GOLD should be completing a cyclical low in February

GOLD should be completing a cyclical low in February

Courtesy of David A. Banister

Over the past 5 calendar years we have seen GOLD either complete an intermediate cyclical top or bottom in each February. My forecast was for February of 2013 to be no different and for Gold and Silver to make trough lows this month.  With that said, I did not expect the drop in GOLD to go much below $1,620 per ounce at worst, but in fact it has. Where does that leave us now on the technical patterns and crowd behavioral views?

First let’s examine the last 5 years and you can see how I noted tops and bottoms in the chart below:

That brings us forward to todays $1,573 spot pricing and trying to determine where the next move will go. To help with that end, some of our work includes Elliott Wave Theory, along with fundamentals and traditional technical patterns. In this case, the recent action around Gold has been very difficult to ascertain, and I will be the first to admit as much. With that said, one pattern we can surmise is a rare pattern Elliott termed the “Double Three” pattern. Essentially you have two ABC type moves, and in the middle what is dubbed an “X” wave, which breaks up the ABC’s on each end of the pattern. For sure, if we add in traditional technical indicators along with sentiment, we can see very oversold levels coupled with the potential Double Three pattern and probably start getting long here for a trade back to the 1650’s as possible:

This chart shows oversold readings in the lower right corner using the CCI indicator. That said we would like to see 1550 hold on a weekly closing basis to remain optimistic for a strong rebound.

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Comments

[JOYFUL]

I bailed at 7th grade so I don't expect I can jump to your requested level of performance...but hey,

your real nasty schoolyard bully gets bored with simply bashing you in the head, time after time...he needs the thrill of new exciting ways to torture his victim...often he gets up to tricks like pretending he's your friend for a time, and let's you get all comfortable and relaxed...

then boom - it's a kick in the head, your down in the mud, and he's laughing his ass off!

That kinda stuff...I was just pointing out to our friend that it's a big ol ruthless world we live in, and the bullies what run it get up to all the same stuff as I used to watch on the TV with the cartoon villains...they're all quite mad!

You gotts have an eye! ...and no candy from strangers.

[A82EBA]

Ah, got it, thanks

[Quinvarius]

If I thought these markets were completely free, I'd tell you gold would be over 10k an ounce on Monday morning.

[JOYFUL]

Gold goin north and the $ heading the opposite direction can be taken as givens for this discussion...

what I'm talking about is the (very real) possibility of some new set of circumstances that accompany gold's rise to more 'natural' levels...or even accomodate that rise as part of a new strategy for defrauding investors...by negating or blunting the benefits.

Given what we already know of the love of head fakes and endless gaming on the part of these psychotic serial manipulators, there's every reason to believe that they are busy planning another chapter right now...

good case in point would be the suspicious lack of coverage of the latest G20-IMF conclave, beefing up the IMF fund's, and it's ability to act like a globalized US FED print house. SDR's could have a particulary nasty connotation for gold...if employed in the manner of their trial run way back when.

On October 3, 1969 the first SDRs were authorized to be allocated by the IMF. These were allocated over a three-year period every January in the years 70', 71', 72' totaling 9.5 billion USD.

The official US price of gold was equal to $35 dollars and thus one SDR was equivalent to 1/35 of an oz. of gold. Therefore 9.5 billion SDR equaled 271,428,571 ounces, roughly 8,442 metric tonnes. To give you a perspective, that is slightly above the official gold stock of the US today at 261 million ounces.

The total price drop between May of 1969 to January 1970 was $8.52. A whopping 20% drop in price. More unusual however, is that the average monthly price of gold in January and February of 1970 was BELOW the official price of gold set by the United States of $35 an ounce...David Walker - SDR's and the Gold Price. 

Times have changed, and the world is indeed a different place now, but these guys have a pattern of long-term planning and testing...their capacity for manipulations seems endless, and I see no reason to suppose we are safe from some newly refined version of their old tricks...adapted to inflict maximum pain.

I'm just as eager to see AU get back to it's natural value as the next guy - what I'm not eager to do is get fleeced in new and different ways! Quoting data which 'proves' a repeat of any given situation is a very tricky business given the criminal minds were are up against. We need to be actively thinking through scenarios of the kind which appeal to  their hegemonist fantasies of ultimate power!

[shovelhead]

I don't care what they do.

Hold fast and win by preserving value.

Real money always has an 'Official' price and what someone will trade for it. They could try a pointless unenforceable ban on gold/silver barter but that would only increase the value.

The way to win is to not to play.

[e-recep]

i know well about the impending hyperinflation but this annual up and down cycle specific for february claim is nonsense.

[shovelhead]

I dunno...

I looked for the month to month low/highs and bought 1000 0z. AG about $.50 off the June bottom last year. (jumped a day early).

Seems to be repeatable swings throughout the year. Worked pretty good for me.

Matters not... I'm adding some more if they want to beat down some.

@ $27 I'll even sell the boat to buy.

[Papasmurf]

The down markets in October crashes are nonsense too, but that's when most crashes have taken place.

http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

http://en.wikipedia.org/wiki/Black_Monday_%281987%29

http://en.wikipedia.org/wiki/October_27,_1997_mini-crash

http://en.wikipedia.org/wiki/Friday_the_13th_mini-crash

http://en.wikipedia.org/wiki/Stock_market_downturn_of_2002

http://en.wikipedia.org/wiki/United_States_bear_market_of_2007%E2%80%932009

http://en.wikipedia.org/wiki/Panic_of_1907

[hmmtellmemore]

Whatever.

[I need more cowbell]

Anyone who trades anything, paper gold included, in these completely manipulated, no, thats not strong enough, completely controlled markets, is insane or a gamblaholic. You stack phizz, period. Even the totally naive J6P gets this when I ask them.

Given the choice of having $10000 locked away in a safe for 10 years, with no access until then, what would you choose to put in the safe? Gold or dollars? I have yet to have anyone say dollars, even folks completely in the Matrix without clue one.

[fijisailor]

Sure they'd rather have $10000 tucked away but the huge majority can not hold on to $10k no matter what form it is in.  Therefore they need the nanny state to drag them into some sort of retirement system.

[Dr. Sandi]

Now, if the Nanny just wasn't pissing away my $10K on magic beans and T Notes, I'd be a much happier sheeple.

[francis_sawyer]

You can even make it more poignant

~~~

Over 8 years how much do they pay [per month] for their smart phone service... It varies ~ but $100/mo. is not unusual for many... In a little over 8 years, they'd have pissed away $10,000 on monthly service ALONE... They'd have probably reached the $10,000 figure within 6 years if they were constantly upgrading to the newest gadget...

So ask them to look back at what their phone service meant to them over that time [& if all those 'OMG' messages were worth it]... The AVERAGE price of Au during that time was between $600 - $1,800 an ounce... Probably could be sitting with 8 or so oz in their pocket...

ZOMG! LULZ! 

[GMadScientist]

I do the same math, but I look at how many dollars people burn up in their SUVs over 10 years.

25 bucks a tank wasted (given that their gas mileage is half what sane vehicles achieve)...times 52 weeks a year...times 10 years...21 ounces!

[thisandthat]

Add cable tv/internet/triple play to that - most people never even once watched most channels they're paying for, and even downloading like a maniac you don't need more than a few Mb/sec. You could save 3/4 figures/year with just a basic internet plan and free satellite/free to air/no tv at all.

[Room 101]

+1 Excellent post.

[Rustysilver]

Francis,

Please STOP making sense.

[El Oregonian]

It really doesn't matter what the charts signify because the Metals are manipulated as well as anything else these bastards want to manipulate and control. IF, and I do mean IF, you want to screw them then do it by taking posession. Paper manipulation would disappear and the vampires would be exposed to sunlight and POOF, they'd crumple into a pile of ash.

You've got the power, now weld it!

[akak]

Hear hear!

I never cease to be amazed at the insane amounts of money that most consumerist sheep simply MUST spend for their latest keep-up-with-the-mindless-Jones' "must have" e-gadget, in order to fill their empty lives with equally empty drivel and neurotic, nonstop jabber.

[GMadScientist]

They feel the same way about your penchant for collecting guns and ammo.

[akak]

When did I ever say that I owned a gun?

I think you are, once again, making assumptions and presuming too much.

[shovelhead]

I don't have a cell phone...

They have to let me out of my cell to call my lawyer.

[GMadScientist]

I'd get a better lawyer.