Gold and the US Dollar – Long Term Chart Breakout
The chart and brief description below come from our friend Chris Kimble over at Kimble Charting Solutions. Chris does a great job of presenting charts and technical analysis in a straight forward way. Here he looks at the monthly chart for the Gold/US Dollar ratio which is attempting to breakout of the 6 year downtrend. This is a great long-term sign that the metals market has bottomed and is starting its next long term bull market. This does not mean that gold will be screaming higher starting tomorrow but over the long term it should continue to trend up.
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Gold- breaking above 6-year falling resistance
Below looks at the ratio of Gold compared to the US Dollar over the past 20-years. The ratio reflects that some long-term trends have taken place and the ratio is making an attempt to do something it hasn’t been able to accomplish in 6-years.
CLICK ON CHART TO ENLARGE
The ratio broke above 6-year falling channel back in 2001 at (1) and then it proceeded to rally for the next 10-years.
For the past 6-years, the ratio has continued to create a series of lower highs and lower lows inside of falling channel (2).
Currently the ratio is attempting to do something that it has not done in 6-years, which is a breakout above falling channel (2) at (3).
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Yes!
I made $5 on NUGT today. Gonna make about $2 on ZSL. Whoopty do! lol On a brighter note my PALAF is scratching its way higher and I am up 9% on ASM.
So what do people think of the dollar pricing here. Will it break out or break down?
Will The dollar break down? Uncle Sam has been on life support visa The Federal Reserve since the late 1960’s.People believe in prosperity without thinking, most people have gambled their money away in overpriced real estate. They have also carried the price of most stocks far upward. Speculation has been increasing, now all of a sudden we have a plethora of people who think this can go on forever. It really is nuts and with the dollar backed by nothing which direction does anyone expect it to go.
People must look after their families that is it.
Ditto on the “nuts”
Thanks DT.
As nuts as Trump appears,believe he actually desires a lower US dollar and in that sense is quite wise if he can pull that off
It will be interesting to see if he comments publicly on the Dollar again and tries to talk it down, and how business and central banks react if the dollar does blast down through support.
Personally I could see a brief relief rally first, followed by the plunge, but the movement of the Dollar is always difficult to pin down. 92-93 is the make it or break it zone so I’d like to see if it gets tested again in the near future.
Pretty weak close in the miners. Certainly no indication of an imminent upwards breakout. We needed follow through but got none.
Agreed. It was a bit lackluster for most of miners, but looking to see how things may shake out on Friday to close up the week.
LONDON BASED OPTIONS EXPIRY: JULY 31.2017 AT 11AM.
The weakness in shares today may imply a takedown coming in the metals.
This would fit in with the delivery delays occurring in London.
Been doing it for ,
7 years ..
Ira’s end of day:
Foul mouth Saccigoci going to chase off all the leakers
Maybe that is what it is going to take
I agree with CFS here. This smells of a PMs takedown. Dont think it will be a waterfall decline, jus a continuation towards the low end of this range bound area we have witnessed for much of the year so far.
Excelsior, I think the dollar does breakdown eventually but not just yet. Its 6 month chart does look bad but this current bounce is to be expected due to RSI levels being so low.
Thanks Ozibatla.
Yes, I could see a relief rally in the Dollar adding to a PM takedown in the short term, but in the mid-term (2-4 months) I’m looking to see if the Dollar eventually may break down and if the PMs will rally into the fall.
Agreed Excelsior. It would appear that the powers that be have manufactured a way to cap the PMs when in a positive environment such as what we have with the dollar.
The military has lost their minds. Saying they would nuke China if requested..
Article at zh
I guess you get that kind of attitude from guarding the poppy fields to long…..lol
Bush deep state hold over would be my guess
Good one Jerry.
15 years we’ve been in Afghanistan and opium production has increased every year.
The History channel did a good documentary about the CIA and the war on Drugs.
The Federal Reserve Banks are in on it to.Cocaine profits were laundered at the Miami Branch.Tell me someone didn’t know what was going on.
Good observation John.
Power corrupts, absolute power corrupts absolutely.
Thanks John.. 🙂
The War on Drugs is as big a farce as the War on Terror.
From the days of the Opium Wars in China, at least, it stands to reason that lowlife families at the highest levels of power have controlled the drug market.
Ditto GH
Haha that is gold (no pun intended) Jerry. Ive actually heard stories where soldiers have become disillusioned at the prospect of guarding poppy fields in the name of the “War against Terror”
Thanks Ozi , 🙂
4 Top Mining Execs Share Secrets to Success
Charlotte McLeod • July 26, 2017
Robert Friedland, Randy Smallwood, Ross Beaty and Bob Quartermain discuss their successes, failures and who the industry’s next best CEOs may be.
http://investingnews.com/daily/resource-investing/mining-execs-share-secrets-success/
@TruthGundlach – Jeffrey GundlachVerified account
“Gold at key juncture. Pushed above 200 day moving average recently, and the 50 and 100 today. Coiling just below 5 year downtrend line, too.”
9:47 AM – 27 Jul 2017
Uranium to stay weak for now but a ‘violent price increase’ is coming: Cantor
Michael Allan McCrae | about 10 hours ago
http://www.mining.com/uranium-stay-weak-now-violent-price-increase-coming-cantor/
Why the Greens Hate Nuclear Power
Stephen Moore – Jul 14th, 2017
“But if we did stop using fossil fuels, what would make the most sense as a mass-scale substitute to coal, natural gas and oil? What could reduce carbon emissions while also keeping energy affordable and reliable?”
“If you answered “wind and solar power,” you flunk. These are the most expensive and impractical alternatives. The obvious solution to keeping the world’s cellphones, computers, homes and factories powered up with minimal economic disruption, if it ever came to that, would be for the world to build hundreds of nuclear power plants.”
“To state an obvious point that almost all the Sierra Club elites and the Michael Bloombergs of the world choose to ignore: Nuclear power can give us all the power we need to keep our modern industrial and technological world economy rolling without emitting any greenhouse gases.”
“Yet nuclear power is declining as an alternative energy source, and plants are being shuttered at a record pace. The big problem for atomic energy is that it can’t compete on price with the new age of cheap shale gas and, to a lesser extent, clean coal…”
http://www.heritage.org/nuclear-energy/commentary/why-the-greens-hate-nuclear-power
If Cantor is correct on the pathway to $80 Uranium by 2022, it would be a great trading market on the way up. JMO
Yes, agreed. I have my suspicions though and there was a great article out recently where Amanda Van Dyke was intereview, and she felt the Kazakhs would keep Uranium prices in the $40s (below most current longer term contracts, and not enough to get to 60 to encourage new development. That theory resonated with a number of Uranium investors.
_________________________________________________________________________
Fund Manager Amanda Van Dyke at Peterhouse Asset Management
The Next Bull Market Move Interview
by @bullmarketmove on July 22, 2017
“I caught up with Amanda last week and we did a special ‘one question, one in-depth answer’ style of interview. I asked her one question, about Uranium, and this was her detailed reply which includes how a Uranium bull market starts, the role NAC Kazataprom plays in the market, and if something significant has changed within the Uranium market. Enjoy!”
But then of course, we have the boss of GoviEx stating (in harmony with David Cates of Denison) that Uranium spot will be $60 in 2 more years, which feeds their narrative of going into production or getting acquired (but needing a higher spot price for any of that to play out). Still it seems like a rational and reasonable argument that Daniel Major makes below:
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Daniel Major: Why Uranium Must Reach $60 by 2020
BY COLLIN KETTELL ON JULY 23, 2017
http://palisaderadio.com/daniel-major-why-uranium-must-reach-60-by-2020/
Could China Be Turning a Corner?
Quietly, the structure of existing credit has improved.
By Andrew Polk – July 27, 2017
“Doomsayers have plenty to work with in China. The country’s rapid buildup of debt — reaching approximately 260 percent of GDP, from 160 percent less than a decade ago — seems almost guaranteed to herald a financial crash or at least a major correction, quite likely followed by years of stagnation. If the world’s second-biggest economy ultimately defies the doubters, though, this may well be seen as the year things turned around.”
Consider this: China is on track to see its best nominal GDP performance since 2011, even as credit growth remains moderate. First-half GDP numbers show that the economy is now requiring less credit to produce growth — the least in six years, in fact. So far this year, it’s taken 2.9 renminbi worth of new loans to produce one renminbi of new GDP growth. That’s down from an average credit intensity of just over 4 renminbi in the first half of the year between 2012-2016, an almost 30 percent reduction.”
https://www.bloomberg.com/view/articles/2017-07-27/china-may-be-getting-a-handle-on-its-debt-woes
(ALK.AX) (ALKEF) Alkane Resources and the rare earth market – 23 July 2017
Video w/ Technical Analysis and fundamental commentary
Kevin Baker show out of Scotland, commenting on Hillary corruption.
Early morning rocket shot.. ..
Critical day today: GDP came in a little below expectations — not enough to be conclusive. If the Dollar Index closes above 94 then 100 (significant gap area) is more likely than a break of 91.92.
GDP…..gosh darn people
What I Believe Most
Jul 5, 2017 by Morgan Housel
“Ten things that guide almost everything I think about in business and investing:
Investing is a game of probabilities, and almost all probabilities are less than 100%. So you’re going to be wrong and lose sometimes, even when the odds were in your favor. The late investor Peter Bernstein: “You just have to be prepared to be wrong and understand that your ego had better not depend on being proven right. Being wrong is part of the process. Survival is the only road to riches.”
History is mostly the study of unprecedented events, ironically used as a map of the future. Stuff evolves, tastes change, paradigms shift. So what worked in the past may not work today or tomorrow. The most valuable part of history is studying how people behaved when something unprecedented happened. It’s the most consistent thing over time.
The coziest spot is under the warm blanket of ideology. It offers easy answers to difficult problems. But, man, is it dangerous, especially in an adapting world. Great stuff happens at the intersection of “Confident enough to take a stand” and “Humble enough to admit when something I don’t want to be true is true.”
The best results happen when your interests align with others’. This sounds obvious but few business models truly scratch every stakeholder’s itch. Once you view businesses as a collection of people trying to solve each other’s problems, with some groups that can be taken advantage of for a period of time but never all of the time, you see investments mostly through the lens of aligning interests of everyone involved.
Many failures can be traced to the pointless pursuit of arbitrary benchmarks. Most notable is the calendar, which pushes companies and investors to cut corners before the earth completes its rotation around the sun. Swap out the sun for another celestial body and you’ve described a mental illness. Another is index benchmarks, which use something short-term and broad (industry performance) to guide something long-term and specific (a strategy to meet your goals).
The worst business and investing traits are ego, single-outcome modeling, and pessimism. The first two are based on the idea that 7 billion people trying to improve their lives will adapt their activities to the way you want the world to work. The third is the idea that there aren’t 7 billion people trying to improve their lives.
Incentives are the strongest force in the world. They cause otherwise good people to do awful things, and vice versa. They’re also the most misunderstood and counter intuitive force in business. Brent Beshore: “I want to know what motivates people. The problem is not that they won’t tell me, because they will. The problem is that none of us know the truth, even about ourselves. The only thing to do is watch someone over a very long period of time and try to piece it together.”
Investors are always looking for factors that select for above-average investments. To me, the best one is “Things that feel uncomfortable to the point of crazy.” It doesn’t work every time, of course. But in hindsight the root of most successful investments is the guts to back something that made little sense to others. Lack of enthusiasm or understanding among competitors is what seeds the potential for something big.
Amazing things rarely happen outside of teams. And teams only work when everyone is confident enough to push back when they see problems, yet understands that diverse thinking often means moving ahead with things you disagree with. It is a hard balance to strike.
There are five sources of edge: 1) Learn faster than your competition, 2) empathize with stakeholders more than your competition, 3) communicate more effectively than your competition, 4) be willing to fail more than your competition, and 5) wait longer than your competition.”
Thanks Ex. This type of article always deserves some in-depth contemplation!
Thanks. Yes it seemed worth posting more of the content, as often links don’t get clicked on. I really like that last quote towards the end and it sums up #Contrarian Investing quite nicely.
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“Investors are always looking for factors that select for above-average investments. To me, the best one is “Things that feel uncomfortable to the point of crazy.” It doesn’t work every time, of course. But in hindsight the root of most successful investments is the guts to back something that made little sense to others. Lack of enthusiasm or understanding among competitors is what seeds the potential for something big.”
#5 works for me… 😉
Sure. Most of the points were very cogent and spot on.
Good thoughts to ponder to wrap up the week. Cheers!
Ditto….my last weekend on the beach.. 😉
Teranga Gold Submits Application for Removal from the Official List of the Australian Securities Exchange
by @nasdaq on July 27, 2017
https://ceo.ca/@nasdaq/teranga-gold-submits-application-for-removal-from-the
(SCZ) Santacruz Silver Closes First Tranche of Non-Brokered Private Placement
July 28, 2017 /CNW
Gold & Silver up again this morning. Looking forward to a Feelgood Friday to close up the week and the weekly candles in the miners.
(SGN) Scorpio Gold’s 2017 Phase I Drilling Encounters High-Grade Gold Proximal to Underground Mine Workings at the Goldwedge Project, Nevada
by @nasdaq on July 27, 2017
https://ceo.ca/@nasdaq/scorpio-golds-2017-phase-i-drilling-encounters-high-grade
“If You’re Not a Contrarian, You’re a Victim”
BY BRIAN MAHER – JULY 26, 2017
The Daily Reckoning has taken up temporary headquarters in the fair (and humidity-free!) city of Vancouver, Canada…
We’ve alighted upon these blessed climes to cover this week’s annual Sprott Natural Resource Symposium.
“Robert Friedland is the founder and executive chairman of Ivanhoe Mines.
A capital fellow, this Friedland. A speaker of the first cut and caliber.
He struck every note precisely in the middle.
He told thumping tales and commanded a crowd of hundreds as easily as gravity commands a cannon ball.
Robert Friedland
And Friedland says the demand for metals like platinum, copper and cobalt will soon vastly outrun supplies.
Why?
Clean energy.
Friedland flashed a picture of a sunny day in Beijing.
It looked like a foggy day in London.
Pollution now chokes the air of China’s major cities so badly a person can barely take the oxygen out of it.
“Airpocalypse” Friedland terms it.
And he said this pollution’s effects cost some $5 trillion every year.
60% of urban air pollution is caused by the internal combustion, he added.
So places like China will be spending mountains of money on clean energy to liberate the lungs and restore the sun to its throne in the sky.
What does that have to do with platinum and copper?
Because the critical components of many clean energy technologies require metals like platinum and copper.
Friedland said mass-produced electric cars will be in operation by 2023 — six years from now.
He said it will be a “massive disruption.”
He compared it to the speed with which the automobile replaced the horse around the turn of the 20th century.
And that of course presents a handsome opportunity for investors…
Friedland said a serious platinum shortage will enter effect by 2020 as surging demand outstrips supplies.
Once again… a recipe for dramatically higher platinum prices.
Related question:
What has been the best-performing metal for the past 12 months, according to Friedland — better than gold or any other metal?
Cobalt.
Cobalt is used in lithium batteries for electric cars.
No coincidence it would seem.
Meantime, electric cars also require oodles of copper — a nice point to put somewhere.
For these reasons, Friedland expects metals prices to rise substantially in the coming years.”
https://dailyreckoning.com/youre-not-contrarian-youre-victim/
Gold hits 6-week high after U.S. data dampens rate hike expectations
Reuters – July 28, 2017
https://finance.yahoo.com/news/gold-steady-ahead-u-gdp-070842862.html
FWIW, the 2 hour chart for AXU looks constructive, with a golden cross.
http://stockcharts.com/h-sc/ui?s=AXU&p=120&b=5&g=0&id=p93921690847&a=536865842&listNum=1
Also, just like in 2010, AXU’s 20 dma (the dashed line in the middle of the bollinger bands) has crept above (ever so slightly) the 50 dma, with which it had merged in a very rare manner over a very log and tight consolidation (it did the same thing before the epic 2010 run, FWIW). Now this could all change if today falls apart, but so far, there is some bullish tilt to this.
http://stockcharts.com/h-sc/ui?s=AXU&p=D&b=5&g=0&id=p00547170785&a=536867819&listNum=1
FWIW, the 2 hour chart for AXU looks constructive, with a golden cross.
Also, just like in 2010, AXU’s 20 dma (the dashed line in the middle of the bollinger bands) has crept above (ever so slightly) the 50 dma, with which it had merged in a very rare manner over a very log and tight consolidation (it did the same thing before the epic 2010 run, FWIW). Now this could all change if today falls apart, but so far, there is some bullish tilt to this.
http://stockcharts.com/h-sc/ui?s=AXU&p=D&b=5&g=0&id=p00547170785&a=536867819&listNum=1
Hey Cory is Doc going to come back to the show?