Tag Archives: Gold

A 14 Handle on Silver?

By Monetary Metals

biiwii comment: technical target, even if rally is to resume, extends down into the 14’s first

A 14 Handle on Silver Again?

The prices of the metals dropped by 20 bucks and 20 pennies this week. In other words, the dollar went up ½ milligram gold or 30 mg silver. It wasn’t the euro, which ended the week unchanged. It wasn’t the US stock market, which ended up seven bucks.

What was it?

To answer this, we are reminded of a curious panel at the London Bullion Market Association conference a few weeks ago in Vienna. One of the panelists said “it’s hard to predict the price.” It seemed a lot like saying it’s hard to bend silverware by mind power. The panelists all agreed that the price of gold will fall, to like $800 or so. Readers know that we don’t see any such price in the data (and we don’t heed such predicts based on flawed methodology). Of course the fundamentals could change, but it’s no way to make predictions based on, “well things could change”.

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Happy Halloween

By Biiwii

Hey look, anyone can post a jack-o-lantern with a scary face on Halloween, but how many sites are treating you to a traditional Irish Halloween Turnip?  Hmmm… ?

irish halloween turnip

And so October has come and (almost) gone.  We got what we expected, which was a mother of a bounce, now probing the high extremes of the upside range.  Why is it extreme?  Because if it goes past certain levels it morphs from ‘bounce’ to ‘bears hand it over on downs’, and another opportunity lost to croak this market.

October was so very positive and now the bulls have some good tech earnings and a period that everybody knows is favorable.  I mean, they sold in May right?  Right??  Sure they did; a lot of them sold in August (and some bought back in October).  So it’s the bullish November-April cycle beginning on Monday.

All I can say is don’t swallow the bromides, promos and infomercials coming from people who manage other peoples’ money for a living (i.e. the mainstream financial services industry and its associated media).

While I am not net short yet, I sold a little Apple here, added an EM short there and am skulking my way to the door.  I have had some great trades and some real goofs on this bounce but it is time to realize that play time is ending and now only the true believers are going to take this market higher or going the other way, lower.

There is a very real possibility that the wonder bounce has been a last chance to sell.  I am not saying that because I want the market to drop, which I do (because I find it easier to manage when people are spooked), but because the balance of the indicators (technical and macro) still say that the intermediate trend is changing to down.

[edit] Work done in NFTRH 367’s first 6 pages implies there could be an opportunity for one more small pop higher, though none of the above is altered materially if that plays out.

Over in precious metals, the spooks came on cue, 10 HUI points below our ‘bounce’ target zone.  This was completely view-able in advance through the CoT structure.  It’s confirmation was in the reversal in silver vs. gold, post FOMC.  While for the moment I am net short the PM’s, I have a few quality miners tucked away in my pocket.  This is not because of some idealistic viewpoint but rather, because my view of a coming macro change has not been eliminated by the market bounce.

Speaking of FOMC, it was really interesting that they decided to put a little pin prick in the fabric of things with that ‘at its next meeting’ wording.  Meanwhile, another sign of manufacturing degradation has burped up in the economy.  You won’t find it on financial TV where some guy jumps around like a gorilla on crack to entertain the investing masses.  But you will find it faithfully chronicled each month by a guy formerly in the medical device manufacturing industry.

The market road map has been loss of momentum → downside resolution → bounce attempt → downside retest → mother of a bounce…  all very manageable and logical.  Now it gets interesting again because irrationally bearish sentiment is fixed, technical limits are upcoming and market/economic indicators are questionable at best.

Happy Halloween!

Little Change to Gold and Silver Supply/Demand

By Monetary Metals

At the risk of being boring, there’s not a lot to say about the markets for gold and silver this week (and frankly being on a challenging travel itinerary, flying from Vienna to Sydney to give a keynote at the Gold Symposium this week, is part of it). There was a modest drop in the prices of the metals, $13 in gold and 21 cents in silver. As it usually does, the silver price moved more than the gold price.

Of course, it’s only boring if you aren’t in the markets. If you are then quiet weeks are OK, but you still pay attention.

It’s the basis that tells us what this means, if anything.

Read on for the picture of supply and demand fundamentals…

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Goldman’s Bearish Gold View…

By Steve Saville

[biiwii comment: right on Steve-o… ]

Another Look at Goldman’s Bearish Gold View

Early last year I gave banking behemoth Goldman Sachs (GS) credit for looking in the right direction for clues regarding gold’s likely performance, which is something that most gold bulls were not doing. In November I again gave them credit, because, even though I doubted that the US$ gold price would get close to GS’s $1050/oz price target for 2014, their overall analysis had been more right than wrong. It was clear that up to that point the US economy had performed better than I had expected and roughly in line with the GS forecast, which was the main reason that gold had remained under pressure; albeit, not as much pressure as GS had anticipated.

But this year it was a different story. Here’s what I wrote in a TSI commentary in January-2015:

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And Then There Was None (Backwardation)

By Monetary Metals

No backwardation in gold and silver…

The dollar dropped about half a milligram gold, and 50mg silver.

But who wants to read about the universal currency falling, failing? Few people are so barbarous as to think of the dollar’s value as being priced in terms a monetary metal. As all right thinking folks know, the value of these commodities is only whatever dollar price they may fetch. In that case, it’s more exciting to report that popular betting commodities are back in a bull market.

“Gold went up $21 and silver went up $0.20.”

OK that said, what we are always interested in is the fundamentals. Every week, we say, “read on, for the only true picture gold and silver supply and demand fundamentals.” What do we mean by that?

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Gold Stocks: Different This Time

By Biiwii

The title does not include a (?) after it and that is for a reason.  The gold sector’s fundamentals, both sector-specific and macro, are improving and this was not the case during the last exciting upturn in the sector circa summer 2014.

Back then, everything from Russia’s move into Ukraine to the Ebola scare were imagined to be sound drivers of the gold price.  This stuff proved, as expected, to be wrong when the whole complex made new lows in November of 2014 (prior to this year’s ultimate lows).

What is driving gold and the gold sector this year?  The things that we have been saying for years now would be needed.

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Daily Gold Ratios

By Biiwii

Because well, it’s only the thing I am most obsessed with in the financial markets  :-)

Gold-Oil (GLD-USO)

gold-oil ratio

Gold vs. Commodities (DBC)

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Gold is Not Money, Part 2

By Steve Saville

I opened a blog post on 7th October with the statement that gold was money in the distant past and might again be money in the future, but isn’t money in any developed economy today. I then explained this statement. The post stirred up a veritable hornet’s nest, in that over the ensuing 24 hours my inbox was inundated with dozens of messages arguing that I was wrong and a couple of messages thanking me for pointing out the obvious (that gold is not money today). The negative responses were mostly polite*, but in many cases went off on a tangent. Rather than trying to respond individually, this post is my attempt to rebut or otherwise address some of the comments provoked by the earlier post on the same topic.

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Gold vs…

By Biiwii

Gold vs. other things.  Draw your conclusions and talk amongst yourselves…

gold vs. s&p 500

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