k then see if it is even a possibility of it breaking. The area has not been seen in YEARS.
But hey, anything can happen. At that price I am buying hand over fist.

As far as the taper, it is already starting slowly, they just don't discuss it.Ending all QE after a news statement would likely
send most markets into some kind of madness. So, although there has not been follow through on runs when there should have been and although the
fundies are strong for gold and the techs are somewhat poor with a mid term bear,
----> I am beginning to think / realize that with all the stated yet, failed attempts at ending QE, the actual affect of the END may already be somewhat priced into the gold market, which would answer much of the current disconnect.

Currency WAR is going. GOLD is always ultimate currency.

Hmmm, Gold is back and cable is down... Why I sleep so deeply, opportunity gone... Lucky that still some longs in stock...

Maybe we can head to 1275 today. However still keep flexible as the trend can turn anytime today, as we are still in range.

Long USD/JPY, target 102.60-103, dependent on the strength.

Morning all. In my opinion this is the time to look to short gold. Explanation coming up.

4 days to rally and no success. the highs getting lower, and the lows getting lower. Unless gold rallies past 1257, it's going downhill from here for the day. Only an opinion based on fibs of the past. too many 786's not breached.

Lower highs and Higher lows, this is what I saw. I think we are in a thin range, and still it is possible to break either way.

However, what I expect more is to see a small correction of past strong drop before next Friday.

I'm holding off to see whether gold tests te round number: @1250. if it beaks through it, then wait till market runs out of steam.

i foresee a reversal of trend any time here. Maximum by the end of next week. Monday and tuesday may be down. But last two days even with the news and Benarke, I see it going up

Looks like time to sell EUR/USD. However I want 1.3630 for better entry.

Market talk of soft buying of AUD/USD NZD/USD last night after the break out. Hope it is not a beginning of correction.

Same strategy, ranging is so stable in gold market, which give a lot of opportunity of stable gains when no big news inflows. However, still keep flexible in case of any breakout.

WHAT THE %^&*

I just lost two posts TWICE!!! One on cable one on gold. Then the two together.

The forum is jumping pages.... maybe my keyboard is fu'd....

DAMN.

cable did break resistance but not out of the woods.

Tough to say if it's good to just jump in now while it's 40 pips or so off the high?! Cause she may just go up.
or wait for 6300 / 6250 to see if it gets rejected.

ALSO THERE IS A POTENTIALLY HUGE DAILY BULL FLAG - the top of the flag was pierced on this recent break. Doing the chart. longer term for cable and gold.
NEW 12 month HIGH GBP/NOK!

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GOLD is adding a dollar here and a dollar there, seems like it is looking to sneak back above 1250.

Going to be posting a Gold chart you may find useful for either side trades.