Just last September 2011, gold (XAU/USD) reached a new all-time high of just above 1,900.00 US dollar per ounce. Investors’ [Read more...]
Gold (XAU/USD) Seen To Rebound?
Technical Update On Gold
Gold has managed to record new all-time highs almost day after day as investors seek refuge on this precious metal amidst the ongoing global financial turmoil. Now having recently marked a high of $1,894.79 per ounce, will it continue to rise or will it at least consolidate or even correct in the mean time? [Read more...]
Gold Aiming For $1,650 Per Ounce!
Bling! Bling! Who wants to join the global gold rush? Just recently the price of gold set a new all-time high at $1,476.22 per ounce. Despite trading at this level, it appears that is some more upside on gold. [Read more...]
Short Term Weakness Seen In Gold
The price of gold of XAU/USD in the commodities market could be due for a correction in the near term. [Read more...]
Gold Flirting With Its All-time High Again
The price of gold have been relatively volatile during the past couple of weeks due to the swings in market sentiment. On November 9, gold marked a new all-time high at $1,424.00 per ounce before falling steeply amid the speculation that China will raise its interest rates to place a check on its 4.4% inflation figure for the month of October. A rise in interest rates would likely slow China’s growth and since it is now the number two biggest economy in the world, such would not go reflect in the other countries as well especially its trading partners, hence, boosting the greenback. It’s kind of weird, however, since the price of gold actually rose when the same inflation data in China was released the day before. [Read more...]
Gold to Resume Its Upward Move
After marking a new historical high at $1,386.82 per ounce back in October 14, gold appears to have lost its upward momentum as it slid back to a low of $1,314.60. In my opinion, however, gold’s recent correction is very much warranted due to the fact that it was already trading at an extreme overbought condition. It also exchanged in a rather fast pace, marking new a new-all-time high after the other in succeeding trading days. In any case, gold may once again resume its upward trend after it found support at the uptrend line and at the $1,320.00 marker. A hidden bullish divergence, where the prices register higher lows and the stochastics marking lower lows, can also be seen. This occurrence suggest that buying interest could again make a comeback. Furthermore, this morning’s bullish gap adds to signs that the demand for this precious metal is indeed increasing once more.
Gold’s rebound was helped by the broad-based selling in the USD when the G20 officials said that it won’t engage into a “competitive devaluation” of their respective currencies in order to promote their countries’ export industry Rather, it said that it would just let the market dictate the forex valuations. So given the US Fed’s openness to do another money-printing scheme (quantitative easing) to encourage spending, traders maybe beginning to shun away from the greenback again. Another event that could place some selling pressure on the USD is when China allows the Yuan to trade more loosely and thus become stronger against the US dollar. Chinese officials could do so by selling more of their dollar reserves in the market. Such, of course, would dilute the USD, making investments in other instruments like gold more attractive.
Gold Sailing in Uncharted Territory!
Bling bling! Gold hit a fresh all-time high this week when it reached $1,282.53 per ounce. In my previous post about gold last September 2 (please see it here), I noted that it was already poised for an upside breakout at that time. And guess what, it did just that as it surpassed its previous high at around $1,265.05 per ounce. At present, gold is trading just below $1,280.00. If history repeats itself then it could be up for a short term dip. Notice that some time the other week, gold formed a doji candle which led to a temporary correction. A similar doji formation can be seen at the present which means that gold could once again dip slightly. The stochastics, being in the overbought territory, also suggest the same movement. Nonetheless, gold should find support at either the previous high that it surpassed or at the uptrend line. And until this line gets broken and gold reverses, it should continue moving towards more uncharted areas.
With gold hitting fresh highs, long traders could lock in their profits in the mean time especially before the US Federal monetary policy decision this coming September 21. A weak US dollar has contributed a lot to the jump in the gold’s prices so if the Fed holds its interest rate unchanged and its quantitative easing as is then a weak dollar may ensue once again. Earlier, Fed Chairman Ben Bernanke indicated that the central bank could introduce more QE measures if warranted. Having said that, it is likely that the Fed will maintain its policies at an extended period of time to support the economy’s rebound. If such is the case, then a frail US dollar, and therefore, a stronger gold, could arise.
A rise in the prices of gold, as you know, would be reflected in the prices of the commodity dollars (Australian dollar, New Zealand dollar, Canadian dollar, and Swiss Franc) since these currencies enjoy an 80% correlation with the price of gold. The mining sector, particularly the gold miners, would likewise benefit from a jump in the prices of gold. As for me, buying into any these would be a good play as of the moment.
Gold Poised For An Upside Breakout? – September 2, 2010
Welcome to a brand new month of trading! In today’s feature is the monthly chart of gold (kindly check here for my last post on it). The month of August was a good one for the gold bulls as the price of gold was able to rebound after if fell to a low of $1,157.15 per ounce after tapping a new all-time high of $,1265.05 back in June. As you can see, the price of gold sprung back after finding some support at its 19-month uptrend line (black trend line). Presently, it seems that gold is poised for a bullish breakout since it has been consolidating within an ascending triangle for the last 5 or 6 months. If it’s able to move above the high at $1,265.05, it could set a new high by potentially reaching $1,500.000 (gauged by measuring the height of the triangle). However, if it is unable to do so and the black uptrend line breaks, the price of gold could fall all the way down to $1,000.00 or even back at the longer term uptrend line (blue line).
The commodity dollars like the Aussie, Kiwi, Swissy, and Loonie could benefit from the gold move upwards. Why? Well, the mentioned currencies have about 80% correlation with the price of gold. Hence, whenever gold loses value, the comdolls tend to fall as well and vice versa. A rise in gold prices could at least temper these currencies’ move downward. An upside move could likewise benefit the mining industry particularly those companies which produces gold. Of course, the mining companies’ revenues and profits would increase even if the volume of their production remains the same.
Gold is Still Alive! Whew! – August 5, 2010
Hello trading fans! Last week gold provided the market with a scare when it temporarily broke its long term uptrend line (kindly see my previous blog here). As you know, a break of an uptrend could spell disaster given the possibility of a reversal. Hence, it’s a good thing that gold managed to pull itself back above the uptrend line again. Gold actually found a nice support at 1,160.00 after it cut through the uptrend line. And now that it is trading above it once more, it’s safe to say that it could continue its journey back north. A break, however, of the uptrend support could once again push it towards 1,160.00. In my opinion, it is imperative for it to clear its all-time high 1,265.05 to be able to extend its present uptrend. A failure to do so could send it in consolidation mode. Worse, gold could even reverse and give back at least part of its gains.
Fundamentally, the demand for gold rose last week, pushing its price up, when the US’s GDP printed a slower-than-projected growth of 2.4% (versus 2.5%) after expanding by 3.7% during the first leg of the year. Prior to that, both core and headline durable goods for the month of June also unexpectedly fell by 0.6% and 1.0%, respectively. This week, frail US economic data has continued to subdue the confidence in the market, causing investors to seek shelter in gold. Pending home sales (-2.6%) and factory orders (-1.2%) likewise posted some unexpected declines.
Gold could experience some volatility tomorrow with the release of the US’s non-farm payroll (NFP) report for the month of July. US firms are seen to have slashed a total of 59,000 workers on top of the 125,000 that was retrenched in June. But if the ADP’s estimate is correct (according to them, US firms did not cut any jobs but even added 42,000 more), risk appetite among investors could return which could spell a retracement in the very short term as they move their funds to riskier assets. Worse-than-expected results, on the other hand, could spur risk aversion which would benefit the safer instruments like gold.
Gold Bubble Popped?! – July 29, 2010
Say what?! Yeah.. You read that correctly. After making a bullish run for the longest time and even marking new historical highs one after another, gold apparently has just lost its upward momentum. In my last post about it back in June 28 (kindly see it here), gold was pretty much in fashion as it just registered a new historical high of just above $1,250.00 per ounce. But as you can see on today’s weekly chart, its bullish run appears to have come to an end. Notice that it has just broken its long term uptrend line which started way back in October of 2008. At present, gold is sitting just above the $1,150.00 support. A break below this could be disastrous as it could fall all the way down to $1,050.00 or even at $1,000.00. In case gold manages to hang on, it could still aim for its previous high just ab0ve $1,250.00. But with the stochastics still far from being oversold, gold, still has some room south to cover.
As I’ve discussed previously, the increase in the demand for gold in the last several months was primarily due from the risk aversion in the financial market. You see, gold’s intrinsic value makes it one of the best assets out there that can protect the investors’ money from inflation in times of market unrest. And as you know, investors at that time was so tentative given the debt crisis in Europe and the weak showing of the US economy.
The situation and the sentiment now, however, are different. The market has since been rallying, buoyed by strong corporate earnings in the US and robust economic data from both the US and Europe. If the market continues to rally then the demand for the safer investments such as gold would likely diminish. The market, for the last months, may have exaggerated the effects of the credit crisis in Europe to the global economy. But as evidenced in the surprise earnings of the banks in Europe and the US, the effect of the crisis on their business was not that much.
So if gold starts its descent, then the mining industry particularly those companies that are producing gold could also take a hit. Of course, a decline in the price of gold could mean a slide in their revenues. Same thing goes for the commodity dollars like the Aussie, Kiwi, and the Swissy. Since these com-dolls have a positive correlation with gold, a decline in the price of the later could drag their prices as well or at least slow their gains.
Remember, you heard this first at LaidTrades.com.
A Chance to Ride the Global Gold Rush! – July 7, 2010
Good day finance fans! Here’s an update on the price action of gold which I last posted on June 28 (kindly see my previous entry here). As you can see, the price of gold has weakened after it marked a new all-time high at $1,265.05 per ounce on June 21. Gold has a possibility to dip a little more since it has already broken its shorter term uptrend line. Despite doing so, its long term uptrend remains to be intact and as long as it is, the price of gold would likely trek higher over the longer time frame. With the stochastics in the oversold area, traders could indeed buy it back up any time soon. The presence of a bullish divergence, where the price registers higher highs and the stochastics mark lower lows, also suggest a likely bullish continuation in the coming days. In my opinion, a good long entry point here would be at the intersection of the 50% Fibonacci retracement level that I drew and the long term uptrend line. A break, however, of the long term uptrend line would be a sign of some sour things to come.
Remember that investors generally buy gold during times of economic down swings since unlike most other assets, gold does not lose its intrinsic value. With most of the biggest economies in the world already turning bearish as indicated by the breaks downs in their equity indices (S&P 500, Dow, Nasdaq, FTSE, SSEC), investors and traders alike would surely pull out their funds away from these market and into somewhere where the value of their money could be at least maintained or better. Since gold has been on a bull run as exhibited by its uptrend for almost two years now, investors would likely place their money in it. And given the influx of new funds that that came out of equities, the demand for assets such as gold would likely increase, which of course, would jack up its prices.
If the breakdowns in the mentioned indices worsen and if the Stoxx 500 follows suit, gold will likely be more in demand. Now, if I wish to ride the gold’s uptrend, I could either invest in gold itself or in the commodity currencies such as AUD, NZD, and CHF. I could likewise invest in the listed gold mining companies.
2010 Global Gold Rush – June 28, 2010
Here’s an update on the price of gold from my previous most last June 10. As you can see, the price of gold has skyrocketed over the last couple of months and has yet again registered a new all-time high of $1,265.05 per ounce last June 21. It could aim for a new high in the coming days since its short term uptrend line is still well intact. Though, since its stochastics are still far from the oversold area, it could range for awhile or even retrace back to the support at $1,160.00 or at the long term uptrend line. In any case, the price of gold would likely continue to move higher in the longer term until it breaks its uptrend and reverses.
The increase in the demand for gold in the last several months is primarily due from both price speculation and market fear. It is important to note that gold bares no interest and dividends to its investors but given its intrinsic value, its one of the best assets out there that protects the investors money from inflation. Given the ongoing debt crisis in Europe and now the weak economic data from the world’s biggest economy, the US, fear is slowly making a a comeback. With the Fed’s near zero interest rates and its recent dovish comment regarding the US’s economy and their future policy, it’s no wonder why investors seek gold as a safe haven. Given the uncertainties in the market, both in Europe and in the US, any downbeat developments could send the price of gold higher. Such, though, could benefit the mining industry, specifically the gold miners. The commodity dollar like the Aussie, Kiwi, Loonie, and Swissy could also get some support with the increase in the price of gold.
