We start today’s editorials on gold with Kenton Ralph Toews, P. Eng of Sprott Global
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I actually appreciated his comments because he is, at least, being honest.
Again, The Greater, I want to hear what everyone has to say.
Kenton, by the way, provides me with great analysis on mining companies.
Best,
Big Al
He made one very good point that I am in agreement with, James. Kenton notes that a stock market correction (which is now so widely predicted it almost cannot happen!) could seriously damage the price outlook for precious metals. He is right. The baby almost always gets flushed with the bathwater. Naturally a sharp correction would impact most equities as well and should be expected to send miners even lower. I could hear the doubt and lack of conviction in his voice by the way. Like many who analyze precious metals markets he is stumped as to why they are not performing and so is wavering and hedging his comments by suggesting simultaneously you both hold some and sell some. Not many investors would feel confident after hearing that position expressed. Clearly metals are a sell if that is the mood as downside risks appear to exceed upside potential. I am quite surprised more don’t come to the natural conclusions. If gold has not yet confirmed that the down-trend is broken you should at the minimum be hedging your position until the directional change has been clearly established. If you are not doing that then it makes more sense to sell than to hold and await what comes. Just holding though seems crazy after 19 months of continuous declines with little hope on the horizon. Most would have been out after the first 5% to 7% losses!
He can make a call but he would have to admit it is just a guess because fundamentals are out of the window right now…we are all like lemurs looking at our light boxes waiting for the words of King Ben to decide what to invest in. Fundamentals shmundamentals…Ben just announced QE will continue and gold falls….what a life.
Kind of interesting times are they not, Tom!
Big Al
James, not sure we heard the same thing. What I heard is essentially that we should hold our positions while PMs are basing in a tight trading range after a major INDUCED correction.
Funny the Asians are bullish on gold when the western banks and their shills in the media are pressing the bear case. Regardless, downside momentum is abating and we’re well off the Apr bottom. That’s good news, but not an absolute guarantee–and I’d run away from anyone offering guarantees because the best they can do is offer probabilities, not absolutes.
The banksters seem to be having a hard time knocking AU down any further since the Apr take down. That’s encouraging, but neither the charts nor the fundamentals can foretell when the big houses (market manipulators) will crash the market or front run a rally by first purchasing options (while government regulators look the other way). Once the too big to fail exhaust the downside, my guess is that they’ll pre-position themselves for the next upside move. It’s a rigged market and all that small traders can do is catch the better part of the middle of the move… while investors are often best to ride it out until the real blow off–which the fundamentals and current market behavior suggest is a ways off..
Same response BJ that I made to Tom. – interesting times huh!
Big Al
I don’t want to hear from everyone. Everyone has an opinion, doesn’t mean every opinion is right.
I hope our choice isn’t being honest or hearing sweet nothing’s in our ears!
Things are getting really really ugly now!
Best to you too Al!
Ugly, ugly, ugly. Today, Bernanke speaks. I looked at Kitco earlier. It has the Dow Jones Industrial Average on it. Dow was up 80. Then I looked a bit later. The Dow was down 103. Of course, gold was down by that time after being up to over $1400 earlier.
Marketwatch has a fun article entitled ‘How Bernanke blew it’. Google the title to find it.
Interestingly I thien listened to David Stockman on Jay Taylor’s show:
http://www.miningstocks.com/radio/jayradio.php
He rants against the Fed and says that it has destroyed all capital markets in the world with its manipulation and money creation. Essentially he saying they are destroying civilisation. Maybe he is right.
When I go to Kitco to look at gold and the Dow, I see that Stockman is 100% correct. All the markets are trading just on what comes out of Bernanke’s mouth and whether he picks at his left nostril or his right. It is total insanity.
Interestingly, the dollar index is at 84 now. It was at about 85 when Bernanke took office. Dollar index flat; Bernanke has not debased the USD any more than any of the other central bankers have debased their currencies. They are all as bad as each other.
Excellent observation about the dollar, Silverbug. It fly’s in the face of all the (brilliant) people who kept insisting we were on the edge of hyperinflation. Instead, deflation still looms as the overriding concern for the global economy and demographic outlooks continue to reinforce this concern both here and in Europe as the Baby Boomers will be heading for retirement by the millions over the next decade. Old people just don’t spend like the kids do. They save instead. Worse yet, as so many of them are going into the grey years with credit card debt, mortgages and Lines of Credit outstanding we have a double whammy where they will be trying to both develerage and put aside a little something for when they are not working. So savings rates on average will continue to look weak as debts are reduced first. Both these events will pressure the consumption economy and weigh on future earnings expectations as time goes by. And it is not just here in the US. Japan has one of the worst demographic outlooks of all. Canada is also quickly going grey while over in China the population is on a faster grey track than even the US. There is no question that age is playing a role in what we are experiencing now and it is perhaps the most significant of headwinds we are facing because it tells us that intervention alone cannot change the over-riding direction of the economy. That is, we are returning to a culture that will save more and spend less and this of course impacts on every equation from income tax revenues to spending to real estate acquisition and to proceeds from VAT taxes in the countries that rely on them. It is that special bit of money that economists call “discretionary spending” that is now most under pressure and will be falling as the years roll on.
This guy has clients? I sure hope he doesn’t charge them.
I am one of them, Clark, and he is doing a great job for me!
Big Al
Found this article several days ago on 24hgold.com — Indisputable Proof Paper Gold Markets are Massively Manipulatated by JS Kim – May 21st , 2013 http://www.24hgold.com/english/contributor.aspx?article=4377443194G10020 ,about an hour and a half I just posted it on my Facebook page so it seemed to go through. Well see after I post it here. Well there goes TA and in goes having a FED`s crystal ball handy at your finger tips. As to how far can gold/silver go down or up anywhere they want it to go. But perhaps presently here-today`s value, because they want victims for fleecing with these ETF`s price fixing schemes, and to keep the American dollar up at all cost. Have you noticed that when the US Dollar goes down, gold/silver seems to be up, then down it goes, then the US Dollar is in the green again against the other currencies be they up or down themselves. Though its seems like its Australia and Japan & the Euro currencies that seem to be where the fight is at keeping the US Dollar high. ………
Gold did fall far below the bolinger bands and I heard it fell 9 std deviations. The bollinger bands show +- 2 std deviations (95% probability). Clearly gov’t manipulation. It can’t stay down for long. The gold stocks seem to be showing some strength finally.
Now it’s your turn Paul….bollinger bands, STD deviations…I think I recognise the first as a German beer?
May I prevail on your patience to explain…thanks, A
I have to say it again, Paul L, – interesting times huh!
Big Al who seems to be repeating himself again and again!
Does this guy actually get paid for this advise? It can go up or down? WOW! Brilliant!
No offense but analysis like this is pointless. Kind of like saying that horse could win, or it can lose. I wouldn’t last very long and wouldn’t have much of a reputation. If you don’t know anything say nothing. No reason to have him on. Again not to offend, but at point in the game being in very critical critical times we don’t have time for someone to come on and literally say it can go up or down. Too much at stake, too much data to digest. Garbage in garbage out!