Does The Gold "Support Channel" Mean The Drop Is Over?

Tyler Durden's picture




 

With the inevitable chatter of further easing from the ECB and the 'Fed must act soon surely' to monetize Facebook shares, this chart via UBS shows the longer-term support channel suggesting, at least for those who follow technical analysis, that gold's dip may be over...

 

Chart: UBS

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Tue, 05/22/2012 - 14:49 | 2451954 jomama
jomama's picture

it ain't over until Merkel sings, bitchez.

Tue, 05/22/2012 - 14:52 | 2451982 Levadiakos
Levadiakos's picture

I'm looking to drop into Mandy's blouse

Tue, 05/22/2012 - 14:54 | 2451991 Pladizow
Pladizow's picture

As long as the problems persist in Europe, gold will find it hard to rally.

Tue, 05/22/2012 - 14:58 | 2452013 mayhem_korner
mayhem_korner's picture

 

 

Yes, because all the panicky bank-runners will convert every Euro/drachma they can milk out of the ATM into US Dollars.  But that just coils the spring a little tighter in my view...

Wait. Stack. Prevail.

Tue, 05/22/2012 - 15:03 | 2452031 Pladizow
Pladizow's picture

Agreed, this weekend I caught an STD - as I continue to Stack The Dips!

Tue, 05/22/2012 - 16:16 | 2452582 Doubleguns
Doubleguns's picture

If only it was airborn contagious. Sheeple might catch it.

Tue, 05/22/2012 - 17:40 | 2452919 He_Who Carried ...
He_Who Carried The Sun's picture

Its over when its over.

Did you notice, FB and Gold

currently move in the same direction.... :-))

Its all "Zucked".

Tue, 05/22/2012 - 18:45 | 2453119 Xkwisetly Paneful
Xkwisetly Paneful's picture

Are the governments spewing money again?

Oh no but some magic line on a chart will be buying?

 

 

Tue, 05/22/2012 - 23:32 | 2453852 Harlequin001
Harlequin001's picture

Did they ever stop?

Guess I should go and buy some more eh...

Wed, 05/23/2012 - 00:02 | 2453914 Chief_Illiniwek
Chief_Illiniwek's picture

I recommend - for the sake of your loved ones - that you treat your STD immediately.

Tue, 05/22/2012 - 15:00 | 2452023 kito
kito's picture

only if there is another lsap by the fed, and ONLY IF, will gold break 2000. there is no other way. bernanke is handling this beautifully. stocks have stayed levitated, bond yields are at historic lows, commodity deflation has been chipping away at everything not nailed down. he has no need to do anything, and wont, until at least after obama is re-elected. so dont count on gold wandering too far north. not very likely.

Tue, 05/22/2012 - 15:17 | 2452172 oc
oc's picture

yeah Kito because gold wasn't in a bull market for eight years prior to QE. QE is the only reason the gold price has risen.

Tue, 05/22/2012 - 15:22 | 2452210 tocointhephrase
tocointhephrase's picture

kito?

Tue, 05/22/2012 - 15:45 | 2452394 Bay of Pigs
Bay of Pigs's picture

Don't confuse him with any facts. He's a flat earth deflationist who doesnt understand PM's at all.

Tue, 05/22/2012 - 16:20 | 2452596 Doubleguns
Doubleguns's picture

You never hear of a kito ostrich?

Wed, 05/23/2012 - 05:34 | 2454205 Harlequin001
Harlequin001's picture

That's when you extricate your head from your arse and bury it in the ground isn't it?

Tue, 05/22/2012 - 19:28 | 2453266 Xkwisetly Paneful
Xkwisetly Paneful's picture

The bond market was in a 30yr bull market so I guess by same logic QE is not the only reason bond prices spiked?

Soon to be down year over year- how long will the delusional fanatic hang in there?

How long will the denial that QE is what spiked everything except wages and homes sink the fuck into the donkeyhumans?

 

Wed, 05/23/2012 - 00:57 | 2453996 Harlequin001
Harlequin001's picture

It won't. So much debt has been created that there is not enough cash in the system to liquidate all the sellers at par. That means either capital writedowns or more money printing. Capital writedowns on sovereign debt are the death knell for an economy. The damage has already been done, just as it was in Weimar Germany throughout the first World War though the collapse didn't occur until nearly eight years later.

The Germans tried to not print in 1919 but since so much cash had already been printed and prices had already risen by a multiple of seventeen, not printing was by then not an option for your average worker. Does Greece ring any bells here? Either print, or collapse, and then collapse. The damage has already been done. Either way it will make no difference whatsoever to the outcome for gold and general prices of foodstuffs, which will inevitably go higher. A lot higher.

Either way.

Tue, 05/22/2012 - 15:31 | 2452285 HomerToeclipper
HomerToeclipper's picture

Paralysis by analysis....makes me wonder: Gates open a few years back on Gold, commodities and equities to let in the suckers. add some drama to insert some volatility and interest. Set the traps to lock people in and then viola!...pull the rug out of everything simutaneously.  Bankers win again!

Can it be that simple?

 

Tue, 05/22/2012 - 17:43 | 2452927 Beam Me Up Scotty
Beam Me Up Scotty's picture

How can they pull the rug out from under me if I still have my stack? I still have a job and income...if they pull the rug out, my stack will get bigger!!

Tue, 05/22/2012 - 20:49 | 2453505 hamurobby
hamurobby's picture

Only if our income exceeds our needs, It may get to the point we have no more extra income, and I believe that it is their goal.

 

Tue, 05/22/2012 - 16:13 | 2452564 Sophist Economicus
Sophist Economicus's picture

This is a silly chart of derivative gold.   It's price doesn't indicate gold's true scarcity.   The gift is that the physical price is driven off the derivative.

 

Gold is aritifcally low, interest rates are artificailly low and derivative values are, for the most part, artificially high.

Tue, 05/22/2012 - 16:46 | 2452710 Bay of Pigs
Bay of Pigs's picture

+1

And we have a winner!

Tue, 05/22/2012 - 17:32 | 2452754 JeffB
JeffB's picture

kito: "bernanke is handling this beautifully"

That really depends upon one's goals and time frames.

If Bernanke's raison d'être is propping up the house of cards well enough to fool enough people long enough to get O'Bama reelected, then I suppose you might have a point.

That isn't exactly the benchmark I'd use for "handling this beautifully", however.

To each his own, I suppose.

 

Tue, 05/22/2012 - 16:40 | 2452682 geewhiz190
geewhiz190's picture

if DXY rallies back to it's 2010 level, gold could be 1200 an oz.  with the euro breaking and the yen starting to slip in what looks like a potential big fall ahead, the dollar could get back to the levels it was at 2 years ago.  this would probably smack the DJIA pretty well, along with most commodities including gold.

Tue, 05/22/2012 - 17:45 | 2452932 Beam Me Up Scotty
Beam Me Up Scotty's picture

Cheap OTM FAZ calls will protect my stack...

Tue, 05/22/2012 - 21:58 | 2453685 thorgodofthunder
thorgodofthunder's picture

Believe I called 1000/oz as soon as it hit 1800. 

Funny, the same zuckers who bought the now mellow yellow metal at 1800 probably bought fraudbook at 100 billion.  Most of you fools spending your beer money on souveneer shop nuggets that probably can only be cashed in for 20% fees.  Morons most of you.

There's a zucker born every minute I guess!

Tue, 05/22/2012 - 23:53 | 2453891 prole
prole's picture

How right you are thunder-- Gold, currency of the Gods, The premier money/precious metal from King Tuts time, to Jesus, the Spanish Armada until now, imagine all those suckers, what a bunch of saps!

Tue, 05/22/2012 - 14:49 | 2451955 YesWeKahn
YesWeKahn's picture

monetize Facebook shares, nice.

Tue, 05/22/2012 - 14:49 | 2451956 GeneMarchbanks
GeneMarchbanks's picture

Technically this is about as useful as any analcysts.

Tue, 05/22/2012 - 14:49 | 2451957 SHEEPFUKKER
SHEEPFUKKER's picture

Raid on in full force this arvo. JPM surging. Shocking.

Tue, 05/22/2012 - 15:23 | 2452222 tocointhephrase
tocointhephrase's picture

Dead cat bounce!

Tue, 05/22/2012 - 17:07 | 2452794 saturn
saturn's picture

Dead "dog" bounce this time around..

Tue, 05/22/2012 - 14:49 | 2451958 j12t
j12t's picture

What's the CAGR on that graph?

Tue, 05/22/2012 - 14:50 | 2451965 Calidreaming
Calidreaming's picture

Well I like to differ about Gold.  Think the run to gold is similar to past and current

bubbles.  Think the true value of gold is in the 600-800 oz range.

 

Tue, 05/22/2012 - 14:55 | 2451995 crghill
crghill's picture

What will it be worth after they print another 3 Trillion $ out of thin air?  Or after they print a few trillion Euro?  I'm just askin.

Tue, 05/22/2012 - 14:56 | 2451998 Pladizow
Pladizow's picture

To: Calidreaming

How large is your short position?

Tue, 05/22/2012 - 15:00 | 2452025 mayhem_korner
mayhem_korner's picture

 

 

Any chance Calidreaming is Bruno Iksil?  Showed up around the same time JPM declared him expendable.

Tue, 05/22/2012 - 15:07 | 2452086 francis_sawyer
francis_sawyer's picture

Looking at his avatar, he appears to be underwater...

Tue, 05/22/2012 - 15:14 | 2452150 Boston
Boston's picture

I'm very long but looking for a drop to 1350-1500 before the printing (and Au rebound) begins.

This would be similar to what happened in 2008.....slamming into (and even a little beyond) the lower channel line.

More importantly, it'll provide lower prices at which to buy more!

 

Tue, 05/22/2012 - 14:55 | 2451999 mayhem_korner
mayhem_korner's picture

Think the true value of gold is in the 600-800 oz range.

 

600-800 what?  US Dollars?  How many barrels of oil does an ounce of gold buy, and is that more or less than 10 years ago or 50 years ago?

Your prediction is pointless banter.  I'll leave it to others to educate you as to why gold is not a bubble, but moreover it is viewed by the holders here as a store of purchasing power.  We don't care too much about the "transitory" price swings effectuated by the "barbarous relics" that occupy the central bank leather chairs.

Tue, 05/22/2012 - 17:48 | 2452937 Beam Me Up Scotty
Beam Me Up Scotty's picture

Correct. You can still buy a gallon of gas for .20 cents if it's two silver dimes.

Tue, 05/22/2012 - 15:04 | 2452058 AmazingLarry
AmazingLarry's picture

I think you forgot to add a 10 to those figures, homeslice. 

 

 

Tue, 05/22/2012 - 15:33 | 2452304 css1971
css1971's picture

The ratio of gold to oil is typically about 15. It's about that now. Gold is approximately fairly priced.

People should really stop worrying about how many dollars per ounce. The same number of ounces will buy you about the same amount of stuff. i.e. oil.

Guess what. If gold hits 600 per ounce, the S&P will be at 500, the DOW will be at 4700,  oil will be at 40 and you will still get 15 barrels of oil for an ounce of gold.

Tue, 05/22/2012 - 15:37 | 2452338 Sweet Chicken
Sweet Chicken's picture

This guy gets it!

Tue, 05/22/2012 - 19:59 | 2453357 engineertheeconomy
engineertheeconomy's picture

You're both wrong. Petroleum is a temporary fad, a blip on the radar that won't be around in another 50 years.

Land is permanent.

Keep your eye on the Gold/Land ratio charts and you will be better off.

Tue, 05/22/2012 - 23:43 | 2453877 GlobalCtzn
GlobalCtzn's picture

I agree. Oil is another facet of this MANIPULATION. Land is less than perfect as a guage, but much more difficult to manipulate in the aggregate than the price of oil.

Tue, 05/22/2012 - 19:17 | 2453222 Al Huxley
Al Huxley's picture

Well said

Tue, 05/22/2012 - 16:28 | 2452621 Doubleguns
Doubleguns's picture

Mr California Dreaming, Great name, You obviously are dreaming and do not understand what 28 more years of deficit spending means. It means more borrowing or printing and I think it will be printing since everyone else is running out of money too. You really think thats bearish for gold?

Need to see the link........I am sure. From ZH no doubt, you read that dont you.

http://www.zerohedge.com/news/ryan-2013-budget-details-released-which-we-find-us-runs-deficit-until-2040

 

Tue, 05/22/2012 - 20:40 | 2453481 ljag
ljag's picture

I'm a little fearful of gold (although I own quite a few coins). SILVER is where the eyes should be pointed. I predict silver will eventually overtake gold in price (per dollar) before all is said and done. Look at what we did to the Chinese and their silver-backed currency. They don't forget.

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