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
The Palladium Gold Ratio is one indicator we used over a year ago to indicate 2013′s economic growth spurt. Ref. the most recent up arrow. While the ratio is looking wobbly, a new down signal would only begin with a drop below the lower of the two moving averages and be confirmed by an eventual cross of the moving averages.
Palladium Gold Ratio, weekly chart (NFTRH 277)
The Payrolls data are a jumble of interpretations and misinterpretations. The ISM was however, an unmitigated negative. We’ll see if the likes of Pall-Gold and other indicators confirm in the coming months.
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.
There are definitely nominal technical parameters we are watching for the health of the precious metals rally, jagged, nerve wracking thing that it is. The HUI Gold Ratio is however, just fine as it sits now. Barely budging off recent bullish action.
In fact, if it clears the 200 day moving averages, some momentum could finally get into the sector.  Okay, so it’s GDX-GLD. Same diff…
A 35 page monster (lots of pertinent charts and graphics, so it’s not as difficult a read as it may sound) was just sent out to NFTRH Premium subscribers. It’s a good one too. Filled with probabilities in alignment with our bigger picture plans for the financial markets, and yet some short-term moderation of views as applicable.
Friday was a scary day for the US stock market. Said market is not broken, but the indicators beneath it are rapidly coming apart and the bull market’s technical parameters are coming into play. Then there is gold and other ‘risk off’ things. So much to discuss and 35 pages really was not enough. Good thing we have nothing but time to lay it all out going forward in 2014.
NFTRH 275, a solid piece of work… out now.