NYSE:GLD Archive

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Record High in Gold Adds Allure To Yamana Gold Shares

By
king1
– May 14, 2010
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By Relmor Demitrius

Yamana Gold Inc.(NYSE:AUY) and other miners are feeling the effects of record gold prices.  Due to extreme market conditions in 2008, Yamana Gold has fallen short of its own high, trading near $11.25 today, but had traded as high as $14 in December of 2009.  Will Yamana Gold and other miners see another explosion back to extremely bullish prices?

Strong gold prices have been providing an excellent over $10 base on shares of AUY.  I am bullish on this equity anytime its trading strong over the $10 line.  Checking the charts we can see strong support in this area and a recent gap up and hold has given reason for investors in AMEX:HUI and NYSE:GDX companies to have hope of an early summer breakout.  The higher AUY trades, the more attune to market sentiment it will trade.  Is the NYSE:GLD a better play here?  When is spot gold due for a pull back?  All equities can be sold regardless of strength of sector in market pullbacks and gold miner shares are certainly no exception.  With price ranges from $18 to $4 during the 2008 blow off top to the sinking lows of the dreaded March of 2009 area, fear buying into shares of gold miners hasn’t always been the driving force in this equities accumulation pattern.  As gold prices rise, because of a base of support due to somewhat static costs versus increase in the product selling price, so does Yamana Gold’s abilities to generate profits.  The costs to mine gold do increase as oil prices increase and labor costs due to foreign exchange rates vary, but if the underlying product increases at a higher percentage than the increase in costs, additional profits are available.

With gold prices reaching record highs of over 1200 dollars an ounce, expanded revenue for unhedged miners are sure to follow.  I expect Q2 numbers in revenue in Yamana to have an increase due to this gold surge.  The percentage increase from $800 to $1000 isn’t as great as from $1000 to $1200, but most of this added value comes with less and less costs attached to the higher price.  Why do costs increase as gold increases?  Well it doesn’t necessarily, but when gold increases certain economic conditions are usually in play that increase gold miners costs of production of the metal.  These include mining countries with a strong local currency or having the falling dollar cause a rise in oil prices.  These are a few conditions that high gold prices can affect the cost side of business.

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Gold Breakout Comes Early (NYSE:GLD, NYSE:AUY, NYSE:GDX, NYSE:ABX)

By
king1
– May 10, 2010
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By Relmor Demitrius

SPDR Gold Shares (NYSE:GLD) in the last two trading days had climbed almost 3%, to $118.27 (this reflects a spot price equivalent of around $1,182.70 an ounce) at close on Friday.  Fears of a European financial meltdown brought on by weakness with their smaller members such as Greece, Spain, and Portugal combined with a falling stock market, drove buyers into gold last week.  Even after the GLD closed trading, a late day surge saw spot gold go from around 1,180 dollars an ounce to a near record high of 1,208 dollars an ounce, at the time New York COMEX ceased trading on Friday.

Last month I wrote an article predicting a sizeable breakout in gold to happen around the 20th of May.  It seems the gold breakout came early on Greece news, creating fear buying.  On my Chart 1, I showed the coming together of two long term trend lines around the 20th of May.  As you can see from the circled breakout from early September on Chart 1, that move also had an early breakout, so this should not be surprising, as May 20th was more of a deadline for this move, rather than a prediction on the exact day of its occurrence.  A strong qualification of a valid resistance break is that it occurs on high volume.  As indicated on Chart 2 this break does indeed have higher than usual volume.

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Technical Alert on Spot Gold and the GLD

By
king1
– April 23, 2010
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By Relmor Demitrius

SPDR Gold Shares (NYSE:GLD) and Spot Gold has been trading sideways for a few months now.   After achieving new record highs and a period of prolonged consolidation over the $1000 dollar mark, the GLD has been setting up a nice floor for possibly another breakout coming soon.  These breaks can be up or down on this pattern, but they usually break in the dominant trend, in this case, up.  Let’s take a look at some points of interest.

As per my chart 1 below, the GLD is in a symmetrical triangle pattern that will resolve on the 20th of May.  We have converging trendlines that demand a resolution on that day or before.  The break should occur in the direction of the trend, which has been up, and is usually a break of significance, meaning not just a few dollars.  I expect a break back into the higher channel, now between 115 and 125, at this time.  A break on this consolidation is possible back into the extremely bullish top channel of 125 to 137 as well.  I expect sideways until then, between 109 and 112 until this break occurs.

The 2nd chart is a look at the rounding top action versus sharp hits and retraces.  You will notice that the rounding off pattern (attacking the resistance line more than just once, for instance) has resulted in better overall reactions to the price.

The third chart shows a similar pattern break in the past, with the underlying volume information.  You can see the first pattern broke on high volume, and the same it true when the pattern broke down at the top as well.  Notice the sharp hit off resistance and the subsequent harsh reversal.  I see rounded tops here, consolidating into that wedge, and a breakout coming.  I show expected direction on this chart as well.

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The Two Sides To Gold

By
king1
– April 20, 2010
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By Relmor Demitrius

Gold made front page news in 2009 when it soared past the $1000 barrier and reached new all time highs.  People rushed into gold tracking stocks like NYSE:GLD , NYSE:IAU,  and NYSE:GDX.  Many economists offered explanations for why this happened or found a causal relationship in the economy to justify this event.  Whatever the reason, understanding how currency and gold values are affected can reveal the answer and maybe even how, where or even when to invest in the future.  Can gold go higher?  If so how high?  To say gold is high due to inflation is immature and shows a lack of knowledge about the subject.  Sorry main stream media gold fly by night journalists, your two bit answers don’t explain even a portion of the story, nor why that statement isn’t accurate right now.  To understand this move in gold we must first understand currency and its relationships with hard assets.

Like anything, the value of the dollar is based on supply and demand.  First let us focus on the demand side.

If demand of the U.S. dollar increases, and the current supply of dollars remains the same, the value of the dollar will increase.  This means that the dollar index, a basket of currencies used to track the value of the dollar, ironically against things measured against simply other currencies themselves, and why they call it a floating currency, will go up.  As the dollar index goes up, it signifies that fewer dollars are necessary to purchase the same amount of goods.  It also means the price of gold will drop in dollars.

If demand of the dollar decreases , and there is the same amount of supply available, the value of the dollar will drop, and the price of gold will go up in dollars.  So as the dollar index goes down, the price of gold should rise, all other factors, of course being neutral. 

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Bottom in for Gold

By
Hardeek Patni
– January 20, 2010
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Spot Gold has climbed steadily since 22 December 2009 low of $1075/oz. Gold had declined about $150 since the early December peak at $1225/oz. The decline was due to fear of Dubai debt and profit taking as a correction was due. As mentioned in my previous article, Abu Dhabi stepped into rescue and provided Dubai with a huge $10 bln bailout.

Now moving over to Gold’s technical outlook, little has changed since my last update. My buy zone of 1100-1125 was very decent considering the bottom being $25 away. So now what is the big questionon everyones mind? It is obviously confusing if we look at technical patterns and compare it with seasonal patterns. Technically the current pattern is supposed to be bearish – A sharp dip followed by a fake rally with another down move.

However, seasonal patterns show us the complete opposite. Historically the month of January has been a very sideways month for Gold with February and March being extremely bullish. Considering this pattern to occur again Gold could easily surpass $1200 and challenge $1300 by March.

The seasonal pattern has the bias over technical pattern because fundamentals are more stronger than technicals. Also, after the great performance of Gold last year and gaining popularity as the next bull market, there would be many huge portfolios being adjusted with more weight given to Gold.

Looking at the Chart now, Wave IV met its end at $1075 on 22 December last year. We are now in the early stages of wave V and the rally should be accelerating next week or early February. Those who are in buy from my suggested buy zone should move their stops to 1100 since any move below 1100 could open up the way to the previous all time high of 1030. Another interesting fact here is that the length of wave A) is equal to wave C) which increases the confidence in this count.

Summing up, Gold is bullish above 1100 and we are in the early stages of a massive Wave V. Moving above 1180 would certainly bring momentum back in this market and Gold will shine yet again.

19-1-10 GOLD

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