Gold hits $1200 in overnight trading

Project Mayhem's picture


Gold has hit $1200 / ounce in overnight trading, or so says FXstreet.  Though it's not quite so obvious from the Kitco chart.  According to Tyler's Bloomberg terminal, the actual spot price was $1199.43, or 57c short of the critical number.  So we are very close in terms of spot.   Gold futures actually exceeded the $1200 level to a high of $1200.50 on the GCG0 contract.  Take your pick as to which one 'counts'!    (h/t SV)


Does this overnight gold rally have anything to do with the Iranian yacht club ?  Or perhaps it is related Obama's Afghanistan escalation and West Point speech today?   Before we answer those questions, another cup of coffee will be required.  So here's a gold bug instead.


this sad little gold bug is now worth $1200.

Yes so $1200 has been hit , thought not fully surpassed, so it is functioning as resistance for the moment.  I would like to refer the audience to my Sept 09 column , when gold was at $995, where I issued an end-of-year price target of $1200 for gold.  Well , we exceeded this mark  briefly, but we will have to see where we are in January 2010.  I expect the rise will continue, though there is a potential for a strong correction between now and then, as gold is extremely overbought.   A violent systemic deleveraging spasm could bring us down to test the $1000 - $1050 level, which is strong support.



--^  RSI is extremely overbought .      Not cool.

Let's have a look at what the excellent Clive Maund has to say...




So the question is what's going to win out in the short-term here -- 1) the bullish geopolitical / sovereign debt factors, or 2) the bearish technical factors?






Project Mayhem Research (PMR) is a DC/Baltimore-based grassroots think tank dedicated to exposing corruption worldwide. PMR is affiliated with, a popular and growing anti-corruption site, through contribution of free articles for the public. Topics include the politics of war and weapons systems, unexpected applications of cybernetics, the growing international surveillance state, global warming 'deindustrialization' economics, broad systemic international corruption , in-depth policy analysis of studies from bank and military funded research groups, genetic analysis and surveillance of pandemic influenza, corruption in the international gold market, the power structure and history of the global elite, and analysis of their political objectives expressed through monopolistic international finance capital (read: powerful banks) between now and 2050.

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time123's picture

It looks like gold is shining again! It is unstoppable, having moved above $1200!


Anonymous's picture

The last time we started a war, gold went down, shocking a LOT of people. Just sayin'.

Hephasteus's picture

Warmongers sold gold to pay for war?

I'm shocked. SHOCKED I SAY!!

Herd Redirection Committee's picture

Thats called a time to buy.  If you are entirely in gold right now, and not making any income, ok, this would be bad for you.

But for the other 90% of gold owners, it is an opportunity when gold goes down significantly.

It takes a TON of dirt, literally, to find an ounce of gold.  There is no way to make that simpler that we haven't already discovered, no big deposits, no breakthroughs in tech since the 90s.

When I find a number for how much it costs to produce an ounce of gold in a lab, then I will tell you what the upper limit is on the price of gold.


charto911's picture

The Gold Bugs are out says Gartman, the fundamentals and the charts continue to point higher but for how long? At 2,000 year highs not in inflation adjusted dollars but still. We have made our money and our looking at other alternatives like going back to sports and expert advice but in all reality if you have followed Jim Rogers commodity index or any commodities for that matter since march until now you would consider your gains and envioson a hog getting slaughtered and hope that the hog isn't you. Good Luck from here but this gold bug is distrubuting his bars out of sole fear of being greedy.

Gordon_Gekko's picture

Well, the hog is YOU my friend. You are selling Gold in exchange for what? Bits of paper?'re the hog about to be slaughtered.

trav777's picture

People haven't figured out that we are facing the equivalent of "economic entropy" here and that ever-more paper is required to get some kind of production.

We are facing an existential crisis in the money we use, in debt, and in paper.  The future does not hold more growth, so who should lend?  The only way to make money is to lever up.  When economic profitability in the aggregate or EROI reaches unity, it will require infinite leverage to turn a profit.

At that point, paper loses its value, no more IOUs, no freakin vague paper promises.  What can you do, what do you have

Gordon_Gekko's picture

How many gold bugs does it take to change a light bulb?

To answer your question - zero, because they are so rich now that they can hire any number of people to do it for them! lol.

Anonymous's picture

good stuff for defending the mayheim household in beautiful downtown dc...ha ha

Project Mayhem's picture

haha  I have to stick with the cheap stuff like rem870

Apocalypse Now's picture

PM- Unrelated, great article with more info on climategate:

I like that they mentioned HAARP.  Man made global warming could be used as a cover story for the military application of HAARP (it was included in prior UN issues, but appears to be absent today).

Anonymous's picture

oh really? do the liberal negro crack addicted politicians in the district of criminals, allow you to own a shotgun? gads. what a amazing thing to ponder.....:)

Anonymous's picture

i remember when the premium on krugs was a dollar. wow!

how about that silver boys? man , watch it when it starts running. it is a sight to see.

Anonymous's picture

We're all gold bugs now!

Actually, if you define a gold bug as someone who wants gold to go to $10,000/oz, despite everything else he owns going to zero, most of us will never get quite that crazy.

The demand equation has changed dramatically. Huge amounts of gold are held by central banks, and they have switched from net sellers to net buyers. The Chinese are talking about buying 1000 tons per year for the next 10 years. Mine output is about 2000 tons/y, and has been easily consumed by nominal demand. There are reported bullion shortages in London.

If we are in a slow but inexorable deflationary spiral, the market will go back down and the dollar back up. However, at that point it will be obvious that the Fed has lost control of the economy (if it ever had it). Most asset prices will collapse, and cash will be king. But the lack of confidence in the Fed means fiat currencies will still be risky, so gold will remain the ultimate form of 'cash', holding nominal value in slow deflation, but much safer if something even worse happens.

trav777's picture

Find me ONE example where the cash notes of a bankrupt state have been worth anything.

Cash will not be king.  Things of Value will be.

People could certainly stop ascribing value to gold.  But that's a far longer walk than to abandon value ascriptions to paper, especially the banknotes of a defaulting sovereign.

Tell me how kingly the ruble was when the USSR came apart.  It was the reserve currency of the entire Warsaw Pact.  Empires these days seem to blink out of existence.  Literally, within a week the entire "Evil" Empire came apart.

gatopeich's picture

The observed fact is that gold/silver are right now moving hand in hand with mayor indexes, all prey to the overinyected liquidity, or the manic pumpers, or what you enjoy calling that. They float up or down simultaneously, roughly by the same ratios.

Because the inyected liquidity is in the hands of very short term actors, I agree with the "gold oberbought" argument. Those bastards are ready to sell hard anytime soon, at the start whistle for a USD rally.

Observing the current pattern of the pumping machine, which keeps going since Nov 11, I see a possible 2009 top on Thursday (Dec 3). That if the beast does not decide to surpass every limit and get on going further till who-knows-when.

But before the first stone is casted, allow me to express my ultimate faith in the fast recovery of gold, and its rally towards uncharted territory in 2010, amen!

Good luck!

Anonymous's picture

i believe the asians are determined to show that the emperor has no clothes.

Anonymous's picture

Why is the premium on the Krugerrand jumping?

Anonymous's picture

Old news...

WaterWings's picture

Gold is overbought? Clive is just giving us more time to get more physical delivery before everyone realizes it's underbought!

Project Mayhem's picture

RSI was wayyy overbought last week.  StochRSI is no longer overbought.   I like Clive because he's very careful about his predictions and he has a great track record.  


But I do agree, I'm not sure how much of a 'correction' we are going to get , especially with this crap going on with Afghanistan-Pakistan.



Anonymous's picture

the real question is how many idiots does it take to say that gold is a side show.....

gold is not overbought....learn to distinguish between frn related price fluctuations and demand fluctuations in price....

gold is in severe and permanent backwardation....the fake paper markets are disguising the real price of gold which is at least 1300/oz NOW....the fake markets are also disguising the backwardation of gold.....

anyone in a gold etf is going to find out that paper gold is like "Paradise by the Dashboard Light"

Anonymous's picture

Covering Tungsten shorts has got to be painful!

Thanks for helping beat down the ClimateGate deniers on the other threads. It is much appreciated. The wheels are starting to come off! "ClimateGate" the one word KNOCKOUT punch for 30 years worth of lies.

Project Mayhem's picture

No problem .  I was listening to cutting through the matrix the other night, where Alan said we had 'one chance' to expose this whole carbon-banking scam , so I figured it was best to strike while the iron was hot.

Global Warming: "Fixing the Climate Data around the Policy"
The results of these high level consultations were forwarded to the Danish government as well as to the governments of participating member states. A so-called summary report for policymakers was drafted by PricewaterhouseCoopers LLP, on behalf the corporate executives participating in the event. This report has very little to do with environmental protection. It largely consists in a profit driven agenda, which uses the global warming consensus as a justification.

I think it's hillarious how we are talking about PriceWaterhouseCoopers drafting political policy for this corrupt 'global warming' banking and taxation scam -- don't even get me started on all the shady activities that PriceWaterhouse is involved in  (hell lets start with Enron...)


Anonymous's picture

Teh thread wouldna been complete without popup from the GS jack in a box.

Gunther's picture

bullionvault has a spot gold chart too; they quote 1198.65 as high on 9:11 AM GMT.
1200 did not get passed according to bullionvault.

I do not know the psychology of the buyers in Hong Kong; if they decide to move gold through 1200$ it will happen shortly but if they wait we will have to wait too.
For now they buy on every dip without increasing the price too much.

Even if gold tests the outbreak at 1030 $ again it would not change the uptrend.
In Euro and Yen gold is around the all-time-highs what might be resistance too.

Project Mayhem's picture

okay , so we hit $1199.43 on spot apparently, haha  .  Tyler put up a post about it

In terms of gold futures, we exceeded $1200  to a high of $1200.50 on the GCG0 contract.   Thanks to SV for this clarification.

Gunther's picture

Anyway, 4:27 PM GMT we hit 1200.96$ spot.

As long as the spot data are correct nothing big with the difference.

I thing a commenter at ZH had poor data from yahoo finance somewhere. If the kitco data are o.k. yu were a few hours early.


earnyermoney's picture

You dealt with buillionvalut before? I have done google searches on buillionvault and all recommendations are coming from people who get some payout for all referals. These guys legit?

Project Mayhem's picture

None of the bullionvault bars have been audited with drilling or ultrasound.   They just calculated the density , so they could be fooled by transition metals alloys such as tungsten.   So I think they are probably honest people, but they rely on the integrity of the LBMA system.   If LBMA is compromised , then there may be problems.  It really just depends on your risk tolerance.  But everyone should own at least some physical gold in their possession.

Project Mayhem's picture

I'm guessing its the ask which crossed $1200


definitely agree there is a 'China put' under this market


Artful_Dodger's picture

Agreed. The fact that the Yuan is tied to the dollar and falling in unison causes 'China' to buy gold too...

Grand Supercycle's picture


What will happen to GOLD when the USD rallies and equities resume their downtrend ?



Internet Tough Guy's picture

What will happen to you if the USD doesn't rally?

kaiserwongze's picture

Totally agree.  What happens when the dollar AND US equities go down? THAT might be the actual contrarian play

D.O.D.'s picture

Excellent, hard hitting question Walter Cronkite!  Way to get to the core of the subject.

Internet Tough Guy's picture

Stick with Grand Unicycle. He will take you far.

SWRichmond's picture

Short term, IDC.  When gold is at 5K, it won't matter too much whether I bought it at 1050 or 1200, will it?  If Rogers is the world's worst market timer, I'm the second worst.

The way to win this fight is to relentlessly keep on taking delivery.

Anonymous's picture

Delivery wait times going up. Physical and scrip part ways in 2010.