The drivers behind gold and base metals
To wrap up the markets today I chat with Doc and LPG. We first look at the drivers behind gold as well as the markets that have been highly correlated with the precious metals. We also consider real interest rates with the move down in gold. We then switch focus to the base metals that continue to climb.
Click download link to listen on this device: Download Show
It’s not trump entirely. It was the BoJ that got the ball rolling for sure.
Is it just me? Cant think of anything to buy the relatives for Christmas, everyone’s got a HD flat screen TV, everyones got a smartphone, I can’t even think of a present to buy myself….its like everything is old….
And building the European Army ! New chips airplains tanks and Bombings AAA Debt !!!
This argument gold returns nothing is funny to me.
I think it says a person doesnt understand gold, maybe I have it wrong.
I like the comparison of returns on a dollar coin and a gold coin.
Golds not supposed to have a return as far as I can figure.
Want returns, invest it.
I would wonder about investment advice or opinion from someone that makes that argument.
The BoJ announced they will buy as many bonds as needed to produce 2% inflation.
The irony is, the lower they send the yen, the higher the USD index goes and the lower commodity prices go. This is pure cover for the Fed for the day when they need to start easing.
How Japan is not in hyperinflation is beyond me. What they have done goes beyond moral hazard.
Gold is doomed unless there is some sort of black swan event, IMO or it can break an at least 20 year old correlation with yen direction.
Base commodities such as copper, nickel, etc, are soaring.
Like gold, the yen has also not yet retraced 61.8% of its move up…
http://stockcharts.com/h-sc/ui?s=%24XJY&p=W&yr=7&mn=3&dy=22&id=p59692807933&a=489358284
So we’re nearing the end of the month, and it would be appropriate to begin numerating the elliot wave count on the monthly $U.S. gokd price. With the decline and massive volume exceeding the June 25, 2013 low, very highly likely we’re seeing the end of the first upwave, where the price flag automatically came up in stockcharts.com, and now we’re awaiting a new price flag on the downside. The sharp, sudden diwntrend is very characteristic of capitulation into a low, but may take until December before the low is in. By eay of irony, that price low may be in accordance with an ‘inflation line’ calculated on te basis of $42 in 1971 and adjusted for inflation using shadowstats.
I use Tom’s Inflation Calculator and the ShadowStats option to come up with the results. The chart is in log scale, meaning that straight line should be a mild, steepening parabolic curve.
In the TNX/!PRII Daily chart, I have found that when the 34-day EMA crosses the 233-day EMA on a daily basis, you can be sure of a reversal. This chart is valid on all time scales daily-weekly-monthly
If only the people could be more like the squirrels…
http://www.coasttocoastam.com/article/ironic-squirrel-attack-befalls-politician
The loonie is not exactly falling apart:
http://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=3&mn=7&dy=0&id=p87133038948&a=443833933
Just saw a CBC article saying that one of the banks expect the Loonie is headed to the 71 cent mark by the Q2 of next year. I’m hoping this is a contra indicator, but it is hard to believe when so much is pointing to a higher dollar. The only thing that is keeping my dollar bear torch lit is the fact that Trump won’t be able to get jobs back to the U.S with a high dollar. If I was the Fed, I’d be holding off on a rate hike here; especially when there is the SPLITALY vote up soon.
http://www.cbc.ca/news/business/loonie-us-dollar-forecasts-1.3863851
Considering how oversold the euro is, it will probably rally regardless of how the vote goes.
http://stockcharts.com/h-sc/ui?s=%24XEU&p=D&yr=1&mn=0&dy=0&id=p10063102166&a=477637674
Considering how overbought the dollar is, it might be difficult for the breakout to hold.
http://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=0&dy=13&id=p69255874387&a=454846003
I have my doubts about .71 for the loonie.
http://stockcharts.com/h-sc/ui?s=%24CAD&p=W&yr=6&mn=0&dy=0&id=p89914433864&a=452282882
Gold looks terrible when compared to commodities.
Gold:CRB Monthly
The uptrend is intact but look at the MACD and stochastics:
Copper just put in its best close since 7/2015…
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&yr=1&mn=1&dy=13&id=p45473231385&a=487154642
It is now weekly overbought for the first time in almost 6 years.
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=W&yr=6&mn=2&dy=0&id=p20612264714&a=486871395
On the daily chart, it is very overbought but still very strong.
http://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&yr=1&mn=3&dy=0&id=p74945822212&a=451232211
Next year is going to be a great one for commodities:
http://stockcharts.com/h-sc/ui?s=%24GNX&p=W&yr=3&mn=3&dy=0&id=p69656710489&a=422940314
5 Trades in December: Question for KE crowd.
What ETF would you play for each of 5?
December 2nd: At 8:30 AM Eastern, the U.S. Bureau of Labor Statistics will release November’s Non-Farm Payrolls report. This jobs report is a way to measure the temperature of the economy — and is widely used for political posturing and in support of policy. It would be a big market shocker if this report isn’t positive, to support the Fed’s rate increase — even if it takes a “seasonal adjustment” to make it look good.
You could make 37.5% in the minutes after that report is released.
December 8th: The European Central Bank’s Governing Council will meet in Frankfurt to discuss interest rate policy. Europe’s still in too much turmoil to pull back on their easy money policies. If anything, there’s a slight possibility of more stimulus in December. But their most likely call is to pass the buck to the Fed for the big December move.
This could make you 35.1% richer in less than one hour.
December 14th: U.S. Fed chief will announce the bank’s decision to RAISE interest rates. The Fed has been dying to restore its power to fight a future financial crisis by raising rates. Only problem: doing so in an election year is always hazardous to the party in power.
Now, with the election behind us, the field is clear: The Fed MUST raise rates in December – more importantly, our analysis indicates that the Fed WILL announce a rate increase at 2:00 PM on December 14.
You could walk away with a gain of 50% or more* in as little as one day.
(*NOTE — This is an extremely CONSERVATIVE estimate: You could have used our prediction that the Fed would raise rates on December 4th of last year to grab gains of up to 146.5%!)
December 15th: The Bank of England meets to discuss their interest rate policy, with an announcement the day after the Fed. Brexit uncertainty is still driving their every move. Sure, recent economic growth data beat expectations. But don’t expect any tightening.
You could walk away with a lightning-fast gain of 35.5% in a single day.
December 20th: The Bank of Japan meets, and the tune they’ve been singing is “more, more, more.” They’re very actively trying to stimulate inflation, and if they don’t announce more stimulus, they are likely to promise it at some near point in the future
Credit: http://www.moneyandmarkets.com/experts/boris-and-kathy
Gold has been very cruel and unkind, it’s like getting married and then divorced all in a span of ten months. I need another moosehead beer this is turning out to be a real hangover. DT
Tracy a beck hole of debt ! https://www.youtube.com/watch?v=SuniKsBxZ10
Frankly James you are right, it’s turning into a bunker busting implosion, blame it on Trump.
Dr. Marc Faber just prior to the election
1 year ago I said there will be no DOW crash…only a correction….Well all the gold bugs especially Moriarty for YEARS now…..said the DOW will crash and gold will soar!!! LOL Howz that working for ya…
http://www.greaterfool.ca/2016/11/23/lessons-9/
Id rather own a producing farm or commercial RE and I do…..CASH FLOW I love it… and the end of the financial system predictions are hilarious..
One trick pony fools…I’m so sick of gold bug idiots……Gold fever is a disease…
Bill:
The board always looks forward to you coming over to whine. I’m up 300% this year, how about you?
Bill marked the low for the gold space with his bearishness last Dec/Jan as well. He was quite bold…
On January 11, 2016 at 3:57 pm,
Bill says:
ANYONE investing ANYTHING in any market has rocks for brains these days.
I JUST looked at 40 charts and WOW. THE SHTF…..Oil tanked 5% alone…CRB smashing to new lows…
Im still 90% cash deese daz
————————–
Here’s one of my comments from the same thread (before the miners went apeshit):
On January 9, 2016 at 11:30 am,
Matthew says:
CLGRF weekly looks fantastic but I am more excited about plays that offer that optionality discussed in segment 5.
However, I’m not interested in the very low grade high capex huge deposits. Those will do best near the end of a raging bull when there’s lots of dumb money chasing starry-eyed stories.
I much prefer deposits that were recently economically feasible but became “worthless” due to the price of gold and especially silver declining below the cost of production. The re-rating of these deposits as they pop “into the money” can provide very quick, big gains. In fact, the big gains will start as soon as the metals have bottomed as the market will anticipate the inevitable.
As an aside, this might be, at least in part, the thinking behind Alexco keeping the drills turning and essentially doubling their high grade silver resource since 2011. I am one shareholder that is in no hurry to get production going again. Growing the “bank” in the ground and producing when silver is much higher seems like a far better strategy to me. For those who prefer production despite the associated added risks, miners like Americas Silver will offer plenty of leverage to the metal price.
—————————-
And a few timely and timeless truths:
On January 9, 2016 at 8:18 am,
Robert J Moriarty says:
…as you well know markets discount the future. All markets will turn long before conditions start to improve. If you look at any length chart of the crb or any other measure of commodities, they are cheaper than they have ever been in history. I recognize that markets tend to overshoot both on the upside and the downside, but soon people will recognize we still need oil and we still need steel, we still need copper, we still need wheat and maybe markets have gone way too far.
At all tops and at all bottoms, the majority of investors and gurus will be 100% dead wrong. If the consensus is that commodities will continue down, as always, the consensus will be wrong.
Mathew:
Bill has always invested using his rear view mirror. He lost his shirt on mining stocks because he wouldn’t sell so it’s all my fault. I didn’t remember that particular post but I’ll take 100% credit for having the guts to say it and getting it exactly right. Oil was $26 on Feb 10, commodities turned, copper and steel have rocketed and Bill is in Real Estate. Must be time for a top there. He just comes over here to give me a hard time. If I made 100 predictions and 1 was wrong, he would be whining about it. I’m human and not all predictions work or are timely but Bill is wrong 99 times out of 100 and chortling about how smart his was for getting one right.
I agree with LPG. The bottom is about 1170. Then we head back up.
LPG, of all the correlations, Gold correlates the best with inflation rate.
New Photos are up on the MEXUS GOLD (MXSG) website showing the progress and trucks being loaded at Santa Elena.
Scorpio Gold Reports Financial Results for Third Quarter of 2016
+1
I think this news release is a game changer. (;-)
Americas Silver weekly:
http://stockcharts.com/h-sc/ui?s=USA.TO&p=W&yr=2&mn=7&dy=0&id=p71095498997&a=489469576
Yeup, Watching to see if that 61.8% fib retracement level will hold as support.
IMHO it could hit the high teens because of tax loss selling but am watching it closely too.
I’ve been buying it closely. 😉
Good volume on UEX Corp.
I enjoyed the audio editorial with Cory, LPG, and Doc. Since Doc mentioned the Baltic Dry Index and many of the capsizing Shipping companies getting a disproportionate bid lately, then this article seemed worth posting.
_____________________________________________________________________
What Just Happened In DryShips Has A Name
Nov. 17, 2016 – Paulo Santos (10,138 followers on Seeking Alpha)
Chilean Metals (TSXV: CMX) is a Good Bet for a Copper Recovery
Jay Taylor | November 23, 2016 – Smallcappower
http://smallcappower.com/chilean-metals-inc-tsxv-cmx/cmx-articles/chilean-metals-231116/
This is pretty extreme…
http://stockcharts.com/h-sc/ui?s=%24GDXADP&p=W&yr=5&mn=7&dy=22&id=p22884746821&a=483701731
This looks like a blowoff to me:
http://stockcharts.com/h-sc/ui?s=%24RUT&p=D&yr=1&mn=7&dy=0&id=p63910038767
Either way, it is definitely a selling opportunity.
Gold started the year with a big gap up versus the Dow and that gap has now been filled.
Gold:Dow is also, once again, back-testing the downtrend line that it broke out of in February.
http://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24INDU&p=W&yr=6&mn=9&dy=0&id=p00262274743&a=421713933
Michael Oliver is saying what I’ve been saying about the action being comparable to the rally of 2012 in that it really tested the conviction of those who were bearish. It is now the bulls that are getting tested.
http://kingworldnews.com/michael-oliver-another-look-big-picture-gold-takedown/
A dead cat bounce to low 1200’s is probably due soon for traders but gold should go much lower later to near 1100. Looking like it was a bear market rally.
The major breakout in XOP is going to turn into a fake breakout as oil heads to lower 40’s. Waiting to buy back in.
Gold got trumped again today…..looking for that $1000.00 break and eventually the bottom.