Gold Volatility At Yearly Lows

[Reub]

Gold volatility, as measured by GVX, has fallen to lows that match any that we've seen since this index started in 2011. I'm not sure what this means however I think that it might be a good entry point for gold purchase, being that the downtrend has run its course? Any opinions?

[Kshartle]

Gold volatility, as measured by GVX, has fallen to lows that match any that we've seen since this index started in 2011. I'm not sure what this means however I think that it might be a good entry point for gold purchase, being that the downtrend has run its course? Any opinions?

I think Gold is at a major crossroads. The charts show a clear double-bottom at $1,180. Millions and millions of ounces have been sold short in anticipation either of deflation or economic recovery.

The money masters have demonstrated they will do anything to avoid deflation. There is little hope of economic recovery in my opinion when you look at what the government regulations and druken sailor spending on welfare schemes is doing.

Time appears to be on Gold's side.

I'm decidedly long, but if I were short right now and the price moved past $1,300 I would assume the $1,180 was as far it could go and start covering.

I think the next few months will be decisive with either a break of $1,180 as a prelude to total capitulation and a price of 1k or a break of $1,300 and a return eventual to the previous high around $1,900.

We might need a bad print for Q2 GDP and a promise from Yellen to keep the presses going to spark it.

[MachineGhost]

I think Gold is at a major crossroads. The charts show a clear double-bottom at $1,180. Millions and millions of ounces have been sold short in anticipation either of deflation or economic recovery.

You better hope that Europe's not pushing on a string with its negative nominal rates, otherwise we're going to wake up to a new definition of Japanification.  Gold's hitting new 5-month lows.  A buy signal is now off the table.

[img width=800]http://i62.tinypic.com/2nl47x2.png[/img]

[Kshartle]

I think Gold is at a major crossroads. The charts show a clear double-bottom at $1,180. Millions and millions of ounces have been sold short in anticipation either of deflation or economic recovery.

You better hope that Europe's not pushing on a string with its negative nominal rates, otherwise we're going to wake up to a new definition of Japanification.  Gold's hitting new 5-month lows.  A buy signal is now off the table.

The main competition for gold is the dollar, not the Euro. Still, Draghi promised if the negative rates don't work they will take extraordinary or unconventional methods to get inflation going meaning they will give money directly to governments in exchange for worthless bonds and possibly buy mortgage backed securities.

What do you consider a buy signal? How much higher would the price have to move from here at $1,260?

[MachineGhost]

What do you consider a buy signal? How much higher would the price have to move from here at $1,260?

Good question.  A buy would be when the oscillator turns up.  I played around with inputting manual numbers and 1526 triggers a buy.  So a monthly gold London PM closing at or above that will constitute a buy signal.  I think maybe the threshold gradually lowers as more time is spent going down or sideways, but I'll check for that at the end of the month.

[Kshartle]

What do you consider a buy signal? How much higher would the price have to move from here at $1,260?

Good question.  A buy would be when the oscillator turns up.  I played around with inputting manual numbers and 1526 triggers a buy.  So a monthly gold London PM closing at or above that will constitute a buy signal.  I think maybe the threshold gradually lowers as more time is spent going down or sideways, but I'll check for that at the end of the month.

Whoa even $1,450 would be a major breakout from 12 month highs.

I don't think I could sit out until $1,526, that more than 20% above the current price.

[frommi]

I have to admit that i am not bearish on gold for the short term anymore . I recently bought a position in GOLD (the miner) in anticipation of the good old PP times.

[Kshartle]

I have to admit that i am not bearish on gold for the short term anymore . I recently bought a position in GOLD (the miner) in anticipation of the good old PP times.

frommi, it's ok to admit you are not bearish on gold.

There is a support group here for people like us.

The next step will be admitting you're bullish.

[Reub]

Decision Moose mentioned that gold usually does poorly in the spring and summer...through July as a general rule. We're almost there!

[dualstow]

I have to admit that i am not bearish on gold for the short term anymore . I recently bought a position in GOLD (the miner) in anticipation of the good old PP times.

frommi, it's ok to admit you are not bearish on gold.
There is a support group here for people like us.
The next step will be admitting you're bullish.

Haha! Made me smile. :-)

[Kshartle]

With Yellen's comments yesterday that the Fed will continue being easy and not worrying about inflation.....the shorts are increasingly looking to be on the wrong side of the gold market. When they are done exiting we'll be much higher. When the momentum players come in I think we'll be breaking 2k.

I'm confident this will happen before the next economic crash but we'll see. The bankers are not strangers to the printing presses. They will not tolerate real interest rates on the major paper currencies.

[MachineGhost]

What planet are on you?  The bond tapering continues, i.e. tighter money.  And its great timing as I just bought bonds the goddamn day before.  Just can't win.

[Kshartle]

What planet are on you?  The bond tapering continues, i.e. tighter money.  And its great timing as I just bought bonds the goddamn day before.  Just can't win.

I'm on the planet Earth. Where are you, Mars?

The tapering is all priced in and has been almost from before the start of it. The discussion is all about rates. Yellen reiterated that rates are going to stay very low for a very long time and that the uptick in government reported inflation doesn't matter to her. They want to increase employment and are saying that negative real interest rates are the path.

Market surveys show a drop of 25 basis points in the long-term fed funds rate expectations post Yellen's Q&A.

This was a dovish statement and press conference further confirming she is an inflationista.

The only surprise to the market from a QE perspective would be a suspension of the taper or reversal. Sheesh man.

You really bought more LTBs?

[Kshartle]

Or maybe gold will plumment and yields will crash also MG.

I guess that's what makes a market, different interpretations of all information and different expectations.

No hard feelings.

[dragoncar]

You guys always talk about low employment... Does anyone have a chart of absolute employment numbers since at least 2000?  Can't find one

[Kshartle]

The bond tapering continues, i.e. tighter money. 

Wait back up here....I thought you believed in MR or whatever and that QE was basically a non-event and non-inflationary. How can you say that a reduction in QE is "tighter"?

What difference does it make how many "asset-swaps" the fed makes with banks?!?!?!? 

[Kshartle]

You guys always talk about low employment... Does anyone have a chart of absolute employment numbers since at least 2000?  Can't find one

It's pretty easy to find the labor participation rate. Some guys have posted it, recently in fact. I think it's dropped from about 70% to 62.5% since 2000. So that's more than 10% of the working age population going from pulling the wagon to riding in it.

[MachineGhost]

What difference does it make how many "asset-swaps" the fed makes with banks?!?!?!? 

Because fewls like you believe otherwise.  Perceptions is reality, not actual reality.

Nice big move on gold today.  Naturally that has to add insult to injury.

[dragoncar]

You guys always talk about low employment... Does anyone have a chart of absolute employment numbers since at least 2000?  Can't find one

It's pretty easy to find the labor participation rate. Some guys have posted it, recently in fact. I think it's dropped from about 70% to 62.5% since 2000. So that's more than 10% of the working age population going from pulling the wagon to riding in it.

Yeah it's super easy to find the labor participation rate.  But then I have to make my own chart using those numbers, and find the adult population chart, and math.  I just want a chart of absolute employment numbers.  ADP only gives data back 3 years unless it's hidden somewhere.

PS what just happened w/ gold

[Tyler]

PS what just happened w/ gold

Kshartle must have made a few calls.  Up 3% and counting. 

[Kshartle]

PS what just happened w/ gold

Kshartle must have made a few calls.  Up 3% and counting.

It's still only 10% off the double-bottom so I think the next phase of this bull is just getting started.

I own 3x as much in the miners (mostly juniors) so this has been a good month. Of course these are so volitile who knows what next week will bring. I'm investing for the long-run and I see nothing but more printing on the horizon, globally.

Reclaiming $1,300 is big imo. I don't understand how anyone could be short gold unless they have an alternate reason for driving the price down. It doesn't seem like a remotely rationale trade to me at this point given the economy and central policies worldwide.

[buddtholomew]

I'm not pleased when gold is up and I loathe when gold is down. I do however feel validated to some degree on days like today.

[barrett]

buddtholomew, are you not pleased when gold is up because you are young and want to buy it cheaply? Or do you just mean that it's good to see the rise in gold offsetting the drop in the long bond?

[Kshartle]

buddtholomew, are you not pleased when gold is up because you are young and want to buy it cheaply? Or do you just mean that it's good to see the rise in gold offsetting the drop in the long bond?

It means he's hard to please.

[dragoncar]

buddtholomew, are you not pleased when gold is up because you are young and want to buy it cheaply? Or do you just mean that it's good to see the rise in gold offsetting the drop in the long bond?

It means he's hard to please.

I'm guessing because gold up implies predictions of bad general prosperity?