Gold Price - Where is it heading?

Re: GOLD Where is it heading?

Dr Doom said:

Old support was at $550 but had resistance at $570, which should be new support, if you believe technical analysis. Current spot price @ $592 and falling, acting like a commodity instead of a currency.

Look out for a merger between Anglogold & Newmont too.

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It is!

**ducks for cover**

:

Re: GOLD Where is it heading?

You like that rumour

I'm thinking a merger.

Lots of aussie gold stocks trashed with the rest today too. Hmmm... when to buy and top up......

Re: GOLD Where is it heading?

Holy Cr@p!

70c off breaking 590 as well!

Take it down boys!!!!!!

Re: GOLD Where is it heading?

Maybe $550 by the end of the week?

NCM and LHG should find some buyers.

I'm also thinking some corporate acty possible now there's some value out there.

Fat Prophets reiterated their support for gold and LHG tonight.

Re: GOLD Where is it heading?

kennas said:

Heading to $550, the next decent support line. Remember it ran from $500 to $720 in a couple of days! Unhedged gold companies are still raking it in at the moment. Looking forward to upgrades across the board in the comming months.

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I agree with the $550 level being quite important kennas. Under Elliott wave parlance, the whole move from $412 to $730 was a 5th wave extension or blow off. These are quite common in commodities because much of the buying is fear based rather than hope based that we see in the stock market. Having observed many 5th wave extensions before in the stock market and commodities,there was only one possible result(it is the same every time!!) when that wave 5 terminates. A very sharp correction or "mini crash" occures. Sometimes this may be as low as the subwave 2 of the 5th wave extension. In this case that is $430 Now time will tell if we get that far. From a technical stand point my target is approximately $490 which is 50% of the entire range from the low of $250 to the high of $730.

Currently I would label the decline Wave A. The first chart below shows the range of this 5th wave extension. Remembering that most moves in the market are percentages of previous highs and lows, I would expect from a fibonacci standpoint that this wave A finds support at approximately $566 the 50% level or $530 the 61.8% . How can we be sure which one of these can be a descent support level for wave A? We need more evidence.

The second chart shows the centered 80day cycle(80 day SMA in -red line). Now half the span of that cycle is 40 days or 40SMA-blue line which is also centered. Just as the faster of the 2 averages turns down(40SMA) we extrapolate forward and note the price level(in this case $626) where the 2 lines intersect. The difference between this price and the high on this chart-$720 is $94. Subtracting $94 from $626 gives us a target of $532 which is pretty close to the 61.8% level.

Of course this alone is not justification to take up a long position in anticipation of a rally. Price action and the "pattern of trend" must be considered first.

Now how far can prices carry upward in a wave B rally? Once again this should be a percentage of the decline either 50% or 61.8% of the decline. This rally will be just as sharp upward as the decline was downward and will "rekindle" the hope of the bulls. This will be a suckers rally and fully retraced. After that rally, volatility and the rate of change of price will slow for the remaider of wave C. once again I think that level will be close to $490, but could go as low as $430 as stated before. All the same, given the whole bull campaign took 6 years, the ensuing bear campaign will not be over soon. My guess it will take a good 2 years, before finishing, and then the secular bull resuming.

The last chart is "a guess' as to what the rest of the decline may look like. In the end it will probably look nothing like it!!

Re: GOLD Where is it heading?

kennas said:

Maybe $550 by the end of the week?

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A mass exodus from gold (speaking of Exodus)

566.5 as I type... amazing action here!

Re: GOLD Where is it heading?

wayneL said:

A mass exodus from gold (speaking of Exodus)

566.5 as I type... amazing action here!

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Still heading down and no sign of the bounce I thought would kick in around 600.Shame as I went long on two "oversold" Gold stocks last thing.

They will look more "oversold" on open.

Re: GOLD Where is it heading?

Down to $563

Re: GOLD Where is it heading?

This is great! Bearish stance is paying dividends.
As stated earlier, time to go long again will be when holders of gold/resource stoxx are completely disgusted with their positions and give up hope.
The market has a habit of shaking out the weaker impatient hands, before moving back into the desired direction of speculation.\\ In terms of time, this correction is not even half done yet.
Looks like that is going to be some time away, when the 8.5 yr cycle bottoms out. So it could take 2 yrs when that cycle bottoms out.

In the short term this wave A "washout" will find support between this price and $530, and will base for a strong sucker rally.

Re: GOLD Where is it heading?

wavepicker said:

This is great! .

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why is it great?

because every1s losing money except u?

Re: GOLD Where is it heading?

I agree with wavepicker. Forget the dollars and cents; it is great because a very large lesson on trading should have been learned by many here. Human emotion will drive share and commodity prices well beyond rational fundamental valuations. Sure, fair value may always return but the pain in between is usually more than most can withstand. If you hang around long enough you will learn that the market can, and will, do whatever it wants whether you agree or not. The question is how long you can hang around for?

The way to become a better trader is to take this experience and learn from it. The road is going to be a lot tougher now than the last 3-years. If you've done well over the last 3-years yet dropped your load over the last few months, the you need to consider the implications of "luck" rather than the ability to read share prices and market sentiment correctly. I think a few people herein fall into this category.

I do speak from experience. I lost twice my annual salary in 1987. I have never placed myself in that position again because I walked away, learned how to trade properly and came back. The future is bright everyone!

Re: GOLD Where is it heading?

nizar said:

why is it great?

because every1s losing money except u?

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If you have lost, I am very sorry to hear that nizar. I hope things turn out ok for you in the long run.

Please undersatnd that I too as have many others here have had our fair share of losses in the last 10 yrs. I got absolutely smashed in 2000 and kept losing for another 2 yrs following that, until it got pounded into my head what I should and should not be doing.

For me it was not losing $$ that had a big impact on me. It was the psychological damage to my confidence that was detroyed and to this day I am trying am still trying to come to terms with that.

Re: GOLD Where is it heading?

0252 GMT [Dow Jones] TECHNICAL ANALYSIS: Gold (last $560.00/oz) still looks
bearish on daily chart despite falling $86 since last week; MACD, stochastic
still in bearish mode, latter in oversold territory suggesting sideways or lower
prices possible near term. However, significant support lies at $548, which
38.2% Fibonacci correction level of entire advance from August 1999 trough of
$251.95 to last month's peak at $730.50; this lies just above 200-day moving
average at $546.50 and strong $534.15 base during February-March, which may
prompt corrective rebound if tested.(LST)

Re: GOLD Where is it heading?

The only buyers of gold are the Bears and they're using it in thier tooth fillings as they'ere wearing out slowly with all the feeding they're doing.

There's a sign on the ASX front door that reads.....


OUT TO LUNCH

BACK AT 500

THE BULL

Re: GOLD Where is it heading?

aug gold < $550

This is one vicious bear!

Re: GOLD Where is it heading?

Some nice work there Wavepicker. How does it stack up with todays bottom @ $542, then rebound back to (now) $560?. I'm sort of thinking that there is solid physical support on any of these dips by long term gold investors eg oil countries diversifying, Russia adding to it's vaults etc.
Having been such a substantial route of all the commodity markets as well, I can feel a rally is in the pipelines very soon, in all asset markets. How long and how genuine this will be is the real unknown, though gold should be the currency that will continue to appreciate once the US dollar breaks from it's current dead cat bounce rally. The real test will be when US interest rates continue to rise but the US dollar does not, and conversely gold rises.
So, topped up on BDG today @$1.60, and finished at $1.70 - just too good an oportunity to pass up. Also, the hi lo range of LHG today made for some good trading. Volatility = oportunity.

Re: GOLD Where is it heading?

Dr Doom said:

I'm sort of thinking that there is solid physical support on any of these dips by long term gold investors eg oil countries diversifying, Russia adding to it's vaults etc.
Having been such a substantial route of all the commodity markets as well, I can feel a rally is in the pipelines very soon, in all asset markets.

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....and for the life of me it looks very much like a capitulation low. I also thinks thats the bottom of the pool... for now anyway.

Re: GOLD Where is it heading?

Dr D, the chinese pictogram for crisis is danger and opportunity. You got it right!

My orifices are bleeding at the moment and I need some encouragement to get the toes wet again. Like gold going back above $600! Although, maybe I'll have missed the opportunity. Agree on BDG and LHG though. They'll benefit most from a sudden, or even gradual, rise in the POG.

Re: GOLD Where is it heading?

wavepicker said:

If you have lost, I am very sorry to hear that nizar. I hope things turn out ok for you in the long run.

Please undersatnd that I too as have many others here have had our fair share of losses in the last 10 yrs. I got absolutely smashed in 2000 and kept losing for another 2 yrs following that, until it got pounded into my head what I should and should not be doing.

For me it was not losing $$ that had a big impact on me. It was the psychological damage to my confidence that was detroyed and to this day I am trying am still trying to come to terms with that.

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agree

dont feel sorry for me; i actually havent lost; cashed out after the 40pt suckers rally on friday AM; it was a perfect chance to get out

now im just waiting on a re-entry

agree about psychology and all that; even i was reading the other day some established fund managers quit after dot-com because they were sick of being wrong... its all part of the game i guess

Re: GOLD Where is it heading?

Dr Doom said:

Some nice work there Wavepicker. How does it stack up with todays bottom @ $542, then rebound back to (now) $560?. I'm sort of thinking that there is solid physical support on any of these dips by long term gold investors eg oil countries diversifying, Russia adding to it's vaults etc.
Having been such a substantial route of all the commodity markets as well, I can feel a rally is in the pipelines very soon, in all asset markets. How long and how genuine this will be is the real unknown, though gold should be the currency that will continue to appreciate once the US dollar breaks from it's current dead cat bounce rally. The real test will be when US interest rates continue to rise but the US dollar does not, and conversely gold rises.
So, topped up on BDG today @$1.60, and finished at $1.70 - just too good an oportunity to pass up. Also, the hi lo range of LHG today made for some good trading. Volatility = oportunity.

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Dr Doom,the charts I posted earlier were simply meant as a guide, and perhaps give us some clue where the a potential "zone" may provide support.

I agree with Wayne about the capitulation low. Markets trends often end in a climax. Especially so in commodities. That was the case at the peak and may well be the same now. If it is, then there are always re-tests of the previous lows before a new trend gets underway. If this is not the final washout before a major rally then one would probably expect the market to consolidate at this level or thereabouts before putting in one more low at slightly lower levels, before reversing.

Which of the above 2 scenarios it is does not really matter, and is not that important anyway, it's just a number. Trading is not about picking tops and bottoms. It's about recognizing when the current trend is at risk of ending, and looking for evidence within the pattern of the trend that support your analysis. We must have a better level of confidence than just guessing. At present there is no clear evidence. If a low has been registered then a pattern that appears more "cyclic" than just a bounce has to emerge.

Time will tell. I was waiting for this trade all year. Although I expect quite a sharp countertrend rally, I might sit this one out and just observe. I don't like trading countertrends, safer to trade the larger trend for now.