CEF’s net asset value does not imply that the bugz are over bullish. Quite the contrary. It is selling at a decent discount to net assets and could be viewed as a long term value for those who don’t think that precious metals have gone the way of the Dodo Bird.
So as lame as the precious metals (esp. silver) have been acting, this is one for the bulls because it sure is not concerning that gold bugs are not putting their money where their convictions are.
Gold: Goons cover shorts, get less long. Large spec’s sell and get short. That means another incremental improvement this week.
We should watch volumes today to see if there is enough conviction to get GDX, GDXJ and high profile individual miners above the moving average clusters they recently fell below. I’ll try to get a review of that after the market closes, assuming today stays positive.
Well, let’s just say that the baby trend continues in silver vs gold…
If silver takes leadership in the precious metals well, you know how that goes. I have bought, held and added to a silver bullion fund over the last few weeks and it has not been fun. But I did not think of selling it because silver has not broken critical support and the ratio above appears to be holding support as well.
Guest Post by Steve Saville
 Horning in a little on Steve’s post, the chart below was included in an NFTRH update on March 14, with this observation:
“While the GSR [gold-silver ratio] and HUI have indeed spent most of their time in negative correlation, the launch phase of the bull market (2000-2003) was different.”
Also, recall this public post yesterday: Silver-Gold Ratio, Bottom Retest Completing? Bottom line, Steve Saville’s views are in line with my own regarding the gold/silver relationship.
Gold vs Silver
We most recently discussed the long-term performance of the gold/silver ratio only two months ago, but the subject is sufficiently important to warrant some repetition. So, without further ado and with reference to the following monthly chart, here are the main points we made in our 4th February commentary:
Putting in a real bottom (one that a major bull move can generate from) is not easy. A subscriber just passed along a view of the Hulbert HGNSI showing that plucky gold newsletter writers got way over bullish right around the Ukraine hype period. They and their cheer leading are their own worst enemy.
But here is a view of something that has been going on since August that I think could be very relevant. Silver has been declining vs. gold in search of a retest of last summer’s lows for the Silver Gold ratio (SGR). This has gone hand in hand with the big, grinding bottoming process in the precious metals stocks sector.
Just continuing to do what I feel needs to be done in a market like this. The Semi’s would lead a bull charge, while Tech, Biotech and Small Caps would lead the bear. Throw in some indicators like BKX-SPX and especially the Equity Put/Call ratio (making a hidden bear signal that I for one found pretty compelling) and we lean bearish.
As for the precious metals? Well, when we were noting a bearish CoT structure and Ukraine hype, the ‘community’ was noting breakouts and bullish objectives. Nagging details like the CoT? Cue the crickets…
That’s all under the bridge now. It’s what’s directly ahead that is important. NFTRH 284 looks ahead to coming signals, and it’s out now.
They took their foot off the throats of the stodgy old monetary relic and his impetuous running mate as of Tuesday. Here’s the most recent gold and silver commitments of traders reports. There’s probably still more unwinding to do…