Thoughts on gold.

Original unmodified chart with commentary here.

Here are my latest thoughts on gold.

Yellow line: Will inhibit higher gold prices until DECISIVELY penetrated.

Blue line: Will force gold prices up until either the yellow line or blue line are penetrated.

Red line: Apparent maximum downside potential for gold prices.

If gold prices tend to HUG the blue line on their way up, then the break will be to the DOWNSIDE, with a maximum downside potential at the red line.

If gold prices shoot up to the yellow line, then bounce back to the blue line and stop there, gold prices will most likely penetrate the yellow line, decisively ending the current short term down trend. Should that happen, then $2000 gold prices are very possible in a few months.

My gut feeling is that the yellow line is currently stronger than the blue line, therefore we will probably see lower prices return for a short while.

Typically, when prices far exceed a previous record high, prices return to that previous record high, and stop near that price. That has not happened in gold yet. In 2008, prices did exceed the previous record high but when they crashed, they did not stop at that high, instead stopping significantly below it.

Therefore, watch gold carefully. If it cannot maintain prices above the blue line, then the yellow line will push prices towards the red line. If that happens, look for prices to bottom out at the red line.

Yes, that is extremely contrary to what is said at the above link. Eventually we will see whether my analysis of the gold chart holds water or not.

That's about how I'd short-term TA this, if it weren't for a few odd geopolitical events going on just now that might make this look like noise in the end. Happy sitting on the stack, looking to get more, won't mind if I miss out on the first part of a big move up.

I'm out of all the other markets, myself. It's just too hinky right now. Looks great on charts, just doesn't feel right. Too many things on the edge that might break. I'll forgo a little more up to miss out on a ton of down anytime, but it did take some losses to learn that one.

Sub $1000 gold? Will there be any physical left if that happens?

PMBug said:

Sub $1000 gold? Will there be any physical left if that happens?

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Nope.

If it gets there, your window of opportunity will be hours or days at most.

No offense but I don't see the point of looking at technicals (especially short term) in a manipulated market. QE2infinity and gold goes bear. Fundamentals out the door.

Gold will only break 2000 when our masters are ready for the transition or if they can't manipulate it further or world war 3.

But this is a pm forum so carry on if you think it is worth the time. Best wishes.

PMB, yes we may see gold below $1000 as far as $700. All in order to scrub the paper clean. Availability myth will continue as it always has been, even if the camels back breaks. Only way you could buy @ $700... A sign at your door "Buying Gold & Silver".

Shelby-V, the masters will and are waiting for the price increase(not value) of PM to coincide with hyperinflation. Allowing oligarchs to gain possession of metals from the underlings in survival mode. In the end of such strategy, oligarchs own everything and we shall be back to 1400's serfdom.

Of course this is only the rhyme of history, no stone carving or prediction. I am concerned and hoping for an awakening before history tramples with repetition.
No holding of breathe however.

If it goes down to 700 $, I'll get sick.

Potemkin said:

If it goes down to 700 $, I'll get sick.

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If gold goes to $700, I am selling my rental property and clearing out my local coin dealer.

Potemkin said:

If it goes down to 700 $, I'll get sick.

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You wouldn't be sick for long. In a normal world there is no way that gold could stay that low for any extended period of time without the miners taking huge losses. The only way it could stay that low for any period of time is if oil prices crash also, or if TPTB decide to start subsidizing the miners to artificially suppress the POG (and I would not put it past those a**holes to do something like that, just to protect their corrupt fiat ponzi scheme).

If Au go's to $700 you won't be able to find any....JMHO

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That makes, what, five of us. It gets down to $700 I will not get sick... I'll gather up whatever "money" I can and keep buying. If I have no extra money, I will just wait it out. No way gold stays at $700 (current dollars) for long.

FOFOA says that the "paper price" could indeed go down to, say, $400 (!), it would then all disappear (mentioned above) for a while before rocketing up to some huge number in the MANY thousands.

Stay the course. Stack on. Even if gold price has been boring around $1300 for weeks....

I think productions costs are around 700-800 $. What I read today...

So, it could go down all the way to 700-800 $, why not.

Gold is a gamble, but we know fiat money is paper, so what to do?

Risk buying gold at 1,300 $ to get smacked down to 800 $ and cry?

It can fall down and stay there for like 10 years. Gold is good, but the timing issue is so delicate. You gotta know when to buy.

do what I do and buy when its going to the moon )-:

Potemkin said:

I think productions costs are around 700-800 $. What I read today...

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If that were true, the miners would be swimming in profits while selling at $1,250+/ozt. But they aren't.

I see that gold is really STRUGGLING to stay above the BLUE line in the chart. Could we see a dump soon?

What if it continues to fall and we see 1100, 1000, 900, 800... 500 $?

I'm not sure whether gold is the best asset to buy right now. It has disappointed.

Not even the Russian-Ukraininan conflict had a strong effect on it. Tapering only makes the dollar stronger.

So, gold is performing terribly.

They make another big short-sale and it'll bring it down. The big investors can do it at any time.

Potemkin said:

What if it continues to fall and we see 1100, 1000, 900, 800... 500 $?

They make another big short-sale and it'll bring it down. The big investors can do it at any time.

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Personally, I expect to see gold at the RED line before it goes above the YELLOW line. Will it happen? No clue. But if it keeps doing what it has been doing recently, just barely crawling up the BLUE line, it is just a matter of time before we see another gold dump.

And if gold decisively pierces the BLUE line before decisively piercing the YELLOW line, there is nothing stopping gold from dropping to the RED line and stopping there. Any significant drop below the RED line is near impossible for several years, and probably will never happen.

Another possible indicator of weakness in PMs is that PM dealers are everywhere, just like they were in the last spike up in the late 70s and early 80s. When everyone is on the bandwagon, it is time for the bandwagon to break down. It took years to drive the excess dealers out of the market back in the 80s. It is possible that we could see the same washout in the next few years.

Well, it looks like the weakness I perceived in Gold two weeks ago has now been confirmed. The BLUE line has been decisively broken with nothing now to stop gold from heading straight for the RED line.

So, what do I expect now? First, a last harrah with gold heading back up to the BLUE line. Will it make it all the way back up to the BLUE line? No way to know yet. So far we have CONFIRMED weakness in gold. A run back to the BLUE line, but stopping there would confirm that confirmation. Then a crash below $1200 would confirm the confirmation of that confirmation.

Next I look for gold to stairstep all the way down to the RED line before showing any strength to the upside again. Basically, I don't expect the price of gold to pierce the YELLOW line for months, maybe even years. Sooner or later either the RED line or the YELLOW line must DECISIVELY fail. Once that happens we will know whether gold will be in the dumps for another decade or more, or whether gold will eventually, probably years from now, finally get above $2,000 per ounce, in fake dollars, of course.

If anyone has bought gold on margin, the next runup will probably be the LAST chance for years to dump the gold at any kind of a 'reasonable' price. Most likely, after the next runup, all we will see during the next several years is mostly sub-$1200 (maybe even sub-$900) gold. If gold gets below the $1,000 level, those with available cash flow should probably think about aggressively stacking gold. With the printing presses going full tilt, I can't imagine gold staying there very long, maybe just a few months.

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I am on a trip now, my "Save My Soul" trip (I will spare you all the details).

But, I did have the chance to BTFD (gold) on the way up here. When I get to DC, I will try to pick up a Platinumt Eagle (or maybe two, depending). Pt is hard to fin (esp. Eagles) near where I live. DC will probably have them though (LOTS of money in DC...).

I buy Au and Pt when I have the money and the opportunity (and the paranoia when relevant). So, I am good for one more toz of Pt should I spot such an Eagle there in our empire's capital.