This page has been archived and commenting is disabled.
New Gold Records Ahead: Target Price Update!
Last week, we analyzed the recent strong move of the US dollar due to a short squeeze on the future markets.
The ‘greenback’ increased its purchasing power against most currencies,
especially the euro. We noticed a crucial technical support level at
1.42. Today, we are trading around 1.41, which paves the way for further
euro declines towards the next support stage at 1.35 in the coming
period.
If we look at the macro-agenda over the next weeks, there’ll be more
than enough occasions to increase the downward pressure on the euro. For
instance, this Sunday we have regional elections in Germany as well as
in Spain, 2 giants within the European Union. As we saw in some recent
European elections, the outcome can be very unexpected and even
unpleasant for market conditions.
Furthermore, we’ll be receiving the newest results from the European
bank stress tests… but let’s face it, these have shown to be one big
farce, so we’ll not bother that much. What were are most anxious about
is the end of QE2.
If the ‘black swans’ stay away and no market crashes occur, there
won’t be an extension of the Fed’s quantitative easing at the end of
June. This will probably lead the USD higher, i.e. the euro lower. Mind
you: we don’t expect the absence of QE’s to last that long, maybe one or
two quarters, as the problems in the US haven’t been solved, on the
contrary, they are getting worse by the day.
Until QE3 comes around, we’ll get new and unexpected opportunities
like we mentioned last week. The first odds are occurring in gold, with
prices in euro trading in record territory. For now, we see
little-to-none downside for gold in dollar terms, as participants are
stepping in with every price dip. Investors are clearly worried about
the stability of the global financial system, for which gold offers the
ultimate safe haven.
This leads to gold trading still at record levels, not so much in dollars, but in euro!
Gold ticked 1,060 euro per oz in the recent days, barely 10 euro
below the all-time high for the price of the yellow metal in Europe. For
us, it’s only a matter of time to see gold trading at new records in
the EU.
If we take our EUR/USD assumptions of 1.3-to-1.35, with gold trading
sideways around $1,500/ounce, this works out to a Target Price range for
Gold from 1,110 to 1,150 euro per ounce. On top of that, we wouldn’t be
very surprised to see gold climb further in dollar terms, but not at
the recent pace: $1,650/ounce should be feasible in the coming months.
Again grabbing our Eurodollar assumptions, we are putting a TP of €1,250
per oz on gold: +20%!
Even with all the commotion for commodities in general, and
precious metals specifically, there are still profits to be made for
alert investors. As for us, we’ll take a twenty percent profit anytime
in the current market environment!
Register for our Free Newsletter and follow us on Twitter.
- advertisements -
Mogul Rider,
I don't want to throw a wrench in your fan but the dollar and gold were pegged then.
I'm shorting Oligarchs in the aftermath of 2806.
The comments the last two weeks are a wonderful tell on the physchology of crowds. The pumpers were pumping, the fish were believin and some of us asked you to be careful. We were called trolls.
Ask your pumping geniuses what they should recommend next.
hmm, don't see too many pumpers here today
wonder why.
We're busy looking for best prices amongst the dealers for adding to our physical holdings.
What are you doing here?
Many of you are shorting gold you say because of deflation. Interesting. I would suggest you look up Homestake Mining stock price from 1930-1939 during the worst deflationary period this century, No it isn't the gold price but the extraction costs plummeted people. So before you short gold I would suggest you do your homework. Cause like your 49 dollar silver buy - you are gonna get killed again.
BTW, some of you shorting were supposedly long long long silver and gold.
Are you saying then that you were full of shit?
Just asking
You are shorting using an ETF as well most likely. Which leads me to ask. Do you even have physical? My suspicions are you again are full of shit pumping trolls.
Busted!
Homestead Mining is quoted often in the scenario you put forth. I'm not here to argue the small stuff, but the situation then was that gold was not an asset available to those who wanted it. Owning the miners was a natural and easy way to "own gold" without breaking the law. Today, those who want to own gold can just go out and buy it. This could very well be the reason that the miners are not "acting right" in what would normally be considered a market where they would advance. The miners should benefit from the rise in gold price, of course, but they are not likely to replicate the huge returns they did when gold was illegal to own.
Many different markets and time frames occuring simultaneously.
There are those long and those short.
Right now you see a rotation out of commodities into something else to chase return, churning and HFT algorithm shuffling unhinged from human choice making.
These aren't really markets, they are data points being chased by trading programs.
Reality is secondary to the binary database swirling and gyrating like a coiled wormhole in the ether.
Waves of chaos that swallow up lives.
When the real collapse comes, there will be a value placed on physical goods not seen since the turn of the last century, or before.
Chairs will be highly valued.
still, its interesting how gold in most currencies hasnt moved that much lately, its just the USD that has moved, moving the price in USD. I would imagine the same to happen in this correction to hopefully 1350..
rsi,
Yeah, at $1350.00, that means you can buy it(if you can find any) at $1400.00................
A $100.00 is a $100.00 bucks.
*
It is always worrying when someone writes that they see 'little to no' downside in the price of any asset. Not that gold in the long run isn't a great bet.
Just tell yourself 'everything is securized' as much as you need before pouncing on.
Brainwash makes everything possible. In your mind.
I'm already short gold. That makes 2 of us. Everyone on the planet is long gold/raging inflation upon us.
Obviously, the large money to be made is short gold and long raging deflation.
Yeah you were pumping 49 buck silver two weeks ago as well. get lost 1 ounce wonder
With black swans circling, that makes two of you who are likely to be decorated with shit. Good luck.
ok, im shorting gold heavily now.
It only costs $5 to dig an ounce of gold outta MethMan's ass!!