Today's chart on #gold, aka the slaughter continued...

Today's chart on #gold, aka the slaughter continued...

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Bloodbath in the #GOLD Markets - Key Levels Collapse

general equity holders should refrain from schadenfreude

Next support levels seen at $1470 then $1340.

In light of the big gold price dive today, Ross Norman, suggests that gold may yet have the last laugh:

Gold will remain on the ropes until it engenders higher levels of investment demand - for that it will require more sales channels, more product innovation and more education. It is a tiny lifeboat in a sea of economic trouble - this boat ain't sunk yet !

Bloodbath in the GOLD Markets - Key Levels Collapse

ROSS NORMAN - Sharps Pixley

After gold slipped gently below the important technical level of $1540 this afternoon, it appeared that short sellers and heavy long liquidations had done their worst - but more was to come. $1540 was the market low in 2012, a level it tested and held in October 2011 and May 2012.
Gold investors have been noticeably absent and are perhaps now fully desensitized to bad news as the lacklustre price action in the wake of Cyprus, North Korea and weakening US data proved.
Shorting gold will remain a popular sport while there is money in it and there has been a noticeable absence of bounce in the price after each sell-off, prompting repeat attacks to the short side. Next support levels seen at $1470 then $1340.
For those seeking a haven in equities that have been trading at all time highs, we suggest you refrain from schadenfreude - and be careful what you wish for.
Underpinning gold are attractive fundamentals with the price floor in the form of mine costs rising sharply (gold prices rose 6% last year and costs 12%). More of this and a little below the current price and the gold-shorters will be butting up against production cut-backs - this wheeze will run its course.
Meanwhile the total US national debt rises in 2013 from 16.8 to 17.8 trillion dollars - before number blindness creeps in a translation is perhaps in order - that is equivalent to more than 330,000 tonnes of gold, or over twice all of the gold ever produced in history or total gold mine production for the next 120 years - fat chance that is going to be paid down through the fruits of economic labour.
Gold will remain on the ropes until it engenders higher levels of investment demand - for that it will require more sales channels, more product innovation and more education. It is a tiny lifeboat in a sea of economic trouble - this boat ain't sunk yet !

Ross Norman

See the article online here: ROSS NORMAN - Bloodbath in the GOLD Markets - Key Levels Collapse

#Goldman advises to short #gold | FT Alphaville

despite the resurgence in euro area risk aversion, it’s pretty notable (if not remarkable) that gold prices have remained unchanged over that period, something which is pretty visible on the ETF level.


This is from their latest commodity research note:

Turn in gold prices accelerating; closing our long gold position
Given gold’s recent lackluster price action and our economists’ expectation that the acceleration in US growth later this year to above-trend pace will support US real rates, we are lowering our USD-denominated gold price forecast once again. Our new forecast is further below the forward curve with year-end targets of $1,450/toz in 2013 and $1,270/toz in 2014. As a result, we recommend closing the long COMEX gold position that we first initiated on October 11, 2010 for a potential gain of $219/toz, with the risk reversal overlay expired on March 25. Our long-term gold price forecast (2017+) remains at $1,200/toz: while higher inflation may be the catalyst for the next gold cycle, this is likely several years away.
Initiating a short COMEX gold position as our ECS Top Trade #8
While there are risks for modest near-term upside to gold prices should US growth continue to slow down, we see risks to current prices as skewed to the downside as we move through 2013. In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast, as aggregate speculative net long positions across COMEX futures and gold ETFs remain near record highs. We therefore recommend initiating a short COMEX gold position as our ECS Top Trade #8, implemented through an S&P GSCI® front-month rolling index to further benefit from the contango in the COMEX future curve, targeting a move to $1,450/toz with a stop at $1,650/toz. While we may be end up too early in entering this trade, we prefer that to being late given our belief that the skew to current prices is to the downside.

The other interesting thing they note, is that despite the resurgence in euro area risk aversion, it’s pretty notable (if not remarkable) that gold prices have remained unchanged over that period, something which is pretty visible on the ETF level.
Indeed ETF gold holdings continue to decline quickly.

 READ THE REST OF THE ARTICLE HERE: Goldman advises to short gold | FT Alphaville

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