Thursday, April 13, 2006

Gold spot ( XAU ), market commentary & chart

The observation that the Gold price is rising because of geopolitics or due to the rate of inflation is very common. However, I believe that the price of gold is simply affected by the present physical supply and demand at spot price. Geopolitics & Inflation are factors which affect the demand and supply of physical gold, but they are certainly not the only factors, other factors are: mine supply, central banks transactions, jewelry demand and numerous other potential issues.

In my opinion the physical supply and demand can support higher and possibly much higher price of gold. The geopolitical and Inflation factors could also support much higher gold price under some circumstances. Gold is still somewhat undervalued asset when viewed by some perspectives.

Lately there are lots of bullish market comments regarding commodities and especially gold, contrarian investor might suggest that this is a sign of some kind of top. However, this is the third Elliot wave for gold and public participation is normal at this stage, any pullbacks are supposed to be shallow.

Technically, the price of spot gold is still very strong, a short term trend line is broken and another trend line is established almost immediately.

gold spot , xau intraday chart

Mr. Gary Dorsch Published interesting market commentary ( Forex , Gold , Central Banks , commodities and a bit of geopolitics) - link


Anonymous said...

I am concerned about India's gold jewellery demand. Esp since in Rupee terms, gold is now more more expensive than in the 1980 peak.

"This explains why the gold jewellery market is down 40% this year to date and has been for over six months. Indeed it is 186.66% higher than when gold was $850 an ounce."

“From what we’ve heard for the first few months of this year, we could see jewellery demand slumping back almost 500 tonnes for the full year. That’d leave jewellery offtake some 400 tonnes below mine production. That’s just not sustainable in the long term.”

real1 said...

Thats possible but unlikely, rising investment demand, & possitive central bank transactions, might come in quickly then decline in global jewlery demand if at all.:

day trading future said...

An interesting read...


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