Tuesday, February 14, 2006

Gold charts

Some nice recovery for the precious metals today, gold and silver are currently 12$ and 0.25$ above last bottoms, there is a good chance the bottoms are already in. According to my E wave count for gold this is a third wave within a bigger scale third wave up, third waves are known to be confusing and this is exactly what I see in the market – confusion and allot of it. Some "professional analysts" are calling for 2000$ per oz gold price while others are talking about 450$. You can read all kind of pseudo explanation of why the price of gold is going this way or that way. This confusion will certainly help gold to go (a bit?) above 1000$ in 2006.
I have already explained a lot about the main drivers behind the price of gold, so please review the archive for more information.

China hungry for gold
14:25:23 GMT, 14 February, 2006
Shanghai Gold Exchange president Wang Zhe believes that China could become one of the world's biggest gold importers.

The country's gold trading volume increased by 36 per cent in 2005, and Mr Zhe said China "has the potential to be one of the biggest gold markets in the world," according to the Financial Times.

His views are supported by recent consumer spending in the world's most populous country.

The Old Phoenix jewellery store in Shanghai has been selling a large number of $2,000 gold bars embossed with the Beijing Olympics logo.

A salesman said that "there will be a new bar every year until 2008 and many people want the complete set".

The situation is vastly different from even a few years ago – up to 1982, individuals in the country were not allowed to own gold.

However, the country is now poised to become a significant gold importer.

"Commodities will have a strong investment case in the year ahead because of the strong Asian growth," said Michael Hartnett of Merrill Lynch.

Gold in particular has a strong case as global growth gains momentum in the second half of 2006. source: World Gold Council www.gold.org

Click on the annotated charts below to enlarge:

gold chart
gold price

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