Saturday, 24 September 2011

Golden Gravity

Gold got hammered last night. Many reasons put forward (the Comex Margin hike a few days before Option expiration has been used well before):

Gold Daily and Silver Weekly Charts - Liquidation Panic - Martian Gold - Comex Hikes Margins

When Hope Fades

Case Closed: CME Hikes Gold, Silver, Copper Margins

Did Schaeuble Break The Precious Metals And Force Everyone To Raise Cash?

Europe Closes On 'Bailouty' Hope As Rumor Of Major Fund Liquidating PMs Grows Louder

The Bullish Argument

Is Gold No Longer A Safe Haven? Not According To Capital Economics: "Gold Will Surge When Euro Crisis Escalates"

Marc Faber: On Operation Twist, The Dollar, Gold, And The Greeks(Marc is calling for a repeat of late 2008 and 2009 ie the US Fed eventually hits 'print' when the stockmarket is thru the floor)

Some key facts (for calm and perspective):
When Lehmann Bros filed for bankruptcy in Sep 2008, the US stock market fell about 30% and along with everything else (except Swiss Franc, Yen and USD) that was being dumped, Gold fell just over 20% in a month.

Once all the margin calls were rung out and a calm sense of doom descended after the panic, approximately a month after Lehmann, Mr AU Gold cut his traditional relationships and ran [as a safe haven].
  • Between October 2008 and March 2009 (March is when the Fed hit 'print' the first time) Gold added 25% (in USD) whilst the Stockmarket fell another 30%.
  • Because the Australian dollar was falling Australian gold holders picked up 40%.

Why the $1580 (US) level in Gold is important (to me).

Weekly Gold Chart (my platform and my analysis).

I’m thinking the April high of $1580 as support which coincides with:

1. Line of trend support drawn from January low of $1308 .
2. Red 30 week Simple Moving Average line which has been defining support since January 2009.
3. Yellow Weekly RSI (7) in its historical turn zone (45).

Every time parameters 1 to 3 have lined up above she has bottomed PLUS, as a bonus $1580 was the level of April resistance

This could well overshoot in these crazy times, where the majority of world banks are insolvent (not just Lehmann) and the governments are in debt up to their eyeballs but its already corrected a healthy 15%. With the banking sector insolvent methinks there is real need for a 'real' safe haven

(click on charts to expand to see the nitty gritty)

Zoom in:

If your Super is NOT in equities (ie not in Growth or High Growth) and you aren't exposed to banks and/or companies that benefit from house construction, discretionary spending (eg Retail and Shopping Centres) etc, DON'T PANIC!* and have a look at opportunities in these times.

*if your Super is in equities (ie growth or high growth) and you are exposed to banks and/or companies that benefit from housing construction, discretionary spending (eg Retail and Shopping Centres) etc and/or you have geared (mortgaged) Investment Properties, FEEL FREE TO PANIC!

Which reminds me (things bogans like)...

#242 – Playing the Market
#227 – Banks
#85 – Residential Property Investment (my favourite of them all)

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