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Old 01-06-2015, 07:28 AM   #1
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Lightbulb Gold is breaking above major resistance levels in EUR, CHF, and soon in JPY

The strong dollar has played a part in keeping gold hovering arround $1200. Gold and the dollar are inversely correlated:
Stronger dollar -> weaker gold / Weaker dollar -> stronger gold
Most people only follow golds performance in USD. Since gold is a currency, prices in other fiat currencies are important as well, too.

You can check gold charts in different currencies here:
http://goldprice.org/gold-price-chart.html

Yesterday, gold broke above 1000 Euros for the first time in 18 months and above 1200 Swiss Francs as well. Both prices are connected since the SNB has put a floor under EUR/CHF at 1.20 which is where the pair currently trades. Gold in EUR and CHF is rising in anticipation of ECB QE and a possible exit of Greece from the Eurozone ("Grexit"). The EUR 1000 level was a crucial technical resistance for gold. It was broken yesterday.

Gold in Japanese Yen (JPY) is even close to breaking the 145000 mark which is also a major technical resistance. Above that there is only the 155000 mark before the all time highs of the year 1980 at 167000 JPY are the last target to be taken out.

How can you profit from the performance of gold in other fiat currencies being an American?
Hedge funds have done pair trades, ie going long gold and shorting the foreign currency. For example they have shorted the JPY against USD and went long gold in USD. These are two separate trades, but the losses on the gold/usd trade were more than offset by the gains on the short usd/jpy trade. The net performance of the two trades can be seen in the gold/jpy chart. It is basicly going long gold in a foreign currency.
Here is Kyle Bass plugging his pair trade:
http://www.gotgoldreport.com/2013/03...to-sleep-.html

I would not go long gold in JPY right now, but it certainly looks interesting in EUR and CHF to me right now.
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Old 01-06-2015, 11:02 AM   #2
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I'm long on popcorn. Ready for the fireworks show.

The wheels keep turning. That Grexit has been anticipated for sooooo long.

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Old 01-06-2015, 12:16 PM   #3
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Bonds are catching some serious buyers right now as is precious metal. The market is kind of crazy right now, and it looks like traders are as nervous as a whore in church. I wonder what it takes for this thing to catch a head of steam?
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Old 01-06-2015, 01:17 PM   #4
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Well not that it's the only for full panic mode to set in, but a terrorist attack on U.S. soil again, with the cold spell even a power outage on the east coast that lasts more than a couple hours could cause some serious panic.
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Old 01-06-2015, 04:21 PM   #5
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Times like this that I am so glad to be 'all in' even though pm's are still well beaten down.
Though theres probably still ways to 'manage' the 'markets' by changing the rules to suit the ponzi players .......

Im very happy to be out of the nonsense even though mr market will ultimately prevail and and I might have to see gold go 'no bid'
We will all, no doubt, wish it werent so when it happens.
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Old 01-06-2015, 08:46 PM   #6
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...

Every year I mention to my (very few) friends interested in investment kinds of topics that "it is weirder than it's ever been, so unpredictable". Yet this year, 2015, has turned out to be a really fishy one that is only days old...

I have joined (re-joined) the parade buying Au and Pt again the past few weeks. Oh yeah. Just today I bought a couple of fractional Eagles.

Review coming very soon (I hope) on my latest purchase of Au Eagles with Bitcoin.

* * *

I never could get the hang of technical analysis (stocks, bonds or gold). So I don't do it!

I buy Pt when it is relatively low vs. Au (usually an oz of gold too). Then when Pt is higher (say 12% or more higher), then I don't. I make an exception if I have not seem Pt Eagles, as often they are hard to get. But, I got one oz of Pt each from Amagi and Provident recently.


EDIT:

You got that rblong2us! Crookeder-est and crookeder-est than ever! Yet I still have both stocks and bonds (lower percentage than ever in my life). Diversification...

But, a great time to sell is when stocks are near (LOL!) all-time highs, same with bonds. It WOULD be a good time to lock in some gains, right before they come to BAIL-IN our bank accounts!

Now if our company in Peru could just get the d*** bearings we order, well then we would be about as optimally placed as is possible for me in this extra-weirdo and extra-treacherous financial world we are stuck in.
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Old 01-07-2015, 02:27 AM   #7
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I just looked at a monthly gold chart. I don't see any strength in it at all right now, even with the recent advances. To me, it looks like a bull trap waiting to be sprung with the bears laughing all the way to the bank.

If gold keeps going up (not likely) in the next few weeks, we COULD see MINOR strength to the upside. But, no matter what, it will take MONTHS and MONTHS of sideways movement before the current downtrend is broken.

If I can find some spare time, I will post some gold, silver, and oil charts illustrating how weak they all are.

FWIW, oil is likely to hit $35 per barrel in the next few weeks, but probably will stop there and recover to the $60 range by the end of the year.
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Old 01-07-2015, 08:17 AM   #8
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Originally Posted by mmerlinn View Post:
I just looked at a monthly gold chart. I don't see any strength in it at all right now, even with the recent advances. To me, it looks like a bull trap waiting to be sprung with the bears laughing all the way to the bank.
I am talking about gold in Euros, Swiss Francs and Yen, not Dollars.

See the Gold/Euro chart here, I did some annotations:

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Old 01-07-2015, 08:38 AM   #9
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Originally Posted by PMBug View Post:
I'm long on popcorn. Ready for the fireworks show.

The wheels keep turning. That Grexit has been anticipated for sooooo long.
Grexit is obviously a real possibility should the progressives win the election on January 25th:
http://www.zerohedge.com/news/2015-0...-prepares-grex
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Old 01-07-2015, 10:14 AM   #10
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Originally Posted by swissaustrian View Post:
I am talking about gold in Euros, Swiss Francs and Yen, not Dollars.
Ah, that is a whole different ball game (and sorry that I missed that point in your original post). Based on that chart gold, measured in rubber Euros, broke the down trend last July (blue line) and now has confirmed that breakout by topping the red line. No reason now why gold can't keep going up as the Euro goes down.

Charts do clarify a lot of issues. A picture is truly worth a thousand words. A similar chart based on dollars paints an extremely negative picture for dollar based gold.

Looking only at that chart, it looks like Draghi is trashing the Euro big time. Looks to me like the Euro/Dollar ratio is going to flip sometime in the next few months since there is no reason for dollar based gold to go up while there is every reason for Euro based gold to skyrocket.

I guess the next question is, "How long can the Euro last before it is replaced with a gold backed currency?" And, if replaced, by which currency? My guess would be a NeuMark or something similar since Germany has enough gold to float a gold backed currency, whereas most of the rest of the EU is broke.
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BARTER is the money of PEASANTS.
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Old 01-07-2015, 11:28 AM   #11
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Phew

we finally got a positive gold outlook from mmerlin

Yes, I also wondered what would happen as the US$ kept going up against the rest of the fiats.

Being the perceived safe haven and having all those dollars come home might not be such a good plan.

The US could buy some oil though ............
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Old 01-15-2015, 08:09 AM   #12
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Well, the gold market was probably on to something, since the SNB terminated the EUR/CHF peg at 1.20 today which led to a 14% crash in the exchange rate (so far).


Gold in USD reacted like this:

It's actually trading above/at the 200dma for the first time in 4 months.

Gold in EUR took an even bigger jump as the EUR weakened against the USD by 1%

Gold in CHF fell quite a bit (12%), but still less than any fiat currency

The market is now expecting massive QE from ECB next week which should be positive for Gold/EUR.
I also expect Gold/CHF to recover some of the losses.
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Last edited by swissaustrian; 01-15-2015 at 08:25 AM. Reason: typos...
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Old 01-15-2015, 08:30 AM   #13
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and of course, all other central banks knew in andvance and naturally no insider trading took place...


Quote :
SNB Chairman Jordan says declines to comment on communication with other central banks ...
http://headlines.ransquawk.com/headl...ket-15-01-2015
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Old 01-15-2015, 11:13 AM   #14
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Anyone else notice what the swiss franc is doing in dollar terms? It's up as much as it is in Euro terms.
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Old 01-15-2015, 01:57 PM   #15
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Originally Posted by DSAbug View Post:
Anyone else notice what the swiss franc is doing in dollar terms? It's up as much as it is in Euro terms.
it is up against every currency accross the board. People are running to ATMs here and getting Euros to go shopping in the neighbouring countries. You can get Euros at local ATMs. The Eurozone is no more than 300 miles away from any point in the country. Some products are 50% cheaper in the Eurozone now, from cars to food to electronics.
I am actually kind of happy with the move, because a company I am currently building has ordered a lot of equipment in Germany and we got a nice 14% discount on 66% of the payment now, we only had to pay 33% upfront.
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Old 01-15-2015, 02:19 PM   #16
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I think Switzerland knows something the rest of the world refuses to admit yet; the Eurozone is getting ready to break up. Greece will leave this spring, followed by Spain, then Italy, then Portugal. I think France will hang on by their fingernails because the alternative means that they would be more broke than Greece. Although Greece is more corrupt and mismanaged, France is a fucking basket case of regulations upon regulations, work rules, agricultural rules, too much debt and no will to reform.

France needs a top down reform that guts the socialist nation of all the idiotic laws and regulations that stripped it of all ability to compete, and removes all desire whatsoever of starting a business. Italy is the same in this respect. Opening a business with more than a few employees in Italy is insanity these days, just as it is in France. In fact, the regulatory environment for small business entrepreneurs is far friendlier in Russia than it is in France, Portugal, Italy of Spain. Although, that assessment doesn't address the possibility of you and your entire business disappearing in the fog in the night if you somehow anger Putin or any of his cronies.

I kind of wonder just how much jack Putin has, and if it's all in gold.
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Old 01-15-2015, 04:34 PM   #17
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Originally Posted by ancona View Post:
I think Switzerland knows something the rest of the world refuses to admit yet; the Eurozone is getting ready to break up. ...
Or it's just not prepared to keep the peg while the ECB fires up the digital printer.
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Old 01-16-2015, 10:38 AM   #18
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FXF is up another 1.7% today..
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Old 01-16-2015, 12:51 PM   #19
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Originally Posted by DSAbug View Post:
FXF is up another 1.7% today..
Massively overvalued now against EUR (30%) and USD (15%) in terms of purchasing power parity (PPP)
The graphs are from mid 2013, EUR/CHF is roughly 1/1 now and USD/CHF is roughly 1/0.85:



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Old 01-18-2015, 01:20 PM   #20
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Having had an entire weekend to digest the Swiss FX problem, I am anxious to see how the markets act on Monday, which should give us our preview to the entire ball of string for the spring trading season.

I suspect that the upward pressure on metals keeps growing as the trust is lost between CDS writers and those that are beginning to realize that they may never get paid in the event of a default.
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