70 thoughts on “GOLD SENTIMENT

  1. bginvestor

    I checked the vertical height of the 2016 break out; if it does similar, its got a ways to go before the daily high cycle..

    However, with that said, I would expect less height since the 2016 break out was from a long term decline.

  2. jacob2

    Need no chart for oil sentiment (favorite sector). WHEN oil turns there’s going to be a lot of drama. Harvey, infrastructure spending, lower taxes, lower dollar, higher oil= INFLATION imho.

  3. Nada

    Someone asked about 1267 and goldpredict;

    Who knows. In regards to goldpredict. I would not use him as an example of someone that knows what is going on with gold price action. He has missed two ICLs in a row and has been wrong about gold for the last 4 months in regards to short term moves. So now he is calling for no move back under 1300. I guess he has finally jumped on the train after been left behind for the last year. All his trades have failed for the last 6 month, so to me he is in tilt with no real insight to offer.

    I like his cautious outlook, to keep one grounded but that’s about all you get for the subscription fee. With that said, yes 1267 .5 fib is now impacted due to the new high. Since this is a news event, I have no clue how high it will go. Commercials are loaded for bear, cycle is stretched and sentiment is extreme, so a DCL hunt will happen soon enough, but..

    “The market can remain irrational longer than you can remain solvent.”

    This is why I always buy time with options. I am in Nov puts and will observe price action once US boys come back from vacation to see if to cut loss or take a DD with the outlook of averaging down. Obviously it is very dangerous to short gold with Kim Jung Un, debt ceiling and German elections coming up this month. For sure Monday morning will sting, but it may be an opportunity as well.

  4. Pedestrian

    A further note to commentary on the prior thread regarding the Chinese Yuan and its redeemability in gold, we have Martin weighing in with an interesting take. What I had said (which probably sounded ridiculous at first blush) is perhaps not that crazy after all.

    What I remarked on was the act of making oil contracts redeemable in gold (instead of Yuan) is that it makes the Yuan a gold currency by default. Since oil is the most widely traded commodity on the planet it matters which currency it is settled in. And if settlement of oil contracts in gold (which is really a global currency unto itself) is permitted it makes the currency issuer stronger because the act adds credibility to the exchange process.

    We should note that the Chinese did not make their oil contracts to be settled in dollars (which they are increasingly short of) but chose gold instead which is nobodies currency. That interesting take suddenly makes gold relevant again since it is now once again a tool of monetary settlement and puts to rest the popular Central Bank notion that gold has no place in international trade anymore.

    Apparently the Chinese disagree about golds irrelevance and have found a new use for gold which will be applied as a tool to give the Yuan greater credibility and assure a process to settle as an alternative to any single currency.

    So this is a confidence issue and the ultimate goal is to increase visibility of Yuan as its central idea. By using gold as the medium, Chinese authorities have exploited an opportunity that will likely work well to their advantage.

    Here are Martins comments on PEGS versus LINKS which I found to be fascinating:
    ————————————————–

    “The objective is to establish the yuan as a reserve currency until we reach the Monetary Crisis Cycle conclusion. The logical step is to try to boost the yuan as a redeemable reserve currency with stability. You either PEG it to the dollar (unwise for political reasons) or you “LINK” it to gold – but do not PEG it to gold. If you attempt to PEG the yuan to gold, that would fail for you are making the same mistake as Bretton Woods. The only possible way is to “LINK” it to gold but on a floating exchange rate. That way you are encouraging confidence in the yuan allowing it to be redeemed on a floating basis with gold. Hence, the political risk of the currency is reduced for it could become possible that the currency system breaks apart and political currencies could be…frozen and nonredeemable”. — Martin Armstrong

    GOLD, OIL and the DOLLAR
    https://www.armstrongeconomics.com/markets-by-sector/energy/gold-oil-dollar/

  5. Pedestrian

    OK, so here we go.

    Lets take one last stab at attempting to divine where gold will reverse. For the past two weeks gold has defied my best attempts to ascertain its top but I have not completely given up hope and I have one more chart that just *might* make the case.

    Its Platinum at the weekly level.

    We already know one important thing about the platinum market that maybe bears repeating here. First it has a good current correlation to gold but more importantly it can lead price changes at turns. The important thing I refer to here is that platinum trading is dominated by professionals so the chart can be a more reliable indicator or sentiment where it counts.

    If retail is excessively bullish we can’t necessarily see that on the chart but it only appears in some technical reads, COTS and that sort of thing. But my thinking here is that platinum might give us better “visual” chart clues to follow and so this weekly I have linked suggests we are at the top right NOW.

    As usual I will leave it to the technical guys in the room to draw in your own support/ resistance channels and come to your own conclusions. But to my eyes platinum is primed to fall at resistance and that decline could happen almost immediately.

    Should it break out then I think we can safely conclude gold has also turned very bullish.
    (and with luck these metals will stop humiliating me every day lately)

    Platinum on a weekly chart — We have arrived at solid resistance. It’s make-it or break-it time.
    https://finviz.com/futures_charts.ashx?t=PL&p=w1

  6. Goild

    How high can gold hike in this leg?

    The leg that started on May 2016 went for $175.
    The two legs that started on December 2016 went for $155
    If we say the current leg started on July 2017 then it is now at $130.
    Add that the main driver now is NK tantrums, then it can go another $35 to meet the 2016 high.
    There it would be a good place tol short JNUG.

    1. Gary Post author

      I would say a test of 1400 is more likely. The big institutional players like to break gold out to new highs and then sell to the emotional gold bugs that biuy the breakout.

      Most intermediate tops occur as a marginal break out that quickly reverses. Notice that the last intermediate top formed that exact pattern.

    1. Gary Post author

      My suggestion is to put the Fib retracements on the chart. Once we get the cycle top you can bet the farm gold will at least go back to the 38 and very often 50% is reached before the cycle bottoms.

      Even the baby bull met this requirement.

      The only question now is where is the cycle top going to form?

  7. Christian

    DXY is looking more and more like an undercut low and this one seems to have legs to stand on.. The timing could be perfect.

    If DUST opens with a gap down tomorrow, I’ll be buying that last tranche without hesitation 🙂

    1. Nada

      What is your average currently? I remember you entered around 25, and saw where you averaged down at another level. Hopefully you get another opportunity to get out, I am looking to add to puts at open for GLD, but may instead open calls to hedge while we wait for top. It all depends on price action. GL

    2. Pedestrian

      Wait Christian.

      We can already be pretty sure that DUST will open with a gap down given gold has already jumped today on news North Korea lit up a hydrogen bomb. But I no longer think this is the end or that we will see an instant reversal starting Tuesday morning.

      After banging my head against the charts for the past hours I finally came to the realization that price is actually going to exceed the September 2016 close. Not by a great deal either but its going to be enough to light a fire under the gold bugs in the room and send metals and miners straight into extreme overbought conditions.

      We can never know anything with 100% certainty of course but I had one of those technical epiphanies today and discovered where I went wrong with my assessment. Yes, gold is still going to go down hard this month and yes, its going to make the bugs mental in the process.

      But before that happens we will see an important technical move higher (than Sept 2016) on a weekly closing basis that is virtually certain to get everyone on the wrong side of the trade. I can hardly wait. Hell, I have been waiting a few weeks already and have been losing fans in the process since to them it looks like I am dead wrong lately.

      I am NOT wrong about gold. I was merely early. This is STILL a bear market even if we break higher.

      Anyway, I apologize that I cannot tell you what I discovered other than to say for me it was a profound moment and I now know where my mistake was made. All I can tell you is that gold is going higher than I initially anticipated on this cycle and the money will be made on the long side for the next short while.

      You don’t have to wait of course 🙂 …. I just suggest caution in a friendly way

      1. bginvestor

        Ped,

        I’ll say it again, I’m surprised how much of perma bear u are..

        we’ll see if your right , but the charts have been saying something different.. there’s not a lot suggesting this ICL is going left translated..

        I’m long.. waiting for small pull back to add

  8. Gary Post author

    You are more than likely going to be wrong again. The 2016 high is too big of a resistance level to get taken out on the first try. Plus there will be a ton of conservative traders that will take profits before gold reaches that level to lock in gains before the expected pull back from that zone. That should give us the dip into the daily cycle low.

    It’s the second or third daily cycle that will break out to new 52 week highs, and probably reach at least 1400 before the larger intermediate cycle tops.

    Haven’t you noticed how price (in almost any asset) almost always has some kind of correction before it actually reaches a major resistance zone? This is the conservative traders and people that got in at the bottom playing it safe and locking in gains a little early.

    Then you get the second push that makes it all the way to resistance which then turns price back down again.

    Has anyone noticed how the SPX came up about 8 points shy of testing 2500? That was a bunch of traders getting out just a little early. 8 more points isn’t that big of a deal and that’s why the S&P came up just a bit short. Now it’s time to test 2500 for real. I expect it will have a bit of trouble breaking through on its first try.

    1. Pedestrian

      That makes perfect sense Gary and I don’t for a moment think what you are saying is impossible or even unlikely. Indeed, it is very likely price will initially get repelled just shy of the 2016 highs before going on to exceed those highs. Since you read my post you no doubt noticed I didn’t address the mechanics of how gold gets to a number greater than last years high, only that I now believe it will.

      On the part about being wrong we will also have to disagree.

      At this point all I can be accused of is mistiming the turn and selecting a resistance level that did not pan out. But we ARE going to see an important bearish reversal and this coming peak will mark the highest level we will see for the rest of the year.

      That was my contention already. Only I thought price would fail well BEFORE we got to the 2016 resistance. In the process I have missed a piece of the August rally but I’m not shedding any tears over that. It’s far more important to me to get the pattern right and understand what’s coming next rather than just be satisfied having picked off bits of a single move.
      ————————————————————————–

      So to be very explicit on what I see happening:

      Gold will exceed its 2016 highs by a modest margin. Say 10 dollars round number.
      Gold will NOT get to 1400 dollars in 2017.
      The peak we see this month will be the top for the remainder of this year.
      There is an important bear trade impending on a cyclical basis that will go MUCH lower than anyone here imagines (so look out below).
      Gold will eventually fall below 1000 dollars before its next yearly cycle upturn in 2018.

      Everyone here can save the name calling until I am proven wrong.

      1. Gary Post author

        Yes gold will make it’s high for the year sometime in the next 2 months.

        But the next lower low will hold above the July low.

        Gold will continue to make higher highs and higher lows. Why? Because it is in a new bull market.

        1. Pedestrian

          LOL!!!!

          I knew you were going to say that!

          Gary, gold is still going to be in a bear market even when it gets above the 2016 high. I have no way to explain this to you any more simply but you will know it without a question or doubt when we fall below the 2015 lows.

          Just a matter of time.

          I am so sure that I’ll even bet you a Burrito on this call.

          1. Gary Post author

            I’ll be happy to make that bet. Gold will easily make it to $5000 during this 8 year cycle and maybe $10,000.

          2. Pedestrian

            I never said anything about where gold would top out Gary. All I am saying is its going to have to go back down (a lot) before we get there. Ten thousand is preposterous by the way. Five thousand is not likely either unless we get a lot of inflation which really isn’t in the cards.

            I’ll go with a peak that does not exceed the 2011 top at most.

          3. Gary Post author

            Which is more preposterous, gold will go above $5000? Bitcoin will go above $5000? The Dow will go above 20,000? Or the Fed will print trillions of dollars out of thin air?

          4. Pedestrian

            OK, I will answer that but it’s going to run longer than usual…
            ———————
            It is definitely gold, Gary. It is already overpriced as it stands based on the historical charts and still due to retrace much of the rise we saw during the 11 year bubble since year 2000.

            How well do you think gold will stand up during a credit bust (it’s coming) which is a defacto deflationary event because it sucks the life out of the money supply during a contraction? We are talking dollars here of course, not some third world currency and of course gold is priced in dollars so that is our reference point.

            And since a deflation is without question in the cards because credit (and therefore the supply of money) are going to contract when the bond bubble deflates then why should we suppose gold will soar in the opposite direction priced in dollars?

            A credit contraction generally means that dollars increase in buying power as there is a shortage of them.

            But you will probably say that dollars are going to decline in purchasing power and as the buck weakens gold must therefore rise in response. And the reason that dollars are going to fall is because the Fed will unleash trillions more on the economy.

            And maybe you will be correct. The powers that be have already floated trial balloons about creating a minimum income for all citizens and surely that is one way to offset a contraction in the money supply and create as much inflation as needed.

            But that has not happened yet and is still purely hypothetical.

            Even I will admit I don’t know exactly how this is all going to play out since the dollar does look like it is nearing a time for a cyclical downturn sometime in the next 12 to 18 months. But I still cannot fathom that the dollar will fall that steeply given the weight of the credit contraction that looks inevitable.

            Meanwhile, we should probably clear up the terms of this discussion. I think what you are referring to is the nominal value of gold at some reasonable future date. Say 3 to 4 years in the future for the sake of argument. You can correct me if that is a wrong assumption.

            What I am talking about though is the REAL value of gold with the effects of inflation stripped away. And in real terms gold is almost certainly overpriced on a hundred year time frame.

            Nominally however it might go to 100,000 dollars. I really have no idea because that part of the future is not known. The dollar will have been utterly destroyed in that process along with the way of life in America and we might well imagine a cup of coffee that today costs 3 bucks will instead run in excess of 200.

            But I imagine that ounce will still only buy the approximate median of what it could buy at any other time in history. Getting back to my point though, gold should fall in real terms in the future which is another way of saying that even as it increases nominally it is going to be declining in purchasing power.

            I will repost that chart of 100 year gold to help make the point.
            http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

            Notice that in the chart we can see a price peak in 2011 that is actually lower than the 1980 high when we have adjusted for inflation. Isn’t that kind of curious? Gold in real terms never even attained the level it saw 4 decades ago when it went parabolic this last time around.

            What is of interest technically is that the lower high in the second bubble of the last 100 years is warning that the next high will come in lower still and not that gold will be rocketing to the moon at all. So its purchasing power in other words will have to fall in order for the chart to make sense.

            You may say on the other hand that this chart is incomplete and we are only half way to the top. That the secular bull market in gold never ended and there is still another leg higher.

            But as I have mentioned a number of times already, the difference between the two price peaks is an almost perfect Pi number measured in years or months and to me that signifies that we have completed the second price peak already and will not go higher other than nominally because the secular bull ENDED 6 years ago already.

            So in real terms gold will actually trend down for many years.

            Maybe I am not doing the best job of describing this scenario but hopefully you will get my point. I simply cannot come to terms with a gold number anything like 10,000 dollars when I also can easily see we will suffer recession or worse during a period of contracting credit and money supply.

            Unless the Fed and Treasury are about to deliberately devalue the dollar and cause an eruption of inflation during a time of falling demand, sovereign debt failures and low growth (severe stagflation coming?) then it just does not fly in my books.

            But I am only working with the information I have today. If you can make an argument for why gold will get to 10K within any reasonable time period then go ahead and make it. But what I am saying is that 10K won’t be worth snot when that day arrives and therefore maybe gold is not the thing we need to be investing in at all.

            I mean, why would I be interested in any ounces of gold in the future being able to buy a lesser percentage of what an ounce of gold can buy today? That’s what the chart above says is going to happen.

            So 5000 dollar gold doesn’t even interest me if it cannot keep up with the inflation implied. I certainly won’t be better off. There has to be something better to buy that throws off interest, dividends or profit.

            Gary, this is why I am a reluctant gold bug and prefer to not buy and hold the stuff. It’s because I am just not a believer in the argument that gold is an adequate defense against what is inevitably coming our way.

  9. TraderPete

    I think I know where Pedestrian gets his ideas from. He gets them from The Elliot Wave Theory (The Wave Principle), specifically, Elliot Wave International (Robert Prechter’s outfit), which, as we all know, is a Fool’s Paradise. Also, I suspect he is drinking the Kool-Aid offered by Harry Dent.

    1. Pedestrian

      No Pete. I don’t follow Elliot theory as I already pointed out in a previous post.

      And I don’t use Harry Dent’s dismal gold numbers although I respect his ideas because they are groundbreaking where demographics are concerned. And for that matter, I don’t crib Martin Armstrong’s work either but I will tell you I really appreciate him on guidance because he is a unquestionably brilliant.

      I do my own chart work. It conflicts sometimes with everyone else. It does not agree with the many gold-bug analysts that are popular at any given time. But it is independent research based on my own gold charting and the correlations between other assets.

      You are more than welcome to ignore it if you disagree. I suggest you keep an open mind though.

        1. Pedestrian

          So here is an answer to that.
          https://goldprice.org/gold-price-chart.html

          It is a gold chart just like many other gold charts. At the top you will see that there are 4 peaks. Each peak is successively lower than the one that precedes it. So we have a high, then a lower-high and so forth.

          The importance of that chart formation is that it signifies there WON’T be another primary high that exceeds the multi-year peak set in 2011. In other words, had the secondary highs come in above the first peak then we should have expected the secular bull to continue up to another level.

          But that did not happen.

          Each peak came in as a lower-high on a primary price topping pattern that took 11 years to form and which was actually more than 3 decades in the making since the previous primary high of 1980.

          So you are going to be wrong Gary Savage.

          This is now a secular gold bear market we are enjoying and its hardly even gotten underway yet. The best we can hope for in real terms is a price that meets but does not exceed the 2011 top. That will still be a great rally if it comes off a low in the 950 region as I imagine will happen.

          But just forget 5000 dollar gold right now. That ain’t gonna happen anytime soon.

          1. Gary Post author

            The chart is just a 5 day chart???

            I’m not going to be wrong. Gold is in a new bull market.

          2. Pedestrian

            Yeah, seems its one of those charts that posts automatically at the default level. I have it set for a 10 year view so you will have to click the 10 year button to see what I was talking about.

            Very sorry. Next time I won’t use Goldprice.org

          3. Gary Post author

            I’m not sure what I’m supposed to see on a 10 year chart. There’s nothing any different happening now than what happened from 74 to 76. The bull retraced almost 50% before rocketing to $850. 2011-2015 was the correction that setups up the slingshot to the upside that will eventually culminate in the next gold bubble. Not quite a 50% retracement this time but this time it took longer so in the end it accomplished the same result. It cleansed the bullish sentiment.

            The next phase will take the Dow gold ratio back to 1:1 or lower. Maybe lower this time as this time there is trillions and trillions of freshly printed currency units to drive the bubble.

          4. Pedestrian

            Sure its different. The 74-75 period was a simple double-top (twin peaks) signifying an interim decline to get underway, not a termination pattern of a final top.

            Also depending on the gold chart you are using the 75 peak was higher if intraday prices are used. The Macrotrends chart I linked previously shows that 1975 came in as a higher-high than 1974 (click to remove the inflation-adjusted setting for a clearer view).

            So that information would have told you to BTFD.

            We are not getting that same message on the 2011 peak. What we are being told instead by the pattern of peaks is to sell every rally and that’s what my program has been for 6 years already.

            So I pay more attention to the bear side of the market.

    1. Gary Post author

      The bullish percent isn’t a sentiment indicator. It is an overbought oversold indicator based on how many stocks in the index are on a buy signal on their point & figure charts.

  10. Goild

    Well, indeed gold can and likely will continue hiking based on NK tantrums.
    Though if they dissipate, gold’s hike may be supported solely by air and quickly fall to $1260 where it reversed one month ago.

  11. victor

    Goild, I think you can’t wait market to open… ( :
    One analyst I respect pointing out on September 11-12 and 28-29 as important dates that prelude big stock market selloff in October, will see…

  12. Goild

    Victor,

    Perhaps we can project that on December we will have a gold low as it happened several times in the past.

    October would be a good month for the SM to have a good dip, perhaps pulling gold down till December

    I start my trading day telling myself to not lose money. Then I set a red line to warn me about falling knifes.

    Recently I am looking at pivot points, and support and resistance levels. An interesting subject.

    Have a nice evening.

  13. deak

    Gary i hear you with that macro view.

    Traders, i need to know what Draghi is going to say Thurs. so i can make a killer short term option play, do i front run Draghi here & play JDST w/sentiment high, or play JNUG for a last pop, or sit it out?

  14. dboz

    As of last Friday, Gold is 65% and Silver 63% daily bulls. Not by any means extremes yet. Plenty of upside is possible. Not sure how deep a pullback we will get but there will be a pullback at some point. Just not sure when.

    That said, market futures are looking a little dicey for tomorrow.

    1. Pedestrian

      Just what I was writing about above:

      Dollar shortages usually result in the strengthening of the currency. What can come next is tightening credit conditions, rising interest rates and reduced demand for corporate and retail loans which lead asset prices to fall back and growth to slow. More serious outcomes can be recession and in worst case scenarios the more rare depression. All of it is going to be the opposite of what we have known for the past years of QE when excess liquidity was like a sea of froth spilling out across the worlds asset markets. So a contraction of dollars is in effect a deflationary impulse on many parts of the economy and will dampen speculative spirits. The thing is, as a chartist we can see that we are near a cyclical downturn in dollar strength and that idea is clearly at odds with what I just wrote above. Indeed, how can we experience a dollar devaluation when the currency itself is becoming scarce and the money supply in contraction. Perhaps something else is going to happen. There is an obvious conflict between what the charts are warning is coming and what the news says is taking place in the real world.

  15. CooLoser

    Hi Gary,
    Do you think the Bitcoin Bubble could be popping?
    It’s currently trading at $4259.58 this morning.
    That’s more than $750 from the all time highs.

    1. Nada

      Assuming we hit a cycle top on the NK test, .5 retracement would now be around 1272ish. Spot gold reference. Today’s price action will be key. Hopefully the boys come back from vacation thirty for USD.

  16. ARends

    Pedestrian,

    I listened to Harry dent and few others Looked at your charts. in view of technical we can look out of different POV while gary indicators carry enough value to a bull than a bear argument presently. I agree with Gary on technical. Your inflation adjusted link is great but just prove the manipulation of gold and suppression of price for many argument reasons.

    The bubble phase/ excelation in next few years has got enough backing from the POV I believe below. Fear and driving factors for risk are entrenched in investors seen by Gold action with Nkorea in impact that will play out in all of many geopolitial events or financial crises fears that there is too many, how ever the following will escalate it even more.

    Looking at FED balance sheet and gold http://www.macrotrends.net/1486/fed-balance-sheet-vs-gold-price.

    I see a clear point in 2013 which is period believed suppression started with meeting Obama (and excutive order) had with FEd and other info I read GOLD loan of KNOX for futures trading security (not have article presently) of banks if I am not mistaking. This graph makes it very evident I believe in it self.

    Considering all the basis POV GOLD is traded for, the SDR coming into place that is going to be foreseen commodity based, China hoarding of GOLD of past 15 years and studies that show how they have been hiding the bulk values not going through markets. The oil and Yaun backed by Gold demand impact coming into play now Then there is trades in futures much more than present GOLD. The monetary value initiated for demand as oil large demand (all the wars that US tried to protect that as dollar backed being the reserve currency). The fluctuating currencies also being established for trade. BRICKS trade set up by CHINA with most countries included but the USA with China pushing GOLD. Voting of all these countries against the USD as reserve was recently short 0.1% at IMF in majority to US vote. There has been such a deliberate suppression of GOLD for some reason. There is a clear path for the dollar demise I believe as china taking over with world trade initiative (Treaty on SILK trade path). We have not considered the debt and where QE still goin to flow and all arguments of risk back of save havens as we see the flattening of the yield curve (sign as many other of US on demise and market ready to crash) and safe havens are going to become key as other bubbles are popping up with investors that will have to start flocking in the direction just in POV true bull identity.

    Considering oil trades that will require delivery of gold rather than just trade funds with paper trades. The actual demand would also have an impact which has been a huge argument of Gold traders for actual GOLD delivery, that would fail due to lack of Gold to paper that is already on the brink presently with aper just keeping affloat (failed US manipulation with china gold initiative) then the culture of investors to security of Gold might be on little hold after technical picture in meduim term that is clear bull in meduim-long term to start piling in.

    I believe there are more factors for bull in GOLD that factor in the technical bull option to bear, than the Harry dent argument or others hold. His argument still comes back to a driving factor of demand or emotional, which also now have an additional the diversity value of Gold, especially with the currency component escalation.

    1. ARends

      I think that I might have to add, that the dollar in the above event of the SDR as reserve currency will surely send $ back to US for hyperinflation when reserve currency is lost, that would surely escalate all commodities in USD value but much more in gold. USD value is purely derived from demand which US tried to protect with it as reserve laying about in all backs in bulk through the world. All those dollars, trllions would come back to roost. So who would want to stay in those bonds…the results are catastrophic . Mayby the Nkorea is a ploy to pull china in for war and resolve the $ issue. The dark state could create anything where money is concerned..people has never been a problem and having less of us is just up their ally

    2. Pedestrian

      I think the flaw in Harry Dents ideas about the future price of gold is that it is based on fundamental reasoning related to demographics and the population cliff. And I would agree up to a point. But since when did fundamentals ever move the price of gold that much? And why would it matter when we are not on a gold standard? The Spanish flooded their economy in the 16th century with precious metals and got great inflation instead of the great wealth the thought was coming. That is a fundamental based on supply and demand during a time when the old worlds money was based on precious metals. But that’s not the case anymore. I try to stick to the technicals. Gold is pretty much just an adornment with a few medical and industrial applications. We only pay it lip service as money anymore. And in 700 years it has never exceeded 2400 dollars per ounce in real terms. So why in the world anyone would get excited to hear gold will go to 10,000 is beyond me since it only means the dollar has been destroyed.

      And whats so much fun about that?
      http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Gold%20LT%20USD.gif

      1. Pedestrian

        Anyway, just look at that chart I linked. Note the steep rise and fall of each bubble period (2011 is missing from the chart). Why should this time be different? Gold hit a bubble top 6 years ago and still has a long way to go back to the bottom for the chart to make sense. So gold is still massively overpriced based on the median price of the past 7 centuries. It is also overpriced in inflation terms. And that is in spite of the fact the vast majority of gold ever mined has come out of the Earth since the 20th century. Compared to the past it is in surplus. So how do we square away such high prices when we can see gold barely broke above 400 dollars in real terms for the consecutive 250 years following the late 1500’s which included the industrial revolution?

        It is just speculation and madness. That’s what this is. And its not worth what the bugs proclaim.

        1. Gary Post author

          I would argue that the 2011 top wasn’t even vaguely close to a bubble. Price was barely stretched 30% above the 200 DMA and didn’t even come close to producing the 100% in a year or less requirement that usually defines a bubble.

          There was also no massive public participation in 2011.

          1. Pedestrian

            Silver was unquestionably in a bubble. And since both metals trade together we can presume that gold also hit its secular bull peak at the same time even if it did not exhibit all the anticipated markers.

          2. Gary Post author

            Nonsense. Silver didn’t even make nominal new highs. How in the world could you possibly call that a bubble?

            When silver is $200 plus then we can talk about a bubble.

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