Friday and The Doctor Is In with weekending thoughts on gold.
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Dreadful performance for gold today failing completely at the bullish pennant. Resistance could not be breached and the price is down $30 or more.
Looks like the rally from $1180 to $1260 was a dead cat bounce. It got the bulls all excited though! We need the bulls to say, “Oh it’s juts another dead cat bounce” and ignore any rally before we see the actual bottom.
Comments on the picture on the link say it all: Now we need to look and see if we have to change the channel in place since 15 April and put in a steeper one, which would be very bearish and could increase the pace of the decline and extend the hyperbolic downtrend.
I just hope that today’s deline is a ‘false’ painting of the charts by bears – but I somehow doubt it.
http://1000gold.blogspot.co.uk/2013/07/complete-failure-of-bullish-pennant-on.html
Both gold and silver may be lining up for a minor double bottom. (Probably not though.) We will know soon enough but I would not hold my breathe for good news just yet. This down-cycle trend in the metals remains unbroken ater many, many months and until we get a solid signal of a turnaround it is a fools errand to “buy the dips”. Meanwhile, I would NEVER average down in such a situation either as it is crystal clear the bottom has not yet confirmed. It is therefore a waste of time and money to buy a decline especially one that is this significant (and continues) as you will be overpaying and feeling regret later. There is no urgency whatsoever to catch the reversal as I see it. Trying to time this coming bottom is just an exercise in futility as it amounts to premature buying and an expression of impatience. As a general rule, price declines of this severity and magnitude take time to play out and discover a new base so to my mind it makes much better sense to just wait for a clear signal that the declines have indeed ended before trying to pile back in. As I have mentioned before the shorts are having a day in the sun and have been rewarded all the way down. Let us keep in mind too the flaw in the logic of those who keep professing that massive short covering must surely be on the horizon. It is not and has not been a theory that validated even once in almost two years. The yakkety yak of the guys who keep proclaiming the mother of all short squeezes will arrive must all be broke by now too. Same goes for the guys who think we will get a V shaped price recovery which is clearly preposterous with the kind of action seen so far. It is also worth repeating that we must keep our emotionalism in check and make more use of our analytical reasoning skills. Back on June 28th Gary Savage was actually calling for a return to 1900 this very year based on one single days price action. Unbelievable!! That was an emotional kneejerk reaction in my opinion and I hate to be too critical of the guy but he was way off the mark as we are now seeing gold again falling over 3% today to as low as 1208. Any good analyst knows better than to make a call like his with so little confirming information. He got way ahead of himself there which is a classic mistake but one that is usually confined to those with little or no experience. Like I said….emotionalism. So lets keep our heads screwed on people and not be so quick to jump back into the fire. As I warned before it was my belief that this was nothing more than a suckers bounce and as such was one suitable only for very short term traders with a good sense of daily momentum. While I may be a buyer at these new lower prices it is also important to point out I remain a seller too on reversals. We are only playing to volatility in a down channel until that time that a genuine turning point arrives. It is not yet here and many months could pass before anyone can feel confident in having bought the real bottom.
🙂
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For the record Matthew, it is my belief we will see a significant decline in gold next week. Possibly as early as early Monday morning and that decline will drop prices firmly below current resistance invalidating any potential double bottom others might be predicting. Gold will fall below 1200 dollars therefore which will confirm the falling trend of lower lows and lower highs that have been in place for so many months. I would not be a buyer of gold early next week.
Great post Bird Man! I agree that we will NOT see a V shaped recovery after the prolonged hit the markets have taken.
When investing we all need to keep our emotions out of it and look at the bigger fundamental picture around the world. That has always been good advice for all investing
Cheers,
Cory
Thank you Cory. Very enjoyable interview you did today by the way. Doc is a great listen too and has helped confirm my own bias that more lows lie ahead.
Yeah I thought Gary was talking a lot of old junk in that interview really. Eventually, gold wil have to bounce. Strong resistance then would be at $1430 and $1520 where all the lows were in the last year.
$1200 is maybe a fair price for gold. It was $1200 before QE2 started in mid-2012. QE2 is therefore out of the gold market and the silver market that was at around $17-18 in mid-2010.
Note that silver and oil are both BELOW THEIR 2008 PRICE HIGHS. So is copper. Oil never reached it again. Gold is still significantly above it. If gold is priced similarly to silver and oil as compared to their 2008 highs, then it would be around $800. This is a bit of a concern.
Gold can stay under production cost for a long time but silver cannot. There are only a few month inventory available above ground.
It does not matter what we think. It does not even matter whether we capitulate or not. When central bank has sold enough gold and decides to keep some for the next intervention, the slump will stop. This correction has similar effect as 1975-1976 correct. They are both engineered by central bank and serve to shake out most early bulls including most real bulls.
I think the downtrend in place has a bottom line that fors to very close to $1000. This lower downtrend oversold line starts at would be from the $1321 low from April 2013. Looks yukky to me.
The one saving grace for bulls is if gold makes a right shoulder onthe chart and breaks out of the inverted head and shoulders formation that is still kind of there.
Technical analysis in PM market not only wastes one’s precious time, bt also helps to seperate him from his wealth.
The only chink of hope is that th gold price could form a right shoulder (inverted) and break out of the resistance. Well, it is forming that on Monday but chances of creaking out of resistance? Slim but possible – most things are possible.
if we need to see that ultimate capitulation, it’s not happening yet! just keep on stacking averaging down….
Yep, I see the puke point closer to the 900 handle.
Few can mine it for a profit below 1200.
You are right BJ very few can mine gold for under 1,200 however the high frequency traders and paper market manipulators are more concerned about their profits over pure production fundamentals. That is scary to me.
I believe it will all recover, just not in the short term.
Cory
Actually the all in cost averages 2100 and all in sustainment cost is 1500. If this continues, a lot of mines will close. The supply can only come from official sector. Several mines have shut down lately. I read an article saying that China bought 250,000 tons concerntrate from Russian in order to extract 2.5 tons of gold. It is very difficult to mine gold.
That look like a pass out point
I really like what you guys tend to be up too. This type of cvleer work and exposure! Keep up the fantastic works guys I’ve incorporated you guys to our blogroll.
Have been for months and still are in the “sell the rally” mode it seems.
Yesterday, while I was at work, my cousin stole my iPad and teetsd to see if it can survive a 25 foot drop, just so she can be a youtube sensation. My apple ipad is now broken and she has 83 views. I know this is completely off topic but I had to share it with someone!
I thought I would pass this on to Al’s listeners, it is a health issue with a non evasive approach. This mostly concerns older men, I have been experiencing problems breathing through my nose, I have tried several options to increase air flow like breath right strips at night but to no avail.
Yesterday I bought a fine nasal trimmer to clip the excess hair that grows in nasal passages, I know it sounds gross but it is a fact of life for men as they age. These hairs are there naturally as a filter but oddly older women don’t see the same hair growth anyway my point is this after clipping most of them out I couldn’t believe the difference in air flow and how much easier it is to breathe. I don’t know what Doc would think about doing this bit I found the relief to be unbelievable. DT
DT….”.always a breath of fresh air.”…………
Big Al and all:
We will “need” some “event” to get this market kicked back into gear. My guess is that that event is coming much sooner that later. I will tell you this – when they start haggling over the debt ceiling again in, I think the fall – gold will get a nice pop. What else can effect a surge up in the PM’s – As that as old saying goes – LET ME COUNT THE WAYS.
Marc…..great article at KWN….concerning CHINA , the bonds and the dollar.
I tell you this ,because China, may cause this market to drag on for awhile, until, they dump some of the dollars,which they will have a problem doing because they have to many dollars…….,,,,,,note, in the article ,,,THE CHINESE, HAVE $1000 FOR every Chinaman,,,,to get rid of…….they are in a pickle, ….But, the US is in a problem in NOBODY IS LEFT TO BUY US BONDS,,,except the FED….. SO, AROUND WE GO…..
If China crashes, demand for physical gold will slow down. China bought same amount as the world production in the first half. Let’s hope they keep buying.
Lawrence……China will keep buying…..they want to have the “RESERVE CURRENCY” STATUS…………..check out the HUBS…meaning areas where China is now starting to trade with other countries in YUAN in lieu of DOLLARS…….even Canada is now considering………………
Marc…..the morons in Washington….are not going to do anything about the
not going to do anything about the DEBT CEILING….
remember it is election time again………
Interesting comment Marc. The debt ceiling meeting is approaching in Sept. We will see how much the precious metals pop after it is raised again (just my opinion but I do not see how they can get around not raising it).
Cheers,
Cory
Wow …glad you have found some relief.I am going to pass this on to my father in law.I hope Doc responds with an opinion.Thanks DT
Bring back Trader Rog Al. At this stage of the game or the summer who cares where PMs are going? It’s just that TR is a born optimist and right now I could do with a gleam of his good news, even if comes through a prism!
🙂
I wouldn’t read much into the price action of gold this week. Important/professional money has probably been out of the market since last Friday. I’m more interested in next week. Even short term, I still maintain a bullish bias even though the triangle target of $1150ish has not been met. If we do go there, I think the better miners will continue to show relative strength.
Here’s a great analysis that exposes the truth about long interest rates and how they affect gold. It supports what I’ve stated here many times before.
http://news.goldseek.com/Zealllc/1373040094.php
Is there supposed to be two “T”‘s in your name?
Waiting for Godot
That is what it is like waiting for the price of gold to rebound.
We wait endlessly and in vain for something that seems less and less likely to happen.
In the meantime we debate, we argue, we hope, we pray, we cry, we listen to “experts”, we read blogs, we post comments.
All the while gold continues to go down.
I said I would see you in September, but I decided to post this since the events that we are witnessing now are just too important not to comment on.
First as I have been saying for many many months now we have seen the parabolic blow offs in gold and silver that signaled the end of the bull market. This turned out to be true.
The bull market is over, we are now clearly in a secular bear market.
The bull market rally ended and the bear market started when gold failed to take out $1800 for the 3rd time. Thats when we needed to head for the exits.
All we have now is a classic slope of hope, as gold goes down, only to rebound briefly, keeping gold bulls hanging on. Then more take downs as hope is dashed again again. This is the worst kind of market.
There can also be no doubt that FUNDAMENTALS DON’T MATTER!
The only fundamentals that matter are price and value.
If you still think fundamentals drive a market I feel bad for you.
The proof to the contrary has just been witnessed with this gold market, and stock market I would add.
I stated I added another $75k after the April takedown, this turned out to be another mistake. I went against my own principles. When everyone bought physical in April I stated they shot their load, would never overpay for gold, and the masses were wrong as usual.
Right now there is no bottom, no matter what “experts” like Peter Schiff say, who now must beat the same drum so as not to lose all credibility.
Time to fire your analyst (TR, PS, KWN, ZERO HEDGE…)
We’ve been played
Capitulation – we still hear talk about having not seen the final capitulation. BS
The capitulation has already happened, only the gold bugs are left holding the bag.
At this point gold cannot win.
If QE continues stocks continue upwards and gold continues down.
If QE ends stocks and gold all go down together.
Investors have to respect the principle of ever changing cycles, which I described several times. The public is always late and always wrong. When everyone turned bullish on gold that was the signal the party was over. No bull market can go up every year.
The great racehorse Cigar won 16 consecutive races in top company before the winning streak ended. But every time he ran he had a bulls eye on his back. Finally he got beat when he ended up in a speed dual with two other horses and a come from behind horse overtook him. Same with gold. After 12 years of gains the FED and the bullion banks did a job on gold.
Just like every good horse can get beat on any given day, any good investment can turn sour real fast. This is the principle of ever changing cycles.
Will I sell my gold? Why bother? I already lived through the pain. Why sell at $1200 in 2013 when I could have sold at $1900 in 2011?
I hit a home run and now it is a single. The sad fact is, however clever I was for buying, I was equally as stupid for not selling. I could have saved myself all the trouble and just blindly followed the herd and bought stocks and done better.
I am considering going back to racing – where I don’t have to worry about Goldman Sachs and JP Morgan manipulating the price, our government manipulating data and Ben Bernanke having the whole global economy in the palm of his hand. This is insanity and we are all insane for being a party to it.
It is now time to walk away and focus on more promising pursuits. Pick up some two year olds, bet horses with value (overlays) and write my book.
Hopefully while I am gone Godot will decide to show up…
🙂
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James welcome back!
I tend to agree James. We have not seen true capitualtion until the small speckers finally throw in the hat and give up. Right now there are far too many still chasing the bottom for the conditions of a genuine capitualtion to exist and therefore prices will continue to fall. My own best guess is we are heading for the 950 range or a bit lower where mine closures will appear and a real cleansing of the junior sector takes place before salvation will be in sight. That is pretty far below where we sit now (270 bucks or so) but little remains in the way of resistance except for the 1000 mark between here and there.
James’, brilliantly stated!
I trust Rick Ackerman more. He was calling for gold to rally to 1320.
Rick is pretty darn good but even the technicals are not helping lately. I think James is correct that both gold and silver are now in bear markets. That is distinctly different than a correction within a long term ongoing bull and as such it makes no sense to try buying bottoms until one has actually arrived!!!
A bear market when government print money like crazy. It make anyone with a brain become suspicious.
Matthew,
Great article. Very detailed…I think Adam really proved the “non-correlation” of the longer rate upticks and their LACK of causal effect on gold. My reasoning is very simple. You move your capital into a very undervalued asset(s) in the macroeconomic climate and wait for it to become overvalued in a mania-type, macro-herd hysteria climate – then get out – dont try to time it perfectly and move into the “next” undervalued or “beat-up” asset class on the list – my preference – hopefully that will be income producing residential real-estate – everybody needs a place to live…….or maybe a MLP in yield-producing farmland. But, anyway, you guys get the picture. Gold as insurance – yeah, to a certain extent – but, just as important, looking at the big picture and acting accordingly.
Martin armstrong is the only one that makes sense
🙂
Well, he did have the timing right and nobody here listened.
Latest from Martin Armstrong (17 minutes)
http://armstrongeconomics.com/wp-content/uploads/2013/07/Texas-Conf.mp4
With all the doom and gloom popping up on this site I felt this article would be of interest. In conclusion:
◾The stage is set for the large bullion banks to profit from a rally. Expect a rally.
◾The silver and gold markets are deeply oversold and sentiment in both markets is very low. Are silver and gold investors currently disgusted and disappointed or happy and excited? Right! Rallies occur when practically everyone is disappointed, disgusted, or frightened out of the market. It was the same with the S&P (March 2009, October 1987) and crude oil (December 2008) and gold (October 2008).
◾Now is a time to buy gold and silver, not sell them.
◾Listen to the national media and consider doing the opposite.
◾Silver and gold sentiment and indicators are at multi-year, multi-decade, or all-time lows. The indicators and sentiment suggest the high probability of a substantial rally ahead.
◾The cash markets are strong. Individuals and central banks are buying gold and silver in Russia, China, India, and other Asian countries. Individuals who see the big picture are also buying in Europe and the US.
The above is from the Deviant Investor. I know nothing about him but the rationale he uses makes sense. As Red Green (a Canadian–the red green show) would say: Keep your oar in the water. We’re all in this together and I’m pullin for ya.
It’s a waiting game, plain and simple. 1, 3, 5 years, who knows.
X-(
“The indicators and sentiment suggest the high probability of a substantial rally ahead”.
If I had a nickel for every time I have heard that since the peak I would be a millionaire from nickels. Every crazy analyst who keeps calling for a huge imminent rally keeps getting his ass handed to him on a platter. Whats that they say about the definition of insanity being that we keep repeating the same mistakes despite our better reasoning? Case in point……another blogging chump calling for a HUGE rally…..any day now. Gee, do you think this new guy is right?
Everyone should note that the same things could have been said of the bears in 2011. As silver, then gold, went parabolic, there were many well known top-callers who were way too early.
When prices go vertical, up OR down, their reversal is impossible to predict with any real confidence. This is why “fading” in and out of positions is the prudent (not to mention humble) approach for most investors. More than any other asset, gold bullion should be bought in increasing size as risk comes off (price falls).
The secular bull market is not over.
http://www.investopedia.com/terms/s/secularmarket.asp
Nonsense as usual Mathew. Any damn fool who was not overwhelmed by the mythology of gold could have seen the top when it arrived. I called it myself within just days (being one of the fools) and have not looked back since. Same goes for the downside. But be my guest if you want to be one of those buying all the way to bottom and averaging down. Your illogic is amazing. It serves you right to lose money with your crappy attitude to others so I wish you well along your chosen path.
Nonsense? Bob Moriarty and Dave Morgan were both early. If you knew how to read a chart, you’d know that many people tried to nail the “obvious” top for silver in late 2010 as it approached $30. They then became fuel for the rally to $49. Today, we see people trying to nail the bottom, only to provide fuel for the continued decline. Understand?
Buying in increasing size as price falls is how the biggest money operates. Done right, it feels nothing like “catching a falling knife.” One would obviously start such a program way below the high.
What is it about my difference of opinion that so infuriates you this time? Have you ever noticed that I don’t put words in your mouth or make assumptions about your trading or losses? Not only do you make a fool of yourself with such antics, but you expose your unstable nature. On that note, what happened to your promise to ignore everything I say? You are obviously a flake — a psychotic flake who never once noticed that there are two Ts in Matthew. Detail is obviously not one of your strengths.
Just curious to know if you can even spell your own name, Matty boy.
Caught a clip on Bloomberg this AM saying China’s gold purchases went through the roof in May. Go figure….. Maybe the nonsense in the West will abate once the Singapore exchange in physical precious metals opens up this month.
BJ, don’t you know that a new exchange is just another tool in the arsenal to flatten prices which is supportive of those with an interest in acquisitions on the cheap? Don’t bank on the Chinese supporting prices when an Asian Comex opens because you will be deluding yourself very badly. Look at it this way….if the Chinese wanted to move prices they would just come out and tell us all that they have 4, 5 or 6 thousand tonnes of official reserves at the PBOC now. Are they doing that? No they are not and it is VERY unlikely they will do that until they have acquired the level of reserves necessary to move markets in their favour. In the meantime the Chinese will participate in suppressing and flattening prices as it suits their agenda better, allows the public there to invest at favourable prices and continues the theme of no transparency where Central Bank gold ambitions are concerned. Maybe just ask yourself from a logical point of view why the Peoples Bank of China does not make its records of gold hoards public before hitching your hope to the idea that somehow they will have an Asian style Comex that is open, transparent and accessible to those in the West.
Here’s a good listen for all:
If I have trust one country, I will trust Singapore. This country punishes wrong doing severely. I never heard any scandal coming out of there. The leader ustilizes dictatorship in the correct way. You would be exceted if you commit fraud. It is no joke.
I got trapped holding nem shares on Wednesday not realizing the market was closing 1pm. I have been selling out by 3:30pm and only holding the general market and would never hold before a jobs report. I averaged down today with many more shares. Gold has started a rally from 3:30 pm which is likely shorts locking in profits for the weekend.
Marc Faber gives us the quote of the day:
“At least if a hedge fund loses money, he stands up and say, ‘Yes, I f*cked up, or I messed up. I lost money.’ But the central bankers will always, always find an excuse that they are not guilty of any mistakes in their policies. It’s a very vicious and despicable class of people (central bankers).”
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/5_Marc_Faber_-_This_Will_End_In_Disaster.html
But what about the fantastic jobs print?
Hi Big Al,
I think when a major producer of gold says it will have to shut down because of the low price, cannot make a profit, there will be the bottom. Best to all.
You might soon get your wish, KS. All eyes should now be on the dollar which broke overhead resistance and now sits at 84.67 which will defy all those pundits who foolishly proclaimed the dollar would soon be dead. Hyperinflation is the mythology of those who do not understand the importance of how currency relationships function and who cannot seem to accept that for the dollar to fall precipitously another MUST rise. That would be the Euro in this case which makes up the largest percentage of the basket……not going to happen though. On the contrary, the dollar is performing spectacularly well and in time will reach the old highs near .88 thus depressing gold prices even further in an environment of rising interest rates. The price of oil meanwhile should not be considered supportive of gold even though both generally rise and fall together over long periods of time. We have two very different dynamics happening in the currency and energy markets at this time. Oil is temporarily being pushed higher on fears associated with Middle-East conflicts, the security of the Suez where Egypt is concerned and worries over interventions in Syria. None of the current problems poses a real risk to oil supply though and so they can be discounted. The current period in energy prices will be fleeting as it is almost purely speculatively whereas the more significant changes in currencies are warning of deflationary expectations which will eventually feed into crude pricing. That is to say that worries over another economic crisis potentially materializing out of China due to evolving credit problems and falling economic activity in combination with an insane set of policies in Japan have led investors to seek safety in the dollar and treasuries. There is an interesting relationship between oil and a strong dollar now too that is worth paying attention to even if it is fleeting. I anticipate crude will soon decline and that this, in combination with a rising trend for the dollar and the recent rate increases (plus the belief they will keep rising, whether true or not) will deliver a body blow to gold prices in the coming months. The outlook is NOT favourable for precious metals in this environment and we should anticipate much lower prices ahead.
Thanks Bird Man, Strong dollar means weak gold price. Good thing I kept my day job. Still buying silver eagles with dollars. Best to all.
Bird…..What a load of crap , you come out with, the dollar is strong, the metals are getting hammered………….”WHY”…..because the people who run America at the moment have the biggest clout………they can print as many dollars as they want to suppress markets….pass as many sanctions as they want to against whatever country they want to oppose because they wont go along with their bullying tactics …………….sooner or later the little boys in the school yard will fight back ……
America land of the free !!!!!!!…….”NO” America land of the corrupt.
The strength of the dollar is not directly associated with anyones desire to hurt gold prices specifically, Tony, so there is nothing to read into the strengthening trend except what we know on a historical basis of the dollar/gold relationship. I am merely commenting on the relationship as it currently exists.
Recent history has shown gold and dollars to generally function inversely of one another. That was not always the case though. At an earlier time when metals were linked to dollars they would of course trade with a high correlation because they were effectively one and the same.
I suppose you could say that if the time arrives that a strenthening dollar is gold positive again then we will have returned to the old “normal” relationship and it will be one that is dictated by the market. It is certainly a possibility that could happen but I do not think you would like it.
Keep in mind that too is a double edged sword. It is extremely unlikely as you can appreciate though. I ask you to use your head in this case. Can you foresee that gold prices might actually rise in tandem with dollars during a time of devaluations? That would of course imply dollars and gold would also fall together.
Do you see the error in your argument now? You cannot have this both ways and the truth is that you and most investors would prefer that gold rises as the dollar falls and vice-versa as precious metals are the backstop against devaluations and debasement. In other words, if we are to accept that the currency in a strong position means by default that gold must fall it does suit us better as it also, by definition, means that gold will rise when the dollar falls.
Please don’t call that bunk without giving it a little more thought.
Plnsaieg to find someone who can think like that
I just now re-listened to Charles Nenner interview at financialsense.com from June 1st.
His call was for gold to hit a cycle low of 1280 in mid June.
So much for Charlie Boy … another one bites the dust.
That was hardly a bad call when you consider that it was originally made as gold peaked at $1923 in 2011.
The interview was done June 1st; did he first call it in 2011?
For the amount he charges (12k or something) I think he needs to be closer than that; and it isn’t over yet IMO
Just for you Irwin a song as synthetic as our monetary mayhem supposed system:
http://www.youtube.com/watch?v=rY0WxgSXdEE
Thanks Dennis M
Here’s a funny:
Welsh Comedian Arrives in Australia …
http://www.youtube.com/watch?v=TSFmipc_60s
🙂 🙁
Oppenheimer: “Time To Cover All Shorts In Gold And Gold Miners” Because “Gold Stocks Are So Bad, They’re Good”
Silver down 4.5% in just 24 hours. Hmmmmm. Maybe there will be a huge bounce to 50 bucks any damn day now! Nawww….just kidding. Trying to encourage a little humour about the fall, that’s all. Hope you all realize that this is doom for gold though. I keep telling you all that silver telegraphs the price for our favourite barbarous relic in advance but few seem to get that message.
Get this one simple concept right though and you will be a great trader in no time flat.
Silver moves always indicate future prices of gold.
The popular myth that gold price defines what happens to silver is dead wrong. Let me reiterate that as silver went parabolic and has since crashed that is all you ever really needed to know to understand why buying gold since silvers parabolic move has NOT been a good idea.
Interesting comments. In the past, I mentioned that we in all likelihood would see a gold/silver ratio of 65-671/2—-that was based on TA. We’re now there and I would like to see that ratio now reverse. It does look like it is tiring at these levels and we’ll see what happens in the next 2-3 weeks.
I like everyone else on this site would like to see a reverse in the prices of the PMs but the charts are what they are. Of the many charts I follow, the most important ones currently are the PM weekly charts and the dow/gold ratio. Right now they are negative for the PMs. Unlike other technical analysts, I don’t put much credence in Elliot Wave, fibonacci indicators, price points, etc. I feel a lot of those indicators are like frosting on the cake. I find other indicators more important to signal major turning points——-momentum and strength indicators are just 2 of my favorites. Right now they indicate no incipient messaging of an imminent turn in these markets. Sure, we could have a cataclysmic fundamental happening on Monday and then if the PMs suddenly moved massively, the charts would reactive in kind. However, without that cataclysmic happening, the charts are indicating more of the same for next week. Am I being negative on the PMs?—–NO, I’m just reading what the charts are currently signalling. The minute the charts start to even indicate a hesitation, I’ll be the first to say it.
🙂
Watch FNV, NGD and TGD very closely. These rock solid companies will give you the pulse of Gold and Gold stocks.
Thanks, Jed. Jed, remember when you gave your informative talk on “rare earths” about 11/2 year ago? It might not have been that long. I remember posting that according to the charts AVL would go as low as $.70- $.75. You mentioned that if it did you would back up the truck. Well, it went even lower—today, it closed at $.58. Would you still recommend buying the stock? I might add that the technicals are looking very interesting currently. Doc.
Seasonal strength for gold is July 12 to October 9th.
Hi! I know this is kinda off topic however , I’d fiugred I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog article or vice-versa? My website goes over a lot of the same topics as yours and I believe we could greatly benefit from each other. If you’re interested feel free to send me an e-mail. I look forward to hearing from you! Great blog by the way!
Bonds. Not a word above about bonds just like Main stream media.
It is amazing how so many people can be so oblivious about what is happening right in front of them and yet they continue to look only at the FED, Dow, S&P, Dollar and so called BLS. Take a look at the 10 y treasury not interest rate, the very same T bond that 85% of all new issues are being purchased by the Fed.
http://finance.yahoo.com/echarts?s=^TNX#symbol=^tnx;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
How on earth can this happen? It means that regardless of Fed purchases of new issues bonds prior issues are being sold into the market at significantly larger amounts than demand, rates rise accordingly. What does this mean for the economy, market, dollar and all things priced accordingly? It means that the borrowing of money is going to get more expensive.
Technically Bonds appear to be starting a major bear market, and when treasuries enter long term bear it is likely to continue for 28 years or more. If bonds drop in value, rates rise by definition and can be no exceptions.
The US is starting its Boom to be quickly followed by a crack up. Bond capital will move out and into equities, stocks and interest rates rise but the economy gets worse and worse requiring more and more QE. The dollar will rise during this rotation, but eventually people will panic after realizing that the value in the US economy is completely money printing and no productivity.
The Fed can not allow interest rates to rise, not to mention the $400 trillion derivative market based on the 10 year interest rate, so the fed will be and probably already is buying not just the new issues but all the older issues offered up for sale. The Feds balance sheet is rising fast and will rise even faster, it already looks like a hockey stick. Only one way out for the Fed and that would require a world wide economic boom based on real accounting and not horse pucky.
We’ve had a rise in asset inflation and the final curtain brings a rise in consumer prices/inflation. It’s only a matter of time. Also, as bond yields rise, you should see investors start to move out of dividend paying stocks. We’re entering a dicey time right now and the next 6 months will be very interesting. With the large number of companies warning about 2nd quarter earnings, it’ll only become more problematic for the conventional markets going forward.
Yes, selling dividend stocks like utilities or anything else that runs high debt loads in order to obtain free cash flow. I saw all these things happen in the 70’s, but the set up today is totally different. Back then derivatives were occasional insurance arrangements for crops, international marketing and some other things but all above board with only small leverage. Today the leverage is unbelievable and practically everything is securitized not only once but re-hypothecated God only knows how many times. Take look at margin levels now being used to buy stocks, another bubble rising.
richard, we could go on and on tell the cows come home, but frankly I think we would be wise to just keep our cows and our homes which is probably what will happen everywhere.
After the next 6 months people will begin to seek out real value only to find it’s already owned by smart money. Currency wars start trade wars with capital controls where hot money finds it increasingly difficult to move around. World wide kinetic war is usually the terminal result and usually the nation that first implements it, loses. Does not look good for the US as it is constantly engaged in kinetic war already.
At least the Fed will have a hockey stick to kick its horse pucky around, but I doubt anyone else will play the game so the Fed will have to play with itself.
Informative radio show:
http://radio.goldseek.com/
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I think there is very little reason to get worried.
Unless you are trying to jump in and out of gold, it is a matter of accumulating physical gold. That is certainly my aim, as I do not trust the Potemkin banking system.
If you jump in and out of gold, it is on the paper side you do that, and then yes, the current price movement is important.
However there is really little reason to use gold for that, since then it is just one of the offerings in the casino.
Use this opportunity to buy gold coins. And you will be all right.
You are right, g kaiser, too many silly traders haven’t got a clue.
But you know better than everyone else, right Mathew? Some of those silly traders you refer too bought gold as it plummetted in the 1981 death spiral and will NEVER repeat that experience. It took two decades to recover to bubble highs.
I knew quite a few of them actually. Today, gold is poison to them and by coincidence those are the same people who control most of the liquid assets in this country. Plenty of that wealth is tied up in the form of pension plans seeking yield, not losses.
Demographics plays a huge role in how some assets perform. Gold has always been vulnerable due to the bad taste it left in the mouths of the millions in the baby boom generation last time around. In the 70’s and 80’s the time was ripe for that asset and fear was exceptionally high due to the oil embargo of the time and double digit inflation magnified those fears substantially.
We were also much closer in time to when gold had been delinked from the dollar and memories were still fresh regarding the importance of gold in economic and trade affairs amongst the boomer parents.
Things have changed though and so no direct comparison can be inferred today based on what happened in the past. An older generation now has been weaned on financial assets and paper trades and physical ownership of assets is not seen in the same light as it was with those who had grown in the Great Depression.
This is one of the reasons gold never caught fire this time like it did in the era of the Seventies. The old-timers have almost all passed on to another world and thier kids (the boomers) still have fresh memories of being burned by that bubble. It will take a major economic shakeup to rattle most of them out of their complacency and reluctance to invest in what many still view as a risky investment.
The 1980 top was absolutely nothing like the 2011 top, technically or fundamentally. Gold then was overvalued and overbought when priced in anything. The 2011 top is very much like the December, 1974 top at $195. Anyone who paid over $400 in the ’70s didn’t do a very good value assessment. Today, $400 isn’t what it used to be, so anyone who has bought gold in this cycle, so far, will see great gains. The highest price I’ve paid is $730, but most was bought much lower. I was selling between $1850 and $1910. Right now, I prefer to add to my silver.
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this same guy was bullish a week ago? rearview drivers are useless. if gold rebounds today or early next week these same “all seeing” technicians will switch back to bullish…it is all silly