Gold OTC derivatives

Total OTC derivatives are up from ~414 trillion to ~516 trillion for notional amounts outstanding (+24.6%) and up from 9.682 trillion to 11.140 trillion at gross market values (+15%).

Gold OTC derivatives are actually down from 0.640 trillion to 0.426 trillion for notional amounts outstanding (-33.4%) and from 56 billion to 47 billion at gross market values (-16%).

Gold OTC derivatives are still just a tiny part of total OTC derivatives (less then 0.1% for notional value and a~0.42% at gross market values)

The decline of gold OTC derivatives is probably a direct result of:

1) De-Hedging by gold producers.
2) Market participants move their business from OTC derivatives into more liquid, transparent and regulated markets such as COMEX (GC) and CBOT (ZG).

You can see the BIS OTC derivatives report here

XAUUSD, XAGUSD Charts

Significant corrections are taking place for both gold and silver. So far this is the sharpest drop seen since the mid august bottom. Each Fib line is currently a possible downside target.

Personally, I observe that at the moment some other markets offer superior short term trading opportunities.


Silver (Spot price) 8 hours chart


Gold (Spot price) 8 hours chart

GCZ7 Chart (Comex Gold)

Dear readers,

The trend is simply (still) up until it isn't. The move is extended and as the price keeps climbing the risk for a sharp sell off is also increasing. But for now after a modest ~25$ correction gold quickly recovered and made a new high. The trend (since August) support is currently coming at ~758$ . From an Elliott wave perspective (according to my count and understanding )support is at 749$ & 726.5$. Trend resistance at 803$ and climbing. More resistance at round numbers, contract highs , all times highs and Fibonacci targets.


thats all for now...

GCZ7 8 hours linear chart.

Gold Yen

Gold Yen indicates some kind of top (short or mid term) is around here so take note and be conservative with bearish USD speculation.

GGP Update

Dear readers,

In recent weeks the Dow Jones World Index had it's worst decline since 2002.
On the same page the VIX reached the highest point since 2003.




Given recent moves in major currencies (EURJPY 169 – 149, GBPJPY 251-219) gold have been as stable as one can expect from a major independent private currency. This is very encouraging to say the least. Odds still favors higher gold rates more then lower USD index.


Gold daily chart annotated with wave count

Same 1-2 extending
















Silver daily chart annotated with Elliott wave count

Retraced September 2006 – February 2007 secondary advance

2007 Q2 Hedge Book

Insiders are still buying :

Q2 07 Hedge Impact Declines 5.4 Moz to 31.2 Moz.

See the full report here

Dubai's Gold ETF

By Summer Said

DUBAI (Reuters) - Dubai, already the region's gold trade hub, may see the launch of the Middle East's first gold exchange traded fund (ETF) in 2008, a senior World Gold Council (WGC) official said on Monday.

"Gold trade in Dubai and the region is definitely booming and the market players need an ETF market to manage their risk and catch up with other international markets," said Moaz Barakat, managing director of the WGC in the Middle East, Turkey and Pakistan.

"There is a great interest for ETFs in the region... We may have a Dubai ETF next year."

ETFs offer investors exposure in the underlying commodity without taking physical delivery. Sponsors of gold ETFs buy a matching amount of the commodity from the market to keep in vaults.

"It will be linked to a dollar-based gold price, but it has not been decided yet if it will be listed on the Dubai Gold and Commodities Exchange or the Dubai International Finance Exchange," he said.

source

GCQ7 Update

Dear readers,

This will probably be the last GCQ7 chart as gold futures contracts are rolled into December and October (GCV7, GCZ7).

Hype is all over the place so sentiment indicator probably supports the case for some correction here, As previously mentioned USD is trying to bounce.



August Gold - GCQ7 Intraday (120 min) Chart

Gold, USD & Forex Update

Dear readers,

The USD is looking oversold here and some bounce might be expected. If you add a channel the way I did, you can see that the USD index is at the bottom of the channel. In addition, the USD just tested the psychological important 80 level – this level was rarely violated, ever.


USD Index Daily Chart (note the deep oversold condition of RSI 14)




































Try to avoid shorting the Yen as the crowed count this currency as a weak one. The interest rate on the yen is low and might continue to stay low for some time but the Japanese economy is not a weak economy in my book, not at all.

Particular vulnerable is the EURJPY pair which had already completed or might be very near to complete a seven years rally. A large correction is expected here – take note!

EURJPY Weekly Chart , Elliott wave count. (click to enlarge)





















Gold and silver had a nice rally (as expected) but some significant resistance seen for both. on the other hand gold in terms of Yen and Euro made some advance so the move was not all USD related. If the USD will start strengthening as it might gold can correct some of its recent 47$ rally. Corrections should be seen as a buying opportunity and the June low should hold.

Spot Gold weekly chart annotated with Fibonacci levels. (click to enlarge)

Gold and Silver Charts

Dear readers,



Yet again, minor consolidation might be over; gold and silver should be ready to move higher. Just my opinion, only the time will tell.



(SIU7) COMEX September Silver Intraday Chart (2 hours sticks)



















(ZGQ7) CBOT August Gold Intraday Chart (2 hours sticks)

Gold Market News

First Japanese gold ETF due to launch Aug. 10

source

As well as Small-Lot Gold Futures Trading on TOCOM(100 grams per lot , margin = 12,000 Yen)

source

Korea : The government plans to establish an exchange for gold as early as next year.

By Lee Hyo-sik
Staff Reporter

"The government plans to establish an exchange for gold as early as next year to make gold transactions more transparent and discourage the smuggling of the precious metal.

According to the Ministry of Finance and Economy, the government will set up an exchange, an organization to manage and supervise gold distribution, next year to stem any illegal transactions and distribution of gold.

It will expand the exchange into a comprehensive commodity exchange, like New York Mercantile Exchange (NYMEX), to deal with not only gold, but diamond, crude oil and other commodities as well.

The exchange will operate separately from the Korea Exchange (KRX) on which stocks, bonds and derivatives are traded, the ministry said."

source

GCQ7

Gold, Silver, Platinum & Palladium all up on the day.

Two hours sticks chart of COMEX August gold contract looking very similar to the COMEX September silver chart I posted two days ago.

Japan Should Diversify Reserves

Markets normally lead the press…

Japan Should Diversify Reserves, Abe Adviser Ito Says

By Shigeki Nozawa

July 11 (Bloomberg) -- Japan, the largest overseas holder of U.S. Treasuries, should invest $700 billion of its currency reserves in higher-yielding assets such as stocks and corporate bonds, said Takatoshi Ito, an adviser to the prime minister.

The reserves should be managed by a special fund that will gradually diversify into euros, Australian dollars and emerging- market currencies, Ito said in an interview in Tokyo.

Central banks in South Korea, China and Taiwan have announced plans to buy assets with higher returns than U.S. debt, contributing to a 7.4 percent drop in the dollar against the euro in the past year. -source



Long term 27 years Gold / Yen Chart (XAUJPY) Price scale : 10K Yen per Gold Troy Ounce.

XAU, XAG & Forex Commentary

Not much change in the USD price of gold (xauusd) today. Gold futures traded and closed slightly higher but priced in Euro and Yen gold is actually down today.

The Euro made a new all time high vs. the USD, EURUSD ~= 1.3740. Note that pre issued Euro high was EURUSD 1.4750, Long term (30 years) retro perspective EUR/USD chart.

Marginal carry traders capitulated as the Yen rallied strongly. Be careful with that one! , Seems like the carry trade become way over crowded as every one and his dog doing the thing.

Silver up, the high of the day was 13.085 for SIU7 (COMEX September contract)

Silver SIU7 Intraday Chart (2 hours sticks)

It Is What It Is.

It is always nice to see the price of gold performing well on a day when other currencies are basically idle. The price of gold climbed through several horizontal and diagonal resistance levels, the process was very quick. Gold charts of multiple time frames are now looking much better. Today just proves that buy and hold can work on some occasions, especially when quick mark ups are expected.

If you followed my posts you should know what my expectation is and there is not much more to add at this point.

Here is an example for one of the positive developments taking place:

Not perfect but this semi inverted head and shoulders pattern has a target of 677$.

Gold Spot (XAUUSD) Intra Day (four hours sticks) Chart

XAGUSD Chart

Some initial upward movement for the price of gold and silver. Not surprising as buy signal was generated by the HUI/GOLD ratio. Silver outperformed and closed at the high for the week. A slight uptrend is apparent on the intraday chart. As you probably know all trend lines are made to be broken and the shorter the time frame the larger the chance that a trend line will be broken. Anyway, markets moves are not linear, markets moves in waves or more precisely fractal waves.

Spot Silver intraday 2 hours chart.

Quick Update

Dear readers,

It is a given fact that gold reached a technical comfort zone. I find it funny to read commentary with price objectives slightly above, at or below gold mining break even point. It is a mystery how low the price of gold can be manipulated in a mission to hide competitive currencies devaluation on a global scale.

All charts and ratios considered I estimate that a volatile markup for the price of gold and silver should soon follow.

Recommended Readings

Individual gold trade this month
By Wang Lan (China Daily)
Updated: 2007-07-04 08:51

The beginning of gold trading by individual investors on the Shanghai Gold Exchange (SGE) later this month is expected to provide a welcome alternative at a time of high stock market volatility. -link

RTS Realtime Systems Group Offers Connectivity To Dubai Gold & Commodities Exchange

03/07/07

RTS Realtime Systems Group (RTS), a leading independent software vendor, announced that the firm is now offering access to the Dubai Gold & Commodities Exchange (DGCX). The move expands the RTS presence in the Middle East and further strengthens its leadership position in electronic trading software, with thousands of user connections to more than 85 exchanges and liquidity pools throughout the world.
-link

Warehouses to help stabilise gold prices

(03-07-2007)
The International Gold Council this year estimates that demand for gold in Viet Nam could reach 70-80 tonnes. A Brink’s Viet Nam representative, Ben Van Kerkwijk predicts in the short run demand will accelerate. - link


GLOBAL EXODUS FROM THE US DOLLAR IN MOTION by Gary Dorsch -link


The Silver Millionaire By David Morgan - link

Positive Reason

Interesting times head as significant adjustments are in the works. Currencies, Silver Gold, Oil, Stocks all in the equation with the most controlled item actually needs to be Interest rates.

Commodities continue to trade with a group and / or individual bias. Generally it might be the case that commodities are the best play as the long term (decades) cycle is probably most favorable for this asset class.

Gold and Silver fundamentals have never been better with global system adjustments seen as a long term positive. Significant amount of shorting taking place and some of it probably un hedged (naked).

Exact timing and finding reasons for the day to day action is tricky.

USD Index

This chart does not look good to say the least... , the bounce was disappointing and the new downtrend looks convincing.

Silver

If enough cash based buying enters the physical silver market then regardless of the silver market fundamentals (which are supportive) the price will quickly rally. The move should be similar to the second half 2005<> first half 2006 in which silver climbed about 130% in 8 month. 12.30$ today is like 6.70$ in 2005 so the target is about 27.80$ which is between the short and long 261.8 Fibonacci levels.


Spot Silver {XAGUSD} Weekly Log Chart

Today commentary

It might be the case that criminal acts, corruption and the highest level of abusive acts against people's freedoms are taking place. Authorities all over the world have pushed themselves into the darkest corners. Top academics and high rank officials are refusing to admit their own mistakes which are based on false economic theories. One should be careful and consider all options. Disinformation is running at extremely high level but the trend is changing with the expansion of the internet and generosity of moral people.

In regard to gold, silver, forex, stocks or any other market - you should spend your time better by learning the charts, particularly the long term charts. Charts are the most efficient and concentrated data you can find. Learning charts is not an easy task and the short term charts are vulnerable to abusive manipulative acts, paint the charts they call it. Fundamentals, fundamentals, fundamentals, learn history; concentrate on numerical facts not opinions. It is best when the technicals and fundamentals point in the same direction.


Good Luck, for peace, freedom and prosperity…

Update

It appears that after yesterday slump some technical repair is currently taking place. This is not the time to sell gold and silver as February 26 was not the time to buy. Yesterday action is nothing new for anyone watching the precious metals, gold has seen moves of ~ 40$ in 24 hours more then once , sharp moves like that are typical at bottoms or tops though it is not always the case.

For readers who need to buy physical gold and silver this is a rare opportunity and you might want to buy a larger amount then you normally do. Long term investors which buy gold physically or gold funds can enter the market gradually. Speculators need to be on the watch for buy signals.

I see quiet a few bearish gold articles with targets of 600$ and 570$ which should be viewed as a contrary indicator (The majority of investors and traders tend to be bearish at bottoms and bullish at tops). It appears there is allot of speculative short selling taking place with intention to capitalize on a falling gold and silver prices. Are the short sellers getting over confident? Time will tell…

If you think like I do that gold is in a multi years / decades bull market then you have to be bullish most of the time , sometimes natural but never bearish.

Overall, initiating bullish positions with medium to long term time frame seems favorable both in terms of price and time.




Bill Cara has posted about Gold mining costs and you might want to read that:

Goldminer Report

Real Drivers of Gold

The annual mine production of gold is around 2500 metric ton. The notional amount of gold over the counter (OTC) derivatives is 463 Billion USD (BIS Dec 2006). This numbers alone support much higher gold price, just do the simple math.

This is only small part of the story as Total OTC derivatives (most are interest rate contracts and credit default swaps) amount at 415 Trillion USD. Gold derivatives are just 0.1% of the total amount. Compare that to an annual total world GDP of about 70 Trillion.

In addition it is strongly recommended that you review this post : Gold Market Overview


Gold Anti-Trust Action Committee(GATA) documentary video(2005)

Gold , Silver

Gold and particularly silver are down sharply today. Gold and silver are about at the same point as in the beginning of the year and April 2006. Volume at futures exchanges was large. It was like traders got scared that their gold would catch rust. I estimate that the high volume was due to fundamentals, value and de hedging.

Dow Jones /Gold ratio making new highs, inline with recent out performance of stocks vs. gold. My opinion is that Higher gold price will be necessary for the continuation of the stocks bull market.


Gold (XAUUSD)



















Silver (XAGUSD)



















Some of you might want to read this article : Booms Were Made to Go Bust(Robert Kiyosaki)

Gold Market Update

Gold trading is directionless, sentiment is negative as I observe at mainstream media publications.


Gold markets structural developments:


Small-Lot Gold Futures

100 gram gold contracts to be issued in China and Japan :



"BEIJING, June 26 -- The Shanghai Gold Exchange will launch individual gold bullion trading nationwide in July by teaming up with Industrial Bank."

-source


"TOCOM hopes to inaugurate the new section, aimed at attracting individual investors with reduced trading risks, on July 9. The basic trading unit will be lowered to 100 grams from one kilogram for the existing gold futures. The per-lot margin will be fixed at 12,000 yen for July compared with 90,000 yen for the existing market. Transactions will be settled with cash, not with physical delivery. The daily price fluctuation range will be initially set at 120 yen, twice as wide as for the existing gold futures."
-source


India Gold ETF's


"Sandesh Kirkire, CEO of Kotak Mahindra AMC:

Q: Can you put into perspective as to how much you would actually be investing in physical gold and how much would be in money markets?
A: I think a significant portion will be in physical gold and very marginal amount will remain in cash and cash equivalents. "

-source

Gold, Forex

If you look at gold compared to other major nations currencies like Yuan, Rupee, Pound, Ruble, Real, Etc. you can see that some of them have been more strong then others and gold retraced a large amount of time and price . It has long been my opinion that gold will appreciate vs. most if not all national currencies. In terms of some national currencies gold is currently trading at serious discount. For monitoring the price of gold and other precious metals / hard currencies Vs. most national currencies I use FX CHARTS & PLOTS (v2.12)

And they tell you it is not a currency….

Today gold was clearly trading like a currency and no wonder that silver lagged. (The monetary component within silver certainly exist but for lesser extant compared to gold) Before the New York open gold was higher both in terms of Euro and USD then moved higher in USD and Lower in Euro, later the opposite: up in Euro down in USD, a sell off in both majors then a strong impulsive rally into the close.(Compare minutes XAUUSD with XAUEUR charts to notice that)


Added:

XAUUSD and XAUEUR 2 minutes chart






















The day to day action is trend less, the downside momentum is gone but some trend line resistance exists.

Gold continue to present a relatively rare opportunity in the global financial market place. An Item which is liquid, time lasting and provides insurance against systematical issues. In addition the possibility for significant price appreciation certainly exists. This is my opinion.


XAUUSD weekly log chart with Fibonacci price projections

Few clarifications

Dear readers,


I got some nasty massages and emails lately, namely personal attacks. I just want to remind that I'm not a registered investment advisor, broker or dealer. All content on this site is either quoted from other online sources (normally linked to the source) or it is my own analysis and thoughts. Either way I do not recommend that anyone will act upon my analysis.

If you want to trade / speculate in capital markets be sure to take the time and study.

Regarding IMF, BIS, any other official organization and its employees: I have respect for all of those as I do think that some kind of supervision on the system is required. If I ever insult anyone or anything, please forgive me, I bag your pardon. My intention in referring to official institutions is to educate or archive events that I see as remarkable.

If time allows I will keep this blog up to date with my occasional analysis and anything interesting for me and my readers that I might find elsewhere.

As for the price of gold, it might be the case that higher gold prices will be required to support the structure of the global monetary system and general capital markets. Timing however remains a mystery.


Good Luck.

XAGUSD Chart

The Silver wave count seems to be a bit head of gold as observed by comparing recent cycles lows. Overall gold and silver haven't done much lately but continue to be attractive at current prices with significant upside potential.



XAGUSD Daily Chart

Switzerland gold sell ?!

The sell if they will isn't as meaningful as the reporter wants you to believe. Consider that the outstanding notional amount of gold over the counter derivatives is 463 billion USD , reported by the BIS December 2006.

Switzerland's central bank is to sell a further 250 tonnes of gold, dashing hopes for a revival in depressed bullion prices after months of heavy selling by Spain and Belgium.

The Swiss National Bank is world's fourth biggest holder of gold after the European Central Bank system, the United States, and the IMF. Most analysts thought it had stopped selling its horde after a 1,300 tonne "purge" between 2000 and 2004,

The SNB said yesterday it would feed a fifth of its remaining gold onto the market gradually between now and September 2009 as part of a rejigging strategy for its reserves.

source


COMEX gold contract for December 2009 is currently priced at about 750$

Few Notes

• There is probably an ongoing gold &silver options repositioning.

• Gold / oil ratio should continue to move up (15).

• Gold / silver ratio, many traders are probably taking this trade , not that wise especially for small or big trades, mid size can do better.

• XAU, HUI indices seem to confirm the turn.

• Trading continues to be internally technical.

• If I read the chart correctly 680 shouldn't be very difficult for start.

• The downtrend is dead, long live the uptrend.

XAUUSD Waves Update

Dear readers,

Gold have probably bottomed and in time will be headed higher to challenge recent highs at 700 U$D / 520 € / 83,000 ¥. Silver confirms this assumption and the silver /gold ratio shows relative strength.

Elliott Waves Cyclical view: The advance from the recent low consist of multiple sequences of intraday impulsive 5 waves patterns (visible on minutes charts). Despite the recent failed (v)[green] wave within the last (i) [blue] wave, the previous bullish Elliott wave count remains intact .

The count on the chart below is consisted of multiple first and second waves which are typical for extended third of the third waves. If the count is valid then the lion part of the advance is yet to be seen. I see no reason to mention upside target for now, as, the 700 $ level along the Euro and Yen targets need to be challenged first.


Again, Forex and Metals traders should note the possibility that gold and silver can go up along a rising USD index. (See chart here)

Strategy: buy pullbacks as long as spot silver above 12.37$ and gold spot above 632$.


XAUUSD (spot gold) daily chart

ZG, GC & Spot Charts update

Gold options expire, futures contracts are rolled over (June to August), Statistics coming in at 8:30 and 10:00 AM. Technically the market is extremely indecisive and market participants wouldn't want to be heavily committed.

Elliott Wave update will be coming as soon as the picture gets a little bit clearer.

ZGM7 CBOT Gold Intraday (120 minute) chart



















GCQ7 COMEX Gold daily chart



















XAUUSD (spot gold) daily chart

Elliott Wave Principle

Dear readers,

Gold and silver caught some bids today and closed higher along a rising US dollar. Those of you who have been following my posts were certainly not surprised.

Some readers have emailed me with questions like: how do I make my gold price predictions (which are often very accurate) and what technical indicators I use for trading?

Well, I look at many different things: price & volume action, chart patterns, candle sticks, Fibonacci levels, moving averages, PPO, RSI, Stochastic, Inter market relationships, market sentiment and more. But above all cyclical analysis, namely Elliott wave analysis.

Elliott wave analysis is far from being a perfect tool (what is perfect?) However, as regards to making predictions Elliott waves counting when combined with other market indicators is the most valuable tool in my opinion.

Once you understand how the wave principal works, you will learn to respect the market opinion, you will stop looking for reasons to explain why the market is doing this or that. You will learn to accept the cyclical nature of waves.

One excellent book for learning wave analysis is: Elliott wave principle by Frost & Prechter.

By the way, I'm currently reading Prechter's latest book: How to Forecast Gold and Silver Using the Wave Principle. This 483 page book is an amazing documentary which aggregates all of the author gold and silver real time analysis between 1979 -2001.

I will post a more detailed review once I finish reading this book. For now I would just say that while Prechter is usually known for his bearish predictions, I was very surprised to read about some extremely bullish price objective for gold that might still be valid today.



Short term technical update:

The price of gold is still inside the downtrend channel.


ZGM7 – CBOT June Gold Intraday (120 minutes) chart

Gold Channel Chart

The action today give the USD index a green light to go higher, don’t be surprised to see the Dollar index climbing higher for days, weeks and maybe several month.

As far as gold is concerned it is certainly possible that strengthening USD index will have less downside affect on the price of gold, but that remains to be seen.

For Fibonacci levels refer to the previous XAUUSD daily chart.

As always be cautious.


ZGM7 – CBOT June Gold Intraday (120 minutes) channel chart

Intraday Gold Chart

Dear readers,

Most assets rising in price today and the EUR/USD is higher, the price of gold is up. Positive liquidity which is oxygen for all assets markets appear yet again.

Technically: The price of gold managed to break above the sharp short term downtrend line. However, I opine that the last three candles on the daily chart are technically very bearish and that will have more implications going forward. The gold bears have spoken and showed forceful resistance.

ZGM7 – CBOT June Gold Intraday (120 minutes) chart below, annotated with Fibonacci lines and Elliott wave count

Drop & drop and drop...

Short term intraday turn up in the momentum indicators failed to materialize into rising gold prices. Gold then dropped like a rock below this month low.

A lower low after a lower high is technically bearish. Spot Gold is currently trading around the dreaded 666$ level.

The uptrend on the daily chart is still intact but might not hold.

Elliott wave cyclical point of view: I think we just witnessed a truncated v wave.

I'm not ready to get long term bearish here but more downside is certainly possible.

Spot Gold daily chart

Gold Market Commentary

As yesterday low failed to hold a selling spree begun. Buyers quickly lowered their bids and the price of gold tumbled. Personally, I had a small short term speculative position which was immediately stopped out for a minor loss. When a FOMC is scheduled I never hold a large position. So it goes...

Technically the daily uptrend is still intact. HUI, XAU, and GOX actually finished the day higher but GDX closed lower. Silver pulled back less then it normally does on events like this.

CBOT June gold (ZGM7) intraday (120 minutes) chart



















Gold in nominal USD terms is trading near record levels. If you refer to long term gold charts you will easily notice that gold have been trading at current levels for very short periods of time. I mention this because I think that physical buyers see current levels as unsustainable and thus shy of buying large amounts of gold. Some more time might be needed to digest the current price level. Hence, egg pattern, prolonged incubation process then an inevitable hatch.

All readers are welcome to share their outlook, analysis and opinions. You can do so publicly by posting a comment on blog or privately by email realggp@hotmail.com

Gold Charts

Technically there is not much change… The uptrend on the daily chart is intact.

COMEX June gold (GCM7) daily chart- the price is still between the 50 %( 672.50$) and the 61.8 %( 695.8$) Fibonacci levels.




















CBOT June gold (ZGM7) intraday (120 minutes) chart – the price recently bottomed at 670.1$ and again at 684.1$ today. Bottom to top and top to bottom short term Fibonacci levels are added.

Gold & the US Dollar

The last time the US Dollar index was around current levels gold was trading almost 250$ lower. In early 2005 a bottom in the USDX was realized and the Dollar climbed 11 points. At the same time gold was initially trading within a tight trading range till breaking out and rallying along the USD.

I have been watching some gold & USDX charts lately, my insights are:

The inverted correlation between gold and the USD is not reliable.

The scenario in which gold and the dollar are both trending higher might repeat again.





Short term bottom seems to be in place (or near) for the USDX. If the Dollar will start to rally soon it might have an immediate negative affect on gold but that will be limited both in terms of price and time.

Intraday Wave v underway but ...

Dear readers,

The gold market showed strength in the face of rising USD Index. This fact which probably surprised some traders - will be very useful at a later stage of this gold global bull market.

Technically, as the price of gold broke above the short term downtrend line the bottom was confirmed. Gold then spent some time back testing the downward slope line and then headed higher. Once gold managed to exceed the highs of the day (yesterday) a flood of market if touched (MIT) buy orders were all over the place and the price was quickly marked up.

GCM7 Gold June Comex Intraday (120 min) chart

























There is literally tons of resistance from here all the way to 700$. This is the intraday wave v and once completed a correction will be needed.


GCM7 June COMEX Gold daily chart


















To understand my technical work you must have knowledge of Elliott wave theory. You might want to check this online tutorial. For access you only need to be an Elliott wave international club member. If you can afford then order R. Precter book: How to Forecast Gold and Silver Using the Wave Principle.

Short Term bottom in place?

Dear readers,

Seems to me like intraday wave 4 is over and wave number 5 is underway which should exceed 698$ for the Comex June contract (GCM7). For the relevant Elliott wave count refer to this post.


A break above the short term downtrend line will give confirmation.

GCM7 Gold June Comex Intraday (120 min) chart

Short Term Update

Dear readers,

The Europe session will soon begin and the short term momentum haven't turned up yet. So whether we like it or not short term downside still possible. The GC June contract (COMEX GCM7) is trading between the 50% and 61.8% Fibonacci levels. Long silver short gold spread trades haven't been profitable for a while so take note. As always, keep an eye on XAU, HUI and Of course EUR/USD & Crude.


GCM7 June COMEX Gold daily chart

Euro at All Time High ?

Gold & Silver gained some ground as the Euro makes a new all time high (or is it?)


The Euro was introduced to the world financial markets as an accounting currency in 1999 and launched as physical coins and banknotes in 2002.

source

As explained several days ago, pre issued Euro high was actually higher at about 1.4570$



Long term (30 years) retro perspective EUR/USD chart.

Gold Spot & Futures Charts

The USD Index hovers near decades lows, the EUR/USD pair kissed its all time high (~136.667) currently floating less then a cent below. The jury is still out as things can abruptly change on a penny or less…

So far June COMEX gold contract failed to exceed its late February high (~699$) while spot gold managed to trade above the same cyclical high. The contango is taking its toll.

XAUUSD Intraday Chart (4 hours candles). Annotated with Fibonacci levels and Elliott wave count ( wave 4 underway). As posted before; ~667$ spot remains target before heading higher.


















GCM7 - COMEX Gold June contract daily chart. Annotated with Fibonacci levels and Elliott wave count (wave iii blue underway). Note support at ~672$, just below the 50% Fibonacci line.

• As explained before, take any of my posts in the right time frame context.

• I observe and estimate that the price of gold is constructing an Egg pattern which requires extremely high degree of patience.

Educational Gold Trading Video Collection

Educational Gold Trading (or related) video collection.

Video wall by Blinkx.


Thanks for all video contributors, send me video links for inclusion consideration.

Market updates and charts will be posted as needed.

Update

Quite but tensioned trading as the US Dollar index is very near to historical lows (see USDX pattern target) and the EUR / USD pair is 100 pips below the all time high ( I'm referring the high of the actual Euro , theoretically – pre issued EURO was actually higher). Silver continue to lag behind gold, HUI & XAU pulled back slightly.

In depth look at HUI & XAU.


That’s all for now...

Five Interesting Blogs for the Weekend

• The Elliott Wave Lives ON – Excellent Elliott wave blog, S&P and GLD wave counts included.

• JsMinset – Jim sinclair popular gold blog.

• Well designed and informative - Grace Cheng Forex Blog.

• Advanced XAU / GOLD Ratio Analysis at paint the charts.

• Silver serial commentary and insights at Silver Axis

COMEX GOLD (GCM7)

Dear readers,

Just a quick chart update, this time for the COMEX Gold active contract (GCM7). COMEX is where the big guys like to hang out.

Platinum ETF might be issued in Switzerland

Daily chart - COMEX June Gold 100 OZ Contract (GCM7)

IMF Gold Sell

Just for the record, someone needs to track these guys.


Japan's Omi Recommends IMF Sell Gold Reserves

Japan's finance minister said Saturday he had proposed to the International Monetary Fund's policy-steering body that the fund sell its gold reserves to cover its falling income.

"Japan has told (the committee): 'Why not sell gold?'" Finance Minister Koji Omi told reporters after attending the International Monetary and Financial Committee's spring meeting in Washington.

Omi's proposal is in line with Japan's long-held stance as well as recommendations made earlier this year by a high-level panel at the IMF. In late January, the panel, chaired by Andrew Crockett, president of JPMorgan Chase & Co. (JPM), urged the fund to sell some of its vast gold reserves and invest the proceeds to raise income.

The fund currently is unable to earn enough revenue to cover its operating costs because of its shrinking loan portfolio. Countries such as Brazil, the Philippines and Uruguay have paid off loans from the fund ahead of schedule, reducing interest payments to the international lender, while fewer nations are seeking the fund's financial support.

Commodities traders have been closely watching the IMF's handling of gold. The fund is the third-largest holder of gold reserves in the world, after the U.S. and German central banks. As of late last year, the IMF said it held 103.4 million ounces of gold. -source

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