Gold

[Nasi Goreng]

The problem with gold in USD terms is we are at completely the wrong end of the cycle. Interest rates are rising and fixed income, bond yields are increasing. There are no real inflation worries right now and banks seem to be in much better order.

Back in the last gold bull market, interest rates were dropping to zero, bond yields were negative and banks were collapsing. The environment now is so much different to back then yet the price of gold is still quite high. The price today is the same as it was in November 2009.

The gold bull market continued to rally for another 2 years hitting the top in September 2011.

I've recently seen quite a bit of TA that suggests price could go down to 850 which was the peak of the cycle in 1974. This may seem absurd but the gold price in year 2000 was 356. What is the difference between 2000 and 2015?

I hear what you are saying about capitulation but that moment is not here yet. You are right that there is currently too much supply and that miners need to go under before we find a bottom. Once we get below 1000, we might get that capitulation moment... and then 850 is not really that far away.

[Daytr]

Hmm the bull market for gold actually started in a rising interest rate environment back in around 2000 where the US raised interest rates for about 4 -5 years straight. It went from around $260/once to $850 from memory in that time, all prior to the credit crunch of course.
In regards cycles, I read it differently. Gold has been slaughtered in price as global equities were bolstered by zero interest rates & masses amounts of QE. I see an overvalued equity market (global) being hurt far more by rising interest rates than gold & if money did indeed pour out of equities gold would likely benefit as an alternative to cash. Obviously the US is only one market, but an important one & Europe will be a long way off raising interest rates I would have thought. Japan are trying but it could be a dangerous in regards servicing their own debt. The US will have a similar problem the higher they raise interest rates the more cost to the taxpayer in interest costs of their massive government debt. Personally I think normalization of markets will prove to be a good thing for gold.

[Valuegrowth]

http://www.cnbc.com/2015/07/19/gold-...-fed-hike.html


Gold hits 5-year low under $1,100 on Chinese selling


http://www.cnbc.com/2015/07/20/analy...l-on-gold.html


Analyst: Too soon to make a call on gold

[Valuegrowth]

We may see gold crisis in 2017/18. Even gold can go down to as low as $300 by 2017. USD could become supper winner among hard currencies by 2017/18. My initial target for Gold was $500 by 2017. However, now I believe it can go below that level as well due to some factors. Still we haven’t seen interest rates adjustment in the USA. It should adjust gradually from 2016 onwards. Therefore, we should see bigger fall in gold prices in 2016 as well. Coming USA factor will crush gold. As I forecasted, I am going to stay with my bear call for gold.

http://www.marketwatch.com/story/investors...unce-2015-07-29

Opinion: Study predicts gold could plunge to $350 an ounce

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked site.

[Daytr]

Gold rose from 1999 to 2005 all the while the US was raising interest rates. 3000 tons of mine supply would be cut per annum.

The only reason gold could stay below the cost of production for any length of time is if there was wholesale hedging like in the 90s however for a number of reasons that wont happen.

We are at the low point of seasonal demand, gold should pick up toward the 3rd quarter.

Nice short covering bounce on Friday night.

If the USD still keeps climbing and say we see the NZD at 50c or 25% lower than where it is now then I suppose gold could do the same, but I even doubt that, but then you are talking about a gold price of around $800 not $350. I look at gold as one of the lead indicators i.e. it fell first & a long way before the currencies such as the AUD or CAD & I wouldn't be surprised to see it recover first as well. In the last year or two gold until very recently has been by far one of the best performing currencies & it still outperforms the likes of the Kiwi & AUD.

[Daytr]

Gold is having a good Euro session after a strong night last night.
Almost touched $1120 so well outside the recent range.
Short covering was evident, although from what I have read quite a few shorts had already covered so I wouldn't be surprised to see them reinstate at some point.

[JBmurc]

To see Gold at $300oz USD would likely still be 1600-1800oz NZD so really no change but it would wipe-out most of the USD producers ....this would be also see oil in the teens in USD so goodbye US based producers along with many others ....

the catalyst for such prices would have to be some "BLACK DEATH" type 50% world population wiped out etc ....

[Daytr]

Interesting night for gold up 1.5% to $1134. Oil smashed again after a bounce only 24 hours before. I'm glad I took a nice profit on my WTI position as it was smashed 4.15% ! Copper down, equities down reasonably sharply & Chinese markets had another volatile day. Seems the PBOC is willing to support the China50 market at 10,000. Gold now seems to be reflecting global risk, i.e. rising against other markets, in saying that I'm not confident it will break above $1140 key resistance & this could be a good area to short. I'm long gold stocks so they should have a pretty good day ahead with Aussie gold at A$1542.

[Daytr]

Wow that $1140 barrier smashed as equities got trounced. Gold now trading as a risk barometer, although I am still skeptical that this bullish run will be sustained and that commodities are having an oversold bounce rather than any fundamental change. The dairy price is a good example. Gold supply generally is still fairly abundant, in saying that ETF selling has dried up at least temporarily. Oil down, WTI below $40 & Brent around $45 so oil due to oversupply isn't showing the same risk characteristics as gold. $1170-1180 area now key resistance for gold.

[JBmurc]

AUD Gold only $3 to go till it breaks $1600oz ,,,AUD Gold All time high was in the high 1700's .......