Gold ETF Supply and Demand

By: readtheticker | Fri, Aug 15, 2014
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This is the story of supply and demand within the gold ETF.

Demand = Buyers
Supply = Sellers

The difference between supply and demand will in the end move prices! Off chart fundamentals may be the reason for price to move but until the supply or demand battle unfolds prices will not move.

The story so far:

The advance that ended in 2011 ended with a Buying climax. The high volume blue bar confirms that more selling was going on than buying. After such a climax we always get a reaction, the automatic move down to support. These two form the high and low of our expected trading range. Price muddles along this trading range through out 2012.

At the moment the buyers are being very cautious. They do not want to mark prices up if supply is still present in the market place. So far buyers have waited 6 months to ensure that supply has dried up. The question is now that the market is neutral, who will take the lead. Demand has an open door as supply has retreated, but if the buyers do not turn up, the sellers may see an opportunity to drag prices lower, or they may have decided to wait at resistance before having another go.

Expect buyers to test this market, to test to see how easy or not it is to push prices higher. For prices to rise the force behind demand must over come the force of supply.


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Investing Quote

"Stocks create their own field of action and power; power to attract and repel,which principle explains why certain stocks at times lead the market and 'turn dead' at other times"

- William D Gann

"Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected"

- George Soros

 


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Author: readtheticker

readtheticker
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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/