I would hang on a little while longer like for the next few days and enjoy the ride. Would love to see POG crack 1, 426.

This post has been edited by tchtax: Aug 27 2013, 11:08 PM

It was a nice dip.. I've reloaded at 1390. Back in full position.
I want see it burst thru 1425 and go to 1450 as next target.

Can hold longer. Some even say it will go up somemore.

I on the other hand, waiting for it to drop slightly lower to enter.

I plan to hold till early or mid of Sept. And sell everything few days prior Fed next meeting in mid of Sept. It looks like QE taper is on the way.

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Is gold rise just a dead cat bounce?

By Garry White, and Emma Rowley

What is driving this tentative recovery in the market for the “safe haven” metal? A key factor may be that the sell-off in exchange-traded funds backed by gold has passed its worst.

“Support has come from the financial market turmoil in emerging economies, geopolitical tension in Syria and Egypt, together with the fact that gold holdings in exchange-traded products has been stable for a couple of weeks,” says Ole Hansen, head of commodity strategy at Saxo Bank.

“[That] could be taken as a sign that most of the institutional selling may be over or at least paused.”

John Paulson, the legendary hedge fund manager, may have more than halved his stake in the world’s biggest gold-backed exchange traded fund (ETF), the SPDR Gold Trust, in the second quarter of the year but this has not dampened investors’ spirits.

That may seem counterintuitive, after all, people watch what Paulson and his peers do in the hope that they represent the “smart money” to follow. However, some traders blame gold’s fall to its low on the last day of June on selling by these gold-backed funds to meet clients’ request to exit their positions.

Some now hope funds are close to finished in terms of selling their gold, after an outflow of 402 tonnes from ETFs over the quarter. To put that in context, that wiped out the bulk of the buying by ETFs across 2011 and 2012 put together.

Meanwhile, outside the investment world, Indian and Chinese demand for gold has been strong, while the fall in the price has likewise stimulated retail investors to buy gold bars and coins.

Together, consumer buying of the metal rose by 53pc to a total 1,083 tonnes in the second quarter of this year compared to 2012, the World Gold Council reported in its latest quarterly update.

That left overall global demand at 856 tonnes, 12pc below its level a year ago, according to the Council’s figures.

Some think that if the heavy selling period is over, the gold price has quite a bit further to rally, up to $1,450 an ounce or above. And yet, it still looks risky to call this anything more than – potentially – a short-term floor for the price.

Why? Look to the Federal Reserve again. The gold price plunge in recent months has been largely driven by the expectation that the US central bank will start to unwind its vast quantitative easing (QE) effort, which, given its inflationary effect, puts some lustre on gold as a store of wealth. On a broader level, the backdrop of an improving global economy – which allows the Fed to unwind QE – further erodes the appeal of gold as a hedge.

Of course, when the Fed will act is not totally clear. On Thursday the minutes of its latest monthly policy meeting led people to take differing views on when the wind-down of purchases – the so-called “taper” – will begin.

Analysts at Morgan Stanley saw the “key takeaway” as being that the Fed remains on track to taper its QE purchases in September.

“Fed officials are well aware that market participants generally see a September announcement of a start to QE tapering as likely, and they did nothing with these minutes to warn investors away from that view”, they said. “In our view, the recent gold price rally will likely fade towards year-end as the headwinds that have pressured gold throughout the year re-emerge.”

These are, in their view, a strengthening dollar – as QE is removed – driving up bond yields, which lessen the attraction of holding gold, which is a non-yielding asset, and “a continuing erosion in investor faith” in the metal.

Still, there is nothing like agreement in this area, with Saxo Bank making the call that QE tapering is a “temporary sideshow” which will be followed by “more QE coming in 2014, not less” on the back of negative economic data.

All that is clear is that the Fed holds the gold price in its hands.

why is it on?

Fed seen making first taper move in September
View from Jackson Hole retreat

JACKSON HOLE, Wyo. (MarketWatch) — The Federal Reserve seems on track for a small reduction in the pace of its asset purchase program in September, according to experts attending the central bank’s annual retreat in Jackson Hole.

There was a palpable sense at the gathering that Fed officials are eager to bring the era of extraordinary policy stimulus to an end.

Read what business economists expect of Fed taper

“There is a yearning to get back to normal” said John Taylor, the Stanford University economist, in an interview.

Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said “the message is right now that they go in September. I haven’t heard anything to suggest expectations for a September move are off-base.”

Barry Eichengreen, an economist from the University of California Berkeley, said he sensed that the central bankers were looking past potential pitfalls.

“I think there is a desire to return to conventional monetary policy, but we don’t have a normal economy,” Eichengreen said.

He said he was surprised how little “visible alarm” there was from Fed officials about recent volatility in emerging markets tied to the Fed’s tapering plan.

Fed Chairman Ben Bernanke said the Fed would start to pull back from its $85 billion-a-month asset purchase program “later this year” if the economy continues to improve as expected.

Markets expect the Fed to cut the asset purchase plan by $20 billion in September.

O’Sullivan said the Fed might engineer a smaller $10 billion reduction at first.

Many participants at the Jackson Hole conference want the central bank to wait until later in the year.

They note there are an impressive array of challenges that await the central bank this fall.

For example, Congress and the White House have made no apparent progress on any way to end the bitter divide over fiscal policy. In addition, a spike in interest rates since the talk of taper started could stall the housing market and emerging market economies are slowing down in part due to take of a Fed exit.

After September, there are two more Fed policy meetings this year, one in October and the last in December.

“I think it is too soon,” said Susan Collins, dean of the University of Michigan’s Gerald R. Ford School of Public Policy. She noted that recent economic indicators has been mixed.

A September move “could be premature,” agreed Eichengreen.

But others argued that September was as good a time as any to move.

“The sooner, the better to get started,” said Taylor. Otherwise you just keep postponing the inevitable, he said.

Bernanke, whose views may decide whether the Fed moves in September, didn't attend this year’s Jackson Hole retreat.

Former Fed Gov. Randy Kroszner said he favored a small “step down” in September, after which there could be a pause for the central bank to gauge the impact on the markets and the economy.

If all goes well, the Fed could then reduce the pace of purchases over the next seven meetings until the middle of next year, Kroszner said.

Others weren't so sure that the tapering path would be so smooth.

“Everyone is realizing that tapering is not going to be easy,” said former Fed Gov. Lawrence Lindsey.

Interest rates spiked over 100 basis points just on talk from the Fed of a pullback.

“The Fed is learning it is hard to wean the addict off the drug,” Lindsey said.

Collins said that the markets might have to cope with “a range of views” from Fed officials about the right course of action.

“Hopefully markets are not going to overreact,” she said.

Glenn Hubbard, dean of the Columbia University Gradual School of Business, said he thinks the Fed will wait until December to slow the pace of purchases due to an absence of a clear sense of the economy’s direction.

One factor that may be driving the Fed is the transition to new leadership. Bernanke is widely seen as leaving his post when his term ends in January. A spirited debate has broken out over whether former Treasury Secretary Larry Summers of Fed Vice Chair Janet Yellen would replace him.

“The Fed would like to be headed toward exit on Bernanke’s watch,” said Vincent Reinhart, chief U.S. economist at Morgan Stanley.

OMG gold have seen been growing every since the 2nd drop.

0.0 mind to share what's the factor that causes this to happen.

i've monitor our ringgit have significantly drop quite alot. but i am sure there are more factors than just currency.

would like to hear more from your point of view.

the fundamental to sell off my gold and silver.

currently 916 is rm170/g. When reach rm180/g, its time to offload all.

Appears none of them are Jack SURE!

Are you?

OMG...i was looking at the chart. it was 1421/oz and it shot up to 1426/oz in a split second

This post has been edited by hey_there: Aug 28 2013, 01:16 PM

Drums of war are really beating, oil prices have spiked up.!!

Like war on Libya, war on Syria is likely will be limited and short.

What hapening to Gold price ?
Huhhh ...Need another BOX lolllll to keep for longer time ...

Yes, you are right, no one in the market really know what Fed will do, I bet even Bernake himself is not 100% sure.

But we at the same time have not heard anything that the taper maybe delay, so I believe Fed is on track, but at lower level, not as much as 85billion, to test the market.

Another important piece of hint is the US Aug payroll report due Sept 6, one last piece of important info between now and Sept meeting.

So to be safe, I will off load my truck early next month after the Aug payroll report out (maybe to load the truck with more) and see what will happen next.

No harm to keep the gun powder in my own pocket dry and safe to prepare for next shot.

Oh yes, if you believe gold's going to go up, buy silver.

I just get another 30g this morning...

my indicator , not what pipu say, is the unemployment rate.

My take is this: If they take their foot off the pedal, the interest rates will go up.
This will tank the U.S economy which is not showing many signs of growth.

No One wants a depression. Bennanke is a anti deflation bug, He rather inflation which is felt the world over now
because of his policies.

Its not yet.

As for gold and silver, I have BOTH.

Sure or not?

nothing is sure one..climbing up to $1430

Time to buy or sell?

This is my take....its up to you to DYODD.

101 econ: If you raise interest rates, costs of doing biz goes up. If biz is already bad, guess what will happen?