Tag Archives: Gold

Around the Web

By Biiwii

Market Analysis & News From Around the Pipes…

 

Silver-Gold Ratio & USD

By Biiwii

Okay, one last precious metals short-term micro management exercise before moving back to a more generalized market view.

Actually, this one is pertinent to many other items as it is our gauge for the probabilities of an anti-USD ‘inflation trade’ bounce.  Silver-Gold ratio is still alive despite silver’s hard down this morning, and Uncle Buck is still below his MA 50 despite today’s strong bounce.

sgr.uup

GDX-GLD Ratio

By Biiwii

Well here is what GDX-GLD (equiv. to HUI-Gold ratio) did out of the gate this morning, which is interesting, considering HUI-Gold has been making historic long-term lows lately.

gdx.gld

“Drop Dead Gorgeous”?

By Biiwii

As currently ‘risk OFF’ gold and silver prepare to get thrown out of the bull party (celebrating a bankrupt country’s pending agreement to play ball) once again…

au.ag

…we conjure some stuff that some in the gold “community” were considering last week.

For reasons of decorum I won’t name the source, but the following was written on a chart presented in the weekly free ‘analysis’ of a writer who has somehow managed to do two things all through the gold bear market; 1) remain bullish and 2) always sound authoritative and flat out right.  That is some trick.  Never have I seen a mistake admitted.

“GDX is sporting a drop-dead gorgeous bull wedge pattern.”

NFTRH 348 summed up wedge patterns thusly…

“This is a convenient opportunity for us to be reminded again that Wedges, either bullish
falling or bearish rising, are among the most hyped things in TA. And when they do
work out, they only have relevance for 1-3 days, assuming the chart is a daily like this
one.”

Here is the state of the “drop-dead gorgeous bull wedge pattern” at yesterday’s close.

gdx

NFTRH 348 continued:

Here are some facts…

• HUI lost the key support parameter of 160.

• HUI is below the 50 and 200 day moving averages.

• MACD and RSI are bearish.

• HUI broke out of the “drop dead gorgeous bull wedge pattern” and then soiled
itself the very next day.

• Key support levels now are the November and December lows, just as we noted
last week.

• HUI is bearish until proven bullish, technically. Not the other way around.

I am not trying to be like ‘hey look at me, a genius’.  I am trying to be like ‘hey, this was obvious and I have got to wonder who on earth is still taking the bait in the gold “community”‘.

When there is no more bait and when the fish stop biting, the precious metals will be ready.  I am not bearish gold or silver on a risk vs. reward basis given other factors coming into play, but as we have been noting all along certain indicators and macro fundamentals have just not registered yet.

The way the markets are going, that could change in a flash (today, next week, next month?), but you don’t sit out there spouting dogma with your capital on the line, waiting for the change.  You gather indicators, funda and technical data points and build your case.  The gold “community” may have to wait until the stock mania is fully expressed, again, whether that is today, next week, next month or…

We just don’t have answers, so it pays to just admit as much and do the work in an ongoing way without the need to provide easy answers every step of the way.

[edit]  Durable goods fall 1.8% in May, and gold gets hammered further.  But this is actually a positive to the real, long-term bullish scenario for gold.  The one that ignores cartoons about Indian Weddings, China Demand, strong US economy pushing up prices and sending institutions running for gold’s inflation hedge, etc. etc. etc.  We are of course talking about a counter-cyclical environment.

Gold Ratios Today; Ag-Au & Au-Pd

By Biiwii

A couple of our most recently watched gold ratios..

Silver-Gold ratio bounced today, keeping the hopes of the ‘inflation trade’ alive.

sgr

Gold was down hard today, but the problem for the Palladium-Gold ratio is that the cyclical metal, Pd was down harder.

pall.gold

Here’s the weekly view, showing what looks like a shoe-in that a negative macro signal is going to come about.

pall.gold.wk

<Insert here > the usual caveats about tolerances on timing and individual indicators not being taken in a vacuum; but if this indicator is going to work as it has before, it’s message is not a pleasant one.  And no, I don’t have a clue about how this squares with the bullish things I am seeing in the Semi Equipment sector, another ‘canary’ that chirped the post-2012 up cycle.

It’s why you’ve got to love this market I guess.  It’s wonderfully dysfunctional IMO mostly thanks to the historically vigorous levels of policy input post-2008.

Gold and Silver, and…

By Biiwii

[edit] Whoa!

au.ag

This is odd, but not illogical, given the dynamics in play for the gold and silver CoT data and a possible counter-trend setup we have been watching for in the ‘inflation trade’.

au.ag

Here is the CoT chart for silver that was used in NFTRH 348.  Not so bad is it?  The extreme was set at the first set of arrows, but Silver CoT has improved greatly over the last couple of weeks.

cot.ag
Courtesy of COTbase

Silver would likely lead gold if a bounce in commodities and certain global markets were to take place.  Meanwhile, the actual bullish stuff is elsewhere as the US stock market has re-found its momentum leaders and Europe declines to the upper end of its buy range.

Palladium-Gold Ratio

By Biiwii

With reference to this morning’s bigger picture post, here’s Palladium-Gold ratio in-day today.  That is not what you’d want to see dear happy optimists.

pall.gld

Gold’s Ratio Signals

By NFTRH.com

A brief snapshot of counter-cyclical gold’s macro signals vs. other metals (and broad commodities) that are more positively correlated to economies, using weekly charts…

Each week NFTRH updates many charts of nominal US and global stock markets, commodities, precious metals and currencies over multiple time frames.  But we also cover economic data and indicators, with the first macro chart below (Palladium vs. Gold) still barely holding its economic ‘UP’ signal from January, 2013.  At that time a coming economic up phase did not seem likely, but PALL-Gold and fundamental information gleaned from a personal source in the Semiconductor Equipment sector gave us a good risk vs. reward on that stance.

While it can be argued that using an indicator like Palladium (positive economic correlation) to Gold (counter cyclical) is subject to the discrete supply/demand fundamentals of the two assets, it has worked to signal up and down economic phases, with the most recent shown in Q1 2013 (green arrow).  This indicator has been whipsawing since topping out a year ago and the moving averages are near a trigger point.

pall.gold

A related indicator is Gold vs. Commodities.  Gold-CRB made an impulsive rise in late 2014 as the global deflationary phase topped out.  As policy makers (ECB, BoJ, China Central Planning and US with ongoing ZIRP) continue to promote inflation 24/7, 365 Gold-CRB has dropped as it should when inflation is starting to ‘work’ and inflation expectations start to take hold.  But a problem for hopeful inflationists is that so far at least, counter-cyclical Gold-CRB appears to be in a bullish consolidation.

gold.crb

If cyclical PALL-Gold were to break down and counter-cyclical Gold-CRB to hold support and resume its uptrend the indication for the global economy would be negative.

Another chart worth considering is Gold vs. Copper, the traditionally cyclical red industrial metal.  A series of higher highs and higher lows began in late 2013 and is still in play.

gold.copper

To put perspective on this, behold how bearish nominal Copper is and has been by viewing this monthly chart similar to those we have reviewed in NFTRH for years now to maintain a big picture bearish outlook on this metal.  We have allowed for the current bounce/rally/bear flag, but until $3/lb. is exceeded and held, this is a very bearish picture.

copper

Finally, let’s review Gold vs. its primary running mate, Silver.  Actually, flipping Gold vs. Silver over to the Silver-Gold ratio works best visually at this time.

We are allowing for a bounce in Silver vs. Gold.  This could come about if the Fed rolls over again today and plays nice with its language.  Or it could just come about simply because it is due.  This would go hand in hand with a resumption of the mini inflation bounce implied in TIPs vs. regular Treasury bonds and in nominal Treasury bond yields.  The message of Silver-Gold however, is similar to the charts above on the bigger picture because it is locked below very strong resistance.

sgr.wk

Bottom Line

I consider Gold vs. Palladium and Gold vs. Copper to be indicators on the global economy whereas Silver vs. Gold is more an early indicator on inflationary pressure.

The conclusion is that the economy is in danger of decelerating (Pd-Au, Au-CRB, Au-Cu) amidst a dis-inflationary environment (Ag-Au).  The timing could be by this fall.  First, a resumed bounce in the ‘inflation trade’ has a chance to get reanimated.  But that is not the dominant longer-term trend.

Ag-Au & Pd-Au Today

By Biiwii

With respect to the two metallic market indicators in the previous post, I find it interesting that they are diverging today.  The markets are down, people are concerned about a stock market correction (gotten a look at market sentiment lately?), Greece, the Fed and whatever else they can find to upset themselves with.

But today Silver has been trying to bounce vs. Gold while Palladium is more in line with the bearish festivities going on today.  Silver is trying to sniff out an inflation play, while Palladium is still on the message that an economic signal may be coming in the next few months.  It’s only one day (not to be taken in a vacuum), but both ratios have been dropping for somewhat similar reasons, as they both tend to be cyclical.

Of course, it’s FOMC week so we might expect some whacky things.

slv.gld.pall

NFTRH 347 Out Now

By Biiwii

There is short-term and there is long-term.  Short-term, an indicator of positive inflationary cyclicality looks set to bounce.  Long-term, it is locked well below key resistance.  Joining this long-term Gloomy Gus indicator is another that we used in 2013 to gauge an oncoming economic UP cycle.  It is working its way toward economic DOWN, slowly but surely over many months.

There’s lots of other valuable stuff in #347 as well, including market calls/opinions, stock highlights, interest rates and well, the most comprehensive kit and kaboodle you’re going to find out there.  But then, I am biased.

NFTRH 347 really helped me get my orientations focused.  That’s why I love doing this work.

nftrh347

Stocks Upbeat, US Dollar Downbeat

By Biiwii

US stocks poised for upbeat day as dollar slumps

Well okay, the media has its rationalization, but stocks were obviously at a bounce point yesterday.

Stepping away from the stupid noise that the media inject each and every day, there is a tie-in between the US dollars’s resumed correction, a speculated upon ‘C’ leg up in commodities, the fact that silver vs. gold has room to bounce (but is big picture bearish) and oh yes, this chart’s all-important message…

tyx

‘Inflation expectations’ appear to still be well in play.  But at around the time the ‘Continuum’ above reaches the limiter (AKA 100 month EMA), other indicators should also be at potential termination points.  We finely detailed the plan in an NFTRH update this morning, but for our purposes here, we’ll just note that all of this is counter-trend as it stands now.  So don’t get lost along the way.  Stay on your indicators.