How low will this correction in metals go?
We focus on gold as well as the general metals sector with Doc today. With the expectation that this sell off will continue the question is where will it end? Will it be quick or slow and if $1,150 is reached on gold what will the bounce back look like?
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Thanks for the link, One
OoTPs; I don’t think the pullback for some of the stocks will actually be that severe and in fact, I’m getting ready for some purchases in the near future.
Doc, I agree. I already have my concentrated list for new buys and my non-trading positions in firm long-term holds are on positions I won’t sell for years unless company specific news dictates a sale.
I’m not remotely concerned with any gold weakness as I welcome it. Weakness to re-position is good, not bad.
Love you’re commonsense take on the PM markets.
Here’s a good interview with Hamilton:
http://talkdigitalnetwork.com/2016/05/this-week-in-money-45/
He is analytical and logical to a degree that makes most other commentators look like emotional artsy farts.
Matthew, even though Adam does have related material to sell, nevertheless, he is very smart and provides really sound advice on the overall PM market and miners. Very logical and consistent and well worth listening.
Thanks for posting that link.
I agree Al. My intuition also tells me to go along with Doc. Doc is a straight arrow with a remarkable record. I can hear the sincerity and honesty in his voice. It shoots clear through the fog. We are fortunate to have him here. When Doc’s not sure, you know it. When he is as sure as he can be, he says it.
+1
FWIW,
I will view my thesis on gold as being wrong if it goes below $800ish… (on its own – ie not accompanying a potential eq. mket meltdown).
Even a move to news lows just below $1040 would not make me consider my thesis being wrong.
Best to all,
LPG
And I’ve gotta add that IFFFFF the USD goes up vs. the loonie and the aussie, mex peso while gold/silver prices correct, I do NOT mind this at alllllllllllll.
Best to all,
LPG
LPG,
Most people live on the edge of their seats and create most of their own fears by needless hand-wringing over daily fluctuations.
Over complicating targets and trends in the gold markets is not a surprise really when reading some of the dialog from the PM community. Its just what people do.
V
Amen, V
What stock you will buy Richard on the pull-beck ? Thank’s
No crash-back available in gold unless accompanied by much higher volatility. As it stands, the kinds of moves to be expected are within a certain price volatility on a given day; too much emphasis on price alone as a determinant will likely skew one’s outlook.
OK. So what should the emphasis be on.
Birdman when large specs start hedging their long positions all hell will break loose in pms.Large specs longs are at record high.It is gonna be a panic run to the exits.
I sense that there is doubt in the market right now. Selling pressure did not live up to the level of golds knockdown today in any of the indexes I follow. Sure, they all declined but not with the intensity I might have imagined. It seems rather that there were enthusiastic buyers for all sellers as stocks did not suffer too badly in some cases.
So the specs are buying the dips in force. They need the fear of G-D in them before they will be motivated. Maybe we will get another day like we had today so they see the light.
Yes, similar thoughts Birdman. I would not be surprised to see gold and silver rally tomorrow.
B. Interest rates.
OK thanks.
Imo gold has not reached the top yet.1322-1323 is the level that I am watching.Birdman it looks like we are being given more credence ultimately.Birdman todays move in dust looks very promising but my gut feeling is telling me that price will move sideways for a day or two and then drop lower to $1.
Anything is possible Don. When I was looking at the chart earlier I was also thinking a bounce back was in store. Honestly, I am ambivalent right now but there are some indicators suggesting this decline is the real deal and not just a one day event.
Examples of these indicators?
Well this was a metals commodity rout today and that included the whole group including platinum, palladium and copper. So I looked at copper (as one example) for confirmation because the basic story here is about China and news today that there would not be as supportive expansionary environment going forward.
Today copper broke below its trend channel that had been established since the start of the year. Secondly it is posting a large multi-month double top and looks to be completing that pattern.
So what else? Well the dollar is still rising, Yen still falling, commodity currencies in the red. A perfect storm if it holds this way for long. We will see if the dollar breaks above 94.5 tomorrow to keep the trend in motion.
Plenty of people here will naturally argue against comparing copper with other PM’s but it works for me and offers an idea of trend changes in the group. Anyway, its off to bed for me. I am charted out for the day.
Gold looks to be closing at its lows meanwhile. There was no bounce back. Silver will need to close in on its lows and do the same in the next hour or so but its likely. Odds still favour a continuation of this trend and it should go on for a few sessions at least.
That’s fairly normal for a large directional change though. There looks to be momentum to the downside now but I have no idea how deeply it will fall on this cycle.
I won’t break out the Champagne until gold falls below 1200 though.
OK….scratch most of the above. It is all semi-bullshit. The truth Al, is that I have a few indicators that I won’t share. I have discovered them through determination and personal effort and am unwilling to tell anyone exactly how it is I know what gold will do next. And the reason for that is I have also discovered that once a solution to a puzzle is shared it stops working not long after. But this one has been good for years already and its known by very few.
So I am not telling!
Whatever happened to the corrections being short and shallow in the pms?
Lewis, short and shallow is still all we have.
The HUI gained 138% and is now down 11% one week later.
Lewis, they are here.
Thanks Matthew & Al
Gold still looks better than just fine to me. I welcome the recent dips as they serve to quickly reset sentiment to levels that are MUCH healthier for the bull.
I talked about the significance of the 233 week EMA (approx. $1258) for weeks prior to the break above it and now it looks like we will see it tested from above before gold goes higher.
Btw, notice the “back testing” underway on the HUI chart posted earlier. There’s quite a bit of support nearby and it’s Friday’s close that matters most.
I did quite a bit of buying today (as well as trimming the little bit of greenery that I had).
Hey Don Corleone,
what does Franco-Nevada tell you right now? If your thesis is right then that puts FNV :TSX at $90 if you get your final $1322 pop. That would trap even more bulls if your prediction appears. I want to buy this again when it is back below its 50 MA. Sub $78. Great long ball stock
fnv has been a huge stock.Ir weathered the drop in gold from 2011 however there are negative divergence on various indicators.The target for fnv is 75.Do not be greedy with this stock.It has been too benevolent.Do not push the limits.
DC,
I certainly respect and abide to the the FNV grandaddy “god-head” ;}
I am watching it very closely birdman.Referring to ewa we still need a final leg up(3 wave) to complete the pattern.
See this chart for a second. Its the Yen on a weekly and it looks like a large cup formation that might soon turn to a cup and handle. That would be more than sufficient to push gold much lower in the near term if it plays out. Of course it also implies a big bounce back in gold once its complete……
Yen weekly – Finviz.com
http://finviz.com/futures_charts.ashx?t=6J&p=w1
birdman I use the USD/JPY for my analysis and atm it is developing a head and shoulder targeting the 175 level.On your chart it is a reverse head and shoulder.Birdman from what I am seeing the usd is going to strengthen through 2020.My forecast for dx is 110-120.That does not bode well for metals at all.
Sorry birdman.I meant reverse h&s on the USD/JPY and h&s on your chart i.e. the JPY/USD.I swapped them by mistake.
That is so strange because other TA folks I’m looking at see an impending 6+ year drop in the USD. Goes to show “Nobody Know Anything”! Jost a joke on the title of Bob Moriarties latest book. Who to believe???
I did purchase his book today.
A lot of watching from the sidelines Al! years.
I’ve been having the same problem. We lose 100% of the chances we don’t take right?
Hi Tom,
Where did you get 100%?
XAU has pulled back to its 20dma. Still VERY BULLISH. Dollar will drop to 89-90.
velma dx is on its way up and pms are gonna realize that very soon 🙂
This is just a quick shakeout.
Lets hope so, you know what they say it will buck off as many people as possible!
I respectfully disagree With docs opinion. Deflation is coming. The seeds are already sown. I’m expecting one more strong upward thrust higher that is a bull trap, then gold and silver will plummet to gold at $500 and silver at $6.
Velma re.the dx I fully agree with you.It has to drop to 90 first before it shoots higher.Eur/usd has to rise to 1.20-1.22 first before it drops below parity.
You mean the mother of all bull traps velma 🙂
https://www.youtube.com/watch?v=-CH4wZmsmtk
Velma, you could be right—more importantly you are respectful—-disagreement is healthy especially when backed by thoughtful reasons. I actually appreciate that since it always gets me to question what I’m seeing.
If the banking class were not so tied to every asset on the planet including nation states, I would certainly support such an outcome. However, they will do anything to save their horde so pushing central banks to flood markets with obscene amounts of cash might come first before your deflationary spiral takes off. Not sure what happens after a hyper-inflation? I think the rules of, and THE ENTIRE GAME will have to be re-written before either of our “theories” ever take serious hold. I could be wrong, but the stakes are much much higher than they were in the 1930’s.
I look around the world at the major currencies – Euro, Sterling, Yen and Yuan and I really can’t see how any of them will strengthen against the USD in the coming months.
I think some US based posters concentrate too much on the US economic doomsday scenario without fully understanding the global situation. No matter how weak the US economy might be currently it is still the prettiest pig in the barn compared to the other above-mentioned currencies.
I think the USD will strengthen into the BREXIT vote but, dependent on the vote outcome, we could either see the Euro then rally strongly or simply collapse. Likewise, the Pound could then either rally strongly or collapse.
It is a coin toss at the moment and anyone who tells you that they know otherwise is a fool.
Thanks UK Bob I happen to agree with you at this point.
Now I’m certainly no Euro expert, but won’t the Euro go up if the U.K exits from Euro land? I imagine Germany losing a country that has twice the amount of debt to GDP than Germany would actually help the Euro. Am I crazy?
The UK leaving would see a call from several other countries to have a vote to leave the European Union and the Euro could collapse as a result.
If the UK stays in I imagine the Euro will soar the following day.
I agree with that, Bob. The UK leaving could mark the end of the euro-gold positive correlation and the end of the USDX-gold negative correlation. In other words, gold wins either way.
Notes From Underground: Authorities Reveal Their Intentions To Financially Repress the Germans
There were two articles today that exist in direct contradiction to each other in substance, but when taken together reveal how ECB President Draghi and IMF Director Lagarde HOPE to punish and repress the German saving class in an effort to salvage the EU via the alleviation of debt owed by the so-called peripheral nations. The first article of significance is an op-ed piece by the FT’s Wolfgang Munchau titled,
I have an alternate wave showing silver as low as 15.50 The preferred wave shows a bottom of 16.75
Watch the Nikkei. As it drops, commodities will go up….. Long term EWT chart shows the Nikkei tanking….
We’ve been hearing so much about the impending pullback in PM stocks. Ostensibly this is going to happen because they have come “so far in such a short time”. This is certainly true. But I can’t help but wonder if this anticipated crash-back is actually going to be as severe as anticipated.
On the other hand, bull market corrections can be very severe, only to be reversed quickly.
In any case, here is a link by Hamilton from Zealll.com. He puts some very good perspective on the run-up we’ve seen.
http://zealllc.com/2016/gstoofar.htm