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Morning Gold Fix: August 2
Commentary courtesy of www.fmxconnect.com
Why the Rally?
Last
weeks activity in Gold was a welcome respite from the last month’s
blood bath for the longs. What we are curious about was the reason for
last week’s rally. Was it:
1. Small short squeeze on the physical side, and a sign of things to come?
-Would be nice, and combined with recent spread and GOFO activity, we’d say hopefully
2. A Technical dead cat bounce before the trend lower continues?
-High probability that this was a pause in the trend and partly caused by #1 above
3. The market reassessing the BIS swap deal somewhat?
-Don’t think so, but I for sure am reassessing it as a bullish fundamental watermark. More tomorrow
4. QE2 beginning to be priced into the markets?
-With all the deflation
talk last week it seems hard to believe. But witness the activity of
Commodities in general and you see the reflation game possibly coming
back to the forefront.
We are fearful that this down trend has
a way’s to go, but are less likely to sell dips now. Consistent
momentum to the downside may be drying up. A wash out may occur, but we
will buy that now.
We aren’t buying strength, but will buy a pullback after a break out.
Gold Technicals (Courtesy of Global Research and Investments)
DEC GOLD Resist: 1189*-119150, 119810* ST Trend: Down
(118390) Supprt: 117440, 116970, 1160-1158 Obj: None TRP: 1198.10
Comment:
Overall the market is bearish, but selloffs have stopped against weekly
support associated with the 1160- level. A close under 1158 is needed
to resume selloffs into the 1145-1135 zone. The rebounds off 1160 late
last week calls for recovery rallies to test 1189* resistance. A close
over 1189* alerts for a reversing turn to start a correction phase and
test 119810* for a bottoming turnaround. Trade capped by 1189* alerts
for a secondary drop against 1160.
-Elizabeth Thawne
Summary
Gold
opened Friday’s trading at $1168.2 per 100 troy ounces. For the second
straight day, the metal gained, rallying almost 15 dollars before
closing the day at 1181.7.
August
gold was down 2.3 to $1179.4 per 100 troy ounces as of 8:46 AM EST,
this morning. The September U.S. dollar index was down .300 to 81.355.
October platinum was up 16.1 to $1592.9 per 50 troy ounces. Silver was
up 32.2 cents to 18.325.
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The Noble metal's price in the ignoble currency is soon to be meaningless.
That's the hard money belief right? Then do cents really matter?
ORI
http://aadivaahan.wordpress.com
No. Only sense.
:-)
Bloodbath? Whoever wrote that must be leveraged.
Sucker.
#1...as a response to #3.
And don't cry for us phys longs...the window to buy cheap was worth the 'sweat'.
My guess is number two, and it should have a 50% fib bounce to the 1220 area, possibly falling a bit short.
I think that the divergence is telling.
Did your charting predict the central bank of India purchase ?
Did your charting predict the flash crash ?
Gold is down because of Europe. The rally in Gold since February was the result of FEAR in Europe (weak EUR) .... they were buying gold while the EUR was going down. Before February weak dollar meant Gold up, after February the relationship was inverted... strong dollar (weak EUR) = Gold up.... just check this chart of EUR/USD vs GLD for the past couple of months... as soon as FEAR abates in EU then GLD goes down...
If EUR/USD goes to 1.35 GLD will go back to 110... even if the EUR stays around here and European banks stocks stay stable it will be enough to keep putting pressure on Gold.
http://img293.imageshack.us/img293/2825/compareo.jpg
****caugh caugh ** what technicals are you talking about??? *** caugh caugh****
The charts still didn't predict the Euro weakness that resulted in the gold strength before it happened.
Of course it didn't .... but it will show you the correlation between the two... if back when the EUR was 1.18 you understood the relationship and you thought that the EUR was due for a rebound then you would short GLD because you would understand how it was related with the weak EUR and not a weak USD...
I don't own physical gold... but in the long run I only see one way for it regardless on how it moves in between... UP
Written 7/30
Precious Metals Outlook: Bloomberg TV Headline: Goodby Gold
Bloomberg TV ran the above story yesterday morning, interviews were conducted and a consensus was formed. Based on this simple indicator I would say that Gold Prices bottomed yesterday at around $1159. We will call this indicator the ‘Fin. TV’ indicator. You may recall how unbelievably accurate the Fin. TV indicator was in early July when identifying the equity market low. I explained this phenomenon in the post titled , Stock Market Strategy: The More Things Change the More They Stay the Same . The bottom line of the explanation reads: “Rosenthal Investing Axiom: When CNBC et all call for imminent market demise expect instantaneous market rally.”
So, by applying the Fin. TV rule to Gold prices we should not be surprised to see Gold trading at $1175 as I write this note. Yesterday’s cacophony of calamitous Gold comments leads to the current $15+ comeback; categorically classic!
http://rosenthalcapital.com/blog/
Why did Gold rally? Shouldn't that be reversed: Why didn't Gold get slaughtered by the Gold Cartel? I mean let's face it, with No Position Limits on the Comex JPMorgan and HSBC are like the Fox guarding the Hen House.
I gave ZeroHedge more credit in this regard. Come on ZeroHedge why do I a lowly reader have the scoop on the Gold Price and you don't?
5. Short covering
Gold just popped up nicely.
See also the claim that "Time for gold bulls to feel a little fear" from the Sydney Morning Herald.
Haha!
I was feeling that gold was overdue for a big correction myself, then looked around and realized a lot of other people were saying the same thing. Maybe too many.
Oil above $80. Still waiting for deflation to knock it back to $11.
Exactly.
Deflation needs to happen but the Fed CAN'T let it happen. Why don't people get that. I'm curious why your calculus stopped at deflation.
Yes the economy has to delever, debts that can't be paid have to evaporate. That will lead to deflation, duh. That's where the dumb money is going.
Why can't you take it one more step and connect the dots. We can't pay back our US Treasury debt under deflation, we'd have to default. Deflation simple CAN NOT HAPPEN!!!! Bernanke has said they will DROP MONEY FROM HELICOPTERS to prevent deflation. Does it need to be any clearer to you. Do you need Bernanke to hand deliver a picture postcard to your doorstep. Is that what it will take to convince you?
The only alternative is inflation. Inflation is a foregone conclusion. But once inflation is in the air you might as well head for the lifeboats because the next stop is HyperInflation.
Correct
It doesn't even matter if Bernanke doesn't print money and dump it out of helicopters.
The real economy is delevering and downsizing, as tax revenues plummet, the US government will not be able to service the debt. When US debt becomes a non performing asset, it will get sold. What do you get when you sell US debt ? DOLLARS. The dollar becomes a non performing asset and plummets in value. (INFLATION)
Premiums for the real money of gold/silver physical will continue to spread against paper ponzi, as history repeats and the sheeple never know what is real money until paper is swept away; coast to roast!! Wonder when the riots start for gold/silver paper certificates needing redeemed? At least fuel for the Winter months!!
I wonder what the total value of Kitco's "pooled" gold/silver and other precious metal accounts are. Or should I ask what's the fractional basis for these accounts.
http://www.cash4gold.com/
With burnokio rose, burnyakky attack and Q&E 2.0? Petro dollars may go to new highs? Nothin like perpetual war, rising oil, and strong dollar policy!!! LOL
Even the morning gold pump is bearish. How telling.
I notice that there are less junks than usual as well. Many of the underwater bagholders must be somewhere else. LOL. The dollar will fall, gold will fall, and commodities like copper, aluminum, and oil will rise.
Bagholders will have one more chance to sell at a little bit less than 1220 for gold before the dump happens.
It wasn't very nice of them to drop a dead cat all the way from 1265. She'll bounce before she splats...
hope you dont have children...I mean for others to have to depend on such a moron...wow..feel sorry for your wife....or boyfriend..whichever...with you as a head of a house hold....like having someone like Bernanke in charge of money...well you get what I mean.....
"hope you dont have children...I mean for others to have to depend on such a moron...wow..feel sorry for your wife....or boyfriend..whichever...with you as a head of a house hold"
ROTFLMAO!!!
Whenever I find an O-Bot, this is what I think!
Thanks for the chuckle!
on Mon, 08/02/2010 - 08:29
#499621
hope you dont have children...I mean for others to have to depend on such a moron...wow..feel sorry for your wife....or boyfriend..whichever...with you as a head of a house hold....like having someone like Bernanke in charge of money...well you get what I mean.....
who is "them" ? and why do they have an interest in dropping the price of gold ?
JonnyBravo you're even making me sick now just repeating the same things over and over. Can't you be a little creative with your fearmongering campaign against gold?
How about there are enough gold teeth in the world that if the price goes over 2000, all the toothless will sell and gold will plunge.
There you go Jonny!
.
I will remember this post.
You are stating that we have seen the top in gold.
Will you admit that you where wrong when it hits $1280 ? what about $1300 ?
Some chance. I've been reading the exact same crap that JB puts out here every day since gold was in the $600's. The same few (but persistent) characters who seem to spend all day trolling gold posts 'Out of a desire to help guide other unfortunates away from the perils of Gold' are still there on Marketwatch, and other forums, still voluntarily giving up their valuable time 'Saving' innocent investors from Gold.
The fact that they have had to change the 'Gold is going to crash to $300 any day now' message to 'Gold is going to crash to $950 any day now' seems to have in no way caused them to re-think the validity of their self-imposed task.
When Gold is at $2000, I confidently predict that JB will be with us, possibly under another pseudonym, shepherding the unwary away from gold with the message 'Gold is about to plummet to $1,500 any day now!'.
He will simply change handles when Gold breaks out to the upside. Instead of Master Bates or Johnny Bravo, we will have Harry Nutz or a similar iteration.
or Americanpatriot or Newbegold
No point in junking a SVP at JP Morgan. His boss, JonNadler gives him a $200 bonus for each junk.
If Johnny and Jon can get gold down to $800 or so, then Jamie Dimon will give them $10,000,000 bonuses for saving the bank!
Then he could afford to move out of mom's basement and give up the paper route.
Maybe even buy a real car.
Now, now let's be nice Rocky!
The only ones who should offer up vitriol should be our beloved dumpster (who I have not seen around for awhile) or the equally mysteriously disappeard Chumbawamba.
If gold reached $2000, I probably will sell a fraction, a small fraction. I'll keep the rest in case we get a FOFOA like number. Remember, there will be a party if we get to 50k.
EDIT: Hope to see at the ATM on August 12 pulling out $500. Hope to see you ALL there, pulling out the max in FRNs, Euros, Yen, Rupies, etc.
Price of gold on Sep. 10th, 2001, the day before Osama bin Subcontractor attacked us because he hates our Freedom Fries: $271.50. Current price of gold: $1,184 - up 336%.
S&P 500 on Sep. 10th, 2001: 1,093. Current S&P 500: 1,126 - up 3%
This does not take into account the dividends that one would have gotten from owning the stocks but I doubt that it would make much difference.
Gold up 336% stocks up 3%
Ladies and gentlemen, we have been at “war” with the horrible terrible "Islamo-fascists" for almost nine years. Show me one war in all history that had deflation, just one.
And please don’t tell me about deflation in the housing “market.” There are no “markets.” The peasants with money are herded into one pre-planned bubble after another which is then popped and the peasants skinned alive. Then the “bailout” can proceed which means that the bankers get to borrow from the Fed for el zipo and loan it back to the Treasury at 2,3 or 4 percent interest. It's just a "carry trade" like the one we used for years to rape Japan. My guess for the next pre-planned bubble is the stock “market.”
Every cookie jar will be robbed and every income stream will be diverted to the banksters’ lake of unearned money to float their yachts.
By the way, they’ll take our cupcakes, too.
Ok, so take a gander at the monthly gold chart, with lines demarcating inflation-adjusted amounts for the gold price since 1929.
Of course, you can always try to express it this way:
http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm
What's happening is that with the decline of the discount rate to near zero, the gold price fix is becoming ineffective, though you can see what gold leasing and the price-fixing regime using this method had done to the gold price since 2000:
http://stockcharts.com/h-sc/ui?s=$GOLD&p=M&b=5&g=0&id=p29560442230&a=182333562&listNum=2
In a word, price fixing in the gold markets using an out-dated regime of bullion leases has not been able to keep the price at bay since year 2000.
You can see at what ludicrous levels the price of gold was meant to be fixed. It has absolutely NOTHING to do with moderating interest rates, as was intended in 1980. It had mere talismanic effect since that time. And now, the discount rate could easily see a negative rate come fall:
http://stockcharts.com/h-sc/ui?s=$IRX&p=W&b=5&g=0&id=p19892911321&a=191058127&listNum=2
Hard proof that setting controls on the gold price is a monstrous idiocy and historical cock-up.
If you can't control fiats you can't control gold. It's like they are stuck in a quarantined infestation. The virus knows what to do and how to act but it can't get outside the petri dish.
The LBMA has lost control and has gone data blackout. Europe sopped up all the excess gold like gravy and now it's a case of free gold is free liquidity. Which means everyone has to show death and destruction type need to get any. This will cause western accounting to take on a new meaning of deceiptfulness during august.
JonnyBravo you're even making me sick now just repeating the same things over and over. Can't you be a little creative with your fearmongering campaign against gold?
How about there are enough gold teeth in the world that if the price goes over 2000, all the toothless will sell and gold will plunge.
There you go Jonny!
JonNadler, you may as well just fess up that you and Bravo are hard at work there at JPM and will get HUGE bonuses when Jamie Dimon sees gold at $800.
It's pathetic to see the depths that JP Morgan will go to when they send their Senior VPs into a gold thread just to try and save their stupid bank.
'Course gold goes to $2000, I'll drop a farthing or two into your begging bowls.
It wouldn't surprise me to see Gold drop to $1000 if we get serious drops in the stock market. Folks who have Gold (physical or paper) will sell to raise cash in the short-run. That will be combined with the continuous manipulation. When that short-term drop happens, I'll buy more.
When the DOW had its biggest crash in history on May 6, gold was up $25.
??????
+1