Gold has still to loose

ON 21 DEC 12  (READ MORE AT http://www.sharetiger.org/2012/12/gold-loosing-shine.html  ) AND ON 18 FEB 13 ( READ MORE AT http://www.wallstreetanalyzer.com/2013/02/gold-may-loose-its-technical-support.html ) . WE HAVE WRITTEN THAT GOLD IS LOSING IT’S SHINE AND EVEN MAY BREAK ALL THE TECHNICAL SUPPORTS. IT’S NOW DONE AND STILL WE THINK THAT SPIRALLING DOWN THE PRICE IS NOT YET OVER. SO DON’T SQUARE OFF THE POSITIONS , WE ARE INITIATING A FRESH TARGET FOR GOLD AND  ie $ 1445- 1460.

INVESTORS AROUND THE GLOBE IS PERPLEXED BY THE SHARP MOVE LOWER ie BIGGEST  ONE DAY FALL IN MORE THAN A YEAR. IT IS BELIEVED THAT EUROPEAN CRISIS IS ONE OF THE FOREMOST  FACTOR WHICH IS AFFECTING THIS PRICE VARIATION. IF SOURCES ARE TO BE ASSUMED THERE IS MORE THAT 3500 TONS WITH PIIGS OR OTHER EUROPEAN NATIONS WITH FINANCIAL TROUBLES. 

WE WILL BE HEARING VARIOUS EX-POST FACTO JUSTIFICATIONS  FOR THE GOLD FROM VARIOUS AGENCIES / STOCK BROKERAGES. BUT I WARN YOU DON’T BUY ON DIPS , MORE IS YET TO COME AND WE ARE NOT OUT OF WOODS. WHILE CYPRUS' GOLD SALE IN ITSELF IS SMALL, HEAVILY INDEBTED EURO ZONE NATIONS SUCH AS ITALY AND PORTUGAL COULD ALSO FIND THEMSELVES UNDER INCREASING PRESSURE TO PUT THEIR BULLION RESERVES TO WORK. IF CYPRUS CAN BREAK THE GOLD MARKET, THEN (THERE ARE) MANY REASONS TO BE WORRIED, WITH SLOVENIA, HUNGARY, PORTUGAL, SPAIN AND ITALY IN LINE," SAID MILKO MARKOV, AN INVESTMENT ANALYST AT S.K. HART MANAGEMENT.

NOW WE THINK GOLD OFFICIALLY ENTERED BEAR MARKET TERRITORY FRIDAY, DOWN MORE THAN 20 PERCENT FROM ITS AUGUST, 2011 HIGH OF $1,891.90. THE NEWS THAT CYPRUS WAS TO SELL 40 TONS OF GOLD MAY BE AN IMMEDIATE CATALYST FOR SELLING, BUT TRADERS SAY THE BIGGER FACTORS FOR SELLING ACROSS MARKETS ARE CONCERNS ABOUT A SOFTENING ECONOMY, AND REPORTS OF WEAKER DEMAND IN THE OIL MARKET.

IN THE LAST POST WE HAD INITIATED A TARGET OF 1545 BUT NOW AS IT BROKE THROUGH $ 1535 – $ 1525 LEVELS SO QUICKLY, IT HAVE UNLEASHED A NEW WAVE  OF SELLING WHICH MAY ONLY HALT AT NEXT SUPPORT OF $ 1455. SO NOW ALL WHO ARE HAVING SHORT POSITIONS SHOULD HOLD THEIR SHORTS AND THOSE WHO ARE HAVING NO POSITION MAY INITIATE FRESH SHORTS AS OF NOW OR ON ANY DEAD CAT BOUNCE.

HOLD YOUR SHORT POSITION IN GOLD

 

ON 21 DEC 12 WE HAVE WRITTEN IN THE POST THAT GOLD IS LOSING THE SHINE AND THE SAME IS BEING PROVED. YOU CAN READ MORE ON http://www.sharetiger.org/2012/12/gold-loosing-shine.html. WE AGAIN RECOMMEND OUR CLIENTS NOT TO SQUARE OFF THE SHORT POSITIONS AS OF NOW. OUR TARGET FOR GOLD IS 1545 IN NEXT 15 DAYS .

GOLD REBOUNDED FROM A SIX-MONTH LOW ON MONDAY AS BARGAIN HUNTERS RESURFACED AND JEWELLERS IN CHINA RETURNED TO THE PHYSICAL MARKET AFTER THE LUNAR NEW YEAR HOLIDAY, BUT A FIRM U.S. DOLLAR WAS LIKELY TO LIMIT THE UPSIDE.

GOLD HAS BEEN UNDER PRESSURE FROM TECHNICAL SELLING AND GAINS IN THE U.S. CURRENCY AFTER THE EURO SLIPPED FROM A 15-MONTH HIGH STRUCK IN EARLY FEBRUARY ON RENEWED WORRIES ABOUT THE HEALTH OF THE EURO ZONE ECONOMY.

GOLD ROSE $5.18 AN OUNCE TO $1,614.24 BY 0333 GMT AFTER FALLING TO AROUND $1,598 ON FRIDAY, ITS WEAKEST SINCE AUGUST. FRIDAY'S LOSS MARKED BULLION'S BIGGEST ONE-DAY DROP SINCE DECEMBER.

IN HONG KONG, PREMIUMS FOR GOLD BARS ROSE TO AS HIGH AS $1.70 AN OUNCE TO THE SPOT LONDON PRICES FROM $1.50 LAST WEEK, REFLECTING A SURGE IN BUYING INTEREST FROM JEWELLERS, SAID RONALD LEUNG, DIRECTOR OF LEE CHEONG GOLD DEALERS IN HONG KONG.

BUT HE DOUBTED WHETHER THE BUYING INTEREST WOULD LAST.

"THE STRONG DOLLAR IS THE MAJOR POINT. SENTIMENT IS NOT BULLISH FOR THE TIME BEING, EVEN THOUGH WE SEE THERE'S TENSION IN NORTH KOREA," SAID LEUNG, REFERRING TO A LACK OF SAFE-HAVEN BUYING NORMALLY ASSOCIATED WITH GEOPOLITICAL TENSIONS.

NORTH KOREA HAS TOLD ITS KEY ALLY, CHINA, THAT IT IS PREPARED TO STAGE ONE OR EVEN TWO MORE NUCLEAR TESTS THIS YEAR IN AN EFFORT TO FORCE THE UNITED STATES INTO DIPLOMATIC TALKS WITH PYONGYANG, SAID A SOURCE WITH DIRECT KNOWLEDGE OF THE MESSAGE.

LEUNG SAW SUPPORT FOR THE METAL AT $1,600, WHICH IF BREACHED COULD TAKE IT DOWN TO $1,580.

HEDGE FUNDS AND SOME BIG SPECULATORS SLASHED THEIR BULLISH BETS ON U.S. COMMODITIES, TAKING AIM PARTICULARLY AT GOLD WHICH HAS LOST SOME OF ITS LUSTER THIS YEAR, TRADE DATA RELEASED ON FRIDAY SHOWED.

IN OTHER MARKETS, JAPANESE SHARES RALLIED AND THE YEN FELL ON MONDAY AFTER TOKYO ESCAPED DIRECT CRITICISM FROM ITS G-20 PEERS ON ITS AGGRESSIVE REFLATIONARY PLANS THAT HAVE WEAKENED THE CURRENCY.

THE EURO WAS LITTLE CHANGED AT $1.3351, HAVING FOUND GOOD SUPPORT NEAR $1.3310 ON FRIDAY. THE LOW ALSO REPRESENTED THE 38.2 PERCENT RETRACEMENT LEVEL OF ITS NOVEMBER-FEBRUARY RALLY, AND A WEAKER EURO MAKES DOLLAR-PRICED GOLD MORE EXPENSIVE.

"THE TECHNICAL PROFILE REMAINS BEARISH. IF PRICES ARE UNABLE TO REGAIN $1,640 THE MARKET WOULD TARGET $1,525-$1,550. THE RSI IS DOWN AT 30.1, ON THE THRESHOLD OF OVERSOLD AND IT'S LOWEST IN A YEAR," SAID ANZ IN A REPORT.

"THE CURRENT SPELL OF WEAKNESS ADDS TO THE RISKS THAT WE MAY UNDERSHOOT OUR Q1 FORECAST OF $1,730, ESPECIALLY IF PHYSICAL BUYERS HOLD BACK ON EXPECTATIONS OF FURTHER FALLS."

A RAFT OF BUSINESS SURVEYS THIS WEEK WILL BE COMBED OVER FOR CONFIRMATION OF HOPES THAT A DIRE FOURTH QUARTER OF 2012 MARKED THE CYCLICAL TROUGH FOR THE WORLD ECONOMY.

MAJOR POWERS PLAN TO OFFER TO EASE SANCTIONS BARRING TRADE IN GOLD AND OTHER PRECIOUS METALS WITH IRAN IN RETURN FOR IRANIAN STEPS TO SHUT DOWN THE NATION'S NEWLY EXPANDED FORDOW URANIUM ENRICHMENT PLANT, WESTERN OFFICIALS SAID ON FRIDAY.

PROMINENT HEDGE FUND MANAGER JOHN PAULSON CONTINUED TO HOLD SIGNIFICANT GOLD INVESTMENTS IN THE FOURTH QUARTER OF 2012, EVEN AS OTHER INVESTORS PULLED OUT.

NOTABLE INSTITUTIONAL INVESTORS, INCLUDING GEORGE SOROS, JULIAN ROBERTSON AND ALLIANZ'S PIMCO REDUCED THEIR BETS ON GOLD DURING THE QUARTER, WHEN BULLION POSTED ITS BIGGEST QUARTERLY LOSS IN MORE THAN FOUR YEARS.

PAULSON & CO OWNED 21.8 MILLION SHARES IN THE WORLD'S LARGEST GOLD-BACKED EXCHANGE-TRADED FUND, SPDR GOLD TRUST, AT THE END OF DECEMBER, UNCHANGED FROM SEPT. 30, A FILING WITH THE U.S. SECURITIES & EXCHANGE COMMISSION SHOWED ON THURSDAY.

"THAT'S A GOOD SIGN AS HE'S A BIG PLAYER. IT SHOWS THAT HE STILL HAS LONG-TERM FAITH IN THE MARKET," SAID BILL O'NEILL, A PARTNER IN COMMODITIES INVESTMENT FIRM LOGIC ADVISORS.

PAULSON IS BY FAR THE BIGGEST SHAREHOLDER OF THE SPDR GOLD ETF. HE HAS OFTEN ADVOCATED GOLD TO OFFSET RISKS RELATED TO CURRENCY EXPOSURE AND U.S. DOLLAR DEPRECIATION.

THE VALUE OF PAULSON'S SPDR ETF HOLDINGS, HOWEVER, DROPPED TO $3.54 BILLION IN THE FOURTH QUARTER FROM $3.75 BILLION IN THE THIRD, RESULTING IN A PAPER LOSS OF $215.5 MILLION FOR HIS FUND.

THE DECLINE WAS BECAUSE OF A 5 PERCENT, OR $100, DROP IN THE PRICE OF SPOT GOLD DURING THE FOURTH QUARTER.

SOME ANALYSTS CITED YEAR-END HEDGE FUND REDEMPTION FOR GOLD'S PULLBACK IN THE QUARTER.

IN DECEMBER, MORGAN STANLEY SMITH BARNEY RECOMMENDED THAT ITS FINANCIAL ADVISERS PULL CLIENT MONEY OUT OF A PAULSON FUND. EARLIER IN THE YEAR, CITIGROUP'S PRIVATE BANK DECIDED TO WITHDRAW $410 MILLION FROM PAULSON & CO.

GEORGE SOROS, WHO CALLED GOLD "THE ULTIMATE BUBBLE" IN 2011, REDUCED HIS POSITION IN SPDR GOLD BY MORE THAN A HALF TO 600,000 SHARES IN THE FOURTH FROM 1.32 MILLION IN THE THIRD QUARTER.

TIGER MANAGEMENT'S JULIAN ROBERTSON DISSOLVED HIS ENTIRE STAKE IN MARKET VECTORS GOLD MINERS ETF, WHILE HE HELD ONTO THE JUNIOR GOLD MINERS ETF.

RECENT SIGNS OF RECOVERY IN THE U.S. HOUSING AND JOBS MARKETS ALSO DIMINISHED GOLD'S APPEAL AS A HEDGE AGAINST ECONOMIC UNCERTAINTY, ANALYSTS SAID.

"IF THE EQUITIES MARKET CONTINUE TO ROLL HIGHER HERE, INVESTORS COULD DIVERT MORE MONEY AWAY FROM GOLD IN THE NEAR TERM," O'NEILL SAID.

YEAR TO DATE, GOLD IS DOWN AROUND 2.5 PERCENT. IT TRADED AT $1,635 AN OUNCE ON THURSDAY, JUST $10 ABOVE A SIX-MONTH LOW.

SPDR GOLD TRUST IS THE WORLD'S LARGEST GOLD-BACKED, EXCHANGE-TRADED FUND, HOLDING AROUND 1,323 TONNES OF GOLD BULLION. IT IS ALSO AMONG THE WORLD'S TOP ETFS IN TERMS OF MARKET CAPITALIZATION.