Rick Ackerman says his technicals point to the doldrums continuing for a bit.
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GDXJ continues to look relatively strong (currently up 2.5% today). Here’s a simple look:
http://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=1&dy=0&id=p82968806798&a=359004460
I think yesterday’s plunge was just profit-taking and top-callers. I wouldn’t be a buyer here, but I wouldn’t sell too much either. Near or at the money puts as insurance could be a good idea for nervous longs or spec shorts.
GDXJ finished the day up 4.28% on record weekly volume for the highest weekly close since early September.
As I wrote two weeks ago now, it appears to me that we have a slow climb in gold through the end of July. (I stated earlier I am expecting to be just under $1400 by end of month…that implies $2-3 rise per day on average with no major set-backs, although manipulation effects although occur around options/future expiry dates and on Fridays.
My crystal ball only allows for glimpses of about a month into the future, but pure fundamentals tend to determine longer trends.
The long term factors for gold/silver, other than simple supply-demand are always energy and the value of the dollar. Energy rising is a short term concern, but a long-term benefit for gold.
With platinum/palladium, supply constraints trump all other factors, and they both will rise long-term.
I don’t know CFS. The Canadian dollar lost a cent today and crude plunged 2.4% on its way to 100 dollars. I think it will fall below the hundred mark and begin to carry gold down beginning early next week. The GDXJ chart meanwhile gives me no confidence that it will go much higher now that it has peaked at the March 2014 highs and looks to be making a minor double top that should confirm Monday. My assessment is currently negative for further price increases.
I don’t know about anyone else but I have taken a real interest in soft commodities lately. On the principle of what goes down usually comes back up again there is some great opportunities lining up now that should be ready by harvest time.
We are not currently seeing signs of inflation concerns or major spec interest as far as the softs market is concerned. Since mid April when coffee peaked we have seen the major commodities of sugar, corn, wheat, soybean, cotton and rice all take a face plant one by one.
But if we make the assumption based on war models others are discussing lately that fertilizer prices based on natural gas and crude and potash inputs will be on the rise it should be easy to conclude all of these will be headed much higher at a later date.
And it is not as if population pressures are decreasing, that conflict are waning or that the weather patterns are improving. Indeed there continue to be either drought conditions or extreme wet weather in many important grain growing areas at this time and as we all know conflicts are increasing across the globe. None of those factors imply stable prices.
What is interesting to me right now is how most of the major products are moving downward together. Some of it is certainly seasonal and yet if we are to agree that inflation is a true threat then it does not make sense to also believe that grains will stay down too far beyond the harvest and heading into winter.
But something is not adding up here. We are also seeing the whole of the metals group including copper going up together while the energy complex is in retreat in sympathy with softs. While most of us here are focused on gold and silver I think it is well worth watching what energy and the two major crops of wheat and corn do in the next while.
For those who don’t deal in futures, what are the ways to play softs, Birdman? ETFs, I know… What do you think is the best way?
Very interesting comments, Bob.
I happen to completely agree with you and your neighbor!
Not sure who Bob or his neighbor Al but you seem to have responded to my post. There was a point to my rambling above though. A lot of ado is made about how QE and interventions are bringing us all into a period of serious inflation. It is constantly being remarked on and during the early part of the year when much of the commodity complex was rising it seemed easy to conclude that a combination of conflicts in some parts of the world in combination with central bank policies were going to bring about a long suspected burst higher in the commodity sphere.
The reasoning thus followed that gold was about to see a Renaissance and recovery after such a long time in the wilderness. The point that all commodities rise and fall together as a general rule was not missed by anyone. And yet here we are with energy and most soft commodities going limp and there has yet to be an equal acknowledgement that gold too could be at risk as everything else declines.
For some odd reason gold is always special to its most devoted fans and even glaringly dismal news on the commodity front can be discarded as being not consequential.
As I mentioned above, something is not adding up here. It now strikes me as improbable after having given this more thought that gold or silver can stage much more in the way of price appreciation against such a backdrop as we are now seeing with energy and the grains.
I am therefore confirming my view that gold has peaked or is near its top for this period of the cycle and is now a short candidate. Unless there is an appreciable change in sentiment on commodities in general the outlook for gold has dimmed.
Let’s revisit this in late Fall.
My viewpoint is going to be the outlying opinion at this time, Al. The consensus in the gold community (as opposed to the rest of the world) is overwhelmingly bullish at this time and there is a certainty that final lows have already been seen. I think the gold herd is wrong and they are going to be punished for their beliefs in the very near future.
My doubts in gold also persist because forces remain at work to pressure the Euro down and thus should result in a stable to rising dollar. Perhaps I am just being clinical but I remain unimpressed with either gold or silver at this time and continue to believe that recent short covering in the absence of new buying is just not sufficient to move prices much higher.
So the major headwinds here are threefold. First, what is happening to commodities, secondly, the reasons behind the recent price rise (hardly convincing) and lastly, confidence that the dollar will rise all point to weakness continuing in the metals.
In other words, we are still in a bear market and this rally will not sustain itself.
As an aside, falling commodity input prices should also be indicating to us that bottom line corporate revenues and profits should improve beginning in the first quarter of 2015 and so this is now supportive of further strength in equities.
Lets consider that producer prices have now been raised as a result of the rapid rise in commodities that began last January and that those increases are not likely to be rolled back anytime soon.
I therefore remain convinced that what we are seeing in the precious metals sector is nothing but a false breakout and that it has now substantially run its course. Lower metals prices lie ahead as do other buying opportunities.
This is perhaps why there was was a sudden selloff in miners recently as some traders (and machines) made the connection between a sectoral decline in resource prices and the future prospects of precious metals.
We need to keep in mind that forces of pure logic are at play here as programs trade on certain principles that have a high probability of repeating. Ergo, when the bulk of commodities go into decline it spells out to the machines to dump the baby with the bathwater.
And down goes gold…….
Well Bird, were we not expecting some changes concerning gold in India?
Its possible gold has had upward preassure due to expected change, maybe we get Garys dip now as we find out the changes are not coming as soon as some had hoped.
Hard to see gold going down with so much physical demand, except that all demand has been met, and, we really still don’t know how much physical is available.
I have not been following the twists and turns in India lately so you might need to get me up to speed there. Where gold is concerned though it is still the hedge funds calling the shots and moving prices and indeed most of that is paper trading. Gold and silver continue to defy supply/demand logic and move more by sentiments and herd behavior of the bigger players. Sorry if I sound like a stick in the mud where gold is concerned but the current popular consensus that we have bottomed and are about ready for a moon shot does not ring true for me. Too many are in that camp already even before a real breakout has happened and because sentiment is trying to lead prices higher (hype versus facts) I feel certain that more disappointment lies ahead. In my experience it has rarely paid to get on board a trade where it is being pushed by emotions yet is missing the key ingredient of genuine momentum. The viewpoint in the gold camp has become overly optimistic based on chart patterns that I think are not serving them well right now but more to the point the buying and interest is now running contrary to the largest part of the commodity sector which is in outright decline. This will have to be resolved either by precious metals declining or by the balance of the sector turning around.
In most of your commentaries and paragraphs in Ricks forum I notice
there is no evidence with the speculation that you alude to of future
trends being described.
Quite the opposite in my opinion. Gold sentiment with the public is at
all time lows and now just starting to pick up.
Softs are clearly carving out a bottom. Buy low…sell high. The pure
essence of making money.
I will conclude my commentary as covering all the subjects would be
very time consuming. Unless there is a black swan the odds favor
commodities/precious metals. To note, black swan would only temporarily
stop a bull market in the assets above or it could possibly fuel it as well.
So, for the majority of your opinions and speculation I do disagree.
Mumbai (Mineweb) –
Eagerly awaiting the Indian Budget on July 10 for growth oriented policies, the gold market has come in for some major disappointment. The Union government in India has kept the import duty on gold and silver unchanged at a record 10% in the Budget.
While expectations were high that India would cut the gold import duty to 8% from the prevailing 10%, India’s finance minister did not bother to even mention the bullion industry in his budget speech.
The gold jewellery sector is still reeling from the shock of having being completely ignored in this year’s budget, though some said this would amount to a fresh revival in gold smuggling.
Manish Kedia, bullion retailer said, “The World Gold Council had earlier said that smuggling would rise if imports remained. The Council’s research at the end of last year had suggested that 75% of Indian households would either continue or increase their current gold buying in 2014. But by ignoring the sector, the government has shown that it is not interested in our problems and that it is not really concerned if smuggling jumps.”
The introduction of the curbs last year has ensured that legal gold imports have slid by nearly two-thirds. However, official data from the Ministry of Commerce has noted that “unofficial gold will undoubtedly continue to supplement official inflows.”
Many jewellers were hopeful that the government would lower import duties on bullion as well as do away with the 80:20 rule altogether in the budget. However, that has not come through.
Haresh Soni of the All India Gems and Jewellery Associaiton said he was too shocked and very disappointed that nothing had been done for the sector as it was a burning issue which had paralysed the bullion industry.
Not all bad
Though there were no bold reforms by the Modi government’s first budget, the Gems and Jewellery Export Promotion Council has welcomed the Export Promotion Mission and revival of Special Economic Zones (SEZs) to boost the sector which received a mention in the budget.
“Announcing the reforms, Finance Minister Arun Jaitley has maintained the populist front, announcing various small measures and state level schemes however none of them promise any major impact on the gems and jewellery sector. Despite this, the gems industry is happy,” said Vipul Shah, Chairman, Gem and Jewellery Export Promotion Council.
He added that “our recommendation for rationalisation of import duty of broken diamonds and withdrawal of import duty on pre forms of semiprecious and precious stones has been accepted. Also the rationalisation of import duty on processed diamonds to 2.5% will help the domestic manufacturing sector.”
The gems and jewellery industry has a reason to cheer with the renewed focus on promotion of exports and reviving the SEZs in the country. “We also welcome the steps to improve the infrastructure for exports in all states by forming an Export Promotion Mission along with the state by the central government. The Council’s long standing demand of creating a convention center in Mumbai may soon become a reality,” he added.
The gems industry has also welcomed the intent of the government to rationalise the direct tax mechanism for faster settlement of tax disputes as this industry is one of the main victims of such disputes.
Even as the finance minister was reading out the Budget in Parliament, stocks of six jewellery retailers rose by 2.92% on the hopes that the government may cut gold import duty.
While Rajesh Exports was up 2.9%, Gitanjali Gems was up 0.8%, Tribhovandas Bhimji Zaveri was up 0.27%, PC Jeweller was up 2.04%, Shree Ganesh Jewellery House was up 2.27% and Tara Jewels was up 3.23% in early trade. By the end of the Budget though, stocks had started trailing and were down end of day
Thanks bb.
I do disagree very much so with these miningweb claims. They are
notorious for poor information. Not all the time but their researchers
are far from being the best professionals. Under paid ?
Nonetheless, demand is really picking up for precious metals from around
the world. India is in my opinion being manipulated and that will end too.
IMVHO
Jul 12 The most hated bull! Puru Saxena 321gold
Bird, this article might be supporting your position.
Ive read a few articles by Mr Saxena over the years, he seems well informed and astute to me.
Peru analyst is certainly not the worst. However,
I personally would not put my money on someone
unless I have followed their analysis for several years.
If I was bullish or bearish I would be careful to prove
my ego correct by choosing anaylists that only concur
with my own possibly flawed speculations.
Very financially dangerous. IMVHO
Unless of coarse there are other motivations. Those kind
of motivations I do not appreciate.
Just because HH, Peru was saying to get out of gold or short when most were screaming “buy,buy,buy”, he obviously proved to be correct gold.
Take it however you want.
In any case, Im sure Bird is capable of reasoning thru himself.
Forgive me bb
I do believe there is a misunderstanding. I never commented
regarding Puru and gold. I have followed him and all stated
he’s not the worst. Has nothing to do with market accuracy
in the case of gold.
My concern is a permanent opinion from someone here and
they are looking for every reason to support it other than maybe
sincere means. Whatever the motivations are through attempts
to disinform others for some personal satisfaction is unknown.
However, I am free to disagree with the opinions and will continue
to do so if in feel its poor analysis or attempting to mislead others.
I am not making any accusations so please don’t accuse me. Postings
should be sincere and if the opinions do not agree we all have a right to
a civil debate here.
hh, im not accuseing of anything.
the only permanent opinion I have seen is “buy buy buy”.
As for “ulterior” motives to mislead people? Why would anyone be looking to get their “jollies” that way?
I think it more likely people are just giving their opinions.
In this case Bird was pondering out loud, I mearly attempted to share info I had that he did not.
I guess we could all put the disclaimer of “not investment advice” after every post, I just see no nee for it, anyway, Im not accusing of anything nor was I looking to argue.
I am just here to get ideas as to which way where when how to deploy investment cash.
Sorry bb…never once accused you anything.
Its being taken out of context. I simply stated
please don’t accuse me because I’m not making
any accusationns to avoid conflict. However,
thats not succeeding.
We are all free to a civil debate here. We are here to share
as well. Precisely my continued contribution to the forum.
Peru is making a good point here bb. Commodities have been in a long multi-year down draft. Looking over the CRB Index though you get the sense that it has bottomed and is turning up. At least that is what I thought back in December. Shortly after there was a burst of life in the sector which was rewarding. Bit it has not carried through and we are again seeing steep declines especially in soft commodities. That was why I began to doubt golds current strength and I think it may just be lagging the rest of the sector. We will know soon enough one way or another if my assessment was correct.
Yes, we will.
I don’t agree. The market is well known for shaking momentum players, amateurs and
participants who came in late on this last rally. Therefore, bull markets do proceed in
ways to fool the most participants and leaving only the strong hands to eventuality
prosper. Also, there are no guarantees but odds do favor a continuation of what I believe
to be a bull market. IMVHO. …
It may not be a very humble opinion but I would bet that it is and I thank you for that.
Ever play Big Canyon or go to Woody’s Wharf?
Well no, thank you Big AL for the incredible interview with Rick Rule.
Congratulations to you and Cory it was dynamic. You know I’m
bias and a big fan of Rick. To stay brief I will stop there. Because
I could consume a lot of time praising his professionalism.
Very familiar with Big Canyon and in that area quite often in Fashion
Island. As you know very prestigious and highly entertaining. Although
I don’t chase the ball. I do in a way envy those that have the time that do.
You might say my time and activities are centered around health and fitness.
With my passions in high finance and those activities I don’t have a minute
to spare. Briefly speaking and won’t elaborate anymore to bore you. You can
say its a long story.
You sure get around Big Al you even know about Woodys Warf. You can sure chase
a lot of short skirts around there.
Lastly, maybe your right, its not so humble. Its more of a formality using IMVHO.
Nonetheless, it was a free bone thrown out there as it was proprietary information.
If your down this way stop into Captain Jacks for the best seafood. Then drive down
the coast and spend a week at the Ritz Carlton in Laguna Niguel/Dana Point.
YOU’LL LOVE IT !!!!!!!
India’s gold imports plummet 34% YOY
Annual gold imports dropped from over 1,000 tonnes in the last fiscal year to under 700 tonnes in the year ending March, 2014.
Author: Shivom Seth
Posted: Thursday , 10 Jul 2014
Mumbai (Mineweb) –
India’s gold imports declined nearly 34% to 670.4 tonnes in the year ended March 2014, from the April 2012 to March 2013 fiscal period of 1,013.9 tonnes, following the stringent curbs imposed by the government and the Reserve Bank of India on overseas purchases of the precious metal.
Minister of State for Commerce Nirmala Sitharaman, who made this announcement in India’s Parliament, said that neither the Reserve Bank of India (RBI) nor the Indian government has data on the availability of gold with the public.
Replying to a query in Parliament on the gold reserves held by the RBI, she added that according to RBI’s statistical supplement dated June 18, gold held by the RBI is 557.8 tonnes.
Though gold reserves with the RBI remained at $20.790 billion, the value of gold reserves has fallen from its earlier perch of $20.96 billion. The value was stagnant since May 2. Under the review period, gold reserves declined by $175.4 million at $20.79 billion, data showed.
Here is an article I just came across from Trader Dan which in some ways support my views regarding commodities and their impact on gold. The charts are eye openers if you had not been following corn and wheat etc for the past months. Why all this matters is because commodities tend to rise together. Not always mind you but it is consistent enough that divergences will be sure to attract doubts.
Hedge Funds Bet Big on Corn – and Lose Big
http://traderdannorcini.blogspot.com/
Dan does not actually make mention of gold in the above post however in a related article from the 8th of July titled “Soybean Chart Analysis” he states the following:
“A quick note on gold – it is firm due to geopolitical events – first it was Ukraine, then it was Iraq, and now it is Israel and Hamas. One wonders, with the various commodity indices all retreating lower once again, how long the geopolitical concerns can keep it supported. Gold needs support from rising commodity prices.”
Bingo. He gets to the point in far fewer words that I but is saying the same thing. And he is correct.
Was actually jj that brought Trader Dan to my attention, sinse then I read his work.
I get exactly what your meaning.
For me, Im thinking to hold my positions and see if Rick is right going to 1360, then might be a time to sell, get Garys low and rebuy for the “to the moon” fall and winter.
Or go bust I suppose, but that’s what I intend.
I have noticed for some shares there hasn’t been any up momentum for awhile just spikes, altho, there are some that seem to have held most recent gains.
I wonder if the markets purpose is not to take comodoty money to attempt to direct It elsewhere. I know, tin foil hat.
On the other hand,Very few of the companies I follow are actually making money, maybe that’s the obvious reason people don’t want mining shares causing their prices to fall. Could it be that simple?
Here is an article I just came across from Trader Dan which in some ways support my views regarding commodities and their impact on gold. The charts are eye openers if you had not been following corn and wheat etc for the past months. Why all this matters is because commodities tend to rise together. Not always mind you but it is consistent enough that divergences will be sure to attract doubts.
Hedge Funds Bet Big on Corn – and Lose Big
http://traderdannorcini.blogspot.com/
Dan does not actually make mention of gold in the above post however in a related article from the 8th of July titled “Soybean Chart Analysis” he states the following:
“A quick note on gold – it is firm due to geopolitical events – first it was Ukraine, then it was Iraq, and now it is Israel and Hamas. One wonders, with the various commodity indices all retreating lower once again, how long the geopolitical concerns can keep it supported. Gold needs support from rising commodity prices.”
Bingo. He gets to the point in far fewer words that I but is saying the same thing. And he is correct.
There again I disagree. Traded Dan may not be accurate.
Market will eventually prove who is wrong.
I don’t like following chartists to the gallows. There are so
much other analysis to take into account. Mine is proprietary.
If you like Trader Dan and making you money is great.
However, I must disagree. I don’t feel from following him
for several years he meets my standards. Quite frankly to
the contrary.
Chaarat Gold on a good upward trajectory right now. ‘Ridiculously cheap’ is how its CEO would call its share price. As a longterm holder I would agree.
http://www.proactiveinvestors.co.uk/companies/stocktube/2909/chaarat-gold-boss-explains-why-share-price-is-undervalued–2909.html