Gold Jumps As Citi Says Gold Sell Off Over, Reiterates $2400 Target

Tyler Durden's picture

Wondering why gold has moved by over $20 in the last few minues? Wonder no more - according to a note just released by Citi analyst Tom Fitzpatrick, the gold correction "has run its course and a rally is now back on the cards." Granted it is not all smooth sailing - "Gold may drop to $1,550 before turning", but when the turn comes, Fitzpatrick sees it as going all the way up to $2,400. He has the following technical observations: "Only a weekly close below $1,535/oz means corrections may be deeper." The result can be seen on the chart below. Incidentally this is a 1:24 scale replica of what will happen once the Fed and ECB proceed with the only logical step which is doing what they do best. Unless, of course, the plan is to have a modest war in the middle east to distract everyone from the economy. Because we have never seen that movie before.

From Citi:

  • Held the 55 week moving average on a weekly close basis ($1,567)
  • Failed to post a weekly close below the Sept low ($1,534)
  • Remains in the bullish channel ($1,544 this week)
  • The correction down looks to be over as we stabilise at these support levels and a rally back up is on the cards
  • Resistance levels are at $1,802 followed by the trend high at $1,920.
  • Our long term target is $2,400.

  • Held the trend and 200 day moving average as support.
  • Positive momentum divergence reflects weakness in the move down here and warns of a turn back up
  • Held the low from Oct 2011 and has formed a double bottom within a triangle
  • A rally through 139k would open the way for a move to the double bottom target of 153k (20% higher)

  • The move down on the Gold / Bonds Ratio has been almost exactly the same as that seen in 2008
    • The 2008 correction down was 2.81 points on the ratio over 99 sessions
    • The 2011 correction down which hit a low on Dec 29th was 2.84 points over 93 sessions
  • We also have positive momentum divergence on the chart - similar to that seen in 2008 at the lows of the move down.
  • The trend resistance from the highs converges with the 200 day moving average (also like 2008) at 12.21 and a rally through there would be a decent bullish break.

  • Tested and so far held the support levels that provided the top of the range in 2010
  • Also held the 76.4% retracement of the last rally from Jan 2011 to the highs in Aug 2011 (0.1250)
  • The rising trend line also converges with these supports
  • The 2009 correction down was 30%. The move down seen from Aug 2011 was 28%

Overall:

  • Gold has held good supports in the $1,550 area
  • Gold is showing signs of strength against the DXY Index and the equally weighted basket of G10 currencies
  • Gold looks to now outperform both Bonds (T-Bond) and Stocks (Dow)
  • Unless and until we see a weekly close below $1,535, we believe the uptrend in Gold has resumed and a move to $2,400 throughout the course of this year is on the cards.

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MFL8240's picture

More on the US clown show.  Are they forgetting the crime lab in DC will print all the money needed to supress Gold?  Up $20, down $50.  That why the people should get the hell out of this charde in Chicago and into Physical Gold and Silver.  

SheepDog-One's picture

Problem is, its hardly 2008 anymore where the floor for oil was around $60 and they had leeway to print. 

'They'll print all the money needed'...yea and then they can then enjoy the new $130 floor for oil.

Hey, GO for it!

Worker Bee's picture

Citi says gold is going down they are idiots. Citi says gold is going up they are omniscient gold calling Gods.

SheepDog-One's picture

Well I dont know who youre claiming said all that, in fact many of us here warned they would sell off gold. So do you own any gold?

Worker Bee's picture

I cant afford gold. I do have a really nice gold (plated) Obama Medallion on a 24k(ish) chain though.

SheepDog-One's picture

In the words of Tyler Durden at the dry cleaners-  'Oh....youre a moron...'

smiler03's picture

Somebody says they can't afford gold and you call them a moron.

What a twat you are.

HungrySeagull's picture

Silver is good.

If you are careful and gently accumulate silver coin, eventually on a long enough timeline you will own gold.

I did myself for a few weeks on one coin that netted me a 300 some dollar gain which I put back into Silver and got out before it fell straight to something like 26 dollars and immediately within minutes settled on the hard deck of 30 dollars.

 

It was crazy but you gotta know when to hold em and when fold em.

 

I am just sorry that I was sleeping when Kitco showed a 29 to 25 something dip over 10 minutes during the night.

Judge Arrow's picture

in the short term, this works more often than not

If Silver moves up % wise faster than Gold then BUY the SPY (buy calls).

If Silver moves down % wise faster than Gold then SELL SPY (buy puts).

Mesquite's picture

>Worker Bee...

Har har har...Very good...Me too!... <](;-)-}=<

Worker Bee's picture

Who is the "they" that would sell off gold? If the market is being manipulated woudnt it be institutions like Citi doing it? Im just saying that all these ANALysts are idiots until they say something that fits our world view..just an observation. Im not a moron..I graduated from Everest College with honors!

Spigot's picture

Its called being "the water boy". In this case they are given the task of signalling the intentions of TPTB, who (IMO) always find a way to front run whatever direction they choose to move the markets.

Monedas's picture

Maybe I can sell that Maple I've been carrying in my wallet since September....this month ?  I'm afraid the condom ring it leaves will be permanent !  Monedas 2012  Comedy Jihad Seeing A Flat Screen LED HDTV In My Future !

HungrySeagull's picture

Forget the condom ring, look out for the imprint of the Colt inside it's holster.

Monedas's picture

??????   Was my Fatwa approved ?

Dave Thomas's picture

Monedas, I used to carry a liberdad in my wallet. Some female clerks used to roll their eyes, a giggle is better than a sigh.

Try one of those 5 oz pandas and see what they do.

 

Monedas's picture

Supersize !!!    A friend of my brother's wears a 5 trounce Panda on 18k chain and bezel !  We tell him he's gonna get his throat cut....but he likes the attention?   Goes around in the front yard without a shirt on ?    Drives a vintage Fiat 2000 sportscar, no shirt, gold chain and sometimes a little drunky ?  I don't think he's gay....but if he had been born in the 60s he would for sure be gay ! Does that make sense ?

ffart's picture

I did a google image search for Fiat 2000 and got what looks like an armored fighting vehicle from WW2. Putting a SILVER coin on a gold chain is just tacky though.

CvlDobd's picture

I thought technical analysis didn't work? Are we carving out an exception for gold?

EL INDIO's picture

Yep. All he said is if Gold goes up then it is going up unless it goes down in which case it would be going down !

 

Can someone give a prediction without ifs and buts ?

Snidley Whipsnae's picture

Your comment reminds me of Pres Truman's famous statement...

"I would like to find an economist with one hand"

SheepDog-One's picture

Robo gnashing his teeth and kicking himself in the ass 'WHY did I call the gold top at $900 and sell....WHYYYYYYY'!!!

tekhneek's picture

There was a guy here like a month ago saying his "target" for gold was like $1,200 by the end of January and like $900 by June.

I think he said silver would be like $18 too and then $12.

They usually just make new accounts though. He'll be back when gold drops from $2100 to $1800.

SheepDog-One's picture

SURE I remember him! Trolls...LOL.

mick_richfield's picture

We should start a collection of like ZH baseball cards with our most famous trolls, their avatars, famous sayings, and stats.  Like "Most Downticks for a Single Post",   "Career Downticks", etc.

Like:  "You can dig it out of the ground for five dollars."

I would definitely collect these.

 

smiler03's picture

What I'd like to see is an accessible database of all ZHers predictions for what and when and the date it was made.

Just a small task for a Geek, I'm sure :O)

 

edit: and the actual outcome.

Frank N. Beans's picture

let's see...

Banks need QE3+

Bernanke wants to print but can't because...

This requires big drop in stock market, but...

Stock market not cooperating, so ...

US pretends (or not) war is coming, followed by acts of war

Stock markets swoon, recession acknowledged by US 

Presto chango, QE3+ enacted!

Gold jumps!

Stocks jump!

Bankers happy!

Everbody (who's important) wins!

 

 

SheepDog-One's picture

Isn't the problem with that scenario they'd go thru all that, and maybe get back to about where we are now, only with $140 oil as well? 

Think for yourself's picture

who in TPTB cares about $140 oil if it gets them to kick the can down for a few months while giving them more time to get their next step ready?

fnord88's picture

corrrect me if i'm wrong, but wouldn't a higer price of oil mean more demand for US dollars? Wouldn't TPTB love that?

DosZap's picture

Frank N. Beans

THe FED has never stopped printing, they are holding up the EU, and they finally got smart, and are just doing what they want,without announcing it, and that keeps the metals mkts low, and the sheeple from bitching.

I cannot believe you have not figured out the game,their WAY past anything labeled QE3...................you just are not in the loop any longer.

What you do not know will kill you..........................

Monedas's picture

Where's a good LCS in San Diego.....San Diego Coin and Bullion ?   For us little guys !

San Diego Gold Bug's picture

Monedes,  I use to use SD Coin & Bullion until I found Liberty Coin & Precious Metals.  They are located in Del Mar.  I found them on the comparegoldprices.com website.  They are large from what I can tell and their prices are as good or better than Apmex and Gainsville.  Here is the link  Libertycpm.com

Cheers

Monedas's picture

Thanks ! Don't worry about the red arrows....some Iranian losers who've lost their asses in paper gold over and over again ! You come across as sincere....and shall we say...comfortable !    I'm reluctant to sell my Maple and won't at these prices....but, what the heck (Hell) I have to spice up my Social Suck budget once in a while !    Monedas   PSA:  I'm not picking on Iranians....it's just my "Joke du Jour"....Monedas 2012 !

GBnotEU's picture

Spam, spam, spam, spam, spam, spam, spam, spam, spam, spam, spam, spam, spam, spam.

Monedas's picture

VAT is a bitch ! Buck up !     Brits see the Menu at CompareGoldPrices and they go nuts !

RichardENixon's picture

Would you like spam with that?

Monedas's picture

I think people are not understanding San Diego Gold Bug (look at his post further up) ! He's buying with both hands ! He's saying the trend is up....although it's just starting ! I think English is not his first language....but don't worry about him....he's doing just fine....big time !

css1971's picture

Yeah this seems to be the crash which bottomed mostly on Oct 4th. Which everybody[1] missed cos the CBs stepped in.

 

Bulletsnbullion's picture
Ned Naylor-Leyland: “The Chain of Custody Behind Gold’s Price Setting Mechanism Appears to be Breaking”

I had the chance to speak with Ned Naylor-Leyland yesterday, Investment Director with Cheviot Asset Management, and adviser to an offshore precious metals fund. It was a spectacular interview, as Ned is one of the few truly free thinkers in the investment business today.

During the interview Ned shared his thoughts on the new PAGE(Pan Asia Gold Exchange) launch in 2012 & the great opportunities it will provide investors, the recent pullback in gold and silver, and what may end up taking gold to go much higher levels.

Read more »
Sneeze's picture

Gold's gone MOMO.

Judge Arrow's picture

In the short term this approach usually works

If Silver moves up % wise faster than Gold then BUY the SPY (buy calls).

 If Silver moves down % wise faster than Gold then SELL SPY (buy puts).

Ignorance is bliss's picture

I'd rather own Gold or Silver vs. the IOU from an over indebted ponzi nation. Figure the odds of continued Dollar devauation....Has the dollar ever increased in value over the long run? Last I checked its lost 95% of its value from the 1930s.

 

Citi, Soros, Goldman, JPM, BofA etc. only have one mission. To take your money and make it their own. As far as I am concerned whatever they say makes as much sense as the stench coming from my ASS.

sdmjake's picture

"Own gold vs IOU from ponzi-ville" ---BINGO!

Shizzmoney's picture

Report came out today that crime was down 6.4%, even as joblessness went up.

Reason? Gold prices haven't bloated (yet).  Granted, it's at an all time high; but it relative to the risk.  EVen a petty criminal knows trying to just steal an OZ at $1500 isn;t that much of a risk (because $1500 don't go as far as it used to - especially in the drug market).

But if Gold were to get to $2500? $3K?  Higher (as Mike Maloney thinks it will)?

Social disorder will begin.

Urban Redneck's picture

I guess the Ministry of Propaganda has decided that copper theft isn't a crime...

BigMike's picture

If I were Obama I'd push for another round of QE or NGDP targetting while at the same time releasing oil from the strategic petroleum reserve.  In the short run, you can goose inflation and 'growth' while at the same time keeping oil prices in check. 

 

Obama released oil from the SPR last year, who is to say he try and pull something like that again?  

 

If the Iran thing doesn't blow up in the next few months, the oil price could come off as well.  

 

I'd love to see gold pull back to the $1450 area, while silver bottoms at $24.50-$25.00 btw.  The gold/silver ratio would also top out at 60 before heading lower.  

GoodBoyFX's picture

is it me or Citi trading desk is very vocal in their trading ideas? Why is that? we don't hear any other bank share their ideas. Once in while Goldman Sachs gives ambigous calls. What is the motive of these 2 by publishing these ideas? one possibility is that they want us (ill-informed traders) to follow their fake calls and become victims of stop hunts by their network.