GOLD

[Lego_Man]

How does the logic of trying to do TA on the price of gold in NZD work?

How can there be "support" and "resistance" of something when that thing is solely the function of 2 other independent variables?

It makes about as much sense to me as charting the S&P in terms of the spot price of live hogs and trying to make projections.

[arco]

How does the logic of trying to do TA on the price of gold in NZD work?

How can there be "support" and "resistance" of something when that thing is solely the function of 2 other independent variables?

It makes about as much sense to me as charting the S&P in terms of the spot price of live hogs and trying to make projections.

You can chart a comparison with anything you like - e.g. DJIA relative to Gold.

.

[srotherh]

How does the logic of trying to do TA on the price of gold in NZD work?

How can there be "support" and "resistance" of something when that thing is solely the function of 2 other independent variables?

It makes about as much sense to me as charting the S&P in terms of the spot price of live hogs and trying to make projections.

And does every other market not have more than one variable.
Surely charts are a historical map of the interaction of all variables which people watch to indicate the areas of support and resistance going forward.
why study the $US- Gold chart only when investing in $NZ. Why not observe both.???

[Lego_Man]

Where i am coming from is that the value of the NZD is inconsequential relative to the value of gold, thus what exactly is "resisting" gold moving above or below a point in NZD terms? Putting gold in nzd terms is almost converting it to an entirely different measure, albeit one that still retains some of its correlation to itself.

I just dont see how there can be anything but very weak TA relationships in such a derivative measure. I mean what happens when "NZD gold" reaches a resistance point? Who steps in to short it? Who even cares that such a point is reached? It just seems pretty illusory to me.

[Baa_Baa]

Where i am coming from is that the value of the NZD is inconsequential relative to the value of gold, thus what exactly is "resisting" gold moving above or below a point in NZD terms? Putting gold in nzd terms is almost converting it to an entirely different measure, albeit one that still retains some of its correlation to itself.

I just dont see how there can be anything but very weak TA relationships in such a derivative measure. I mean what happens when "NZD gold" reaches a resistance point? Who steps in to short it? Who even cares that such a point is reached? It just seems pretty illusory to me.

I think you've covered three important points;

1. Measuring the price of gold in NZD (NZPOG)
2. Using the language of TA to describe NZPOG
3. Applying trading analysis

For 1. NZPOG, is important to anyone who buys and sells in NZ currency, to keep tabs on the price in NZD. This is the same regardless of what the asset, service or product might be. This helps us to figure out whether we are buying or selling at a price relative to a previous high or low and factor that into a conclusion of whether it is a good, ok, or bad price. It's a number that gives a perspective of value relative to historical price for buyers or sellers using NZD's.

For 2. TA of NZPOG helps because it introduces all sorts of other indications of whether the price is a good, ok or bad price relative to your own ability, timeliness and cash to participate. On the other hand the language of TA is born out of trading and it is illusory in that it implies forces that don't exist or that play out as a by-product of other primary forces. To help illustrate this, the price of gold in NZD is not set buy the buyers and sellers of gold who use NZD to do it. The price is a factor of NZD relationship to the USD of which Gold price is set in (or Pounds). This is helpful only as a buyer or seller using NZD, and TA helps to inform a view of when to act in buying or selling.

For 3. Trading analysis of the metal is useful in the markets that the metal is actually traded in, and that's done largely on paper (etf, options, futures). The reality is that very little actual metal physically moves between counterparties as a result of a trade, but sometimes it does. It is not inconceivable that people and businesses in NZ pay for metal trade done in USD with NZD's. What trading analysis is not helpful for is the reason a person might want to have some metal, which is more akin to insurance than investment, let alone trading in the sense of ST profit gains short or long. It is very helpful for buying for inventory, or selling mined metal.

My point is that if you use NZD to participate in buying or selling precious metals, or in fact any asset class, the value of any one particular measure or method of reason for getting into, staying in, or getting out of precious metals can be questioned in isolation; however a combination of all relevant knowledge and skills, and the ability to apply them would be ideal. To buy and sell using NZD's and not to monitor the price and circumstance of ones holdings in the currencies that one is forced to consider and use is illogical.

BAA

[Baa_Baa]

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[Baa_Baa]

You can find TA and some discussion on precious metals here http://forum.sharechat.co.nz/showthr...7896#post17896 ... todays' chart is the ST USPOG arithmetic scale, which shows the current decline and immediate support.

Enjoy, discuss it with me and others on the dedicated 'Precious Metals' threads.

BAA

[lakedaemonian]

I think you've covered three important points;

1. Measuring the price of gold in NZD (NZPOG)
2. Using the language of TA to describe NZPOG
3. Applying trading analysis

For 1. NZPOG, is important to anyone who buys and sells in NZ currency, to keep tabs on the price in NZD. This is the same regardless of what the asset, service or product might be. This helps us to figure out whether we are buying or selling at a price relative to a previous high or low and factor that into a conclusion of whether it is a good, ok, or bad price. It's a number that gives a perspective of value relative to historical price for buyers or sellers using NZD's.

For 2. TA of NZPOG helps because it introduces all sorts of other indications of whether the price is a good, ok or bad price relative to your own ability, timeliness and cash to participate. On the other hand the language of TA is born out of trading and it is illusory in that it implies forces that don't exist or that play out as a by-product of other primary forces. To help illustrate this, the price of gold in NZD is not set buy the buyers and sellers of gold who use NZD to do it. The price is a factor of NZD relationship to the USD of which Gold price is set in (or Pounds). This is helpful only as a buyer or seller using NZD, and TA helps to inform a view of when to act in buying or selling.

For 3. Trading analysis of the metal is useful in the markets that the metal is actually traded in, and that's done largely on paper (etf, options, futures). The reality is that very little actual metal physically moves between counterparties as a result of a trade, but sometimes it does. It is not inconceivable that people and businesses in NZ pay for metal trade done in USD with NZD's. What trading analysis is not helpful for is the reason a person might want to have some metal, which is more akin to insurance than investment, let alone trading in the sense of ST profit gains short or long. It is very helpful for buying for inventory, or selling mined metal.

My point is that if you use NZD to participate in buying or selling precious metals, or in fact any asset class, the value of any one particular measure or method of reason for getting into, staying in, or getting out of precious metals can be questioned in isolation; however a combination of all relevant knowledge and skills, and the ability to apply them would be ideal. To buy and sell using NZD's and not to monitor the price and circumstance of ones holdings in the currencies that one is forced to consider and use is illogical.

BAA

I'm not really into TA, but try to keep an eye on the opinions of those who are focused strongly on it for a further measure of confidence if my personal investment thesis is running in parallel with the trend.

I tend to think of the relationship between the NZD and Gold analogous to entering the lobby of a skyscraper like the Empire State Building.

In the building are quite a few elevators........some service the bottom portion of the building, some service the top portion of the building, some in between.

Some elevators seem to travel in predictable patterns, others not so much.

It's all rather confusing, so I try to keep things simple.

I try not to jump directly from one moving elevator to another moving elevator.

I try to exit one elevator at a level I'm happy with, and enter another if/when it passes by.

My goal is to reach the top of the building, but am willing to accept the cost of getting stuck for awhile in the lobby of Floor 72 for a while, rather than risking a ride in the service elevator to the basement.

For me getting into Gold has been firstly getting out of the NZD and into the USD at levels I'm quite happy with(especially back in Q1/Q2 2007, and then again recently), then patiently waiting for a Gold price I'm happy with.

I'm not sure if it is an appropriate way of looking at things(or even an accurate analogy!).

But for the life of me I can't see a sharp and simple relationship between the Kiwi and Gold...so I've broken in down into pieces I CAN better understand NZD/USD & USD/Gold.

Just my 0.02c

PS: Very nice chart Arco!

[Baa_Baa]

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[airedale]

Very unusually the POG went up by $10 when the Nymex opened last night.
Perhaps the usual Nymex downwards ratchet has reached the end of its travel.