Tuesday Morning Commentary from Gary
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When did this happen? I seem to have missed that.
Sorry I’m not good enough with searching charts to give you specific dates but late last year I would wake up on Monday or Tue morning and somebody would have dumped lots of paper gold on the market for sale driving prices down prior to or right when the markets open. It happened multiple times and after doing it several times where the drop held they did it a few more times and the price quickly recovered – perhaps I just answered my own question, the game stopped working!
Ah, sorry mwfolsom – I misunderstood you. I thought you were saying that it had happened again overnight.
Yep, I agree with you. That is my worry now – could wake up tomorrow and they have driven gold back down to 1150 with a massive dump of contracts.
I should have got in on this when I sold the likes of FRES rising in London just before Christmas – it was a win win as London traders could buy it in Sterling, no currency exchange charges, and then ride it up. If the USD stays strong then FRES makes income in US dollars and if the USD falls then gold and silver goes up so FRES goes up.
As soon as I saw it break over ยฃ7.00 I should have bought but, greedily, I want it to go back down again. Hopefully lesson learnt. Probably not ๐
Good interview guys. It sounds like both Gary and Doc are in agreement that there are about 4-6 weeks left in the Gold uptrend, before it turns around an corrects into the late spring & summer. It will be interesting to see if Gold’s move starts to accelerate once it takes out 1253 or if it just grinds up slowly. If it doesn’t gain about 100+ points in the next month 1/2 then I am concerned it may get pushed back down to test 1137 again, and if that fails then 1050. If it did that in the summer, then it would likely be the time to take a major long position. Good luck to all over the next few weeks as it seems we have more room to rise into Feb.
Gary mentioned that it is options week so maybe you were right about the dumping.
Admittedly, I have not looked back at the overnight action on the charts but I don’t recall seeing any drop down in gold that caught my eye mwfolsom – usually when they dump contracts the drop down in the gold price sets off all sorts of alarm bells.
I would guess that mwfolsom is talking about comments made in the past.
Is that right, mwfolsom? Thanks for joining us, by the way!
Yes, sorry the complexity of the terminology of paper gold escapes me – I just remember them being called “gold contracts” and at first it worked – they did push down the price but later it wasn’t as effective so perhaps they gave up on that game plan.
By-the-by, I do appreciate what you and Cory are doing along with your regular guest. I’m still very much in the learning curve here.
It’s impossible to predict the outcome of any market where there are available futures contracts. Gold bullion markets are are very illiquid in terms of gold availability, meaning that things are kept going in terms of price speculation, rather than gold exchanging hands. The collapse of the GLD provided supply, which re-liquified the market. That means a re-invigorated bull market for leverage in the gold sector, right at a time when liquidity is constrained in commodities like oil or copper.
My friend trust me, we are all constantly in a learning curve!
Sorry, I may not be describing it correctly but often during the night or around market opening someone would dump tens of thousands of gold contracts on the market and the gold price would fall. I remember it happening many times and there was lots of speculation about “someone/something” trying to push down the price of gold.
I think that you should take foreign central bank interventionism as your indicator on what any central bank is likely to enact. We have seen very aggressive pricing in of negative nominal rates at the short end of the yield curve as well as negative policy rates in Japan, in Europe(ECB, German bunds, Swiss Treasuries) all of which are measures to devalue currency. The U.S. has also been aggressively pricing in negative rates, though markets must turn before that happens. What you will see is an ‘interest rate panic,’ where people in the U.S. will see it as affecting the entire world, but the rest of the world sees it as confined to the U.S.
Will 2015 be the year when gold goes up at least $100 in just one day?
Keylime,
I personally hope not.
I prefer nice and slow price action like what we’ve had for a few weeks. It leaves many in doubtโฆ which is the best recipe for the beginning of a bull run.
Just my 2cts.
LPG
+1 For LPG ๐
No actually +2 for LPG!
+1… Just be quiet like China… once it’s too bullish too obvious.. the run is over.. at this point IMO.
I have a bunch of +1s saved up, so here’s +3, LPG ๐
Exactly !
You also have a parabolic in long-dated bond prices, which people are ignoring because they’re entirely focussed on conventional Indeces.
Which means what exactly… for those on here who aren’t as clever about these things as you and I ๐
Very interesting thoughts about interest rates – especially Gary’s thought that they will raise interest rates and that the markets will go ballistic – upwards – as a result.
There is no chance of an interest rate hike in the UK – none. Ditto Europe and most likely ditto Japan so, if the US does raise IRs, it will be alone among the major Western economies to do so.
Very interesting though as Gary is the first person I have heard state that an IR rise could be good for the markets.
What that means is a steepening of the yield curve, share rates may rise at the long end, while short term treasuries decline in yield. The short term end of the curve is a very different animal from the long end. Interest rates at the short end of the curve are where policy rates are set.
Thanks for explaining that. I wish I actually understood it but won’t pretend that I do. Treasuries and yield curves are something that I have never managed to get my head around re why they rise and fall.
Maybe I am just thick? Don’t answer that ๐
Raising rates would also pull even more liquidity to the US markets from the rest of the world where rates are lower.
The logic is there UK Bob. I just personally don’t think it will happen!
I don’t mean it is logical that you are just thick!
I believe that he is simply referring to the fact that for interest rates to rise, the economy would clearly have to be much stronger!
Fed will NOT raise rates. Fed serves banks and it will not harm derivatives with higher rates. Also higher rates would harm housing sector. What will happen is crash in stocks and then QE4 will be implemented to support stock and oil sector.
Watch and learn. BTW NO ONE THINKS QE4 is coming. Only everyone on wall st and you guys talk about raising rates. That will be the surprise to you guys.
This is basically my thought stewie and hence why I am so nervous about all stocks now – both the convetional markets and the metals.
I think they will pump things up and then create a massive crash as justification of more QE – there is no way that Europe or the UK will be raising rates this year.
Then again, I thought that they would crash the markets in 2013 and in 2014 and I was badly wrong both times.
Your not wrong bob just on cycle timing. Its due this year/next the very latest.
Stewie: I was in this camp for quite awhile and then something big happened: oil started crashing. This event gives the Fed what it needs to raise rates. However, if stocks start to follow oil and the rest of the commodity sector into the dumps, you will be correct.
Tenyear,
I disagree they will use oil and markets going down as excuse not to raise and stimulate.
Bob,
they will let equities crash before injection..At least 20% IMO
Fed is central banks and serves banks first so they will not harm banks as they first task regardless what they say to public. Having said that i do not believe you will ever see fed raising rates. Since QE1 we’ve learned that. Retracting QE was political and to save the faith in dollar. Once they have an event like oil crash now and/or stock market crash they will say OH we’re here to help and do QE4. We the gold bugs especially should know how all is manipulated. Lets not forget that. There is zero chance of raising rates. Mark this post. QE4 is coming and it will GIGANTIC. That will fuel oil back up and all commodities. I’ve been saying COMMODITIES SUPER CYCLE IS COMING !!!!!
Guys, you are in the minority if you believe the commodity super cycle is coming as most believe it has ended or is ending. That being said however, the stock market looks like it is about to just fall off the cliff in a big way. If this happens, and it corrects 20% or more, I’d agree the Fed would have no choice but to add QE…It might only take a 10% correction for them to worry.
If we get QE4 then surely the money will flow into Apple, Facebook and all the coventional stocks, as it did with QE1 to QE3, and not into gold?
Tenyear,
Minority is what i like ๐
You just answered my next question.
Black swan may i say
Tenyear…. in markets there is no such thing as END. There are only cycles. Money rotates from stock market to other assets like gold/commodities. Since we just had decade low in commodities and doing multi year top in stock, expect this to reverse, hence my theory on commodities. Also commodities are real unlike BS paper stocks with imaginary P/E ratios. Oil is finite and essential to world’s economy. Essentially it’s most important commodity on earth. $50 oil will be here for 12-15 months TOPS. Nonsense people say about cheap oil now going forward is nonsense. Two words. Hubbards peak. 2015 will be like 2008 IMHO and what will follow will be similar.
Bob UK
QE1 created monster inflation in commodities. This will happen again as soon as wall street will lose faith in fed credibility or when dollar starts crashing. That will start happening with QE4 which will happen in 2015. That money will rush into real depressed assets which are gold, silver, miners, oil. COMMODITY SUPER CYCLE IS COMING FOLKS. GET READY WHEN IT’S CHEAP AS DIRT.
Glenfidish i’m with you hommie ๐
Get ready to watch a reversal!
HUI/GDX
Has filled Matt ๐
I think GDX might have another 30 cents on the downside but it is not time for the sidelines (dollars!).
We just got that 30 cents more and have bounced 13 cents from there.
http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=0&dy=0&id=p53448838245&a=384422366
good call!
Do you really think it will go that high again? lol. its a nice chart but this rally looks done.
Tom, what is it that makes you think the rally is done? The chart is not negative right now and today’s action was very good for the health of the move, not negative.
I am not saying that the rally can’t be done, but there is no reason so far to think that is the case. Do you see something in the chart that you don’t like? I’m just curious about what you’re basing your bearish opinion on.
Gary,
There was a time you were on the ball but lately you are way off my friend and I mean that sincerely. Blah Blah Blah.. I personally did not see what you are talking about. The trend is up and your on the wrong side. It started when you jumped over to equities before year end. Wrong move IMO. You should have stuck with the cycle in gold.
Now you seem upset from what I read in between the lines. Also same can be said when we have a day like today all the bears show up and blah blah blah below 1000..
What is happeneing today glenfidish? I am away and have not looked at the markets? What I am missing.
p.s.
Every time I see your nickname I immediately think of glenfiddich whisky.
lol.
Back filling/consolidation and setting up for a decent candle close for miners.
๐
And a pretty decent Scotch Whiskey at that!
Sure is Al ๐
And it is exactly bob why I gave myself that name.
Big Al, Cory, and Gary
I don’t know why you guys keeps saying that gold ain’t going to the moon to your audience. There must be an agenda here. I don’t know of anyone on this blog who is advocating that it is going to the moon.
Big Al you must have a personal reason for repeating that your going to stay on the sidelines. Could it be that your Tax loss selling time has not expired yet? You do have a reason or an agenda. I want to see the day when Big Al does a BIG BELLYFLOP off the sidelines, who knows you might stay on the sideline till hell freezes over. Anyway good luck to you.
Now Gary, you keep stomping your feet that gold is not going to the moon, but who is advocating that. No one on this blog that i am aware of. Your not even man enough to admit your on the wrong side of gold trade. I beleive your mind got twisted some time back in Nov. after the Swiss vote when it was you that was advocating the gold was going to the moon, and a week later you made an about face and said Gold was going back down to make a new low. At this time I beleive your emotions and viewpoint were damaged. You always seem to try and hit a homerun instead of identifying a trend and manage your position, instead you alway do an about face. It appears to me you have been whipsawed and shedded, step back and have a look at the bigger picture and refocus buddy.
I guess one day you guys will say I told you so, but by that time the money will be in the bank account.
Good luck to you all. From the playing field .(he shoots he scores) cheer, cheer ๐
Peter
Glen,
Actually I’ve traded both markets perfectly. We exited stocks at almost the exact top.
http://blog.smartmoneytrackerpremium.com/2015/01/slow-january.html
Notice this is when I started calling for chop in the interviews and said to wait until the first week of Feb before buying stocks again.
I told my subs last Monday that if they wanted to trade miners to buy. Right before the close today I told them that warning bells were going off and it was time to either tighten stops or take some profits just in case the banksters were about to terminate the rally.
Miners need to reverse the bearish engulfing candle immediately or the week could end badly and do a lot of damage to the sector.
KBH helped trash the markets today
I agree glenfidish, a month ago gary was screaming jump in what more evidence do you need, now he bearish, al repeated the same im glad im on the sideline when gold has risen 100 points since he been on the sideline dont get it.
Catman,
Maybe they work for kitco ๐
Looking for a 190’ish give or take on HUI..
Then tomorrow 94-96ish
Thursday/Friday attack on 200+..
Lets see how it works out. Buy guys Buy!
Gary the fear you talk about needed in the market got you to sell out of your gold position while we were in the ICL.. That’s how i see it. It takes down even the best of traders.
That is why I am not a trader.
Lawrence trading is a different animal..I personally try not to do it on a daily basis. I leave it for guys like Matt “Pro’s”..But im good at reading charts and I figured what the heck am i going to do with my time at home. So I opened up a trading portfolio few years back.
This month I have not sold anything from my trading portfolio. Not yet!
Dollar crash is coming next …get ready
US Dollar Reaches Sentiment Extreme
http://thedailygold.com/us-dollar-reaches-sentiment-extreme/
Suely for the USD to crash another currency has to be stronger?
Looking arouond the world right now the USD looks head and shoulders better than all the other dying currencies.
Euro is due for bounce back. Besides people will flee $ to gold once QE4 is announced so therefore flee $$$…JMHO but 2015 will be way different then 2014 and previous.
Gary was calling for a three cycle low in the dollar 2014, Rick was has been waiting for the stock market crash forever, and al is always going to be on the sidelines
too funny!
Gold to oil ratio. Oil is getting really cheap now. I suspect it will bottom out at ration of 30. What’s weird is that i do not expect gold to go down so does that mean that both of those will go up in tandem. If so this strengthens my theory of commodities cycle up.
http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart
Big way down from circa 45 bucks to 30ish bucks yet though? Another 30% or so decline?
I’m waiting for $40 oil. I’m in then. I’m waiting to see capitulation in volume and some hammer candle sticks with long tails. So far none of that.
Ratio is now at 27 so 3 more points. It could overshoot but oil is cheap already. As seen ratio of 30 will not be sustained in any length of time so either gold has to go higher or oil or both, but not down in both
Bob sorry i meant 30 ratio not $30 oil. Don’t think it will go down that deep but that would be nuts
What do you mean ‘in then’? Buying USO?
I swinging for fences so I will do UWTI. UWTI is like boring 200% on top of what you put in at 0% interest. Now with slippage people talk about that’s the interest of 3% let’s say. When you score 10x bagger slippage don’t matter. Free or cheap loan i don’t have to repay until i’m out i’ll take anyday.
I say 35/40 wti oil
Look for a weekly close around 35/38.. You get that and buy the farm. That is oil stocks and im no expert on that.
I would love to see that price. Hope you’re right
Gary, dumb money and over zealous investors have left gold long time ago. There is nothing to get excited and the bear market has been relentless. How long and how far we have gone in the gruesome market? You over estimated the dumb money.
Year 2013 shaked out all dumb money and year 2014 shaked out some smart money. Now nothing else to shake out. This is what I feel.
Gary,
Dumb money does not dumb at these prices. Smart money does. By low sell high, Warren Buffet style.
You would have to be a complete idiot to sell here on seasonal patterns+sub 50 wti which means cheaper cost for miners+and a crb that is stretching towards all time lows. Turn on your fog lights. You had it right and you got shaken out. I ws actually shocked when you did that. I clearly remember the day and you left me in ahhh..
It’s not to late to get back in. Tomorrow we gap up again.
The bottom is in. I’m sure of it like sun sets in am and sets at night
We had upside breakout in triangle. It’s not unusual for break out to retrace a bit.
Positive divergence in MACD and RSI and most importantly massive volume says we’re heading higher soon. Sideliners are just frozen with fear and will unleash only upon higher prices but that will be misleading and why chase. Also rally’s not always retrace. Usually they do but if you have massive short covering you will NOT get that chance. If and when there will be one and there will be at some number gold will paint. But i don’t care i’m all in at gdxj low. Exact low. I need to load up soon on UWTI and i’m set for next 24 months.
http://goldstocktrades.com/blog/wp-content/uploads/2015/01/sc-12.jpg
Stewie
Slowly buying small blocks of UWTI – do you have a buy range? If not, would you mind letting us know when you are buying UWTI? Thanks, Brian
I have no UWTI yet but i will get in at around $40 on wtic index. I think by then UWTI will trade at $2.00 or below. I will buy at 75% at once or maybe all of it.
I’m looking for high then normal volume and hammer candle stick with long tail. Then i’m in. We did not see either yet.
Yes load some oil as well. I feel next year we will get a spike for oil. Artificial low price reduces supply and stimulates demand, which was balanced at $90 for a long time. When hedge period is over, god knows how big the gap is. Oil is consumed and the above ground supply is very limited. Just look at the contango we know the future supply is restraint even there is a glut of oil now.
What if the banksters instead smash the sector tomorrow???
They just lose more gold until they run out
Gary this possibility always exists though. It does not make difference what price is. They manipulate most if not all markets. Maybe stand on sideline is the only way. I agree with you assessment on conventional market but it too must have an end.
The majority lost big money last year and drove prices much lower for tax loss. This is a year where I see gold trending higher and end year very little tax loss.
I see the complete opposite for equities this year.
I meant dump
ATT GROUP: Toronto Time= 21.18 EST
MASSIVE SILVER DUMP IN PROGRESS [initiated @ 21.00 EST] temporarily halted @ 21.07 EST.
We are in a very big congestion zone for hui index. I said that we may end the month 190is maybe 200 region. I talked about this with matt yesterday. I expect much upside breakout in feb.
So, any idea what happened to the folks that were dumping tens of thousands of gold contracts on the market in the wee hours of the morning? Have they manipulated the market enough? That seems highly unlikely!