Are these thoughts realistic or simply crazy?
Click download link to listen on this device: Download Show
Then should we sell?
Should have sold years ago, when the pumpers were calling for 5000+ for gold….reevaluate when we get under 1000. Jmho.
Also, listen to what Rick had to say.
Gary or Rick?
Can you have Rick Rule back Al?
Thanks. I did sell all my gold/silver stock s and 25% silver when it was high in 2011. I bought them back during the last two years.
I don’t know how to sell in the past.
Again, Lawrence listen to Rick.
I don’t give advice Lawrence. I would only say this….if I had bought high and held this long (which I did not, by the way) it makes no sense to sell anymore because we are a whole lot closer to a bottom than a top. Just my opinion for what its worth.
I was just kidding. I bough most of mune fairly low.
chart of the day.
Listen to what Rick said on this question.
Breached….bullshit..u guys still dont understand..traders are going to back money going back and forth…until….until……a reset or monumental global decisions are made to re-establish a new monetary order with respect to each countries sovereign debt or lack there of…….
The question here Marc, is “timing”.
Big Al, How does one feel good about this economy when they can’t make their house payment, cannot afford the increases in food prices and on and on. You stated you think people are feeling good about the economy because they don’t want to realize what is actually happening and don’t want it to tank? Man it’s already tanked and waiting to be submerged. With all due respect….couldn’t disagree more with your analysis, but that’s what this board is for. Regards……
Yes sir, that what this Board is all about. Thank God for that!!
And a darn fine job you do of it, too, for which I thank you.
It’s 8am Gold-Smashing Time
Submitted by Tyler Durden on 05/27/2014 – 08:24
It’s that time again… like clockwork, as 8amET rolls around gold and silver become the object of derision for some entirely unrigged decision-maker at a bank… pressing gold prices down to 3 month lows. The question is will the selling prompt buying like on Friday or beget more selling because it is after all a Tuesday… With $450 million notional flushed through futures contracts, someone was in a hurry after seeing Europe’s extreme left and right uprising to unload any protection against an ECB capable of only one trick to save the world
More than a million dollar question, bb!
Gary excellent commentary.
Great picture Joseph.
Little early in the morning for this gringo to think about chowing down on enchiladas.
The result of inflation ha been happening for years now.
I don’t see how consumer confidence is improving with so may retailers sales dropping.
Bird, you hit the nail on the head yet again. A few days ago you were sayin yu wouldn’t wanna be long.
Doc awhile back was sayin he figured 1260 might happen too, were close, and Garys sounding good with cycle lows.
Yes, thanks b. I win this one (please don’t ask me about the times I got beaten though!)
Yeh, what the musketeers have been saying are proving to be correct so far!
A bad day in May turns out to have been correct. Lets see what they will say about June now.
This was expected incidentally. We already had forewarning of how European elections might turn out. The results now tell us that there will be considerable pressure at the policy level to get the economies over there humming again. The people have spoken and they are sick of austerity. Angela Merkel herself confirmed that action is going to be needed to relieve the pressure. That means in short they will loosen in an effort to promote higher levels of employment. At the ECB there will also be calls amongst the Governors (who incidentally are already unanimous that action needs to be taken) to be more aggressive in their monetary stance and on rate setting. So what does that tell us? It means that the Euro is going to get pushed even lower and by default the dollar will rise which is exactly what I have been telling all of you here for the past weeks. The outcome of that is that both gold and silver will be casualties. That in a nutshell is why I stated last week my intention was short gold. A very good call as it turns out. So I guess I will be in disagreement with you today Gary. This is not a fake out as I see it but rather a directional change that was decisive. After a long period of sideways trading the market has made its decision……………and that is lower gold and silver prices.
Can’t blame you for being in a good mood jj since you went to the dark side last week. Got to love Tuesdays eh!
yup, good tinin jj
Definitely one for you, Bird!
Yes you have been correct in some things. However many other things remain to be determine. Once ecb decides to make actions I see gold rallying. There maybe a 2 week/1 month tops delay, but it will rally as equities implode.
Let’s see who is correct? me or you lol..
Doing my best here Glen. Gold is a moving target though. What works today will probably not work tomorrow. At other times gold moves on interest rates or inflation news. Not long ago gold was going inverse to stocks. Sometimes it is purely sentiment driven and speculative. Then there are days I cannot explain at all. All I know is that if gold prices are moving today based on the Euro that a month or two down the road that will change and we won’t be able to trade on that relationship anymore because something else will come into play…..but I have been damn lucky this year (so far!).
I like how you say it because you take emotions out of the trade/investment. Thus it should be a reminder to all to keep emotions aside and reality in check. I enjoy your work. Keep it up!
I think a persons income level determines when they notice price increases.
Obvious I guess, so, whats the average income in the U.S.?
That should tell us when enough people get upset enough to cause a ruckus, might have to calculate food stamps too.
Around $40K per year for a family.
Crazy-good analysis, guys!
I assume that here you are referring to both Gary and Chris.
Indeed I just listened to Chris… Chris Rocks!
Chris is good. There is no doubt about that.
Bird, I think your right about he Euro and dollar, have you calculated physical buying?
We “should” be seeing an increase on lower prices and Modi.
Couldn’t that counter the dollar?
I feel pretty sure about this trade bb. Especially after we saw that sharp decline in the Euro in the past two weeks and the dollar popped up so nicely. It was a bit of a delayed reaction waiting for gold to respond though. The elections seem to have made the difference. JJ is laughing above but he can’t really criticize my logic. His technicals did NOT warn him about this but European policy should have if he cared to read it. I don’t really care about all the fluff on the internet about gold fundamentals blah, blah, blah….or golden crosses or inverted head and shoulders patterns when all I really want to know about is the correct direction of the goods. The dollar told me all that mattered.
Birdman you must have 3 arms, 1 to pat yourself on the back!
Options expiry today is a major factor regarding gold and silver not anything to do with European elections….good grief!
I been telling Doc the charts suggest the opposite of what he was suggesting why the H did I short the pm’s sector 2 weeks ago
Golds reaction today is based solely on technical levels being taken out, its that simple…don’t over think Birdman those that can move a market and that’s nobody here have reacted as traders when support falls the next zone better hold or it falls aswell.
I guess Birdman you’ll be like all the other gold gurus when gold finally bottoms either with a 3rd test of $1180….$1050 or $960, you’ll be here telling everyone about your great calls….and you made how much, not being short anything….I’m in this to make $$$$ not chest pound with the coffee ladies
Yeah yeah. Heard that one before. And next month it will be options expiry were what caused gold to go up. Which you will tell us about AFTER options expire. Good grief! I love you guys who can rationalize everything in the rear view mirror. At least in my own case I explained (in detail) last week why I believed gold would decline and thus by default my position. By the way the third arm is so I can give you the bird (you were long weren’t you Hahahahahaha!!!)
No rear view mirror BS go ahead and look at previous Potion expiry dates for gold and silver and the reaction in both during those dates….every gold and silver investor should be aware of these dates or you are flying blind!!
During the bull run it provided a great buying opp no these past 3 years its more often starts the new trend…Down!
On May 22, 2014 at 12:11 pm,
original jj says:
US long weekend is followed by Options Expiry for both Gold and Silver Tues 27th….always good for a smackdown!
Hey Bird…well look like patience will pay off…Gold is in a bear market and so are the miners..until they aren’t. Let see that capitulation to 950 (50% retracment) then it is all in!
NYC…..I am firmly in the camp that a turnaround in price is coming. I happen to believe gold will move explosively out of the blocks when the time is right. For the moment though we will have to grin and bear it as precious metals remain out of favour with the majority of the public who are for the most part momentum and trend oriented. The herd has spoken and they don’t like gold right now.
Nothing wrong with chest pound with the coffee ladies!
I think its still illegal to pound ladies chests over coffee.
Now this is funnly lol.. sorry bird quite the chuckle.
Laughed when I wrote it, Glen. Just taking the piss out of jj for fun though. I like the guy.
both bird and jj are great assets to this site. Al gets it. keep up the good work.
Interesting comments, Bird
Thanks Al. You might have caught that speech by Mario Draghi on Sunday by the way. I think it is what is behind golds drop today because it signals the dollar will strengthen. He sounded unequivocal and again reinforced that the ECB was prepared to act come June 5th. He also reiterated that the high Euro was creating disinflation for Europe. Here are some comments from the Guardian:
“The ECB is on guard against deflation and ready to act with conventional and targeted measures, while a broad asset-buying plan remains an option, the bank’s governor said in a speech on Sunday. To guard against a drop in price expectations, “more pre-emptive action may be warranted”, he said.”
“The ECB is preparing a package of policy options for its June meeting, including cuts in all its interest rates as well as targeted measures aimed at boosting lending to small- and mid-sized firms. Draghi indicated that full-blown, US-style quantitative easing – printing money to buy assets – remained an option for the ECB, saying a destabilising of inflation expectations “would be the context for a broad-based asset purchase programme”.
Mario Draghi hints at ECB rate cut to avoid deflation
How much more obvious can they be? Last month they actually spoke about a programme as large as a trillion dollars. I hve no idea if they would go so far but I do know its foolish to doubt their resolve at this stage of the game. That is why gold is getting smashed. It is called heading for the exits ahead of the herd.
Whats going on with all the repeated posts?
When all the bulls, like myself, have been made to look like idiots, I think you are nearer to a bottom than a top. But bottoms in commodity futures (silver, sugar, natural gas, cotton, etc.) can take 3 to 4 years to finally run their course. We are starting year 4……
Time to go to the beach!
Why is there gold there?
Maybe Ryan lives in Alaska.
No, of course there is, but some people like 24 hours of darkness!
Yes we are starting year 4 or close to it!
I don’t believe any government statistics anymore. They are rigged.
I believe all markets are rigged.
I know cash is sloshing around due to printing of money.
I know the price of gold is manipulated.
However the price of gold can only be manipulated as long as there is physical gold available.
Question: Is it possible for the government/bullion banks/Federal Reserve to buy gold at a higher price in asia, and ship it back to the US and sell it at a loss?
IF AND ONLY THIS WERE POSSIBLE GOLD REALLY COULD BE DRIVEN TO ZERO.
Hello CFS… Hey even Jim Cramer of mainstreamland says “the markets are rigged”, so maybe the contrarian play (at least for the summer months) should be as if the markets were NOT rigged. Just a thought.
I did not realize that Mr. Cramer said that. Thanks
Yeah, I’m not a big fan of Cramer, but I remember this Yahoo Ticker bit from back in February…
I have come to an interesting conclusion.
That conclusion is that it really doesn’t matter what people like us think about the statistics. It only really matters what the masses think!
Don’t see how they can drive the price to zero. There is only limited gold around. If price is 0, I can buy 1 million tons. Problem is that nobdy want to sell it under cost. producers have to sell to governments. But most producers are outside of US. US only produce less than 200 tons.
Obviously the price cannot go to zero!
Strange things can happen if the cost of printing money is negligible!
Man there are so many comments made today that are just 100% incorrect, no make that 110% incorrect.
Gary just because something goes up in value it doesn’t mean its inflation at work. None of us here, none! can move any market its BIG money that moves markets and the “Smart” money has been piling into US equities as a safe haven (I can hear you say jj your nuts) really? Big money is getting out of idle positions held in the global banking system into fine art, high end real estate, US equities, anywhere to protect their wealth from Bail-ins….smart money is simply buying whats going up and selling whats going down.
Knocking the US equity market (US economy in general) these past 3 years and continuing to pump the precious metals market has been the complete opposite effect of making money!
Dow up 57%….S&P up 72%…Naz up 90%….Gold down 33% …Silver down 60% and the HUI down 65%
Gary your meal costs is related to food inflation brought on by supply issues, the drought in Cali is going to effect the food chain Big time!
Deflation is everywhere as governments around the world are raising taxes, hunting down money that is avoiding taxation, job markets stink around the globe, available retail space is exploding. China is clearly contracting!
This web-site is more like a bunch of old women getting together over coffee complaining about manipulation, big bad banks, why XYZ should be heading to da moon when it can’t even get its face off the matt
Learn how to manage your investments using technical as its clear those following fundamentals are clueless….and I’m not taking about technicals that have arrows pointing to where the Hope is headed, real technicals that suggest your wrong and you’d better react are continue you see your net worth decrease as Big money moves the markets.
Whats the point of suggesting XYZ is going to go down yet you don’t short it and make money…..sounds again like a bunch of old ladies talking about this and that but never reacting to their own opinions.
Yeah, good point about the inflation remarks. I just wrote a post the same time as you in objection. But Gary and I have been over this territory before and he insists on using the word inflation like that…..now where is my tea cozy, dear?
Your comment, Knocking the US equity market (US economy in general) these past 3 years and continuing to pump the precious metals market has been the complete opposite effect of making money! is, of course true.
But here is my deal and very possibly my deal alone: I really personally don’t care about the day to day fluctuations in the metals. I have said a million times that our positions are long term. Longer than our own life spans possibly. Nothing more and nothing less than that.
Have I personally ever advocated concentrating investments exclusively in hard assets. NO!
Have I ever said our portfolio is 1/3 conventional market; 1/3 real estate; and 1/3 hard asset related? Only a few hundred times!
I am very interested in the prices of au and ag because I think that they are very telling of other issues. And, I personally find these observations to be more than just slightly insightful.
Whats the point of suggesting XYZ is going to go down yet you don’t short it and make money? If you really believe that XYZ is going to go down, of course you should short it!
More on all this later.
You always make some very good points. Your points and the points of others are what make this site a lot of fun for me and, I believe educational for all! Should make everyone think and then come to their own conclusions.
Big Al, if I had your money I’d burn mine!…lol
Your soooo wealthy it doesn’t matter if your portfolio continues to decline in value.
Good Luck to you…..
JJ im sorry to say but if it was supply and demand we wouldn’t be having world wide food inflation. Cost are going up around the world. Its all related to a race of all goverments to print more and devalue vs us currency.
glen read this regarding food inflation, its not currency related….California
Gary, you keep talking about the inflation in stocks but it really is not a correct use of the term “inflation”. What is happening in equities is based around the use of credit and I hope you realize that credit will not be leaking anywhere as the outcome of a sharply falling market is margin calls. Basically the money will disappear if stocks go bidless and prices drop. Maybe I just don’t understand you or we have very different definitions of what qualifies as inflation.
inflation is here already…once the “general public” realizes it will be too late
Gold will sniff it out after hopefully bottoming at $950 and GDX 15 or 18, and then we will see the next l;eg up
Sure here in food and energy. But, wait a minute, that doesn’t count anymore!
Damn, bit my tongue again!
I understood Gary to say that the “inflation in the conventional market” was caused by all the printed money seemingly going into that sector.
I would have to agree with Gary on that comment. Certainly is more money chasing a bit of a finite supply of goods.
With all respect it doesnt take a wizard to realize cost of living have increased since the good old days. There is more more money supply then ever before. This my friend is economics 101=Inflation. No more no less.
gary appears to be calling “inflation” as an increase in money supply.
I don’t think so. He is calling price increases in stocks as inflation. I mean, I can agree prices are “inflated” but that is hardly the same thing. When I think of inflation itself though it is with reference to rising input costs, changes in government policy etceter. This is not like that because it is purely driven by hard behaviour, credit and a belief the Fed is backstopping the markets. It is the kind of inflation that can vanish quickly once stock markets correct. I don’t buy the “leakage” idea at all as it makes no sense.
I think that CFS; Gary; you; and, I are all correct in this case.
Got to disagree Al.
Correct. Inflation is always an increase in the money supply. that liquidity has to land on something. For the last three years it has been landing on the stock market.
Here is the leakage I’m talking about.
That’s what I understood you to mean.
OK, maybe you are just playing loose with words and terminology. I don’t call what is happening to stocks inflation though. In more common parlance we think of inflation as a price phenomenon that is being imposed upon us against our will. Too many dollars chasing too few goods (demand) for example or steep increases in commodity inputs that feed through to the consumption level. But what is happening with stocks is not the market imposing price rises in that same sense at all. In this case we see investors chasing the market up to make profit or gains. Does that sound like the same kind of inflation as when gas prices increase and you start pulling your hair out at the gas pump? And besides that you are saying that due to all the money printing we are getting inflation in just a single asset class which is stocks and that also makes no damned sense to me. Since when does inflation only strike in one area and all others are immune? So it should be obvious stocks are rising because of capital flows, speculation, margin credit, earnings (past years) and pension plan growth. Do those sound like the drivers of typical inflation to you? I don’t really want to make an argument here Gary but the term inflation is being used incorrectly. What incidentally do you think is behind the making of the price of assets anyway? What is value? Where does the money go when they fall?
Maybe you heard that inflation relates to the general price level…or is that just an old fashioned notion now?
Inflation is always a monetary phenomenon. Period.
But it doesn’t have to flow evenly into everything. A perfect example is the 70’s. Stocks didn’t produce big gains despite huge inflation. That’s because stocks were still overvalued and the inflation tended to flow mostly into commodities. The same thing happened in 2008. We had huge inflation in 2008 but stocks were too overvalued for the inflation to stick in the stock market and instead it flowed into the commodity market. The same thing will happen again and may have already started as the CRB has broken out of it’s three year down trend.
Strange! Gold is down and gold silver ratio is also down. This rarely happens. Is it hard to suppress silver now?
That’s one of the “clues” that tells me a bottom is close. Silver should have gotten absolutely KILLED today, and it DIDN’T. In fact, most of the day it was down LESS on a percentage basis than gold. That’s continuing now into the early evening. The other noteworthy thing is that the silver stocks all started picking up late in today’s trading session. Silver may be gold’s poodle – most of the time – but when it isn’t…… pay attention.
Just bought SLW. Waiting for more.
Al. can you explain what facts or information that you have which leads you to believe we are heading for a depression.
Regarding consumer confidence…in 1977, I did a 20 year study comparing the Conference Board’s Consumer Confidence Index to the S & P 500. Confidence FOLLOWED the movement in the S & P. I haven’t updated the chart since 1989, but one of you young whipper snappers might do the comparison to see if that’s still true. As a result of my study, I pay no attention to confidence because I do not believe it has merit as a predictor of the market.
Thanks Sandy. You still have your original article or was it posted anywhere?
Gary, Birdman and others with an Open mind, have a look at what currency devaluation does, the Nikkei was 8500 when Abe told the world the $Yen was to be devalued, it fell 36 cents vs the US$…the Nikkei reaction was up 95%
Golds high was when $Yen was trading at 130++…since it fall to 97 gold has followed as well
This is currency inflation clear and simple….the US equity markets are not driven by inflation….it Big money Global Capital flows!!
And where do you think the big money capital flows come from? QE flows into the banking system and they throw it into the markets.
Hmm. Why not gold though?It is also an asset class.
Gold got its fair share of inflation from 2009 to 2011. Then it needed a normal correction after that huge move. That correction was stretched by the manipulation last year. But in the near future I think we will see stocks start to stagnate and the liquidity will start to leak into the commodity market. The Fed will try to fight this by intervening in the markets but they aren’t omnipotent and eventually all these manipulations will just make the problems worse. They are creating another bubble in stocks. When it pops it’s going to release a gigantic amount of inflation to flow into the commodity markets.
And so me a chart the last time that happened, IF and when the DOW tops…25,000…30,000 and all this money rushes for the Exit’s it will not necessarily rush into the commodity sector IF deflation on a global scale unfolds.
So me your chart of the CRB index rising big time vs the Dow declining?
The CRB rose as did the Dow when global growth was in play, now global growth in the CRB is not in play but capital looking for % returns is and they certainly have received that parked in US equities since 2009….
looking at 2007-2008 the US$ rose 17cents!! as money flows from around the world parked into the safe haven of the worlds most liquid asset the US$
obviously so = show
Last time I checked Gary we got deflation following a big stock market crash not a tsunami of inflation. Check for yourself since you seem pretty confused on the topic.
Partially yes of course, the real driver European money, big money!….Where would you go if you had 10’s of millions in Europe, London high end real estate, NY real estate, US equities…..US cash
That chart is clear evidence of currency devaluation Gary and its reaction to send the Nikkei waaay up….the US had its currency devaluation 2000-2008 its NOT in play now….it will be again but not anytime soon
Everyone is still devaluing. Now it’s just everyone at the same time so the currency charts don’t look as one way as they did from 2001 -2008.
But all currencies are being devalued and that is the sole reason all stock markets continue to rise.
Well then why isn’t the Golden currency rising Gary?
Big money is continuing to flow into equity markets, not Gold
Exactly jj. Why have gold and silver been dead all these months (years) if all currencies are devaluing?
The question, at least in my mind original, is how long will U.S. dollar; real estate; and, the conventional markets retain that status.
That is the real issue in my mind.
Hey…who accused me of having an open mind!
Sorry, my boss at the time liked the study so much that it became a wall chart in his war room…and, therefore became his company’s property. Anyhow, right now the market is hitting new highs…and, confidence is on the verge…so I don’t think a chart is really necessary.
Good point, Sandy!
Thanks anyway Sandy. I will take your word for it.
I think the PMs will fill today’s gap this week. Then everyone will think “false breakdown”. Who knows what happens from there. I’m going long a few miners today for a trade.
Amazing…everyone wants to make a killing these days. I went to the Conference Board’s web site to see if historical data is available for its Consumer Confidence Index…it is for a hefty price of $2215 for all. I got my data free by spending month’s at the library and recapping the index two years at a time…for free! Now, I see that Barron’s no long publishes the stat in its Market Lab section. Too bad. Like I said, we don’t really need a chart for that…just pay attention or you can start building your own each month as the data is announced. B-T-W…I see Barron’s no longer publishes a ton of other stats that I used to use.
This is that time where technicals are going to say gold is going down. This is why I say technicals are mostly worthless at major turning points. You need different tools to spot major turns. Sometime in the next several days we are going to get a major bottom in gold right when everyone becomes convinced there is no end in sight.
still waiting for your chart gary of crb rising hard while dow falls hard….and answer to why gold is in a bear market for 3 years while currencies all devalue
if charts are meaningless why do you make your points using charts at your own blog?????
I never said charts are useless. I said you need different tools to spot major turns. Right now the charts are saying gold is going down. But cycles are saying a bottom should happen in the next 3-8 days.
Com’on Man!…back away from the spicy Mex meal its effecting your wave patterns, lol
Seriously, I have no problem with what you say Gary just back it up with facts.
1) so why are all currencies devaluing (as you say) yet the golden currency continues to decline?
2) so when in history has the US equities fallen hard while the CRB rises hard, show me that chart
3) you say: technicals are mostly worthless at major turning points….really than why do new tends often appear at ket trend line levels….I’m still waiting for your chart showing key cycle turning points showing the trend lines weren’t in play aswell
I linked to the chart in an earlier comment to Bird. Here it is again.
Cycle trend lines always get broken before a cycle can form a bottom. A trend line break is one of the confirmations I look for to signal that a cycle is in decline or in rally mode.
Have a look at this chart Gary, thoughts….same results to repeat with a topping DOW?
You are looking at the ending phase after commodities have already spiked and collapsed the economy. That will happen again. But during the initial phase where stocks start to stagnate and traders can’t make money they start looking for other areas to invest where they can get a return.
That has probably started as the CRB rallied 9% at the beginning of the year vs. 3% in stocks. If stocks start to churn then more and more liquidity will flow into other areas where price is trending. If the CRB has another big move in the second half of the year then money will start to move into that market out of a stalling stock market. The key is whether or not the stock market is ready to stall and force traders to look elsewhere for a trend.
Agree Gary its all about momentum trading and these past few years since gold topped the % gains have been in equities
I’m a momentum trader, we are a brainless bunch lol as we don’t care what it is thats trending just ride it, currently from “your” call March 17th being short (as I’am) the pm’s sector is a momentum trade.
Its a fine needle to thread having the Dow come off and send money into commodities as any sign of Deflation will send money to the sidelines, US$’s
Q3-4 is going to be very interesting…..thanks for your reply, appreciate!
“The Backstop Boyz” have laid the perfect trap, and the bears have blithely walked right into it.
If gold this Week closes above $1295, Silver $19.65 and the HUI closes out the week above 222 I’d say your 100% correct
We’ll see as bear traps or bulls traps produce quick reactions if they are in fact Traps!
We have a technical breakdown on our hands here Gary. Both gold and silver breached.