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  1. #1
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Gold in 2014 - 2015

    Interesting pattern forming on the daily chart of December 2014 Comex Gold.
    No clear near-term direction as yet from Mr. Market, but price action appears neutral at best.

    Attached is a chart I created this evening.

  2. #2
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    Default Re: Gold in 2014 - 2015

    As alway, Raz, thanks for the technical chart.

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    Default Re: Gold in 2014 - 2015

    Thanks Raz, my back of the envelope has a fair price of gold around 1280. I will dollar cost average into it, if it breaks below that price.

    The Author is crazy hedging 100% of his gold. All it takes is for Ukraine, Syria, Gaza, South China Sea, .... you name it, to escalate to the next level
    and gold and oil could go to the moon in a heartbeat. A hedge on gold eliminates the insurance that it offers. I was hedging at gold 1800 (out of the money calls on gld)
    but not my entire position, and gold would have to actually increase more for me to be called out.

  4. #4
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by charliebrown View Post
    ...The Author is crazy hedging 100% of his gold. All it takes is for Ukraine, Syria, Gaza, South China Sea, .... you name it, to escalate to the next level and gold and oil could go to the moon in a heartbeat...
    You'll get no argument from my wife. She knows the guy better than anyone else and tells him he's crazy all the time!

    If we wake up tomorrow morning to the news that a fierce gun battle is underway in Riyadh amid reports that much of the royal family is dead then it's likely crude would be trading north of $150.00. But I doubt that gold would be up 40% overnight - unless the Saudi military and household guard was behind the coup.

    Anyway, that's what STOP orders are for.

  5. #5
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    An updated bar chart with commentary on this past week's trading in Comex Gold is attached.

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    Forrest is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by Raz View Post
    Interesting pattern forming on the daily chart of December 2014 Comex Gold.
    No clear near-term direction as yet from Mr. Market, but price action appears neutral at best.

    Attached is a chart I created this evening.

    Thank you Raz...always nice to get the reason behind my reluctance to sell just now.

  7. #7

    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by Raz View Post
    Interesting pattern forming on the daily chart of December 2014 Comex Gold.
    No clear near-term direction as yet from Mr. Market, but price action appears neutral at best.

    Attached is a chart I created this evening.
    I think gold is not a good buy right now. Wait a bit and see. Louise Yamada has predicted something like 600 $ gold - if I'm not wrong. I just read an interview.

  8. #8
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    This just posted and because of where the precious metals are at this juncture in time - I'm posting it.

    This is real technical analysis; it's not easy reading, but the effort to understand it is usually very rewarding.

    PLEASE don't pass this around the internet!
    Attached Files Attached Files

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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by Raz View Post

    This is real technical analysis; it's not easy reading, but the effort to understand it is usually very rewarding.

    PLEASE don't pass this around the internet!

    thank you so much for sharing Raz!

  10. #10
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by mkeplinger View Post
    thank you so much for sharing Raz!
    You're welcome.

    Here's another report using technical chart work from Goldman Sachs. It covers the Bonar, Yen and Gold.

    I don't know if this guy is good but his charts of the US Dollar ("Bonar") and Gold look similar to some of my work.
    And he does, after all, work for the Vampire Squid.


    If the Dollar continues to climb, Gold will go lower.

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    aaron is offline iTulip High Commissioner, Select Member
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    Default Re: Gold in 2014 - 2015

    Is it the dollar or the oil price that relates to gold? Or, are they one in the same?

    If the floor for oil is ~ $70, what is the extraction cost of gold?

    I remember reading numbers that it cost $1200 dollars to get gold bullion out of the ground... That was when oil was over $100. Since oil dropped 30%, what is the average cost of extraction? Has it dropped commensurately?

    Finster's charts seem to bear out a low in early spring, which seems to match up . Thanks

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    Default Re: Gold in 2014 - 2015

    aha, i have an answer for you $100 dollars per oz is the embedded price of oil in gold.
    Here is a link to the article. So, if that is true and the gold extraction cost is around 1200 then the oil is about 8% of of that. So if Oil falls 30%. Then that only reduces the oil cost of gold by 3%. i.e. the extraction cost would fall to 1170

    http://srsroccoreport.com/the-gold-o...rice-for-gold/

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    Default Re: Gold in 2014 - 2015

    http://srsroccoreport.com/the-gold-o...rice-for-gold/

    The majority of the diesel used by these mining companies is in the extraction of the gold ore. A small percentage of overall diesel consumption is used in construction of mine sites as well as a source of electric generation in remote locations when electricity is not available.

    In 2010, the top 5 gold miners produced 24.7 million oz of gold consuming 18.7 gallons of diesel per ounce to do so. If we go by the U.S. price of a gallon of diesel in 2010 ($2.99), these top gold miners spent $1.38 billion for this fuel cost. Thus, it took approximately $55.91 in diesel-fuel costs per ounce of gold to extract the ore.
    interesting stats, these are, eh CB ?
    eye note the prices in the wild wild west - aka mining country - are coming down fast

    altho not nearly fast enuf to help the miners much, but we seem to be coming down to a bottom (even faster...)

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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by lektrode View Post
    interesting stats, these are, eh CB ?
    eye note the prices in the wild wild west - aka mining country - are coming down fast

    altho not nearly fast enuf to help the miners much, but we seem to be coming down to a bottom (even faster...)
    The author was using a US diesel price, yet those miners don't use diesel in the U.S. and diesel prices vary by a wide margin where it is used (mainly Africa). Miners also work out deals with the authorities on long term supply contracts and sometimes seek to hedge their diesel price exposure, also not accounted for.

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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by steveaustin2006 View Post
    The author was using a US diesel price, yet those miners don't use diesel in the U.S. and diesel prices vary by a wide margin where it is used (mainly Africa). Miners also work out deals with the authorities on long term supply contracts and sometimes seek to hedge their diesel price exposure, also not accounted for.
    always appreciate these insights, steve!
    so while the drop in fuel price will help some in mining costs, in the shorter term its not likely to have much effect on the miners bottom lines?

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    Default Re: Gold in 2014 - 2015

    Quote Originally Posted by lektrode View Post
    always appreciate these insights, steve!
    You're welcome, lektrode, happy to give my 2 cents.

    Quote Originally Posted by lektrode View Post
    so while the drop in fuel price will help some in mining costs, in the shorter term its not likely to have much effect on the miners bottom lines?
    I would say that's accurate. It's the margin - costs don't generally fall faster than the commodity price (mainly since labour is so sticky), in my opinion. If you look at the components of the increase in cost escalation over the last five years, it breaks down as:


    • ore grade (36%)
    • labour (24%)
    • strip ratios (9%)
    • royalties (7%)
    • power (6%)
    • fuel (4%)
    • FX (1%)
    • recoveries (<1%)


    Natural to think the high grade ore is being depleted which it is to some extent, however much of the ore grade factor also points to the structural problem these companies have - they balance the need to mine lower grades when gold prices are high so that reserve life index is lengthened. This is in perpetual conflict with the desire to boost short term cash flow. Some mines have flexible plans (more open pit usually), some don't (usually more underground), so when commodity prices fall the big question is can they re-sequence to mine higher grades quickly since their costs don't often fall enough to offset the commodity price. We will see more hedging.

  17. #17
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: Gold in 2014 - 2015

    In the intermediate to long-term (6 months to 3 years) the price of gold could easily fall below the cost of production. It most likely has already fallen below the marginal COP for many of the miners. This happens several times each decade in the grain markets.

    But when financing dries up - so do the marginal producers. However, since gold is not consumed in the strict sense of the word, it could remain below cost of production longer than the cycle observed in the agricultural markets.

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    Default Re: Gold in 2014 - 2015

    had some good questions/obs goin here, but just lost it all (damn fat finger)

    but wondren about the likelyhood of the 'changing of the guard' in the beltway of having downward pressure on the PM's

  19. #19
    Raz is offline iTulip Ambassador, Select Premium Member
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    Default Re: More "worthless" technical analysis

    I intended posting this last night but we were gone much of the day and being very tired, I forgot.

    Eidetic sent this to me late Saturday evening. It's never profitable to ignore these people.
    Their track record for the past nine years is outstanding.

    Be careful that you're reading exactly what they're saying! I made highlights in the text for clarification.
    Gold just might possibly be making some type of significant low right about here, but it's NOT out of the woods just yet.

    Feb Comex Gold made quite a turnaround last night; the low for the evening was $
    1,141.70 - right in the middle of their projected support zone.
    Big upside reversal on the daily chart: http://www.cmegroup.com/trading/meta...ious/gold.html

  20. #20
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    Default Re: More "worthless" technical analysis

    As always, thanks Raz.

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