Gold Set to Return to Run of Records Next Year - Chart of the Day

GoldCore's picture


Gold fell $3.10 or 0.18% in New York yesterday and closed at $1,693.60/oz. Silver climbed to $33.24 then slid to $32.51, but finished after an afternoon rally with a loss of 0.33%.

Gold inched down on Thursday, near the monthly low reached in the prior session under pressure from a stronger greenback as players await the European Central Bank rate decision at 1245 GMT and US Initial Jobless Claims at 1330 GMT.

Physical buying of gold bullion has increased on the dip, particularly in Asia, and many are seeing these levels as a floor for prices.

The massive consolidation seen in the last 16 months means that gold and silver are now right on their long term moving averages (See charts showing 100, 200 and 365 daily moving averages) 

Gold will revisit its record breaking form of the past four years in 2013 after gains were tempered this year by reduced jewelry demand.

Bloomberg Chart of the Day – Gold Poised For 12th Consecutive Gain

Bloomberg's 'CHART OF THE DAY' shows gold climbed to records every year since 2008 until this year, with the all-time high still the $1,921.15 an ounce set in September 2011. 

Gold has consolidated on previous years gains this year and has risen another 8.2% so far in 2012. 

Gold bullion will average a record $1,925 in the fourth quarter next year, the median of 16 analyst estimates compiled by Bloomberg last month show. This would be a return of 13% in 2013.

The Federal Reserve said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015.

Gold rose 70% as the Fed bought $2.3 trillion of debt in two rounds of monetary easing from December 2008 through June 2011. The Bank of Japan and the European Central Bank have pledged more action and China has approved a $158 billion subways-to-roads construction plan.

European peoples struggle while their governments rack up huge debts and then force unbearable austerity measures on them, as they continue to cheapen the value of the single currency’s purchasing power. With little to no extra cash to spend consumers can’t organically put extra money in their struggling economies.  

In nearly the 4th year of the European debt crisis, it doesn’t take a rocket scientist to figure out that the current policies are not working. People are beginning to look at gold and silver as safer stores of value than paper and electronic currencies.  

Gold Spot $/oz, 2007-2012 – (Bloomberg)

Gold bullion is becoming many central banks safe haven again and it will again become the public’s safe haven of choice in the coming years.

Investors, hedge funds and institutions boosted assets in gold-backed exchange-traded products to a record this year, holding more than the official reserves of every nation except the U.S. and Germany. Investors held a record 2,627 metric tons in gold ETPs on December 4, data compiled by Bloomberg show.

Gold jewelry demand slumped 9.8% in the first nine months this year, World Gold Council data show.

Importantly, gold has yet to exceed previous records when adjusted for inflation, with its 1980 peak of $850 equal to $2,398 today, data compiled by the Federal Reserve Bank of Minneapolis show. 

This puts gold rise in price in recent years in context.

Silver To Outperform Gold In 2013 – Morgan Stanley
Gold and silver remain Morgan Stanley’s ‘top picks’ for 2013. Morgan Stanley maintains its long standing recommendation to be overweight precious metals, analysts including Peter Richardson write in a report according to Bloomberg.

Morgan Stanley said the yellow metal may average $1,853/oz in 2013 – for a return of 9.5%.

Silver Spot $/oz, 2007-2012 – (Bloomberg)

Gold investment demand will remain strong against weaker USD, low real interest rates, central bank buying, enhanced geopolitical uncertainty.

Silver more volatile but cheaper safe-haven play than gold; expect silver to outperform gold in 2013.

Gold inches down; lower prices lure physical buyers - Reuters

Gold Holds Near One-Month Low Amid Record Holdings, Dollar Gains
- Bloomberg

Morgan Stanley Backs Gold, Silver, Beans as Best Picks in 2013
 – Business Week

South Korea central bank bought 14 tonnes of gold in Nov
 - Reuters

Goldman Sachs Call Ridiculous, Gold Ready To Rocket – King World News

BBC's 'Panorama' Killed Report Exposing Silver Market Manipulation
 – Max Keiser

Why Gold Prices Will Soar After the FOMC Meeting
 – Resource Investor

A Millisecond Analysis Of The Latest Gold Smackdown
 – Zero Hedge

For breaking news and commentary on financial markets and gold, follow us on Twitter.

Cross Currency Table – (Bloomberg)

Join David Morgan, publisher of the Morgan Report and a recognised expert and global authority on silver and Mark O’Byrne, Head of Research and Founder at GoldCore.
In this 60-minute webinar, discover:
*  The Outlook for Silver in 2013 And Coming Years
*  Silver Seasonality - When To Buy
*  The Safest Way To Own Silver 
Join us for a webinar on 12/12/12 at 1900 GMT.


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Likstane's picture

Seeking Alpha?

I'd rather listen to Bob Costas talking with Grahm Summers about QE 3


Caracalla's picture

Seeking Alpha's top article tonight recommends shorting gold now 

catacl1sm's picture

When do we get negative yield T-bills?

orangegeek's picture

Gold priced in US Dollars topped around the same time as the US Dollar bottomed in 2011.


For the US Dollar to fall, the Euro must rise (negative weighting).


The US Dollar has been rising lately.  And gold has been falling at the same time.

Westcoastliberal's picture

Hey Tyler,

This is big! Do you guys know about this?  Sounds like confirmation on what you guys have been saying for years:

CFTC Charges Hunter Wise Commodities, Lloyds Commodities, C.D. Hopkins Financial, United States Capital Trust, Newbridge Alliance, Blackstone Metals Group, and their Principals in Multi-Million Dollar Fraudulent Precious Metals Scheme CFTC alleges that defendants conducted illegal, off-exchange commodity transactions, and deceived customers in connection with financed transactions in precious metals

According to the CFTC complaint, the defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.

The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions, according to the complaint. Defendants allegedly do not own or sell metals to customers; customers are charged storage and insurance fees on metals that do not exist; and are charged interest on loans, which are never made by the defendants


BigDuke6's picture

Bernanke and the London tribe have printed billions...

and here we are wondering where gold is heading.

the miners are doing shit because they are hedged at prices predicting $1400 for the next 2 years.

How the fuck did they get away with it?

Apart from the fact they own the media.

Peter Pan's picture

I am not concerned about gold's future record. It's the record of government and fiat money that constitutes the major concern.

shovelhead's picture

It matters not what prices do short term because we all know that this market is a puppet show.

What matters is your paper is constantly being devalued whether the PM prices reflect that fact or not.

Remember, PM's stand still, it's the paper dollars that pile up around them because they can't print gold that sits in your hand.

If they could they would.  The Comex and LBMA will eventually prove this fact when they can't make delivery one of these days.


Zap is right. It's a hedge against Bernanke and the Govt. Inc.

These guys are monkeys tossing nitroglycerin back and forth and the odds of the monkeyshines turning out well are slim to none from where I'm standing.


Zap Powerz's picture

There are lots of conflicting arguements for and against gold as an investment on this tread.

I own some precious metal.  It is all junk silver.  I dont own it as an investment.  I own it as insurance in the case of a currency collapse (a very distinct possibility you must admit).  Its pretty ease to use silver dimes, quaters and half dollars as a medium of exchange because they are already in small, stadardized sizes.  I would hate to have to buy some fuel and the only "money" I had was a gold eagle.

To me, my junk silver is like health insurance.  I pay for it and I hope I never ever have to use it.  But if I do have to use it, Im going to be really glad I have it.

If I never use it, I will will it to my kids and they can do with it whatever they want to.

That is my two silver dimes worth.

klockwerks's picture

Best explaination I have heard, simple, to the point and just good old common sense. Insurance and I'm glad I have and if I croak, which at my age could happen sooner then later, my 7 grankids will have something to remember from their funny grandpa. Since I never throw anything away, depression lesson from my grandpa, the silver will be payment for them to clean up my mess.

SmittyinLA's picture

Gold is static, zero appreciation ever.

I've never seen a 1oz gold coin grow into 2oz not even over a billion years. 

There are far better investments.

Gold is for 3rd worlders, they're like phish, they like shiny objects. 

If you have gold sell and buy something useful that earns a return, sell the gold, buy the mine if you must.

Mr Lennon Hendrix's picture

The dollar is static, zero appreciation ever.

I've never seen a 1 dollar bill grow into $2 not even over a billion years. 

There are far better investments.

Dollars are for 3rd worlders, they're like phish, they like American objects. 

If you have dollars sell and buy something useful that earns a return, sell the dollar, buy the game Monopoly if you must.

catacl1sm's picture

I wish I could +1 you multiple times. That was epic.

geno-econ's picture

Please explain why FCX is diversifying out of future copper and gold production and instead into oil and gas production . The stock has been hit hard in last two days as a result.  Point is why should we be bullish on gold when a large pruducer sees limited growth prospects and bet the farm on other more volitale businesses ?

lakecity55's picture

Hey, we no stack paper at ZH, Comrades!



steve from virginia's picture


Is gold a commodity, it is a collectible or is it something else?


Chart-based analysis treats gold like a commodity such as wheat or crude oil. There are typical market analysis tools to indicate what the price action in commodities will be, for instance a calendar is useful to forcast the price of ag commodities b/c grain harvests usually take place in the fall and the grain futures' prices decline accordingly.


To look at gold as a commodity compared to crude oil one must compare the end-users of each good. People who buy crude products have modest means, their cars are likely to be their only luxuries. When fuel prices are high, end users buy less gas and the price declines as a result. Asset managers who speculate in crude to anticipate higher prices lose money because their customers cannot meet the price.


However, gold buyers tend to be wealthy who are encouraged by high prices. If crude prices were to rise to $500 per barrel there would be no customers for crude and the price would immediately crash along with the economy. If gold prices were to rise to $10,000 there would be increased demand for gold and a market looking for still higher prices. The non-gold economy would be unaffected b/c gold is a good for the wealthy only and would be more so if the price increased dramatically. This dynamic makes gold more like a collectible. High prices for Picassos or Manhattan apartments do not adversely effect the greater economy.


Like crude, gold supply is limited by geology and the increasing costs to obtain it. There is an scarcity premium attached to gold, this is also the case with collectibles. There aren't enough penthouses in high-end Manhattan buildings to keep up with demand for them so that the few that appear on the market are bid up.


A better commodity argument would have a general economic decline effecting the gold price along with those of other finance assets such as equities. This was so in 2008 however, the worth of gold was greater compared to other assets.


Best to keep the charts in perspective and consider gold as in the same category as Jackson Pollocks. It -- and the Pollocks -- might decline in price but unlike AAPL will never be completely worthless

Panafrican Funktron Robot's picture

It's a solid argument, they don't call them "precious metals" because they're easy to get or commonplace.  What I would suggest is that gold is actually even more valuable than a collectible, however, because it also does have commodity value, ie., there are genuine practical uses for gold as an industrial material.  In addition, it does have a current function as a currency (and the oldest still-utilized currency in human history), which adds value to it as well. 

Joebloinvestor's picture

I see a crashing (deliberate) of the paper gold market before any solution.


ilovefreedom's picture

Everything to do with Apple this week has to do with the potential increase in capital gains tax and nothing to do with the fundamentals of Apple as a company.

Gold has everything to do with the dollar as it pertains to the value of the EURO and the value of the Euro as it pertains to the economic challenges they currently face.

Your analysis is very superficial and narrow.

mrktwtch2's picture

your forgot the implosion of the euro next ya and the strengthing dollar will send gold under 1200 or more..

klockwerks's picture

Man I sure hope so as then I will be able to afford it. All I have now is silver but if this whole mess goes up in flames where will gold go then. It's coming!

DavosSherman's picture

Don't let ilene see this.

Orly's picture

So the gist is that since gold did not make a new high in 2012, it must be going to happen in 2013.  And that would be because jewelry demand will pick up dramatically, even though people of the world are not getting any richer by any stretch.

Hmmm.  Okay.  I guess we could actually say the same thing about Apple.  The stock is tanking but there will be more demand for the iPhone 7 next year.

As a chartist-type person, it just looks like to me that gold is rolling over here in a major fashion.  The price of gold on 01 January 2014 will be the same price as it was on 30 January 2011.

Keep spinning your wheels.


TraderTimm's picture

Since inTrade shuttered US bettors, how about making a bet on gold with BTC?

"Gold will surpass $1800/oz at any point on or before December 31, 2012"

Current standing (BTC @ 13.28) - Yes: $832.52 / No: $2,822.26

Not the only one there, but has a good amount put in.


Mr Lennon Hendrix's picture

One of the most interesting thing about self proclaimed "chartists" is that they say they are strictly true to the charts, but when you look at the traders philosphy it is not the case.  Each trader imagines the world in such a way and use the charts to support their philospohies. 

If I were a dollar bull I could look at the chart and draw lines of support to show how the dollar will stay up.  Then I could draw lines on the euro to show how it will fall through support to new lows.  I could do the same with gold.  I could show that the recent highs were not as high as the all time high and that means it is falling further.  Imagine if the 50mda breaks the 200 mda, then for sure it will keep falling.

But the fact of the matter is, as solid as charting can be, it pales in comparison to fundamentals.  Let's examine some of the underlying fundamentals:

All Central Banks are printing currency ad infinum.  All Treasuries are issuing debt ad infinum.  Basically the global financial system is leveraged higher than any time before.

Let us not assume we know if this will end in deflation or inflation as we know it, but let's assume that if deflation happens the Central Banks continue printing.  This will continue to debase the currency while stocks fall.  When assets crashed in the fall of '08 gold bottomed then and stocks bottomed in the spring of '09.  So gold wins during deflation as the best asset.

Now let's examine inflation rises.  Then rates would need to rise.  During the 70's, when rates were rising and inflation was high, gold rose too.  Gold outpaced all assets then and rates had to get to an all time high to bring the price down.

So based on fundamentals gold is by far and away the best investment to have long term.  Now that we know that we can begin to examine the charts:

When I look at gold's chart I see a great bottom near $1550.  I see over a year of consolidation and a formed base.  I see that it created a golden cross last summer and that it is holding its recent gains nicely.  How high will it go?  Well it will surely test the old high soon.  If it tests the old high and deflation doesn't set in then it should go much higher.  Then if rates rise it will go much much higher.

If deflation sets in then gold is the best asset to own.  Yet if deflation sets in then the science known as economics will be seen as non performing.  This will turn finance on its head.  This would be a dangerous situation that I don't think any of us can fathom the outcome of a debate about the soundness of a study at Major Universities across the globe.

RockyRacoon's picture

Love ya, Orly, but you are contorting to make correlations where there are none.   Apple and Gold ?  Really?

The TA is very useful in normal markets.  Need I point out that these are manipulated markets?  Forgive me, but it appears that you are massaging the phantoms you see in the charts to fit your own Weltanschauung.  It just won't work, and you'll be the most surprised one of the bunch.

Imminent Crucible's picture

Orly didn't read the article. The gist is not "Gold didn't set a new high this year, so it will next year." The gist of the article is "current [central bank] policies are not working. People are beginning to look at gold and silver as safer stores of value than paper and electronic currencies."

For nearly all of recorded history, until 1971 people everywhere "knew" that gold and silver were money. It's only in the last 40 years that people have been conditioned to "know" that rag paper with ink on it is money. The US dollar; backed by the full faith and credit of the Federal Reserve Corp. The Euro: backed by the likelihood that Europe will last more than a decade or two without falling back into war.

The old "knowing" was based on the fact that gold and silver are scarce, inert and beautiful. Pictures of Ulysses Grant and Ben Franklin, not quite so much.

The more recent "knowing" is based on the fact that the biggest bunch of charlatans, thieves and frauds in history have told us that paper is money, "because we said so."

Pretty much blasts a hole in the theory that people are evolving into smarter and more sensible beings. 

FrankDrakman's picture

As a chartist-type person, it just looks like to me that gold is rolling over here in a major fashion

You mean, just as it did in 2008, when it went from $1,000 in January to $700 in June?

You would have been an absolute fool to buy anytime in 2008.

EnslavethechildrenforBen's picture

Let's see. If you bought it under $1000, and it's worth almost twice that now, I'd say you nearly doubled your money.

Now who is the fool?

Fucking MORON

LawsofPhysics's picture

Indeed.  I guess strange things will be bound to happen as the paper world contines to decouple from the physical world in the absence of any rule of laws and contracts.  Interesting times indeed.  Any predictions on where treasury yeilds will be by 2014 Orly?

Panafrican Funktron Robot's picture

Sorry to go off on a bit of a tangent, but one story that kinda caught my eye was the recent Harvard test cheating scandal that is being dramatized via a TV special, I'm willing to bet they'll ignore the actual root cause, ie., that when our leaders lie and cheat, people (especially the more impressionable among us) tend to use that as an exemplar.  I tend to be more in the relativist camp when it comes to societal morality, but there are a few basic constructs that appear to be universal, with one of those being "truth telling", an extension of which is honoring contracts.  In other words, if you agree to do something and sign your name to it, and then you proceed not to do it, to me, that's lying.  When basic and necessary constructs of a society are routinely ignored or openly and flagrantly violated, society ceases to function, and we descend to what could functionally be described as anarchy.  I know this is 100% review for you LOP, and I may even have a good bit of this fucked up in my thinking, but the main point is that what you've been harping on here for a while now is both completely accurate and THE actual root cause of all the entailing bullshit.

philipat's picture

"Gold was lower in 2012 becuase of reduced jewellery demand"

IMHO it was much more likely due to huge naked paper shorting on the COMEX by the bullion banks with probable backing from the Fed because if Gold skyrockets, the Ponzi which is Fiat is exposed for what it is.


NotApplicable's picture

Ten year ought to be at zero by then, with the thrity right on its tail.

After all, there's a near infinite amount of debt to be rolled, and zero is the only way they can do it.

philipat's picture

And by that time The Fed will own ALL US Debt!!