Tag Archives: Gold

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.

gold

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

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Gold-Silver Ratio

I had just done an NFTRH update using GDXJ’s 30 min. chart and the darned chart changed right in the middle of the post (funny thing, those short term views) and I decided that it would just put too much noise on anyone not already off on what looks to be a great weekend, weather wise here in the North East at least.  So that is scrapped.

But part of the post also included the Gold-Silver ratio, which is at an extreme over sold condition.  The chart indicates that gold stocks often decline after sharp declines in the GSR.  All within the normal and bullish context of an extended bottoming pattern?  There’s a very good chance that’s the case.  But silver is over baked vs. gold, at least in my opinion.

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Gold’s Value is Not About Currency Collapse

This article at Hard Assets Investor talks about Jeff Gunlach’s bullish gold call for 2014 and uses Dylan Grice’s 2012 call as an example of how the end of the world (i.e. gold’s safe haven value) can be put on hold indefinitely.

Is Jeff Gundlach’s Bullish Gold Call Too Early?

So is Gundlach wrong today? Grice wasn’t necessarily wrong in 2012. What he called “the largest credit inflation in financial history, a credit hyperinflation” has instead rolled on…taking asset prices higher and crushing interest rates. But it hasn’t, as yet, hit the value of money itself.

Nor will it hit the value of money, especially the US dollar, until all confidence is lost in the system.  We are about a million miles away from that condition right now (see second chart below).  Confidence will be lost first in the assets that are benefiting from the inflation – like stocks, so strategically at the heart of the wealth effect that policy makers are trying to stimulate – and then in policy makers themselves.  Then we’d have a big bull market in gold for all to see.

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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.

gold.weekly

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.

gold.xeu

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.

Precious Metals Observations

  1. This is the first time in a long while (that I can remember) that the goons have not absolutely pummeled the precious metals after FOMC has baffled us with their bullshit and moved along.  Then again, CoT has implied that the right goons have been on the precious metals side lately, especially in silver.
  2. Certain precious metals sector big picture technicals are becoming very bullish in affirmation of the big bottoming pattern (HUI) that NFTRH had on radar well before it became ‘known’.
  3. It sure was entertaining watching the ‘new lows coming in July’ brigade scatter and flip a switch to bullish a few days ago.  Look at former darlings DUST and JDST now.
  4. Take a look at silver’s weekly chart.
  5. Take another look at silver’s weekly chart.
  6. Take a look at silver vs. gold, it’s over bought.
  7. Take a look at HUI vs. gold, it’s over bought.
  8. And both of them are highly constructive toward our longer term bottoming pattern, although over bought is over bought.
  9. Have balance.
  10. Have patience.
  11. Don’t try to make up all your losses (if you didn’t take risk management measures in the bear market) in a day.  It’s not gonna happen.
  12. Things are changing and the dynamics coming into play just might mean more dynamic money making opportunities going forward.  Opportunities to alternatively grow and preserve capital.  This is what we wait for people.
  13. Gold is monetary value.  Always was.  Nothing more.  Tune out the pumpers, who will now grow more vocal.
  14. But the associated speculations… now those can be fun.  If/as the bottoming scenario solidifies, it could be an extended phase where speculation works well.
  15. Did I mention that the sector is getting over bought?

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.

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