One question I've wondered about:
If the USA govt decided to trash the price of gold, could they not print as much money as they like and sell in the Comex and drive the price down? The gold futures market is supposedly very small - as per your earlier link to zeroedge and the guy who was closing out his fund because he was down 70%.
The "larger" picture seems so intangible with the Fed creating trillions and giving it to the banks - very surreal.
"On Wednesday, UBS published a valuable chart of an index of the bank’s gold shipments to India, clearly showing a recent surge, and offered the remarkable comment: “We struggle to recall a month when our total physical sales have been stronger.” In fact, the reason for this is not so much India as China, as UBS makes clear. In early December, the Chairman of the Shanghai Gold Exchange revealed that gold imports into China had quintupled in 2010, being already 209 tonnes by the end of October, a very serious number in the context of gold. ( See Dec 6 2010 column.)
I can't see this working as it is not money which is sold in the Comex pit but GC futures which carry the obligation to deliver physical gold in 100-troy ounce lots. The US govt could print money and use it to post the margin against the gold futures which they sold but eventually they would either have to cover their short futures position or roll it into the next expiry (or take some gold out of Fort Knox and deliver it!). Their position would show up via a sharp increase in the open interest on the GC contract.
The Fed printing trillions is actually an bullish argument for gold because the Fed is debasing the US currency. e.g. If you can buy a troy ounce of gold with X dollars and the Fed prints enough dollars to double the amount in circulation then, ceteris paribus, the same troy ounce of gold will be worth 2X dollars.
aquarian, is last night close below 1365 or above? I'm often confused about the closing time. What is your time frame for targets above?
With gold now at 1364 (as I'm writing) and looking at yesterday price actions (taking into consideration China actually hiked their rates), my guess is gold will touch 1380 by June. it should happen earlier, unless Bernanke turns hawkish tonight.
Last edited by jonc; February 9th, 2011 at 01:03 AM.
1. below by a bit. 1364.1 - I really mean these as a bands and I do not have the precision you may be thinking of and my posts are guidelines and just fuel for thought - certainly not trading recommendations.
If I knew what was going to happen - I'd be very wealthy and creating my new green energy invention and trying to heal the planet - not getting sore fingers on this keyboard, LOL
If you look at the beginning of the thread you'll see that I'm really only interested in trading gold if it breaks below the 1318 area. If that were to happen (and safer it it is the Friday close, ie the week's close) then I would feel the trend has potentially changed and look to sell rallies. (e.g. breaks 1318 down to say 1300 area and then back up to 1318 area starts topping then I would look to sell rallies) -only an example.
I think of charts analysis as If ....then ... analysis.
I am not predicting where gold will be. I'm waiting for a new trend.
Gold can bounce around in this area (1320 to 1395) and I'm not taking action.
If gold goes above its old high - around 1435 then the bulls are back in control - but I will not be trading the long side.
3. I don't think I'm good enough to estimate both time and price. (but for fun let's say it will break up or down 1365-1375 within the week.)
I don't trade gold now. I am starting with the charts so that if and when I do trade it I'll have a "feel" for the prices.