Silver and <b>Gold Prices</b>: The <b>Gold Price</b> Lost $3.30 to Close at <b>...</b> |
- Silver and <b>Gold Prices</b>: The <b>Gold Price</b> Lost $3.30 to Close at <b>...</b>
- Macro Factors Dominating <b>Gold Price</b> As US Dollar Outweighs <b>...</b>
- Long Cycles And Trend Changes: <b>Gold Price</b>, Dollar, S&P500 | Gold <b>...</b>
| Silver and <b>Gold Prices</b>: The <b>Gold Price</b> Lost $3.30 to Close at <b>...</b> Posted: 10 Sep 2014 04:43 PM PDT
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose.  | ||||||||||||||||||||||||
| Macro Factors Dominating <b>Gold Price</b> As US Dollar Outweighs <b>...</b> Posted: 09 Sep 2014 08:27 AM PDT By: GoldCore
A current snapshot of the world gold market and its near term outlook can be gauged by examining four sets of influences on the market, namely the macro/geopolitical environment, investment demand flows, physical demand in the major markets (using India as an example), and finally the technical picture. Macro Economic/Geo-Political Overall sentiment in the gold market continues to be set by the global geopolitical and macro environment. The relative strength of the US economy compared to other economies is currently creating relative dollar strength, even despite the fact that the monthly US non-farm payrolls for August came in at 142,000 new jobs last Friday, this was substantially lower than the consensus predictions of 200,000. This is because other major currencies are making the US Dollar look good. The British pound is weakening due to the heightened uncertainty over the outcome of next week's Scottish independence referendum, while last week's European Central Bank (ECB) cut in interest rates and expectations of sovereign bond buying by the ECB later this year are weighing on the Euro. Therefore, with pressure on the Pound and the Euro, the US Dollar is displaying relative strength. As gold price discovery on world markets is in US dollars, and most pricing and trading is in US dollars, as the dollar strengthens, gold purchases become more expensive for non-US dollar denominated investors. This is just a fact of the market. Globally, while there are not as of yet very strong expectations of interest rate rises in the major economics, interest rate expectations are strongest for the US economy. This was illustrated yesterday when the San Francisco Federal Reserve cited a study which indicated that investor interest rate expectations are currently lower than those of the Federal Reserve. The San Francisco Fed seems to be signalling that investors should expect an interest rate hike sooner than expected. With the recent ceasefire in the Ukrainian-Russian conflict, the relative demand for gold as a safe haven asset has dwindled in the last week. Today a report by Dutch investigators into the downing of Malaysian Airlines flight MH 17 only stated that the flight was likely downed by an outside impact. Since the report's conclusions appear to be deliberately ambiguous, this does not appear to change anything as far as the ceasefire or the negotiating position of any peace negotiations. Investor Demand The flows of investment into and out of physically backed gold Exchange Traded Products (ETPs) are also helpful in gauging sentiment in the world gold market. In August there was a net 17 tonne outflow from physically backed gold ETPs, with an outflow of 6.5 in the last week of August. ETPs include the GLD (SPDR Gold Shares) and the IAU (iShares Gold Trust) products. The total accumulation of gold in these products then stood at 1,726 tonnes at the beginning of September and was down 36 tonnes compared to the beginning of the year. While this year-to-date drop is not much compared to the 800 tonne outflow in 2013, it is still a sign that investors who use the ETF/ETP route, are not, on a net basis, allocating new money to gold. In first week of September there were 13 tonnes of outflows from physical gold ETPs. In GLD, the total holding is now at 785 tonnes, and total ETP holdings (in all tracked products) are now down to 1,713 tonnes (as of September 4), nearly 3% lower than the start of the year. Thus, ETP flows are slightly bearish at the moment but overall quite neutral. Investor sentiment in the gold futures market as well as coin demand for the bullion coins of the major Mints are also used as additional gauges for investor demand flows, but at the moment, these gauges, along with the ETPs are just neutral to slightly bearish. Physical Demand in India Physical demand in the large consumer gold market of India has been weaker than expected because the newly elected government has not yet reduced gold import restrictions despite the trade balance having improved. Last year, the fall in world gold prices saw a surge in gold imports into India which had a large negative impact on the trade balance and weakened the Indian Rupee. Import duties on gold rose to 10% and import restrictions were imposed specifying that of all the gold officially imported, 20% had to be re-exported. Other import restrictions were also introduced for banks and trade houses that usually import gold. These restrictions on gold demand worked as expected however they led to a sharp increase in gold smuggling into India. Although official figures on gold smuggling are just estimates, the World Gold Council speculates that for all of 2014, Indian gold imports via smuggling could reach 200 tonnes. This is about the same amount as was imported into India officially during Q2 of this year. It remains to be seen how the new Indian government views the current import restrictions on gold. They may wait in the near term before tweaking with economic policy that has helped to improve the trade balance. The Indian festival and wedding season is fast approaching however, which is always seen as a positive factor in the annual cycle of Indian gold demand. The major festival of Diwali is on October 23, while the end of year wedding season peaks in November and December. The wedding season is important since in traditional Indian society, gold is given as wedding gifts as well as being a source of demand for wedding jewellery. Another factor impacting gold demand in India is the monsoon season since this affects crop production and dictates how much disposable income is available to rural Indian society to save in the form of gold. If a monsoon season is weak then sometimes saved gold is even used to raise cash to balance household incomes. Technical Factors Support that had existed at $1,270 has now been breached. The next major support level is at $1,240, but before that the psychological support level of $1,250. There is major support near $1,180. Resistance is now at $1,277 and $1,297. If gold did manage to go above $1,297 it could trade up to $1,325 or even higher to $1,345. A resumption of an uptrend in the price would be clear if gold broke above $1,520. Interesting, Jim Sinclair, the well-respected gold expert and technical analyst said yesterday that gold cycles which turned gold back from the $1,900 level in 2011, have now turned up and are indicating that the gold price which is now in a major support area, will now aim to reach a $2,100 target area. Market Update Today's AM fix was USD 1,256.00, EUR 974.78 and GBP 779.79 per ounce. Yesterday's AM fix was USD 1,267.25, EUR 978.87 and GBP 786.57 per ounce. Gold fell $13.20 or 1.04% to $1,255.60 per ounce and silver dropped $0.17 or 0.89% to $19.03 per ounce yesterday. Gold is currently trading near a three month low at $1,255, but unchanged from close of trading in New York yesterday. Specifically, the three month low was in June 2014 at $1,240. Yesterday in New York trading, gold fell more than $10 from $1,265 but recovered to close in New York at $1,255. In Singapore overnight trading, gold finished trading near $1,255. The US Dollar Index is currently trading near its 14 month high which was reached in July 2013. Silver is trading at $19.19, unchanged from yesterday. Platinum is down 1.05% at $1,395 while palladium is down 1.45% at $887. This update can be found on the GoldCore blog here. Yours sincerely,
WINNERS MoneyMate and Investor Magazine Financial Analysts 2006 Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator. GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection' © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication. | ||||||||||||||||||||||||
| Long Cycles And Trend Changes: <b>Gold Price</b>, Dollar, S&P500 | Gold <b>...</b> Posted: 04 Sep 2014 11:55 AM PDT Several markets seem over-extended and about to reverse their current trends. S&P 500 Index: It bottomed in March 2009 about 670 and is currently about 2,000. The S&P, thanks to QE, ZIRP, Central Bank purchases, and who knows what other contrivances, has levitated to the magical 2,000 level. Will it go higher? Dollar Index: The dollar index, currently about 83, is well below its high in 2002 at about 120. However it is also well above its 2008 low around 72. Will capital flows into the US and the fear trade continue to levitate the dollar? Gold: Gold prices peaked in August 2011 about $1,920 and today gold sells for about $1,270. However, prices have retreated to 2010 levels but are still far above the lows in 2001 at about $255. Is gold ready to rally? What about cycles?
S&P 500 Index: Consider the following graph of monthly prices for 30 years. The blue vertical lines are drawn every 81 months – about 7 years. Note the highs in 1987, 1994, 2000, 2007, and 2014, and note the current "over-bought" condition of the S&P as indicated by the MACD and TDI indicators. This graph does not conclusively inform us that the S&P is ready to correct, but it does indicate that the S&P could be forming a 7 year cyclic top with a low due perhaps in 2016 – 2019. Dollar Index: Consider the following grAph of monthly prices over nearly 30 years and the vertical blue lines every 75 months. Note the alternating high – low pattern with a high in 1989, low in 1995, high in 2002, low in 2008, and possible high in 2014. The dollar index might move higher and take longer but it could be topping now. The monthly TDI is modestly over-bought and the weekly (not shown) is strongly over-bought. The dollar index could be peaking. Gold: The gold chart shows 20 years of prices with Blue vertical lines every 56 months. Note the lows in 1999, 2004, 2008, and 2013. Gold appears to have made a long term low in 2013 – 2014 and has built a base from which another rally should appear. The MACD and TDI indicators are oversold and indicate strong rally potential. Further, my long-term empirical gold model indicates that current gold prices are too low by about 20%, which will provide a "tail-wind" for gold prices over the next several years, independent of massive QE, more wars, dollar weakness, and economic slumps that create even more unpayable debt. Given the troublesome economic conditions in the world and potential expansion of war in the Ukraine, Iraq, Syria, North Africa, and elsewhere, there is considerable risk that the S&P could fall substantially and a strong probability that gold will rally. Furthermore, there is a growing global movement away from the use of the dollar in global trade, led by China and Russia, and that bodes poorly for long-term dollar strength, particularly as cycles indicate a potential top due in 2014. A fall in the dollar would likely be accompanied by a rise in gold prices. Markets can move farther and take longer than most people expect, but it is certainly time to consider that the S&P is quite high and ready to reverse its five plus year uptrend, and that gold is too low and set to reverse its three year downtrend. Additional Reading: Gary Christenson | Deviant Investor NEW: Check Gary Christenson's brand new book site at GEChristenson.com |
With gold trading in a narrow range below $1,300 and remaining relatively weak, it is worth pausing at this juncture to look at the combination of factors that are affecting its price formation.
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