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Gold Price Forever $1200

Market Analyst & Author
November 26, 2017

Talkin' turkey this post-Thanksgiving, let's chew on the track of Gold in the above Scoreboard, which shows price in 2017 now as more buoyant than 'twas coming into year-end 2016. But the centerpiece trading range across the entirety of the track is the 1200 "handle", (a trading term used to express price by a round number).

And truth be told, regardless of the endless rationale, analyses, prognostications, hype and gripe across the spectrum of gold writers, stackers, traders and investors, gold these past five years has pretty much made its home in the 1200s. Whilst day-in and day-out, there are expectations that gold may at any moment suddenly be off up into the 2000s, (or in some views, boffed down into the 800s), at the end of the day, "we ain't really gone nowhere."

To be sure, gold's guiding light -- the debasement of currencies -- traditionally has been "de rigueur" for price gains, certainly so through the mania of monetary manufacturing millennium-to-date -- at least until five years ago: come 2013, gold did not resume gaining following its fall from the All-Time High in 2011.

Oh yes, since then, the Stateside money supply (M2) has further increased by 31% (from $10.5 trillion to $13.8 trillion), but it has not worked a wit into the price of Gold. Rather, gold by the consensus of all trading pressures is being valued "in as nausea perpetuity" 'round 1200. The following graphic bears this out: it charts the closing weekly price of gold by its "hundreds handle" for the past 17 years, the last five of which oscillate in and around the 1200 handle:

In viewing price this way, you'll recall 'tis no wonder we were recently told with respect to gold by a financier friend in Monaco: "Well, it's dead money, isn't it." Moreover, we've poked our own fun at gold, quipping in a missive this past May that in ten year's time, the voice from the radio shall say: "The Dow has reached 30,000 for the first time ever, Fed accommodation pushing the money supply across the $100 trillion mark; Oil is still clinging to the 200 level, while London gold is 1279 the ounce." Terrifique.

Still, per the above graphic if one regards the green track of Stateside money supply as the "mean" to which gold must ultimately regress, all will eventually be right with the monetary world.

For the present, from the "Extracting Blood From A Turnip Dept." we next turn to gold's weekly bars. Therein we see that despite the parabolic trend being Short per the declining red dots, price itself is not actually going down ... which would be worse that its going nowhere ... the latter basically remaining the case with gold settling out the week yesterday (Friday) at 1288. 'Twas the fourth week in the last five of a net price change of less than 10 points:

Thus clearly of late, were one to be simply holding a position in gold, there's not a whole heckova lot goin' on out there. But were one instead trading its day-to-day tide of spasticity, 'tis been quite the erratic ride, as too has been the case for the stock market. Here are the percentage tracks for the past 21 trading days of gold and the S&P 500, both of which are about +1.5% from one month ago (up-down-up-down-up-down-up-down):

Now let's view the past three months of the daily bars for both gold on the left and Silver on the right. Recall from the weekly bars that of late we've price essentially going sideways despite the descending parabolic trend suggesting lower levels? Here we've the opposite case: Gold's baby blue dots of 21-day linear regression trend consistency are swiftly ascending, the sideways price also balking that suggestion of higher levels. Silver's "Baby Blues", whilst less robust, find her price similarly stuck:

As for the precious metals' 10-day Market Profiles, we find Gold (below left) up in a more thinly traded area than 'round its 1278 price supporter, whereas Sister Silver (below right) as we've been seeing week-after-week is sticking to her 17.00 level:

Next let's look at the Economic Barometer as charted from a year ago-to-date, along with the S&P (red). No doubt about it, this has been a terrific upside run for the Baro since its bottoming in mid-September: so much so that we peeked back 20 years to see how the present stint compares. And what we found was not surprising, in understanding that the Econ Baro behaves more as an oscillator than as a uni-directional line, (such as gross domestic product, which basically rises as the population grows and so forth). This current rise in the Baro is coming up to an oscillative level where since the depths of 2008 it tends to run out of puff. Politically, one might note that the level of economic optimism is far firmer now than 'twas in the prior presidential cycle. 'Course, should the "pending" tax bill not live up to its economically supportive expectations, which already are well "priced into the market" and then some, such ought be the catalyst that sends the Baro -- and certainly the S&P -- back south. Here's the one-year view:

Finally here we've the Gold Stack. And of the 21 line items therein ranging from the 1100 handle up to the 2700 handle, eight are depicted as being in the 1200 handle. Gold forever 1200 indeed! Here 'tis:

The Gold Stack
Gold's Value per Dollar Debasement, (from our opening "Scoreboard"): 2768
Gold’s All-Time High: 1923 (06 September 2011)
The Gateway to 2000: 1900+
Gold’s All-Time Closing High: 1900 (22 August 2011)
The Final Frontier: 1800-1900
The Northern Front: 1750-1800
On Maneuvers: 1579-1750
The Floor: 1466-1579
Le Sous-sol: Sub-1466
Base Camp: 1377
2017's High: 1362 (08 September)
The Weekly Parabolic Price to flip Long: 1355
10-Session directional range: up to 1298 (from 1270) = +28 points or +2%
Trading Resistance: 1292
Neverland: The Whiny 1290s
Gold Currently: 1288, (expected daily trading range ["EDTR"]: 13 points)
Trading Support: 1285 / 1278
10-Session “volume-weighted” average price magnet: 1283
The Box: 1280-1240
The 300-Day Moving Average: 1253 and falling
2017's Low: 1147 (03 January)

In closing, we leave you with these two quick thievery hits:

■ Another week, another "cryptocurrency" leak: $31 million-worth of something called "Tether" gone in a digital micro-millisecond. Just like that. Yet nevertheless, 'tis queried with bitcoin breaking above $8,000/bit: "Is it still time to buy?" One wonders what shall be the price of Gold upon the day one has to pay someone to take their bits**t away. Don't laugh: we've already seen negative interest rates.

■ Still no word as regards catching those who broke into the Fog Shots vodka factory right there in downtown Los Angeles: 1,800 gallons of distilled ethanol gone in, well, hardly just a digital micro-millisecond. And don't look at me: just because the factory is not that far from U$C (the University of Spoiled Children), to quote Sgt. Schultz: "I know nothing!"

'Course, what we do know is that Gold shan't really be forever 1200. Not when today 'tis already worth over 2700! Got yours?

Mark Mead Baillie

Mark Mead Baillie has had an extensive business career beginning in banking and financial services for two years with Banque Nationale de Paris to corporate research for three years at Barclays Bank and then for six years as an analyst and corporate lender with Société Générale.
For the last 22 years he has expanded his financial expertise by creating his own financial services company, de Meadville International, which comprehensively follows his BEGOS complex of markets (Bond/Euro/Gold/Oil/S&P) and the trading of the futures therein. He is recognized within the financial community of demonstrating creative technical skills that surpass industry standards toward making highly informed market assessments and his work is featured in Merrill Lynch Wealth Management client presentations.  He has adapted such skills into becoming the popular author each week of the prolific “The Gold Update” and is known in the financial website community as “mmb” and “deMeadville”.
Mr. Baillie holds a BS in Business from the University of Southern California and an MBA in Finance from Golden Gate University.

In 1933 President Franklin Roosevelt signed Executive Order 6102 which outlawed U.S. citizens from hoarding gold.
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