5 replies to this topic

[Islander]

Barron's article


The thrust of this article is simple, if you track gold in dollars you are likely not seeing the golds in global terms. The trend is up with a return to recent highs later in this year - Maybe. Islander

[mss]

Barron's article
  The trend is up with a return to recent highs later in this year - Maybe.  Islander

<{POST_SNAPBACK}>

Thanks for the heads up post from Barrons. The key is "later in this year"
mss

Edited by mss, 07 July 2005 - 01:07 PM.

[calmcookie]

MSS - yes, thanks for your emphasis on timeline. Agree. Plenty of patience needed ... just hope I'm not in a nursing home by then ... couldn't handle celebrating (or crying) with pureed food . Kidding aside, Islander, thanks for post, but could not open the link to article ... it came up blank on my screen. Do you have another way to get to this? Thanks, C.C.

Edited by calmcookie, 07 July 2005 - 01:48 PM.

[Mike]

Barron's article

The article seems to be restricted to subs. Care to post a paragraph or two?

[PorkLoin]

Islander: >>The trend is up with a return to recent highs later in this year - Maybe.<< It's a good point about how the currency cross-rates make a big difference. Right now, I think it's a negative for gold that the Dollar (which for most of us here is what we see gold in terms of) is rallying against the Euro. The Dollar got whacked down from 1.3+ Euros to not much above 0.8 Euros, and gold finds it easy to rally in Dollar terms when this is going on. Now we're seeing what is a substantial counter-trend rally in the Dollar, one that IMO may go up around the 1.0 Euro level -- this would be consistent with common Elliott Wave counting and frequent market behavior in general, even in the context of a larger, ongoing bear market (which I think we indeed have in the Dollar). The Dollar/Euro relationship isn't the end-all for gold pricing, of course, but in general Dollar strength means gold weakness, or at least relative weakness, compared to when the Dollar goes down. Best, Doug

[geosing]

Barron's article

The article seems to be restricted to subs. Care to post a paragraph or two?

<{POST_SNAPBACK}>

There was a problem in the link also. I have corrected the link above in the quoted block.

Excerpts: © Barrons

Technical analyst Ian McAvity, editor of the long-term-oriented Deliberations on World Markets newsletter, points to a chart he calls "non-dollar gold," which is simply the price of gold adjusted by a basket of other currencies.

He multiplied gold by the U.S. Dollar index, something mathematical types will verify is a valid formula (because it reprices each data point based on the then-current exchange rate of the basket), and the result is rather eye opening (see Chart 3).

In a nutshell, gold denominated in other currencies has broken out from a multi-month trading range that arguably began in mid-2003. Its failure to trade to the bottom of that range in January of this year was a hidden warning signal that an upside breakout was likely, and early last month that breakout did indeed occur.



[...]
This time, the base is longer and far better developed than it was then, and that is, forgive the pun, gold to a chart watcher. McAvity is still rather leery about buying even after last Friday's plunge and would like a dip into the $375 area as a much better entry point.

[...]

But at McAvity's entry point, $375, the market would have corrected roughly 38% of its four-year rally in dollar terms and landed at a nice support level from the May 2004 low. Advanced chartists will recognize this as a Fibonacci retracement of the bull market, a typical retracement of any rally or decline

© Barrons