Three opinions on the juniors and gold and silver starting with Doc
Click download link to listen on this device: Download Show
It’s always interesting to get different opinions on our favorite subjects. Here is opinion number one from Doc on gold and the stockmarkets.
Hi Cort, Thanks for all your great work over the past years. Establishing PR was a great thing and has helped so many, all over the world. Hopefully it will cnnitoue to do that.National blogger sounds good to me, you write the most informative and soundly based ME/CFS blog on the net. The numbers who read you should convince any publisher with the right fit to take you on.Best of luck with whatever you decide to do Cort. I’ll watch with interest. And from an Aussie, it’s thanks mate! from me.CheersTony
Well if Gold drops to $1000 range, what do you think the fate of junior miners would be? We are seeing spectacular gains in conventional market, DOW can reach to 17000 to 18000 and stocks will still be considered ‘cheap’. Its just prudent to forget the resource business altogether.
My 2 cents.
Every comment is worth reading!
Big Al
There seems to be a battle going on at the moment between , the tech. charts & the manipulators of the PM,s & the way i see it the latter is wining at the moment it would appear every time the metals attempt to make a move up , in come the boyz with the cap……..why are they so heavy handed on silver ? It’s because they know if silver blows , they know Joe public will rush in because he CAN afford silver but not gold.
gOOD POINT mR iRISH,
Big Al
As I look at the TA gold will turn up , silver might lag a little, going sideways until gold is above $1600 and closes over.
I don’t believe Gold will see $1000 again in my lifetime.
CFS, I hope your age is 20—–by the way, I agree with you.
I agree cfs!
Big Al
Irish, Silver is an industrial metal, there will always be demand for it.
I don’t think the big money even thinks very much about silver. It is a currency, but not very useful as a real store of wealth.
cfs..yes silver is an industrial , could that be part of the reason why JPM is keeping it low , so its cheaper for their friends in big business. ?…apart from shafting the little investor.
Now isn”t an interesting point, Mr Irish!
Big Al
Doc said it looks good going into next week. Options experation for gold and silver is on Monday the 25th. The metals often get hit right before this does Doc have any thoughts about this?
Jim, you’re correct about the options—-the way the PMs have been behaving the last 2-3 weeks you might not see a hit this time. You know how sometimes you just get a feel that something is brewing, I just hope it’s brewing in our favor. We’re either going to make a significant move one way or the other in the next 2 weeks or we’re going to trade sideways in one of the narrowest bands I’ve seen in awhile which will result in an ultimate breakout anyway.
the range in gold is getting tighter and tighter, it has to break one way or the other. Everytime it hits $1600 it quickly comes down, but just the same whenever it breaches $1770 lately buyers step in. it looks like a bottom is forming but it might be too early. If next week is going to be a critical week then we need to be prepared for anything. I don’t see anything yet from a news standpoint to get it out of its range. A black swan event is needed, otherwise it would need to be a technical reason for the breakout…
James….it will only break out when the 4 big players in the paper market, allow it to .
If gold copies the 1970-1980 bull market, it would do a Fibonacci type 61.8% retracement of the bull move so far after going up about 6x or 7x like it did in 1974-1976 after the upmovefrom 1970-1974. ie. Gold went from £40 to $98 and then back to $103 or so, a 60+% correction. The of course, it went to $850+ by 1980.
That target would be $890, which is amazingly the same as the the 21 January 1980 intraday high!
That means that the top at $1920 had an amazing Fibonacci ratio with the 1980 intraday high of $887.50 and the 1999-2001 low at $253 – a target that could have been calculated years ago! In fact, it could have been mentioned by somebody as far back as 2001 but was never mentioned by anybody!
887.50-252.80=634.70
1920.00-887.50=1032.50
1032.50/634.70= 1.62:1
The Golden Ratio!
OK, one would not really expect gold to go back 33 years to touch the 1980 high if it follows an Elliott Wave pattern but it is an interesting phenomenon.
The upmove that would follow such a correction, if in proportion to the 1976-80 bull run, would take gold to $8400 by my estimate.
However, if gold follows the 1970-80 bull market but approximately 3 times slower,as it has done so far, taking 11 years for the move from $253 to $1920 (7x) compared to the 4 year move from 35/40$ (1970) to $198 (1974), the correction could take about 5 years to complete, 5 years to repair and then about 3 more years to run up to $8000+. A long time to wait!
However, this would fit in with a few years of relative dollar strength (the US dollar index USDX vs the Euro, Pound and Yen) which might be expected if the normal up/downtrends of the dollar of the past 43 years continue.
Gold went from $40 to $198 then back to $103 in 1970-76. – terrible typing!
That’s right, silver; and the move down was 47% and it happened within an 18 month time frame—-here we are 19 months out and we’ve seen about a 19% decline. That tells me this bullmarket at this point is much stronger then in a similar point in the 70s bull market.
COT report for this week—-the commercials once again increased their gold long positions and decreased their shorts. They decreased their silver shorts and longs but on a net basis increased their longs.
richard: Could this sideways move in the PM’s be the result of a change in sentiment from deflation to inflation? Many have said that gold moves up during times of both deflation and inflation. Don Coxe, Mish Shedlock and others have said that the fear trade moved money into bonds and gold during last couple years, but now that the market is up most likely on liquidity injections by central banks is inflation and fear of rising prices is changing sentiment. Is this the inflection shown in the Bolinger Bands.
Clay, you could be onto something. That’s why I mentioned the inflation ” sleeping giant” moving a little. In Feb., both the PPI and the CPI had significant moves, the Chinese economy is struggling (if you call 7% GDP struggling) with inflation over 3%—?beginning of stagflation. And you know that they’ll export that inflation. Then you have Japan printing money like they never have in the past; they’ll also export inflation. Our productivity is declining and gas prices are continuing to trudge higher. Then you have yields on the TBs starting to move up. The bond market may be signalling the early germination of the inflation we’ve been anticipating. It’s very possible that the PMs next move could be based on inflationary expectation. This could at first be a very gradual move until the real thing emerges in the future.
richard: That would fit nicely with your feeling about sideways movement in gold, and perhaps explain many other things.
I sometimes forget the total percentage of new treasuries that are now purchased by the Fed, and I think that includes all of the 30 year bonds and most of the longer term notes. The Fed people even talk about keeping all that debt until maturity if need be. Backing out of short term is one thing, but talk about never backing out the long term suggest something of a long term bond bear. With so much of today’s economy dependent on securitized debt while entering a bond bear, stagflation would be the least of our worries.
The thing I can’t wrap my mind around is what happens if most foreign sovereigns continue to back out of treasuries and then the domestics begin to back out. Can the Fed up their purchases to the point where they can still suppress the yields?
richard: I think you just hit the core of a nerve at the Fed that causes them the most pain of all, even more than the solvency of banks or federal government. What happens to the reserve status of the dollar????? If they loose that, they loose everything.
When you own and operate the press, sure it can happen.
Big Al
Not without the exchange rate tending towards zero……hyperinflation as cost of imports go to infinity. Look at Zimbabwe.
Interest rates are not the total problem.
My opinion for what it is worth, suggests that the markets in all things is transitioning from a long term 30 year bull in bonds to a new long term bond bear. The complete change in the Bond Guru’s notably from PIMCO over last 3 years is a strong indication of this major change.
If the bull in US bonds is changing to a long term bull, this transition will be unlike any before due to the present size of bond market and the fact that most of that debt was purchased in last several years at the top in price. How will bond market proceed from bull to bear when it also coincides with the ballooning derivatives market which forms most of its basis on bonds???????
“They say that time is money. What they don’t say is that money may be running out of time.” Bill Gross, March 14, 2013
Clay, I’ve started to short the bond market the last 4 weeks since I like what I’m seeing on the charts. Of course, one wonders what would happen to the bond market if the conventional markets start to move down in the next few weeks. Would investors flee once again to the safety of the bond market?
I have been in and out of TBT and a few other bond shorts so many times in last many moons, it has sickened me towards entering the pool again. You have more guts than I.
I tell you one thing; I exit my position if TA tells me—-I try to keep my losses to a minimum. For the first time in a long time the TBF has moved above it’s 50 and 200 day MA and also (more importantly) the 50 week MA. That 50 week MA is starting to level out and if does, it’s going to serve as a good support. We’ll see.
Hey Irish,
I hear that Whiskey sales were up 22% year-over-year. Bushmills up even more. You wouldn’a bin hittin’ the bottle lately?
cfs…..not me….i hate the stuff…perhaps the Vatican ordered in a load , ahead of their election, when i was a child grown up in Ireland i remember the priests had a taste for the stuff…………
hahahahah!
So long as the bears are looking for weaknesses in the bond market, the money printing will continue. I think the Fed is “praying hard” for improvement in the economy to assist in their vigilance to prevent a rout in the Bond Market. However money printing and economic improvement fuels inflation, which weakens the bond market making it more difficult to control the bond bears. A catch 22 situation.
clay…..it’s not a question of, if the bond marked collapse’s it’s more a question of when…..who in their right mind wants to hold the dept of a country which is going to go broke .
We reco forget about trading TBT and using futures to short bonds. It didn’t work for me and my friend either one of the best out there. How can you short a market with the manipulator’s finger on the buy and sell buttons every day? Trade stuff that is generally away from manipulation. As we go deeper into 2013-2014, the volatility goes a lot higher and markets faster. For those with no stomach for this buy silver coins and take possession. I intend to trade silver, gold, grain and crude oil futures later this year for my retirement account. Do not go there without experience. Our letter Trader Tracks will have those trades up in the letter in the Futures and Commodities section as well as a pared down junior, intermediate and senior PM stocks list. – Traderrog http://www.wavelengthpublishing.com
Roger: That is one excellent point of view and I completely agree.
From Greg Hunter’s web site, “The world is holding the “Global Sustainable Currency Summit” this September in China. The theme is “From Money Chaos to Global Currency.” ”
http://usawatchdog.com/weekly-news-wrap-up-3-15-13/#more-10165
You’ll find something interesting in the conventional markets and the dow/gold chart today. The volume was very large compared to the previous number of days/weeks. If we continue to see this, it could be signalling a top in these charts and markets.
Good to get your opinions and outlook Doc. Thanks to both you and Al.
This should be good for PMs.
http://money.msn.com/investing/has-germany-killed-the-eurozone
Thanks cfs.
Yes, would think that the prudent action by the Germans in the potential long term results for the rest of the European countries would be positive for pm’s.
Big Al
I’m giving my son all my gold and silver. I don’t feel so guilty that way.
http://www.dailyreckoning.com.au/the-young-are-going-to-get-screwed-by-debt-part-one/2013/03/13/
meanwhile in Italy:
http://www.webofdebt.com/articles/grillo.php
It might pay to elect a satarist.
Our emperor: please abdicate. George Carlin could a better job than you. (even from 6 feet under)
God save us cfs.
Talk about total control!
Big Al
But with the Dow index having an RSI = 71, does that not indicate Dow is probably going down.
Does that not imply 85% probability Gold going up?