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Citi: "Gold Is Putting In A Base"

Tyler Durden's picture





 

With silver's best week in over six months and gold testing3-month highs, Citi's FX Technicals group believes gold continues to look constructive overall with a test of $1,361 and eventually $1,433 expected. Rather ominously, from a broad perspective, they would not be surprised to see an inverse correlation between gold and equities just as was exhibited throughout the last bullion bull market in the 1970's.

 

Via Citi FX Technicals,

Gold is putting in a base

Gold continues to look constructive overall and a test of $1,361 and eventually $1,433 is expected

A rally through there would be a major bullish break.

As seen throughout the last major bull market in gold, there appears to be an inverse relationship between Gold and Equities at this stage of the cycle

While we have not yet seen significant bearish breaks on Equities, just as we have not seen bullish ones on gold, the price action on both are beginning to point towards exactly that.

Gold Monthly Chart

Having held the 2013 low as support again at the start of this year, the short term bounce up has led the monthly momentum to also cross back up from stretched levels not seen since the major trend low in 2000

Gold Weekly Chart

The bullish outside week on Gold posted two weeks ago is still valid as we trade above the low from that week which was $1,231

A rally towards $1,361 is expected and overall a double bottom pattern with a neckline at $1,433 is in the making

From a broad perspective, we would not be surprised to see an inverse correlation between gold and Equities just like we saw throughout the last bull market in the 1970’s...

Gold and Dow Jones in the 1970’s

Dow Jones Industrial average and Gold Weekly chart overlay

Is something similar happening again this time?

The key level to watch on the Dow on a weekly close basis is the 55 week moving average at 15,218. It should also be watched in conjunction with the 55 week moving average on the S&P 500 at 1,672 (see Equities section for more details)

The key medium term level on Gold is the double bottom neckline at $1,433. The pattern would target $1,686.

 


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Sat, 02/08/2014 - 18:54 | Link to Comment The Shootist
The Shootist's picture

In other news, we live in a debt based money system and most governments are running centrally planned Ponzi schemes.

Sat, 02/08/2014 - 18:56 | Link to Comment Troll Magnet
Troll Magnet's picture

first things first: we must confront homophobia...erm..in Russia!

Sat, 02/08/2014 - 19:08 | Link to Comment BoNeSxxx
BoNeSxxx's picture

Nah you are thinking WAY too big... first we need to get Justin Bieber help for his bad behaviour. It IS Breaking News dontcha know?

Sat, 02/08/2014 - 19:19 | Link to Comment Supernova Born
Supernova Born's picture

Gold's "base" predates our solar system.

Sat, 02/08/2014 - 19:47 | Link to Comment Rubbish
Rubbish's picture

Do I now buy a Bitcoin?

 

/sarc

Sat, 02/08/2014 - 20:10 | Link to Comment max2205
max2205's picture

Citi must have out bid GS to have Tyler put their BS on this site

Sat, 02/08/2014 - 22:07 | Link to Comment OC Sure
OC Sure's picture

Looks like a 4rth wave to me in want of one more fallout to the 950 level accompanied by Iron Maiden's Run For The Hills ringing from every media outlet in existence. If this is wrong, then all it would take is a convincible breach of the long term downtrend.

Sat, 02/08/2014 - 22:07 | Link to Comment Soul Glow
Soul Glow's picture

A good comment, yet remember Fed policy has been to debase the dollar at an infinite pace, especially over the last year.  

Gold has bottomed.

Sat, 02/08/2014 - 22:27 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Yes, my thought as well re gold having bottomed.  But, who TF really knows?

***

Wandering slightly O/T for a moment, our Central Bank has announced its precious holdings (in declining order):

Au

Pt

US CA$H

Ag

Pd

BTC

Does the above make the Central Bank of DoChenRollingBearing the most transparent in world history?

Sat, 02/08/2014 - 22:49 | Link to Comment boogerbently
boogerbently's picture

You are "richer" than I thought, to invest/trade/risk $$$ in BTC.

Sun, 02/09/2014 - 08:36 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

The only real question about gold is how much more of our grandkid's money is the Fed going to throw at it to keep it down?

Sun, 02/09/2014 - 14:32 | Link to Comment Woodhippie
Woodhippie's picture

Amen GZG, amen.

Sun, 02/09/2014 - 00:41 | Link to Comment OC Sure
OC Sure's picture

@ Soul glow

"Gold has bottomed."

And it may bottom again unless it takes out the long term downtrend line.

Please don't go all in now just because the fed has debased the dollar at an infinite pace. I agree that it has, but the market is telling us something else is wrong. The actual level of gold right now has your analysis priced in already. If it is going to go gangbusters because of the infinite debasement, then why hasn't it? Wait. Let it break the downtrend line; then buy it and then buy more at the fall back to that line.

Nibble now on whatever hunch you have if it eases your emotion but please don't go ALL in yet.

 

Sun, 02/09/2014 - 08:00 | Link to Comment giggler321
giggler321's picture

ZH continues to post articles about them being manipulated and then posts bottom calls.  In a manipulated market looking and comparing technical analysis of history for trends means nothing.  If the manipulator what's up they go up; same for down so with calls of prediction it is just luck or wrong.

Sun, 02/09/2014 - 15:10 | Link to Comment OC Sure
OC Sure's picture

The "manipulation" is in the price already. The trend is still down.

Sat, 02/08/2014 - 19:55 | Link to Comment elekt
elekt's picture

I don't know about all you all, but I trust Citi's financial advise!

Sat, 02/08/2014 - 22:08 | Link to Comment Soul Glow
Soul Glow's picture

A house has many opinions.  

Sat, 02/08/2014 - 20:35 | Link to Comment unrulian
unrulian's picture

i have some junk that the serial centrally planned ponzi loving junker can have

Sat, 02/08/2014 - 18:56 | Link to Comment logicalman
logicalman's picture

Charts only tell you what has already happened. If they had much in the way of predictive power, the world would be a different place.

Sat, 02/08/2014 - 19:16 | Link to Comment cynicalskeptic
cynicalskeptic's picture

What do charts mean in completely manipulated markets?   How many times have the markets been manipulated to CREATE certain patterns in the charts?

 

 

Sat, 02/08/2014 - 21:39 | Link to Comment OC Sure
OC Sure's picture

Markets are markets regardless of whomever is attempting to manipulate them. Now, central banksters have the market on interest rates cornered but that doesn't change the footprints in the sand. All the tells are still there and the trend is knowable nonetheless:

"...the technician claims with complete justification that the bulk of the statistics which the fundamentalists study are past history, already out-of-date and sterile, because the market is not interested in the past or even the present! It is constantly looking ahead; attempting to discount future developments, weighing and balancing all the estimates and guesses of hundreds of investors who look into the future from different points of view and through glasses of many different hues. In brief, the going price, as established by the market itself, comprehends all the fundamental information which the statistical analyst can hope to learn (plus some which is perhaps secret to him, known only to a few insiders) and much else besides of equal or even greater importance."  Technical Analysis of Stock Trends, Edwards and Magee, 1948.

Translation: Follow the footprints, don't jump ahead to where you wish they would end.

Sat, 02/08/2014 - 22:13 | Link to Comment Soul Glow
Soul Glow's picture

Trends - the word implies pattern; the future.

The future does not exist, but it will unfold - this we know.

Sat, 02/08/2014 - 23:25 | Link to Comment OC Sure
OC Sure's picture

The trend indeed is your friend. To see it is to know the future before it becomes the present and to have all the riches that come with it; clairvoyance explained.

"As a rule, there is always a crowd of traders who are short at [support] because [the price] looked so weak, or long at [resistance] because [the price] looked so strong, and, when the market goes against them they are forced, after a while, either to change their minds and turn or to close out. In either event they help to define even more clearly the price line of least resistance. Thus the intelligent trader who has patiently waited to determine this line will enlist the aid of fundamental trade conditions and also of the force of the trading community that happened to guess wrong and must now rectify their mistakes. Such corrections tend to push prices along the line of least resistance." 

- Jesse Lauriston Livermore

 ...Your present is the past accumulated; your future's present is the future's past that you create;

 

 

"It is a matter of for what and why,

Do we live to live or live to just die?"

 

Sun, 02/09/2014 - 00:56 | Link to Comment PeakOil
PeakOil's picture

+1 for Livermore quote

Sun, 02/09/2014 - 12:47 | Link to Comment OceanX
OceanX's picture

Actually, the future does exist, all possible futures exist.  (as well as the past) Choose your direction, visualize your preferred outcome ...

The dream state allows you to transcend termporal boundries, giving you a channel of communication through time.

-- The ancient knew this.

 

Fear, Dread and Anxiety  enable evil to thrive...

Sun, 02/09/2014 - 15:10 | Link to Comment OC Sure
OC Sure's picture

Only the actual exists, not the potential.

Sat, 02/08/2014 - 19:00 | Link to Comment RaiZH
RaiZH's picture

I just want to see the end of the paper market, that will be interesting... however that unfolds. 

Sat, 02/08/2014 - 19:01 | Link to Comment Yen Cross
Yen Cross's picture

  The xau put in "an" base almost 3 weeks ago. 

  Every "paper trader" is going to challenge the 1300 level though. 200 day avg. 1310 area.

Sat, 02/08/2014 - 19:02 | Link to Comment unwashedmass
unwashedmass's picture

 

the "pattern" targets 1686.....the Cartel should hope and pray it stops there...when control is lost, god only know where gold is going.....and control is slip slidin' away....

 

but then, that's what happens you gots no gold no more.........and nobody wants your worthless paper contracts.....

Sat, 02/08/2014 - 19:02 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

forget price, short term thinking.

 

If you're in this for marking a profit, buy equities (they always go up).

Gold and silver are about another kind of thinking, one not reported in the funny pages.

Sun, 02/09/2014 - 01:07 | Link to Comment X_mloclaM
X_mloclaM's picture

wrong buck O

equities are short term bounce.

medium term profits is inverse Russell 2000.

long term PROFITS are gold and silver, and as another poster just wrote, 16000 or whatever gold is a PEACEFUL world as asset encumbrance and demands for the socialization of shitty/reused asset risk is over/dead, the system again solvent, money real, measuringstickstiff and efficient allocation of resouces resumes with rising standards of living for poor/middleclass

Sat, 02/08/2014 - 19:03 | Link to Comment ebworthen
ebworthen's picture

Well, we can hope so.

Gold should be at $16,860/troy ounce but that would be in a sane world.

Sat, 02/08/2014 - 19:07 | Link to Comment fonzannoon
fonzannoon's picture

Why is the lead article still about a mortgage broker who's attempt at Holmes on homes went bad? 

There must be millions of people employed between the markets, real estate and mortgages etc. I'm sure one person a day in these sectors drops dead. This guy was not exactly Angelo Mozillo. What's the big deal here?

Sat, 02/08/2014 - 19:12 | Link to Comment Yen Cross
Yen Cross's picture

     Short , 'American Title'

Sat, 02/08/2014 - 19:14 | Link to Comment fonzannoon
fonzannoon's picture

Yen what's goin down this week? Dovish yellen confirms last week's equity rally and retails piles back in, or she disappoints and the seas get rough again? 

Sat, 02/08/2014 - 19:27 | Link to Comment Yen Cross
Yen Cross's picture

   Fonz, personally I think yields on the long end of the curve, are coming back in. I've been on the road, so I need to digest Tylers charts. Tylers' usually spot on though. (when you isolate technical vs site comments).

  I think you'll see a lot of " Jaw Boning" Fonz. The effects will be short lived. IMHO

 Also, xau is rising from fear. (not inflation)

Sat, 02/08/2014 - 19:30 | Link to Comment fonzannoon
fonzannoon's picture

i kept looking for an entry point to get short the long bond thinking we would make the magical move over 3% and the lower yields went the more I have shied away. This is going to be an interesting week. Could be the most important week of the year.

Sat, 02/08/2014 - 19:37 | Link to Comment Yen Cross
Yen Cross's picture

  What's your opinion on 5's and 7's Fonz? I think you'll find the answer there.  The BTC ratios on the last (5 &7) auctions were solid.

  I agree fonz. This upcoming week is going to be interesting from a correlation standpoint. I'm hedged/ I won't lie! I'm having trouble finding direction.

Sat, 02/08/2014 - 19:47 | Link to Comment fonzannoon
fonzannoon's picture

Last week almost broke me from  the btfd mentality. I sat on my hands Wednesday and was lucky to be on vacation otherwise I may have made some bad decisions. When momo started breaking down (twtr,ddd, lnkd etc) I was nervous that they were finally kicking the legs out of the table but all of them were bid back up.

We are back at S&P 1,800...the 10yr is right at a swet spot at 2.7% and gold has been kept in check at $1,270. My guess...until otherwise proven, is that the SPY is free to move around the cabin while the 10yr and gold have to keep their seat belts on. If Yellen disappoints and the market still rallies I will stand in awe. 

Sat, 02/08/2014 - 20:03 | Link to Comment Yen Cross
Yen Cross's picture

  Remember Glen Stevens "Jaw Boning" for the RBA in December and January Fonz? IMHO , were seeing the same theatreatrics here.

  If Yellen caves,(juices the system) the markets will roil! Bad news becomes bad news. Don't waste time on SPY.

  Watch shipping Indexes. Tyer had mvaluse, But BBG discontinued it. PPI and CPI are way off Fonz. (Jobs)

Sat, 02/08/2014 - 20:15 | Link to Comment fonzannoon
fonzannoon's picture

always appreciate the input yen. 

Sun, 02/09/2014 - 01:26 | Link to Comment X_mloclaM
X_mloclaM's picture

We are back at S&P 1,800...the 10yr is right at a swet spot at 2.7% and gold has been kept in check at $1,270. My guess...until otherwise proven, is that the SPY is free to move around the cabin while the 10yr and gold have to keep their seat belts on. If Yellen disappoints and the market still rallies I will stand in awe.

right, agreed, but on Yellen, she will keep this taper pace because the timing is right as well as the importance of remaining consistent. This is why the jobs numbers fluffed up, the rate spike of last year was plenty of vert for these snowboarders, and yields to head lower and lower as reserves pile up. slower. Bounce is on for now, 10s in regression channel looking for fbs. Depends if politicians want to drop a surprise, kicking the omt assumption bankers are coerced into does not exclude other events. China is awake and the : they dont have a closed cap account fo no reason, argument for not underestimating WORK ethic in doing the dirty WORK after vacation in the year of a 4

With that repo unwind TD highlighted we must be in for some bumps, granted CEQ must not have been timed quite right, best to have a nice annual vacation.

So keep your Munny in the banks, such that they're not loaned up, and the gap can be collateralized for fin asset nflation for CIO to sell you XIV, over the tv.

Cuz youve seen how calm shit is.

 

Sat, 02/08/2014 - 19:29 | Link to Comment disabledvet
disabledvet's picture

anything can happen. "that's why they call it the future."

so long as everyone just "stays tuned in" it's all good.
The only thing that is certain is that news will be bad and everyone will be happy about that because "there's no news...like bad news."

Sat, 02/08/2014 - 19:22 | Link to Comment AuEagleNest
AuEagleNest's picture

Comment bumps. There's blood in the water and ZH'ers are in a feeding frenzy. That thread is closing on 800 comments and still going strong.

Sat, 02/08/2014 - 20:40 | Link to Comment Race Car Driver
Race Car Driver's picture

> There's blood in the water and ZH'ers are in a feeding frenzy.

 

What do you suppose a few dead banksters is going to change for these people on a personal level? Do you think that folks who read and commented on that thread are going to use any of that information as cause to change their lives or patterns?

Prolly not. It's a few dead banksters this time and not journalists. We've been reading about dead journalists for almost a year now (if you count Breitbart as #1) and I bet very, very few people changed anything about their lives as a result. 

So, yeah ... dead banksters. No more impact than reading about the losing quarterback in the fascist bowl. In fact, I bet the sports forums are far more crowded, have far more comments about the win/loss of their favorite team has had far more of an impact on their personal lives than news about an obscure dead bankster.

 

Sat, 02/08/2014 - 21:16 | Link to Comment AuEagleNest
AuEagleNest's picture

"We've been reading about dead journalists for almost a year now (if you count Breitbart as #1)"

Actually I'd give Michael Hastings the #1 spot, but then I'm a liberal and held no truck fo Breitbart.

I don't think dead banksters will have any "real" impact on the personal lives of any that read/post on ZH, so I'm not sure what your point is. I was just providing info as to why the dead bankster thread was still in the top spot. But I do have to say, it brightens my day everytime I read about another bankster "suicide" and I'm all about enjoying the day. I can't say that it will really have any impact on my life, other than that.

Sat, 02/08/2014 - 19:06 | Link to Comment geminiRX
geminiRX's picture

Armstrong says the bottom is not in, for what it may, or may not be worth:

http://armstrongeconomics.com/2014/02/08/gold-the-upside/

Sat, 02/08/2014 - 21:00 | Link to Comment greatbeard
greatbeard's picture

Pretty spot on commentary by Armstrong.  Looks like a strong possibility gold could go either way.  Kudos to Armstrong for seeing those possibilites.

Sun, 02/09/2014 - 01:32 | Link to Comment X_mloclaM
X_mloclaM's picture

lol

Sat, 02/08/2014 - 19:06 | Link to Comment Sudden Debt
Sudden Debt's picture

I've seen those techs for already a few weeks and they're great but at 1433 I'm out.
If it goes over 1500 I'll get back in.

Sat, 02/08/2014 - 19:17 | Link to Comment geminiRX
geminiRX's picture

Out of paper or physical? After 1500, there may be not be "a getting back in" from a phys perspective...for awhile

Sat, 02/08/2014 - 19:34 | Link to Comment Sudden Debt
Sudden Debt's picture

I'm in big on physical and once it's bought it goes into the vault and I don't keep track on them anymore. Only the amount counts there.

But I also trade the paper a lot because there's a lot of money to be made especially now that it's so low.

Sat, 02/08/2014 - 19:13 | Link to Comment BoNeSxxx
BoNeSxxx's picture

And give up $70/oz (which is roughly the buyer premium)?

Hang tough SD, don't trade the Prescious - just hold it.  It will be good to you some day.

Sat, 02/08/2014 - 19:32 | Link to Comment e-recep
e-recep's picture

Contrary to FOFOA, I believe the price of gold (or gold price, whatever) won't drop to zero before skyrocketing to $55,000+. It will rise and fall and rise and lift off exponentially when the time comes. Just like it happened in Roman times.

Gold today is still a commodity trade item. It behaves like one, too. There are no bank runs, the filthy rich are still in equities and bonds, besides land and gold. Even the Cyprus confiscation didn't move the price of gold. There are no delivery problems (except that of Germany) and the premiums are still reasonable. When you stand for delivery you get your phyzz.

But one day this will change and people will run for the exits. I dunno what will trigger it but there are enough reasons out there : super-high leverage, toxic-debt infested banks, reckless money printing, unpayable debt, government bullying towards offshore accounts and too many paper promises and derivatives.

Sat, 02/08/2014 - 19:50 | Link to Comment Rubbish
Rubbish's picture

I doubt many if any coin dealers would sell any gold below 1150

Sat, 02/08/2014 - 19:59 | Link to Comment Godisanhftbot
Godisanhftbot's picture

 Hows that Bitcon supossitory  feel this fine day?

Sat, 02/08/2014 - 20:06 | Link to Comment Godisanhftbot
Godisanhftbot's picture

 Bitcon,  just another penny stock pump with a worldwide collection of anii feeding the frenzy.

 

 

Sat, 02/08/2014 - 20:06 | Link to Comment Godisanhftbot
Godisanhftbot's picture

" If bitcon AND gold both go to zero, the world will be a better place for it "  Alexy R. Kraptokovitch 2013, in an interview with  Pravda , on his way to the gallows.

Sat, 02/08/2014 - 20:39 | Link to Comment Kuanyeah
Kuanyeah's picture

Fiat currencies holders pay for debt holders in the long run. Physical gold holders do not.

Sat, 02/08/2014 - 23:23 | Link to Comment Soul Glow
Soul Glow's picture

Inflation is a bitch; for paper holders, anyway.

Sun, 02/09/2014 - 10:40 | Link to Comment Herdee
Herdee's picture

This is another opinion about market direction posted on kitco.com by Toby Connor.There is a caveat but he's also expecting "the blow-off top".I suspect that this is where the majority of folks get sucked in as schucks by the banks.

http://www.kitco.com/ind/Conner/2014-02-04-The-Last-Great-Buying-Opportu...

Sun, 02/09/2014 - 11:47 | Link to Comment oddjob
oddjob's picture

http://goldscents.blogspot.co.uk/

No need to direct any traffic to Kitco.

Sun, 02/09/2014 - 12:23 | Link to Comment Sufiy
Sufiy's picture


Jim Rickards: Gold Set for Massive Rally

  Jim Rickards presents his hew book and talks about the real fundamentals supporting his call for the much higher price of Gold. It is the very good piece to continue our conversation about the state of the Gold market and its ongoing manipulations this weekend.

 

http://sufiy.blogspot.co.uk/2014/02/jim-rickards-gold-set-for-massive-ra...

Sun, 02/09/2014 - 12:54 | Link to Comment BoNeSxxx
BoNeSxxx's picture

The original Tyler used to come out of hiding anytime Rickards name was mentioned just to bash him as a 'recycler' of information... The 'new' Tyler(s) don't seem to have the same axe to grind with Rickards...

Shame really... I miss the days when a Tyler(s) would step into the fray and show their nuts - it is fight club afterall.

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