Recently I read a lot of comments and discussion about the "real value" of Gold, the supply-demand in physical and in "paper" gold. Some argue, that while phísical gold mkt has probably a huge demand (mainly from China, India and Russia recently), the price of gold is still falling, which they see is not reasonable.
Let me point few things:
1. There is difference between buying and own spot physical gold versus "paper gold", like GLD, futures contracts or other gold related ETFs with no real gold back up. But this difference will only has relevance if things in fiat ccy systems, or in global economy or commercial system really turn bad. Then those who have physical will win, but those who have it as a certificate or "paper" won't be able to use it. However until such an end-game scenario the difference doesn't really matter, what's more owning the physical Gold actually costs lot more as you have to securely store it, deliver it, etc.
2. What about the Price? Well the Price is more or less the SAME! It can not be different, as that would be arbitrary. So what one has to pay for buying physical gold is the same price one other pays for a futures contract or ETF (- costs and management fees charged in case of gold funds).
The real difference in between the two (physical and paper) is the ability of LEVERAGE. That's what confuses a lot of people, and that's why you can never really tell what is the real value or fair Price of Gold as a commodity.
For example Hedge Funds or Banks can open really high leveraged positions thus pushing or sometimes maybe even manipulating Price of Gold in any direction.
The conclusion is even if someone thinks Gold as a commodity in long term should value a lot more than now, we can not deny the trend of the Price, and actually we can not see where and when bearish trend will end. No one should buy Gold just because it "looks cheap". Buy when you are more certain about it will get a lot more expensive: means when the trend reverses.
Technicals:
Daily: Still bearish trend, bearish Ichimoku picture. The idea of buying at channel low was ok, but we haven't yet seen a real follow through as Price got stuck in a triangle. If today it close will be higher then it will have a good chance to break on the upper side bringing some further short term bullish pull back. 1195-1205 is the Key support/resistance zone now.
4 Hrs: Nothing special here, looks rather sideaway. As you see Price should break and stay above upper key level 1170-1175 to have chance for a counter trend move. Lower key level is 1148-1150 (and 1135 as local low)
p.s.: Swiss Gold referendum is getting closer. If anything, I will be rather a buyer of Gold until end of November, as I doubt speculators will be strong and brave enough to push it a lot lower... who knows how swiss people vote.
Let me point few things:
1. There is difference between buying and own spot physical gold versus "paper gold", like GLD, futures contracts or other gold related ETFs with no real gold back up. But this difference will only has relevance if things in fiat ccy systems, or in global economy or commercial system really turn bad. Then those who have physical will win, but those who have it as a certificate or "paper" won't be able to use it. However until such an end-game scenario the difference doesn't really matter, what's more owning the physical Gold actually costs lot more as you have to securely store it, deliver it, etc.
2. What about the Price? Well the Price is more or less the SAME! It can not be different, as that would be arbitrary. So what one has to pay for buying physical gold is the same price one other pays for a futures contract or ETF (- costs and management fees charged in case of gold funds).
The real difference in between the two (physical and paper) is the ability of LEVERAGE. That's what confuses a lot of people, and that's why you can never really tell what is the real value or fair Price of Gold as a commodity.
For example Hedge Funds or Banks can open really high leveraged positions thus pushing or sometimes maybe even manipulating Price of Gold in any direction.
The conclusion is even if someone thinks Gold as a commodity in long term should value a lot more than now, we can not deny the trend of the Price, and actually we can not see where and when bearish trend will end. No one should buy Gold just because it "looks cheap". Buy when you are more certain about it will get a lot more expensive: means when the trend reverses.
Technicals:
Daily: Still bearish trend, bearish Ichimoku picture. The idea of buying at channel low was ok, but we haven't yet seen a real follow through as Price got stuck in a triangle. If today it close will be higher then it will have a good chance to break on the upper side bringing some further short term bullish pull back. 1195-1205 is the Key support/resistance zone now.
4 Hrs: Nothing special here, looks rather sideaway. As you see Price should break and stay above upper key level 1170-1175 to have chance for a counter trend move. Lower key level is 1148-1150 (and 1135 as local low)
p.s.: Swiss Gold referendum is getting closer. If anything, I will be rather a buyer of Gold until end of November, as I doubt speculators will be strong and brave enough to push it a lot lower... who knows how swiss people vote.
