Tag Archives: Gold

It’s the ‘Screw Everybody’ Market

Bulls and bears trading left jabs, and the black boxes just doing what they do, churning the market based on inputs of geopolitical and geo-financial (it’s not a word, I know) angst and inflammatory headlines.  All while a group of interest rate manipulators huddle to try to find the ‘just right’ (ref: Goldilocks) statement to put together tomorrow.

I have one tech company up 5% and the other down 5%. But cash is by far my best holding right now.

As a decidedly non-committed bear I took my own advice and covered all short positions as SPY hit target.   I managed some nice bear trades and still managed to lose money on balance so far this week.  That argues to me that I am not smarter than the market this week and thus, should act accordingly.

As for gold and gold miners, I really don’t know right now.  My already small exposure was eliminated on the pop after yesterday’s breakdowns.  But I tell you folks, if I see the combination of weakening forward-looking data (I could not care less about November’s ‘Jobs’ or Industrial Production) and commodities continuing to implode relative to gold, I for one will be on high alert.  Also, it’s a prime tax loss selling week.  So how real or materially important is that selling in the miners, other than to provide a potential trading opportunity?

Bigger picture, the final piece of the puzzle for gold bugs is the US economy and its headline stock indexes.  This is a very interesting, no compelling market environment for geeks who live for this stuff.   Certain markets and ratios are blowing off (up and down) and it is really fascinating.  Something seems about to change after these terminal moves blow out (cue Silver 2011 reference).

[edit] btw, volatility aside, the stock market has not at all broken its short-term downtrend.

Is the End of QE Bearish for Gold?

Guest Post by Steve Saville

[edit] highly recommended; please read.  Steve Saville illustrates our core philosophy on gold very well here.

The conventional view is that Fed money creation is necessarily bullish for gold and that a tightening of monetary conditions beginning with the cessation of Fed money creation is necessarily bearish for gold. It’s strange that this view is popular given that gold was clearly hurt more than helped by the QE program that extended from October of 2012 through to October of this year. If gold is now going to be hurt by a ‘tighter’ Fed, the implication is that regardless of what the Fed does it’s bearish for gold. If the Fed aggressively pumps money into the economy, it’s bearish for gold. If the Fed stops pumping money, it’s bearish for gold. If the Fed not only stops pumping money but starts hiking interest rates, it’s astronomically bearish for gold! Rather than relying on conventional wisdom, which is usually wrong when applied to the gold market, we’ll now turn to some historical data in an effort to understand how gold will likely react to a less ‘accommodative’ Federal Reserve.

First, some data from the distant past.

Continue reading Is the End of QE Bearish for Gold?

Around the Web

  • NFTRH on the Yield Curve and what it says about risk ON/OFF
  • Josh Brown kicks the pessimists:  Jobs on Jobs on Jobs (Biiwii comment: really, it is what it is; understand it and don’t fight it until forward looking data say so)

 

This “Economic Disaster Zone” Will Create Big Gains Someday

Guest Post by Bill Bonner

1203-DRE-blog

Source: Wikipedia

Dear Diary,

We are here in Lower Manhattan. It does not seem much like an “urban jungle.” It is too cold and rainy.

After a brief excursion outside, you have to warm yourself by an artificial fire, with a coffee. Or, after 7 p.m., with a glass of Jameson. Then the fog of the outside world clears long enough to think about “the hurtin’” and other philosophical puzzles.

Continue reading This “Economic Disaster Zone” Will Create Big Gains Someday

EWI’s Gold Report

Guess who’s been getting bullish on gold?

Swiss reject holding more gold – should you? (Your Free Gold Report Expires Soon)

Only a few days left: A special report on gold — available exclusively to you from an organization we trust — will expire for good at 5 p.m. Eastern time Friday, Dec. 5. If you want to read this Gold Report while it’s still free, please follow this link now.

As gold hit new lows last week, Swiss voters prepared to reject a measure that would have required their central bank to hold a portion of its assets in gold and repatriate 30% of central bank gold stored in Canada and in the U.K.

Many analysts and investors took the referendum’s failure as yet another bearish sign for gold, and gold indeed fell leading up to the vote (as most experts expected the measure’s rejection). But come Monday, the yellow metal rallied back above last week’s highs, turning all the talk about the referendum’s bearish impact on gold into mostly wasted breath.

Elliott Wave International’s Chief Market Analyst Steve Hochberg warned about this scenario in his Monday, Nov. 24, Short Term Update, six days before the Swiss vote:

“The financial media is increasing their focus on the November 30 Swiss vote that would require the Swiss National Bank to double its gold reserve holdings. Speculation is high as to whether the measure will pass but I think the outcome is largely irrelevant.”

You see, if you ask Hochberg and his colleagues, the technical case for gold’s next big move was already made LONG before the first Swiss ballot was counted.

On Nov. 11, Hochberg and his colleagues Robert Prechter and Peter Kendall teamed up for a rare joint issue of their Elliott Wave Financial Forecast and Elliott Wave Theorist publications. Together they laid out their case for the next big move in gold.

“Why should I care?”

Because Hochberg, Prechter and Kendall have provided laser-precision forecasts for the biggest turns in precious metals over the past few years. They were virtually alone in calling for a bear market in gold back in 2011, when everyone thought gold was a buy. Now that gold has dropped 40%, and gold bugs are bugging out, they report the near- to intermediate-term picture has changed, and a new, BIG, countertrend opportunity in gold is dead ahead.

We want to help you prepare for this opportunity, so we have arranged for you to read their latest analysis in full — for free.

But because this move in gold may happen extraordinarily fast, and we have received special permission to share it with you here, you will have just a few days to access this report  — again, it’s 100% on us! — before it goes back behind the paywall of EWI’s Financial Forecast Service.

You have one final week of free access.

At the end of this week — promptly at noon Eastern time Friday, Dec. 5 — all non-subscribers will be locked out of this free special report on gold for good. Only the in-depth, expanded, premium version will be available.

So if you want a quick, two-page update on a BIG developing opportunity in gold, please follow this link for immediate access to your free gold report now »

Simply click the above link, follow the quick steps, and you will have a free, printable version of the report on your screen in a few moments.

P.S. If you own gold and you are considering reallocating the metals portion of your portfolio, please take a few minutes to read this two-page report now. If Hochberg, Prechter and Kendall are right on gold, as they have been over the past few years, you’ll be glad you did. Follow this link to learn more about the report.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

Gold Sector, it’s Not Just the Pom Pom Brigade

The last post was a little perspective on gold over the long-term.  This post calls attention to a post at NFTRH where the writer pops off a bit on the gold bears in light of today’s… what ever it is.  Festivities?

I would normally be pretty cautious about a short-covering event like this, but coming off of a gold-negative hype event as it did, driving silver down to the low-end depths of my 14-16 target in pre-market, I find it notable.

Anyway, the post linked above goes into the need to use not only technicals in the gold sector, but importantly sector and macro fundamentals along with other indicators.  You don’t friggin’ chart in a vacuum!  Especially in the precious metals.

I swear this sector is filled with hyperbole both from the Pom Pom brigade and their evil twins managing what has become an ‘everybody knows’ situation with respect to how bearish gold is.  Just ask that weirdo, Willem Buiter over at Citi.

Perspective on Gold

I bought this position in GLD for my daughter’s custodial account at 64.50 a share and have been compelled to leave it alone for profit recognition/tax reasons.  Gold (GLD), in such a terrible bear market for so long now is still up nearly 80% since purchase.

gld

I can at times be as guilty as the next guy of out thinking myself.  This account has precluded me from doing that with an asset I consider a long-term value (well, gold, not necessarily GLD).

I know, I know.  Harry Dent says 250 to 400/oz. is coming.  But I don’t have a crystal ball and I am not going to trust his.

GOFO Squeeze

Guest Post by Tom McClellan

1-month GOFO rate
November 28, 2014

There is a big squeeze under way in the gold leasing market, a condition which is usually followed by a meaningful gold rally in the weeks that follow.

Continue reading GOFO Squeeze

Huey, Dewey & Louie

huey.dewey.louieLooking around the gold sector at some of those who have tried to keep ‘em bullish all the way down.  The peddlers of hope are irrepressible.

Huey writes that gold stocks are well supported by the enormous expansion in the global gold jewelry business.  In fact, according to Huey Western mining stock shareholders stand to reap substantial reward from the relentless growth in gold jewellery demand.

Do you hear that?  Not just have an end put to their misery but if they will just hang in there a while longer they will be in line for a substantial reward… all due to a supposed fundamental underpinning that has nothing to do with the investment case for gold miners… and is not nearly the best driver for gold either.  Keep bafflin’ ‘em with bullshit Huey.  All the way down… unbelievable.

Dewey is getting excited about the Switzerland gold vote.  This has less to do with a fundamental case on gold than Huey’s constant hair brained babbling about Modi, Indian Weddings, China’s demand and whatever else he throws at the wall that sticks.  Dewey recently got some serious play at MarketWatch and indeed is often seen in the mainstream media.  He also sells gold.  How convenient.

As to the Swiss vote, if it goes positive any hype driven upside will not last.  If it goes negative as I think it might, any downside based on that would be bogus as well.

Louie (who I have never heard of before but works with a key silver figurehead who I have heard a lot of) is going on about the streams of gold leaving Western vaults and heading east.  Yes, it’s the old China demand thing.  The same China demand thing that we had to ignore in 2013 and 2014 to our benefit.  Unfortunately, people who keep grasping at these straws laid out by promoters keep finding disappointment after the hype wears off.

A peak in bullshit was during the summer with all the Ukraine/global geopolitical tensions hype.  They will try to find anything to promote a bullish case for gold.  Ebola?  That was a low point as someone I thought reputable allowed himself to get tangled up in a headline about Ebola being the thing that would finally drive gold and silver prices.  It’s a sickness with this sector.  It’s dumb, dumber and dumberer.

I have tried to lay out some signs to look for with respect to the propped up US economy and even further propped up stock markets.  Gold is not going anywhere until economic signals start to come in (it’s why I posted about something as boring as the Semi sector’s book-to-bill ratio).  Some signs are coming, but not nearly to the degree needed.  Meanwhile, these clowns with their theories that have long-since been discredited, ply their trade.

Now of course, as we have been noting all along, technicals may precede a full fundamental engagement and so technicals I shall continue to use.  There is improvement and being a long-term gold bull I’ll keep on it every step of the way.

But what we will do is real charting (i.e. charting that does not pretend to predict the future), that explains the positive and negative probabilities; not this charting I often see that portrays what the chartist wants it to portray.  Huey actually wrote that “silver bulls need to put on their cheerleading uniforms, and cheer for a breakout.”

You can’t make this up.

[edit]  It is not lost on me that on the internet the delivery of easy to digest content is king.  I sometimes get propositioned about mutually beneficial relationships and what it takes to really rake in the eyeballs.  I get advice like you get X% more opens if you put a shiny picture of gold in an article (seriously). 

I get asked to write bullish things about silver to mutual benefit (i.e. I’d be positioned as a ‘featured’ writer on a given website).  Yes, a lot of the sites you visit that have featured writers – as if they are above the other writers – is simply because those writers took a deal of some sort. 

I have even been labeled an “expert” (which I find a little embarrassing) simply because I write a lot, I guess.  There’s a lot of bullshit out here on the internet folks.  A ton of it.  As I try to become better at marketing my services, I am constantly faced with making decisions to avoid this crap.  Not that there is really any decision to make.  Integrity wins ultimately or else we are all just bunch of tools.

I’ve written the word “bullshit” a few times in this post and that speaks for itself.  Information may be free but it is well massaged and thoroughly evaluated for its potential… to sell something… to somebody.

Around the Web

[edit]  Let’s add a new post at NFTRH.com… Semi Equipment Book-to-Bill Ratio Moderating.

  • NFTRH Dovetails some public content (Stocks vs. CPI and vs. Gold) with some of what this weeks report discussed regarding a potential plan for stocks.
  • Josh Brown on how unfairly Jim Cramer was treated by Jon Stewart during the financial crisis.  Well Josh, I had to laugh at this bit… “Had Cramer pushed back and brought up his vigorously alerting the Federal Reserve to the markets’ problems in advance, it would have been entirely justified.”  I remember the screaming monkey show by a guy who became a made-for-TV alarmist after touting touting and touting stocks some more right into and through the top.  Spare me.  I have however, also been a Daily Show fan from day 1; going all the way back to Craig Kilborn.

 

Investors Hated Gold…

Guest Post by EWI

Investors Hated Gold at Precisely the Wrong Time: What About Now?

Sentiment extremes often foretell major turns in financial markets

Editor’s note: You’ll find the text version of the story below the video.

I came across this sentence in an article about gold:

Nobody expects gold prices to turn up soon…

Another observer put it this way:

There doesn’t seem to be anything on the horizon that will make gold prices go up.

It would be easy to think these comments published last week, when gold’s price reached a 4 1/2 year low ($1,131.85).

Continue reading Investors Hated Gold…