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Guest Post: Has Gold Unwound its Overbought Status?
Submitted by Chris Capre of Second Skies LLC
Has Gold Unwound its Overbought Status?
One of the biggest questions being written about which is on traders and analysts minds is whether Gold has moved into bubble territory and is about to start a major reversal, or is going to keep on truckin’ Blind Boy Fuller style. While my fundamental hat suggests it’s likely to continue its trend (as a hedge against bad govt’s), being a quantitative price action and ichimoku trader, I have to see what the technical picture is communicating.
For looking at whether a market is in an extreme phase and is set to reverse, we often look towards our weekly 20EMA spread. This model plots the distance from the weekly closing price to the 20EMA as a gauge of market extremes or whether the trend is likely to continue. If a market is at an extreme level, it usually has a very large spread from the 20EMA. Any abnormal spread from the 20EMA is likely to return to the 20EMA.
Looking at the chart below, you are seeing the weekly chart on Gold over the last 6 years. In this chart, you can see price’s movement and its relationship to the 20EMA, along with the lower indicator/model representing the spread between the week’s closing price and the 20EMA.
We have highlighted the key peaks which generally occurred around a 1258 reading, or price having $125.8 price spread from the weekly closing price to the 20EMA. This generally led to a pullback minimally to the 20EMA within an average of 4 weeks and a maximum of 10. We would like to note that historically, since April of 2005, Gold has spent only 43 weeks below the 20EMA (closing basis) out of 541 for a total of 8% of the time, statistically displaying its tendency to trend upward. It also means should Gold break below the 20EMA, the chances of price staying below it for extended periods of time are unlikely.
What we do have to note is the most recent parabolic run away from the 20EMA created an abnormal spike never before seen in history with a reading of 2718 or price closing $271.8 away from the 20EMA. So the next logical question becomes what do we make of this and is it the end of this massive uptrend?
Our view is this is unlikely, considering the historical relationship to the 20EMA as noted before (8% of time below). In fact, we may consider a pullback to the 20EMA to be a healthy thing as it will put Gold through a re-distribution phase and allow the order flows behind it to start another run higher.
But, the extreme nature of this suggests price is likely to pullback to the 20ema within the next 2mos or by year end. Across most instruments, price rarely has this kind of extreme or unstable relationship to the 20EMA and usually means the orders behind such movements have to normalize a bit before starting another run. Keep in mind, this does not have to happen with a violent sell-off and could be the result of price hanging around the $1700-$1900 range while the 20EMA catches up to current price levels.
In fact, to add any new positions, we’d rather wait to let the spread normalize and move back into the prior range which suggested a very healthy trend.
We also do have to add to the bullish prospects how price had one of its biggest weekly drops from an open of $1860.92, to an all-time high of $1911.89, then shedding $209 to the weekly $1702 low to do what??? Bounce strongly and end the week at $1827. This is highly suggestive of how the buyers were ready to stand up to one of the most violent and largest % based weekly sell-offs and send the metal within roughly $40 or 2% of where it opened the week.
Thus, although the short-term price structure may suggest consolidation or mild pullback to the 20EMA, our medium and long term technical view is still strongly bullish.
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margin hikes on the way, gold down to around $1650 then resume uptrend.
Margin hikes are all relative. It is like changing the nominal down payment on a house if the price of the house goes up.
20% down on a 100k house is 20k, if the house price goes up to 200k then the down payment(margin) must also increase.
And what do suggest you tell all those that bought silver at $50.00 and are now almost 4 months into waiting to break even? "It was all talk?"
Don't be so naive.
"And what do suggest you tell all those that bought silver at $50.00 "
I would tell them if that move makes them loose sleep, then wait and sell at $75...
I bought silver at 49, at 40, 30, 20, and 16. Not necessarily in that order. I am proud to say I bought at 49.00, cause sometimes it takes balls to buy into a running bull market. I felt it might be a temporary high but pulled the trigger anyway as a test of my conviction. Never for a moment have I regretted it. Oh by the way bought some more on the pull back. Of course most of my family and friends keep telling me that PM's are in a bubble.
I've been buying the gold and silver tops all the way since $270 and $4. It really burns. I am not sure I can take it anymore.
@Thomaa, your irony is a hoot! I was with you at $270. And I was into silver at $5 just before the Hunt Brothers started their corner. You are right. It burns. But it burns good!
I wasn't a buyer then but I believe silver was more like 2 when Hunt bros started their corner. And it was like 1 a little bit before that.
I've been doing the same thing in gold. At this point, Russell over at the Dow theory says
"It will take great guts to stay in gold during the coming period" o.k. I'm IN..and the GUTS I have for gold
Hoo=yah
Look all the doubt even among the goldbug community. Even Marc Faber thought gold was over bought in May and it didn't look back.
Put some weight on fundamentals for a change. Sentiment is over-rated.
Fundamentally, what is going to stop it ?
Nothing will stop it The owners of Gold have GUTS in their conviction! and they are right
Stoneleigh over at automatic earth is even bearish on gold, what the hell is going on?
http://theautomaticearth.blogspot.com/
Stoneleigh: Of all the commodity bubbles, it is the end of the explosive rise in gold that is set to surprise the largest number of people. Very few expect it to follow silver's lead, but that is exactly what we are suggesting.
Gold has been increasingly considered to be the ultimate safe haven. The certainty has been so great that prices rose by hundreds of dollars an ounce in a blow-off top over a mere two months. The speculative reversal currently underway should be rapid and devastating for the True Believers in gold's ability to defy gravity eternally. Expect to hear all about the enormous Ponzi scheme in paper gold, and a lot more about plated tungsten masquerading as gold. It doesn't even matter whether or not that rumour is true. What matters is whether or not people believe it, and how it could feed into a spiral of fear as prices fall.
Gold has been increasingly considered to be the ultimate safe haven. The certainty has been so great that prices rose by hundreds of dollars an ounce in a blow-off top over a mere two months. The speculative reversal currently underway should be rapid and devastating for the True Believers in gold's ability to defy gravity eternally. Expect to hear all about the enormous Ponzi scheme in paper gold, and a lot more about plated tungsten masquerading as gold. It doesn't even matter whether or not that rumour is true. What matters is whether or not people believe it, and how it could feed into a spiral of fear as prices fall.
Guessing the "price" of gold is a fool's game. The only factors to consider are psychological fundamentals of the economy, the greed of the bullion banks, and the foolishness of politicians. And these things cannot be quantified. All other considerations, including TA, are useless.
I tell those that bought at $50 to listen to Andy Maguire and learn about HSBS and JP Morgue. I also tell them to be grateful the can was kicked again, and buy more while the sale lasts.
in the long run silver at 50 (or 45 more likely is where they bought) will beat the crap out of gold at $1500
I would tell them if they are in it short term to wait, it will go up, and then get out of it. They are called weak hands and we don't want them in the game, it is too much for them if they are looking to "profit." Wrong reason to be there. If they are in it long term, then hold and know it is going to be volatile. Back at 17.00, when I got in, it dropped. Long time at 15.00 (I bought more here and lower), then it crept up, then it hovered around my buy in # for a while. Then it took off. I had to focus on why I bought it and relax. My husband was really helpful that way.
They have to know why they bought it. I don't believe that anything is improving in the economy. Every time I buy, I have to wait to make back the commission. I just don't let myself agonize over it. I did not buy in at 50, but if I did, I would know that I felt better having it than not, and that I have it as insurance.
I am alert, as you suggest. I question myself. But at this point, I have cost averaging on my side. I can afford to sit and wait to make up the commissions because, in the big picture, I bought in so long ago, I am ahead. Focus on the big picture, or don't play, is my best advice to that person who bought in at 50.
Good points.
I started buying silver at $17 and gold when it was $1300 after I sold out of the GLD. If you can get out of the mindset of worrying what its going to be worth tomorrow or next week, then you don't sweat the swings. I am buying for what its worth 3, 5, and 10 years from now. Cash is worthless with a debased currency but its better than bonds or equities while you are converting to PM's with dollar average costing. I thought I had missed the train 1 year ago and right now I'm 50% of where I need to be. Buy regularly with what you have and don't worry about the price. buy it, own it, hold it for long term.
If there are really all these people who "bought at 50" and are getting skeered, you could do them a big favor and ease their burdens by buying all their unwanted tail risk relics. I myself have never met one.
I bought silver at $50, but far more afterwards. I've been in the black for months. If you aren't commited, there's no investment worth buying into- they can all go down. The trick is to have a strategy, and stick to it. I was expecting a correction long before I bought even one coin- there was homework to be done before opening my wallet. I bought at $50, because I expected the pullback at $75, but because there was a plan, and I stuck to it, it still worked out fine. Better than intended, actually, because the correction lowered my break-even point.
So, the only thing I can tell those folks is... me too. Should've stuck with your strategy.
Agree, golds gonna get whacked
1650~1700 then it's back in buy line
This happens...probably this week, nothing but fireworks on horizon.
Short it if you are so confident (GLL). Go ahead, I dare you. Not with my money, I will stay put knowing the European situation will collapse this house of cards and while none of us know the date and time, its very close to now.
Ok.
When is the next non farm payroll release? Let me evesdrop over by those JP traders for a second...
No whack except you doing it to yourself. Gold is STRONG real money, and the story is out to the masses about all the phoney fiat paper floating around the globe.
I wonder how many trillions they are spending to levitate that Euro at 1.44.........Gold is going to Alf's WAVE 3 target of $3500 HOO=yahNo whack except you doing it to yourself. Gold is STRONG real money, and the story is out to the masses about all the phoney fiat paper floating around the globe.
I wonder how many trillions they are spending to levitate that Euro at 1.44.........Gold is going to Alf's WAVE 3 target of $3500 HOO=yahI could live with that.
Anybody know of any metrics or charts that have been developed showing historical price action in relation to margin hikes?
1835.4
Two weeks ago the paper bugs and government fundamentalists were warning me incessantly about gold being in a bubble, so I went out and bought more physical.
That is the spirit.
When everyone warns - buy.
When everyone has a logic for the price rise - buy puts.
even ZH crowd is scared now.
"even ZH crowd is scared now."
Wow! We got a flock o Trolls on this thread... and they sound desperate...
For the record... We ain't scared!
No scare here. I have the guts to ride Gold all the way to somewhere near the top. I will not get shaken out. I have been tested bythe anti-gold element for 10+ years now.
And the Gold army is strong HOO-YAH
Snidley, you are Humorous! Like A Fat cigar smoking " BLIMP". Some one stick a / Pitch Fork / in you...
Yon Krill! You little whiner... You said you were going to come to my hood and take care of me... I was expecting you today but you don't seem to be in a hurry...eh, boy? lol
You just run along boy and drive that Mercedes with the bag on your head...hehehe.
Got you a big collection of Mercedes eh boy? Can't be a man without a status symbol... or maybe it's a phalax symbol you need, eh boy? hehehe
You bring yo self around and I will show you the time of yo life boy...
Blahhh Blahhh Snidley! Hey Snidley what is a Golden cross? Hey Snidley can I buy some " Al Capone " checks from you?
You are a joke! Hey Snidley ))( any comment on month end exporter flows? Hey snidley you are a " PUNK" loser!
I respect the forum, and ocasionally I get perturbed. I have never liked Snidly Scum Bag from Day (1)...
We all know that. I'm going to find that bitch and ( PUNCH) it in the nose! Period
Well boy you just come on and give ol Snidley a punch. Like I said we will show you the time of your life...
We will send you away mortified...er, satisfied... those fied words are confusing, eh boy?
What a Yon Krill, boy? yo figgerd dat one out? It's whale food but more... guess yo aint as smart as I thought and certain not as smart as yo thought...hehehe
Yo drivin dat Mercedes and typin at de same time boy? hehehe... ya'll be carful, ya hear???
Hey boy, did yu know that gold is kicking the crap out of equities? for the las 11 (ya eleven) years? Ain't that amazin boy? Yo got yo some a dat glitterin gold boy?
As smart as yo are yo certain mus have some? hehehe
Address? Bitch. I'll Bless your Door step!
Smart as you are boy and you need an address? You can find me if you work at it... and I will make damn sure you get your moneys worth when you get here boy... Lets dance boy!
Ancient Aliens on History channel said the Giza Pyramids were created by ETs as a way to convert other elements into gold! Someone tell the Fed so we can take over Egypt and flood the market!
yiddy alchemist have always wanted to convert lead to gold. but now they figured out a way to deal with this problem. its called gold plated tungsten....
fractional buillion paper ponzi is way easier...
Why go through the trouble when you can just sell gold you dont have?
http://www.youtube.com/watch?v=BfCn8NlLHko
yes but a lot of these countries that for years have trusted amerika , and its banks may start demanding their product be produced and delivered to them, ala , venezuala....etc... no paper promises will suffice for these requests? what then?
what then?
http://www.youtube.com/watch?v=sI2uWOk25gI&feature=related
And a lot of us become feudal kings :-)
when all of the gold is taken out of new york, what is left?
oh i almost forgot........
tyler, ,,,,,tyler .....it is my understanding that the basement vaults at jpm were flooded and there are many pallets of gold bullion missing. presumably it has been stated by the custodians at jpm that these missing pallets somehow floated out of the building and are now somewhere in the hudson........
over and out......
Brilliant! I hadn't thought about that. 9/11 was too much hassle, use a hurricane as cover, mandatory evacuate the masses and load up!
Unless proven otherwise, I assume the U. S. has no gold in storage. I trust our government as far as I can throw a 400 troy ounce gold brick!
3rd infantry brigade, 1st infantry division is guarding empty vaults.........all that gold is in the city of london and has been for a long time...
Yeh, Floating out over to Hugo Chavez
No, it was the Anunnaki. The performed genetic engineering on protohumans, programming us to collect the gold they need to shiled the atmosphere on their orbitally eccentric planet. Every several thousand years or so they swing by Earth to pick up the gold then we have to start all over again. They are part reptile, by the way.
http://www.youtube.com/watch?v=jJV4wrNwWDU
i can't believe they are not here yet. like heaven's gate and comet hale bopp.....they thought they had arrived in 1997, but alas, false alarm...
Well, in Europe's point of view:
Europe is going to need to print 25% more euro's in the next 2 years to keep the shit floating.
Imagine you're a billionaire... wouldn't you throw in a few billion in Gold?
By the looks of it, they are buying and so do a lot of people who have money to be rescued.
LOL.
Did you mean PIIGS floating?
:)
Sort of relavent ... involves floating ... panic ...
http://www.youtube.com/watch?v=Th_aBzrV37M
Regards,
Cooter
does that mean the eurozone will export some inflationary pressures to the gulag amerika's shores?
This is a good article. I agree, that we are short term over bought. Have been posting that we need to turn lower (rest) to give us our next solid leg higher. I did buy more physical on the dump, and now will wait to see if we pull back again to 1,700 or 1,650 to add again. But for us here, so what. This is our protection and short term dumps just gives those of us who want to add a better entry point.
And gold can remain range bound for a few weeks to work off the over bought and let the 200dma move closer to the current price. No matter what, just keep thinking the 3 stooges in control with no clue what they are doing. So will bet none of us are selling our physical.
Carry on.
i am wondering if bullion prices ever will decouple from paper gold prices...
It will happen, the same day that the zh servers go tits up! ( Gold price is actually decoupled now, but just to a small degree) The Chavez delivery has made things quite interesting in this arena...
if that ever happens, its game set match, no doubt about it..........
speaking of servers, i would like to see zh servers. i bet its hot in there......ha ha ha
I hope Chavez gets on TV and personally says he got his gold because in my opinion they are going to stiff him!
all they have to do is wait and obviscate. he is a dead man walking with the big c...........
Owning gold is like getting financial insurance. Gold is there to protect your wealth if/when the SHTF. It's a good idea to wait for a pullback in the price as long as you have a secure stack of gold already.
If you don't have any gold, and you're waiting for a lower price, I think you've failed to understand the point of owning the metal in the first place.
By all means, make a dolla once you have a healthy stack, but if you don't have any gold, what the hell are you doing waiting to get some?
This isn't about making money, it's about survival. Once you have a healthy stack, THEN worry about the price and whether it's going to go up or down short term.
t1000...I concur,++++ but be damn careful how you buy! DO NOT pay the huge spread on on crap "numisatic" coin. Find and compare your local coin dealers...a much safer bet...:)
Yeah, get gold eagles, gold buffalos or Canadian maples.
Good article on the gold bubble talk: http://truthingold.blogspot.com/2011/08/idea-that-gold-is-in-bubble-is-i...
Agreed T1000. When SHTF MS-69 or MS-70 or MS whatever won't mean shit to a tree!
Tuco Benedicto Pacifico Juan Maria Ramirez
Good comment:
"...I ask you to consider that the marquee indicator of an investment product in the peak frenzy of a bubble is the endless aggressive promotion to seduce YOU into buying THEIR investment - not THEM seducing YOU to sell them yours. ..."
That's good advice assuming you don't see confiscation as a possible scenario. Buying the small spreads for common gold (like early double eagles) is not all that onerous, especially when you consider the appreciation over time due to the run-up in gold. MS-61s to 64s can be had for a small premium over raw coins. AU-50 and better sliders are even cheaper. Having some cheap slabs on hand makes you a "collector" and free from the usual parameters of confiscation. Just a thought. ... That's spelled numismatic, BTW.
What's your definition of a "healthy stack"? Owning physical is a must, but you'll still be screwed when the SHTF if you don't have enough (i.e. holding something ending with at least six zeros worth).
It's all relative. 10 oz for one person might be good, while 10,000 oz for another might be too little. University of Texas holds 1 billion in gold, around 525,000 oz., but that's only 5% of their portfolio: http://www.forbes.com/sites/robertlenzner/2011/04/17/university-of-texas...
Personally I'd load up as much as possible to trade fiat for gold, but if anyone is waiting on the sidelines for the right moment and they don't have any gold, they're missing on the purpose of getting it in the first place. Don't wait. If you don't have it now, forget the price and load up to where you can feel good about what you have in hand.
Don't try to pick up the nickles and dimes of fiat lying on the ground when the the gigantic steam roller is fixing down on you, getting closer and closer every day. The fiat gain is not worth it compared to the loss when/if this ponzi economy collapses.
I agree it's relative if you look at it on a percentage basis and better to have some physical gold compared to none. Still, an individual who owns 10,000 ounces ($18 MM) of gold, even if it represents a tiny percentage of his or her net worth, is in far better shape overall than someone who owns only 10 ounces. Obviously, the amount of gold you currently own is a function of your overall wealth with the ability to buy more with future earnings / income. My question is really about individuals who own relatively modest amounts of gold for whatever reason (even if it represents 100% of their assets). Recognizing you can't buy what you can't afford and it's better to have some gold rather than none, how much "protection" does the person really have who owns 10 oz (i.e. $18,000) of physical gold if paper assets turn to dust?
It's a good question. I think even having 1 oz is going to be far better than having nothing. How much protection will that give the person, I guess we'll see on the other side :)
"This is a good article. I agree, that we are short term over bought."
What you think or agree to doesn't matter. What the Asians, Indians and Mid Easterners do with their excess fiat is driving gold.
America is slip sliding away... Best buy some gold and protect yourself... Or, you can depend on your government to do it... :)
Sudden, which country in Europe do you reside in?
Belgium
just wait a few days...
the country that invented the french fries.
and no, it's not france.
You mean freedom fries. Fixed it for you.
xau/usd trading at 1836 right now
http://www.semmo.net/streaming-real-time-quotes-gold-spot-price-silver-spot-price.html
bla bla bla
the gold price in fiat is political
look back at the last 4 decades from an Austrian School point of view and run for your lives
the banksters pulled a John Galt on you
Galt's Gulch is offshore somewhere
Switzerland's too cold.
The elite favor Dubai now.
http://www.rense.com/general84/dee.htm
Dubai sucks and they only want the financially elite. South of France only a few hours out of Switzerland...
South of France sounds good to me. Rennes Le Chateau in particular. Portal to another dimension and all the Visigoth gold you can't carry...
http://www.telegraph.co.uk/news/worldnews/europe/france/8671426/Indiana-...
Hmm, Solomon's gold and the Holy Grail in the South of France. How could Monty Python been so wrong?
The pumpkins are doing great Hulk. Thanks again for the advice... Massive Strawberries... Yen
Stupid, useless TA analyses, ignoring the horrendous macro situation. Of course the paper dollar price could
fall for various reasons, margin hikes, selloffs, but so what, if you own physical? Its the ounces you
own, not Crimex paper, that counts.
But in the meanwhile margin hikes are strengthing the hands of the rich and weaking the hands of those that want to but can't afford too buy! Which leaves physical as the only alternative for the second group.
dead wrong Edog!
Buy the dips when margin hikes are announced.
Physical is the only sensible approach now. Unless you think unk sam can stick save this FUBAR situation...
Odd:
http://www.sgxniftydowfutureslive.com/index_files/DOWFUTURES.htm
has Gold at 1809
Kitco has it at 1834 (assuming 1834 is correct)
$1831.10
http://finviz.com/forex.ashx
click on commodity for spread out chart...
Can't afford a Terminal? I Own (2)... Snidley / Splat.
Yeah boy you got 4 or 5 fancy cars and 2 or 3 fancy terminals and god knows what other crap you have accumulated...
But you are still a miserable ass hole... and no amount of money or toys is going to fix that.
Yon Krill, you are simply a losing sniveling little piece of crap trying to make money scaming good folks out of their hard earned money... and you demand respect... what a piece of work you are boy... Your daddy should have turned your spoiled ass over his knee and beat the bejesus out of you... Too late for that now, boy...
I feel sorry for you boy...
your face, bitchez!
For my 2 cents worth; I'm looking for a high of around 1850 - 1870 and a retest of the lows around 1710 - 1700. Over the next few sessions to maybe 2 weeks out a bullish wedge formation developing.
Only thing that would turn me slightly bearish is a break of 1691. This is a low probability, but with the political elite controlling the CME Crimex division [and subsequent margin hikes and other bullshit]you can't rule it out.
Then sell your gold and move along if your scared. Or from the timing of your article I would guess you are sweating a short or hoping to get some on the cheap.
What the hell is the "EMA"? Never heard that term before. I get the moving avg part, but what's "E" ????
BTW, Dennis Gartman says you have that chart upside down. Buy high, sell low.
E is exponential; as is Exponential Moving Average [EMA]
All of this technical analysis leaves me cold for the simple reason that it does not take into account the fact that the world's political, financial and economic systems are out of balance and in disarray. Those that are fixated on the price of gold (too low or too high) simply miss the danger of holding too much faith in a paper based system that is in danger of imploding.
At bthe end of the day, one has to be honest with themselves and ask themselves only one question.....If you were given $1,000,000 today where would you invest it? Government bonds of Europe or USA? Or gold and silver?
Gold now down to $1803: http://www.oilbull.com/gold-chart/
Chart looks odd though. Straight down on a minute-by-minute basis. Almost too controlled. What's up with that?
I have a print of 1826/ ??? Whats up?? Should I short. Nah
FOREX also has a print of $1826 . . .
opps
Yeah, it's the same as here:
http://www.sgxniftydowfutureslive.com/index_files/DOWFUTURES.htm
Something's glitchy.
I bought in 2008 and in 2009 and 2010. It still feels nice in my hands, wy should I sell? Give`s kind of security....
You're either a troll or can't read a simple chart...
http://finviz.com/forex.ashx
$1831.10
Something is not right http://www.24hgold.com/english/gold_price_in_dollars.aspx Seems to be two different prices atm. Which is right?
Exactly. There was a short period where different sites were giving ($20+) different prices, that's all. They seem to be back in line now.
And PM futures blast off.
There is a big difference between traders and holders.
The economics: creation of M2 and credit greatly exceeds the production of goods and services- inflation- gold's value rises unless new supplies come online. Until this changes, the dollar, euro, etc value of gold is unimportant. You cannot value a commodity in currency that has no value.
Traders: new margin hikes are anticipated. Look at the current pricing. Gold is down and silver is up. I suspect more margin increases are coming until it places too much gold in strong hands. Short term- expect lots of volatility.
I am so tired of hearing the whole buy sell routine. I could care less. Here is a value component few are considering: what is the value of anonymity? What is the value of sleeping comfortable in the knowledge your security is not based on the actions of a bank or government?
When currency develops value, I'll change, until then, HAHAHAHHAHAHAHAHAHAHAHA!
The BIG problem with analyzing gold using historical patterns, no matter how sophisticated, is that several hundred million Chinese are now buyers who weren't there in any of the previous data. Add in the soon-to-be 'fact' that sovereign currencies are doing the slow collapse in preparation for the violent implosion, and any analysis of where gold is going based on historical data is merely interesting - not predictive. We are on the verge of, if not already in a completely different world, and human beings being rational creatures do not care what past data says, all they know is they if they intend to be able to eat in the next few years they better own some gold and silver. And as we know these are very thin markets, so those couple of hundred million Chinese would-be eaters, along with an increasing number of Americans, Europeans, Latinos and Indians who would also prefer not to starve, add up to gold = $10,000 quite easily.
I know we like to focus on the Orient as a source of funds for the gold trade. I do not think they are the ones to propell the price skywards. The reason is that by in large they are already converts. The marginal buyers will be found in the west. It is the west's reawakening to gold we should look for.
Re the Martin Armstrong comment - so he's predicting $1350 gold, and from memory stock market bull rally into 2015, based on the pi-cycle thing he came up with.
I only recently came across him, spent a fair bit of time reading up about him and his Russia collapse / Gold collapse calls in the 80s, his incarceration etc. What I want to know is how accurate is he really? Spamming predictions and getting some right doesn't count. I'm keeping an eye on what he says, anyone with any feedback, keen to hear it.
maybe he had to make a deal, to get out of prison.
Chart doesn't reflect value of gold, just price in fiat and time. In a vaccuum the chart may have some relavence but not on the eve of destruction of the finacial system.
"This time is different". Sound familiar? Well it's not, and it doesn't matter what you are talking about.
Betting gold short, but not planning on it going to 1300 directly.
Took this Euro short. Weirdest Sunday open, the Euro opened almost exactly where it closed on Friday. Never seen that before, almost always some type of gap. It is exactly at a nifty trendline, check the chart, esp, the lower chart closely.
In a way I am playing "all the same bet", in my prior posts, I have detailed
Gold Short,
as well as US indices
"Channel of Doom from 2003 now currently fully in play", and
"Egg of Doom".
Please go to main page and then scroll down for those. And below is the NYSI Summation index, indicating a long equities, possibly, but crossover has not happened, it can flounder around on the bottom for quite some time.
http://oahutrading.blogspot.com/2011/08/euro-short-based-on-nice-trendli...
you all worry too much. if BTFD's makes you worry, stick to LULU & BIDU. Cramer's got yer back... in the meanwhile STFU. I know precisely why I buy gold & silver. You should too. I know "why" I make every investment... the "why" can only change when new information is presented. When BenShalome starts deleting instead of adding zero's, ZIRP changes, or the Euro get their shcizza together, I will come back to ZH for more of the best info on the interwebs. Till then, glasses up for Blythe and have a nice afternoon.
Heard around and about....
I look forward to the day the EU Parliament building in Brussels is converted to a hotel and there is a plaque on the outside entrance that says: "Here was once the headquarters of a vision of European Unity that went far beyond it's mandate of debt control, and with it died socialism."
The problem with using charts, beyond that it usually is sophistry, is that we are living in fucked up markets. To say based on certain levels we are overbought or oversold regarding gold is a bit bizarre given margin hikes touched it off.
These outside influences adds another factor to why such sophistry is flawed at best. Where will this look at the charts mean if more margin hikes occur? Not much.
Of course long term wise, these hikes won't change the outcome, they just buy a little more time for the idiots to conduct their dogmatic policies of ruination before everything falls apart.
I don't think there is a chart for that.
As I've said before, gold is in a bubble. Why? Because EVERYTHING is in a bubble. Just while the printers are printing, more will flow into gold/silver and out of the everyday shit because everyone knows it's a better store of value, and the differential between the bubbles sizes is HUGE.
Take quadrillions of fiat/gold market, and you can see that while gold is in a bubble, it by it's very nature has a ratio...err percentage far, far, far smaller than any of the other existing bubbles.
Which means until the bubble economy finally pops with no more monetarism, it can inflate faster than the rest of the bubbles in a meaningful way...even while being overvalued. Because there is nothing else in monetary world better than holding precious metals, even if in the end they are mostly useless. They're rare, they're a traditional form of currency, and when everyone else is going crazy, they store wealth better. There's a lot of fiat around to push up the price. That fiat isn't going away until it does. When it does, gold won't be the place to 'safely' hold wealth. But until then, it sure is.
But then again, when that happens, what's a little bit of wealth on paper regarding the value of the precious metals worth for a functioning economy where you can actually make gains comparable to that of holding precious metals. Because in the end, holding precious metals as the world way of making money, does nothing to provide for needs. You need a functioning economy to do that.
Only collapses, manipulation, and actual change will gold go down. The first two, still screws everybody, the third one should be viewed as just fine as you open up legitimate replacements for the flow of funds to go into, producing real returns, based on tangible shit.
You could also say if you pass equilibrium between fiat, but what's that? 10 million an ounce? Hell I don't know. It's a shit ton higher than what it is now.
But if gold is higher than what it should be in a 'sane world', then yes it itself is in a bubble. So we are. But funny enough, it's probably the SMALLEST by FAR of any of the bubbles out there. So in a relative term, no it's not in a bubble. From a real world perspective, yes it is. Compared to others No. Compared to reality. Yes.
But since the markets haven't reflected reality in a long, long time, I wouldn't worry much about precious metals. Because the printing was an imbalance, it doesn't change the reality of the precious metal, it just changes the worth within that system and what it's redeemed for units of account within said broken system.
So as long as we use a broken system, sky's the limit. Except again under the most extremes of crashes, where it is even possible it goes up based off people piling in from selling their other shit, and margin hikes.
The banksters have already decided (as it's always been their method), they are going to print to pay their bad frauds off. The only question is, who will hold them to account? The gold market is doing a much better job than gov't right now, as gov't (and most of the electorate) still wants to cut, print, or tax...to pay off the banksters frauds.
Meanwhile Gold is Gold. Silver is Silver.
Now if we could only get the people that realize this in the precious metals market to link that with their politics, we might get somewhere. Otherwise we'll go through hell and really only protect ourselves.
The average person not only has to preserve their own wealth, they also have to try to change the system. Doing one or the other, or neither just invites doom. Although those with gold will be able to claim they are last men standing, king of nothing hill. Better to be there than at the bottom, but there is still a better way. It's possible to do both. In my opinion I see ZH as trying both. To help people preserve their wealth, while shining a light on the idiocy of today's markets, bunk dogmatic ideology, etc.
Everyone must get on board with trying to do both. For your personal stake, and for the macro world at large (that you also live in personally). So buy gold and silver to protect yourself, while also trying to change the world so you don't have to, and can eventually turn some of that herd 'wealth' into real productive wealth. Because that is what we ultimately need. Not gold at 1 trillion an ounce, but a functioning economy that every nation in the world can participate in, for their own benefit, because to pool our resources is always better, when it's done under the proper constraints contingent upon what each sovereign nation legitimately deems necessary for it's own to survive.
Glass-Steagall
Author of the article here;
I am not going to disagree with you we are in some f'd up times. No doubt about that. These are certainly unique times and there are various/numerous fundamental economic factors which will have a deep impact on price.
But I am going to disagree with you charts/TA is sophisty. I have a fund with an 8yr audited track record (http://kronosfx.co.uk/). We only trade off our charts/quantitative price action models. The algos we use take no economic or fundamental data into the equation. Just price and price behavior. If we were sophists and had some bogus algo, we would not have been as successful as we are. But we have been and that is why investors have money with us.
I am not trying to make this a TA vs. Fundamentals argument. I certainly agree there are macro-economic factors which have and will have a great deal of influence on price. If I wanted to talk about the economic or fundamental factors which are affecting the price of gold, shoot, I could spend weeks writing about all of that and there are plenty of those articles here discussing those angles.
This post was simply done to reflect another angle on the market and provide a purely technical perspective. All the price history we see on the chart here of Gold vs. USD is reflective of the total summation of all price fluctuations over the last 6yrs (regardless of their cause) and that data is not only useful, but tradable.
Regardless, in many ways, I agree with many of your sentiments and thank you for sharing them.
Do not worry about him, it's just fight club.
Probably more accurate than reading pigeon entrails to be sure. As long as others rely upon and trade on TA there will always be an audience. Thanks for your reasoned and civil reply to the comment.
Wow, it feels different here at ZH.................an article on gold and not a troll to be seen! WTF are they? Is there a troll precious metals Disinformation Convention on or something? Or have they all left for South America with their suitcases stuffed with precious metals? Not even the psuedo trolls like Leo and Robo or Jonny Bravo (without the "H"). Maybe they'll feel brave enough to come back out if gold drops below $1700.......which if happens won't be for long.
There are some trolls here... They are attempting to be a little more sophisticated with their comments... but it isn't working.
How much do you think anti gold trolls are paid?
Wot?! Gold not going straight up, forever? HERESY!!
HOW can Tyler provide a platform for these… these… UnbeLievers!?
I mean, it's not as if some leveraged hedge funds are currently holding more gold than most of the world's central banks. Wait, no . . .
PUT GLD. Buy physical. Fuck paper.
This is one scary ass chart whether you are a trader or an investor. I love PMs long-term, but you've got to GTFOOT if you are a trader and didn't buy at $1000 or lower. If we are lucky, the correction will be an Irene.
Quick, dip your head in the tub... your hair is on fire! lol
Just outta troll school?
It's OK, I understand. You are scared. Don't blame you. Hey Dude, I'm on your side. I'm just a technician who wasn't always one, and burned because I wasn't.
Then buy the chart and ignore the FUBAR world economy...
It's your money, enjoy...
Just don't come around here with the snake oil... we ain't buyin it.
and... the fact that you couldn't resist the "you are scared" comment gave your troll azz away... You might want to remember that if your career as a paid troll is to flourish. lol
Troll, huh? Guess you haven't been following me. Momentum is on gold's side right now, but once it goes parabolic you are the playing the punk opposite Dirty Harry, as far as I am concerned. Don't worry, I'll also let you know when gold looks good technically.
I try to temper my central bank anger (and I have PLENTY) with rationality.
You take your technical advice and park it where the sun don't shine, boy...
I doubt you could find a central bank with a map... So what are you angry about?
Forgot to buy gold at $65? I didn't. Forgot to buy gold at $260? I didn't. Forgot to buy gold at $500? I didn't... Well, even a techno geek like you should get the drift...
I suppose I would be angry too if I missed all the buy opportunities up to now... But there is still time, boy... Stop fiddlin with those dumb azz charts and get some gold!
Get yoself some glitterin gold! And don't be angry, be happy boy. YeeeHaaaw
Deleted
Hey, How about those Illuminati Hideouts! Just read a post about Bug out Time Shares. They are hiding as J6P and Hillbillies in the Hinterland. Jed Clampet with a shot gun across his knee siting on the back porch donchaknow. GPS anit no good for stasing that Au its all tracked you know. Bug out Time Shares, Secure and Affordable. Bury your Gold here for future reterval. Survive your next few days here.
Yeah, yeah....
Here's the real question of the day- ASEs or Franklin halves? Got about ten more minutes to decide, both are below spot for the minute.
*edit*
Franklins won, gained 2.4% on the purchase. Not a lot of oz, but every little bit helps, and someone has to be able to make change...
Depends on why you are buying. ASEs are finer silver so make good bullion to hold for the long term. Halves are good for trade/barter during hard times. Both have a function. Your question is like asking whether a hammer or a screwdriver is better -- depends on the job to be done.
The minute a sitting president of the United State of America does nothing, ala Harding, I'm selling my gold. until then, all the head-spinning technicals and their assessments are just grains of sugar in a can of Coke.
Sammy Hagar & MONTROSE "Paper Money"
http://www.youtube.com/watch?v=LJz1ZaOtbiI
If anyone thinks some technical chart mumbo jumbo works for the metals I just point them to a chart for rhodium and get out a ruler. LMAO
Could never figure out why investors would buy scrap coinage over bullion and get stung with a loss of 8-15% when sold. Why not just take a hit of 6-8% upfront. Have people never sold back to the dealers they bought from? Maybe i"m missing something.
No- I have never sold back to the dealer I bought from. Why on Earth would I? He'd just give me paper for my silver. I do spend silver, but only in exchange for useful things from private parties.
The reasoning behind buying 90% ("scrap") is that I am only "reselling" it face-to-face to others for durable goods. Right or wrong, those people have preferences, and some prefer old dollars and halves for nostalgia's sake, while others like the shiny ASEs. I don't care, I just try to have both in the stash. I keep about a 60:40 ratio between the two, weighted towards the "scrap," because I've found that that is the most useful balance. There are a lot of gun dealers and survivalist types that prefer Peace dollars and Morgans over ASEs. Regular Joes seem to like the shiny bullion. I just want what I'm buying, so I let them choose the payment type- most still choose paper cash, but it changes a little every day.
In any case, there's no penalty in a private trade, unless you're a poor negotiator. In paper terms, I've never let a coin go for less than a 40% return. Anything less than that, and I just hang onto it.
The mere fact that you used the word "investor" gives away your position. You should familiarize yourself with the fundamentals of ownership and all will be made clear. Decisions like bullion/junk silver become obvious.
As to PM's, the two options that are available to me are (1) buy or (2) don't buy. Sell does not appear anywhere in the mix.
The "buy" option comes with features such as hold, polish, stack, gloat, and smile. :D
ladies and gentlemen, i present to you the latest delicacy that is the rage here in gulag amerika.....
http://message.snopes.com/showthread.php?t=54615
copper thieves become kentucky fried bruthas....
Good link H/P/D! Keep em coming! Yen (:...
ok i will admit it sometimes i can have a sick sense of humor.....:)
Just keep em coming. You are normal. Thanks again yen.
soRU
trust me
L0L!!! hey, y/c! i got freaking cloned!
I'm just getting started. Hows the fam ? Well I hope?
oh, my degenerate spawn are in their 30's and all up in nevada for burning man. i went shopping with my daughter on fri night; i'm in recovery
getting started is always fun! keep trying! then, your life changes for what might as well be termed: forever
i meant here, on zH, Yen
I forgot about that. You must be on phone duty... I did that once / Bishop Days. Did you open a small FX account yet?
You mentioned getting started. I'll put you on the fast track! God Bless you and your Family. I will Probably regret this.
Shoot me some trading Ideas @ HOTFX@Ymail.com I'll forward you to my other things... Stay sharp and Risk is on.
Study risk reward... That is your assignment for the week.