1. Gold Spot Price Analysis
1.1 Gold in USD (one ounce =
US$1,358.10)
·
On 14th of october
Gold reached a new all time high at US$1,387.00. Since then we witnessed a
small correction back to the uptrend line from end of july. Last thursday and
friday Gold surged higher again putting in a low at US$1,315.95.
·
Now we have massive
support at around US$1,315.00 - 1,320.00. Here we can find the quickly rising
50-dMA (US$1,297.29), the lower Bollinger Band (US$1,312.02) as well as the
double bottom at US$1,315.95US$ and US$1,319.95. A setback under US$1315.00
is therefore quite unlikely.
·
To the contrary,
the probability for a continuation of the Gold rally is now very high. The
highs at US$1,365.00 and US$1,387.00 could lead to some short term
consolidations but Gold should not close under US$1,340.00 anymore.
·
The medium
term picture is unchanged and still very bullish. My next price
target is the Fibonacci - Extension (261,8% of the last big correction) at
around US$1,600.00. This might be possible until end of this year or spring
2011.
·
Looking forward to
the new year there should be a period of consolidation and correction coming.
Gold has been rising for 10 years now. After the ongoing parabolic excess to
price levels around US$1,600.00 - US$2,000.00 in the coming months we should
witness a prolonged phase of correction starting latest in spring 2011.
·
The Dow Jones/Gold
Ratio is now at 8.19 points and is moving in a very tight range since months.
·
Long term I
expect the price of gold moving towards parity to the Dow Jones (=1:1). The next primary cyclical change is still years away.
This means we are still in a long term bull market in gold (and also
commodities) and in a secular bear market in stocks.
1.2 Gold in EUR (one ounce = 976€)
·
Once again Gold in
Euro moved down below the 50-dMA (971€) and tested the lower Bollinger Band
(950€) as well. Therefore €-Gold continues to move between the 38,2% and
61,8% Fibonacci Retracement respectively 985€ and 947€.
·
Even though I do
not expect an immediate price explosion in €-Gold the time window for
physical buys under 1.000€ will close soon. The typical test of the 200-dMA
(912€) is still missing but I don't see any bigger setback coming again. To
wait for this could be fatal. The next big €-crisis is just a question of
time. At the moment the US-Dollar is beaten down and could fall to as low as
1,50€ or even 1,60€. But latest by spring 2011 markets will focus once again
on the big and unsolved problems in Greece, Ireland or Portugal.
·
Therefore my clear
and simple advise: As an €-Investor you can buy gold & silver bullion at
current price levels. A bull market forgives many mistakes if you are
patient. Therefore it does not matter if you buy at 900€, 950€ or 975€ as
long as you buy under 1.000€!!
1.3 Goldbugs Index USD (522.23 points)
·
The Gold mining
Index HUI tested successfully the 50-dMA (500,61) as well as the lower
Bollinger Band (491,44) in recent days. Parallel to higher gold prices the
mining shares booked nice gains last Thursday and Friday.
·
Has now finally the
time come for a sustainable and big move above 500points ? Yes I think so. It
looks very good. Supported by the end of the year rally in the stock market
in the next 4-8 weeks Gold and Silver mining stocks should explode higher.
1.4 Gold COT Data
·
The amount of short
sold contracts by the commercials is still very high. The number came down a
little bit during the recent correction to a level last seen end of august while
gold was about US$100 lower. This clearly shows hesitancy on the part of
commercials traders to short this strong bull market.
04/18/2009
= -153,419 (PoG Low of the day = US$885)
12/01/2009 = -308,231 (PoG Low of the day = US$1,190)
05/11/2010 = -282,644 (PoG Low of the day = US$1,201)
06/15/2010 = -278,944 (PoG Low of the day = US$1,220)
06/29/2010 = -289,956 (PoG Low of the day = US$1,231)
07/13/2010 = -248,348 (PoG Low of the day = US$1,197)
07/27/2010 = -227,555 (PoG Low of the day = US$1,156)
08/03/2010 = -222,029 (PoG Low of the day = US$1,180)
08/10/2010 = -230,980 (PoG Low of the day = US$1,192)
08/17/2010 = -249,570 (PoG Low of the day = US$1,223)
08/24/2010 = -264,300 (PoG Low of the day = US$1,210)
08/31/2010 = -284,561 (PoG Low of the day = US$1,232 / High of the day =
US$1,250)
09/07/2010 = -287,680 (PoG Low of the day = US$1,245 / High of the day =
US$1,257 )
09/14/2010 = -292,939 (PoG Low of the day = US$1,249 / High of the day =
US$1,274 )
09/21/2010 = -292,308 (PoG Low of the day = US$1,272 / High of the day =
US$1,389 )
09/28/2010 = -302,740 (PoG Low of the day = US$1,284 / High of the day =
US$1,310 )
10/05/2010 = -299,498 (PoG Low of the day = US$1.313 / High of the day =
US$1.341 )
10/12/2010 = -300.022 (PoG Low of the day = US$1.340 / High of the day =
US$1.353 )
10/19/2010 = -293.082 (PoG Low of the day = US$1.370 / High of the day =
US$1.329 )
10/26/2010 = -282.435 (PoG Low of the day = US$1.329 / High of the day =
US$1.342)
1.5 Gold Seasonality
- The critical
second part of october is now behind us. November and December have
always been very positive months for precious metals. Gold is still in
it's strongest seasonal phase of the year.
1.6 Gold Sentiment
The amount of outstanding puts
in the gold market did not change a lot recently and is still far away from
extremes as of last December 2010.
The Market Vane report from
27th of October shows that bullishness among analysts has dropped from 85%
mid October to the present reading at 70%. From a contrarian point of view
that is a bullish signal.
All in all the sentiment has
been cooled down a bit due to the correction and Gold can climb up again on a
wall of worry.
1.7 Conclusion
·
Short and
midterm Gold should be on the way to my next price target around US$1,600.
·
Gold is now in a
strong parabolic spike that could lead prices higher than many people can
imagine. Already until december we could see a move up to US$1,550.00. Latest
around these levels another correction should be seen.
·
Looking forward to
the next two weeks Gold might first pull back down a bit at US$1,365.00 and
US$1,385.00 followed by an attack towards US$1,400.00-1,420.00.
·
The FED Meeting on
wednesday will bring clarity about quantitative easing 2.0. So far the FED
has managed to stimulate the markets only with ambiguous announcements and
rumors. But she will hardly plan to disappoint the markets since this could
lead to a nasty sell off. Should the FED therefore continue to "print
money like crazy" Gold could even reach US$2,000.00 by Spring 2011.
·
However one thing
is absolutely sure: Volatility will increase.
2. Recommendations
On 22nd of November my new
record will be released on iTunes.
http://www.wormland-music.com/pro...yself/index.htm
