Category Archives: Gold

Gold vs Euro, a Story

The monthly chart updates the situation in gold vs euro and tells a little story.

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You see, once upon a time millions of Knee Jerks came flying into gold in panicked response to a credit meltdown in the weaker components of their union.  The first of these monetary refugees created ‘fear gaps’ and the last of them, the unsustainable blow off top.  By then, the gold mini hysteria had gone global and gold – all those unhealthy holders in tow – was cooked for a coming bear market.

Now gold vs euro is in the finishing stages of what looks like an Inverted H&S bottom after poking down and closing the open gap in 2013.  The left side Shoulder did this and then the Head rammed down even deeper just to make sure.  Now we have Portugal and all those low quality bond yields that were until yesterday showing a clear lack of respect for risk management.

People never change.  They herd, they over intellectualize and they take too much to heart what other people say, without realizing that other people have agendas.  Charts on the other hand, simply tell stories over time and space.  This one has an interesting story.

Jay Taylor; a Perfect Storm?

Over the last 2+ years of a cyclical bear market in gold I have not seen much, if anything, of Jay Taylor.  When I first came along to the gold sector in 2002 there was Jay among several other standbys writing about the precious metals.  Some of them I very much respected too.

Taking this article at face value and without prior judgement we’ll parse through it and see what we have…

A Perfect Storm to Push Gold Higher?

Martin Weiss put out a very interesting piece tying together various rising political tensions in the Ukraine, tensions between Japan and China in the East, and rising tensions in the Middle East with rising levels of inflation. Again, I think my Inflation-Deflation Watch [IDW] is telling us that whether it makes sense or not, we are now starting to see a breakout in inflation, at least in terms of overall asset prices.

Off to a bad start Jay.  Martin Weiss, are you kidding me?  His articles would not be complete without the obligatory pictures of angry Arabs and burning oil derricks.  Ukraine?  Geopolitical tensions and inflation?  Is that the sustainable case for gold?  Your IDW is telling us that inflation in terms of asset prices is breaking out?  Inflation has been breaking out ever since the biggest part of the stock bull market engaged in 2013 and that inflation has fed directly into stocks not gold.

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Gold’s Big Picture

This chart needs no mark ups.  Very simply, gold needs to follow the miners (already crossed) and cross MACD up and then take out the area where the Bollinger Band mid point meets the (red) EMA 45.  Combine these with a green RSI over 50 and AROON going 0+ and you’d have a genuine bull market in gold.

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This chart will be stored in the Public Charts list linked above so you can follow its progress any time.

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The Real Price of Gold

The real price of gold, as adjusted by commodities is making some nice baby steps toward rebounding.  Here is a picture of the gold ETF vs. certain key commodity ETF’s and markets, that show the progress of what would be the most desirable condition (a rising real price) for a healthy gold bull.

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And then of course there are other notable measures like Gold vs. Stock Markets.  Here is the progress vs. SPY and EZU…

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Nominal Gold and in Euros

Here is the weekly chart of gold that NFTRH has been working to for several weeks now.  The thumbnail at right shows the cluster that gold needed to blast through to get bullish.  Check.  Gold had positive divergence by MACD and kept its AROON uptrend.  These finally resolved bullish this week.

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Here is another chart we’ve been using to keep track of gold’s big picture in Euros.  The fear and angst of the Euro crisis has been closed out with the gap fill.  That is another way of saying that the legions who became instant gold bugs in the Euro Refuge Knee Jerk Sweepstakes have now been… how do we put this?  Let’s think of a nice sanitary word… processed.  The knee jerks have been processed and the investor base cleaned out.

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Much the same has gone on in the US, although the process has been much more drawn out, commensurate to the intensity of the US financial crisis and ‘great recession’ that the average person and conventional analysts happily package as being in the past.  Just keep that ZIRP going there Janet.  That’s the biggest tell right there.  A healthy economy, record stock markets and employment and manufacturing zooming upward and still… ZIRP out into 2015 or… ?

There is a case for gold as there has been since 2000.

Middle East Influence; Gold and Oil

I’ll try to limit the harping.  If the gold ‘community’ wants to get revved up on this, let ‘em.

Gold higher on rising Middle East violence

As for oil, it is “seen” topping 116 on the geopolitical conflict.

Oil Topping $116 Seen Possible as Iraq Conflict Widens

Why 116?  Who knows with these guesses?  They just pull ‘em out their a$$es.

The ‘gold and oil’ crowd is liable to get really worked up on the events in Iraq.  I only continue to ask that readers filter the pumpers.  Gold and oil rising together – amidst geopolitical strife – is not a material long term fundamental for the precious metals and especially not so for gold mining companies.

So if you’re long (as I am) keep yer head screwed on straight, okay?  A selling opportunity is probably upcoming.

[note]  The site’s server is wonky again and it is due to a supposed upgrade by the host.  They tell me the glitches will be worked out soon.  They tell me that…  apologies if you are experiencing any effects.

Gold ‘Community’ Revving Up on Iraq

They are getting excited again, the gold ‘community’ that is.  On the big bounce in GDXJ (juniors) especially, there is talk of bottoms, new up legs and even the potential Inverted H&S NFTRH has been charting since before I even heard of it anywhere else.

This may or may not be the case.  NFTRH has been on the IH&S for many months now and I’ll be damned if the ‘callers’ are going to co-opt our theme.   But insofar as Iraq has anything to do with anything, it’s ‘buyer beware’ on this hype.

Here GoldCore weighs in…

Gold, Silver, Oil, Gas Jump on Middle East “Powder Keg” Concerns

Why, they even have a cute Power Keg pictured with a long wick laying next to a couple of match boxes labeled ‘War’ and ‘Chaos’.

To be fair, they do mention an actual potential fundamental for gold in that “the US recovery may be stalling”, but you know the ‘community’… it is going to pitch whatever is inflammatory enough to get the troops motivated and pumping.

I would venture a guess that a sizable chunk of the gold ‘community’ wants war and it wants Chaos because it wants to be right and it wants to get back up on the soap box with a booming I TOLD YOU SO!!.  Again, not so much talking about GoldCore as the usual barkers.  You know who they are.

But this crap has nothing to do with gold’s fundamental backdrop.  I think many readers of biiwii.com know my view on that and on the b/s that so readily gets stirred up on the internet when it comes to gold, which is a simple and enduring monetary value asset.

The bear market has driven home to me just how many pitch men and charlatans a good chunk of the ‘community’ are; stumbling all over each other to make ‘the call’ and not giving a damned about how said call – coming straight out the wrong orifice – can affect regular people, who maybe depend on ‘analysis’ they read in their decision making.

So today’s deprogramming and debriefing is this; if you are bullish on gold you’d better be bullish for reasons other than what is going on in Iraq as gold and oil pump together.

Gold in Euros

Not that I want to poke fun at an asset (it’s more its promoters that deserve the poking) that I have considered essential monetary insurance (read: value) throughout its cyclical bear market.  In fact, I believe that Europeans especially should be paying attention now as Gold-Euro fans its way along after closing the Euro Crisis ‘fear gap’ from 2010.

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Gold Price is Up!

Okay, everybody get excited.  The gold price is back above 1300 on a Monday pre-US open.  Woo hoo!  Be sure to check in with your favorite guru to see what he/she has to say.  Maybe this is the big one.  He/she has been micro managing this thing every step of the way after all.  One of these days…

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Gold to $10,000 an Ounce?

This forecaster was anointed by Jim Sinclair when he went bullish.  Evidently he had made a top call at $1900 (really, who did not know that was a top of some kind with the Euro knee jerks momo’ing gold in unsustainable volumes?), I guess giving him credibility and in gold bug circles, guru status as a forecaster.

On the long-term $10,000 gold forecast I am a mere mortal, so I can’t comment.  On the $2,000 in 2014; it’s possible.  On his rationale that the gold stocks will out perform gold because the stock market is going to make higher highs, which would supposedly be good for gold, I must strongly disagree.  I am not saying that the stock market will not make higher highs, but I am saying that I disagree that the case for gold and especially the miners depends on a strong stock market (and by extension, a strong US economy).

Here Daniela Cambone at Kitco Speaks with Bo Polny.  Click the graphic for the video…

Hey Bo… eyes front!  :-)

kitco

[edit]  Kitco appears to be down at the moment [link now working].  You can find this video at Polny’s site if you’re desperate to see it.  Anyway, a reader alerted me to this very funny forum post with a chart of gold that attributes many of Bo’s comments along the way as the price did its ups and downs.  The disclaimer is that I have no idea whether or not these quotes are accurate, but for his sake I hope not.  Click the chart to access the post at Goldtent.org.  You can’t make this stuff up and in the gold ‘community’ sometimes you don’t need to.

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Every once in a while someone links to biiwii from Goldtent and so I check it out.  My impression is that it is populated by some pretty cool people who don’t buy the gold bug b/s and have no interest in cults.