Spot Gold Chart

Dear readers,

The price of gold bottomed at early January and managed to climb about 60$ (roughly 10%) . I'm posting a gold spot chart with several Fibonacci sets, diagonal support lines and the continuation of the Elliott wave count.

Enlarge the chart for better view.

Spot Gold (XAUUSD) Intraday chart Update

Below is spot gold 4 hours chart (click on the chart for larger view)

Dow/Gold , Gold/Oil Ratios – Update

1) The Dow Jones Industrial Average made a new all times closing high of 11,727.

2) Gold is sharply lower. Cbot gold trading had another serious malfunction today (not the first one this year…), AMEX GOLD BUGS INDEX is down 6.67% for the day.

3) The Dow / Gold ratio is nearing completion of an A-B-C correction wave – in my opinion.

4) The Gold/Oil ratio closed above its 200 weekly moving average for the first time since early 2004.

for more information and charts of gold ratios, See this post : The importance of the Dow Jones / Gold, Gold / Oil & Gold / Silver ratios.


See also HUI/Gold ratio.

XAUUSD - Fibonacci levels

Below is intraday spot gold chart with two sets of Fibonacci lines. Click on the chart to enlarge.

Gold spot one hour chart

Gold and silver Recovery is almost as sharp as the correction. The violent down move was clearly non sustainable and counter move quickly followed. If you trade this market using margin use it very wisely if any. As the bull market continue it is very logical to expect similar moves and even more volatile market. Gold outperformed both the XAU index and the HUI index today, in my opinion it is not a sign of weakness but a possibility that investors preferences are changing and the metals are set to outperform the stocks , time will tell…

Click on the chart below to enlarge:




Special risks when investing in a mining company

Indonesia seeks revised Freeport-McMoRan profit-sharing deal

XAU – Philadelphia Gold & Silver Index

Not Much change in the gold market today, silver pulled back some but not too much.

CBOT Expands Precious Metals Complex and Launches 100 Ounce Gold Futures Options read more

Expect more of the same for the foreseeable future. New exchanges for gold and commodities will open all over the world as the sector will be more and more interesting for Investors. Long way to go...

Gold Indices have done great the last couple of month as Investors like stocks better then futures or physical stuff. I expect that to change over time and will not rule out the possibility that gold will outperform most of the gold stocks or at least the gold Indices; likewise I am not sure at all that silver will outperform gold.
In my opinion all gold and silver "Investors" should have some physical metal at hand – especially small investors.

More later – real1.


My last review of the XAU Index:
Gold global perspective: The gold stock indices

The gold stock indices

There are 3 main gold stocks( gold and sometimes silver mining companies) Indices: CBOE GOLD INDEX(GOX) , AMEX GOLD BUGS INDEX(HUI) and the most known PHLX GOLD AND SILVER SECTOR IND (XAU).
The fact that the gold stock indices had very small correction is a positive sign for the near future price of gold ( the gold indices tend to lead the gold price most of the time).

Not much have changed today with the price of gold but gold indices moved higher.

Please note that gold & silver stocks are very different from the metals for a wide range of reasons : production cost , declining reserves, politics , hedging, human factor – to name a few... , However it’s interesting to follow their performance for general market sentiment.

Gold is a chemical element in the periodic table that has the symbol Au (L. aurum) and atomic number 79. A soft, shiny, yellow, dense, malleable, ductile (trivalent and univalent) transition metal, gold does not react with most chemicals but is attacked by chlorine, fluorine and aqua regia. The metal occurs as nuggets or grains in rocks and in alluvial deposits and is one of the coinage metals.
For millennia, gold has served as money and is also used in jewelry, dentistry, and in electronics. Gold forms the basis for a monetary standard used by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS). Its ISO currency code is XAU.

here is what the IMF have to say about gold :

• The IMF's policy on gold is governed by the following principles:
  As an undervalued asset held by the IMF, gold provides fundamental strength to its balance sheet. Any mobilization of IMF gold should avoid weakening its overall financial position.
  
• The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies.
  
• The IMF has a systemic responsibility to avoid causing disruptions to the functioning of the gold market.
  

35 years price history of gold (Courtesy of bigcharts.com)

more later, real1.