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Gold Price - Where is it heading?

Garpal Gumnut

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They heard you GG.

Bulls and bears are trading support and resistance lines at the moment. JP Morgan undoubtably doing both!

I would love to be a fly on the wall of their daily strategy meetings.

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Thanks @Sean K for the great charts and your posts on Gold.

Gold bugs will be vindicated imo.

Governments have printed so much money over the last 2 years.

Crypto is another form of printed money for the Tulip brigade. It is in the ether just like Government debt.

It will be called in this year or next when there is a crash, interest rates go up and inflation takes off.

Anyone from Ole Joe Biden to the Foxy Crypto Spruikers will not be able to put their fingers in the dam wall.

gg
 
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Crypto is another form of printed money for the Tulip brigade. It is in the ether just like Government debt.

It will be called in this year or next when there is a crash, interest rates go up and inflation takes off.

Anyone from Ole Joe Biden to the Foxy Crypto Spruikers will not be able to put their fingers in the dam wall.
And as interest rates rise and rise on government debt (absent another QEx backflip by the Fed), the crypto dam wall (already leaking) will collapse in a spectacular fashion. Don't underestimate the creativity of crypto spin doctors though as they urge hodlers to weather the crash. Bitcoin maximalists like Michael Saylor (including his company, MicroStrategy) stand to lose crypto paper fortunes if they can't steady the nerves of hodlers watching Bitcoin's price crater. The narratives conjured to explain away such an event should make for interesting reading.
 

Garpal Gumnut

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Based on the current activity on gold price where are the big kahunas in here with their bold predictions on a likely gold price by end of 2022?
I'm a small kahuna but will answer anyway before the big ones get in.

Good question @TechnoCap.

My guess would be $US2100 which is about the high of 2020 in quite short order remembering that Gold has been traditionally a haven of safety which for some reason has been overtaken by Crypto. If some more geopolitical problem or further plague(s) intervene it could be much higher.

As always with speculation, it depends.

gg
 
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I'm a small kahuna but will answer anyway before the big ones get in.

Good question @TechnoCap.

My guess would be $US2100 which is about the high of 2020 in quite short order remembering that Gold has been traditionally a haven of safety which for some reason has been overtaken by Crypto. If some more geopolitical problem or further plague(s) intervene it could be much higher.

As always with speculation, it depends.

gg
Guessing the gold price at the close of play on Friday 30 December 2022 is a lot different to forecasting the high or low point some time during the year. It is also a guesstimate on the strength of the US$ during the year. In 1973 - 1976 the major gold shares more than doubled whilst the stock markets slid 50% to 70%. In 1987 the stock markets crashed and gold shares crashed as well. The 1987 crash was quick and 1973 - 1976 was slow and that might have something to do with it.

The UK's FTSE 100 index was at 6,930 during the 2000 peak. It only stands at 7,485 21 years later though the DOW 40 has climbed and climbed from 10,730 in 2,000 to 36,800 in 2022. Quite a difference though many may point out the UK's index has become a worldwide confusion of companies in that time. Meanwhile the ASX200 was at 3,133 in 2000 and 6607 in 2022.

In the end I expect gold to reach a high of about US$2,350 in 2022 and silver about US$38.
 
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Based on the current activity on gold price where are the big kahunas in here with their bold predictions on a likely gold price by end of 2022?
i am thinking gold will continue to be suppressed ( as long as they can ) i would be watching gold and silver premiums ( for those taking physical delivery ) as a truer guide

since i am accumulating gold producers i would be happy if the price continued to be suppressed for a while longer ( HOWEVER how long can that manipulation last ?? )
 
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i have a couple of buddies playing the crytpos ( both ACTIVELY trading ) and am amazed at their complex strategies , now sure they are probably only playing with something like $500 to $1,000 , until they get more experience , but nah not for me ( but then i could never get to like poker machines either )

i would rather gold producers , and bit of the physical ( non-bullion ) stuff

maybe i should BUY some silver coins as well ( but am still thinking on that )
 
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A couple of charts:

Of the 2 monetary metals, gold is a cleaner chart, mostly because there have been and continue to be, major purchases from the CBs. Silver is far more volatile and at current valuations is the cheaper of the 2.

Screen Shot 2022-01-09 at 7.09.40 AM.png

Gold is probably going to break higher in 2022. It has simply been correcting through time.

As compared to silver:

Screen Shot 2022-01-09 at 7.10.19 AM.png

Whose valuation to gold, is very low. Historically, on average, it's as cheap as it gets.

I hold a significant amount of silver currently. At the lower boundary I will convert that silver to gold. PSLV to PHYS and silver bullion to gold bullion, which can be completed at bullion dealers.

The reason:

The idea is, with a portion of your portfolio, to exit fiat currencies on a permanent basis. Two reasons (a) fiat currencies are continuously being debased and (b) the king of the fiats, DXY, may not actually survive the next crisis. Stocks are priced and paid in fiat. Stocks to a point are inflationary hedges (as are many assets) but in a hyper-inflationary collapse of a fiat, they come pretty close to worthless for a long period of time (those that actually survive).

So gold becomes your insurance policy, silver becomes the speculative tool to profit.

Screen Shot 2022-01-09 at 7.22.00 AM.png
Screen Shot 2022-01-09 at 7.23.07 AM.png Screen Shot 2022-01-09 at 7.28.47 AM.png

As you can see, gold has tracked really well during the high inflationary period, last 50+yrs. Silver not so well, unless there is a crisis, which then allows on a % basis, outperformance (see ratio chart).

It has been a while since the 2008 crisis and even longer from the inflationary crisis of the late 1960's into 1980. There are no Paul Volckers sitting in the Fed. Additionally, the debt levels/GDP from the 1970's to today are starkly different:

Screen Shot 2022-01-09 at 7.41.46 AM.png

Therefore the ability to actually do what Mr Volcker did, raise rates above the level of inflation, was possible due to the low(er) level of Federal debt. Today, the US and most of the world are at WWII levels.

Politicians, being who they are, will favour the 'inflate' our way out of trouble, as they did in the 1945 - 1980 period. The result will be an inflationary crisis like the 1968 - 1980 period, with the risk of a hyper-inflationary progression, collapsing the fiat currency.

For the underlying fundamentals:

Screen Shot 2022-01-08 at 3.10.52 PM.png

Mine production of metals has been falling, reducing supply. This lack of supply cannot be corrected quickly, nor cheaply. It requires a lot of capital. The only way capital is attracted to the sector is through higher prices (demand).

With silver, higher prices creates new supply through people selling their silver that their great aunt Fanny has held since 1878. This is another reason that it makes sense to convert when the gold/silver ratio falls to the lower boundary.


jog on
duc
 
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The POG is the canary in the coal mine isn't it. Like Garpal, I have more faith in it than crypto. Or tulips.

I'll be watching it very closely this year.

The industry line is that in 2022 interest rates will rise, causing POG to soften.

Don't worry about interest rates. The CBs cannot raise them. Even if they could, the real rate would need to be strongly positive before there would be any issues.

Look at the history:

Screen Shot 2022-01-09 at 7.45.40 PM.png

Gold:
Screen Shot 2022-01-09 at 7.47.29 PM.png
Screen Shot 2022-01-09 at 7.47.07 PM.png
Screen Shot 2022-01-09 at 7.46.52 PM.png

If you look at stocks however, they entered a brutal 12yr bear market.

jog on
duc
 
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Don't worry about interest rates. The CBs cannot raise them. Even if they could, the real rate would need to be strongly positive before there would be any issues.
Currently the U.S. real interest rate (blue line) is -6.43%, nominal is 0.43% with inflation still rising. Official inflation calculation grossly understates real inflation so the real rate is actually lower. The Fed will can not raise nominal rates to bring the real rate positive without crashing markets. You would think this scenario should be supportive for gold and silver prices in 2022.

1641728162679.png
 
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Last nights inflation result had some interesting aspects.
In recent times, when thoughts of tapering or announcements about higher inflation appear, there has been a tendency for investors to run to safe haven of the USD, and sometimes the PM prices have actually fallen.
Last night was different.
The USD AUD pair was off a100 points, the DJIA up a pizzly 38 points, and the PM's inched higher.
Are the markets starting to think the USD is going to get crunched??
If thats the case, inflation will likely keep going up, unless the Chinese decide to keep the Yuan pegged at or below current levels.
As if the world was not already full of uncertainties, a few more are added.
The markets hate uncertainties, I am betting that this is part of the "Big Reset".
Mick
 

Sean K

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$1830 ish is major trouble, but the more it pushes against it, fails, and eventually goes through, the larger the jump, in TA probabilities. Still short term upside bias from the end of Sep, medium term sideways, long term up. JPM have a team controlling this, but they will let it run at some stage.

Screen Shot 2022-01-15 at 7.00.49 pm.png
 
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