Not a very inspired go at a market report, just for my own reference. The price of gold was around $1,704 per ounce £1,089 on Monday night.
Showing posts with label Jim Wyckoff. Show all posts
Showing posts with label Jim Wyckoff. Show all posts
Monday, 12 March 2012
Sunday, 8 January 2012
Gold price falling on Monday
Some newer negative views: updated Monday 9 January afternoon.
Mineweb including comments from Marc Ground at Standard Bank: "the speculative market remains wary of gold's prospects."
Jim Wykoff remains a gold bull and also believes that it will start behaving like a proper safe haven soon but said the rise of the dollar and "the bulls have more work to do in the near term to suggest an uptrend in prices can be sustained. Prices are still in a two-month-old downtrend on the daily bar chart."
TF Metals sees gold possibly heading back towards $1,565.
John C Burford thinks it may go as high as $1,640 before falling again
Clive Maund expects the price to fall a lot further
Jeff Clark just says the bull case still intact but expect volatility
GM Jenkins on Screwtape files says: I'd be surprised if this is a good week,
Jenkins had some interesting thoughts on conspiracy theory stuff too after signing up to GATA's "Le Metropole Cafe" saying: "I kind of looked forward to hammering them here for talking shit with such confidence, but they turned out to be dead on. Let's see how they do this week."
Should I buy back at least as many physical gold ETF shares I sold on December 16? Am I still waiting for the price to fall?
Is it still a good hedge against the value of my home and the health of the UK economy?
I think the answer to these may still be yes but none of my views are written in stone. This feels like it will be a slow process of building up experience. For now I will try to play safe, just so I can find out if there really is a safe way to play.
I have already lost £250. I don't have a great deal of cash to play around with and I want to survive for as long as possible.
I am also trying to keep my thought process as simple as possible so I can keep track of them.
The temptation is to go with each new idea as it arrives which I do at every opportunity because it diverts me from the reality of what I am doing and the decisions I need to make.
If I reinvested now and the price rose I could make back some of my losses. Even if the price fell a bit I could justify buying now because most analysts still think gold will go above £2000 some time this year.
But I don't feel that this is the safest bet because it would mean buying back my gold and risking more losses.
Why do I see this as riskier than missing out on sudden rise in the value of gold? It's because I think recent price moves show it has been safer to be out of the market than to be in it.
The gold price hit a low of $1,523 on December 29. That wasn't as low as some commentators had been expecting - some saw it going as low as $1,200 but more likely $1,400 (see below).
In sterling terms PHGP, the physical gold ETF priced in sterling, fell to a low of 9711.7p. On Friday last week it closed at 10,320.5. That's a 6.2% gain.
I sold my gold ETFs (the dollar version PHAU) on December 16 and was left with £2,809 of an original £3,057 investment (a loss of £248 or 8% since September 22 when I made my first investment.
But I didn't sell at the absolute worst time.
If I had held onto those shares they would now be worth £2,899
(10,320.5 x 28 (the number of shares I originally owned) = £2,889)
That's only a gain of around £80. So if I had held onto them I would only be up 3% on the current position.
But I don't think that is a sensible way for me to look at this.
I sold my shares so my position changed. In my view I am safer.
Now I need to work out what I have done and what to do next. Some of this will involve finding out where I have made mistakes or missed opportunities. But I suspect I don't have the experience to do that usefully yet.
I don't think selling was a mistake because the gold price fell. I just failed to buy back before the prices rose more than 6%.
The question now is whether I see still see that decision not to buy back my shares as a mistake?
Either I still believe the story that the gold price will fall or I need to take a new position. If it is the latter then I need accept my losses and start from scratch again - ie reassess my views on whether the price of gold will rise or fall and whether it is a good hedge against the value of my home and the health of the UK economy.
The fact though is that I don't know if I am continuing an old strategy or starting from scratch.
I don't know how to make that decision because I am still learning and still relying on others for direction, probably too many others.
A lot of different people have put together a lot of different stories about why the price has moved as it has.
Gold price was dropping in early trading.
The original views I followed when I sold.
Scott Redler, chief strategic officer at T3 Capital interviewed on Bloomberg pointed out by Plan B economics, said gold was in an identity crisis adding that it could fall to $1400 or even $1,200.
Jim Sinclair and Eric de Groot think gold will rebound and engage with some of the bearish views like those of Martin Armstrong: "The fundamental mantra about fiat currency is getting old. The market is poised for retest of the 1225-1325 area going into 2012 which is the key support."
Dennis Gartman in Forbes: "He explained when gold collapses or falters into that $1,300 to $,1400 area, and if it shows sign of holding, then he’ll probably get his feet wet again on the long side and be a buyer.
Mineweb including comments from Marc Ground at Standard Bank: "the speculative market remains wary of gold's prospects."
Jim Wykoff remains a gold bull and also believes that it will start behaving like a proper safe haven soon but said the rise of the dollar and "the bulls have more work to do in the near term to suggest an uptrend in prices can be sustained. Prices are still in a two-month-old downtrend on the daily bar chart."
TF Metals sees gold possibly heading back towards $1,565.
John C Burford thinks it may go as high as $1,640 before falling again
Clive Maund expects the price to fall a lot further
Jeff Clark just says the bull case still intact but expect volatility
GM Jenkins on Screwtape files says: I'd be surprised if this is a good week,
Jenkins had some interesting thoughts on conspiracy theory stuff too after signing up to GATA's "Le Metropole Cafe" saying: "I kind of looked forward to hammering them here for talking shit with such confidence, but they turned out to be dead on. Let's see how they do this week."
Where I stand
Should I buy back at least as many physical gold ETF shares I sold on December 16? Am I still waiting for the price to fall?
Is it still a good hedge against the value of my home and the health of the UK economy?
I think the answer to these may still be yes but none of my views are written in stone. This feels like it will be a slow process of building up experience. For now I will try to play safe, just so I can find out if there really is a safe way to play.
I have already lost £250. I don't have a great deal of cash to play around with and I want to survive for as long as possible.
I am also trying to keep my thought process as simple as possible so I can keep track of them.
The temptation is to go with each new idea as it arrives which I do at every opportunity because it diverts me from the reality of what I am doing and the decisions I need to make.
If I reinvested now and the price rose I could make back some of my losses. Even if the price fell a bit I could justify buying now because most analysts still think gold will go above £2000 some time this year.
But I don't feel that this is the safest bet because it would mean buying back my gold and risking more losses.
Why do I see this as riskier than missing out on sudden rise in the value of gold? It's because I think recent price moves show it has been safer to be out of the market than to be in it.
The gold price hit a low of $1,523 on December 29. That wasn't as low as some commentators had been expecting - some saw it going as low as $1,200 but more likely $1,400 (see below).
In sterling terms PHGP, the physical gold ETF priced in sterling, fell to a low of 9711.7p. On Friday last week it closed at 10,320.5. That's a 6.2% gain.
I sold my gold ETFs (the dollar version PHAU) on December 16 and was left with £2,809 of an original £3,057 investment (a loss of £248 or 8% since September 22 when I made my first investment.
But I didn't sell at the absolute worst time.
If I had held onto those shares they would now be worth £2,899
(10,320.5 x 28 (the number of shares I originally owned) = £2,889)
That's only a gain of around £80. So if I had held onto them I would only be up 3% on the current position.
But I don't think that is a sensible way for me to look at this.
I sold my shares so my position changed. In my view I am safer.
Now I need to work out what I have done and what to do next. Some of this will involve finding out where I have made mistakes or missed opportunities. But I suspect I don't have the experience to do that usefully yet.
I don't think selling was a mistake because the gold price fell. I just failed to buy back before the prices rose more than 6%.
The question now is whether I see still see that decision not to buy back my shares as a mistake?
Either I still believe the story that the gold price will fall or I need to take a new position. If it is the latter then I need accept my losses and start from scratch again - ie reassess my views on whether the price of gold will rise or fall and whether it is a good hedge against the value of my home and the health of the UK economy.
The fact though is that I don't know if I am continuing an old strategy or starting from scratch.
I don't know how to make that decision because I am still learning and still relying on others for direction, probably too many others.
A lot of different people have put together a lot of different stories about why the price has moved as it has.
Gold price was dropping in early trading.
The original views I followed when I sold.
Scott Redler, chief strategic officer at T3 Capital interviewed on Bloomberg pointed out by Plan B economics, said gold was in an identity crisis adding that it could fall to $1400 or even $1,200.
Jim Sinclair and Eric de Groot think gold will rebound and engage with some of the bearish views like those of Martin Armstrong: "The fundamental mantra about fiat currency is getting old. The market is poised for retest of the 1225-1325 area going into 2012 which is the key support."
Dennis Gartman in Forbes: "He explained when gold collapses or falters into that $1,300 to $,1400 area, and if it shows sign of holding, then he’ll probably get his feet wet again on the long side and be a buyer.
Thursday, 8 December 2011
Gold will lose whatever happens on Friday...
I haven't bothered cutting back any of my gold holdings because I have absolutely no idea what to expect tomorrow.
(Update: latest from Jim Sinclair said Bloomberg published an article about central bank activity to control the price of gold today. I had a quick look at Bloomberg gold related stories available for free and found this one on gold lending rates but I'm not sure if it's what he meant. Anyway it's interesting and gives context to comments about gold lending below.)
My lack of comprehension exists on almost every level. At the moment it appears that if the news is good gold will fall and if the news is bad... gold will fall... but either way gold prices will rise...
It would be nice to know even what the variables are that need to be watched, there seem to be a few. The strength of the dollar is the key but there are other bits and pieces and I have tried to work out a handful of randomly selected reports have been saying.
In this piece in The Street some of the variables affecting the gold price today were set out:
ECB cut interest rates (Good for gold? "If the rate cut is seen as helping the Eurozone, gold could rise with the euro, but if it is seen as devaluing the currency, both assets could head lower.")
ECB lent almost $51 billion to European banks for 84 days by swapping euros for dollars with the Federal Reserve. (Good for gold? If it means stress in the system that's good for gold... unless gold was lent to cover the borrowing which would mean more gold in the supply chain which would push down the price of gold - according to James Steel, analyst at HSBC.)
From Bloomberg piece on gold lending mentioned above, two other analysts:
"European banks especially are having liquidity funding problems, which does see a lot of lending of gold and that’s putting downward pressure on lease rates,” Walter de Wet, head of commodities research at Standard Bank Plc in London
"European banks especially are having liquidity funding problems, which does see a lot of lending of gold and that’s putting downward pressure on lease rates,” Walter de Wet, head of commodities research at Standard Bank Plc in London
“It is quite typical of this time of year that banks look to offload metal in an effort to reduce their balance sheet,” Edel Tully, an analyst at UBS AG in London,
The Euro weak, the dollar strong...
"gold quickly reversed directions after Draghi said that sovereign bond purchases would be limited... the euro tanked on the news which dragged on gold."
Mark O'Byrne analyst at GoldCore said: "If there is some kind of success declared in Europe on Friday, O'Byrne says it might result in gold prices falling in the short term, but longer term any action won't solve the debt crisis."
I don't know who Michael Paulenoff is but he's got a much better CV than me and he sounded like his charts were telling him lots of different stories too - but it's interesting.
"There still remains risk of a negative reacton to the Euro-zone Summit plan, which could send gold into another nosedive next week. That said, gold has climbed $45 off of Tuesday's pivot low at $1701.98, a rally that exhibits bullish form, which if accurate provides clues that a new upleg could be in progress."
I still haven't got around to investigating this charting stuff but aim to at some point soon.
Forbes offered more charting witchcraft talk via Jim Wyckoff:
"Bulls do still have the slight overall near-term technical advantage. A 10-week-old uptrend is still in place on the daily bar chart, but now just barely. Bulls’ next upside technical breakout objective is to produce a close above solid technical resistance at last week’s high of $1,767.10. Bears’ next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at $1,725.00 and then at $1,750.00. First support is seen at this week’s low of $1,705.70 and then at $1,700.00. Wyckoff’s Market Rating: 5.5." (According to expofutures.com "Wyckoff’s Market Rating System is based on a scale of 1 to 10, with 1 being the most bearish market rating and 10 being the most bullish market rating. Thenumber 5 would be a neutral rating. And it is not uncommon to see fractions used – like 1.5, 3.5, etc. – if conditions warrant."
And: "Importantly, markets that have been in sideways trading ranges for a while – i.e., non-trending and then move to either a rating of 5.5 or 6 on an upside price move, or to 4.5 or 4 on a downside move are the most critical to monitor. It’s at these ratings levels that most trading “set ups” occur, based on Jim’s trading philosophy and experience. But remember, the market has to have been trading generally sideways beforehand.")
As far as I can tell this means that gold bulls need gold to get a closing price above $1,767.10 - last week's high. The bears hope gold will fall below $1,700. But no one knows who or what is going to happen whether the news is good or bad... which probably means nothing much will happen.
Wyckoff suggests Draghi's comments meant nothing much would happen tomorrow as they effectively "threw cold water on hopes there would be some big announcement on fixing the EU debt crisis coming out of the EU summit meeting late this week."
So gold fell today. This Google chart shows that any gains made later in the day by UK gold ETFs will have been neutralised by another jump in the dollar index - here seen against GLD which is still trading. I don't know what set that off, )
My two gold investments look like this...
But the BlackRock fund will certainly be down now. It would have been priced at midday before share prices started falling on the FTSE 100. Whatever that price was, it doesn't seem to update on the Hargreaves site until midnight. But judging by the share price movements of its top 10 holdings, it will be down in spirit if not in actual price.... 
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