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Jeremy Paxman wasn't too keen on gold was he. I don't remember debates on prime time TV when gold was topping...

Hilarious! It's interesting to see Jeremy Paxman unusually as clueless as your averge Tom, Dick or Harry on what gold is. He and his team obviously haven't done any research about gold whatsoever.

Max Keiser tries to do a good job but his approach is not a good advert for the uneducated. As for that other public school prat, he probably has a nice big London mortgage and is going to go down with it when it goes. Still I bet Daddy has a few bricks stuffed away in Geneva..lol.

Thanks for posting.

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CHART: Gold price vs ETF tonnes shows crash was inevitable

 

There has been no shortage of explanations for the ferocity of gold's two-day retreat – from $1,560 at the open on Friday to a low of $1,329 late Monday.

 

These range from the more out-there arguments – it's a central bank conspiracy and/or Wall Street market manipulation – to the more mundane: technical breaches, margin calls and a stronger dollar.

 

But perhaps the crash in the gold price has a really simple explanation; and one that was signaled to investors way in advance.

 

As the chart shows gold-backed ETF outflows that started early in the new year really took off in February and just accelerated from there.

 

There was no way gold could hold up in the face of this rapid liquidation by gold's most ardent (former) supporters.

 

chart-gold-price-etf-gold-holdings-tonnes-2012-2013.jpg

Buying of gold ETFs – fondly referred to as the people's central bank – played a huge part in gold's 12-year bull run.

 

So perhaps it was a central bank conspiracy after all.

 

Just not the one you would've expected.

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ETF outflows? People selling real, physical ounces or just paper? Are we talking about pallets of gold bricks here or just paper?

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ETF outflows? People selling real, physical ounces or just paper? Are we talking about pallets of gold bricks here or just paper?

 

Real, physical ounces . . . by the truck load!

 

Cf., GLD Holdings Plunge

 

Zeal041213A.gif

 

The amount of gold bullion GLD has hemorrhaged recently is amazing. To put it into perspective, earlier this week the rumor that embattled Cyprus may be forced to sell its official gold reserves made news. The Cypriot government owns 13.9 metric tons of gold. But on a single trading day alone in February’s gold capitulation, GLD had to sell 20.8 tonnes! The supply recently added by GLD dwarfs everything else.

 

Why is GLD dumping gold so aggressively? While silly conspiracy theories abound as always in the gold world, the reality is far less provocative. GLD’s mission is simply to track the price of gold. The World Gold Council (which is funded by leading gold miners) created this gold investment vehicle in November 2004 to offer stock investors an easy, cheap, and efficient way to obtain gold exposure in their portfolios.

 

The gold miners created a direct conduit for the vast pools of stock-market capital to chase gold. The only way for GLD to fulfill its mission of tracking gold is for this ETF to shunt excess GLD-share demand and supply into underlying physical gold bullion itself. This capital sloshing into and out of gold via GLD has naturally had a massive impact on global gold prices. And lately gold has suffered a major GLD exodus.

 

 

longer term picture:

 

Zeal041213B.gif

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Well for me these prices represent great value so earlier this morning I've bought gold at $1365.

 

 

Chart from Zero Hedge today;

 

"Gold had its best day in 3 weeks ending back above $1425 and its best 5-day run in 18 months..."

20130422_EOD4.jpg

 

 

So far so good...................................................

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Chart from Zero Hedge today;

 

"Gold had its best day in 3 weeks ending back above $1425 and its best 5-day run in 18 months..."

20130422_EOD4.jpg

 

 

So far so good...................................................

 

 

nice one! still, price action so far looks very much like a dead cat bounce / rising wedge.

 

Screenshot2013-04-23at124559AM_zps542df22b.png

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Looking at the long term log charts, the magnitude of the crash/ consolidation in both gold and silver are now similiar. This recent one of the past two years taking a lot longer.

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Looking at the long term log charts, the magnitude of the crash/ consolidation in both gold and silver are now similiar. This recent one of the past two years taking a lot longer.

 

Don't know if you saw this Roman;

 

 

From Gold's peak at $1923 to it's low so far of $1321 is a 31.3% move lower, it took 1 year 7 months from high to low.

 

From Silver's peak in April 2011 at $49.82 to it's immediate low 12 days later at $33.03 was a 33.7% move.

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Don't know if you saw this Roman;

Don't know if you saw this Roman;

 

Yep, did notice that. You were correlating the immediate crash in silver with the longer term consolidation in gold if i remember right. Could perhaps be a signal there, where the short collapse in silver gives you the long consolidation in gold?

 

I was more focused on comparing gold with gold, and in the two phases of consolidations/ crashes we've seen. On that basis, you'd think the bottom was in.

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Different perspectives on gold;

 

Volume profile and Linear Regression

 

3 year continuous futures with volume profile;

Goldvolumeprofile_zps391c996d.png

 

The light blue shown on this chart is volume profile. That is showing the volume of trade at each price level (as opposed to volume of trade per day shown at the bottom). The horizontal line emerging from the light blue and running the whole way accross the chart shows the price level over the last 3 years where most volume transacted - $1661.60.

 

The volume profile shows the amount of trade at each price level over the last 3 years. So at $1450 you can see the volume of trade was very low indeed (just below the blue line beneath 'LESS TRADE', and as you look at higher prices, the volume has steadily increased at each price level.

 

Gold has recently sold off very sharply from around $1550 to $1476.10 where it sits now. So as the price moved lower and lower from $1550 to $1476.10, the price moved deeper into price levels where trade volume was less and less. That may partly explain why the move lower was so sharp, certainly if there was some manipluation it's clear from this chart that the price would be particularly vulnerable at the $1550 level.

 

So I would certainly expect to see gold move down and through $1450 (trade volume historically low at that level)

 

You can see below the 'SOLID TRADE BELOW HERE' line there is a sizeable and consistent block of volume. in other words there was a lot of gold traded between $1430 and $1350.

 

So based on this I would be looking for gold to move down to $1430 and then be met with solid support.

 

 

This next chart is 5 year and shows the 'air pocket' in terms of lack of volume more clearly.Gold5year_zps071f6219.png

 

 

At the left axis of the chart just above the blue line there is very little volume. This very low volume region is $1450 to $1500.

 

 

This 5 year chart shows gold (in log) with Linear Regression lines

GoldLR_zps787dde0a.png

 

 

These help to provide longer term context (see explanation below). The lowest trendline represents 3 standard deviations from the mean and is currently at $1432, so if gold were at that level today it would be 3 standard deviations from the average price over the last 5 years. Over any period price can only exceed 3 standard deviations for 0.3% of the period covered. You can see that when gold topped in 2011 it spent very little time above the upper 3 standard deviation line.

 

Interestingly looking at it from this perspective confirms the analysis of the volume profile aspect (that price could go to $1430 but then be met with very strong buying).

 

Of course by its very nature Linear Regression is constantly moving, albeit it's slower over longer periods like this, but what this does show is that we are nearing an extreme.

 

I'm looking for gold to clear and confidently close well above $1430.

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I'm looking for gold to clear and confidently close well above $1430.

 

SO far, you are easily right - Gold above $1453

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I bang on a lot about log charts because it helps you see through the illusion of talking the numbers/ units as your measuring stick. If you simply looked at the numbers, you might freak at the fall of $500 from 1850 at the peak to 1350 at the latest dip. Yet pull up a long term log chart [goldprice.org is good for this] and the latest crash just looks garden variety and on a par with the crash in 2008. Though the crashes are of similiar magnitude, the earlier crash only involved half the numbers/ units of this later one.

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Interesting analysis of Commitment Of Traders (as of Tue 23-Apr 2013) released this weekend 27/28 April....

http://www.gotgoldreport.com/2013/04/gold-legacy-cot-stunner-.html

a little excerpt...

 

If there is one chart from the Commodity Futures Trading Commission (CFTC) data that sticks out more than any of the 30 or so that we track, it is the one below which comes from the Legacy COT report...

(graph omitted)

 

(Ships hailing sound effect: Cue Captains' voice:) "Now hear this!:"

Smaller traders in COMEX futures covered or offset a huge (for them) 12,914 contracts of their net long position or 99% of what was an already low net long stance for gold as shown in the graph below.

(see page)

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See Below: / Looks a tad dangerous

- Maybe await a retrace, or at least a partial retest

 

.

UPDATE - today could be important !

.gldetc.gif

.

Today the 21d_MA may be challenged, or it may overcome the light volume rally we have seen. BTW, neither SLW nor GDX are helping to power a move higher - and that's not as Bullish as it "should" be IMHO, if this up move is going to continue without another significant drop, and possible retest of the recent lows.

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CASEY Research says...

 

Buy Gold NOW

Jeff Clark, Senior Precious Metals Analyst

You've undoubtedly read about the dramatic increase in demand for gold and silver bullion products since the big correction two weeks ago. Supply has gotten tight, premiums are rising, and inventory is hard to come by, especially for certain silver products.

But it's worse than you may know. Many of these reports come from the retail side of the business, including those from sovereign mints. This information is indicative, but more important is the activity among the wholesalers. It's possible the retail trade is just experiencing a giant bottleneck, which would come with a different set of conclusions than if behind the scenes the wholesale industry is seeing net sales.

So we decided to talk to the wholesalers directly: the bullion banks, traders, and refiners. These entities typically deal in wholesale trades only, exclusively in large amounts, and solely with major entities that include dealers and investment funds.

There was a catch, however. In speaking with these entities, we realized one thing: they won't publicly reveal themselves. So we can't tell you who they are, and in fact, they wouldn't speak by phone, only in person. This means you have to take our report on trust – or not – as you wish; we simply don't have permission to reveal names (we did ask). We can say this, though: we spoke with almost all the major ones.

Here's a summary of what they told us occurred during the week of April 15-19 (the 15th was gold's 9.3% selloff)…

  • Bullion Banks. As a group, there were roughly four times as many buy orders as normal. Generally speaking, the buy/sell ratio was nine to one. Inflows (buying vs. selling) were net positive across the board.
  • Bullion Traders: There were twice as many trades placed as usual – and the buy/sell ratio was a whopping 95:1. One anonymous dealer told us it had 995 buy orders that week and just five sell orders. Reports like this were consistent among the group. What's interesting is that all traders reported higher volume. That the increased buying occurred on large volume instead of small volume means the buying was not a fluke. It also confirms the bull market isn't over.
  • Precious Metals Refiners: These entities deal in large trades only. None would reveal the quantity of their orders, but two stated they had no sell orders. A third told us they had one sell order out of 100 transactions.

What we learned from these big players is that no one was a net seller. There was across-the-board purchasing, and on significantly increased volumes. We heard more than once that "We've never seen anything like this." And that includes the 2008-2009 period.

While some of this may sound familiar to what we've heard on the retail side, keep in mind that these are the entities that supply your local dealer. So if your favorite shop found it difficult to access product last week, their woes are unlikely to let up.

What we conclude from this research is that the availability of bullion is likely to get worse before it gets better. If so, it also means premiums will continue to rise. Remember that in early 2009, at the peak of the last big supply deficit, premiums for silver Eagles reached as high as 90-100% before coming back down. In that light, a 25% premium for a silver Eagle today doesn't look so bad.

The disconnect between the paper price of gold and the demand for physical metal is so great that we want to bring this to your attention so that you can make an informed decision about whether or not to buy gold now.

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Thanks for that intel.

 

What happened to prices at that time, CS?

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Now down precisely to the sliding parallel shown in above chart;

 

 

gold_zps8064e524.png

Hi PD,

 

how did you generate the lines?

 

Are you advocating the middle line as the next target resistance area.

 

If the bottom line is broken would this indicate the current uptrend is broken?

 

Regards

 

ML

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Hi PD,

 

how did you generate the lines?

 

Are you advocating the middle line as the next target resistance area.

 

If the bottom line is broken would this indicate the current uptrend is broken?

 

Regards

 

ML

 

I use a trading system called Multicharts, there's a tool called Andrews Pitchfork that allows you to examine markets using 'median line analysis'. I'm relatively new to it but its quite powerful since it allows you to look at price structure from a different and sometimes original perspective.

 

The midline may offer resistance since it provided compelling support on a number of occasions. If gold dismisses it by rising through with little or no resistance that could be interpreted as being very bullish for gold.

 

If the lower line is broken and it is not immediately recaptured then the trend may be broken but it depends on seeing more detail and doing more analysis if that scenario develops.

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