Comments on: Gold Takes a Leap, But Is There More?

By: S SUNEIL GADIYA

S SUNEIL GADIYA — Sat, 06 Feb 2010 12:13:34 +0000

beautiful comments on Gold i luv it to read & enjoi ur analysis

By: Rich

Rich — Wed, 03 Feb 2010 02:09:34 +0000

FranSix: 17 Sep 2009 gold jumped $70 in New York and finished London up 14% in 24 hours. Prices often volatile around bottoms and tops, while people most bullish after tops and bearish after bottoms. Sure seems like a lot of golden calves around. Mooo.

Tom Paine: Maybe gold prices will be lower because of instability, namely debt collapse and default, with higher interest rates to reflect credit collapse and debt collapse when no one will even buy 20% of the Treasury paper. Today there was a rumor going around somebody was going to put America as well as Britain on Credit Watch. Moody’s said this:

http://www.cnbc.com/id/35204886

Regards*Rich

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This just in…

The nightly news featured the head of Education in Nevada who basically said they are broke.
Supply and demand can be tough…

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And for what it’s worth: Big4 and PnF have bifurcated INDU down to 9350, SPX up to 1295, RUT up to 800. NDX a proprietary profitable trade so far…

By: DonF

DonF — Tue, 02 Feb 2010 13:09:17 +0000

Frank Taucher, rest his soul, of The Supertraders Almanac, had reasons why a commodity would act like gold just did. It seems gold may have been in a down seasonal and/or a down cycle, and simultaneously moving down into contract and option expiration. Longs wanting to roll into the new contracts were forced to liquidate at lower and lower prices creating a snowball effect, which Taucher called a “Black Hole”. And longs did not want to roll into a new long contract in the face of declining prices. So they liquidated the expiring contract as soon as they realized they were in a whirlpool and reentered the new front contract on expiration day or the Monday after. That way, their stops are low risk and very close to the lows just reached. When there are enough traders acting on this phenomenon the commodity rockets higher immediately.
Also, the smart money shorts were reluctant buyers, reluctant to liquidate their positions until expiration. Liquidating early would have moderated the decline. The shorts were well aware of the bull trap they had created and proceeded to punish the longs to the last dime.
Smart guy Frank Taucher! He planned for these rare opportunities and saw them coming months in advance. 12 months in advance actually! The original Supertraders Almanac only came out once a year. It was packed with dozens if not hundreds of seasonals, cycles and little known but powerful trading techniques.

By: FranSix

FranSix — Tue, 02 Feb 2010 11:09:52 +0000

Most of the major declines are cued for London trading hours, where most of the physical gets traded. So if Europeans are buying as has been suggested, then you will see it on the London market. If all time zones are buying simultaneously, then you have these huge jumps in price.

Never seen a gap up like this before.

By: Chris T.

Chris T. — Tue, 02 Feb 2010 07:20:44 +0000

Martin has a good point.

Rick, would you get any different pivots using a Euro chart instead of dollars?
Sure that is academic here, you trade US, but it would be interesting even so…
Regards!

By: Tom Paine

Tom Paine — Tue, 02 Feb 2010 01:50:39 +0000

Those who want to bet on much lower gold prices are betting on economic/monetary stability, which is unlikely with the tremendous extremes of debt and monetary inflation colliding like tropical and arctic air masses coming together. Expect turbulence, but also expect a continued inflation of a “gold bubble” as hot keeps blowing out of the biggest bubble of all, i.e., the bubble in IOUs.

Thanks Martin for your take on the possible flight from Euro to gold. It makes a lot of sense.

By: Daman Prakash

Daman Prakash — Tue, 02 Feb 2010 01:21:49 +0000

Your gut hunch will play out.

Short players may tick market higher but in my opinion longs are equally trapped at higher points and they may slow down ascend of Gold once short squeeze is over if they decide to heave a sigh of relief by offloading.

Price action as you say is the most effective way to deal with such situations. One day doesn’t make wonders. The action y’day need to get vindicated till week end.

By: Martin Snell

Martin Snell — Mon, 01 Feb 2010 23:56:22 +0000

While the Euro has been falling the last couple of weeks gold has been relatively flat (at least compared to how it usually reacts to a dollar rise). The net effect is that the Euro price of gold has actually been rising and today got pretty close to the all time record Euro price for gold.

My take is two fold – Euro holders, bothered by the PIGS, have this time converted Euros to gold (and not to dollars). That was the source of the relative strength the last 2 weeks (again especially when compared to the metal stocks). The impetus today seemed to come from the budget details … to anyone with half a brain it was pretty clear that QE2 is coming soon. There really is no way out, no matter who is in charge in this warped system.

I’d advise gold bulls to take a look at the gold/Euro chart … after all the European countries and the ECB together hold more gold than the US. Maybe we should switch to Euro gold pricing for everyone.