Gold's Big Picture

click to enlarge

The chart above shows a 3 year weekly chart of Gold continuous contract. Since gold price peaked in March 08 all new consecutive highs are always lower. The same is valid for new lows. This shows a short term bearish pattern.

For a long-term perspective, gold has technically two indicators to watch out for. First is the 50 weeks moving average and second is the horizontal support / resistance line at $720-730. The strong support line (50 weeks moving average) was broken in July 08. Until now there were two unsuccessful retests for rebound. As the price stays in the territory above a strong support line ($720-730), but below 50 weeks MA, the long term view is neutral.

Comments

[GMiki1:]

Strange week for gold with the commodity indexes readjusting. Looks at if we're back to the extremes on the Dow and a "strong" dollar. I wonder what will happen when Obama actually takes office. It's never dull.

Jan 14 11:19 AM

[sorgmot:]

Talking our read based on Gold in SA $ Elliott Wave charts as interperated by us.

From 1980 a big A-B-C wave lasted to 2002.
Then, (we believe), a 1-2-3-4-5 wave took over in 2002 and rolled gold up from 300 in 2002 to 1030 in 2008 (in a 1-2-3 pattern). which is to be followed by legs 4 and 5. We believe leg 4 is completed now as of Nov 2008 and look for wave five to reach 1450 in 2011.

Check with your financial adviser before making changes to your portfolio.

Good Luck

Jan 14 12:33 PM

[silverwood:]

Yeah, it is never dull. My take on when Obama takes office will be of a candidate who has promised to stimulate (read pump in money) and a Cabinet team ( read Sommers and Bernanke, etal ) the promoters of the perception all is well in fiat land, will be quite the juggling act. At some point the gold suppression team will ease off, because of the large costs to do business and allow gold to rise to the next level where the rear guard will then hold that line. Gold will make a new higher high in it's long term bull market at that point. When this will happen is the unknown part. As history will show the Fed will continue on it's coarse of US dollar debasement, so clearly shown in it's track record.


On Jan 14 11:19 AM GMiki wrote:

> Strange week for gold with the commodity indexes readjusting. Looks
> at if we're back to the extremes on the Dow and a "strong" dollar.
> I wonder what will happen when Obama actually takes office. It's
> never dull.

Jan 14 01:08 PM

[Conan the B...:]

Sorgmot: "leg 4 has been completed"

What would it take for an alteration of your stance?

What if another 1,2,3 is in progress and 4 has yet to start?

Other Elliot Wavers have come to different conclusions.

Jan 14 01:31 PM

[ROLEX18K:]

The GC will crash, I repeat my previous comments only bring new observation for your consideration.
Today walking in the downtown in Frankfurt, Germany, I passed many jewelerly boutiques many of them are brand names like Cartier, Wempe, Christ and all the rest is high street high end focused luxury selling shops.
Most of this boutiques were empty and employees inside exceeded public inside, I wondered if they sold anything at all today.
Then we went with my girlfriend to shopping center also high end focused, the highest floor with most expensive designer clothes was alost empty, the one below little occupied, the floor where are the cheapest brands and exit/entrance was also not busy.
That's why Gold is heading for 700,600,500,400,300,20... but soon 500-600 $ per ounze is very likely.

Jan 14 01:45 PM

[agd108:]

Gold demand is not limited to high end jewelry. It is about keeping your wealth in an environment where currency is being inflated and debased.

Jan 14 04:14 PM

[nmelendez:]

I hate to say this, but this is wave 2 down. Wave 3 up has yet to occur. This is no wave 4.

Jan 14 04:37 PM

[Conan the B...:]

nmelendez: why do you hate to say that you have an opposing opinion, It helps the rest of us.

I paid a visit to Sorgmot's site. As far as I could tell, when he refers to "us" he means himself. I tried to get into Elliot Wave some 27 years ago, I think I still have Prechter's Book somewhere, after he stopped following his own principals, I dropped it.

A guy by the name of Nenner is on Bloomberg occasionally, he has been known to err also.

Trying to use Elliot Wave is like trying to use Gann. I occasionally try to employ simple Fibbonacci on individual equities but nowadays I use charts and the old KISS rule.

I'm going to see what your website is like. take care

Jan 15 03:13 AM

[sorgmot:]

Thanks for the comments.

We and our financial data base suppliers are like a giant team of mental giants. We have lots of different sexes of humanoids (noids) and and computing robots (boots) here. We are into simulation as well as linear programming. And, we still practice the arcane art of business cycle analysis.

Thanks for the feedback. You are correct to note that there are lots of wave 4's of differing degrees floating around in the stew. Our comments were focused on a USA $ for gold wave up that began in 2003 and is (we think) still unfolding as a large scale up wave that will last to 2011 at which time an appropriate scale down wave will take its place based on our reading of its progress to now through waves 1,2,3,and 4 of the same scale. This up wave follows a 20 year A-B-C down wave from 1980 to 2002.

Please do not knock Bob P. or Wesley Clair Mitchell. They both help us look ahead for the most likely outcomes of data series in future time Periods.

Of course, there is always the through the dart system.

And, yes, we are all visually impaired and poor typists.

Good luck.

Jan 17 03:48 PM