Gary Savage – Mon 21 Apr, 2014

Morning Commentary from Gary

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Featuring:
Cory FleckGary SavageAl Korelin

Comments:
  1. On April 21, 2014 at 10:35 am,
    pg says:

    Gold bullion has been bottoming with one month on either side of a Major Bradley turn date over the past 6 years. Next MBTD July 16th, so looking for a bottom between June 16th and August 16th. Next MBTD after July 16th is November 20th.

    Regards,

  2. On April 21, 2014 at 10:41 am,
    James (the lesser) says:

    I prefer the Colonel Bradley system myself.

    I mentioned last week the surest way to kill a system is when everyone gets wind of it.
    So keep it to yourself

  3. On April 21, 2014 at 10:45 am,
    James (the lesser) says:

    Here we go again.

    Thoughts of gold rising this summer.

    Didn’t we hear this last year from a few pundits?

    Names like TRADER ROG come to mind.

    Where is he now?

    Remember my September Song Series and my self imposed deadline of Sept 30th?

    Before you know it another September will be here and gold will be no closer to rallying than before.

    Patience and hope is not an investment strategy

    • On April 21, 2014 at 10:59 am,
      J........the Long.............ootb says:

      Trader Rog……………has been gone for two years………time flies when you are having fun……………………..

    • On April 21, 2014 at 6:29 pm,
      Paul L says:

      A strong short rally will come again from August into September and then it is over for the year and time to get out fast with gold around 1400 or so.

    • On April 22, 2014 at 4:03 am,
      H says:

      Hope is not an investment strategy but patience with fundamentals sure is. In my life I have seen this work very well with real estate and with gold.

      • On April 22, 2014 at 1:09 pm,
        Big Al says:

        I too and I would add the category of securities.

  4. On April 21, 2014 at 10:50 am,
    pg says:

    Silver bullion has been dropping since its top in 2011 in a pattern like the Fibonacci sequence, known as the Lucas series (4, 7, 11, 18….). I won’t go thru all the movements but start at the top in 2011 and first leg down was $18 and then a rally of $11 (approximates of course)

    Current leg topped at $23 and so if things continue as has been the case since top in 2011, current bottom targets for Silver bullion are $19 ($4 drop), $16 ($7 drop), $12 ($11 drop) and $5 (worst case scenario $18 drop).

  5. On April 21, 2014 at 12:08 pm,
    eagleeye says:

    Gary, you were wrong on the dollar and you are going to be wrong on gold. Gold is about to start another leg up, not down.

    • On April 21, 2014 at 12:11 pm,
      Big Al says:

      We will see eagleeye, won’t we!

    • On April 21, 2014 at 2:23 pm,
      Gary says:

      It certainly will at some time but I’ve never seen a yearly cycle low form with this much bullishness. Yearly cycle lows usually don’t bottom until they generate black pessimism.

      • On April 21, 2014 at 3:05 pm,
        Lawrence says:

        Gary,
        Zero interest rate and QE has been very bullish for gold/silver except for these last two years. Do you know of any proof that printing money actually reduce the gold price? If there is no proof, should we treat this as temporary? I have been investing in gold/silver for the last 10 years and went through several severe price drops. This is the worst and longest. I always buy when the price is low. I am willing to leave the gold to my sons if the price don’t rise in my life time. Do you see the possibility that price drop for another 20 years considering that the cost of production is already higher than the price of gold and silver (especially)?

        • On April 21, 2014 at 3:41 pm,
          Big Al says:

          I personally do not see that Lawrence. By the way, your reasons for buying and holding are the same as ours!

          • On April 21, 2014 at 3:50 pm,
            Lawrence says:

            Thanks Al, I did sell 25% of my silver position from $38-48. Looking back I should have sold more. But I will always keep a major position in PM since there is no other real asset to hide from inflation except for real estate. But it costs a lot to maintain a real estate porfolio.

          • On April 21, 2014 at 6:36 pm,
            Big Al says:

            Well sure depending on what kind of real estate. I personally enjoy our real estate a lot. (One of which we obviously live in!)

        • On April 21, 2014 at 4:26 pm,
          Gary says:

          Lawrence,
          This is not how big secular bull markets end. This is purely a manufactured bear raid in the metals market. It’s long in the tooth even though it has been artificial. I’m thinking we get a final bottom at the yearly cycle low sometime in the next 3-6 weeks.

      • On April 21, 2014 at 4:06 pm,
        ManAboutDallas says:

        ‘…with this much bullishness.” Huh?? The ENTIRE Cassandra Chorus – from Goldman to you to Kirtley to McClellan to maybe even God Himself – is seemingly unanimous RIGHT NOW that gold simply HAS to have this “final collapse”. So where’s the “…. this much bullishness”?? Too much “recency bias”, Gary, too much “recency bias”. Today was another outstanding example of the “back-stopping” I’ve been seeing in gold ( not so much in silver, but still there, also ). “They” try to run a “smash job”, and once again, “Somebody” shows up to arrest it in progress. Watching the strategy and tactics being using, they have the fingerprints of Sun Tzu all over them so the obvious conclusion is that it’s the Chinese, which makes sense. The more gold they pack away for “… the next 300 years”, as Rickards has said, the closer we come with each passing day to the day they announce a gold peg for the Yuan, and as the US$ continues to flounder and perch itself on the brink of The Abyss, the more motivated the Chinese are to buy as much gold as quickly and quietly as possible while the US$s they’re using are still worth something.

        • On April 21, 2014 at 4:32 pm,
          Gary says:

          Man,
          Sentiment right now is at 53% bullish. At last years yearly cycle low in June it hit 28%. The bullish percent is another decent indicator of intermediate degree oversold levels. As you can see it still has quite a ways to go to reach comparable levels to the last two yearly cycle lows.

          http://stockcharts.com/h-sc/ui?s=$BPGDM&p=D&yr=2&mn=6&dy=0&id=p75783859442&a=347884532&listNum=1

          At the moment gold bugs are still in the mentality where they see everything with rose colored glasses. Every reversal is “the bottom”, every bounce is the start of the next leg up. Generally daily cycle bottoms and especially yearly cycle lows aren’t finished until that mentality is crushed.

          I would keep hedges on for at least two more weeks and probably another 4 weeks after that, as the yearly cycle low really isn’t due until late May or early June at the earliest.

          • On April 21, 2014 at 4:39 pm,
            ManAboutDallas says:

            Beautiful head-and-shoulders bottom there, with the right shoulder almost COMPLETE! That chart tells me the capitulation occurred last December. Thanks!

          • On April 21, 2014 at 5:42 pm,
            gary says:

            Actually not a true head and shoulders as the left shoulder was lower than the head.

        • On April 21, 2014 at 6:39 pm,
          Big Al says:

          I happen to agree with you about the Chinese Man About.

  6. On April 21, 2014 at 12:30 pm,
    C says:

    Oil and Natural Gas seem to hold well and even going up… could it last until summer along with the dollar, or maybe continue to go up until the Ukraine situation cools down? A few people predicted oil @ 200$ + some time ago…Another oil shock in the making? Anyways, Gold is definitely being hammered at this time for no real fundamental reason.

  7. On April 21, 2014 at 1:23 pm,
    H says:

    Your analysis always seems to ignore the gorilla in the room which is Asian physical gold demand. Why would the manipulators allow the gold price to drop back down to where there’s another buying frenzy in Asia? Does the West not care one bit how much physical wealth is transferred to Asia?

    • On April 21, 2014 at 3:36 pm,
      Big Al says:

      That is something H that I have never understood myself.

    • On April 21, 2014 at 4:12 pm,
      ManAboutDallas says:

      @H: You’ll find your answer in James Burnham’s incandescent tome, “Suicide of the West”; written in 1964 its prescience is now astounding for its accuracy.

    • On April 21, 2014 at 4:35 pm,
      Gary says:

      H,
      Traders only care whether an asset is going up or going down. Buying begets buying, and selling begets selling.

      Emotions are why great opportunities are created during bear markets. And the bigger the bear the greater and more irrational the emotional response. This has been a very big bear. It should create an completely irrational selling panic. Maybe that occurred in Dec. but I kind of doubt it.

      • On April 21, 2014 at 6:21 pm,
        H says:

        I guess that means that Western manipulators are very confident that they can continue to control the market with emotional paper trading by breaking stops with selective dumping of contracts. I do not believe that this can continue indefinitely.

        • On April 22, 2014 at 7:21 am,
          Gary says:

          No it can’t continue indefinitely but so far there’s no indication that it has come to an end.

  8. On April 21, 2014 at 3:45 pm,
    Lawrence says:

    Al,
    I talked to Dr. Ron Paul a year ago days before the steep price drop. He told me that western governments suppress the gold price to protect the dollar. He also said that manipulation fails eventually and price will rise. He recommend no to trade gold, which you must agree with.

    • On April 21, 2014 at 6:35 pm,
      Big Al says:

      I don’t trade it, Lawrence, because, candidly speaking why bother. The leverage is much better in the mining stocks and the security is soooo much better in gold. (By the way, I will buy a little more gold this week.)

  9. On April 21, 2014 at 3:50 pm,
    IsItPossible says:

    Is DOLLAR going to surprise everyone!!!

    https://www.tradingview.com/x/pbdZuAUp/

    • On April 21, 2014 at 4:39 pm,
      Gary says:

      Is,
      I don’t see any relationship to the goofy patterns the author drew that completely disregard the underlying chart, but as I said in the interview it looks like the dollar has put in an intermediate degree bottom. We should know within the next two weeks.

      • On April 21, 2014 at 7:30 pm,
        IsItPossible says:

        Gary,

        Thanks for taking time to reply to my comment.

        This is a $ monthly chart going back to 1973. The pattern is nothing but simple curves draw to understand the direction. For a minute forget about those semi-circles and just focus on the dotted line. If the pattern repeats itself then most likely $ might go into rally mode and might even shift into higher gear if we see more volatility in geo-political arena. Next 6 months shall provide more direction to where $ is headed but if the pattern holds good then we shall see the trend line at 82.5 broken very decisively and quick rally to 94.5 levels….. However, the instability might also lift Gold as it would be hedge against currency as well as instability…. ONLY time will tell…..

        • On April 22, 2014 at 1:04 pm,
          Big Al says:

          Many thanks “is it possible”!