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The One Line to Watch For Where Gold is Heading
Since 2011, the Fed and other global Central Banks have injected over $2 trillion into the financial system. They’ve also announced plans to continue pumping money ad infinitum.
And yet for the period from 2011 until two weeks ago Gold, the inflation hedge of choice for investors, hasn’t done much of anything.
Why is this?
Part of it has to do with simple sentiment. Gold was overextended in 2011, stretched far away from its primary trendline:
On top of this, investors had gone too carried away on expectations of more Fed liquidity. QE 2, which was announced November 2010, was a mere $600 billion (not much compared to the Fed’s current programs which will extend forever). But yet Gold rose like a rocket ship starting in August when the Fed first hinted at QE 2.
Which brings us to today. This excessive enthusiasm needed to cool and Gold has done just that for the last two years. Then the Gold Crash happened and were right back at the long-term trendline.
The is the key area to watch. If Gold continues to correct, then we could go to $1200. But Gold should hold up here as ong as the long-term trendline remains intact.
We’ll have to see. But reports of incredible demand for the precious metal are ubiquitous.
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Best Regards,
Graham Summers
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Housten, there's a problem with your trendline.
You might get "this weeks special gold comment" spot on CNBC with this tripe.
Quick, turn around, there's smoke emanating......
Exactly. Who cares? I hope it goes down to 100.00 per troy paper oz.
Paper contract price and physical prices have officially decoupled and the PM private market has been setting it's own prices. What the market can bear. That's great news.
PM phyzz holders are in the drivers seat now.
Drivers seat, huh? I thought more like "the very back end of the bus" and stuff, but else you are correct ...
This waste of space article unbefitting of Z/H has All the hallmarks of JPM/Goldman Speak, Heads i win and Tails you lose. Darn!
But Gold should hold up here as ong as the long-term trendline remains intact...
I am sure you are serious guys Phoenix, but that is the old newsletter writer scam, the market will go up, but don't be surprised if there is a sharp correction along the way...old trick...
can't be wrong...
so, if you can say what AND when, you are telling someone to short AMZN in Jan 1999 at 100 and said you were right when it went to 8...
via 180...
LT
or was that yahoo?...?
EPIC charting fail. Linear chart with linear support line.
Useless.
Gentlemen, It seems this story is using the [standard] comex gold values as a reference..... while that may have been a valid reference in the past, today it is a very not-so-reliable manipulated paper reference. In other words, the number comex puts out means nothing... NOTHING !!! The comex is the most abused paper manipulated reference next to the LIBOR ??? It is as reliable as the B[L]S numbers put out by uncle Sam.....
Summary: If gold goes below this arbitrary line I have drawn on the price chart, then it may go down much further. Otherwise it might not.
Brilliant! But if this guy is such a whiz, where is his post warning me to sell before the recent dip?
He's got no answers, just wants to take your money with his "investment" letter
+
Notice how NONE of these 'tech chart' douchebags made a useful call about 'the impending gold crash' 6 or even 9 months ago, which if their supposed skills at reading charts were worth a fucknugget's amount of good they should have been able to telegraph with ease. They didn't because they, like most other supposed paid shills, suck at explaining what's really happening in the markets.
Not a single chart douche ever mentions the President's working Group on Financial Markets (plunge protection team) because the mere existence of that shitfuck Cartel proves that we're in a command economy where ALL charts are suspect. Charts only matter in free markets, not rigged casinos for inbred, cocksucking blue blood fucktards marketed to actual productive members of society as 'investment havens.'
Wake me up when they draw a chart of my Stacker Foot going right up their Keynesian douchebag assholes...
where can i buy a fucknugget from?
+1 for nicely modulated tone & restraint.
guns gold grub +
Jeeeze - tell us how you REALLY feel....
Hanging on to my paper shorts. Train going south.... Get on.
What good are ''trends'' in a manipulate markets?
This B.S. paper gold game goes on til it blows up. Trend that.
reports of incredible demand for the precious metal are ubiquitous.
Buying now sounds like great bottom fishing and a good contrarian play! Let the circle jerk continue.
Waiting for another FD so I can buy it!
How does performance from mid-2005 to mid-2009 establish a primary trendline? You can draw a line from 2001 (recent bottom) through 2005 and based on that trendline say that gold could fall to $800. But first, why did gold increase 50% from 2001 to 2005, then almost double from 2005 through 2009, then double again from 2009 to 2011, only to lose better than 20% frm 2011 to now? Which is the real trend?
Maybe the paper price has artificially kept gold to expensive, instead of the opposite. Maybe the reason that so many people/investors own little or no gold is because, to them, gold has value but has not been as good a buy as whatever else they spent their money on. Maybe keeping paper price high is to keep gold out of the hands of the muppets.
We now see the damand for gold when it goes on "sale." So, there doesn't seem to be anything but price that reduces the public's apatite for gold. I'd like to see gold one day be at least 5% of the value of the average portfolio. But I think it's better for gold to increase in popularity because of the perception of value than to get there out of panicked buying during a bubble.
One sees those calculations predicting gold prices. I think that historically, gold has been at 2% of a typical portfolio (e.g. CALPERS). I think it might be down near 0.1% - very unsure there, but it is very low relative to norms.. I can't recall too well, but if it goes back to 2%, people like Sprott are talking $10K gold. If it should go to 5%, Katy bar the door.
It might go to 5%, but that could be because the stocks and bonds crash and gold has its 40 year visit to Dow/gold = 1. Dow at 6,000 and gold at same????? It isn't that far fetched, is it?
Well, unfortunately, with paper gold there's a lot more "gold" to invest in. Still, Sprott is right in that the cost of physical, if everyone held 2% of their portfilios in gold, would be very high. I suppose at that price, gold would have moved out of the weak hands into the strong, putting gold out of reach of most people aside from jewelry. So perhaps even 1% is not attainable for long.
I guess my point is that when the gold price train backs up to get the investors it left several years ago, it pulls away with more gold investors than before because the upside looks better knowing $1900 has been attained. Each time gold reaches new records and then falls back, more people will begin stacking at "sale" prices. The broader the investing base, the more stable the price and more steady the price rises.
US debt has gone from $370 Billion(1970, before the end of gold conversion) to $16,000 Trillion. Over 43 times. Gold has moved from $35 to $1425. 41 times. Anything below $1500 is a good buy. No other metal has kept pace. Silver was $1.55 to $23. Platinum was $115 to $1450.
When things break (anyone doubt that they will?) the 'price' of gold won't matter one bit.
What will matter is - do you have gold & silver, or don't you?
If you can answer 'yes' you will do better than if you answer 'no'
Not that hard, really.
Well yeah, but there's one more thing. The price of gold won't matter one bit when the same people who said "Gold is a barbarous relic, completely useless with no intrinsic value and you're stupid for holding it" suddenly reach out with the government gun and say "In the name of the National Defense Resources Preparedness Executive Order, hand it over, chump."
So here's the important question: Do you have a canoe with a small door in the bottom?
If you can answer yes, you will do better than if you don't see any reason for a door in the bottom of your canoe.
I'd love to see $1200 gold. There would be nothing left.
there is already nothing left.
Hey Graham, I just checked this thread because it had gold as a topic. Your commentary is as riveting and insightful as the last one I read; a piece out of several that you insisted the end of QE was here. At least Simon Black is humourous.
Insatiable demand for physical from the east will keep the floor at $1400
Is there any difference between "But Gold should hold up here as (l)ong as the long-term trendline remains intact." and "But gold should hold up here as long as gold holds up here" ?
Maybe we should say 'the only thing that is likely to stand up is gold.'
"stretched far away from its primary trendline"
Uh....about those primary trendlines. Show me ten certified market technicians and I'll show you ten different primary trendlines. They're drawn arbitrarily. What do they really mean? If CMT's could actually tell you what the market was going to do, that's all any one would use: technical analysis. No need for fundamentals or hemlines or sentiment indicators or the Hulbert Goldbug Newsletter Bullish Percent Indicator Thingy.
And, like contrary analysis, when enough people use it, it stops working altogether because it's not contrary anymore. Trendlines are a sort of Observer Effect: Everyone watching to see if the trendline is violated is going to have an effect on the chart itself. If no one watched the chart, they wouldn't be using this or that inflection point for a stop-loss trigger: "Oh no! OH NO! Gold just violated the critical $1540 level! SELL! SELL!"
And then everyone says "What happened? Why did everyone sell when gold fell below $1540?"
You might just as well redraw that gold chart with a median line instead of a trendline. Then you could say, "Look, gold is already well below its primary median and due to revert to the mean."
Or you could just say, "Who knows what the Fed will do next?"
Hey!!! Tht chart looks just like the Case-Shiller housing chart. Since the government stepped in to keep housing from crashing below trend so that we would have no mean reversion, doesn't equity - and we are a society soooooo concerned with equality - demand that the Fed step in and prop up gold? I mean...the Fed is buying all of those worthless MBS at par. So it should do what....maybe buy all of those gold leases from itself to the bullion banks? It is never going to see that gold back. So why not just strike that gold off the balance sheet. That would also get rid of that nasty accounting fraud where they book leases as promp assets instead of recievables along with the gold in possession - if there is any. Upset the balance sheet you say???? How can the Fed be insolvent? It can always print more. Just wait until interest rates bump up a point if you want to see global central bank insolvency.
Come to think of it, the Fed should want to see gold higher as it would be good for its balance sheet. But then the bullion banks would get hosed. We couldn't have that. We all know the Fed;s triune mandate - in order of decreasing importance: 1) protect the bullion banks, 2) stable money, and 3) full employment. Number (2) having no importance at all, and number (3) immaterial since there is nothing the Fed can do to affect that - just another figment of JM Keynes' distorted mind..
Worst. Analysis. Ever.
Agreed, total fucking bullshit.
Worst. Analysis. Ever
Agreed
Any technical analysis on a manipulated market is BS.
ah, the root scro, well played sir
LT
Gold is a poor inflation hedge although it has some predictive power 12-18 months in advance. Its a hyperinflation and systemic collapse hedge. You either believe the system is working and safe or you don't. I don't.
I sew it into the hems of my garments as a hedge against Janet Napalitano and those big black SUVs we saw all over Boston. Also as a hedge against Jeb Bush running for president - and I tend to go Republican.
Not Sport Utility Vehicles---those were MRAPs belonging to "Boston Police S.W.A.T." Why do so many police departments need Mine-Resistant Ambush-Protected juggernauts to keep the peace in town? With 20 guys in full tactical gear hanging all over them? What use were they in hunting down the Tsarnaev bros?
None. The cops shot one and the other was found by a homeowner in a boat in his back yard. AFTER Boston spent how many millions on Giant Armored Boondoggles to intimidate the law abiding citizens when the SHTF.
You are agreeing with me then. I see (per Denninger) that Los Angeles just got done paying some $4 million to those two poor petite women in the wrong color vehicle who were mistaken for the big black rogue policeman who eventually went into the mountains and died in the cabin fire. Those cops fired 20 (?) rounds and couldn't even hit those women - thank goodness.
Those cops scare the daylights out of me. I don't think that gold in my garments will stop any bullets. Too bad. I mean...this is Vienna circa 1937, isn't it?
Agreeing with you? Not me! I like drones, and, and, MRAPs and the Fed and paper money. I especially love the Utah Data Center!
saw the Jazz there, no wait, what?...
advice is to sprinkle the key words in all communications,
like...
well, dude, trust Allah but tie your camel...
give them something to do in other words...
LT
I see your point. How 'bout: "Alex Jones thinks he's Allah but he Drones on and on and comes up with these Explosive and Inflammatory Charges that usually Bomb because they have no real Detonator. Hi, there Utah Spooks! May you find horse meat in your taboolah!"
With the squids announcement of closing its short, I have decided to delay any tentative purchase decision for either another or one last cleanout on paper contracts. How low can it go? Apparently as low as they are willing to push it with electronic money deposited in electronic accounts regulated by shills answering to the best government money can buy.
Or not, we'll have to see.
Thanks for the insight.
Time for a little venting. WTF is he calling a trendline? Becuase if I use pretty much any mathematical fitting program I've learned since fucking 1979 that line he shows would fit not one fucking bit. To the best approximation gold should be about $100 higher just eyeballing the data.
What the fucking data suggests is that there is a component that is totally variable within the data set, meaning either emotional or contrived by the powers that be. Think of it like Asshole Al Gore's hockey stick model, shit doesn't change like the drop in gold without a completely independent event. Given that, there is NO FUCKING TRENDLINE.
Thank you.
Yeah, funny that's the first thing I noticed as well.
Trend line WTF ?
one man's trend line is another man's dessert...
LT