Haven’t you asked yourself once, why in the web and in many analysts’ as well as in mainstream remarks, time and again the magical 1000$ (even 800$) emerge as the downtarget of this downswing that has lasted for almost three years?
Independently from that and no matter by whom this target is being broadcasted there must be several different approaches making those analysts placarding the 1000$ mark perennially. The big analysts’ houses and the banks may have fundamental backgrounds for that.
Many analysts – also those ones I esteem a lot – who use to publish in the web tackle the matter in a more rational way, consulting the gold chart, stripping it down pattern- cycle-, wave-, volume-, etc. technically and by means of their techniques coming to the conclusion that still another downleg on monthly base would have to follow that will lead to the 1000$ mark to be worked off.
Also the GUNNER24 Method has been pointing to the working off at least of the 1050 since 11/2013 (click and check). Today I’d like to devote myself to the fundamental points of view that have become more and more visible attracting my attention, and I’m going to link them logically.
The basics. USA and China squeezing the gold future:
You should always work on the assumption that money rules the world.
At present, in the gold market there are just 2 truly important players that are really able to dominate and influence the gold market and the actual bear with it. Only these 2 parties have enough money to carry through the "manipulations at the gold market" effectively. It’s the USA with the Fed and the related big banks as Goldman Sachs and JP Morgan. So is China. Both have different reasons for using the COMEX to keep – and betimes push - down the paper price of gold. – The FED/USA wants to keep flat the gold price for many different reasons.
The most important one is this: Gold is the currency for crisis. A too high gold price weakens the US dollar stirring up fear at the financial market and thereby indirectly the US economy. The US is doing everything to maintain the prosperity of its citizens supporting its stock markets. Fears at the financial market would make this last anchor break. The US real estate market is still scraping after all. That leads permanently to losses in the prosperity of the nation.
China is where the merchants are sitting. China tries to sell high and buy low. China wants to have physical gold, getting more and more under its possession, i.e. stockpiling in the own country. They want it to back the currency, maybe with the purpose of an officially supported national currency and because the people want to have it, to possess it physically, as for jewelry the Chinese girls had to yield up for decades…
With pretty few money investment and the help of the executing Hedge Funds and by long-planned squeezing of the gold futures, but also by purposeful concerted COMEX sell-offs, China may collect gold now bit by bit and over a long period, in comfort and at low prices, by way of the LMBA London, shipping it home via Switzerland – where the metal is founded into the bars used in China – and from there via Hong Kong.
This is what the fundamentals are currently: 2 greatly clever parties, equipped with lots of money, are being interested in the falling gold price. That’s why gold is in its correction mode.
Gold has been trading – let’s say for the last year – between 1180 and 1350, however. Gold and the games of both players have levelled off. It looks as if gold is bottoming out.
Thus, may the ignition of the next stage be triggered notifying and working off gold from the current 1300$ to the thoroughly possible 1000$?
The geopolitical developments of the last few months make me reflect: Those who own respectively manage much money are powerful. The powerful ones are not as stupid as they are in the perception of the mainstream sometimes. The powerful ones are continually proficient in expansion and retention of their power. All the livelong day they do not anything else but thinking and filing which way their wishes become fulfilled: More money, more power, retention of power.
Unless the people are satisfied they would saw the sway chairs of the powerful ones.
That’s why Putin has got to protect the Russians abroad. The Russian people want that. That’s why Obama with his claws lowered is fighting for the USA not to be edged out more from the top of the global economy by China and its little allied Russia. It’s all about energy, economics, power, money…
A trigger why USA including Obama are going off all of a sudden is this World Bank report published a couple of days ago. As early as this year China seems to be the largest economy in the world:
http://www.huffingtonpost.ca/2014/05/03/china-worlds-largest-economy_n_5255825.html
Obama knows the figures before of course… What do you think, him and his Think Tanks are going to do then? Will they just smoke a cigar in front of the fire, waiting and seeing. No Sir, they puzzle and puzzle and then they get started.
A well-known remedy – the best for the US economy – is a military conflict. Safe Haven USA including dollar is what people buy then… well, this is the way I would puzzle off… It has been working for decades after all…
Obama is sending now IWF, NATO and EU with Germany as spearhead to the front in order to limit Putin. The USA will have to expand its sphere of power to the east. Otherwise, the haft of the world economy will be taken completely out of the US hand by China and Russia.
It’s got to be for something that they call Ukraine the granary of Europe. Not only Hitler knew that. Stalin too, as well as Putin and Obama are exactly in the picture about what the possession of this breadbasket means for their respective country.
For decades, Ukraine has disposed of Europe’s most fertile soil. 60 millions of tons of wheat, corn and other grains are produced there, annually. Ukraine is worldwide No. 1 barley and No. 3 corn exporter. Nowadays, industrial and gas aspects are taken into consideration.
Currently Russia is worldwide No. 3 in grain exports. USA is No. 1. Russian wheat is cheapest worldwide. Now imagine when Russia gets complete Ukraine under controll. Within one blink Russia would be No. 1 exporter for grains, wheat, corn and barley!! Able to dicdate prices. Mostly – of course – cheaper prices as USA are willed to charge for their wordwide exports.
Just imagine now the consequences for the USA if Russia gets the entire Ukrainian harvest under its control. And what would happen with the farmers in the mid-west if they couldn’t get rid of their harvest any longer… In the USA, blood would (will!?) spatter in the streets and fields.
==> The bread-basket aspect is the next point why Obama is going off so much. The republicans/farmers are lighting fire under him. Besides, they are giving him plain support. It doesn’t bear contemplating what will happen if in the USA even the farming economy goes out the window…
I think many people are not really aware how big Ukraine is – that it’s Europe’s second largest country… hey, that’s the jackpot. If the USA pick quarrels because of Afghanistan, Iraq etc. How important must appear to them Ukraine now?
Since Russia is keeping an eye at Ukraine now getting the opportunity to grab Europes granary it will certainly do so with military options if USA including allies show some weakness.
Playground Ukraine – Proxy war Ukraine
Source: www.seasonalcharts.com/future_metalle_gold.html
While Putin was sunning himself in the glory of the Olympic Winter games in Sotschi - February – in USA started the work for overthrowing the half-democratically elected government of Janukowytch, consecutively with the most important European leaders. The first unrests in Ukraine led to safe-haven buys of gold. February finished clearly gold-positive and the rally topped out at 1392.60$ in March. Since the new fascist military junta seized power (02/27/2014) the gold price has been performing most conspicuous, compared with its average course of the last 32 years telling us that March finishes deeply in the reds. April takes a slightly positive course, but with a sideways tendency. May with a decent rally until the third trading week, and then the summer doldrums start, staying through the beginning of August.
In the end, the weakest phase of the year begins in the middle of May. I think, by means of the most recent Ukraine developments now the next little rally till about May 20 is fundamentally supported for the time being.
In my opinion, on Friday the starting point of the Ukraine civil war was nailed down historically. Last week, Obama sent his two beloved pumas into the race…
First, his queen of hearts Christine Lagarde (chief of the IMF) blackmailed with a 16 billion credit the junta that immediately had to start the purges against pro-Russian separatists. On Friday Germany’s NSA-stricken chancellor had to bend down before all those little dirty secrets at USA’s disposal, threatening Putin officially with new sanctions.
From this morning CIA and FBI have been most officially giving advice to the Ukrainian junta on the purges…
Pandora’s box is open now. That will lead to gold heading for the 1322 with a 100 % of probability – perhaps the 1335-1340 will be reached for the May top:
On Friday, it reached the 1272 at the daily lows. Thus, to a T it touched the 1*1 Gann Angle of the monthly 3 Candle GUNNER24 Up starting at the June 2013 lows. Above the 1*1 Gann Angle gold is to be considered bullish, below bearish. Now, the 1272 is the very most important support for gold, on monthly base. If this one is fallen below, be it on monthly closing base in May or June, be it in the weekly time frame - more about that in the weekly chart at the bottom – the 1200 during the summer doldrums will be inevitable!
At Friday lows, a 32$ rally started leading gold into the Friday top = 1304.
The 1272 showed an enormous rebound comportment on Friday. For it was the matter of a double monthly support. A) is situated above in the setup. That’s where the 1*1 Gann Angle support takes course and B) the 1272 is an important GUNNER24 Horizontal derived from the monthly 4 Candle GUNNER24 Down Setup that starts from the all-time high:
„When price meets time a change is imminent"! W.D. Gann. By working off the 1272 was newly confirmed that gold keeps orienting itself by the important marks 1222/1272/1322/1372 etc. during the coming weeks. With the rebound from the 1272 on Friday thereby the 1322 is newly the main target for the current rebound.
On Friday, gold closed beneath the 1302. Another important GUNNER24 Magnet in the monthly time frame:
The 1302 is either square line support or resistance in the monthly 8 Candle up that starts at the 2008 lows. For the now expected rebound until about May 20, the 1302 mark is the next trigger for working off the 1322. A clear daily close above the 1302, hence about 1304 will be the signal that gold is going to reach the 1322. That will happen undoubtedly!
If the 1322 is exceeded on daily closing base during the coming two weeks – probability to happen a 65% - the 1335-1340 will become the target of the May high.
Then things will turn dangerous…
In May, the weak phase for gold will begin – the summer doldrums. Under consideration of the geopolitical aspects it will be even hot and super-dangerous for gold (and silver). …if it crashes even more in the Ukraine. …if the situation between USA/NATO/EU and Russia escalates in military terms. …if the fight for Europe’s bread-basket really starts…
For I don’t think that in this case there will be many buyers to support gold. Who should buy gold in such a case? The USA/FED won’t. China will less. They would rather collect gold at 800$ or 1000$. If it really goes off in Ukraine there won’t be any more Chinese buyings at the 1200$ mark. On the contrary, China will kick down mightily the short-sell-pedal in order to collect then later in summer, beginning at the 1000$. If the financial markets start to be heading towards a crisis because of an open Ukraine conflict, the US stock markets will be considered as a safe haven, and that’s where the investments will go. Gold will be sold off as it was in 2007/2008.
Please have another look at the monthly 8 Candle up, to the 1*1 Bull Market Angle there. At the first test of this angle at the 2013 December close and January 2014 opening a visible up-reaction started. That was to be expected at the first test. Anyway, this angle was matter of the final bull-market support, a "Monster support"… But as a rule, always another test of such an important Gann Angle takes place – so to speak in order to test back the beginning of a possible new upleg.
As we can see this test is still to come…
The next and thereby second test may be due this year, but perhaps not before the 2nd or 3rd year. But it will surely come. In respect to the imminent weak and even dangerous summer months, I expect this test to happen either in May, June or even just in July. The later it happens, the better it will be for gold. For the mentioned months the 1*1 Bull Market Angle takes course between 1235 and 1255. On the other hand that means thet the important 1272 monthly GUNNER24 Support will be taken downwards. But a break of the 1272 – on weekly closing base in May respectively on monthly closing base for May-July – means technically that the 1200$ (!) wants to be tested. And that means again that the 1*1 Bull Market Angle in the monthly 8 candle up will fall.
==> and that means that the 1000$ are activated until the end of 2014. With the break of the 1272 thereby the strongest down-magnet in the monthly 8 Candle up above will be activated, in the end. That is the environment where the upper line of the 2nd intersects with the 1*2 Gann Angle support.
==> Conclusion: An expanding war in the Ukraine will be likely to allow a gold decline down to the 1000$ mark.
For the fine-tuning into the summer, please use this weekly 8 Candle GUNNER24 Down Setup. It starts at the important August 2013 highs:
We see, that by the end of December 2013 and the first trading week January 2014 some important lows at the support of the upper line of the first double arc were generated. The rebound from the support of the upper line of the first led to the March rally. The 7th week of the then following correction finished on Friday exactly at 1272, again at the upper line support of the first.
Thus, the 1272 is not only double monthly support, but also an important weekly support is showing us that it is supposed to go up for the time being.
Merely theoretically gold may be backed by the support of the first double arc until the temporal influence of the support effect finishes. That would be until mid July 2014. So, this setup puts out that gold will technically rise now till mid of July on weekly base! Merely theoretically the upwards directed course of the first double arc allows gold to crack first the 1302, then the 1322, then the 1340 area and even to shoot over the August 2013 high.
The question I ask myself now is whether the influence of the confirmed 1322 monthly resistance respectively the 1335-1340 area will prevail or the support of the weekly time frame. The decision will be due in 3-4 weeks. If gold tops out visibly between 1322 and 1340 in May breaking then consecutively the weekly support of the first double arc support downwards in the weekly 8 Candle down above, we will thoroughly have to reckon with the 1000$ mark. If gold however defends the weekly first double arc support into July following upwards, gold will be out of the woods. In that case, at the December 2013 lows a new bull-market leg began! I bet however on the 1000$ in the course of the 2014 rather than on anything else.
Be prepared!
Eduard Altmann