Comex gold futures fell to a six-month low on Friday after the Federal Reserve’s move to cut back its bond-buying stimulus prompted a huge sell-off.
It has lost nearly four per cent for the week, and 29 per cent for the year.
The Fed’s $85 billion in monthly bond purchases, along with other monetary stimulus measures, had fuelled a big run-up in gold prices in the last few years, with the metal hitting an all-time high of $1,920.30 in 2011.
However, with an improving economy and stubborn low-inflation in the US, gold’s appeal has dropped off. Prices going below $1,200 level could force miners to start cutting production and this could support prices once they have found a bottom soon.
The coming week could see very volatile moves as trading gets thinner on the back of the holiday season.
Comex gold futures are moving in line with our expectations.
As mentioned in the previous update, favoured view expected that weekly resistance at $1,265-70 could cap the upside for a fall towards an important weekly support at $1,195.
As cautioned, as the weekly and daily trend is bearish, there is a good chance for the price to break below this support and head towards next breakdown point at $1,175-85, opening the way for a projected objective at $1,135-45.
Such declines could be a potential start for a long-term investment opportunity, considering the long-term trend which still looks healthy for gold.
For the coming week, charts look bearish suggesting that price might attempt to break next important support at $1,162. Such a break might lead it towards $1,120. Resistance are near $1,215-1,225. Upticks if any could be blocked in this area. It has to cross above $1,235 to lessen the chances for the expected decline.
The wave counts need to be reviewed once again. A failed fifth wave move at $1,800 resulted in a corrective decline to $1,181 in the form of wave ‘A’. A possible wave ‘B’ is in progress with targets near $1,420 or even higher to $1,485. This means a wave ‘C’ is expected to follow through which could target $1,150 or even lower.
Alternatively, from the peak of $1,920 a corrective decline in the form of ‘A-B-C’ is already over at $1,181 and a new impulse has begun.
Confirmation of such an impulse will be seen at $1,535. With the present move failing near $1,435-40, we will go with wave ‘B’ ending at $1,433 and a possible Wave ‘C’ underway with targets near $1,145-50 or even lower to $1,045.
RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are below the zero line of the indicator hinting at bearishness to be intact. Only a cross-over above the zero line could hint at bullishness again.
Therefore, look for gold futures to test the support levels.
Supports are at $1,185, $1,145 and $1,120. and resistances are at $1,220, $1,255 and $1,275.
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
I expect the portfolios in the investment portfolio thread to languish in 2014 too, some individual stocks should pick up but the portfolio(s) I don't expect to really start to perform until into 2015 and start to really shine into 2016/17
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
I expect the portfolios in the investment portfolio thread to languish in 2014 too, some individual stocks should pick up but the portfolio(s) I don't expect to really start to perform until into 2015 and start to really shine into 2016/17
Just out of curiosity, if you expected your portfolio mix to do badly this year (lost half its value), languish in 2014 and only start to perform from 2015 onwards, why didn't you put all your money in a term deposit and then buy that portfolio in 2015?
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
Whether shares are a great buy is one thing. But I'd say at this time general shares are a value buy. The worst damage the share market copped was around the GFC, after that the value ran around in circles for a few years. But we've seen some life in the Aussie share market and with the odd hiccup they should be proving more worthwhile as the years pass. But I'd think the Euro share market is the best value buy. Even the US share market shouldn't be too bad. The worst years are behind them.
The next trick of our glorious banks will be to charge us a fee for using net bank!!! You are no longer customer, you are property!!!
Just out of curiosity, if you expected your portfolio mix to do badly this year (lost half its value), languish in 2014 and only start to perform from 2015 onwards, why didn't you put all your money in a term deposit and then buy that portfolio in 2015?
In point form as it is easiest for me...
I was expecting/prepared for the portfolio to suffer a drop in the region of 20% to 25% due to the volatility of the PM miners, I did not expect this much of a drop.
I am not concerned about the drop for 2 main reasons, 1, it is not real money, and 2, I think all the companies in the portfolios will survive.
Timing the market is not as easy as some make it out to be, yes spending the same amount of dollars on the same shares now would enable a significant number of additional shares to be purchased and give an even better result down the track, I feel confident that even with the drop the portfolio(s) will outperform the Melbourne property market...
Would there have been a better time to buy those shares? With out a doubt, the answer to that question is yes.
Take AYN for example, I have continued to add them to the portfolio and if they return to the original price paid, $0.037 they alone will be worth over $750000. For them to achieve that the other stocks in the portfolio would be up too so that could easily become a $1M portfolio.
So whilst it is down at this point I am not concerned, I am in agreement with other commentators (not just here but the more public notable ones) that PM's are in a short down turn and will continue their bull run in the near future. Maybe as early as March/April next year could see price rises in them again. (gradually at first)
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
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