GOLD

[Erewhon888]

David Fuller's analysis:

In assessing gold and the three others precious metals traded on futures, I do not wish to engage in too much conjecture regarding the recent performance. However, in the ecosystem of global markets, gold and T-Bonds enjoyed a safe haven status while most investors remained worried about Europe, Japan, China and the USA. Both gold and bonds have weakened recently as stock markets surged, with serial laggard China finally breaking its sequence of nine consecutive lower rally highs since its monetary taps were turned off in July 2009.

Fullermoney remains overall bullish on stock markets, despite some short-term overbought conditions, because most remain in medium-term upward trends, albeit often with the help of quantitative easing (QE). Moreover, the recent surges in previous laggards Japan and China, fundamentally justified and extensively covered on this site, have understandably excited investors. As a consequence, safe havens have lost some of their appeal, but for how long?

Today, I will not say much more about US T-Bonds and other similarly-performing fixed interest markets, except to repeat that the 30-plus year total return bull trend is now a classic bubble, albeit still supported by QE.

Precious metals, which remain in a comparatively young secular bull trend, remain attractive as a store of value against a background of generally low interest rates and unprecedented amounts of QE. I would find it difficult to describe a more bullish background for hard money assets, although all markets are also affected by short-term human behaviour which is often mercurial.

I had hoped that gold would be closer to $1800 by the end of 2012. However, that is a personal concern and it is only completing the 16th month of another lengthy medium-term reaction, consolidation, and reaccumulation phase, in my opinion. There have been several, similarly lengthy pauses within this bull trend, averaging approximately 21 months before the earlier accelerated high was cleared.

However, the technical slide beneath the reaction low on November 5th has opened the door to some additional easing. On seeing a market encounter resistance at the higher side of its range, traders understandably question whether the lower side will be retested. Therefore, gold will now have to rally above $1800 to confirm fully a higher reaction low and additional evidence of overall accumulation. Meanwhile, gold has given up approximately half of its gains from last May's low which marked the beginning of a support building phase that eventually pushed the price back towards $1800.

Currently, gold is somewhat oversold and approaching the upper side of its earlier accumulation phase evident between May and August. Bearish commentators have been emboldened (hopefully a contrary indicator) but a break in the lower rally highs since Octoberis now the minimum required to confirm that demand is re-emerging as the dominant force.

Incidentally, gold in particular and also silver are popular among HFT firms, because they are actively-traded international markets. This is less true of platinum and particularly palladium.

I think one gains perspective on seeing the charts of related markets, even though one may not be interested in all of them. On this evidence, my hypothesis that precious metals are back in an overall accumulation phase is being questioned by gold and silver, but certainly not palladium at this time, and to a lesser extent by platinum.

Meanwhile, I will utter a sigh of relief and raise my glass in a toast to all subscribers who are also long precious metals, once gold is clearly finding support above $1800. That should open the door to a run well above $2000.

 

http://www.fullermoney.com

[wolf]

How refreshing to read posts on an investment issue without reference to aliens, earthquakes or end-of-the-world scenarios!

[Van]

Yet another hammering!

Much like last December, this has been an absolutely disastrous month for Gold, even as the USD has tanked. It's really just panic selling now.

[wolf]

So when will investors be prepared to test the waters again. My guess, 1550.

[aardvark]

i sold some silver on ebay recently - lucky really. but not that lucky since i still have loads!

[Van]

http://bullmarketthinking.com/technical-gold-trader-gary-savage-big-players-use-panic-selling-events-to-enter-billion-dollar-positions-in-gold-miners/

 

“Big players will drive the market below a technical level, and that will trigger stops with the technical traders, so you’ll get a big panic selling event, and the big players use that in order to get into large positions.

 

“You have to do the opposite of what your emotions are telling you, and your emotions are telling you the miners are terrible stocks…but that’s when you have to buy. When nobody wants it.”

 

-------------

 

I have little doubt that someone has been using this week to accumulate a big position.

[Perishabull]

Nice chart.... bet it looks even better on the log though.

Nice chart.... bet it looks even better on the log though.

 

Here you go, right on cue, I've added a couple of lines to give an idea of possible trendlines;

 

 

According to this it could even go down to as low as $1400 and still be in an uptrend, any lower though and that view would be thrown into severe doubt. Strangely I've not been concerned about this downmove and that is worrying in itself, sentiment according to sentimentrader is at 50%, really not very low at all....uh oh.

[romans holiday]

Here you go, right on cue, I've added a couple of lines to give an idea of possible trendlines;

 

 

According to this it could even go down to as low as $1400 and still be in an uptrend, any lower though and that view would be thrown into severe doubt. Strangely I've not been concerned about this downmove and that is worrying in itself, sentiment according to sentimentrader is at 50%, really not very low at all....uh oh.

 

Thanks PD. That has to be the chart by which to keep your bearings in the seasonal, or not so seasonal, squalls. I would interpret it slightly different as far as 'trend lines' go. As opposed to the straight line, where the price is supposed to 'bounce', I prefer to see the [occasionally punctuated] curvature of a cup on these kind of corrections. For me, the low point in '08 is the equivalent of the low we saw this mid year [which was around 1550 if I remember correctly]. The cup pattern this time round was not as deep. I think this dip here will be relatively brief.. perhaps down to 1600.... and then to new highs. If the chart [and that reading] is anything to go by, now is the time to buy.

 

I agree with Sledgehead's point that often you have to let a chart speak for itself... and this long term log is speaking volumes. The trick for the trader, not to mention the investor, is to be disciplined and to bracket out the daily emotion and headline news. Helps also to be well hedged.

[romans holiday]

.......

And that's the problem with all these indicators, whether they be bollinger bands, rsi, macd or whatever new flavour some bod might have concocted from historical plot studies: they simply distract, obfuscate and add an air of specious mathematical legitimacy to what is essentially an emotive, intuitive phenomenon : natural appearance.

 

Charts either talk to you or they don't. Bands and lines and oscillators won't help, because charts will always break the mathematical rules we try to impose on them. The bands and other constructs may appear to offer insight, but the nature of trading, even with the best money management techniques, will ensure they take as much as they give, whether we stick to them rigidly or take them only as guides. At best, they are a neat way of commenting on positions w/o being too wide of the mark. At worst they can lose you everything.

....

 

Yep, pretty much agree. The 'technicals' can be just as much a disadvantage as an advantage insofar as they detract or distract from the simpicity of a long term log chart.

 

So linearising a chart by looking at its log plot might turn a golden-mean looking chart into a linear one,...

 

Not sure what you mean by this.

[callmejoe]

http://kingworldnews...Gold_Price.html

 

Whistleblower - $3.5 Billion Of Paper Used To Smash Gold Price

[callmejoe]

Article for American readers:

http://dollarcollapse.com/precious-metals/tom-cloud-how-to-sell-gold-without-reporting-it/

How to Sell Gold Without Reporting It

[callmejoe]

http://kingworldnews...k_The_Yuan.html

Diplomat inadvertently reveals China amassing gold to shore up the yuan

 

EXCERPT

Today acclaimed money manager Stephen Leeb stunned King World News when he said he was recently speaking with a Chinese diplomat and the diplomat accidently admitted to him that China was accumulating gold specifically to back the yuan. This was a shocking admission and the diplomat then attempted to backtrack but it was too late.

 

I was just speaking to a Chinese diplomat and I said to their diplomat, ‘Your two most important commodities are water and gold.’ And this diplomat said to me, ‘Yes, we need gold to back up the yuan.’ Well this diplomat realized very quickly they had made a terrible mistake in admitting that and began to back off and stated, ‘No, it’s not to back the yuan. It’s because of jewelry.’ But it was too late, the horse had left the barn so-to-speak.

[drbubb]

From DrBubb's Diary

 

I don't put any particular significance in the 480d MA - but it does look historically meaningful

 

GLD /gold ... with-480d MA : 5-years : Longer

 

[drbubb]

http://kingworldnews...k_The_Yuan.html

Diplomat inadvertently reveals China amassing gold to shore up the yuan

 

"shore up"?

The Yuan does not need any shoring up !

He means to BACK THE YUAN as a rival global currency to the US Dollar

[chazza]

So when will investors be prepared to test the waters again. My guess, 1550.

 

Personally, would like to see a back test of the downtrend line we brokout of in August this year. That would mean 1590 area.

[Sledgehead]

Not sure what you mean by this.

 

All I'm saying is that when most people look at a house like this:

 

 

 

... it looks right.

 

That's because its window heights decrease as you go up the building according to golden mean proportions - the kind or ratios we are used to in nature.

 

Similary, we identify certain stock charts as looking right, because they have a natural cadence. Most people would probably be happier with a chart that has certain swings that fall outside linear trendlines; they will not associate such dips as negatives. Projecting a chart that behaves this way onto a log scale or a log-log scale might therefore produce a plot that falls bewteen linear trendlines but that will not necessarily make it look more positive to the average human, any more than making all the windows of the above building the same height would make it appear more appealing. Indeed to many, windows of the same height would look completely wrong, and it may well be the case that a chart that went up in a straight line for 5 years might ingender large amounts of nervouseness, simply because, as humans, we are not used to linear behaviour.

[drbubb]

All I'm saying is that when most people look at a house like this:

 

 

 

... it looks right.

 

That's because its window heights decrease as you go up the building according to golden mean proportions - the kind or ratios we are used to in nature.

 

The Golden ratio has wondrous properties !

[drbubb]

If you want the threads in the same Forum, please let me know

 

Actually, I am planning to move more Trading & Investment threads to this Forum soon

[andrew]

 

 

All I'm saying is that when most people look at a house like this:

 

 

 

... it looks right.

 

That's because its window heights decrease as you go up the building according to golden mean proportions - the kind or ratios we are used to in nature.

 

Similary, we identify certain stock charts as looking right, because they have a natural cadence. Most people would probably be happier with a chart that has certain swings that fall outside linear trendlines; they will not associate such dips as negatives. Projecting a chart that behaves this way onto a log scale or a log-log scale might therefore produce a plot that falls bewteen linear trendlines but that will not necessarily make it look more positive to the average human, any more than making all the windows of the above building the same height would make it appear more appealing. Indeed to many, windows of the same height would look completely wrong, and it may well be the case that a chart that went up in a straight line for 5 years might ingender large amounts of nervouseness, simply because, as humans, we are not used to linear behaviour.

 

That picture has made me think!

 

In some ways the house looks good to my eyes, but in others not so........

Maybe because I was brought up in a area in London with that style of building it lacks ' depth ' to my eyes.

It just feels two dimensional, the building lacks something.....

The proportions of the windows are good like you say.

But to me it has the feel of a pastiche.

 

Getting to your point about charts, like the house picture, if they don't 'feel' natural on viewing I tend not to trust them whatever scale is used.

 

Not sure that this will make sence to you guys...... : (

 

Thanks Sledge your post has helped my thinking.

 

 

[drbubb]

Futures market survey: 75 pct negative about Shanghai gold on Tue.

TMC Net - 6 Hours ago

(Xinhua via COMTEX) -- About 75 percent futures experts surveyed by the China Finance Corporation, a financial information provider run by Xinhua News Agency, are negative about the gold futures traded

[drbubb]

China Builds Up Its Gold Reserves

 

As fewer currencies can now be called non-fiat, the attractiveness of Gold as a reserve asset

has increased. In addition to the countries mentioned above, China also seems to be building

up its Gold reserves. It has long been argued that even if China wanted to diversify its $3

trillion of reserves, it could not diversify into Gold without disrupting the Gold market.

However by stealth, China seems to be doing just this. As well as being an important Gold

consumer, China has become the world’s largest producer of Gold and is likely to be the

largest importer of Gold too, in 2012. In addition, it is buying Gold mining companies around

the world. All in all, this suggests China is building up its Gold reserves. The last time China

made public its reserves they had doubled to 1,054 tonnes, that was three and a half years

ago in April 2009.

 

Gold Reserves: Tonnes : $ Billions

====

United States--- : 8,133.5 : $ 466.8 Bn

Germany-------- : 3,395.5 : $ 194.9 Bn

IMF -------------- : 2,814.0 : $ 161.5 Bn

Italy -------------- : 2,451.8 : $ 140.7 Bn

France ---------- : 2,435.4 : $ 138.8 Bn

China ------------ : 1,054.1 : : $ 60.5 Bn

Switzerland ----- : 1,040.1 : : $ 59.7 Bn

Russia ------------- : 936.6 : : $ 53.8 Bn

Japan -------------- : 765.2 : : $ 43.9 Bn

Netherlands ------ : 612.5 : : $ 35.2 Bn

India ---------------- : 557.7 : : $ 32.0 Bn

ECB ---------------- : 502.1 : : $ 28.8 Bn

 

If they make another update the market should be braced for a significant increase. In 2009, the

market reacted bullishly to the news and we would expect a similar reaction if another update were to

emerge – that is as long as it did not look as though China had built up enough reserves to slow down its

accumulation. This seems unlikely as even if China doubled its holdings again it would still be below that of

France, Italy, the IMF, Germany and the US – see table above. China’s official Gold holdings of 1,054 tonnes

only account for some two percent of its reserves, whereas Gold held by the US, Germany, Italy and

France accounts for around 70 percent of their reserves. We feel central banks’ purchases of Gold will continue,

driven by the prospect of further currency debasement and higher inflation down the road.

 

As well as seeking ways to diversify its reserves, China, may also be looking to build up its

Gold reserves with the idea that before too long it will want to make the yuan a freely

convertible currency.

===

/source: http://www.scotiamoc...orecast2013.pdf

[frizzers]

China Builds Up Its Gold Reserves

 

As fewer currencies can now be called non-fiat, the attractiveness of Gold as a reserve asset

has increased. In addition to the countries mentioned above, China also seems to be building

up its Gold reserves. It has long been argued that even if China wanted to diversify its $3

trillion of reserves, it could not diversify into Gold without disrupting the Gold market.

However by stealth, China seems to be doing just this. As well as being an important Gold

consumer, China has become the world’s largest producer of Gold and is likely to be the

largest importer of Gold too, in 2012. In addition, it is buying Gold mining companies around

the world. All in all, this suggests China is building up its Gold reserves. The last time China

made public its reserves they had doubled to 1,054 tonnes, that was three and a half years

ago in April 2009.

 

Gold Reserves: Tonnes : $ Billions

====

United States--- : 8,133.5 : $ 466.8 Bn

Germany-------- : 3,395.5 : $ 194.9 Bn

IMF -------------- : 2,814.0 : $ 161.5 Bn

Italy -------------- : 2,451.8 : $ 140.7 Bn

France ---------- : 2,435.4 : $ 138.8 Bn

China ------------ : 1,054.1 : : $ 60.5 Bn

Switzerland ----- : 1,040.1 : : $ 59.7 Bn

Russia ------------- : 936.6 : : $ 53.8 Bn

Japan -------------- : 765.2 : : $ 43.9 Bn

Netherlands ------ : 612.5 : : $ 35.2 Bn

India ---------------- : 557.7 : : $ 32.0 Bn

ECB ---------------- : 502.1 : : $ 28.8 Bn

 

If they make another update the market should be braced for a significant increase. In 2009, the

market reacted bullishly to the news and we would expect a similar reaction if another update were to

emerge – that is as long as it did not look as though China had built up enough reserves to slow down its

accumulation. This seems unlikely as even if China doubled its holdings again it would still be below that of

France, Italy, the IMF, Germany and the US – see table above. China’s official Gold holdings of 1,054 tonnes

only account for some two percent of its reserves, whereas Gold held by the US, Germany, Italy and

France accounts for around 70 percent of their reserves. We feel central banks’ purchases of Gold will continue,

driven by the prospect of further currency debasement and higher inflation down the road.

 

As well as seeking ways to diversify its reserves, China, may also be looking to build up its

Gold reserves with the idea that before too long it will want to make the yuan a freely

convertible currency.

===

/source: http://www.scotiamoc...orecast2013.pdf

 

I looked at this very subject here - http://www.moneyweek.com/investments/precious-metals-and-gems/gold/chinese-demand-could-send-gold-price-soaring-61500

[frizzers]

China Builds Up Its Gold Reserves

 

As fewer currencies can now be called non-fiat, the attractiveness of Gold as a reserve asset

has increased. In addition to the countries mentioned above, China also seems to be building

up its Gold reserves. It has long been argued that even if China wanted to diversify its $3

trillion of reserves, it could not diversify into Gold without disrupting the Gold market.

However by stealth, China seems to be doing just this. As well as being an important Gold

consumer, China has become the world’s largest producer of Gold and is likely to be the

largest importer of Gold too, in 2012. In addition, it is buying Gold mining companies around

the world. All in all, this suggests China is building up its Gold reserves. The last time China

made public its reserves they had doubled to 1,054 tonnes, that was three and a half years

ago in April 2009.

 

Gold Reserves: Tonnes : $ Billions

====

United States--- : 8,133.5 : $ 466.8 Bn

Germany-------- : 3,395.5 : $ 194.9 Bn

IMF -------------- : 2,814.0 : $ 161.5 Bn

Italy -------------- : 2,451.8 : $ 140.7 Bn

France ---------- : 2,435.4 : $ 138.8 Bn

China ------------ : 1,054.1 : : $ 60.5 Bn

Switzerland ----- : 1,040.1 : : $ 59.7 Bn

Russia ------------- : 936.6 : : $ 53.8 Bn

Japan -------------- : 765.2 : : $ 43.9 Bn

Netherlands ------ : 612.5 : : $ 35.2 Bn

India ---------------- : 557.7 : : $ 32.0 Bn

ECB ---------------- : 502.1 : : $ 28.8 Bn

 

If they make another update the market should be braced for a significant increase. In 2009, the

market reacted bullishly to the news and we would expect a similar reaction if another update were to

emerge – that is as long as it did not look as though China had built up enough reserves to slow down its

accumulation. This seems unlikely as even if China doubled its holdings again it would still be below that of

France, Italy, the IMF, Germany and the US – see table above. China’s official Gold holdings of 1,054 tonnes

only account for some two percent of its reserves, whereas Gold held by the US, Germany, Italy and

France accounts for around 70 percent of their reserves. We feel central banks’ purchases of Gold will continue,

driven by the prospect of further currency debasement and higher inflation down the road.

 

As well as seeking ways to diversify its reserves, China, may also be looking to build up its

Gold reserves with the idea that before too long it will want to make the yuan a freely

convertible currency.

===

/source: http://www.scotiamoc...orecast2013.pdf

 

I looked at this very subject here - http://www.moneyweek.com/investments/precious-metals-and-gems/gold/chinese-demand-could-send-gold-price-soaring-61500

[drbubb]

A Key Support level has been reached

 

[callmejoe]

http://www.silverdoctors.com/jim-willie-immutable-gold-laws/

Jim Willie: The Gold War