Login

Gold & Precious Metals

Gold: $1400 Is The Key

Share on Facebook Tweet on Twitter

Posted by Stewart Thomson - Graceland Updates

on Tuesday, 28 November 2017 06:09

Nov 28, 2017

  1. The big picture for gold continues to strengthen. Please  click here now. Double-click to enlarge.
  2. In 2016, gold began the year at about $1100, soared $300 an ounce to about $1400, but then it gave back about $250, and ended the year at about $1150 with only a $50 gain.
  3. That price action fit perfectly with my 2014 – 2017 theme of “rough sideways action, initially with a downside bias that develops into an upside bias”.
  4. The year 2018 should see solid Chindian demand, a reversal in US money velocity, and a peak in mine supply. That should push gold up from the enormous sideways trading pattern and into a substantial uptrend.
  5. Please  click here now. Double-click to enlarge this key weekly gold chart.
  6. Note the fabulous increase in volume since 2016. This is very positive.
  7. One of my most important market mantras is that fundamentals make charts. I postulated the “gold will trade sideways with a slight downside bias” thesis in 2014 because I saw gold price discovery transitioning (slowly) away from the fear trade of the West and towards the love trade of the East.
  8. The imposition of the vile 10% import duty in India put millions of jewellery workers on the unemployment line and it caused a huge restructuring of the jewellery industry.
  9. The way it was playing out fundamentally suggested that an enormous inverse head & shoulders pattern would be created as that restructuring progressed. 
  10. The transition in America from deflation to inflation and the peak in mine supply are supporting fundamental factors for the way the inverse head and shoulders pattern has been built.
  11. The bottom line is that in the right shouldering area of a massive inverse head and shoulders bottom pattern, investors should expect the price to trade sideways with an upside bias, and as the pattern nears completion, that upside bias will intensify.
  12. That’s exactly what is happening now. Gold is poised to end 2017 giving back very little of what it gained.
  13. Please  click here now. Double-click to enlarge. The dollar’s action against the yen is a key indicator of the amount of risk that institutional investors are likely to take.


Read more...

Banner

Gold & Precious Metals

Are Trend Following and Gold a Perfect Match?

Share on Facebook Tweet on Twitter

Posted by Charlie Bilello - Pension Partners

on Monday, 27 November 2017 07:21

Market participants are often heard saying things like “you can’t trade Gold on fundamentals.” With no cash flows to discount, Gold is a different animal than stocks or bonds. It is said to swing higher and lower due to changes in investor sentiment alone. Many a trader will advise you to simply follow the trend: 

  • When Gold is in an uptrend, own Gold.
  • When Gold is in a downtrend, go to cash.

Going back to 1975 (when Gold futures began trading), how would such a strategy have fared?

At first glance, pretty good. Owning Gold when it closed above its 200-day moving average and moving to cash when it closed below it would have resulted in a higher return (5.1% vs. 4.6%) with lower volatility (16.5% vs. 20.0%) than buy-and-hold.

Screen Shot 2017-11-27 at 8.09.39 AM

The maximum drawdown: 51% for trend following versus -69.6% for buy-and-hold.


Case closed, trend following wins?

Not so fast. We have yet to include the transaction costs that exist in the real world. The trend following strategy would have traded around 3.75 times per year going back to 1975. At a cost below 0.14% per trade, trend following still beats buy-and-hold. At anything above 0.14%, trend following underperforms.



Read more...

Banner

Gold & Precious Metals

Is This Gold Rally The Start Of Something Big?

Share on Facebook Tweet on Twitter

Posted by Avi Gilburt - ElliottwaveTrader.net

on Friday, 24 November 2017 06:38

First published on Sunday Nov 19 for members:  While I would love to believe that the rally we saw on Friday is the start of the next larger degree break out in the metals complex for which many have been eagerly awaiting, there are many signs that suggest it is only part of a corrective rally.

As I noted in my update last weekend:

“But, please, do not assume we have struck a bottom and expect that we are now ready to break out simply because we see another rally begin in the coming weeks.  The market still has a lot to prove to us, especially since the primary set up we now have on our charts suggest we can see prices that are lower than where we closed on Friday.  But, again, I will certainly maintain an open mind depending upon how the next REAL rally takes shape.”

Now, the question that I still maintain in my mind is if this is even the “real rally” that I have been looking for over the last few weeks.  And, yes, I am still questioning it.

While my primary expectation has been looking for a larger b-wave rally to take shape in gold and silver, many of the stocks I track in the mining complex do not look ripe for the major break out to begin.

First, I want to focus on the metals.   The attached 144-minute silver chart is quite representative of the “mess” we have been experiencing in the metals of late.  My primary expectation is that we should see a rally in the metals, but I am still not quite certain if we will see one more spike down before the larger b-wave rally I am expecting takes shape in earnest.  Unfortunately, due to the messy structure of late in the charts, I have no high probability perspective that suggests we have begun that rally with the move on Friday.  In fact, we still have potential for one more spike down before we are able to strike our targets overhead. 



Read more...

Banner

Gold & Precious Metals

Harry Dent’s Gold Prediction Invalidated

Share on Facebook Tweet on Twitter

Posted by Przemyslaw Radomski - Sunshine Profits

on Thursday, 23 November 2017 05:41

We were recently asked to comment on Harry Dent’s predictions for the gold market and we thought that our reply might benefit other gold investors as well. To be precise, we were asked about Harry Dent’s 30-year cycle that supposedly peaked in 2011, and we supposedly could expect gold to peak again somewhere between 2038 and 2040 (you can watch the interview here). The indirect implication is that gold is not likely to soar sooner and that it’s likely to decline for a relatively long time.

Mr. Dent is referring to gold as a premier commodity and he claims that it moves up and down with the commodity cycle, which, in his opinion, is 30 years.

If the above is really the case, then the previous prediction may be well founded. But is it really so?

We respectfully disagree for two reasons.

The first reason is fundamental. Gold’s price reacts more to flows of gold than to mining supply and demand and thus it behaves more like a currency than a commodity. So, from the fundamental point of view, it may not be justified to view gold simply as a commodity (even a premier one).

The second reason is… Simply checking the facts and the facts confirm our thesis from the above paragraph, invalidating Mr. Dent’s claim that gold moves in a 30-year cycle.

The price of gold was fixed for most of history, so it’s impossible to analyze this cycle directly. No, that’s not our case against the theory. Our case is that we can use the best proxy that we have for the price of gold. The price of gold was fixed, but the prices of gold stocks were not and since the major tops and bottoms in both asset classes correspond to each other, gold miners could be used to check what gold could have done. The gold stocks ratio to the general stock market is even better because by using it we are taking out the part of the mining stocks’ price movement that depends on the stock market volatility.

Let’s check if this is indeed the case with the HUI to S&P 500 ratio (chart courtesy of http://stockcharts.com).

1-hui-spx



Read more...

Banner

Gold & Precious Metals

SELLING OUT OF PRECIOUS METALS & BUYING BITCOIN…. Very Bad Idea

Share on Facebook Tweet on Twitter

Posted by Steve St. Angelo - SRSRocco Report

on Wednesday, 22 November 2017 06:01

There is a new trend by individuals in the alternative media community who are now selling out of precious metals and buying into Bitcoin and cryptocurrencies.  While this may seem like a good idea, especially when Bitcoin and the cryptocurrencies reach new all-time highs, it is likely a big mistake.  Now, I am not saying that individuals shouldn’t invest in cryptocurrencies.  Rather, it’s a lousy idea to sell all of one’s precious metals holdings and put it all into Bitcoin and cryptocurrencies.

Recently, Sean at SGTReport published a short video in which part of the headlined was titled as “SILVER BULL CAPITULATES.”  In the video, Sean explains how past frequent guest and precious metal analyst, Andy Hoffman, has sold out of all his silver and is now only in Bitcoin and gold.  Andy explains in his interview on Crush The Street that he sold all of his silver this summer as he really has no interest in it.  He goes on to say, “Because, in a digital age, I just don’t believe people are going to store thousands of pounds of silver hoping that the gold-silver ratio is going to come down.”

I have to tell you, not only do I find this sort of thinking, utterly preposterous, I also find it quite troubling that analysts who have been promoting precious metals for the past decade are now implying that gold and silver are no longer high-quality stores of value.  I disagree entirely with this faulty and superficial analysis.

There are several reasons why I believe it is essential to hold most of one’s wealth in precious metals than in Bitcoin and cryptocurrencies.  However, the most important factor has to do with the fragile nature of a highly technical complex system that allows Bitcoin and cryptocurrencies to function.  It takes a tremendous amount of energy to maintain and power the internet, servers and computer systems that give life to Bitcoin and cryptocurrencies.

Unfortunately, the majority of the alternative and mainstream media analysts believe in the ENERGY TOOTH FAIRY ( a term coined by Louis Arnoux).  What do I mean by the ENERGY TOOTH FAIRY?  It is the belief by a significant portion of the public and analyst community that the advanced world economy and markets will continue to prosper and grow forever.  Yes, it’s true that some analysts, such as Harry Dent, believe that if we got rid of the corrupt bankers and politicians and allowed people to have a lot more babies, then economic growth will continue indefinitely.

For some odd reason, Harry Dent totally omits the impact of energy on his demographic analysis of the markets.  Does ole Harry not realize that the exponential increase in global oil production has coincided with the exponential growth in human population???  Of course not.  If he did, he would stop focusing on demographics and place his attention on what is happening in the global energy industry.

Regardless, selling out of one’s precious metals holdings might be unwise if we consider that the price of gold and silver are closer to their lows, and Bitcoin and the cryptos are reaching new highs.

PRECIOUS METALS PRICES NEAR LOWS vs. BITCOIN AT RECORD HIGHS

For example, the current gold price at $1,280 is only 10% above its annual average low of $1,160 set in 2015, while silver at $17 is only 8% higher than its average yearly low of $15.68 during the same year.  However, if we look at Bitcoin, the price is near its current high of $8,200:

Bitcoin-2017-Chart

Here we can see that Bitcoin has increased more than ten times from $800 at the beginning of 2017 to over $8,000 currently.  While Bitcoin traders and speculators with Dollar signs in their eyes are betting on much higher prices, let me show you another chart.  This is the first Bitcoin price spike that skyrocketed to over $1,000:



Read more...

Banner

<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >> Page 3 of 370

Free Subscription Service - sign up today!

Exclusive content sent directly to your Inbox

  • What Mike's Reading

    His top research pick

  • Numbers You Should Know

    Weekly astonishing statistics

  • Quote of the Week

    Wisdom from the World

  • Top 5 Articles

    Most Popular postings

Learn more...



Michael Campbell Robert Zurrer
Tyler Bollhorn Eric Coffin Jack Crooks Patrick Ceresna
Josef Ozzie Jurock Greg Weldon Ryan Irvine