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Do you see gold hitting $2000 by 2012 June or would it be a repeat of 2008 where gold corrected about 30% from its peak together with a stock market crash?
Last night ECB's Draghi squashed the idea of large bond purchases by the ECB for now and gold was sold off just when I thought it is about break on the upside of it's coiling pattern
Can you help answer these questions from other members on NexusFi?
Here's a recent comment from Jesse @ jessescrossroadscafe[dot]blogspot[dot]com
This second quote refers to the MF Global bankruptcy. They were able to use a loophole by including a clause in their customer agreement to hypothecate and rehypothecate money from their clients' accounts. The problem is that many banks and I'm pretty sure that all futures brokers also include this clause in their customer agreement. This leaves everything to whether or not the managers of these institutions will use that loophole. A risky proposition in my opinion.
I hate putting a price on something because I'm simply not good at that. But I'm pretty convinced that gold will go up from current levels simply because everything else is deteriorating, and that is why I believe it is a reasonable wealth preservation unit.
There's also the question of liquidity in all this. With reports of mutual funds running at record low levels of liquidity, they might have been in this bear raid, waiting for a top to liquidate their gold holdings. The drop occured when the ES was topping. Selling into buying momentum is what the pros do.
If you want to talk about the pullback in 2008, well the thing is, it still got a good performance afterwards. If you're wondering whether or not to trade gold, then I would advise being nimble. These are volatile times and the last thing you want is to be, is to be married to the losing trend.
When trading, I think wealth preservation is the most important thing. Hence, I don't recommend trading when uncertainty is too high. The trend is your friend, if you don't see him, just don't jump in and expect him to be there.
Unfortunately, most retail traders don't approach trading with preservation of anything in mind. They approach it looking to accumulate or generate wealth, and the only consideration is "how much can I make" --- with zero consideration for "how much can I lose".
When I started trading, almost every books I read advocate trading with the trend and legendary traders who make it big were those who ride the trend.
There are those who can trades well with the trend but I eventually come to realize I don't day-trade well with trend, I do suspect its because the market had evolved - trading with the trend had become too obvious and indoctrinated into the masses such that it can be exploited - especially in today's market which are dominated by trading bots.
Instead day-trading S/R levels and MAs had been much more effective for myself.
attached is a XAU/USD chart, gold rally from 1595 to 1802 and then the rally fizzle, as shown in the dotted white triangle, the equilibrium is nearly completed and near saturation, most likely gold will move down when price break the EQ 1762.8-1714.5-1666.4.
attached is a chart which show the effect of resonance in J-Chart, when price reach 1755.8 on 8 Dec 2011, it has the same image point as the previous 2 equilibrium. usually when this happens, resonance occur and there is a high change of reversal which …
attached is the latest XAU/USD, as analyzed in previous posts, bearish bias on gold which is playing out now. looking to sell when price breaks around 1703.
Update: EQ1762.8 - 1712 -1661.2 was broken, low was 1660.5. With the breaking of this eq, price …
to conclude : thoughts on the fundamentals of euro, IMHO to solve the euro zone problem, the countries have to do the following : 1) devalue euro 2) sell their gold reserves. So it will not be a good idea now to buy both.
For now, I'm of the view this fall in gold present a great opportunity to buy for long term - 2 years. But it is definitely possible for gold to fall even to 1200 before the next leg up - bigger than what we witnessed this year
