Doc’s opinion on gold is not as negative as Gary’s
Doc chats with us about Gary’s comment on the gold market slipping into the bankruptcy phase. Right now he does not believe we are heading down the road.
Click download link to listen on this device: Download Show
Gabriel; good point. I’m not concerned with gold in the long term. One has to ask himself why sovereigns are buying and holding onto their gold along with wanting it in their own vaults.
Well you answered that one because you’re a simple man …
Yes, I am; I believe in the “ole” KISS principle.
KISS – Good philosophy on keeping it simple Doc & Gabriel : – )
I think ONE of the reason why some central banks MIGHT be buying gold hand over fist is right here in this article:
http://www.zerohedge.com/news/2015-05-23/new-silk-road-could-change-global-economics-forever-part-1
Best to all,
LPG
As said to Richard separately, when I saw the map on the article mentioned above, one thought crossed my mind RIGHT AWAY:
USD = countdown to “game over”.
I don’t know why but this thought just came to me as an evidence. We’ll see.
Give it 20yrs max. Just enough time for another commodity “super cycle”.
My 2cts.
LPG
Hi LPG…..20 years?… OMG..I gotta be super patient to see hocky-like stick of my investment performance on PM.. lol… by then I should be at about the age to retire… question is retire rich or poor.
The new silk road is being funded through the AIIB…….but, don’t worry about that, because China is slowing 🙂
The lack of mainstream media coverage reminds me of the shows were the police officer states into a megaphone to the crowd – “Please keep moving, there is nothing to see here…” (when you know there’s a chalk outline on the ground).
I’ve been following this for some time and is one of my reasons for feeling commodities will rise again. However, this will take time and if the the U.S. gets all obstreperous, the time to push this out would be even longer.
Shad,
Part of it might indeed be funded this way.
But look at last years’ double gas agreements between Russia and China. I’m not sure the AIIB is (or will be) involved in these.
If my calculations are accurate, we’re talking about $750bn in contract values (using the mid-point for gas’ indicated pricing range on the 1st agreement and also applied to the 2nd one – which, for the sake of using proper wording, is, I think, still on a MOU phase and not a proper agreement per se).
The way I look at it is the following:
if China wants to SPEND a lot on infrastructure and commercial contracts, it should better do it in its own currency, and not in someone else’.
So the desire to internationalize the CNY participates to that, and so is the likely gold accumulation over the years.
Such a larger number of sizable infrastructure projects would also tend to explain why China (via large Chinese companies or SGEs) is acquiring mining assets across the globe.
The only missing link would be a deep, liquid bond market with good rule of law domestically: this would really help the CNY to be the next USD and China being able to fund its expansion.
But then, maybe, as you mention, China will use the AIIB instead – bypassing the need to reform rule of law etc..
My 2cts.
Best to you,
LPG
Yes, I agree with that LPG. I was just referencing the part of the article that said the AIIB was to help with the development funding on Silk Road (a midst other projects).
Here was the section on that in the article you posted from zero hedge:
“The idea for reviving the New Silk Road was first announced in 2013 by the Chinese President, Xi Jinping. As part of the financing of the plan, in 2014, the Chinese leader also announced the launch of an Asian International Infrastructure Bank (AIIB), providing seed funding for the project, with an initial Chinese contribution of $47 billion.
China has invited the international community of nations to take a major role as bank charter members and partners in the project. Members will be expected to contribute, with additional funding by international funds, including the World Bank, investments from private and public companies, and local governments.
Some 58 nations have signed on to become charter bank members, including most of Western Europe, along with many Silk Road and Asian countries. There are 12 NATO countries among AIIB´s founding member states (UK, France, Netherlands, Germany, Italy, Luxembourg, Denmark, Iceland, Spain, Portugal, Poland and Norway), along with three of the main US military allies in Asia (Australia, S. Korea and New Zealand).”
Cheers to you my good man!
Yes Doc – Agreed that commodities are still going to be in demand as things develop in China. In addition, most get China tunnel-vision, and forget about India, Indonesia, Singapore, Thailand, Cambodia, Vietnam, S. Korea, and all of Africa, South America, Central America, Mexico, the Middle East, and the ex-Soviet territories. There is plenty of needs for commodities outside of China, USA, Europe, and Japan.
Shad,
I don’t even remember parts of an article I read less than 12hrs ago…
Scary…
Thanks for bringing that point up about AIIB.
There’s also a part II to the article. In case you haven’t seen it, here it is (published yday):
http://www.zerohedge.com/news/2015-05-27/new-silk-road-part-2-cold-war-or-competition
Best to you, and thanks again.
LPG
Thanks LPG. I hadn’t seen part 2 yet. Much appreciated!
Wait!… are you guys saying… instead of China to develop Chinese Goverment Bond to be as deep as US govt…. China plans to bypass its political barrier by developing deep AIIB RMB bond?
What I am suggesting is that China is using a team approach to fund it’s infrastructure projects (like the New Silk Road for example in the article), and will be utilizing funding assistance as well as its own money. For example it plans on ponying up $47 Billion, and getting the rest from the other 58 charter members of the AIIB, and other partners.
excerpt from the article:
“China has invited the international community of nations to take a major role as bank charter members and partners in the project. Members will be expected to contribute, with additional funding by international funds, including the World Bank, investments from private and public companies, and local governments.”
The USA isn’t invited to the party, and they likely will not be using Dollars. This is what Jim Rickards gets wrong when he thinks the AIIB is a conspiracy theory about China trying to become the worlds reserve currency. That is NOT what China is doing at all.
What China wants is to have a seat at the table (as Rickard’s mentions), but the AIIB is a way to fund the development of not just China, but much of Asia and the Middle East, and they are doing it without Dollars and with the USA intervention. So it has never been about the Yuan usurping the Dollar (they don’t have nearly a liquid enough bond market yet or the infrastructure for anything like that). What they want is to do business and grow without the dollar shackles on, and they’ve done it by forming a group of 58 countries willing to start a new international platform.
China has strong manufacturing capacity. It can complete large and difficult projects fast. Using this capacity to building silk road projects will speed up Chinese economy and at same time attract world economy to China. US may be marginalized if it can not offer similar benefit to the involved countries. Overall these projects could be mutual benefit. Off course it all depends on the extent.
Good thoughts Lawrence.
If China expands too much it may exhaust itself. I just hope the current “dynasty” follows the teaching which most emperors followed, stay in allowable boundaries 适可而止。this teaching by ancient philosophers is what spared China from disintegration.
Doc – Here’s are article from yesterday on Russian Central Banks buying the “ole relic”
Russia’s central bank increasing gold reserves
http://www.mineweb.com/news/gold/russias-central-bank-increasing-gold-reserves/
This should have gone with Doc’s comment at the top of the blog.
I have no clue and obviously the current gold gurus don’t with their 3 year history, lol who knows if the Greece outcome or the US interest rate BS outcome will send the pm’s sector up breaking out of its 3 year wedge or down testing sub $1000
Still find it odd how the US equity bull is always looked upon as ready to dive while its been running with the bulls for 6 years and gold ready to benefit while being in a bear market since 2011, interesting look at a glass 1/2 full/empty
Doc you adding to your DWTI oil short?
I would say oil looks a little uncomfortable here and has further to fall.
US equities has wind beneth their wings… aka the Swiss central bank
Al:
Haven’t heard much from Howland on Rye Patch lately although they seem to be moving at flank speed on exploration all funded by nice royalties from Cour. Any thoughts?
Rye Patch seems to be doing well, and as you mentioned they are funding operations, explorations, mine development at Lincoln Hill, their recent land acquisitions, and are currently buying back some stock all with their Net Smelter Royalty from Couer. What’s not to like? 🙂
Says the guy with an eye patch and a wry smile… 😉 😮
When you’re a one-eyed pirate with a wry smile, try a bottle of Rye Patch. Goes down smooth…doesn’t need financing….. Arrgghhh Matey!! and Arrgghhh Matty!!
Rye Patch Starts Feasibility-Level Metallurgical Test Program at Lincoln Hill
Rye Patch is in the process of buying back their own shares as announced in late April:
Rye Patch Announces Normal Course Issuer Bid
Rye Patch Receives $1,850,000 Quarterly Royalty Payment
Rye Patch Adds to Oreana Land Position
So, I am curious as to how many other “Explorers” got that much accomplished in the last 2 months, without any production, but with $1.85 Million NSR to pay for everything.
No waiting for funding, no burning through money like most explorers just to stay listed, and no shareholder dilution. They’ll be re-rated soon enough by the marketplace when most Jr explorers will go to the dust-bins of history.
Rye Patch is a definite takeover target within 12-18 months.
Doc have a look at todays JNK market YTD with the S&P running in the background
http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=0&mn=5&dy=0&id=p29198846289&listNum=1&a=409966422
When we had the financial collapse the Canary was the Junk bond market the chart below shows if any collapse of US equities is about to take place it will be showing up here 2008 dive
2009 dive and THE March 09 bottom
That’s a very important chart, OJJ and one I have in my arsenal as well. Helps keep my emotions out of wanting to short the markets.
Bob Hoye is very keen on watching the Junk bond markets for an early warning sign, good luck Mark
I also like to watch the high yield bond etf HYG because it also can give you some good indications.
http://stockcharts.com/h-sc/ui?s=HYG&p=D&yr=7&mn=6&dy=0&id=p03193786294&a=377306009&listNum=1
Mark ever break down JNK and HYG to see who leads first or not enough difference?
OJJ….
THAT’S a great question! I think I’ll do that today. Thanks for the idea! Much appreciated.
What I find interesting is the tremendous narrowing of the monthly BBs for JNK—-I believe something big is brewing for the junk bond market and I’ll bet it’s not a breakout to the upside.
http://stockcharts.com/h-sc/ui?s=JNK&p=M&b=5&g=0&id=p77801438222&a=409967822&listNum=6
Agree Doc, so many indexs feel like their on a cliffs edge, ready to make a hard move down or be pulled back (up) you can feel it, almost smell it, lol
I know it should read they’re but I could careless!!!!
Great chart Doc…..thanks for the pointer.
Yes that is a very useful chart, Doc. I plugged in HYG and switched to color volume and it looks like we have something that I just might want bet against.
There’s a lot of distribution going on.
http://stockcharts.com/h-sc/ui?s=HYG&p=M&b=5&g=0&id=p27305787583
Seeing the squeeeeeezzzzzzze 🙂
Where? Don’t see it in JNK. I hope it spikes though.
http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=1&mn=1&dy=0&id=p11339321720&a=410101586
I’m talking about the BBs on that HYG chart you posted.
I’m talking about the BBs on your HYG chart.
Ohhhhh, a BB squeeze. I thought you were talking about a short squeeze!
I might add as I noted earlier this week, I’m not impressed with this current move up by the dollar. There’s not a lot of strength to it and it wouldn’t surprise me if later next week, we start to short term move down.
posted this after Gary’s audio, worth watching
On May 28, 2015 at 8:27 am,
original jj says:
First resistance area for the US$ index is taking place now
http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=5&dy=0&id=p64740680843&a=409776590&listNum=1
A bankruptcy phase is what I think is coming, not a bloodbath phase.
A bloodbath phase is just the final 5-7 days of an intermediate degree decline.
Gary; thanks.
Last Oct gold falling from $1235 to $1130 in 12 days was not a bloodbath phase as the HUI dove from 200 to 146?
Some gold bugs must have been seen on news jumping from rooftop to mark the bloodbath… LOL j/k
Is the Gold market in a comma ?? Ukraine about to call martial law as it prepares for war and Austria confirms will repatriate its gold from the bank of England, wasn’t that long ago gold would have been up $10-$20 on these well known headlines.
Now; I have a question. If everyone (MSM) is hawking a war with Russia with their propaganda, why would these countries be pulling their gold back to their own vaults?
There is an undercurrent mood of distrust between Central Banks despite the fact they are all working together Doc. And politics plays a large and growing role in gold repatriation. Right now it seems that nobody knows what will happen in the next 24 months but few think its going to be good as the sovereign debt problems start to emerge and upset the party. I guess you could call it hedging on bets. But lets remember that not all countries are calling in their gold. So it is not so much a trend as it is outliers acting in their own best interests.
Hi Birdman,
Not every central banks calling their gold back but I tend to think it’s not as important as observing the elite central banks are calling their gold back…. no?
Russia’s central bank increasing gold reserves
http://www.mineweb.com/news/gold/russias-central-bank-increasing-gold-reserves/
If a war starts, gold will be the preferred exchange for armaments, not counterfeit fiat currency.
O jj,
Personally… every time I hear about central bank going to repatriate some gold… i think a smackdown is coming…
2013,2014 are examples of that.
My 2cts.
LPG
LPG, something stinks and its not showing on the charts I position my trades off….yet!
I’m not a big fan of the manipulation camp as markets can be manipulated for a short time but the over all trend not.
If a smack down is coming now would be a good time to take gold down hard, we’ll see
Thank you!
O jj,
I wasn’t referring to manipulation.
I was just referring to the fact that in 2013 and 2014, when there were news of repatriation, if was often quickly followed by gold being slapped.
Correlation is not causation. 🙂 but I am “mentally careful”.
Same thing with various global QE’s (starting QE 3 in the US): US, Japan, ECB. Typically: QE announcement -> gold moves down shortly thereafter (last example: consider when gold topped this year and when ECB’s QE was announced…).
Again, correlation is not causation, but I am “mentally careful”.
Hope that makes sense.
LPG
good line LPG – “correlation is not causation, but I am “mentally careful”.
Sorry LPG, but you are addressing jj…..his moniker is not OJJ.
Please. You are bigger than that.
It looks like ojj to me – original jj
He just picked it up from me……….. lay O FF….O KK
Yeah, you are right Irwin. But it’s a name slur if you don’t mind me saying since Bob started using it. Calling out Oh…JJ! or OJJ!!……kind of gets on my nerves. Maybe some people don’t like his approach but he has some good points none the less.
Sorry Frank…but you are an idiot……and no, I will not apologize.
————————-
Sorry Cory if you don’t like that but I cannot help myself….he is the stupidest guy on the site. Lowest common denominator. Been here for 27 years or more and makes me sick. Go ahead and delete this comment if you like. I really don’t care. Jerry just never learns anything new. 100% sheep follower and irritant to everyone who posts.
Now we are even TWEETY……
I KNOW one thing for sure Tweety……you sure can not take it , but, you like to dish it out……..
Air is precious. Why don’t you save some.
🙂 oh ……….
Frank just needs to find a good friend, Ernest.
Then they can have a frank and earnest discussion!
Agree, Irwin……. hard to find anyone with a birdbrain around here……..
Troll
SPare me………RUN along now and take your meds…..it is past your bedtime..
Just a bounce for Barrick? I bet not:
http://stockcharts.com/h-sc/ui?s=ABX&p=D&yr=0&mn=8&dy=0&id=p45008712893&a=409972541
I expect $0.44-$0.45 to be good support for Alexco, and a bounce there.
Despite having too much AXU already, I did buy a little more at .45 today and am likely to buy more still if it goes lower.
Probably a smart plan. If it get’s to $.44 tomorrow, I may add some myself to play the bounce. With it closing at $.45 today, it may have already hit support, but we’ll see.
Matt hope you’re correct but what about that 11 area…??
There is a gap there on the daily chart that just might get filled. If it does, I will be a buyer. My last buy was close to 11.60.
Thanks to the action this week, there are no gaps below on the weekly chart.
http://stockcharts.com/h-sc/ui?s=ABX&p=W&yr=3&mn=3&dy=0&id=p55272984983
GOTS……..check list available at Sinclair’s ..jdsmindset
Spare us Jerry. Sinclair is in outer space and not fit to read. Not one single person on this site (except you) even quotes his blather anymore. Makes me wonder why you bother. Are you related to him or something?
Spare us ……tweedy you are not the monitor……….
:)………
🙂 ………
that is gots ya…………..
I was being serious….are you related?
Heck bird……we are all related…..ever heard of ADAM AND EVE……..
Are you kidding me? NOBODY believes that story is fact. Not even you.
I always knew BIRDS had a small brain…….
Small yes,,,,but nothing like that of brokers and real estate dealers. Total losers.
Hard to find an REAL AGENT without a spear in Africa….
SPEAR ME ,,your next comment………..
Fuc*ing moron.
Is that ok with you Frank from Fuc*ing Moscow?
Is that all you got……….gots ya………..
expand your vocabulary……… U……..are missing the meaning of creation….
Adam and Eve, were they not the only 2 people on earth until they left the garden and met other people?
I always found interesting the idea of a snake being used in the story as the deceiver, the snake being the symbol of the goddess.
Bill Holter without a holster is joining Santa.
-good place for him.
I Thought he was HOPPA LONG CASSIDY…….
End of the whirld,
$50k gold is a laughably low estimate,
blah blah blah
The world will be fine,
once the occupants depart.
Matt- any prediction for gold first week of June…?
many thanks
It’s not a “no-brainer” but I think gold is going to manage to close higher next week.
agree………
Sinclair made the gold market in the last bull run.
Bird hates gold until it suits him otherwise,ike most fed fiat lapdog devotees.
$1165 was JS’s last call while Marty the head injured saviour was calling $5k-$12k.
DITTO
Ding Dong.
At least I have been 100% right about gold for the last (almost) four years while some of the regular morons on this site have been sucking dirty air and blowing sunshine up our collective arses.
does not count the last 40 years before that…………HA,HA..late to the party……
Troll.
I think we have been over this issue before……….so spare me
Higher than today Matt… thats not saying much…thanks
No it’s not but the miners will do well if gold just holds up. We have the usual seasonal headwind coming but I believe gold will finish June higher as well.
June is typically not good for gold:
http://www.seasonalcharts.com/classics_gold.html
but…
…it did well that month in ’04, ’05, ’09 and ’10.
http://d1we3mgpmos2z.cloudfront.net/wp-content/uploads/Gold-Seasonality-Indexed1.png
I think it will again.
http://d1we3mgpmos2z.cloudfront.net/wp-content/uploads/Gold-Monthly-Price-Change.png
Btw, I disagree that it’s not saying much to get the direction when most are expecting the opposite. No one that I’ve ever come across can consistently and accurately provide the short term direction along with a price target. Those who might appear to are reporting such calls when specific setups appear.
Hopefully others will share their guesses too.
I agree WMK that if gold just holds up and gets a little higher that the miners will outperform the move in the spot pricing of gold or silver. However, I believe this will just a be a short counter-trend move in PMs higher, Oil ($64-$66 target I’ve had a for a while), and other commodities. I believe the dollar is just taking a breather, and then will start to climb higher again, with a target I’ve had for a few months at $110-$111.
That’s my 2 cents.
For clarity, when the dollar finishes it’s breather over the next week or two, then that will truncate the move up in PMs and commodities, and they’ll reverse back down into to the summer once the USD starts to climb again. My target is the $29-$30 range in GDXJ for this pop.
$30.10 peak from Jan 20th is the specific GDXJ target, but I think it will fall short of that in the $29.change range.
GDXJ short term mid point at 26.52…..with a target at 27.96, if price takes out the mid point with gusto.
Thanks for the update on RPMGF. I plan on adding that to my portfolio.
But I thought we had a thriving economy…? 🙂
Appreciate Matt…. you do your best-
I hope others will provide their guesses as well,,, LPG…????
thanks again
yr friend
Agatha
Sorry Agatha: no idea about 1st week of June for gold.
LPG
Matt- a possible bookmark…
http://www.marketanthropology.com/
Good article Agatha. Thanks for posting it.
Conditions are still favourable for a major rally in gold. If those conditions continue, then a positive move will happen. Doc might be right here. Once the Bear-Bull standoff resolves, I think NYC and then Toronto will move up nicely. It should begin in the three weeks. The more naysayers piping up, the better the chances are of a soloid move up. Good luck gang
sorry…I meant “solid”
Are transports headed down because oil is headed up and not because of a slow down in their business?
Here’s a good interview from Palisade with Jordan Roy-Byrne on the path he see’s for Gold over the next few months and the end of the Gold bear playing out.
Great Panther Completes Acquisition of Cangold
May 27, 2015
Good luck with that:
http://www.afp.com/en/news/austria-repatriate-large-gold-reserves-britain