Libertys :High low prediction

Trading Discussion
161

short @ 1227

162

Push And Pull

The yanking this way and that by fundamental forces now growing wilder and woollier by the day, left gold almost becalmed in a sea of madness.

Oil is tumbling into a seemingly bottomless bit, breaching $61 for WTI crude and looking every bit as if it will go lower. (Although we’re sure that the “magical” level of $60 will bring out bargain hunters and risk takers.)

OPEC cut its estimates for demand by 300,000 barrels per day. That sent markets into a tizzy. The fall in oil is dragging U.S. equities markets down. All three American indices are off by almost 1.50%.

The sleeping bear in stocks awoke and thrashed about. Some believe that oil is a leading indicator for further economic slowdowns. Nevertheless, the Shanghai index is up almost 3%, recovering about half of its own sharp drop yesterday.

Tellingly, the VIX (Volatility Index) shot up about 22% today, reflecting not only the actual behavior in the market but the uneasiness all this flooding data is producing. The end-of-year holiday trading famine doesn’t help volatility either. Lots of big money people take lots of time off at this time of year.

Yet, all the major developed world bonds saw yield decline rather than rise. The 10-year U.S. Treasury is slowly slipping toward 2%.

To close, eyes on the dollar, which today propped up gold. The yellow precious metal would have been down around $9.00 if the dollar hadn’t been so weak.

Wishing you as always, good trading,

163

Predicted Daily price Range for Gold :
high:1233.88
Low :1220.21

164

Closed shorts for now

165

Long gold @ 1218 tp 1233

166

Closed long!:slight_smile:

167

Buylimit for 1220.00

168

Predicted Daily price Range for Gold :
high:1234.14
Low :1217.36

long gold @1220

169

Capital V For Volatility

As we pointed out yesterday the Volatility Index (VIX) has been going crazy. It is up 34% this week, meaning there is much more implied volatility in markets of all kinds.

At first glance, one would think that crude oil itself is the cause of this volatility. In fact, oil prices are being affected by a host of issues across the globe. Analysts are asking whether a new Greek debt crisis that would upset all of the E. U. is a factor. The jerking to a stop (and into reverse) of the Japanese economy may be to blame, too. Russia’s instability is certainly weighing in.

Interestingly, the spike in volatility has helped to revive trading action on most exchanges for most financial products. This comes at a time when holidays and end-of-year considerations usually drive the action.

Demand for oil is slightly cool, but supply continues apace and that is a problem for the energy sector. The dollar began to recover today, so oil fell sharply again.

Higher U.S. November retail sales than expected helped fuel an equities rally. That dragged the buck up with it. Retail sales stats provided the message Wall Street was waiting for – energy only makes up 12 to 13% of the S&P 500, after all, they seemed to reason finally.

Other sectors, too, will benefit from lower oil and gas, as will the consumer who will spend his/her money elsewhere. Travel, durable goods, and even housing will gain. Also, lower gasoline and home heating costs give consumers a sense of well-being, which often translates into action.

All this has had a curious effect on gold.

Today’s dollar power-up pushed the price of gold down, barely enough, though – when matched against regular trading activity, which went positive – to give the yellow precious metal a small loss for the day.

Food for thought: the Russian ruble has lost around 45% of its value this year. Not only are revenues down for Russia because of the fall in energy prices, people are finding it increasingly harder to buy necessities. Something’s got to give. Let’s hope the release is not in the form of a war in Ukraine.

Demand for physical gold has been coming from Russia, China, and South America. It should tell us how those people in those areas are viewing their economies.

Wishing you as always, good trading,

170

The Next Sound You Hear

Traders and investors are running toward the exits. There is a combination of reasons for this not least among them the imminent approach of the big fat holiday season and the end of the year book balancing dance.

Almost everything is down, off, slip-sliding, mud-sliding and downhill sledding today. U.S. equities are way off. Oil is looking for the bottom of the ocean. The dollar is down against the euro, up against the yen and GB pound. No rhyme or reason. The exits are crowded – and confused. Bond yields are down across the three majors. The U.S. 10-year is flirting with a 2.00% yield.

In spite of very negative news out of China on manufacturing, the Nikkei and Shanghai exchanges were up. In the U.S., despite consumer sentiment reaching an eight-year high, stocks are down because oil is causing a disturbance in the force. Europe was down significantly today, too.

Is there a good dose of irrationality? Sure there is.

But what lies in back of it all can be boiled down to one (rather complicated) idea. The U.S., despite its enormous size and influence, cannot be expected to carry the world’s recovery burden. (Let us give kudos to Canada for its proportional role in keeping the economic fires burning.) That is dawning on analysts.

The U.S. financial system, while the most solid among the big players, is still deeply flawed. There is too much reserve cash lying around. Some lending restrictions are weighing down the economy. However, the U.S. is still the best game in town and the dollar is still a good bet.

Leaving Japan aside for a moment, let’s consider Europe and China. More centralization in the E.U. system has left all constituent members paralyzed. It’s getting hard to keep track of the months and months the European Central Bank has been thinking of solutions and not doing anything.

Hyper-centralized China has made countless blunders as it tries to sustain its large economy through use of non-market apparatuses. That chicken is coming home to roost. China will have an even worse time competing with a more light-footed America in manufacturing. And, the fact that the U.S. is moving toward energy independence will hurt China even more. Why is Chinese money flooding into real estate in America’s big cities? One word: opportunity.

It’s hard to know what to make of Japan. It is mired in a set of attitudinal difficulties that seem unsolvable by policy alone. The country is apparently very rich, but consumers are reluctant to spend. Savings rates are very high, but the money has no place to go except overseas. (Read again – the United States.)

Then there is volatility. When that bane of traders and investors hits, many, many seem to lie low. Not surprising. An erratic market makes it hard to find profitable trades. At least if volatility is low and a market is heading up, or down, consistently, you can place your bets accordingly.

Where is gold headed for the moment according to fundamentals? Up and down, back and forth, with a slight bias toward the downside. Technicals may tell a very different story, but that’s the fundamental truth right now.

Wishing you as always, good trading,

171

Eneded up hedging gold and i closed my hedge im still long gold @ 1220 :slight_smile:

172

Predicted Daily price Range for Gold :
high:1214.59
Low :1180.93
Longed another small position in gold tp @ daily high1214, then I’m going to close out my long from 1220

173

Hold On, I’m Coming

Gold fell down and broke its crown today, but oil is plummeting toward a rendezvous with destiny. The equities markets can’t decide what to do, having been up in the morning but now definitively down in mid-afternoon.

The ambiguities that stock traders are puzzling over have also affected the dollar, pushing it a bit lower. The greenback move, however, hasn’t been enough to really force gold down very much. Regular trading did that trick very handily.

It’s all well and good to say that gold is being pulled along by oil in its descent, but that’s not quite enough. Gold is reacting to economic news that the stock market, because of the sinking price of oil, can’t interpolate.

The seemingly unstoppable expansion of U.S. manufacturing burst forth even stronger in numbers released today for November’s activity. It seems like a second wave of automation investment is beginning to pay off with everything from the manufacturing of string to toys, vinyl records to aluminum fabrication sheets improving – everything is picking up. There were some soft spots around the country in manufacturing, and of course, deeper automation does not produce many jobs. But, it brings the U.S. manufacturing economy front and center on the world stage. (It is already the biggest manufacturing power.)

Manufacturing grew at 1.1% in November after a rise of 0.5% in October. That is significant.

There was a blemish on the U.S. economic news report today, though. Housing starts were down, although when adjusted for seasonal factors it was not terribly meaningful.

So, gold reacts to those inputs, but, again, because of tumbling, tumbling, tumbling oil prices, the stock markets can’t. After all, energy represents 12 to 15% of the Dow and the S&P 500. Some analysts are calling the bottom in oil. We think that bottom is in the $50 (+/- 5%) range. But, a likely scenario is that we may see a long period where prices do not go up, but rather stagnate.

Finally, starting tomorrow, the Fed meets. The question as always is, “What tune will they call?” Rest assured that it will be playing, “Hold On, I’m Coming.” Although they won’t actually be “coming” in the sense they will not be “raising rates” for some time yet.

Europe stagnates; China scrambles; Japan backslides. Someone’s got to keep the finger in the dike.

Wishing you as always, good trading,

174

decided to stay long @1220

175

Losing Their Cool

Like so many of the markets, gold seemed befuddled today. Lowering volume, choppy trading that surged then receded, and indecision based on flying rumors about what the Fed might or might not do, hampered gold.

In late afternoon trading, it is up about $1.50, although it is well off its overnight highs, currently trading at 1196-97.

Part of the confusion in markets is being caused by the continuing economic deterioration in Russia. After two smaller, “warning-shot” rate hikes, Vladimir Putin raised interest rates to 17%. Any takers out there ready to buy a piece of Russian debt?

Oil steadied a bit today, most likely because of the psychological support level of $55 in WTI crude. The usual pattern has been recently for WTI to slowdown its descent and then for Brent, the benchmark in the commodity, to tighten the price gap between the two.

Very quietly, not exactly under radar but stealthily nonetheless, interest rates on the three major bonds – U.S. Japanese and German – have been sliding toward shocking lows. The American 10-year is right above 2%. Japan’s is at 0.365% and Germany’s below 0.60%. Breathtaking, indeed.

We don’t believe that the Fed is going to actually lower rates tomorrow. That would be foolhardy, given the rest of the world’s situation. There is a strong likelihood, however, that the U.S. central bank will eliminate or start to eliminate certain phrases in its guidance as it prepares the financial community for the effects of higher rates later in 2015.

That has not prevented everyone today from running around like peasants in a village in the Middle Ages who have seen a meteor flash across the night sky. Everyone on the street – whether in New York, London, Tokyo or Hong Kong – is scurrying about like frightened maniacs, not sure of what to do. Only Shanghai held cool, driven higher by good news in its phone-manufacturing sub sector.

Let’s see how sober the Fed is tomorrow. Meanwhile, fundamentals remain too cloudy for playing in precious metals.

Wishing you as always, good trading,

176

Predicted Daily price Range for Gold :
high:1216.59
Low :1180.93

177

tp for long is 1240 im still holding my long @ 1220

Predicted Daily price Range for Gold :
high:1199,68
Low :1180.36

178

Last night before FOMC decided to hedge my long I closed my hedge as soon as gold cooled down abit

179

Mixed Messages

While the Fed left in place its notation that interest rates would remain stable for a “considerable time,” they also boldly underscored progress that was being made. Inflation is nearing the initial target of 2 to 2-1/2% (although plunging oil prices won’t assist in that), and the labor force’s long-standing underutilization is diminishing.

The statement released today went on to say, speaking from both sides of the Fed’s collective mouth:

“However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.”

At first, gold investors and traders bid up the metal. Then, as other minds took heed, it was pushed down. Equities are the biggest gainers on the day, the Dow, S&P and NASDAQ up 1.70%, 2% and 2%, respectively. So, money clearly began moving into that class of investment.

The troublemaker, crude oil, was up about 35 cents, a meaningless number given its previous plummeting. Bond yields rose modestly.

Incongruously, the dollar strengthened, which lent the meaty part of the weakness to gold. Through whichever means blowing the hardest, it seems as if gold is on its way to testing if not its previous 2014 bottom, at least on its way to probing for a meaningful current bottom. (See Market Forecast.)

The word “patient” in the Fed statement was also tied into Chairwoman Janet Yellen’s allusion to the idea that the Fed would not even be considering rate hikes for the next couple of meetings. There are meetings in late January, mid-March and late April. If conditions warrant, April could be the beginning of such deliberations. However, the two hawkish dissenters will no longer be on board; but neither will the committee’s most dovish member serve. In general, the FOMC will be more centrist except for the leadership, which tilts dovish.

Like the Fed on larger issues, we counsel patience in gold trading right now.

Wishing you as always, good trading,

180

Gold Outlook 2015 | The Gold Forecast