fxmade2trade
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They really cant raise interest rates, traders are bailing from the fiat as we speak. Fear has always proven to make the market highly volatile. Traders turn to PMs for assurance and insurance on their own assets and the SGE vault is pumping it out and China's political stuff wont make that much of a decline they are still buying.
Atilla
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Not bailing from fiat at all. Just finally waking up to the prospect of rising interest rates. Hardly a shock but even though it has been outlined and said to be penciled in - seems not.
Currencies good. Need to factor in impact of rate rises that's all.
Pencil that in to gold and equities as well as deflation into equities and debt, we'll have our outlook for gold sorted.
Usual Indian festivities giving it a bounce somewhat. Wouldn't be surprised if the Indian government bans import again knowing full well gold has further to fall. :idea:
fxmade2trade
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I don't know it seems China and Russia are buying it up, and have other deals on the table for gas and oil, i really don't see it going down anytime soon, the correlation between gold and interest rates has been wrong before.
fxmade2trade
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In a blog I wrote a little about correlation ... I am not saying you are wrong at all BTW nothing about trading is 100% 
So my last post was about the correlation of crude oil and gold, war and location. Within all trades many correlations exist, its good to know and understand them, so you then can position yourself correctly. One of these correlations is the rise and fall of interest rates and the rise and fall of gold, since gold has no interest, it dips when interest rates rise and peaks as the interest rates fall, so that would indicate that you buy gold when rates are low and sell when rates are high. Because this is an accepted correlation, the central banks are watching the market for indication showing prolonged inflation, and have policies that could reverse this correlation. In fact the we saw this opposite reaction when rates rose the price of gold peaked in Europe and in India in 2011, this was an exception in decades of historical data. Many other factors can influence the bullion market, fear seems to move it the most.
So my last post was about the correlation of crude oil and gold, war and location. Within all trades many correlations exist, its good to know and understand them, so you then can position yourself correctly. One of these correlations is the rise and fall of interest rates and the rise and fall of gold, since gold has no interest, it dips when interest rates rise and peaks as the interest rates fall, so that would indicate that you buy gold when rates are low and sell when rates are high. Because this is an accepted correlation, the central banks are watching the market for indication showing prolonged inflation, and have policies that could reverse this correlation. In fact the we saw this opposite reaction when rates rose the price of gold peaked in Europe and in India in 2011, this was an exception in decades of historical data. Many other factors can influence the bullion market, fear seems to move it the most.
Atilla
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In a blog I wrote a little about correlation ... I am not saying you are wrong at all BTW nothing about trading is 100%
So my last post was about the correlation of crude oil and gold, war and location. Within all trades many correlations exist, its good to know and understand them, so you then can position yourself correctly. One of these correlations is the rise and fall of interest rates and the rise and fall of gold, since gold has no interest, it dips when interest rates rise and peaks as the interest rates fall, so that would indicate that you buy gold when rates are low and sell when rates are high. Because this is an accepted correlation, the central banks are watching the market for indication showing prolonged inflation, and have policies that could reverse this correlation. In fact the we saw this opposite reaction when rates rose the price of gold peaked in Europe and in India in 2011, this was an exception in decades of historical data. Many other factors can influence the bullion market, fear seems to move it the most.
Lots of variations and changes I feel needs to be brought in to usual relationships re: gold v rates v inflation v employment. Looking at just gold and rates without inflation and unemployment can lead to errors imo.
- Inflation v rates - not same as before. We now see deflation with low rates and attempts to revive inflation :idea:
- Low unemployment v inflation, old Philips curve etc not same. Stagflation of high inflation and high unemployment in reverse - deflation with low employment seems to be occurring.
- Low and -ve rates haven't stimulated inflation (I got this wrong expecting hyper-inflaiton!). This old thinking seems to have forgotten about expectations theory and relationship not proportional through different cycles of the economic grrowth.
- One of the biggest threats now facing governments is debt and delfation compounds that problem.
Borrow money cheap CHEAP place it in equities or other asset classes with high dividends or better returns. As mentioned with low -ve rates of interest and deflation - gold is not one of them.
Another factor wars are over. We have proxy wars and skirmishes where tools like Isis and Hezbollah will be used. Much cheaper to setup and dispose of with less political luggage.
Reason why gold rose so much and the rises I also supported was due US fighting a stupid losing war in Iraq and Afghanistan. Bleeding dollars and incurring trillions of debt. US faced losing the dollar standard (same as Vietnam) hence the spurt in gold. However, some people have got carried away with gold. We have had the end of war with the withdrawal of troops few years ago and some traders still adjusting gold positions to BAU.
In summary $1300 was a pivot point for some time and failed.
Now testing $1200 (which has been breached) and in the absence of any major war then I can see $1100 tested in due course too.
Can't see it falling much below $1000 but who knows????
fxmade2trade
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Lots of variations and changes I feel needs to be brought in to usual relationships re: gold v rates v inflation v employment. Looking at just gold and rates without inflation and unemployment can lead to errors imo.
- Inflation v rates - not same as before. We now see deflation with low rates and attempts to revive inflation :idea:
- Low unemployment v inflation, old Philips curve etc not same. Stagflation of high inflation and high unemployment in reverse - deflation with low employment seems to be occurring.
- Low and -ve rates haven't stimulated inflation (I got this wrong expecting hyper-inflaiton!). This old thinking seems to have forgotten about expectations theory and relationship not proportional through different cycles of the economic grrowth.
- One of the biggest threats now facing governments is debt and delfation compounds that problem.
Borrow money cheap CHEAP place it in equities or other asset classes with high dividends or better returns. As mentioned with low -ve rates of interest and deflation - gold is not one of them.
Another factor wars are over. We have proxy wars and skirmishes where tools like Isis and Hezbollah will be used. Much cheaper to setup and dispose of with less political luggage.
Reason why gold rose so much and rises I also supported was US fighting a stupid losing war in Iraq and Afghanistan. Bleeding dollars and incurring trillions of debt. Faced losing the dollar standard (same as Vietnam) hence the spurt in gold. However, some people have got carried away and with the withdrawal of troops and end of war still adjusting gold positions to BAU.
In summary $1300 was a pivot point for some time and failed.
Now testing $1200 (which has been breached) and in the absence of any major war then I can see $1100 tested in due course too.
Can't see it falling much below $1000 but who knows????
I personally see many countries in bed together trying to push the petrodollar out and go back to the gold standard as once before all these wars are just a way the U.S. can control how oil is bought and sold .
I really love your points on it though very insightful
gold jinyu Oct. 20th gold price trend analysis
International gold price dropt slightly last trading day. Price corrected itself around 1238 after failed to breach 1243. Gold is still facing a big pressure from upside although price kept rebounding. In today’s Asia trading time, gold went downside slightly then climbed to about 1236 again and correcting.
U.S. September housing starts and building permits are mixed, but October university of Michigan CPI keeps high, which boost USDX rebounded from a bottom point and limited gold’s upstream. Currently gold daily chart price is basing sideways, MACD lines are fluctuating around zero axis, pressure comes from 1243 and support from 1233.
:cheesy:
International gold price dropt slightly last trading day. Price corrected itself around 1238 after failed to breach 1243. Gold is still facing a big pressure from upside although price kept rebounding. In today’s Asia trading time, gold went downside slightly then climbed to about 1236 again and correcting.
U.S. September housing starts and building permits are mixed, but October university of Michigan CPI keeps high, which boost USDX rebounded from a bottom point and limited gold’s upstream. Currently gold daily chart price is basing sideways, MACD lines are fluctuating around zero axis, pressure comes from 1243 and support from 1233.
:cheesy:
Vinayak1000
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Gold edges up towards one-month high as economic fears remain
Gold edged up on Monday towards a one-month high, recovering from earlier losses, as concerns about a slowdown in the global economy persisted despite strong U.S. data.
$1,250 is expected to be strong resistance to any move higher in gold, while $1,220-$1,225 should support the yellow metal in the short term. However, further improvements to the global macro climate may see gold drop towards $1,200.
Gold edged up on Monday towards a one-month high, recovering from earlier losses, as concerns about a slowdown in the global economy persisted despite strong U.S. data.
$1,250 is expected to be strong resistance to any move higher in gold, while $1,220-$1,225 should support the yellow metal in the short term. However, further improvements to the global macro climate may see gold drop towards $1,200.
fxmade2trade
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The SGE is surpassing what it did last year, and with the festival in India this week we should see gold a little higher as we have, they make up around 32% of the gold buyers worldwide. This November will really be interesting if the Swiss get their gold back from the US and it impacts the CHF and EUR in a way to drop the USD and drive the price of GLD up even higher. Yet it seems the market is keeping it below reverse signals even though the demand is high.
Atilla
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fxmade2trade
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the high we saw yesterday
Atilla
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Mixed market emotions today... Stop QE but keep monetary support relaxed. No inflation in site. Equities over valued. Gold should be having a field day but still under pressure along with falling oil prices. What could the matter be?
Doctor doctor what should I do with my spare cash???
Buy land I reckon. Dirt is the new gold.
Sonicscooter
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Slow grind south............no need for it....dead head till next time.