What the markets are telling us for the dollar, gold and base metals
I always find the days after the Fed and other central bank statements the most interesting. It takes the noise out of the short term moves we see right before and after the statements.
In today’s call with Chris Temple we look at the moves in the dollar, gold, and base metals.
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Bebek is going crazy with buying shares in his company. Brilliant vote of confidence, I should take a closer look.
Recall I said this rally off of the July low in the miners had a face only a mother could love. Well it looks like that suspicion is being fully validated. The July lows are definitely in sight now. We may get a sucker’s rally here, but those suspect candles in July were a clear signal that this rally was nothing but a pump and dump.
hmmm, I recall people disagreeing with you spanky.
gold just doesnt have much interest, nowhere near blockchain etc.
Gold is at $1295 and Silver is at $17.02. Why all the fuss?
Spanky it would only be a suckers rally if the downtrend was still in place and Gold/Silver and the miners were heading down to all time lows. It is very unlikely we are going to head down to break the Dec 2015 lows in the metals or the 2016 lows in the miners.
After the first half of 2016 where Gold & the Miners broke above many key prior peaks & troughs and Moving Averages that hadn’t been taken out in years, it is far more likely the only suckers are the ones shorting the new bull market, and far more likely that after this correction, that the Bull market will continue higher.
Nothing goes down in a straight line. Except silver on occasion.
Excelsior, you seem to be a glass half full type whos stands by his calls with conviction and I respect that. Ultimately Im in the same boat believing the metals will prosper again, eventually. However this retracement, unless it reverses soon, is just a repeat of what has previously happened in the PMs bear market is it not?
Thanks Ozibatla – Yes I try my best to keep a positive attitude and keep my eyes open for the opportunities instead of dwelling on the problems of daily life. However, with investing I try to be a realist, practical and just look at things as they are.
Eventually one has to take a side of the trade, because if all people do is commentate on the markets, but don’t ever place a trade (bullish/bearish) then what is the point? I believe trading the Resource and Energy markets are some of the most fun and yet frustrating markets there are due to the insane volatility. The Bio-tech, and Cryptocurrencies have been very interesting as well, but I know less about them and just focus on Resources and Energy for the most part.
My view is that in 2000/2001 as the tech boom collapsed, and the stock market started crashing, and then the 9/11 event unfolded, and that this kicked off the next economic/political/chapter, and a new Secular Bull market.
Secular bull markets in commodities usually last 20-25 years and will contain 3-4 Cyclical bulls and 2-3 Cyclical bears within them. 2000-2008 Bull, 2008-2009 Bear, 2009-2011 Bull, 2011-2015 Bear, 2016-2020? Bull Market.
We are still in the next Cyclical Bull Market inside of the larger Secular Bull Market, and this likely marks the last wave of both the Cyclical and Secular Bull, so it may have quite a move to make before the larger cycle turns over. I believe many of the commodities will also do incredibly well during this period.
The retracement hasn’t even made it to the 38.2% Fibonacci retracement level yet, so it hasn’t been that worrisome to the overall thesis. Now if Gold blasts back down below 1100 then I’ll get concerned and get out of the way.
Unless Gold suddenly goes down and breaks through the Dec 2015 low of $1045.40, then we are in the next Cyclical Bull Market. If we are in a 3-4 year Bull and the final leg of the Secular Bull then corrections are opportunities to add to positions in the miners (that may be pulling back harder on a percentage basis).
When the miners do reverse back up, on the general trend of rising metals prices, then the current levels are going to look like amazing value in hindsight.
Personally, I went in heavy in late 2015 and early 2016, faded last Summer, bought more over the 1 year downward consolidation, but I went in even stronger in this recent Summer Doldrums. I put my money where my mouth is. If the trade turns against me and proves to be wrong, then I’ll exit or greatly reduce my positions and switch back to a Bear Market short trade and swing-trading the counter-trend rallies. Either way there is an appropriate strategy.
I don’t see any evidence that concerns me in the medium to longer term at this point, so for now I’m bullish on where the PMs will be in 2018/2019. I expect that most corrections will be more shallow than the bears are expecting, and frustrating to bulls that keep missing their windows to accumulate before things start moving higher.
Gold Chart going back 17 years to September of 2000:
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&st=2000-09-01&en=(today)&id=p91588628666
A gold backed Yuan, 1980 economist, change of world reserve currency.
Maybe thats what it takes to make gold and miners move enough to own them.
Course Mexico could decide to move to a silver currency, that sure as heck could make silver move.
Russian markets look better than western markets to me, China too.
I think Rogers has been right all along.
I remember when U.S. coins were made of silver before the odious LBJ ruined everything with his Great Society and Viet Nam war.
I just bought more AUG @2.96C and MUX @2.05
Ivan Bebek bought 41000 shares of AUG @3.03 on 9-15-17 so he must think there will be good drilling results soon. MUX has been creamed lately.