Comments on: Whither Gold/GLD?

By: Tom (formally known as tom)

Tom (formally known as tom) — Sat, 03 Jan 2009 03:55:02 +0000

whoops! meant to add: “in my opinion”!

Also, thanks for the time spent on the detailed post on all our behalf – much appreciated.
Gold is a complex commodity when considering paper gold. It should be debated because of its incredible global relevance. I see it at 2,000 next year and substantially invested.

By: Tom (formally known as tom)

Tom (formally known as tom) — Fri, 02 Jan 2009 23:59:07 +0000

Both deflation and inflation will be possitive for gold due to the government intervention (an later capitulation) with GOFO.
Libor – GOFO = DLR

Sorry, on iPhone now and can’t type more.

By: Shawn

Shawn — Fri, 02 Jan 2009 23:28:44 +0000

Unersaettlich- After your response to my post a few days ago, I’ve been looking at the S&P500 Bullish index ($BPSPX). We were last near this level in May 2008 (right before a two month drop) and the last time it was higher was October 2007 (market highs). It really paints the picture that everyone is in the water already. Either it’s a new bull market, or it’s only a mater of days until someone yells “Shark!”.

By: Unersaettlich

Unersaettlich — Fri, 02 Jan 2009 20:15:10 +0000

I cloned a half-weekly standard MACD for GLD ($GOLD has no intraday data)from hourly data (MACD 210,455,158; weekly would have been 5 d/w x 7 h/d x 12,26,9 = MACD 420,910,315, but parameter max is 600). The histogram top has been flat for three days. GLD also has made a possible triple top against resistance at 87 over the past two weeks. GLD could therefore just as easily be forming a top at 87 and be about to go hunting for 60-something, and I still think it best to be neither bearish nor bullish here until we get something convincing one way or the other.

However, the enemies of gold often use Friday afternoon as an opportunity to paint the tape with a weekly close below where it would otherwise be, since Asian markets will not be opening up to undo things in a few hours. Thus we can’t ascribe much importance to dips now, especially since London closed a few hours ago.

By: Leland

Leland — Fri, 02 Jan 2009 19:10:12 +0000

From a TA standpoint, one point against the bearish case is that the WEEKLY MACD is positive. Notably, this did not occur during the peaks in 7/08 and 9/08.

In essence, the weekly MACD and RSI reflect bullish breakouts for the first time since the ~$1000 peak. While weakness is possible in the near-term, this looks poised for an eventual break above the declining tops.

By: vic

vic — Fri, 02 Jan 2009 18:31:10 +0000

I agree that deflation is not good for gold.

The three other variables that gold is strongly corelated to to are US dollar, oil price and interest rates.
1. When the dollar index as 88 a few weeks back, gold did not drop below 750
2. The corelation with oil seems to have weakened. When oil was falling the last few weeks, gold was gaining
3. Low interest rates are good for gold.

My sense is that the announcement of the stimulus package will be good for gold. Many international investors are nervous about bailouts and trillion dollar + deficits.

I have been buying on dips. I respect your analysis. I will be a litte more cautious

By: E-mini

E-mini — Fri, 02 Jan 2009 18:19:41 +0000

Thank You for another informative and insightful post. Very much appreciated.