The up to date graph of British pound gold is here, select the desired currency or group of currencies from the sidebar.
The price has just dipped under £1000 for now; it's £999.12 as I write.
Monday, 18 July 2011
New meaning to 1000 gold - 1000 Pounds Sterling! 2011-07-18 21:46 BST
There is now a new significance to 1000 gold. When I started this blog, gold was challenging its old 1980 high at $850 in late 2007. It then hit $1000 in 2008 before the credit crunch. One thousand Euros gold €1000 came in 2010 in the teeth of the first real show of the Greek crisis in the Eurozine. Now, today, gold temporarily hit £1000, 1000 pounds sterling, my country's ever depreciating currency. I wondered if this would ever happen, but I didn't expect it in July when it's the off-season for gold usually.
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Saturday, 16 July 2011
Gold breaks out to new highs! 2011-07-16
Gold breaks out to new highs! This has been something of a surprise to many of us, all except James Turk who has been saying we were going to get a big summer rally in gold like in 1982.
Perhaps the danger of a bigger drop in gold and silver has diminished a lot with this and $32 may be the floor for this silver correction with $1470 the floor for the gold correction. It appears the correction in Au and Ag could be over with this breakout in gold.
Gold broke above its all time high at about $1577 and went into the 1580s, then retracing intraday to touch $1577 again as a quick test of that level for support. The move has then gone to $1595 with minor intraday corrections on the way. Silver meanwhile has rallied to $39 and is showing signs of wanting to go over $40. The week ended as it did in the big February to May silver rally with gold and silver hitting the highs at the end of the day, rising right until the last tick on the chart. This was hapening as silver was on its way to $50 in April 2011.
I was wondeiring if we swould have a major credit crunch event that would strengthen the US dollar and smash down silver to $21 and gold maybe to $1400 or so. Bob Hoye has been talking about a 100:1 gold:silver ratio sometime in this credit contraction. I can see where he is coming from but think $100 was excessive, maybe 70:1 would have been possible if gold had correctedt o$1400 and silver to $20. This would have been comparable to the 84:1 ratio in the credit crunch of 2008.
However, in the gold and silver rally from Feb to May this year, gold was late in going to new highs, while silver was flying upwards, as Eric Sprott and others reported dollar inflows into silver market being equal to or greater than dollar inflows into his physical gold products. Same for James Turk. So silver flew and gold trudged up. We didn't see much sign of any gold speculation and blow off, no parabolic move at all. The recent gold correction was mild to say the least, from $1570 to about $1470, about $100 or so, only 7%.
So gold now looks ready for an extended breakout here perhaps. Silver has been participating too, since the speculative long positions in silver were largely washed out in the $49.75 to $32 correction in May.
It would be fascinating to see how gold and silver would react if we had another credit crunch and more bank failures, perhaps on the Euro crisis if Greece and other countries default and cause a derivatives maltdown on credit default swaps, etc. Greece/Portugal could be the 2011 equivalent of the subprime mortgage crisis of 2008. Maybe we might still see a gold and silver correction in the near future but would it go lower than gold $1470 / silver $32? However, with the demonstration that the gold and silver bull market resumed quickly after the 2008 credit crunch, maybe the reaction of the precious monetary metals this time might be a little different. Hold on to your hats!
Perhaps the danger of a bigger drop in gold and silver has diminished a lot with this and $32 may be the floor for this silver correction with $1470 the floor for the gold correction. It appears the correction in Au and Ag could be over with this breakout in gold.
Gold broke above its all time high at about $1577 and went into the 1580s, then retracing intraday to touch $1577 again as a quick test of that level for support. The move has then gone to $1595 with minor intraday corrections on the way. Silver meanwhile has rallied to $39 and is showing signs of wanting to go over $40. The week ended as it did in the big February to May silver rally with gold and silver hitting the highs at the end of the day, rising right until the last tick on the chart. This was hapening as silver was on its way to $50 in April 2011.
I was wondeiring if we swould have a major credit crunch event that would strengthen the US dollar and smash down silver to $21 and gold maybe to $1400 or so. Bob Hoye has been talking about a 100:1 gold:silver ratio sometime in this credit contraction. I can see where he is coming from but think $100 was excessive, maybe 70:1 would have been possible if gold had correctedt o$1400 and silver to $20. This would have been comparable to the 84:1 ratio in the credit crunch of 2008.
However, in the gold and silver rally from Feb to May this year, gold was late in going to new highs, while silver was flying upwards, as Eric Sprott and others reported dollar inflows into silver market being equal to or greater than dollar inflows into his physical gold products. Same for James Turk. So silver flew and gold trudged up. We didn't see much sign of any gold speculation and blow off, no parabolic move at all. The recent gold correction was mild to say the least, from $1570 to about $1470, about $100 or so, only 7%.
So gold now looks ready for an extended breakout here perhaps. Silver has been participating too, since the speculative long positions in silver were largely washed out in the $49.75 to $32 correction in May.
It would be fascinating to see how gold and silver would react if we had another credit crunch and more bank failures, perhaps on the Euro crisis if Greece and other countries default and cause a derivatives maltdown on credit default swaps, etc. Greece/Portugal could be the 2011 equivalent of the subprime mortgage crisis of 2008. Maybe we might still see a gold and silver correction in the near future but would it go lower than gold $1470 / silver $32? However, with the demonstration that the gold and silver bull market resumed quickly after the 2008 credit crunch, maybe the reaction of the precious monetary metals this time might be a little different. Hold on to your hats!
Tuesday, 7 June 2011
Gold and silver - summer coming - tedium in the extreme. 2011-06-07
*YAWN!*
We have continuing rally in gold and silver from the lows about a month ago. Who knows where or whether it is going to stall?
looking at the charts since the May tops, gold at $1548.20 has retraced most of its downmove, more than 61.8% of it, more like 75% in fact. Silver has been much more tepid. It hit its head three times on overhead resistance after retracing close to 38.2% of the downmove, a typical Fibonacci level - and today at $37.32 or so is only about 30% of the way from the May bottom back to the previous high. The gold:silver ratio is 41.48, way above the 31 it reached in May at the tops, when the excitement in silver was red hot.
I am wondering whether we get rangebound here, if we get possible new highs in gold soon or whether we get another downleg like 2008. Ross Clark did an interesting piece on Howestreet.com on the US dollar last week, looking for the possible start of a multi-year cyclical rally. However, it is no certainty, he says, but he sees some parallels to 1987 and 1995.
Then, Adam Hamilton did a nice artivle on silver downlegs. However, when he measured the 2008 downleg, he counted the initial one from $21 to $15 in his comparison. There was another large downleg after a few months, when the Lehman business blew up in September 2008 and silver was smashed down to about $8.40. With credit spreads widening and other leading economic indicators going negative, one might wonder if we are going to get a repeat of a 2008 style crisis that could smash silver again in another downleg from here in a large C downwave in an A-B-C correction (that would mean that we are in a B-wave up now). That as I see it is the danger to the long side of silver - and possibly even for gold.
However, gold has shown a lot of strength, surpassing a 61.8% upside retracement of the May slump. that looks good. A repeat of 2010 with serious jitter over European Eurozone debt and some stock market scares might serve gold well on the upside as it did last year. There were a couple of $100 corrections for gold last year but it had good upside strength in US dollar terms overall and absolutely rocketed to over €1000 in Euros too before correcting in Euros later in 2010. The gold price has again surpassed €1000 in 2011 and has wrestled with the highs in Euro and British pound terms just lately on this rebound. It seems that any breakout in £ and € gold would be unlikely to be coincident with a big fall in USD terms. A major and fast dollar rally would be required for that. Of course, if we get a Lehman style crunch, that could happen. So really, who wants to bet on this market right now, especially since we are in the typical seasonally weak season? James Turk as usual sees a big gold rally coming (this summer). I like him but he has been far too bullish on gold, predicting a top at $1500 in the 2008 spike that reached only $1030 for instance. So I take that with a pinch of salt. He sees $1800 this year. Maybe it will happen in the fall when seasonal strength could come into play. I think it is a fool's errand to try to predict this market for the rest of 2011, especially since we do not know what Bernanke and the Fed are going to do about stopping, slowing or revamping the Quantitative Easing QE2 money printing that is scheduled to end in June 2011.
To a significant extent, all bets are off until then and markets are on hold.
We have continuing rally in gold and silver from the lows about a month ago. Who knows where or whether it is going to stall?
looking at the charts since the May tops, gold at $1548.20 has retraced most of its downmove, more than 61.8% of it, more like 75% in fact. Silver has been much more tepid. It hit its head three times on overhead resistance after retracing close to 38.2% of the downmove, a typical Fibonacci level - and today at $37.32 or so is only about 30% of the way from the May bottom back to the previous high. The gold:silver ratio is 41.48, way above the 31 it reached in May at the tops, when the excitement in silver was red hot.
I am wondering whether we get rangebound here, if we get possible new highs in gold soon or whether we get another downleg like 2008. Ross Clark did an interesting piece on Howestreet.com on the US dollar last week, looking for the possible start of a multi-year cyclical rally. However, it is no certainty, he says, but he sees some parallels to 1987 and 1995.
Then, Adam Hamilton did a nice artivle on silver downlegs. However, when he measured the 2008 downleg, he counted the initial one from $21 to $15 in his comparison. There was another large downleg after a few months, when the Lehman business blew up in September 2008 and silver was smashed down to about $8.40. With credit spreads widening and other leading economic indicators going negative, one might wonder if we are going to get a repeat of a 2008 style crisis that could smash silver again in another downleg from here in a large C downwave in an A-B-C correction (that would mean that we are in a B-wave up now). That as I see it is the danger to the long side of silver - and possibly even for gold.
However, gold has shown a lot of strength, surpassing a 61.8% upside retracement of the May slump. that looks good. A repeat of 2010 with serious jitter over European Eurozone debt and some stock market scares might serve gold well on the upside as it did last year. There were a couple of $100 corrections for gold last year but it had good upside strength in US dollar terms overall and absolutely rocketed to over €1000 in Euros too before correcting in Euros later in 2010. The gold price has again surpassed €1000 in 2011 and has wrestled with the highs in Euro and British pound terms just lately on this rebound. It seems that any breakout in £ and € gold would be unlikely to be coincident with a big fall in USD terms. A major and fast dollar rally would be required for that. Of course, if we get a Lehman style crunch, that could happen. So really, who wants to bet on this market right now, especially since we are in the typical seasonally weak season? James Turk as usual sees a big gold rally coming (this summer). I like him but he has been far too bullish on gold, predicting a top at $1500 in the 2008 spike that reached only $1030 for instance. So I take that with a pinch of salt. He sees $1800 this year. Maybe it will happen in the fall when seasonal strength could come into play. I think it is a fool's errand to try to predict this market for the rest of 2011, especially since we do not know what Bernanke and the Fed are going to do about stopping, slowing or revamping the Quantitative Easing QE2 money printing that is scheduled to end in June 2011.
To a significant extent, all bets are off until then and markets are on hold.
Wednesday, 11 May 2011
Silver $22.77 target? I hope not! 2011-05-11 22:02 BST
Silver $22.77 target? I hope not!
I saw gold and silver both slowing down in their rally yesterday (Tuesday).
Gold was approaching very near its 50% retracement of the downmove, at $1520.19 on my chart and silver near a 38.2% Fibonacci retracement of its down move, at $39.44. Both looking a bit toppy. Interestingly, these Fib levels were also support and resistance where short-lived trading ranges occured in gold and silver on 5th May 2011 in the morning. I fancied going short on a spreadbet but didn’t want to gamble really.
Gold went just beyond the 50% Fib target to 1528 and silver turned almost exactly on its 38.2% Fib target at $39.52 intraday, within 8 cents. Now it's Wednesday and both have turned down from these points.
I asked Al and Roger Wiegand if they thought silver is going below the $33 low to form a big A-B-C correction? A 38.2% upside retracement of the $49.75 to $33 crash is very stingy, nowhere near enough to form a nice bullish flag. An equal sized downleg of $16.75 would take the price from this interim high of $39.52 to $22.77 if that occurred!
This comment was posted by me earlier today at:
http://www.kereport.com/2011/05/10/big-al-trader-rog-answer-question-listener-brad/
Here are my CMC markets trading screens. Both prices are nearly at Fibonacci levels that are also prices that were trading sideways going into 5th May during the crashes:
.
I saw gold and silver both slowing down in their rally yesterday (Tuesday).
Gold was approaching very near its 50% retracement of the downmove, at $1520.19 on my chart and silver near a 38.2% Fibonacci retracement of its down move, at $39.44. Both looking a bit toppy. Interestingly, these Fib levels were also support and resistance where short-lived trading ranges occured in gold and silver on 5th May 2011 in the morning. I fancied going short on a spreadbet but didn’t want to gamble really.
Gold went just beyond the 50% Fib target to 1528 and silver turned almost exactly on its 38.2% Fib target at $39.52 intraday, within 8 cents. Now it's Wednesday and both have turned down from these points.
I asked Al and Roger Wiegand if they thought silver is going below the $33 low to form a big A-B-C correction? A 38.2% upside retracement of the $49.75 to $33 crash is very stingy, nowhere near enough to form a nice bullish flag. An equal sized downleg of $16.75 would take the price from this interim high of $39.52 to $22.77 if that occurred!
This comment was posted by me earlier today at:
http://www.kereport.com/2011/05/10/big-al-trader-rog-answer-question-listener-brad/
Here are my CMC markets trading screens. Both prices are nearly at Fibonacci levels that are also prices that were trading sideways going into 5th May during the crashes:
Thursday, 5 May 2011
Silver: 38.2% retracement of entire 2008-2011 move reached 2011-05-05
The retracements for this selloff in silver have been analysed by Roger Wiegand and Ben Davies with respect to the move from the last low of $26.35 to the high of $49.75 to give an idea of the story so far.
I wondered if the correction might be in respect to the entire bull market wave from the low of $8.40 in the 2008 credit crisis to the high of $49.75. Ross Clark on Howestreet has just mentioned this for possible analysis in his interview this week.
Those Fibonacci targets would be:
38.2%: $33.95 / 50%: $29.07 / 61.8%: $24.20.
These were calculated from:
49.75-8.40=41.35 move from 2008 low
41.35*38.2/100=15.80 retracement
41.35*50/100=20.68 retracement
41.35*61.8/100=25.55 retracement
Targets are:
38.2%: 49.75-15.80=$33.95 - just about reached today 05/05/2011.
My trading screen showed $34.15 at 9:15 pm in the UK.
50.0%: 49.75-20.68=$29.07
61.8%: 49.75-25.55=$24.20
See chart:
Sunday, 1 May 2011
SILVER SMASH $6 IN 15 MINUTES - DID YOU HEAR IT HERE FIRST? 2011-05-02 0052 BST
I watched the opening of Asian gold and silver trading. Gold gapped up about $10 on the start at 11:30 pm British Summer Time (BST) on Sunday night 1 May 2011. Silver ralled about 30 cents, then ...
I was reading some articles and listening to a podcast. When next I looked at my trading screen I saw a huge drop on the silver chart. I coudn't believe the scale running down the side. From about 48 to 42?!
Gold was down about 20 dollars and SILVER DOWN 6 DOLLARS IN 15 MINUTES!
This occurred from about 23:20 to 23:35 BST. It was basically a vertical drop in silver. Gold rallied a bit and then did another wave down to finish $33 down in the next half an hour while silver 'stabilised' between $42 and $44.
The price changes were (top to bottom from my chart):
Gold: $1577.51-$1543.67=$33.84 down
Silver: $48.177-$42.152=$6.025 down!
THAT'S ABSOLUTELY OUTRAGEOUS!
Looking at it later, I have labelled the times on the upper left. The vast majority of the smash occurred in 11 minutes between 23:26 and 23:37 British Summer Time on Sunday evening. There is not a single green 30 second candle for the lower $4 of the fall!
Of course, liquidity is probably thin; it's the middle of the night in london and NYC after all. If you look at the latest COT report on http://www.traderdan.net/, Dan Norcini shows that there are a lot of small speculators long at the moment - I guess they will have been wiped out pretty much by this move if leveraged.
If I switch to any other time frame on my live charts, even daily (covering the last 10 months) or weekly charts (going back to 2007), this 15 minute move shows up. The drop looks huge on the daily chart.
Is this why there are no limits up and down for silver now?
% moves:
Silver: -6.025/48.177*100= -12.51% in 15 minutes
Gold: -33.84/1577.51*100= -2.15% in about 40 minutes
Gold:silver ratio at start of move:
1577.51/48.177=32.74
Gold:silver ratio at end of move:
1543.67/42.142=36.63(That will make Bob Hoye happy!)
$ move ratio Au/Ag:
33.84/6.025=5.62 as against actual price ratio of ~35:1
% move ratio, i.e. silver's leverage to gold
6.025/48.177*1577.51/33.84=5.83
Silver moved down nearly 6x as fast as gold.
That's consistent with last Monday's fall of $5 in 24 hours and the last part of the rally just before that fall.
.
I was reading some articles and listening to a podcast. When next I looked at my trading screen I saw a huge drop on the silver chart. I coudn't believe the scale running down the side. From about 48 to 42?!
Gold was down about 20 dollars and SILVER DOWN 6 DOLLARS IN 15 MINUTES!
This occurred from about 23:20 to 23:35 BST. It was basically a vertical drop in silver. Gold rallied a bit and then did another wave down to finish $33 down in the next half an hour while silver 'stabilised' between $42 and $44.
The price changes were (top to bottom from my chart):
Gold: $1577.51-$1543.67=$33.84 down
Silver: $48.177-$42.152=$6.025 down!
THAT'S ABSOLUTELY OUTRAGEOUS!
Looking at it later, I have labelled the times on the upper left. The vast majority of the smash occurred in 11 minutes between 23:26 and 23:37 British Summer Time on Sunday evening. There is not a single green 30 second candle for the lower $4 of the fall!
Of course, liquidity is probably thin; it's the middle of the night in london and NYC after all. If you look at the latest COT report on http://www.traderdan.net/, Dan Norcini shows that there are a lot of small speculators long at the moment - I guess they will have been wiped out pretty much by this move if leveraged.
If I switch to any other time frame on my live charts, even daily (covering the last 10 months) or weekly charts (going back to 2007), this 15 minute move shows up. The drop looks huge on the daily chart.
Is this why there are no limits up and down for silver now?
% moves:
Silver: -6.025/48.177*100= -12.51% in 15 minutes
Gold: -33.84/1577.51*100= -2.15% in about 40 minutes
Gold:silver ratio at start of move:
1577.51/48.177=32.74
Gold:silver ratio at end of move:
1543.67/42.142=36.63(That will make Bob Hoye happy!)
$ move ratio Au/Ag:
33.84/6.025=5.62 as against actual price ratio of ~35:1
% move ratio, i.e. silver's leverage to gold
6.025/48.177*1577.51/33.84=5.83
Silver moved down nearly 6x as fast as gold.
That's consistent with last Monday's fall of $5 in 24 hours and the last part of the rally just before that fall.
.
Tuesday, 26 April 2011
Roger Wiegand intuitive and technical spot on again. 2011-04-26
On Jay Taylor's show last week segment 5 for
http://www.miningstocks.com/radio/jayradio.php ,
Roger Wiegand said that we should be very careful at the $48-51 level for silver because there would likely be a correection on profit taking or an expectation of a top at the old top from 1980 at the $50 level. He said the correction could be $5 or even larger, up to $15. He was correct! As silver spiked up to $49.78 (price quoted by James Turk on Al Korelin's show 25/4/2011 here) this marked a top and there was an almost immediate $3 drop on and A-B-C correction - but there was more follow through and silver was down $5 in a 24 hour period, as shown so clearly on the Kitco multi-coloured 3-day chart (updated version at this link):
Wow! Red day = down day in this case! This drop is more than the entire silver price was 10 years ago. There was a parallel $22+ drop in gold too by the way.
My CMC Markets charts show a drop in gold from $1518.58 to $1492.85, a move of -$25.73 and silver moving from $49.826 to $44.636, a -$5.19 move. The ratio of these in $ terms is 4.96:1 ie 5:1 gold: silver $ move.
To work out the % move ratio (silver had been outperforming gold 6:1 on the upside, we can calculate this easily. It is % silver move / % gold move = 5.19/49.826*1518.58/25.73=6.15. Silver had 6.15x the downside move of gold, as against what I calculated on the upside move last week 6.25:1 in % terms. Silver is leveraged 6:1 vs gold on the upside and downside right now!
Thought for the Day:
I thoroughly recommend the interview with Nicole Foss, one of the most sensible interviewees on financial radio on Jim Puplava's Financial Sense Newshour this Easter weekend. It can be found at:
http://www.financialsense.com/financial-sense-newshour/big-picture/2011/04/23/02/nicole-foss/preparing-for-the-next-tsunami
Title: "Nicole Foss- Preparing for the next Tsunami
The peaking of oil prices and the coming Depression. Resource Wars to follow."
One of her many statements: "I doubt very much that the Chinese Century will look like the American century did. There simply won't be the energy to support it."
http://www.miningstocks.com/radio/jayradio.php ,
Roger Wiegand said that we should be very careful at the $48-51 level for silver because there would likely be a correection on profit taking or an expectation of a top at the old top from 1980 at the $50 level. He said the correction could be $5 or even larger, up to $15. He was correct! As silver spiked up to $49.78 (price quoted by James Turk on Al Korelin's show 25/4/2011 here) this marked a top and there was an almost immediate $3 drop on and A-B-C correction - but there was more follow through and silver was down $5 in a 24 hour period, as shown so clearly on the Kitco multi-coloured 3-day chart (updated version at this link):
My CMC Markets charts show a drop in gold from $1518.58 to $1492.85, a move of -$25.73 and silver moving from $49.826 to $44.636, a -$5.19 move. The ratio of these in $ terms is 4.96:1 ie 5:1 gold: silver $ move.
To work out the % move ratio (silver had been outperforming gold 6:1 on the upside, we can calculate this easily. It is % silver move / % gold move = 5.19/49.826*1518.58/25.73=6.15. Silver had 6.15x the downside move of gold, as against what I calculated on the upside move last week 6.25:1 in % terms. Silver is leveraged 6:1 vs gold on the upside and downside right now!
Thought for the Day:
I thoroughly recommend the interview with Nicole Foss, one of the most sensible interviewees on financial radio on Jim Puplava's Financial Sense Newshour this Easter weekend. It can be found at:
http://www.financialsense.com/financial-sense-newshour/big-picture/2011/04/23/02/nicole-foss/preparing-for-the-next-tsunami
Title: "Nicole Foss- Preparing for the next Tsunami
The peaking of oil prices and the coming Depression. Resource Wars to follow."
One of her many statements: "I doubt very much that the Chinese Century will look like the American century did. There simply won't be the energy to support it."
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