Gold retracement

The big bitch and her little sister are nothing but buys. Charts seem useless to predict anything anymore as we get closer to the end.

The further they take it down the easier it is to stack. In the end there will be nothing left to put out the fire on the metals as the fiat will burn in effigy to the power brokers.

I'm seeing a cup&handle forming on the 24h charts. Unless there are additional hikes I expect a quick but modest recovery to at least $1650 in gold and probably $33-35 in silver.

That's where my money is anyway :X.

After fighting with $1630 resistance all day and evening, gold is now holding with $1635 as support, and after silver's battle to break $30.70 it's now holding $30.90 as support. I can see yet another cup and handle forming in both metals. It looks a bit like the "ascending staircase" pattern I saw back before the smackdown at the end of august, only so far they don't seem to have the characteristic vertical jumps that come with a short covering ralley.

Everything after yesterday's assault has been nice and orderly and very timid. Whoever is trading right now is obviously afraid of triggering margin hikes, but they seem to be determined to inch forward as quickly as they can get away with. I think we have a subdued FUCME/FUSH on our hands, with a possible FUBM a bit later on.

Of course there's no telling what will happen the next time markets go red.

UPDATE: Now they're challenging $1645/$31.50 as the next supports. Looks like we'll get steady advances at least till Blythe's usual witching hour. I'm guessing by the trend that it'll probably crawl to ~$1665/$33 tomorrow, barring unnatural disasters.

http://www.youtube.com/user/endlessmountain#p/a/u/1/nQ78L3p1I2k

The flaw in trying to ascertain gold's value through the lens of a USD price is like reasoning that a silver coin has the same value as a current debased version since they both have identical face values.

Indeed, if you were to trade 10 such silver dimes at a bank, a dollar is what you would get.

The confusion today around the precious metals market is due to those who believe a single price can accurately value both the paper and physical ounce.

The USD price of gold and silver increasingly tracks paper gold and silver much more than it does the physical and, as such, must not be given much credence lest you want to be ripped off. Most of us stackers know this and we simply keep stacking, never dispensing with our metal hoard. We actually rejoice as the paper price falls as it gives us more opportunity to buy more metal at the paper traders expense.

Unfortunately, Gresham's law will eventually force the fraudulent paper forms of paper gold and silver to be traded in for real gold and silver until the physical metal, like those silver dimes,  will disappear from circulation.

In the meantime, keep guessing at what the paper price of gold and silver is, like it matters.

Did I, or did I not say "boy, that chart sure is looking bearish"? Christ.

And, for that matter, I'm 3 for 3 thus far- called the cup&handles yesterday(ish) and the bullish action that followed. Called the bearish turn, called the markets going plunk-o.

Gimme at least a little credit, sheesh.

Anyway, TA is mostly BS. A few chart formations are telling (sometimes), and EMAs have psychological value, but MACD and other things are entirely trailing indicators and not useful at all for making predictions. Much-much-much-much more important is noticing the market associations (for example, gold and silver are currently market-associated rather than safety-associated) and connecting that with current events and market responses to them in order to understand where things are probably going to go next and how that will affect the assets in question.

I mean, there's always that whole value investment thing (which I do follow and have done my research on), but value investment only works when the market is at least pretending to pay attention to fundamentals. Not to say that it doesn't work still (assuming your chosen assets aren't tied too closely to the rumor mill), but it's a much bigger gamble since PE ratios are highly unstable and pricing-appraisal is thus much more difficult.

Thanks, I will. Not all of us are 50 year old rich buggers who have had the luxury of sitting around stacking metal for the last 10 years or so. If you got anything worthwhile to say about what's going on right now, I'd love to hear it.

Well, with Q3 one would expect the prices of gold and silver to go up, instead they drop as soon as uncle Ben spoke. This market has been driving by fear, but intead of gold, investors are rushing into dollars, bonds, etc.

Exciting times we live in!