I'm calling the bottom in gold

Welcome to the Precious Metals Bug Forums

Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more.

Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!

S

swissaustrian

Yellow Jacket
Messages
2,049
Reaction score
0
Points
0
I'm sticking my head out here and saying that today is gonna mark the bottom of the current downmove for gold. Some reasons:

Technicals:
We broke major support levels at 1620 and briefly even at 1600. The breach of 1600 was aggressively bought which is great. It looks like we had a classical spike low. Overall volumes very just massive today.
Longer term technicals are at a crossroads here:
Chart is as of yesterday


1. you can see the massive support at 1620 which was the major resistance for the breakout last Summer.
2. The 50 dma is about to cross the 200dma to the downside. That would be bearish.
3. The momentum indicators RSI and AROON oscilator are pointing towards oversold. MACD is neutral.
Bottom line: either we rebound above 1620 quickly or we'll get major technical damage.

Physical demand:
It seems like there is some very sizable buying going on here, indicated by the rapidly falling forward rates: http://www.pmbug.com/forum/f2/negative-lease-rates-gold-silver-341/index6.html#post18788

Paper positioning:
Open interest in gold futures has also been falling significantly: http://www.pmbug.com/forum/f13/open...s-watch-gold-silver-679/index2.html#post18418
This weeks trading should have even intensified this trend. We will see what happened to oi until last Tuesday when the COT data is beeing published tonight.
Next weeks COT data might even be more interesting.

Chinese new year:
I think that Chinas new year holidays since Feb 9th have also had an influence on the price action in gold. We tend to monitor US (and European) demand closely. However, China already has a bigger influence on pms than the West. I'm anticipating solid buying from China once they return from their holidays on Monday. The Chinese new year holidays last one week. On the other hand Monday is a holiday in the US, too. That should give us "protection" from another COMEX attack which could eridicate any Asian overnight trading gains.


Note: I'm not talking about silver. The dip below 30 wasn't bought aggressively. Paper postioning was very bearish. It doesn't look that great. To get anything going in silver, we need leadership by gold it seems.
 
Gold closes COMEX trading clearly above 1600. That's very good news. We also had some short covering into the close.
Silver on the other hand closed clearly below 30. That's not a good sign for next week.
 
I have to disagree with you and I will explain why.

Today was the stock option expiry on the GLD as you can see here a gazzillion Feb 16, 2013 option calls were taken out of the money on this latest wack today.
Every 10K call position was rendered worthless today (every one)
http://www.nasdaq.com/aspxcontent/options2.aspx?symbol=gld&selected=gld&qm_page=94496&qm_symbol=GLD

The world Gold counsel announced that the central banks around the world bought more Gold last year 2012 than at any time since 1964.

The country of India is trying to suppress the buying and hoarding of Gold by it's citizens, but they arent having it and sales continue through the roof despite everything they have tried. (inflation is going through the roof there because no one wants to buy paper derivatives because of the history the government has debasing the Rupee)

Options expiry on the Comex contracts are the last week of the month here in February. I see them pounding it next week even more going into that expiry. This is their last stand and they are going to hammer the shit out of the price before the explosion higher to shake out the week hands.






 
Looks like we are close to the support over the last year. You might be a little early, but probably not that much. Remember the correlation between gold and how much printing is going on - while there are deviations, gold always catches up before too terribly long (months, maybe half a year). We have some catching up to do, and I'm sure we will.

Personally, I'm waiting for my own dumb system to tell me to buy (it tends to be a little slow, but gets nearly all the move anyway) - it might be doing that soon, and waiting to see what clown show congress puts on re debt ceiling and budgets - it won't be long, and then there will be less uncertainty about the fed's course.

I think the key takeaway here is "it's time to pay close attention".
Remember, Soros and others have dumped paper gold longs. You're betting they were dead wrong. They might be, but...
 
The GLD calls issue is interesting. If the counterparty of the GLD calls (JPM) is behind the current selloff, it would actually support my bottom thesis as they would cash in the premiums today after the close.
I don't disagree with you on the metals options expiries often marking major lows. However, the open interest for gold has already dropped significantly, so the incentive to manipulate prices ahead of the COMEX op/ex should be lower. The upcoming COT data will clarify that.
 

You have to remember that the COT data is from the manipulative machine itself.
It's like using the VIX as a fear indicator (its a manipulated indicator)
At this point they dont care about the paper as it is about the physical metal itself. The commitment of traders are the paper gamers not the serious physical investors. They are trying to diswade the mom and pops from taking currency and exchanging it for physical metals. Thats what is going on in India right now. I hope that you spend some time and study the gold vs Rupee problem they are having because this is exactly what is going to occur in the U.S. "shortly"
I know the paper price is what the physical metals is priced with. I think this is going to change as in "India" take a little study of that situation I recommend it.
I learned a vast amount from spending a couple of days on it. :wave:
 

Very good write up sir but I respectfully disagree. Main reason is silver looks to be ready to test the DMA. September, December, July, all tested 26.06 or so. So now, we don't want to test that low or it will violate the uptrend chart pattern of higher highs and lower lows. Luckily the DMA is above both of those and would show a bullish strength should it hold there. RSI is also not entirely oversold at the 30 (silver) as it normally does on these dips.

I suspect silver to see $27, and gold to test $1,595 or so. All in my opinion gltya
 
Last edited:
As I posted yersterday in a different thread on this forum...

 
I still think you are all wrong. This pummeling has not ended (as foretold above) There are two factors. The Comex expiry next week Tuesday, feb 26, 2013 (as noted above) and the FOMC statement that will come out in 1 hour from now. I believe you are gonna see the "BIG" hammer :judge: come out after the release of the lies from the FOMC.

Get ready for another huge downdraft after the FOMC lies are released.

1 hour, be ready to load the boat this weekend !
 
I have given up predicting the future, especially short term. But, often a SHARP move down leads to a two - three days more of some losses. JMO...

But, it really does not matter! Our ounces are still there! We will win. "They" will lose.

NONE of our problems have been solved.

NO ONE, of consequence, has been put in jail.
 
Funny thing is that silver is holding up better than gold today since the fomc announcement. That is totally weird given the fact that there is huge speculative postioning in silver which should have been causing additional volatility. On a day when gold is down 2.8% you'd expect silver to easily be down 4.5%, instead it's down just 3%.
 
This shake-down will be savage. It will scare even (some) die-hard pm bugs. I think they are going to try take gold to 1500 and silver to 24.

I probably won't get any 'likes' for this, but that's OK. Wise folks will like the opportunity to buy real stuff at those fake paper prices.

They need to crash PMs before they can crash the stock market and that is where they will get the most wealth extraction from the population.

Never forget what the game is, and never forget how to play it.
 
why, you got "like" from me I agree, I think "they" would be willing to sacrifice & completely break the paper metal markets at some stage, if the "integrity" (ie: survival for a little bit longer) of the rest of global financial system was at stake. We are most probably not there yet, but we will get there eventually, I think.
 
We may not be right there at the moment, but if not, we are very, very close. I think time between now and the final leg of the 'end game' is to be measured in weeks, not months, but certainly not in years.
 
sadly. this feels like another rinse and repeat, rather than the end game ............

theres still a lot of (misplaced) optimism out there ........

and the 'mutually assured destruction' card is always lurking ........

Why not play to our 'doomer' fears and see who rolls over ?
 
rb - It's called 'convergence'. There are too many things coming down the pipe at the same time for it all to be coincidence. Granted some of them are beyond the control of TPTB, like drought and food shortages.

PM price manipulation does not exist in a vacuum.
 
These things coming down the pipe are known and predictable and hence manageable.
No one who is 'in paper' will do anything to rock the, obviously fragile, boat.
The manipulators can continue to move markets and benefit themselves.
The food shortages that were being predicted two years ago did not really manifest.

It will take a genuine, large and damaging 'black swan' event to really change things ........ several factors larger than fukushima )-:

My hope/bet is that the controllers will maintain control and that they will allow gold to reflect its intrinsic value from time to time but never allow it to go through the roof.

The alternative is not pretty, so be careful of what you wish for.
 

That Black Swan prediction is the key as it will take something "BIG" to kick off the party. Hearing through channels, watch the New Madrid from March 20th - 25th for some big shaker !!
 
stockjockee said:
That Black Swan prediction is the key as it will take something "BIG" to kick off the party. Hearing through channels, watch the New Madrid from March 20th - 25th for some big shaker !!
Click to expand...

eeerrr wasnt that the prediction for March 2011 .........


or is it an annual scare event ? :rotflmbo:

Or are you channelling predictive info in other ways ?
 
You must log in or register to reply here.
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more…