gold break out coming?

MoneyLA · January 30, 2009 6:04AM

We are nearing a significant price point on the one year chart for gold. At about $940 an ounce, there is a one year declining tops line. A close above 940 an ounce, would put gold "in the clear" for a test of its all time highs above 1000 an ounce.

As we know in technical analysis, charts get "filled." So if gold does indeed break out above 940, then it would be a "quick trip" to the level of the record high.

this is a very exciting time for the charts.

FistFullOfDollars · January 30, 2009 6:40AM

yes....

my bets have been placed, most recently a uhr

57loaded · January 30, 2009 6:58AM

we are going at least back to $825 if not $780

what is your time line?

MoneyLA · January 30, 2009 3:40PM

I am not in the business of predicting moves of how much or when. I can only say that if the price breaks above 940 then gold will move higher closing the gap to 1000.

But here is a guess... with gold at 928, and with recent moves of 15-20 dollars a day, it is certainly possible that gold could break 940 in one or two days of trading.

more importantly, if you are a short term trader, if there is a break of the 940 level, you could expect a quick run up to 1000. and that is the only prediction I would make here.

coynclecter · January 30, 2009 4:06PM

I fail to understand the logic of some of the chartists. If you measure gold only in dollars you are going to get a real distortion as to whether people are buying or selling. If half the world buys today and gold goes up 1% and at the same time the foreign currencys are being sold to buy the gold (and dollars) then the dollar goes up 2%. So we actually see a drop in the dollar gold price and claim that the price is coming down cause people are selling.

If you want to tell the direction of gold you need to price it against an average of a dozen currencies or look at something else beacause if you just chart dollars per oz then you have not allowed for the huge swing in the price of the dollar. If the dollar was still at 72 instead of 85 then you could add 15% to todays price and say it was at a record price.

What if we lived in GB. You would look at the chart of gold/pound and say, wow based on the chart its been on a huge bull rally and should continue.

roadrunner · January 30, 2009 11:59PM

gold break out coming?

I'm with the "yeah" crowd as well. In fact we've already broken out from the lower $800's and crossed several points of key resistance, the last ones being $913 and $922. Depending on how you draw that long term down trend line from March 2008, we could have already broken above long term resistance. Gold stocks would have better supported the rise in gold Friday if not for it being the last day of the month where the pro-Dow and anti-gold crowd did some last minute heavy buying and selling.....after the bell sounded. No coincidence the Dow closed at >8000.........ie 8000.6.

New cyclical low in Dow/gold.......8.6
Even the gold/silver ratio has slowly crept down....now at 73

MS64 Saints now at all-time high of $1500. 65's at $1800.
Even some of the small gold in grades of 63 to 64 has started to stir after being totally dormant for months.

The gold price in terms of world-weighted currencies has been climbing steadily and is at all time highs. In fact except for probably the dollar and Chinese yuan, the top 10-12 world currencies are all at all-time highs.

Added 1/31: there is a fairly large amount of gold optimism in the air as well as commercials, advertisements, blog and web site talke, etc. Typically, this has signaled a turning point. But I'll temper that with a pull back from here would likely be short-lived.

roadrunner

topstuf · January 31, 2009 12:32AM

Here's your WORLD AVERAGE for gold. Dabchyk posts this chart on Voy forum every Saturday.

Voy forum post

Personally, I think gold may be our ONLY safe haven and pretty dang quick.

I'm sticking with CEF until I can find physical available at reasonable premium.

mhammerman · January 31, 2009 1:50AM

Thank you, Coyn and TS.

jmski52 · January 31, 2009 4:04AM

if the price breaks above 940 then gold will move higher closing the gap to 1000.

But here is a guess... with gold at 928, and with recent moves of 15-20 dollars a day, it is certainly possible that gold could break 940 in one or two days of trading.

more importantly, if you are a short term trader, if there is a break of the 940 level, you could expect a quick run up to 1000. and that is the only prediction I would make here.

One might surmise that if gold does go over $1,000 it is due to some degree of mass psychology and a **nominal amount of news from the world around us** being absorbed.

I was going to make a comment about charts not really meaning anything, but coyncleter's remarks made me realize that I do think that there is relevance in PE ratios - and other charts too, I'll admit.

illini420 · January 31, 2009 4:29AM

I think we'll hit $1000 briefly, then settle in the $900s for awhile.

MoneyLA · January 31, 2009 6:38AM

one comment about charting the price of gold and then taking into consideration changes in the value of the US dollar vs other currencies ----

this is mixing "fundamental news" with "technical analysis."

in technical analysis we look ONLY at the price action on the charts, and we do not consider changes caused by the value of the dollar which is a "fundamental" development.

you are correct that changes in the value of the dollar affect the price of gold, but that is separate from what we look at in the charts.

my comments were limited to the observation of the chart for gold.

the dollar might indeed continue to weaken pushing up gold prices, and the faltering us economy might also drive more investors to gold as a safe haven.... but these are fundamental reasons for the price of gold, and NOT technical reasons.

Norseman88 · January 31, 2009 6:50AM

Charting is useful in showing when prices cross moving averages of various durations,
RSI which shows overbought or oversold conditions,
Bollinger bands which show breakouts in shorter durations than moving averages,
and last but not least you have the gaps both up and down which almost inevitabley get filled at some point in time.

cohodk · January 31, 2009 10:20AM

<< I am not in the business of predicting moves of how much or when. I can only say that if the price breaks above 940 then gold will move higher closing the gap to 1000.

But here is a guess... with gold at 928, and with recent moves of 15-20 dollars a day, it is certainly possible that gold could break 940 in one or two days of trading.

more importantly, if you are a short term trader, if there is a break of the 940 level, you could expect a quick run up to 1000. and that is the only prediction I would make here. >>

I'll take it one step further then. If 930-950 is broken within the next few days, and 1040 is broken just days thereafter, 1200 will be hit 3-7 days later.

RedTiger · January 31, 2009 11:17AM

<< 

<< I am not in the business of predicting moves of how much or when. I can only say that if the price breaks above 940 then gold will move higher closing the gap to 1000.

But here is a guess... with gold at 928, and with recent moves of 15-20 dollars a day, it is certainly possible that gold could break 940 in one or two days of trading.

more importantly, if you are a short term trader, if there is a break of the 940 level, you could expect a quick run up to 1000. and that is the only prediction I would make here. >>

I'll take it one step further then. If 930-950 is broken within the next few days, and 1040 is broken just days thereafter, 1200 will be hit 3-7 days later. >>

I wish I saw what you guys are seeing, but really, I just don't see it.

Here is the five year chart:

Doesn't look particularly bullish to me.

The one year chart:

If anything the one-year chart looks bearish to my eyes. Ah well, in the fullness of time we will see.

The most bullish looking gold chart is the one I linked in a different thread a couple of days ago, 5-year gold in Euros

The caveat is that 24,000 on the Euro chart would be a near term price target and it is almost there (23,282 right now).

BBQnBLUES · January 31, 2009 12:14PM

According to New Zealand the "rush is on" !

cohodk · February 1, 2009 1:15AM

RedTiger. It aint there yet. This recent high is only the 3rd point--possibly 4th- in the downtrend. You know you need 3 peaks to even define a trend. So no breakouts yet. If gold can pull back to the 850 level and sit for a few weeks to work off some of the move from 700 to 950, and THEN break the DT, I think the up move will be quite violent. If you connect the peaks of the last 5 years you arrive at a 1150-1200 target. After that we will probably have to talk about a break of the tops, a steeper uptrend and eventually parabola.

But that time is not now as gold is still within the confines of the downtrend. That could change tomorrow. Who knows.

roadrunner · February 1, 2009 4:40AM

I don't have any particular problem seeing 3 or even 4 points to connect the upper down trend line. If one assumes that gold and commodities basically bottomed in mid November, it's not that much of a stretch to see the ensuing pattern as a bullish series of waves rather than just another extension of the correcting pattern from March.

Note also that the rising 50 dma is due to intersect the flattening 200 dma this week.

roadrunner

jmski52 · February 1, 2009 4:50AM

Does the tide rise before a tsunami comes ashore? Seems to me that it does.

ProofCollection · February 1, 2009 7:26AM

With the big move up in the last week or so, gold needs to take a few days to "rest." I expect consolidation at this level over the next week or so, I don't expect a lot of movement. On a solid breakout over $930, I would expect to see $1170 next.

percyb · February 1, 2009 8:54AM

What's a break out?

jmski52 · February 1, 2009 1:32PM

What's a break out?

A break out is opposite of what it's doing now. Maybe the Steelers' win is bad for gold?

RedTiger · February 1, 2009 1:45PM

<< What's a break out? >>

The 5-year gold in Euros chart is a breakout when it made new all time highs.

The gold chart in dollars is not (yet). However, if you look at the price action around September 2007 that was a breakout.

Textbook chart breakouts are a flat line chart followed by a powerful move to new highs on heavy volume. A second common pattern looks like a cup and handle, where there is a fakeout dip of selling, followed by new highs. The top chart shows both kinds, with the breakout from 16,000 per kilo more of a flat base, and the more recent move above 20,000 looks more like a cup and handle base.

roadrunner · February 1, 2009 1:57PM

Familiar pattern with beat down in Asia and then rise in UK. If there is some downside by end of Monday it could all be recovered by Friday as gold is still showing plenty of positive momentum. A fairly short $30-$50 pullback is all that I would expect from here. If the PPT wants to conserve their ammo, they'll wait until $1000 for their next TKO attempt. For now, they need to grow the short futures quite a bit larger. Fwiw the 28 year USD gold chart shows a cup and handle formation.

With Ed McMahon selling his gold toilet during the Superbowl along with MC Hammer unloading his gold heirlooms (I thought MCH was broke, so where'd he get the gold?)....the only question that now remains.....what about Mr. T and his gold necklaces? Maybe if Ed had invested more of his money in gold the past 7 years he wouldn't be in such financial duress where he has to shill for the Cash4gold guys. I wonder if it's all a PPT plot? If they get Springstein on board that will be a coup. But for now, Bruce is only going to Disneyland. Check out one guy's internet story who was offered 1/3 of spot for his gold by Cash4gold.

roadrunner

MoneyLA · February 1, 2009 4:39PM

one day does not make a trend.

OPA · February 2, 2009 6:37AM

<< one day does not make a trend. >>

I hope not ...

unknowncomic · February 2, 2009 7:46AM

jmski, actually the tide recedes just before a tsunami comes ashore

derryb · February 8, 2009 1:11PM

watch the dow. when it weakens to the PPT's lower limit gold gets hit. I believe a 7,900 DJIA is their marker for now. The PPT has been letting it creep down further each time before they act (maybe they've been too busy with real problems). Hopefully at some point their actions won't affect the gold market any longer. Of course, at that point, we're all in deep doodoo.

gold break out coming?

Comments