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Euro Gold Technicals Look Near Perfect

Tyler Durden's picture





 

From GoldCore

Euro Gold Technicals Look Near Perfect

Today’s AM fix was USD 1,664.25, EUR 1,325.04 and GBP 1,051.66 per ounce.

Yesterday’s AM fix was USD 1,663.50, EUR 1,325.18 and GBP 1,053.52 per ounce.

Silver is trading at $30.79/oz, €24.62/oz and £19.54/oz. Platinum is trading at $1,519.10/oz, palladium at $630.80/oz and rhodium at $1,025/oz.

Gold edged up $3.30 or 0.2% in New York yesterday and closed at $1,667.20. Silver slipped in Asia then hit a high of $30.985 in New York and finished up 0.59%.

Gold is hovering near its highest price level in four months due to safe haven demand on concerns about global economic growth and the unresolved euro debt crisis.

The possibility of Ben Bernanke and Mario Draghi announcing further money printing and monetary easing is also supporting gold.  The US Fed chairman speaks this Friday and may or may not choose Friday to announce QE3.  However with a Fed meeting set for September, it is unclear when further stimulus measures will be announced.


XAU/EUR Exchange Rate – (Bloomberg)

Should Bernanke fail to announce further QE Friday then we would expect sharp falls in stock markets and gold could again suffer some short term weakness.

Zero level interest rates and a QE3 announcement will be extremely bullish for the yellow metal.

Monday’s figures showing US consumer confidence fell in August to its lowest in 9 months was positive for gold as it shows that the US economy remains in bad shape and is deteriorating increasing the likelihood of the current policy response of choice – money printing.


XAU/EUR Exchange Rate – (Bloomberg)

The technical picture for Euro gold looks near perfect now.

Gold has been trending higher since May. The long term charts show a series of higher lows and higher highs and even in the correction of recent months there have been a series of higher lows and gold gradually consolidated between €1,200 and €1,400/oz.

Gold is now comfortably above the 50, 100 and 200 day moving averages. 

In the last four years, there have been 3 periods of correction and consolidation which have lasted 12 to 13 months (see boxes in first chart) and we appear to be coming to the end of another such period. 

Break outs from such consolidations often lead to sharp moves higher and thus new record highs above €1,359/oz and possibly over €1,600/oz should be seen before the end of 2012.

The fundamental back drop of the unresolved Eurozone debt crisis , deep divisions in the ECB and a high degree of uncertainty regarding the euros long term future strongly suggest that the euro will continue to fall against gold in the coming months. 

Further confirmation of robust demand for gold is seen in figures showing that exchange-traded products backed by the gold expanded to a record. Smart money from Paulson to Soros to PIMCO continues to diversify into gold. 

Gold ETFs holdings have now surpassed Italy to become the world’s third-largest gold holdings when compared with national gold reserves.

Investors now own 78.99 million ounces in ETPs, exceeding Italy’s 78.83 million ounces, according to data compiled by Bloomberg and the International Monetary Fund. Only the USA, and Germany hold more. ETP assets rose 4.3 percent this year

The gold ETF holdings and national gold reserves remain tiny when compared to the massive debts of most western nations and the massive foreign exchange reserves of many creditor nations.

For breaking news and commentary on financial markets and gold, follow us on Twitter.


Cross Currency Table – (Bloomberg)

NEWSWIRE
(Bloomberg) -- Capital Economics Raises Year-End Platinum Forecast to $1,400
Capital Economics Ltd. raised its forecast for platinum prices for the end of this year to $1,400 an ounce, from a previous estimate of $1,350.

Prices will be at $1,500 by the end of 2013, up from $1,400 previously forecast, the company said in a report e-mailed today.

(Bloomberg) -- Platinum is set to retreat 2.4 percent in the short term before resuming an upward trend in the medium term, according to a technical analysis by JSC Corp.

The precious metal surged to the highest level in more than three months amid labor unrest in South Africa, the world’s largest producer. Platinum dropped to its 200-day moving average after climbing above the line on Aug. 22, signaling the metal is in a short-term correction phase, said Takaki Shigemoto, an analyst at the Tokyo-based research company.

“The metal is poised to fall further to around $1,483, or the middle between its 50-day and 150-day moving averages,” he said today, without giving a timeframe. “That would give investors a good chance to buy as the market is still in a medium-term upward trend.”

Platinum jumped above the cloud on the Ichimoku chart on Aug. 20, indicating the metal entered an upward trend and may return to this year’s peak of $1,737.25 reached in February, he said. The chart analyzes midpoints of historic highs and lows, or so-called resistance and support levels, with a breakout from above or below the cloud pointing to a trend. The metal closed at $1,518.75 yesterday.

About one-fifth of global production capacity was idled this month after police shot dead 34 protesters at Lonmin Plc’s Marikana operation on Aug. 16 and 10 people died in fighting during the strike by rock drillers in the worst mine violence in South Africa since apartheid ended. Before the unrest, platinum had tumbled 21 percent from a year earlier as demand slowed for use in pollution-control devices in vehicles and jewelry.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

NEWS
Gold holds near 4-1/2 month high, focus on Fed - Reuters

Gold rises on stimulus hopes; vulnerable if Fed disappoints - Reuters

Gold ends lower, breaks winning streak – Market Watch

Republicans Embrace Gold to Hedge Non-Existent Inflation - Bloomberg

COMMENTARY

Current Monetary System Is Breaking Down – Market Watch

$16,OOO,OOO,OOO,OOOBAMA! – Zero Hedge

Top 3 Rules to Understand About Gold & Silver Price Behavior - GoldSeek

Video: COMEX large trader positioning for gold and silver futures – Got Gold Report

 


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Wed, 08/29/2012 - 09:38 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Technical Perfection, bitchez!

Wed, 08/29/2012 - 09:43 | Link to Comment AlphaDawg
AlphaDawg's picture

A lot of chat about Morgan Stanley today......

Wed, 08/29/2012 - 09:55 | Link to Comment BaBaBouy
BaBaBouy's picture

Monti Draghi Merkel CAN'T Print GOLD, Bitchez ...

 

BUTT the Presses are Oiled and Primed for the unlimited Paper Fiat...

Wed, 08/29/2012 - 09:59 | Link to Comment Pladizow
Pladizow's picture

"Gold ETFs holdings have now surpassed Italy to become the world’s third-largest gold holdings when compared with national gold reserves." - Allegedly!

Wed, 08/29/2012 - 09:54 | Link to Comment francis_sawyer
francis_sawyer's picture

That's been heatin' up...

Wed, 08/29/2012 - 09:40 | Link to Comment Money By Trading
Money By Trading's picture

Well, gold made a swing high yesterday even with dollar weakness.  Here's why I'm still standing pat:  

http://wp.me/p2CT0a-4x

Wed, 08/29/2012 - 10:58 | Link to Comment flacon
flacon's picture

You are right on the money. 

Wed, 08/29/2012 - 09:42 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

I like being long on gold through euros!

Wed, 08/29/2012 - 09:49 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Nice!  All that shit is too complicated for me.  I skim what I can off the salary>mortgage aka Main St.>Wall St. cash laundering conduit and trade for physical.  Golden crumbs from the Giant's table.  I'm Jack on the mfk.n beanstalk.

My fantasy is a Greek exit, catapulting the euro upward, Benny prints, the dollar jackknifes down the ravine. We're at the point of every storm being a perfect one for PM.

 

Wed, 08/29/2012 - 09:51 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Good luck taking delivery.  If you can't physically touch it and defend it, you don't own shit.

Wed, 08/29/2012 - 09:55 | Link to Comment SilverNoob
SilverNoob's picture

Fuckin' A bro. And not deposited in some bank either. I don't like the idea of my wealth being 'protected' in a deposit box. My statsh is secure as fuck because only I and the wife know where it is..........well, maybe its not that secure then!

Wed, 08/29/2012 - 09:58 | Link to Comment gold-is-not-dead
gold-is-not-dead's picture

Best way by far to accumulate is definitely through the personal ad, "sell your gold"... just offer spot price - 5% and voila, you got yourself a good deal!

Wed, 08/29/2012 - 10:32 | Link to Comment adamas
adamas's picture

refining costs exceed 5%

spot less 20% and it might be worth the hassle

Wed, 08/29/2012 - 09:43 | Link to Comment disabledvet
disabledvet's picture

The demand will come from "closing the gold window" I.e no longer being able to convert your euro's into gold at any price. This will probably happen with the yen and yuan soon too. So much industry is literally flooding into the USA right now it's really hard for me to see where the double dip recession is going to come from. I sure can see where the war(s) are coming from tho...three fronts no less if Europe doesn't "implode" correctly.

Wed, 08/29/2012 - 09:52 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

You can't manufacture demand!  You can't manufacture demand! 

Wed, 08/29/2012 - 10:47 | Link to Comment LawsofPhysics
LawsofPhysics's picture

With 7+ billion people you don't need to "manufacture" demand for commodities like oil and FOOD.  How many holders of PMs have ever starved or been unable to warm their house in the winter?

Wed, 08/29/2012 - 10:50 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Pardon, you can't manufacture recession-busting high-markup discretionary consumer goods demand!

Wed, 08/29/2012 - 09:46 | Link to Comment TheSilverJournal
TheSilverJournal's picture

The Euro is about to get a huge boost. Once the ESM is confirmed and implied caps on yields are in place, the Euro will soar and the dollar will be the one on the chopping block.

Wed, 08/29/2012 - 09:49 | Link to Comment LawsofPhysics
LawsofPhysics's picture

How's that gonna work for E.Z. exports again? 

Wed, 08/29/2012 - 09:51 | Link to Comment SilverNoob
SilverNoob's picture

The ESM has to stand trail in the German courts first. But I agree the powers that be won't a little thing the German constitution get in the way......

Wed, 08/29/2012 - 09:51 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Hastening Germany's exit from the Euro.  Here we go again.

Wed, 08/29/2012 - 09:50 | Link to Comment gaoptimize
gaoptimize's picture

"Once the ESM is confirmed and implied caps on yields are in place, the Euro will soar .."

So you think European investors will bow to a centrally planned yield and continue to buy the bonds offered?  Good luck with that.

Wed, 08/29/2012 - 11:51 | Link to Comment TheSilverJournal
TheSilverJournal's picture

If they don't, then fiat won't last until the end of the year. Once Spain or Italy goes, the Euro goes, then the dollars goes because all the banks are interconnected. Do you really think the centrally planners will give up their printing presses so easy?

Wed, 08/29/2012 - 09:53 | Link to Comment darteaus
darteaus's picture

"Gold ETFs [alleged] holdings"

Wed, 08/29/2012 - 11:32 | Link to Comment Long-John-Silver
Long-John-Silver's picture

1oz Gold in hand is worth 100oz in a Gold ETF.

Wed, 08/29/2012 - 09:57 | Link to Comment You Didn't Buil...
You Didn't Build That's picture

My SLV is up 300% (I bought it at 10) and my house is down 38% and still "correcting" downward.

 

John Williams predicts silver will rise to $200 due to devaluation of fiat.

Wed, 08/29/2012 - 11:05 | Link to Comment Beam Me Up Scotty
Beam Me Up Scotty's picture

Hopefully you don't get Corzined.  Thats much worse than any boating accident.

Wed, 08/29/2012 - 10:09 | Link to Comment Bastiat009
Bastiat009's picture

Gold is like real estate. It always goes up. Well, that's what some say at least.

Wed, 08/29/2012 - 10:31 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

As long as Barney Frank isn't lending you the money to buy the gold, yes, it likely will keep going up and is not bubble-ous.

Really, gold is only reflecting the biggest moves in the paper currencies. Uncaged silver would do this even more accurately as it is infinitely useful in all manner of human endeavor and can thus reflect and transmit - which is what elemental silver does - the value of labor.

However, gold's anchor is energy. Whenever I get lost in the dialectics on value and price and intrinsic worth and so forth, I ground myself by looking at the graph of crude bbl per oz of gold throughout the history of their co-existence.  Here's one snippet I just googled quick:

http://www.rayservers.com/why-gold

 

Wed, 08/29/2012 - 10:45 | Link to Comment Bastiat009
Bastiat009's picture

In July, I read here that gold was going to explode in August.

Now I am told that gold is good when priced in euros.

Since the euro is going to zero I guess it's not a bad call. Now, tell me how many people have a bank account in euros in the US or outside the EZ for that matter.

Wed, 08/29/2012 - 10:52 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

A purchase of PM is not for seeing it explode, it's for hedging against other types of money imploding.

I can say it'll rain on Tuesday, would you believe me?

Wed, 08/29/2012 - 11:06 | Link to Comment JJSF
JJSF's picture

Resistance the past few days was expected really.. Solid uptrend continues..

http://mlatrader.com/gold-resistance-on-speculative-fork/

Wed, 08/29/2012 - 12:07 | Link to Comment TWSceptic
TWSceptic's picture

Perhaps it looks a bit too perfect...

 

I do not trust this rally at all.

Wed, 08/29/2012 - 13:30 | Link to Comment alexanderstollznow
alexanderstollznow's picture

reading all these posts about gold, you could be forgiven for not realising gold has been dead sideways for the last year and is currently sitting right in the middle of the trading range for that time.  that is despite all the babbling here over a year ago about how it was going to run straight up to $3000, after the endless rounds of QE, and runaway inflation.

i am also highly amused that because of that, we are now talking about gold priced in euro.  ie if my chart isnt heading up, then i will just price gold in something with a decreasing value, to make my chart head in the 'correct' direction.  suggestion:  perhaps we could look at gold priced in coal, then the chart will looking really positive.

Wed, 08/29/2012 - 14:48 | Link to Comment Bastiat009
Bastiat009's picture

I 100% agree with your post which is just factual. Being objective is such a rare quality these days.

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