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Is The Low In Place For Gold?
Citi's FX Technicals group is biased to believe that the low in this correction may have been posted for Gold. Here's why...
Via Citi FX Technicals,
Gold
Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.
The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.
Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare.
The above note is probably a close representation of consensus market view at the moment, except that it is taken from an article in the… New York Times, 29 August 1976 (3 days after the corrective low had been posted in 1975-1976 before Gold started a 3 year rally into late 1979/early 1980)
Long-term Gold Chart
Between 1973 and 1974 the DJIA fell 45%. As the Equity market then recovered Gold went into a corrective phase within 3 months that saw it fall 445 as the Equity market rallied.
This time around gold has in fact been much more resilient.
– It did not peak until Sept 2011 ( 2 ½ years after the Equity market bottomed out)
– It has so far corrected 39% with an Equity market that has rallied 140% off the March 2009 low (DJIA). In 1975-1976 it corrected 44% as the equity market rallied 76%
In 1976 the Gold correction ended in August and the Equity market began a deep correction in September (27% over 18 months). During that period Gold rallied by about 78% and over the 1976-1980 period it multiplied in value by a factor of 8 from just over $100 to over $800. The final part of that rally saw Gold rise from about $470 to $850 over about 4 weeks on the back of the USSR invasion of Afghanistan. Even without that move it still multiplied by about 4.5 times in just over 3 years.
So what are we looking at to increase the likelihood of the “low being in”?
In addition daily momentum is turning up from more oversold levels than those seen before the $270 bounce in 2012. On a daily chart this is the most oversold we have seen since the turn higher in Gold in 2001.
In addition it has become very stretched to the 55 and 200 day moving averages which now have a big gap between them
An important thing to note is that Gold broke its support level the same week as the S&P broke above its 2007 high. As long as the equity market stays resilient (As we saw in 1975-1976) it may be a drag on Gold’s ability to rally substantially. In the 1980-2000 period when financial assets were aggressively rallying, Gold took a back seat. We may need the market to be more concerned about the financial/economic backdrop before Gold can get any real traction again.
The pattern into the low on Gold also reminds us of how the S&P set its low in March 2009
Once the first impulsive low at 741 was regained by the S&P it never revisited it.
A close above $1,322 on Gold, if seen, would look similar
In 1976 the move lower in Gold overshot the 55 month moving average by about 14%
A similar move this time would equate to about $1,185 compared to a low so far of $1,181
The 55 month moving average stands at $1,379
The 200 week moving average stands at $1,459
IF and when we start to overcome these levels from $1,322 to $1,459 our conviction of a bottom being in place will grow. While we remain below these levels (especially if the Equity market continues to remain robust) we cannot rule out the danger that we could get another move lower.
In that respect we would remain focused on the 1975-1976 correction which if replicated could suggest as low as $1,075
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Thanks LC55, I've heard it's awful cold there. Happy I could help in some small measure. Also stumbled across this little beauty. Deliveries are required in 30 days or you MUST be given the option to cancel your order and have a full refund. I think I may take this route and do business elsewhere.
http://business.ftc.gov/documents/bus02-business-guide-mail-and-telephon...
Hey, besides my local guy, I have had no problems with Provident, APMEX, or Silvertowne. Local guy is ANA, I remember when he started his business. Great reputation.
That's just my experience; others my differ.
I hope you get to burn those Tulving dudes.
Just want my money back now as the law states. I'll continue to spread my experience with his company. Time will do the rest.
WTF...!!!!!
Charts...???????
Charts...?
Gold is going to do what the USSA Fed and the USSA Treasury say so.
Folks, I'm very much a gold bug, but I think it is going lower for one obvious reason-- we have not had a big bang like Bear or Lehman yet. Big bang, margin calls, selling of assets, deflation, then the bottom is in. From there, the moon, because of consolidation, shortages of energy and real failures in the supply chains for all commodities.
I'm holding.
speak for yourself
Thats what Im afraid of. But I've been wrong more often in the last couple of years than Jimmy Rogers.
Going lower as measured in fiat-wages isn't necessarily a bad thing. Holders of physical aren't panicking, paper traders are.
Yeah, but the question is: will there be any supply left to buy when tshtf or will Americans even be able to withdraw cash? If you're holding cash, your prospects might be good. That is the gamble we are all looking at. No one knows just what that'll look like.
FOFOA would certainly agree with you and me on that, MsC. Let paper gold go down, it's OK, mine are strong hands.
What makes you think the fed will allow that to happen again? Besides, history rarely repeats that quickly. The next crash, as Peter Schiff says, will be a USD crash.
this article totally misses the larger issues in gold.
you will never see a major bank discuss what is really going on in the metals markets....
they pay a lot of money to keep the CTFC, and the Congress to keep the real story on the down low......why would they undermine that?
Congress doesnt know up from down...
Nawww, they are pretty good at going down. On theirs knees if you know what I mean :-P
BitCoin Bust Last price:$68.01138
lol...what a mess.
http://bitcoincharts.com/charts/mtgoxUSD#rg1460ztgSzm1g10zm2g25zi1gRSIzi2gMomentumzi3gWilliamRzv
I was wondering where the Bitcoin pumpers have been... Surprised the gold trolls haven't dared venture back to ZH, even in the midst of this 'sell-off' (although I have yet to hear from a single confirmed seller). Guess we handed them their ass last time.
Gold trolls are too busy juggling
.
Total bullshit.
Today both offices of my local coin dealer were totally out of everything in gold bullion. They are a high volume dealsr. Gold may drop to $1000 but long before that there won't be any available
In a totally manipulated market moving averages and other such analysis is worthless.
Asia.
Jah, hey.
Why don't the gold bugs set a price for gold...say at $3,000 an ounce, and then buy and sell to each other at that price? That way you can sleep at night and not waste your time reading useless articles that take charts and overlap them to try and determine the future. You will feel good knowing that your gold is worth what you feel it should be, while elimanating all this other nonsense. People will stop making fun of you.
It's like you have to convince each other that gold WILL go higher, "so please guys, don't jump ship!"
Save your energy for 2 billion Asians. You'll need it
Gold bugs in the US already are:
http://www.ebay.com/sch/i.html?_trksid=p2050601.m570.l1311.R1.TR12.TRC2.A0.Xkrugerrand.TRS0&_nkw=krugerrand+1+oz&_sacat=0&_from=R40
The 24hgold.com/eBay AGE premium over spot widget has been showing a 44% + premium (1 oz AGEs) for the past couple of days. Check it out, bottom left of their home page:
http://www.24hgold.com/english/home.aspx
eBay is a rediculous place to shop for PMs.
http://www.youtube.com/watch?v=NBh895KdXAU
Think of it less as jumping off a ship and more as jumping into shark infested waters.
To extend the metaphor, paper PMs are a ship that has run aground. The ships representing all the other investments are still out in the bay, all tied together, and all sinking. There won't be any survivors there. Those who own PMs, however, need only wade to shore. Those who choose to remain on the paper PM ship will be surprised when the powder magazine explodes.
Let me explain how pricing works. Each individual decides what they think something is worth to them, and over a large enough spectrum you end up with an average price. When the price is being pushed downward by derivatives the price discover mechanism is being distorted and hindered. That means that it's not the gold bug's that are being unreasonable, but actually the markets not being an accurate depiction of how pricing should work.
Dumbest troll comment so far.
Maybe it's a parody.
Maybe. I like gold, but I don't have a mental illness over it. Sex is better than gold.
The banksters are sucking all the gold out of the system they can, while they still can. They know what it is, they know what fiat is, they know how leveraged the whole show is. They know the shitstorm that is about to hit will undermine all things paper with all the false promises that go along with it. The dam is starting to leak in too many places for them to keep patching it and the new patches just aren't holding. When this fucker breaks, it will rock the world. The con can only go on for so long.
Problem is, when they have theirs, they will tax or outlaw yours.
I will still like my gold even if it does go to zero.
You will thank God for your gold if it goes to Zero.
Only if you have fiat to purchase mas
You won't need anything to buy it if it's at $0. That is sort of what being at $0 means.
I'm pissed I couldn't stack a few hundred more OZs of silver today...... let's see what Monday offers......
Stand by for Lord of Flies time.
Charts= Meaningless
If I was a Comex crook .... or Banker crook .... or Government crook .... or coin dealer crook .... I would be tempted to stock up on orders .... not deliver .... stall as long as I could .... and keep the gold for myself .... if I thought the end was near ?
bummed my source was on vac kay 2day
Particularly if you are the one who turns off the music for the game of musical chairs. Maybe you would even get your friends in on it.
Had a friend tell me a story. They were kids. Got a new guy convinced to go sit down in a darkened room. Told him all the guys in there were jerking off. After protesting, the kid sits and listens for a while, then decides to take his pants down and, well, you know. Then my friend claims he threw on the switch and the new kid was the only one with his dick out. The rest were just pulling on their cheek rhythmically, to, you know, make that sound.
Lotta pud whackers out there.
"I'm so glad I'm not young anymore !" .... Maurice Chevalier in Gigi BULLSHIT !
Not much new about that story, Missy. Saw it in a movie once as well. Anything's better than taking a turn in the barrel.
Monedas!
Naah! You are too good for that.
I said IF .... how's it going Do Chen .... hey, why don't you give assylum to Snowjob .... down in Peru ?
Things are going well, Monedas, thanks! I'll let Snowden worry about his own butt. Peru is my Plan B.
Of course these guys don't trade. They write term papers to justify their existence(s).
Yawn
Just purchased a stuffed unicorn for my baby daughter. If my gold goes to zero like the mainstream gang are desperately pleading to assert, I've still got my unicorn to keep us warm at night. If that's not portfolio diversification, I don't know what is.
Tell us where you live. I am sure we can arrange a rectal exam for the unicorn.
Gold can never go to zero and that is the only thing that matters. Just ask the people of Cyprus as the latest victims of banker controlled fiat.
In any case, I hope it goes lower because I am enjoying these low buying prices before the shit hits the fan.
$100 Federal Reserve notes as ass wipe just around the corner.
Got my stax
got my whacks
gonna take a roll
and wax some cats................
It's a fall back
Funky.
I don't think the bottom is in. It's feeling like $1125 to me. I thought we had a bottom last Friday, but only if we broke through $1300 this week and it didn't happen.
A lot of people thought $1235 was the bottom in May, but then we got $1180 in June. Now a lot people think that will be bottom of this correction. I think we go down and touch a few more lows.
My next buy will be at $1150, but we will likely go lower.
This means that $18 silver isn't going to hold either. Get ready for $17.xx because it's coming. Talk about a deal! This is a birthday present to PM buyers, both physical and mining shares. The HUI is going to break 200, which I didn't think we would see. Not even a potential civil war in Egypt can move the price of gold. Not even $102 oil can move the gold price. Not even a PMI in China that is practically stagnant. Not even interest rates that have been spiking in Japan and the US. Not even a US jobs report that shows we are not recovering. Not even the Fed stating that they have to let the US ecomomy fall on its face.
Newager
Agreed. The lows are not close to being in. Picking price points to me is useless, but agreed no low yet.
prolly a few more weeks of pain
My "next buy" is when I have the money, regardless of the "price". That's my plan and it has worked out nicely. Gotta get that hole in the boat fixed, however....
Personally I think PMs are looking weak at the moment.
I'm building a cash position up and will hold fire till I see some further signs of a significant move in either direction.
At 500 the low wont be in.
Grace us with your wisdom as to why not. We can all be illuminated further. Or are you one of the manipulators?
So is anyone charting the amount of days delay till delivery?
At what point do the big gold buyers think, "Fuck this, I want delivery in 99 days not 100."
At what point do they think, "Yes I would pay more for delivery today."
At what point do they think, "Fuck this, I want to bypass the middleman and talk to the miner. Maybe we can get a better arrangement."
?
If the present charts don't work, can't we find better charts?
At what point do people start phoning up miners directly and eliminating all the middle men?
A great solution. I buy physical from a small US Miner at 5% below spot. 1-10-100 Troy oz bars come assay certified from his US refiner. Deliverable anywhere in the world. I'll put you in touch. Greg@logigold.com
Jewellers can't wait for delivery. How are they doing?
Some ppl just don't fucking get it...
They'll drive it way down, and then pull the plug:
They'll nationalize it, and tax the shit out of any private windfalls.
A safe haven for your gold is exactly as likely as asylum for Snowden: only in Russia, China and Iran. Maybe.
Better diversify your wealth... If you live by the sword (gold), you...
Trying to deal the with the insolvency of nation states, yes, I agree. But at that point they will have lose all legitimacy, so if you turn your gold in, and pay the windfall tax under those circumstances...
No way is the low in yet. Please be patient as until we have a true technical selling climax, there will be no low. The only way to have a selling climax is to undercut the recent 1179 low. Wait for the manipulators to tell you when it's time to begin accumulating again. And for the folks who are always claiming that charts are useless, I agree, because 99% of the people have no idea how to judge, analyze, and apply charts to consistently pull profits out of the market. It's grueling, expensive and looking back probably not worth it to learn the art of learning how to judge supply/demand in markets via charts using price/volume.
Boring comment, but 100% true.
The price will decline until investors start buying undeliverable paper contracts again?
"Don't paint any country with too broad a brush. There are some very fine people in North America. You just have to look outside the cities, by and large"
And city ppl would say "There are some very fine people in North America. You just have to look outside the countryside" :lol:
Its just been my personal experience, and use of the word 'by and large' was meant to convey the inadequacy of my approach.
Wishful thinking, were world governments bankrupt in the 70s? Were houselholds bankrupt in the 70s? Were private businesses bankrupt in the 70s? Oh for crying out loud, it ain't the freakin' 70s! Did we have a 1 Quadraillion derivatives market in the 70s?
Gold was worth 1900 per oz, now it's worth 1235.
You lost money if you bought at 1900 and watched it lose value in monetary terms.
Buy land. You can grow a garden, you won't starve. Your friends and neighbors will need something to eat. You will have a lot of friends.
If you buy gold, maybe you can buy land from a willing seller.
If US dollars are not going to be worth anything, your gold will still have value without the Federal Reserve Note. Gold as money does some talking.
Gold is here to stay. The dollar will be long gone before you know it. There it was, gone.
The dollar was worth 1/1900th oz of gold, now it's worth 1/1235th oz of gold.
So what happens if they drop a nuke or a biomissle on your land?
i am a low level technician but i am born on a sunday.
so i got jobs in major investment banks as a small technician.
due to the demons i am housing i am able to talk with everyone (well i am "in the mode" while writing this :))
i remember talking to the head of gold-trading in a famous bank once (the guys which call the vaults and are able to relocate gold in them)
and this is what he said to me:
there are roundabout 50 people worldwide trading gold with direct access to the vaults.
these 50 people meet once a year elsewhere in the world to talk and get to know each other personally (because when gold is traded via phone it is important to KNOW the guy on the other end)
my conclusion: everyone in this circle knows what is going on. everyone outside may have an educated guess once in a while.
additionally the man told me that every trade of physical has to be relocated over night because paper counts nothing in the real physical world.
every major bank has a compartment(?) in the major vaults and each and every trade of the day has to be done by moving the physical by the end of the day.
for my caveman mind this was pure lived logic and i was very happy that not all things in banks are derivatives.
and, additionally: the tradefloor in that given bank had roundabout 200-300 cameras on a tradefloor of ~150 and every call was wiretapped by agreement
so i really could not believe in rogue lone wolf traders
Forget economic fundamentals, what driving gold today is geopolitics.
As long countries considered the enemies of the US keep endorsing gold, the gold will be suppressed by the likes of Dimon and Carney, enforced by Dickheads like Bernanke.
You heard it here first: Down to $850 - 870 then back up to $1500-$1600 by year end.
Too fast, oligrachy needs more time... :-)
Thanks. I like bold predictions. But I really prefer rational explanations to bold predictions. Got any you'd like to share?
Calling a bottom is always elusive. In general, it is better not to fight the trend, and wait until there are unequivocal signs that the primary trend has turned bullish. If we apply Dow Theory rules to the gold and silver markets, we can conclude:
1) The primary bear market was reconfirmed on June 19, as explained here: http://www.dowtheoryinvestment.com/2013/06/dow-theory-update-for-june-19...
2) The primary and secondary trend remains fully bearish. In order to have a primary bull market, at the very least the secondary trend must turn bullish. This is far from happening technically right now.
I think Dow Theory is based on human reactions to free market forces, hence not really applicable to markets today, especially the metals.
Does anyone have an idea as to how we could track the coin shops and bigger dealers like Provident/APMEX in order to track the supply and preminums?
That would give us a close image of true physical PM valuation.
" True Valuation" in the land of the Great Un-truth.... Very Elusive indeed.
Almost all of you clowns assume that when the big deflationary crunch/margin calls roll in and gold will crash or plunge more. Actually it will soar in perhaps the biggest short squeeze in my lifetime. this ain't 2008, so wake up and use your noodle. For you rookies, margin call when yo short means yo gots to buy, and SOMEBODY gots a massive paper shorts my BITCHEZ!!
The banking system has been drained of physical gold. They have nothing to sell in order to make margin. Not even the Western governments have enough to gold to supply them. They will sell treasuries and they will sell them hard because that is what they have and that is what will be crashing. It will be the ugliest friggin surprise buttsex the bankers have ever had sprung on them.
they (specs) will have positions (short) to cover. this means buying. my point is that margin calls will be gasoline on the fire when it begins.
second point gold is not consumed. it is hoarded. WHEN this grand scheme results in a currency crisis, (yes, my friends, it will) then you will see that the hoarding has not even begun...
third point. it is the unknown unknowns that will launch gold.
There are too many promises of future cash flows in nominal terms (debt or financial assets on the other) in comparison to present goods in nominal terms. (circulation of goods and services, daily consumption items).
The former (TREASURIES = future cash flows, price dependent on discount rate) and buy the later (gold, soft commodities, silver = present good, price not dependent on discount rate).
Gold bubble theorists are the great fools of the past and future decade.
This is iron ore for the last 30 years.
http://www.indexmundi.com/commodities/?commodity=iron-ore&months=360
This is copper:
http://www.indexmundi.com/commodities/?commodity=copper&months=360
There is no bubble in gold while it only backs the money supply by 10%. Call me when it hits 130% like it did in 1980. Most likely we will see that as the debt bubble pops and begins leaking cash all over everyone. Gold and silver are dirt cheap because they have been rigged by myopic governments trying to protect a cartel and a monopoly. Long term, that always fails.
As soon as our oligarchy gets the gold mines they want gold recovers miraculously!
I remember what the CEO of Northwestern Mutual Ins Co said when the reporter asked him why NWML bought several hundred million in gold...He said, "it makes common sense...it does well in inflation and in deflation...common sense..."
Interesting guy.
What if the Fed .... spent $85B a month .... supporting the price of Gold .... kind of gives you an idea .... of Gold's price potential ?
This one's for MsCreant: Johnny's mother "Why is your door locked .... what are you doing in there ?" Johnny "Jus' working in my new catcher's mitt, Ma !"
I think the bottom for gold is somewhere between $1100-$1200. It will bottom by the end of the summer. We may have seen the bottom number already, that was $1169 or thereabouts, I think.
There's an outside chance that it goes to $1000, but I think that's slim.
It's been incredibly resilient despite all the negative chat in financial media.
I get it .... Bernanke drives down the price of Gold .... then the gov buys calls on the miners .... then take delivery of a good portion of the mining shares .... voila .... Social Suck is SOLVENT again ? After wasting trillions of our Ponzi bonanza .... on worthless Public Servants and Negro-Centric welfare schemes and Foreign Aid .... couldn't they use a little of that Ponzi loot to rescue retirement funds .... instead of punishing the saver/investor class .... US ?
Those CITI guys are so smart. I bet they called the recent high too.
Right?
Oh.
That's OK. When they write things that fit the narrative (gold is going up a lot and soon) they are smart. The rest of the time they are dumb liars who are part of the power conspiracy.
wish i had known to save all my bennybux from the last four years that i've been buying to go all in metals now.
oh well, i suck at investing anyway.
I think people need to look at the risk/reward on the gold trade. Ask yourself what you think the maximum downside risk is. $1100, $1000, $750? Now ask yourself what the upside reward could possibly be? $1,500, $1,300, $2,000.
I think it is fair to say the risk/reward is a minimum 2 to 1 ($2 on the upside versus $1 on the downside) based on where the price is today. In an average R/R scenario, it is a lot higher. If you factor in a time frame of 1 year or longer, the risk/reward ratio goes a lot higher
"I think people need to look at the risk/reward on the gold trade."
Using this logic, I'm investing everything into lottery tickets. Just think of my upside potential compared to my downside risk!
Really? There is about a 1 in 13 million chance that you will win the lottery. If you invest $13 million your risk/reward drops to one. Did they not teach math in clown school?
Turn on your sarcasm detector, Sheldon.
Nowadays you can never be too sure, especially regarding gold and the markets :)
Price!? Priced in what...magic fairie dust and promises? Fuck the "price". Stack the phyzz.
How Much Lower Will It Go?
http://advisorperspectives.com/dshort/guest/Vrba-130702-Forecasting-Gold.php
-F6
Funny how without fail Gold is hammered on the first Friday of the month jobs report. Like Ben says tradition I guess...
OK, I just got back from the local ANA dealer.
The only Ag he had besides numismatic single coins was 4 tubes of ASEs. He now only has 3. I lost the tube on the way back home, unfortunately.
Two months ago, he had stacks of NTR bars and rounds and 20 or so Au bullion coins on display along with numismatic coins.
No AU bullion or bullion coins except 1 AGE.
Premium is up.
Things are looking to get pretty slim. I know how much business this guy does, all the remaining tubes will be gone by COB today.
IMO, if you are waiting to be a bottom feeder, there is not going to be anything left. I would not hold off too much longer. I have some fiats in reserve, but I am following the inventories closely.
I'm buying physical gold bullion 5% below spot from a small US Miner with delivery from his US refiner. Assay certified and numbered. 1-10-100 Troy oz bars. Greg@logigold.com
Sounds like a great deal. I"ll send you my PO Box. You mail me some gold and I'll send you a check.
You can deal direct. I'm not in the middle.
I lost the tube on the way back home, unfortunately.
Had me going there.
Gold bottom only WHEN I say so!!
not some 2 bit monkey in some 2 bit Bank!
I Don't know about a new low but I do know that I just lost my ass by trying to send a package regestered mail to APMEX. $28,000 in gold coin stolen cause some one in the post office knows that address!!!
I can't even tell yu how much that sucks. Yes it was insured, for about half, but what the FUCK. I'm about ruined
Sorry to hear about your loss .... this may be a sign of the times .... it's getting dicey .... there are many people out there who think they can swoop in at the last moment .... and all will be waiting for them ! Were you trading your gold for silver .... or just fiating out (cashing out) ?
TA is complete BS. How many bottoms have been called this year?
Agree .... how do you chart .... government capriciousness ?
Help, I've been robbed by the USPS sending coins to APMEX. Total bummer gang, registered, insured, GONE, FUEK ME TWO TIMES!!!!!
Gold is a very long term investment.
Gold is a very long term investment.
Here's a similar bottom-calling article. "Gold: Last Friday Was Likely the Bottom":
http://seekingalpha.com/article/1532442