Bobsta Posted May 5, 2008 Report Share Posted May 5, 2008 NY will choose the direction from here and you get no prize for guessing which direction that will be. Well Gold's putting up a darned good fight and Silver seems to be off on its own little mission. Here's hoping normality is returning. Will Jim be right about the magic second week in May?. . . . Link to comment Share on other sites More sharing options...
marceau Posted May 5, 2008 Report Share Posted May 5, 2008 Well Gold's putting up a darned good fight and Silver seems to be off on its own little mission. Here's hoping normality is returning. Will Jim be right about the magic second week in May?. . . . Agreed, problem is that the second this rally runs out of steam we'll be back down to fill that gap in the low $850s, and I'd say the balance of probability, to my mind, will take us even lower than that. I said last week that I was expecting a $20 or so bounce from $850 and after that a retest of the lows. So far it looks like it's playing out, but if we can move decisively over $870 and stay there then I may change my mind. Link to comment Share on other sites More sharing options...
electroweak Posted May 5, 2008 Report Share Posted May 5, 2008 Agreed, problem is that the second this rally runs out of steam we'll be back down to fill that gap in the low $850s, and I'd say the balance of probability, to my mind, will take us even lower than that. I said last week that I was expecting a $20 or so bounce from $850 and after that a retest of the lows. So far it looks like it's playing out, but if we can move decisively over $870 and stay there then I may change my mind. I have to say that gold is showing good 'buoyancy'; even in this last half-hour; it is bouncing upwards, to be subsequently driven down hard. I am quite pleased with this behaviour, but we shall see if there is a re-test of $850. Secretly I hope there is; I have some more cash tomorrow. Link to comment Share on other sites More sharing options...
drbubb Posted May 5, 2008 Report Share Posted May 5, 2008 OIL is getting expensive again- or maybe Gold is too cheap WTI just exceeded $120 per barrel in the Futures market Link to comment Share on other sites More sharing options...
G0ldfinger Posted May 5, 2008 Author Report Share Posted May 5, 2008 WTI just exceeded $120 per barrel in the Futures market Congrats everyone! (Jim Puplava's price goal for 2008 already taken...) Lots of negative news out there at the moment. EDIT: The monthly average of barrels of WTI per ounce of gold since 1946 is 14.72. Gold would trade at $1,766.40/oz if the ratio was at average today. I have no doubt we're going to get there. EDIT2: And that's only the beginning. Crude will climb to $200, and on. Link to comment Share on other sites More sharing options...
electroweak Posted May 5, 2008 Report Share Posted May 5, 2008 Congrats everyone! (Jim Puplava's price goal for 2008 already taken...) Lo's of negative news out there at the moment. Zapata George doesn't seem like such a loon any more! Link to comment Share on other sites More sharing options...
G0ldfinger Posted May 5, 2008 Author Report Share Posted May 5, 2008 Zapata George doesn't seem like such a loon any more! I never thought he was one. The guy is spot on. Link to comment Share on other sites More sharing options...
bitbigt Posted May 5, 2008 Report Share Posted May 5, 2008 Lots of negative news out there at the moment. Indeed! ...and consequentially the 'TRUTH Value' is shooting up, pulling the gold price along for the ride :-) Link to comment Share on other sites More sharing options...
electroweak Posted May 5, 2008 Report Share Posted May 5, 2008 Agreed, problem is that the second this rally runs out of steam we'll be back down to fill that gap in the low $850s, and I'd say the balance of probability, to my mind, will take us even lower than that. I said last week that I was expecting a $20 or so bounce from $850 and after that a retest of the lows. So far it looks like it's playing out, but if we can move decisively over $870 and stay there then I may change my mind. Marceau, has it shown legs at $870 for long enough for you to turn bullish yet, or are you still thinking it will retest? I think it will re-test, but what do I know..? Link to comment Share on other sites More sharing options...
frizzers Posted May 5, 2008 Report Share Posted May 5, 2008 Just some thoughts on gold and what's next ... A lot of technical stuff coming ... I 've said this before, but ... Since this bull market in gold began in 2001, there have been repeating patterns. Gold has tended to surge up for six to nine months, then consolidate for a year to eighteen months. This happened was very apparent in the move fro Aug 2005 ($430) through to May 2006 when gold hit 730. It then retraced back to 560 and effectively went up and down but sideways with a slight upward bias for over a year, pissed everyone off in the meantime, and eventually bottomed on August 16th 2007 at c. 650. It then surged up to 1020. We have just enjoyed a 7-month move from $660 to $1020. I was hoping to see it go on for a month or two longer and $100-150 higher, but we have nevertheless had a good run. But where will the bottom be? 430 to 730 was roughly a 1.7x move, $300. It then retraced $170 to c. $560. ($545 intraday). Just under half the move. (.56) 650 to 1020 is roughly a 1.6x move, $370. The retracement to c.$845 last week was $175 from the high (.46 of the move). A similar .56 retracement would have us down $207 at 816. However, you could argue that this recent move has been less parabolic towards the end, so we can expect a slightly less dramatic retracement. The 2005-06 retraced to just above the 200dma, though it touched it intraday. The 2007-8 move also retraced to just above the 200 dma. What's more, because 850 is the old 1980 high, it is an obvious line of support. My prediction is that we have seen the bottom just below 850, but that that bottom will be re-tested in the coming months, probably in August-September, or even October. I think now we are going to see a similar up-and-down but sideways with an upward bias pattern for the next year or so. It wouldn't surprise me to see the next major leg up begin around April 2009. I see the first line of resistance on that downtrend line just below 900. If we get through that we could bounce all the way to 960. This is a chart showing the move from August 2005 to May 06 and the subsequent sideways pattern. Link to comment Share on other sites More sharing options...
frizzers Posted May 5, 2008 Report Share Posted May 5, 2008 From August till March we were in a buy-and-hold market. My suspicion is that we are heading back into a traders'. Link to comment Share on other sites More sharing options...
G0ldfinger Posted May 5, 2008 Author Report Share Posted May 5, 2008 ... It wouldn't surprise me to see the next major leg up begin around April 2009. ... Very interesting thoughts, Cuthbert. Link to comment Share on other sites More sharing options...
marceau Posted May 5, 2008 Report Share Posted May 5, 2008 Marceau, has it shown legs at $870 for long enough for you to turn bullish yet, or are you still thinking it will retest? I think it will re-test, but what do I know..? No I'm not convinced at all. We were due a bounce and got one, but it was all a bit weak in my book and far too much of it happened outside NY hours. That gap is just too big and too obvious to have been missed by the shorts, they will attempt to fill it and I'd say the smarter players were just sat on the sidelines today waiting for a rally to create a short entry point. I certainly wouldn't be going long now from a trader's perspective (accumulators can follow a different set of rules). I like Cuthbert's (sounds weird calling you that Frizz) views on future price action and pretty much agree with them from a trading point of view. I still think the rallies are going to get sold for the time being, but an attempt (and failure) to break the 200dma could change all of that. The question is how high the 200dma has climbed by the time we test it. Edit: I also think the recovery, when it comes, will be swifter than previous ones. I can't see the gold market dithering over anything for too long in the current climate. It will either be gold positive or gold negative, each side will bring violent moves and mark the return of gold's infamous volatility (the $20-30 swings will turn into $50-100 swings). The market is on life support at the moment, and traders have started to turn the slightest piece of news into proof of life or death, I can only see this intensifying as time goes on. Link to comment Share on other sites More sharing options...
CIGA Posted May 5, 2008 Report Share Posted May 5, 2008 Just some thoughts on gold and what's next ... A lot of technical stuff coming ... I 've said this before, but ... Since this bull market in gold began in 2001, there have been repeating patterns. Gold has tended to surge up for six to nine months, then consolidate for a year to eighteen months. This happened was very apparent in the move fro Aug 2005 ($430) through to May 2006 when gold hit 730. It then retraced back to 560 and effectively went up and down but sideways with a slight upward bias for over a year, pissed everyone off in the meantime, and eventually bottomed on August 16th 2007 at c. 650. It then surged up to 1020. We have just enjoyed a 7-month move from $660 to $1020. I was hoping to see it go on for a month or two longer and $100-150 higher, but we have nevertheless had a good run. But where will the bottom be? 430 to 730 was roughly a 1.7x move, $300. It then retraced $170 to c. $560. ($545 intraday). Just under half the move. (.56) 650 to 1020 is roughly a 1.6x move, $370. The retracement to c.$845 last week was $175 from the high (.46 of the move). A similar .56 retracement would have us down $207 at 816. However, you could argue that this recent move has been less parabolic towards the end, so we can expect a slightly less dramatic retracement. The 2005-06 retraced to just above the 200dma, though it touched it intraday. The 2007-8 move also retraced to just above the 200 dma. What's more, because 850 is the old 1980 high, it is an obvious line of support. My prediction is that we have seen the bottom just below 850, but that that bottom will be re-tested in the coming months, probably in August-September, or even October. I think now we are going to see a similar up-and-down but sideways with an upward bias pattern for the next year or so. It wouldn't surprise me to see the next major leg up begin around April 2009. I see the first line of resistance on that downtrend line just below 900. If we get through that we could bounce all the way to 960. This is a chart showing the move from August 2005 to May 06 and the subsequent sideways pattern. I have been thinking exactly the same thing, however some of the fundamental influences that affect the price of gold are getting stronger and more pronounced. The price of oil is relentless, food inflation is not going away soon, money supply (especially in the US) is at unprecedented levels globally .. the pattern in gold price over the past few years may be about to accelerate or alter to reflect the now stronger and more influential fundamentals. Jim Sinclair has mentioned something recently when using technical analysis to try and describe the change in pattern. He mentioned the French Curve recently on Goldseek Radio and even posted a picture of his french curves on his website. He has hardly mentioned this form of technical analysis in the past. Axestone has picked up on this and has been adding French Curve Technical analysis to gold in his world famous thread at GIM. The parabolic move in gold may be close. http://goldismoney.info/forums/showthread....66&page=274 post 10932 is Jims explanation of the French Curve. Post 10934 Axestone has added the curve to the current gold bull. Post 10950 shows how the past bull market in gold (1980) was ruled by the french curve. Link to comment Share on other sites More sharing options...
bitbigt Posted May 5, 2008 Report Share Posted May 5, 2008 No I'm not convinced at all. We were due a bounce and got one, but it was all a bit weak in my book and far too much of it happened outside NY hours. That gap is just too big and too obvious to have been missed by the shorts, they will attempt to fill it and I'd say the smarter players were just sat on the sidelines today waiting for a rally to create a short entry point. I certainly wouldn't be going long now from a trader's perspective (accumulators can follow a different set of rules). Yee of little faith! Its in the air... can't you smell it? Golds sentiment has changed. It has gone from being something that everyone felt (or even 'KNEW') was falling and ought to fall (while moving from 1000 to 850) to something that many people now feel may well have had its bottom. Its a self-fulfilling prophecy. The TRUTH Value has risen, and so will golds price 5 more days at this rate of ascent and we'll be back at 1000. Now of course that won't happen in just the next week, but the bottom is in so long as the economic signposts out there keep getting worse. And not so long from now (a month or so) the dollar's mini-rally against the Euro will run out of steam, so pushing the TRUTH Value back up to 1000 or more. Link to comment Share on other sites More sharing options...
marceau Posted May 5, 2008 Report Share Posted May 5, 2008 Yee of little faith! Its in the air... can't you smell it? Golds sentiment has changed. It has gone from being something that everyone felt (or even 'KNEW') was falling and ought to fall (while moving from 1000 to 850) to something that many people now feel may well have had its bottom. Its a self-fulfilling prophecy. The TRUTH Value has risen, and so will golds price 5 more days at this rate of ascent and we'll be back at 1000. Now of course that won't happen in just the next week, but the bottom is in so long as the economic signposts out there keep getting worse. And not so long from now (a month or so) the dollar's mini-rally against the Euro will run out of steam, so pushing the TRUTH Value back up to 1000 or more. Has the trend really changed? All I see is one day's rise after several days of falls. Has sentiment really changed? If your talking about the newsletter writers or the small 'dumb money' traders they flip flop more often than a high jumper at the olympics. I'm not saying that the bottom isn't in, in fact if you re-read my posts today I've actually said we may have already seen it. But I like to go on the basics, one of which is not to buy strength and most will not have had that opportunity today because the market gapped up on the open. I'm sure the painful truth will be unavoidable for the shorts eventually, but eventually could be a long way away based on current market mentality. I think calling a change in sentiment after one day's rise could be a bit premature, gold has an awful lot of work to do before we erase the danger of going below $850 again. Link to comment Share on other sites More sharing options...
Steve Netwriter Posted May 6, 2008 Report Share Posted May 6, 2008 Apologies for a very long post coming up I think this is a very interesting time. I thought it would be interesting to list all the market indicators I can think of and see what they all say at the moment. 1. Sentiment. I think it has done almost a 100% about-face relative to the period when gold was shooting above $1000. Only the die-hard long and strong goldbugs seem to have remained positive. I think this has maximised very recently, and so is bullish for gold/silver. 2. The US$. It's been going through a positive period recently. Is this the end of the bounce? If so, bullish for gold/silver. Against the Euro: Against the JPY: 3. Physical investment buying/selling. I don't have any really recent data, but BV stock levels seem to have held up. Physical buying is supposed to support the gold/silver price at times like this and start the trend back upwards. 4. Physical consumption demand. I don't know. 5. The Gold/Silver ratio. Pass. 6. The Oil/Gold ratio After a dip, oil is now moving up again, and has just passed $120/bll. 7. Price relative to the moving averages. Downside risk to the 200 day MA is now quite small. 8. Real rates of return (interest rates - inflation rate). Negative, so still bullish for gold & silver. 9. Resistance/support levels. Gold recently bounced off a significant support level. Bullish. 10. Fibonacci levels. Gold recently bounced off a 50% retracement level. Bullish. 11. Trading volumes Poor, so not good. 12. RSI. Low and bullish for gold. 13. Trend lines. Gold has broken above the downward trend line. Bullish. 14. COT reports Pass. 15. Economic news Has recently been spun as all good. Maybe starting to turn negative. Bullish. 16. Silver Sammy Contra-indicator Not available. 17. Historical comparisons. The recent dramatic rise in gold/silver and subsequent falls match very closely what happened in 2006. But, then real rates went positive, and so 2006 was a bearish period for gold. Now real rates are still negative, so we are still in a bullish phase. This suggests to me a different movement from here might be expected. 18. Risk/Reward levels (how much you think you could lose max and how much you think you might gain max). Various indicators seem to be pointing towards a bottom either here or not that far down. Downside risk is therefore small, while after the recent $1000+ peak, upside potential is substantial. ----------------- At the very least I hope that helps anyone new to gold/silver to see what indicators there are. I now think this is a good time to start changing my ratio of gold/silver, and am increasing the percentage of silver. Since GM will do a gold/silver metal-metal exchange for 2.95%, it's a pretty cheap way to change your volatility exposure. As a buy and hold long-term sort of person, I consider that a way to gain a slight edge without trading in and out of the PM market. So changing insurance policies without ever being uninsured ----------------- I'd just like to say thanks to all the great posters on here It is very interesting to read all your views and see all your charts. I suspect like me, many people do not reply to every post, as it would fill up the thread with thanks Link to comment Share on other sites More sharing options...
ologhai Posted May 6, 2008 Report Share Posted May 6, 2008 Apologies for a very long post coming up 1. Sentiment. I think this has maximised very recently, and so is bullish for gold/silver. 2. The US$. If so, bullish for gold/silver. 3. Physical investment buying/selling. Physical buying is supposed to support the gold/silver price at times like this and start the trend back upwards. 6. The Oil/Gold ratio After a dip, oil is now moving up again, and has just passed $120/bll. 7. Price relative to the moving averages. Downside risk to the 200 day MA is now quite small. 8. Real rates of return (interest rates - inflation rate). Negative, so still bullish for gold & silver. 9. Resistance/support levels. Gold recently bounced off a significant support level. Bullish. 10. Fibonacci levels. Gold recently bounced off a 50% retracement level. Bullish. 12. RSI. Low and bullish for gold. 13. Trend lines. Gold has broken above the downward trend line. Bullish. 15. Economic news Has recently been spun as all good. Maybe starting to turn negative. Bullish. 17. Historical comparisons. But, then real rates went positive, and so 2006 was a bearish period for gold. Now real rates are still negative, so we are still in a bullish phase. 18. Risk/Reward levels (how much you think you could lose max and how much you think you might gain max). Downside risk is therefore small, while after the recent $1000+ peak, upside potential is substantial. Yes, but do you think the price of gold and silver will go up or down? Link to comment Share on other sites More sharing options...
Steve Netwriter Posted May 6, 2008 Report Share Posted May 6, 2008 Yes, up or down I'm thinking up, or at least not down, or at least not much Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 6, 2008 Report Share Posted May 6, 2008 I would warn gold investors that I bought a sovereign on Friday. It clearly onwards and downwards from here on. Link to comment Share on other sites More sharing options...
Bobsta Posted May 6, 2008 Report Share Posted May 6, 2008 I would warn gold investors that I bought a sovereign on Friday. It clearly onwards and downwards from here on. So you're trying to compete with the Silver Sammy Contra-Indicator eh?! ... The "Bloo Loo Barometer" has a nice ring to it. Incidentally I also sold a little G&S on this morning's strength, so just watch the price rocket now. I have a canny ability to get things completely wrong. I'll be interested to see if/when Marceau turns short-term bull. Link to comment Share on other sites More sharing options...
Steve Netwriter Posted May 6, 2008 Report Share Posted May 6, 2008 As promised: The 2nd Satyajit Das interview from the May 4th Sunday Business programme. http://feeds.feedburner.com/~r/co/vmzZ/~5/...Biz_podcast.mp3 About 10 minutes before the end. From: http://podcastnz.com/index.php?main_page=p...products_id=420 Link to comment Share on other sites More sharing options...
Steve Netwriter Posted May 6, 2008 Report Share Posted May 6, 2008 I think the PPT just pressed the wrong button. The US$ is going dooooooowwwwwwwwnnnnnnnnn...... And gold made it through $878. Very interesting. Wish I could stay up all night and see what happens. Link to comment Share on other sites More sharing options...
Bobsta Posted May 6, 2008 Report Share Posted May 6, 2008 I think the PPT just pressed the wrong button. You mean this one? Link to comment Share on other sites More sharing options...
Steve Netwriter Posted May 6, 2008 Report Share Posted May 6, 2008 It might have been that one I thought they'd hit the "US$ DOWN" button instead of the "US$ UP" button :lol: Link to comment Share on other sites More sharing options...
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