{"id":34618,"date":"2012-12-20T21:37:36","date_gmt":"2012-12-21T02:37:36","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=34618"},"modified":"2012-12-20T21:37:36","modified_gmt":"2012-12-21T02:37:36","slug":"golds-price-woes-wont-last-were-heading-back-to-1800","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/12\/20\/golds-price-woes-wont-last-were-heading-back-to-1800\/","title":{"rendered":"Gold\u2019s Price Woes Won\u2019t Last: We\u2019re Heading Back to $1,800"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

\"gold<\/a>\n<\/p>\n

Ugh. <\/p>\n

Monday was another one of ‘those days’. Gold<\/strong> was hit for $40 – over 2%.<\/p>\n

The bulk of the losses (as they always seem to) came during New York trading. The hard selling began quite gently – but punctually – shortly before 10am, with gold just below $1,700. <\/p>\n

It got aggressive after the mid-morning latte at about 11.20am and, in just over two hours, the gold price<\/strong> was taken from about $1,693 to $1,660. <\/p>\n

Then it was time for a pastrami sandwich. <\/p>\n

‘Those days’ are becoming a little too frequent for my liking. We’ve had about five of them since the beginning of November. Somebody doesn’t like gold …<\/p>\n

<\/span><\/p>\n

Something’s Got to Give<\/h2>\n<\/p>\n

I am surprised to see gold<\/a> under so much selling pressure. I had expected the opposite. <\/p>\n

I’m not entirely sure what’s driving it. Perhaps there is some unwinding of the long-gold\/short-euro trade. This is where people bet that gold will rise against the euro. This trade is no longer tempting given the relative calm that has fallen on the area – for now. <\/p>\n

Whatever the reason, this selling pressure has not come at a good time, technically at least. We are now in an intermediate-term downtrend.<\/p>\n

I’d like to share a chart with you that I have been working off in recent weeks. It shows the gold price<\/a> since 2008. Let me try and explain the various things I have drawn on it.<\/p>\n

\"gold<\/a>
Click here<\/a> to enlarge<\/div>\n

\nHere’s the close-up view:<\/p>\n

\"gold<\/a>
Click here<\/a> to enlarge<\/div>\n<\/p>\n

Underneath the gold price, I have drawn a red trend line off gold’s 2008 lows. Gold is sitting just on the trend line now, ‘on support’. I would not like to see this trend line breached, as that would indicate that a near four-year trend is broken.<\/p>\n

The green line is the 144-day moving average – the average price of gold<\/a> for the previous 144 days. For some reason this worked beautifully in the 2009-11 period catching gold’s lows, as indicated by the lilac arrows. Since late 2011, it has stopped working. <\/p>\n

Of late, gold<\/a> has shown a tendency to make ‘spike lows’. I have pointed these out these with the red circles. I am hoping this week’s action is typical of this. If it is, we should see a rebound in the gold price<\/a>. <\/p>\n

The blue and amber areas indicate the range which has bound gold over the last 15 months, as it has gone through this consolidation phase. <\/p>\n

Three times it has tried to get above $1,800 – the blue area. Three times it has failed. Three times it has tried to test $1,520 – the amber area. Three times it has held. Sooner or later, one of the two has to give.<\/p>\n

I would say the chances are fairly high for a reversal here and now. If gold continues this downward trend, there should be some support around $1,600. Who knows, we may have to re-test $1,520 again – trends do build momentum, particularly given that so much trading is now by computer programme – but I’m not betting on it. And I’m certainly not selling any of my gold.<\/p>\n

Gold Still A Good Long Term Bet<\/h2>\n<\/p>\n

For gold to go through $1,520, we’re either going to need the world’s monetary and financial woes to be suddenly fixed (nah); or there really is a gold price conspiracy<\/a> to impoverish gold investors (hmm); or there’s some kind of 2008 liquidity event (doubt it).<\/p>\n

Five times since early November large amount of gold have been dumped on the market<\/a>. This is not the action of a disciplined seller trying to get the highest price for his or her gold<\/a>. <\/p>\n

Rather, it is the action of, off the top of my head, somebody who has just had a margin call. Or maybe somebody who is trying to get the gold price down, so he\/she can buy and go long, or cover their shorts.<\/p>\n

We’re still in consolidation mode, folks, after that 2008-2011 run from $700 to $1,920. It looks like we stay in consolidation mode for a while longer, with patience and resolve continuing to be tested. <\/p>\n

Dominic Frisby
\nContributing Editor, Money Morning<\/em><\/strong> <\/p>\n

Publisher’s Note<\/em>: This is an edited version of an article that originally appeared in MoneyWeek<\/a><\/em><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Ugh. Monday was another one of ‘those days’. Gold was hit for $40 – over 2%. The bulk of the losses (as they always seem to) came during New York trading. The hard selling began quite gently – but punctually – shortly before 10am, with gold just below $1,700. It got aggressive after … <\/p>\n

Continue reading “Gold\u2019s Price Woes Won\u2019t Last: We\u2019re Heading Back to $1,800”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-34618","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/34618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=34618"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/34618\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=34618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=34618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=34618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}