Look for a short term bounce in gold around the corner
Gary is with us today to focus on the gold market. Although he still thinks we need a sell off before a new strong bull market takes hold, he is looking for a short term bounce in the price. He warns not to get too bullish over the next 8 weeks.
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Hi Bob UK. I just posted a Feb/Mar mash up down below and noticed you were watching to see how Fresnillo would react if Gold tested its lows. It sounds like both then and now that it held up better than the spot prices, so that seems encouraging. Do you follow any other Silver miners or producers?
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On March 7, 2015 at 7:53 am,
Bob UK says:
I will be keeping a close eye on it next week as, if gold does drop down to $1130, I will watch how FRES reacts.
I follow a few, some listed on the FTSE and some listed on the US markets, and have, naturally, missed some good profits this year… just watching… Missed out on a 100% profit… but haven’t we all.
The reason I keep mentioning Fresnillo is that I have noticed that it tends to start going up a day or two before we have a rally in metals. This is just anecdotal by myself as I have never sat down and actually charted it… just what I observe.
Good stuff. Yeah, that is why I was asking, because Fresnillo is a fairly solid major PM mining company, and maybe it could be a good bell weather stock, like Newmont mining. It is also encouraging that the miners tend to turn first before the underlying metal prices. This lends credence to what Gary was mentioning (and what we’ve noticed all year) in the miners starting to diverge from metals prices and then leading the metals up.
Fresnillo is a well run company and has held up well in comparison to its peers in the larger silver producers.
Silver Miners Composite Chart for some of the Majors and Mid-Tiers the last 200 days.
http://stockcharts.com/freecharts/perf.php?AG,FSM,HL,PAAS,CDE,SSRI,TAHO,FNLPF,DBEXF,MND.TO#
Here’s a nice chart of some smaller producers and explorers in the Silver space. Mag Silver has remained in the #1 position out of this group this week, with Trevali Resources ousting Sierra Metals for #2 position, and Sierra now in 3rd place.
Featuring composite chart on the last 200 days with : Mag Silver, Alexco, Silvercorp, Trevali Resources, Impact Silver, Santacruz Silver, Sierra Metals, Avino Silver & Gold, Great Panther Silver, and Americans Silver Mining (still displays as Scorpio).
http://stockcharts.com/freecharts/perf.php?MVG,AXU,SVM,TV.TO,IPT.V,SCZ.V,SMT.TO,ASM,GPL,SMNPF#
One last chart for the day on Silver explorers & small producers:
Excellon, Defiance Silver, El Tigre Silver, Minco Silver, Kootenay Silver, Avrupa Minerals, Bear Creek Mining, Aurcana, Mirasol Resources, and Sabina Gold & Silver.
Well we shall see.
Gary has indeed been the BEST short term caller as of late, bar none! including the master Doc.
I see no hope of any meaningful rally today or in the near future, therefore, sentiment is pretty negative.
When Gary said we were going lower @1235 gold, I thought no way.
BUT he was right then. Will he be right now?
Sentiment is the worst I have seen in years. So even I do not believe it.
That means no sellers left.
Doc said on Jan 16, the bottom was in. I thought Doc was right.
Jan 16 was the day after euro pegg was abandoned by the swiss gov.
Good day Dave. There was a very good chance that back in mid January , that could have signaled the bottom was Nov 2014 lows of $1131. Going into February it broke out above the trading range and above it’s trend lines and MAs. The problem was that it didn’t do a short pullback and keep climbing higher to break back above $1308 and take out $1347 or more importantly $1382. When Gold fizzled out and just kept falling in late Feb into March, it missed the window to get the new bull trend going. As a result, at the time, many people on the blog noted we’d have to wait for the seasonally weak period of the Summer doldrums June-August to see if the Nov lows would get tested again.
Well, now 5 months later (post the Feb Gold Fizzle) Gold was back down to $1144.40 today, but has started to pop back up over the last few hours. It is still very difficult to see how this may play out since we are still in a stronger US dollar, Fed announcing they may raise rates this year, and weak commodity overall backdrop.
Here is a look back at some posts from Feb/March after it was clear that Gold was not going to break out above 1308, 1347, or 1382 and we’d have to wait until later in the year to see if the Nov lows get tested. A fun trip down memory lane:
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On February 17, 2015 at 9:40 pm,
Shad says:
If Gold would have just had a small 1 week minor correction after the 1308 high and close on the 22nd of 1302, then there was a good chance gold could have kept climbing. However, now it lost $100 in less than a month, and is in a much bigger hole to dig out of. Gold had really popped up above the trend line, but now is reverting back down to it, where it will bounce again, but likely not even as high as January, and then it will likely fall further on the next correction down to test 1180 and 1137. If those levels fail then $1044.70 as next major support, and then $993.20 as a worst case scenario.
On February 17, 2015 at 12:20 pm,
glenfidish says:
Doc let me rephrase i meant lower then 1130?
Like this summer?
On February 19, 2015 at 10:28 am,
Chartster says:
The only thing that looks remotely bearish in that chart is the MACD.
I use RSI, MACD, TRIX, and slow stochastic.
If you draw the line from the bottom of 1130 candle to the bottom now, and also draw the line from the top of the 1130 candle to the last top. You will see a bearish expanding wedge. Ready for a possible break down.
On February 20, 2015 at 11:32 am,
Chartster says:
If gold closes where it’s at right now , or even falls further down?
Lookout ..below…….
And 1130 is distant memory!
On February 23, 2015 at 9:56 am,
Lawrence says:
Gary, I have marked you as bearish of gold at $1130-$1200. Please don’t argue that you are bullish when price is up a lot. I will disclose this when it comes.
On February 23, 2015 at 11:09 am,
Gary says:
Lawrence,
I’m not sure what you are trying to say. Gold is in an intermediate decline. I tend to think the bear will continue until it at least retraces back to 1000-1050, but I don’t think the secular gold bull is over.
On February 24, 2015 at 7:18 am,
Chartster says:
The hardest thing in this PM market is when to buy up the mining stocks. With this next big drop coming. I believe march will see the bottom.
I do know 1130 on gold ain’t even close to a bottom.
On February 25, 2015 at 11:16 am,
stewie says:
LPG i agree….. I will go all in again near 1080 or 1130 depending how oversold indicators look. I’m sure we all will be covering it then. lol. I can’t believe how long gold spent in this stupid bear market. Unreal. Unreal.
On February 25, 2015 at 10:50 am,
stewie says:
It will eventually fail and it will first test 1130 and then we will see what happens but i would rather have a washout to 1080-1050 already then wait 6 months. My 2 cents
On March 2, 2015 at 7:08 am,
Chartster says:
True Lawrence, I did think the bottom was in November , until it stopped at 1130. It will fall under 700 soon. I’ve been wrong about when, but won’t be about ” what is going to happen!
On March 2, 2015 at 6:12 pm,
stewie says:
Wash that sh1t down to 1080 please. Bull sh1ting around for another 2 years in this range only gets you 2 yrs old and no money made. Murk that sh1t down so we can move on to 2000 gold. 1130 is coming next then 1080. Deal with it.
On March 4, 2015 at 8:36 am,
Bob UK says:
I think Gary is spot on here and that we are going to see $1130 reached later this month and perhaps go lower.
On March 4, 2015 at 1:29 pm,
Bob UK says:
….I think we will go below 1130 in gold and, as a result.
On March 6, 2015 at 1:53 pm,
Shad says:
I diversified out of many of mining stocks in Jan and Feb, anticipating the PDAC curse in March and now we have it. March and May are seasonally rough months for the PMs, but this coincides with the bottom in commodities we expected in the spring/summer in the whole commodity complex. What was odd is how weak February was, when it is seasonally a great month for gold/silver.
It seems the gold market will whipsaw from here with lower targets at 1137 and 1131. If those don’t hold, then 1044.70 is next support.
On March 6, 2015 at 2:53 pm,
Gary says:
Maybe. We’ll see how they hold up when gold reaches 1130 again.
On March 7, 2015 at 7:53 am,
Bob UK says:
I will be keeping a close eye on it next week as, if gold does drop down to $1130, I will watch how FRES reacts.
On March 11, 2015 at 12:37 pm,
LPG says:
Now gold has fallen to 1146 intraday and this is interesting. Our Daily Bearish Reversals are at 1146 and 1141 followed by 1130.
On March 12, 2015 at 10:12 am,
glenfidish says:
Gary,
Interesting points about the cycle count. For the record Gary,doc, if and when we challenge 1130, will this be a second attempt or a third attempt at 1130?
The reason I ask is because there is much discrepancy upon pundits some saying second time and others are saying third time because the swiss vote would have been the seconf time? To me it would seem as attempt number two?
On March 12, 2015 at 10:26 am,
Shad says:
I think it is attempt number two. The other time the price-point was seen was in overseas trading, the question is do you count the full 24/7 chart or the US charts?
That is why I thought 1137 was more relevant than 1130; however round numbers like 1130 are often where traders place stop/limit orders, and are psychologically relevant towards sentiment.
On March 12, 2015 at 10:38 am,
glenfidish says:
Makes sense Shad and thanks for your comments. I’m inclined to be open minded and personally I think the distance would be to short for a double bottom but you never know what mother market gives us.
On March 12, 2015 at 11:22 am,
Shad says:
That is sound advice Glen. I don’t think it helps to get married to an idea or theory, and since it is so far off, we’ll just have to wait to see what wildcards are thrown at us.
However, I do believe when looking at the monthly and weekly charts in Gold that it has farther down to go before bottoming. Also, after the feeble display to try an rally in late Jan/early Feb and failing to fall lower in Feb, then that confirmed we would head lower into March and we have. At this point we have not tested the 1137 or 1130 zone yet, and as discussed, I think we are due for a short term reversal for a week or two based strictly what is going on with currencies.
Most bear markets in gold have been 3-4 years and if we are 46 months into this bear, then the bottom being in about 2 more months puts us right at 4 years. Now, could it take 4/12 or 5 year to bottom – of course….anything can happen ; – )
On March 12, 2015 at 11:31 am,
Shad says:
There still is a 10% chance that the bottom was 1130 and that we move up from here without testing that Nov low, but it seems like the market wants to test that level, and even lower to finally wash the remaining bullish sentiment out of the marketplace.
I think it will be a process of bottoming and not a one day event, and I just don’t think November was it. Hey, I’ve been wrong plenty of times before though : – )
On March 12, 2015 at 11:54 am,
Shad says:
Since gold has had a downward tendency for a while now, with the counter-trend leg up from Nov – Jan, then it stands to reason the next down leg will break through the old lows at $1137 or $1130.
My best guess would be the $1044.70 target (from Oct 30th, 2009). I think the $1048 area also matches a Fib retracement level. That area between 1050-1044 should be good support. This move down will coincide with the commodity cycle bottom and top in the dollar, so that is why I think it is the upcoming “Major Bottom” and around 4 years of the Bear market.
I think ………..BIG O^OWL……..needs to put you on the staff………….. 🙂
I think those posts are all from an alternate reality.
Funny FFM and Bob UK. I just think as a group we had a pretty good handle on the fact that we’d be back down close to the Nov lows again at one point, and this blog has some sharp cookies on it. Most blogs are either all pumping and hype or perma bear haters. We have a nice mix of level-headed and well informed investors.
Excelsior! 🙂
HA! Right on Gare! I am looking to average down on my NUGgeT hedge. NUGT set a 52 week LOW today.
Gold Stocks At Lowest Levels Since Goldmember
Jul 14, 2015 at 9:17 AM
http://jlfmi.tumblr.com/post/124068892045/gold-stocks-at-lowest-levels-since-goldmember
That article above is using the (XAU) as their measure of “Gold Stocks”.
As mentioned previously, the XAU and HUI are OK, but GDX really has the most even weighting across the board in Major & Mid-tier producers and isn’t so heavily weighted on just the bigger Majors. My personal favorite for a recovering market is (SGDM) for Majors and Mid-tiers and (SGDJ) for Mid-Tiers, Smaller producers, and development companies.
Good luck to all in their investing.
Good interview today guys, and Gary had some interesting comments on Gold, the miners, and the US dollar. The dollar strengthening lately has pressured the commodities, but if he feels it will get up to 98 and then reverse, then that may be a good time to take positions in the commodity stocks, because they should be at their corresponding lows.
If Gold does get down close to the November lows of $1131, it sounds like both Rick and Gary feel it will bounce before it tests that level around the $1135ish area. That would make me nervous that in overnight or pre-market trading that the institutional investors wouldn’t just push it down below that to trigger the sell stops.
However, I can see the rationale behind Gold having a nice counter-trend rally to suck in bullish enthusiasm for a short time and then dropping the bottom out again to shake out all the new longs. Either way, it doesn’t sound like we are going to get the major bottom yet, so maybe it is a good swing trade opportunity on the miners if the USD climbs a bit higher, and PMs drop just a little lower. Crazy times!
Worth a read over a cup of tea and a custard slice. (You folks do have custard slices over there don’t you? 🙂 )
‘Decoding the IMF: Greek deal doomed, exit likely’
http://blogs.channel4.com/paul-mason-blog/greece-crisis-austerity-deal-pointless/4197#more-4197
If, as this article believes, the Greeks will soon exit then surely the USD will get rally against the Euro and all commodities will fall as a result? Maybe that will be the buying opportunity for gold/silver?
Yankee
Doodle Dandy?
funny.
Bob, I’ve never heard of custard slices. In Texas we eat watermelon slices.
Probsably healthier Bonzo… but lacking in yumminess.
Are you kidding? What could be sweeter and yummier than “the sweet watermelon and the buckwheat cake”? In 1973 I rented a new Morris Marina and drove 2300 miles around England, Scotland , and Wales and never ran into any custard slices. I did eat lots of strawberries with clotted cream. Wow!
You will have to come back for a custard slice or a bowl of eton mess.
I actually bumped into a lady about 2 months ago who still drives a Morris Marina. I had to stop and have a natter with her as I was amazed that it was still going strong. It was a dark navy blue one – albeit it with lots of rust and paint undercoat colourings.
Perhaps it was the one you drove. Oh, hang on – there was an empty custard slice carton on the back seat so can’t be the one you drove 🙂
Over here custard is not hard enough to be sliced. It is soft and eaten with a spoon.
Clearly a gap in the sweet sugary market in the US then? 😉
Hi BONZO……Did you manage to drive 2300 without a break down , if so that was amazing,You must have got a good one.
Yes, the Morris Marina ran like a top for the 3 weeks I rented it, but it was brand new. The hard part was driving on the right side of the road and shifting with my left hand, but I got used to it after a day. And nice bed and breakfasts cost only 1.5 to 2 pounds in ’73. I wonder what they cost now. My big splurge was a night at Batworth Park, a mansion that had been built in Arundel by the duke for his mother-in-law. When she died it became a B&B for 2.5 pounds a night with a glorious breakfast included.
Mathematically Greece has to default. May not be called a default, but regardless the math holds.
Sadly most Goverments are stupidly walking down the same road.
When will the corrupt moron politicians not bankrupt us all.
First molotov cocktail thrown by protestors at riot police outside Greek parliament. Stun grenades used in return.
Paul Mason, reporting for Channel 4 News from Athens, is talking to protesting Greeks – by the look of it the country is about to pull itself apart.
We’re not there yet, but getting close now. I outlined this move twice in recent times.
http://thefinancialtap.com/2015/05/gold-cycle-update/
Good articles Bob. Thanks for posting them and I concur with some of the support and resistance levels you noted.
Bob L. – Just curious as to if you follow Gary’s cycles and how your day or week counts line up with the Daily and Intermediate cycles he tracks?
Daily Cycle (DC)
– A typical Gold and Dollar cycle will run for 16-22 days while an equities cycle will run for 36-42 days.
Investor Cycle (IC)
– The movements and flows of the Investor Cycle are much more consistent and provide a long enough time frame to allow “investors” to take position without having to manage it on a daily basis or have to stress about the short term daily whipsawing volatility. The Gold, Dollar and Equities Investor Cycles average from 16-22 weeks in duration.
**Also do you follow the Charles Nenner cycles at all and how do those differ from your system?
Thanks!
For clarity I posted your cycle definitions out of your glossary, but seem to remember Gary having a 25-30 day count on the Daily Cycle, and a 22-28 week count on the Intermediate Cycle. I could be way off there, but just wondered how your cycles, his cycles, and the Charles Nenner cycles may coincide or differ?
They can own guns there so when is the shooting going to start?
I wonder if this will be the ultimate bottom in miners again.?
Tom….No not until the next time !!!
NUGT looks like a buy for tomorrow…and hold through Friday ?
there are several gold stock stat have diverged weeks ago.
Fresnillo didn’t really want to go down today despite the reaction from gold and silver re Yellen’s interest rate comments. I watched silver drop and was expecting to see Fresnillo do the same but it kinda shrugged its shoulders and said “Nah!”.