Lawrie Williams – Mon 8 Feb, 2016

Here is what Lawrie Williams has to say about the surge today in the price of gold.

Gold touches $1200 in dramatic surge

Despite the Chinese market being closed for the Chinese New Year, the gold price has opened this week very strongly.  After a small dip overnight down to the mid $1,160s, it rapid;y recovered any lost ground from Friday’s close, and then surged upwards through what many considered to be a key resistance level at $1,180.  At the time of writing it had pushed up to $1,196 and now commentators and analysts see it as heading to the $1,200 psychological level – a level it hasn’t see since June last year.  Indeed, as I write the gold price has surged from the high $1,170s to touching $1,200 in under an hour, before falling back to around $1,190.  Is this sign of the breakout the ardent gold bulls have been waiting for?

Sentiment towards gold appears to have made a complete sea change in the first five weeks of this year, not only in the world’s two biggest markets for physical gold, India and China, but now also in Europe and the USA, where the price tends to be set.  To an extent this is due to continuing serious nervousness in global equities markets.  For the past two to three years analysts have reckoned that gold had fallen out of favour as an asset class as far better returns were being made in the equities markets, but last year equities were largely flat, and ever since the U.S. Fed. commenced its so called interest rates normalisation programme, albeit with a tiny 25 basis points increase in mid-December. after a brief hiatus period equities have tanked and gold has been on the up.

Today, European equities markets opened lower, as did their U.S. counterparts, with the Dow falling back below 16,000 – it peaked last April at comfortably over 18,000.  Markets can move strongly in either direction, even in a day, but the overall trend since the beginning of the year has been sharply downwards.  The market pessimists have long been talking about a forthcoming equities crash, and now people are beginning to see this as a real possibility, and they are nervous.

Gold has thus been becoming a safe haven again.  We have seen purchases into the big gold ETFs heading towards erasing last years big liquidations in a matter of weeks.  Last week gold moved back up through its 200 day moving average, which reinforced other ‘buy’ signals, while panicky covering by some of the big holders of short gold positions will be adding to the surge.

Before gold investors get too euphoric though, it should be remembered that gold started last year really well too, with a similar surge, which took the then price up to around $1,296 by January 22nd – after opening the year at around the $1,170-1,180 mark (a rise of around 10% in only three weeks).  This year gold has risen so far by around 11% over five weeks – so a similar kind of increase.  Has the speed of the price increase been overdone?  Time will tell, and gold can be a somewhat fickle investment class, although long term it has tended to hold its value well.

Silver has not been immune to gold’s rise.  It was fixed this morning at the somewhat discredited London benchmark pricing system at $14.94 (although to be fair this was around the spot price at the time), but at the time of writing only a couple of hours later it had surged to $15.40 before falling back a few cents like its yellow sibling.


Featuring:
Lawrie Williams

Comments:
  1. On February 8, 2016 at 8:06 am,
    CFS says:

    Happy New Year, all you monkeys.

    • On February 8, 2016 at 8:14 am,
      Dragonite says:

      As Chinese say that gold will be rising on “Year of monkey and month of horse”, meaning indefinitely, who knows. Ha, now it is year of Monkey. Good luck.

    • On February 8, 2016 at 10:31 am,
      Steven says:

      I don’t have monkey blood being a type O negative but I was born in the year of the Metal Rat 1960. The next one is in 2020. It has been a good day so far. I got a short hair cut, shaved off the beard and gained 4 to 5 grand in value of my PM holdings. Not too shabby.

      • On February 8, 2016 at 10:38 am,
        Big Al says:

        Good for you Steven!

  2. On February 8, 2016 at 8:12 am,
    Frank from moscow CCF says:

    Just exactly what I was thinking…….

  3. On February 8, 2016 at 8:24 am,
    CFS says:
    • On February 8, 2016 at 8:26 am,
      Frank from moscow CCF says:

      Didn’t someone buy Johnson M…….about two years ago?

    • On February 8, 2016 at 8:27 am,
      Frank from moscow CCF says:

      Interesting………thanks

      • On February 8, 2016 at 8:29 am,
        Frank from moscow CCF says:

        I do like platinum……..might see platinum zoom past gold…….as it did 06-07(?)

  4. On February 8, 2016 at 8:29 am,
    Chris in Thailand says:

    Living in Asia I can buy into the lows during the Asian markets. But I’m aware that it will be time to take profits at some point. It seems like this can be a swing traders dream..or nightmare.

  5. On February 8, 2016 at 8:30 am,
    Frank from moscow CCF says:

    Yes, you did…..try to warn them……and I am in your camp…………..J THE LONG.

    • On February 8, 2016 at 8:44 am,
      Frank from moscow CCF says:

      dang……….the velvet hammer put gary out…..

      • On February 8, 2016 at 10:09 am,
        Big Al says:

        Causes too much drama, Frank. Please subscribe to his service if you like it.

        • On February 8, 2016 at 10:18 am,
          Frank from moscow CCF says:

          owl…………you are to funny……………

          • On February 8, 2016 at 10:30 am,
            Dragonite says:

            Al seems not very happy we applause to Gary. Gary is a good guy, Al. 🙂

          • On February 8, 2016 at 10:39 am,
            Big Al says:

            Dragonite,

            I have never said that Gary was not a good guy. I simply would like his fans to subscribe to his service and stop the interaction on our site. We live in a win-win world. Gary decided he would not appear on our site as he did in the past.

          • On February 8, 2016 at 10:45 am,
            Dragonite says:

            Fair enough Al. I will stop commenting on Gary.

          • On February 8, 2016 at 10:57 pm,
            Asian guy says:

            Al, will Gary keep appearing on your show from time to time? this would be a triple win: listeners, your show, and even Gary himself.

          • On February 9, 2016 at 11:10 am,
            Big Al says:

            Probably

          • On February 8, 2016 at 10:43 am,
            Big Al says:

            Regarding how, Frank?

  6. On February 8, 2016 at 8:31 am,
    Brian says:

    LakeShore Gold: Bought by TAHO for 15% premium.
    Now I have to find another core PM Miner for my portfolio. Thinking MUX.
    Brian

  7. On February 8, 2016 at 8:31 am,
    Chris in Thailand says:

    wow looks like the U.S. markets are rolling over…..

    • On February 8, 2016 at 8:50 am,
      CFS says:

      All is cycles. As the US Empire declines, the Dow/Gold ratio will approach 2, again.

      Kondratiev was a good economist, but paid for it with his life.

      First, the American revolution, then the French revolution, then the Russian revolution, then the Chinese Revolution, now it’s time for a second American revolution to prove that Socialism/Communism does not work, never has, never will.

      “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”

      ― Alexander Fraser Tytler

      • On February 8, 2016 at 9:07 am,
        Frank from moscow CCF says:

        ditto……on the cycle comment.

  8. On February 8, 2016 at 8:32 am,
    Dragonite says:

    Good job Gary. Just want to say, when you predict breakouts, beware of smash downs.

    • On February 8, 2016 at 8:36 am,
      Dragonite says:

      BTW, my SJB is also doing well. Short the junk bond.

    • On February 8, 2016 at 8:53 am,
      Brian says:

      I find derogatory terms like “dumb money” not only incendiary, but ambiguous.

    • On February 8, 2016 at 8:55 am,
      Dragonite says:

      Gary, you are very right. In the last few years, if you sell breakouts, you make a lot of money.

      • On February 8, 2016 at 10:07 am,
        Big Al says:

        Dragonite, I would suggest that you subscribe to Gary’s service.

    • On February 8, 2016 at 8:57 am,
      JayT says:

      Gary- great to have you back here. Like Al says, it’s smart to listen to all opinions, then make a decision and IMO your insights are sorely missed when not here. Thanks!

      • On February 8, 2016 at 10:07 am,
        Big Al says:

        Jay T, I would suggest that you subscribe to Gary’s service then.

    • On February 8, 2016 at 9:00 am,
      bb says:

      Went o the wrong spot again.

      Guess I dont follow too well, yesterday was dont miss the move, now as the gold price is up a hair, its sell it, its dropping?
      So much for a big move.
      I guess a triple leveraged eft woulda been ok. (altho, a couple of mine got 20-50%)(we’ll see if they hold)
      But wouldnt it have been accurate to say, were gonna get a spike?

    • On February 8, 2016 at 9:09 am,
      Marty says:

      I agree Gary, but in this cycle the monthly 6×24 ma in AU -AG will be the telltale point going forward as support as it was in 2013 on the downside. What was overlooked 2 Friday’s ago was the ESF/BOJ intervention In the yen to preempt the S&P waterfall monthly close. The S&P needed a $20+ increase on the 29 Jan what might have proved to be the nail in coffin for the markets for the year.

  9. On February 8, 2016 at 8:33 am,
    Dragonite says:

    How are the people on sidelines, time to jump in?

  10. On February 8, 2016 at 8:46 am,
    Frank from moscow CCF says:

    gary……….where is that last article……I did not see anything disruptive ….

  11. On February 8, 2016 at 8:57 am,
    bb says:

    Guess I don follow too wll, yesterday was dont miss the move, now as the gold price is up a hair, its sell it, its dropping?
    So much for a big move.
    I guess a triple leveraged eft woulda been ok. (alho, a couple of mine got 20-50%)(we’ll see if they hold)

    But wouldnt it have been easier to say, were gonna get a spike?

  12. On February 8, 2016 at 10:42 am,
    Frank from moscow CCF says:

    Owl………he was your fan first………..

  13. On February 8, 2016 at 10:52 am,
    Dick Tracy says:

    Deutsche Bank could crack the markets wide open like Bear Stearns did in 2008, this time it won’t be a shot across the bow but rather a shot heard around the world. DT

    • On February 8, 2016 at 11:58 am,
      Big Al says:

      No, it certainly will not be a “shot across the bow”!

  14. On February 8, 2016 at 2:55 pm,
    Jason says:

    Miners starting to fizzle. We need to take Gary out of the closet and dust him off, get his latest opinion.


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