Remember that heavy volume in the gold juniors ETF GDXJ? It was a sign of commitment and it was/is bullish.
But what’s good for the goose is now good for the bearish gander in the short term, evidently.
The (3x) bear fund JDST seems to be receiving some of that volume even as GDXJ’s volume dries up (as it should do on a corrective phase within a bullish trend).
It appears a lot of people are hedging. It could be nothing, but that’s a lot commitment building for the gander for a mere corrective consolidation. Would the conspiracy brigade foresee an impending hit from Team Evil? Or maybe it is the sign of a disbelieved rally and is thus bullish. Or maybe it’s nothing.
Just found it interesting is all.
Guest Post by Steve Saville
An interesting aspect of the gold market is that most analysis is off track, with the reasons put forward for being bullish generally being further off-track than the reasons put forward for being bearish. That’s despite gold bulls having the long-term price trend and fundamentals in their favour. The problem is that most gold bulls pay scant attention to the real fundamental price drivers and focus on things that don’t matter. A good example is the current focus on the possible reduction in annual gold production stemming from the combination of rising costs and last year’s decline in the gold price.
Gold is Monetary Value
We preface the post with a statement that has not changed since I began public writing nearly 10 years ago: Gold is not about price; gold is about value. This point was hammered home to me 11 years ago by a person who had much influence upon my viewpoint toward the financial system and its various diseased components at a time when I was ready to listen and understand.
So whether we are talking about 2013′s epic price crash or a new bull trend in 2014, the simple fact is that physical gold itself is a store of monetary value. That applied last year as the value was marked down by greed and confidence and it will apply this year as it is marked up in the face of a likely unwinding of those things. Humans, what funny and hyper kinetic animals.
Precious Metals Speculation
Ah, but this post is about the fun part, the speculative part where we humans can make gains from gaming the simple store of value and its wild little brother, silver. As asset market speculators we care about prices, right? How about the share prices of the completely blown to bits miners that dig the stuff out of the ground?
Gold Continues to amble along in its wedge breakout vs. European stocks (Euro STOXX 50). Stocks may still be bullish, but a funny thing is happening along the way. Gold is not getting blown up in the face of it anymore. The macro is changing my friends. Slowly but surely.
Gold vs. Euro STOXX 50 weekly, from NFTRH 273
One is a leadership breakout play in the form of quality royalty company Franco Nevada (FNV) noted for its imminent attempt at the trend line in an NFTRH Update early last week…
FNV weekly, from an NFTRH Update on Feb. 4 (password protected)
And the other is a bottoming formation in Agnico Eagle (AEM), which was noted in an Update on January 17.
It’s in alignment with a positive view for the whole damn commodity complex and a new wrinkle in the analysis to be fleshed out and kept tabs upon going forward.
Royal Gold (RGLD) was conspicuously strong yesterday as the gold stock sector sagged. It broke upward from consolidation (that worked off an over bought RSI) on volume. This, along with Franco Nevada (another royalty company) are among the cream of the gold sector, in my opinion.
PS: I understand the site is still acting cranky. Thank you for bearing with it. Usually a refresh or two brings it back if
the DB connection is lost you get a 500 server error.