Why Is Gold Bullish Now
You must be noticing why is this Unit-Trust-Investment.com lately talks only about gold investment. Hmmm, my interest is now fully on gold investment during this economy meltdown. Gold has always been the investment that people rush to during economy downturn.
I get more and more excited each day when news are saying that gold is forecasted to go up higher this year and next year. The recent one from Merrill Lynch is saying that gold will be up to US$1,500 per ounce in the next 12-15 months! Gold is now at US$911.40 at the time of writing this. Wow! So much profit to be made.
Now, if it is true that the gold price will be going up to those levels, when we reach there and look back, you will think the price today is cheap instead of expensive.
Eric Hommelberg has listed down all the points that show why gold is so bullish at this time. You can read his article here.
Michael St. Clair predicts even higher price for gold: "The Federal Reserve and the house of cards falls by end of 2010. Gold will trade between $1,700 and $2,000 by 2011."
An old article that I have published has said that it was predicted that gold and silver will be used as currency. This will happen after the US Dollars collapse because of the oversupply of the Dollars in the US economy system. IMHO, when that happens, countries worldwide will turn to gold and silver to calculate the exchange rates. At this moment, all the world's currencies exchange rates are still being quoted against the US Dollars. For example, Ringgit Malaysia is 3.60 against the US Dollars. Something like that.
Wait, that's not all.
Alf Field, using Elliot Waves method, has charted an even higher price prediction on gold. Can we see a US$10,000 per ounce price? Whatever price it is going to be, US$1,000 or US$1,500 or US$2,000 or US$10,000, I am all the way on gold for now as long as the economy does not recover to its previous prime health.
Alright, I hope today's article is enough to keep you busy. Please click on all the links in the article and read them. Then let us know your decision whether gold is a good buy at this moment.
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38 comments:
Interesting post, this might be the way to go, paper money is just becoming paper.
Yes, we shall continue to see a rising price in gold.
hi there
just came across this blog last night..very interesting especially your analysis on gold. btw, i am also in the public bank gold investment a/c..made a little profit based on gut feel...but i really wud be more confident in investing based on proper gold analysis..
pls keep up your good work & do share with us your secrets to making $$$ on gold!!!
cheers
nik
Hi nikki,
Thanks for your comments.
Investing with gut feel will be much more better when we add in good analysis.
I do use a bit of gut feel, intuition, and even interpretation of dreams. Haha. At the end, I will base it on chart analysis.
yes..i totally agree that basing on chart analysis will be a better bet..pity i do not hv the knowledge on chart analysis. that's why i am glad to hv found a your blog coz u r also investing via PBB GIA plus some useful investing tips....
p/s : gold is now high at USD987/oz (PBB GIA @ MYR118.96/g). i want to invest now but not to confident...any suggestions?
cheers & hope we all make lots of $$$ together!!
nik
nik,
If you have not bought any, just wait first for the price to drop later. Now it is high. And will reach a peak very soon.
Buy when the price comes down to the valley again. There is peak, and valley. We buy the valley and sell the peak. That's my strategy.
Is it consider that Gold is currently entering correction period (going to reach valley soon)?
As I read some articles and news saying there are quite a number of investors sell the gold to lock-in profit when it reaches 1000 point that time.
Calvin Mak,
Yes, a slight pullback to a valley. But not a very deep one.
The overall trend is still upward. Those that sell now will enjoy a bigger profit if they can hold on and sell at a later date.
On the other hand, there are also articles and news saying the rich and wealthy are seeking to buy a lot of gold bullions. This will drive the price up further.
Mm...I'm planning to buy-in when it reaches this small valley which could be end of this month I guess?
Do you think it is still a good buy?
Calvin Mak,
Depends on your strategy. Do you want to buy and hold it till year end? Or do you want to use buy-low sell-high strategy?
If it's a buy and hold, you can see what the price is on month end.
If it's a buy and sell, study whether you want to take the risk for the potentially small profit margin.
Anyway, as in the article, some say the price for short term can go up to 1150, 1200, 1350 or 1500, depending on whose articles you read.
Can't promise you anything, use your own judgement. Invest carefully.
I bought a few grams of gold last Thursday at RM118.20/g, thinking that the price will continue to rise, based on article I've just read by Habib Jewel quoting them it will reached up to RM125/g, but the prices went down significantly today. Do you think it has reach its resistant level, and now its going on a down-trend.
rafiq,
Where did you buy the gold? Physical gold or gold investment account?
If it is physical gold, yes, price is now RM127/gm for 916 gold and RM135/gm for 999 gold. (Source: http://www.fgjam.org.my)
Gold price on PB Gold Investment Account may reach that level of RM125/gm. It's just a matter of time this year. It went to as high as RM119 level this year. We may see higher prices.
It's normal that price doesn't go up in a straight line. There is up and down even during an uptrend. There are a lot of resistance points. The current point is at USD950. That's why we see the current price is holding up at this region.
Looks like the dip is going to be deep, as it falls below 950 at some point today….won’t you think? What will be the next resistance point then, 890?
Sam,
We shall see. Looks like the UK/Europe market is pushing the price up again. But later on the US market brings it down.
The resistance is still strong at 950. A lot of buying at this level. The next strong resistance will be at 940. A lot of people waiting at the sideline to come in.
890 is not in the immediate range.
hi carson
ya ppl like me waiting at the sidelines..ha ha..
just wondering what will be the expected peak level in mid-march based on ur analysis? breakin the US1,000 level? also what is the expected valley subsequent to that? below US900?
appreciate the tips so that i can make a better judgment/timing...
cheers
I am keen to invest in gold but I am not sure to invest physical gold coins or gold investment a/c. If I will to invest physical gold coins, how long I have to hold the gold coins. Since the 999 gold price is now already RM135/gm can I still buy at this point or should I wait for it to drop. Plse advise asap.
nik,
I am not psychic to see what the price is going to be. We just have to wait. When it's there, I will tell you. Haha.
Anonymous,
If you plan to buy physical gold, hope you plan to keep it for years. When you sell your physical gold to wherever you bought it from, the buy-back price by the shop is not following the market price. There's around 15% off the market price.
Unless it is from the bank, then the buy-back price of physical gold coins is not that big.
You can buy at any price but how long can you hold it for? RM135/gm at this moment is quite at the top. Have to wait for it to come down lower (perhaps) in subsequent months.
Gold per ounce is breaking below 940 resistance.
Looks like it is heading downward to 900.
Hope it doesn't fall below 900, otherwise I guess it will break the up trend...
Buy now while you can, otherwise it will jump high next week!!
Hey Anonymous,
Based on what analysis are you saying to buy now?
What's your name...?
As I see from the chart analysis, it is possible to go down to around 900 and up again.
I would think gold is still bullish.
Even if gold really up next week, I don't think it will rise a lot and continue going up. It will still go down until the support line. Well, it is just my interpretation...
Maybe March is a month we get ready to buy-in?
Sam and all,
This is my analysis and thought. Please do your own due diligence. There is no certainty in my forecast.
The correction for one week from 20Feb to 27Feb maybe over.
Price corrected from 30Jan to 9Feb for around USD33. Multiply this with a Fibonacci value of 1.618, we get roughly USD53.40.
Price closed on 20Feb at USD992.65. Deduct USD53.40 and you will get USD939.25. This USD939 is what the price closed at on 27Feb.
Therefore, possibly the correction is over.
We might see price moving up from Monday 2Mar ending at the peak on 13Mar.
Using Elliot Wave, I see that there are 2 peaks in this wave ~ 30Jan and 20Feb. The wave will complete with a 3rd peak (13Mar) before calling it a day.
And with Elliot Wave's theory, the coming peak will be higher than the previous high on 17Mar 2008. Thus, my calculation for 13Mar09 is between USD1050-1080. Might be higher. I don't know.
After the peak is reached (13Mar or whatever date), we might see the price coming down to USD940-950 level. Hard to tell at this moment, have to wait till we move nearer. Once a valley is reached, we will see price moving up again to another high that some say will be USD1200 level.
Let's wait and see.
Maybe my technical analysis is not that good yet, I saw the current valley looks like the one happen in 5 Dec 08 and 14 Jan 09 which is quite deep but still in uptrend.
But how do you explain for the peak in 28 Nov and end of Dec with Elliot Wave?
Sam,
There was another wave up consisting of 3 peaks prior to the current up wave (that already has 2 peaks 30Jan and 20Feb).
The earlier wave also has 3 peaks: 25/28Nov08, 17Dec08 and 1Jan09.
After the up wave, came the down wave: dropping to 14Jan09.
Well, I might be wrong. We just have to wait and see.
I think gold will down to around 890 this week.
I have a strong feeling it will greatly bounce back next week.
Well, I think still have to see how it goes this Thurs/Friday. Just prepare I guess.
Sam,
Some are saying that the price will go down to USD880 level even. And there is no certainty how low the price can go. Looks like the up wave was over.
Those who have not bought can now wait for the next low.
I am still waiting for the 13Mar date. It's a turning point. Just have to see later whether the price moves up or down. I will top up more or sell, either way.
I have read some analysis, most are saying the correction will end this week.
Some technical analysis also shows a possible great rebounce is likely to happen next week.
RM is devalued compare USD currently...I guess the profit in Gold Investment will be bigger.
Well, I'm ready for the next low.
Calvin Mak,
Have you bought any? When?
Not yet, most probably tomorrow. I think today US price will drop again. Friday in US will probably drop as well but since next Monday is holiday and bank is not open. So tomorrow should be the best time.
Although there is a risk there as gold might break the support line, but if it rises, buying on Tuesday will be quite expensive then. It's a 50-50 risk.
Besides, I compare the MACD and RSI, although the momentum is going down but the low point also bounce back in January and February. Furthermore, economic is going to get worse, I'm not sure what else I can invest. I can only think of gold currently.
Carson, what do you think?
I mean Dec and Jan.
Calvin Mak,
Yes. There is sign that price is beginning to move up. The slow stochastic indicator also shows the daily price is soon to turn upwards. Though the market may prove me wrong.
If price closes higher than yesterday, there is a good sign things are looking up.
Invest carefully. Some say price may go lower. Depends on who you listen to. Make your own judgement.
Ok, PB gold price is 114.58 now. This seems to be good news that the correction is over and continue the uptrend.
Yesterday was a great buy as it is only about 112, but there is a risk that it might go lower.
Although the price is higher today but the risk is being reduced, because it doesn't break the support line and bounce back. I believe in the coming weeks, the price will greatly increase especially next week.
Of course, like Carson said, make your own judgement :)
Carson,
You said if price closes higher than yesterday, there is a good sign things are looking up.
So, do you think it's a good time to buy or top-up now?
CK,
The profit may not be big, assuming you buy now and sell at the top. Also, there is a risk that price may not even reach 1000 again in this new upmove.
I can only say, buy at your own risk and use your own judgement, gut feeling, instinct. If we're lucky this time, price may be higher than the 20 Feb 2009 high. But that's just my thought and only time will tell us.
Thanks, Carson. Ok, I’m in. I think I can take the risk. Otherwise, I might need to wait for another few weeks…
Looks like today drops about RM3 per g. Mm….another support test to 900? Even my previous last month top-up also back to zero gain now.
Good sell timing is a very hard to identify, the best time is during it reaches 1000 last month but I thought it could go higher and I didn’t sell.
Now it seems I’m back to square one now….buy and hold…..
How do you calculate when to sell to avoid further lose if it really breaks the support line?
Yeah, I am like you, didn't sell and thought that it will go higher.
There is an indicator that you can use as a guide to know when to sell ~ stochastic slow. But of course, you have to use other indicators and analysis too. Otherwise, too premature to sell and you can't maximize your profit.
To avoid further loss, you can set a negative 5%, 10%, 15% and so on to the price you bought. If you bought at RM100, minus 5% is RM95. When the price reaches RM95, you can sell if all other indicators shows that price is falling.
Sometimes 5% is too small. So, you can have a bigger loss tolerance, maybe 10%. Depends on your wallet and heart. Haha.
Hi dear, my name is Hafiz. I am an authorised dealer of Public Gold Sdn Bhd. I am selling a lot of Gold Bar. You may contact me at 0172361609 or visit my blog at http://pampsuisse.blogspot.com and www.publicgold.com.my
cheers!
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