Gold & Precious Metals

Gold sector macro fundamentals take a turn

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Posted by NFTRH & BiiWii

on Monday, 26 March 2018 05:28

Gold vs. major stock markets got impulsive to end the week. The case appears to be building, pending the macro relief that will come when fear and angst max out on the short-term - R. Zurrer for Money Talks

If you have followed my work for a while you probably know me as the guy who keeps insisting that the precious metals will not be ready until some strange interplanetary alignment comes into place. That would be the Macrocosm, our handy pictorial (rough) representation of the optimal backdrop for a real bull view on the gold sector.


See the biggest planet out front? Well, gold has started to make some inroads and if the stock market correction proceeds to its worst near-term potentials (options are a hold the 200 day averages and rally, or a decline to a clear SPX gap around 2460, which would open the possibility of a new intermediate downtrend) the gold sector would get a key macro fundamental underpinning. For reference, see today's article Gold's Fundamentals on the Move: PM Price Moves Should Follow.

In that article, we look at one economic/market cycle indicator on the verge of going negative. That is the ratio of gold (counter-cyclical) to Industrial Metals (cyclical).

But I would like to excerpt some of NFTRH 492's Precious Metals segment for eLetter readers to expand on the theme. The segment also went on to discuss gold and silver prices, CoT data (silver is now very compelling from a contrarian perspective) and review 29 daily charts of miners that I have interest in. 

Precious Metals



Gold & Precious Metals

Will Gold Breakout? 3 Things to Watch…

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Posted by Jordan Roy Byrne - The Daily Gold

on Friday, 23 March 2018 15:19

Watch for 3 three key numbers at next Friday's close: 1. The March Monthly/Quarterly/Next Friday close above the $1330.00 level (hasn't happened for 6 years, not since 2012. 2. Staying above the 200 day moving average at 12.92.07 3. Last, see if the GDX and GDXJ break above roughly $23 for GDX and $34 for GDXJ. - R. Zurrer for Money Talks

Gold has firmed above $1300 in recent days and is holding comfortably above $1300 for now. We think the market will break to the upside sometime this year. The question is when. Here are 3 things to watch that will tell us if Gold is on the cusp of that break-out soon or later. 

First, keep your eye on Gold’s close at the end of next week. It’s not only the end of the week and month but also the end of the quarter. While Gold has traded above $1350 multiple times in the past two years, it has not made a quarterly close above $1330 since 2012. Since this is a quarterly time frame, we would need to see a close above $1340 or even $1345 to mark a significant breakout. If Gold can make such a close next Friday then the odds are good that it could break above $1375 fairly soon.  



Gold Quarterly Chart

Second, (and I always beat this to death) Gold needs to break its downtrends relative to foreign currencies (FC) and equities. The Gold/equities ratio appears to be breaking out but needs follow through for confirmation. The 200-day moving average in that chart appears to have stopped declining. If the ratio can hold above the 200-day moving average then it’s obviously a bullish sign. Meanwhile, Gold/FC has work to do. Over the last 10 months, it has traded in a tighter and tighter range. That trendline resistance could go hand in hand with resistance at $1365-$1375.



Gold & Precious Metals

Record Low Volatility in Precious Metals and What it Means

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Posted by Jordan Roy Byrne - The Daily Gold

on Tuesday, 13 March 2018 06:39

Record-Low-Volatility-in-Precious-Metals02 opt1Usually the most naturally volatile of markets, Gold Stocks are showing  too are showing 14 - 25 year lows in long-term volatility in several indicators. It has been a tough time with the US Dollar rallying with the election of Donald Trump. Sooner or later extreme low volatility will change. Jordan estimates that will occur within the next 18-24 months. R. Zurrer for Money Talks

The past 18 months have been difficult for precious metals investors. If you had known Donald Trump would be elected and the US Dollar would soon begin a nearly 15% decline, you would have expected Gold to blow past its 2016 high. You would have been shocked to see the gold miners and junior gold stocks trading lower. Gold has fared okay but the gold stocks and Silver have lagged. As US equities have continued to power higher, precious metals have struggled to perform while volatility in the space has dwindled. Precious metals volatility has reached extremely low levels and this is a sign that a major move, while not necessarily imminent is surely on the horizon. 

We plot a weekly bar chart of Gold that includes a handful of volatility indicators such as the Gold Vix (GVZ), Average True Range (ATR) and several bollinger band widths (BBw). These indicators have touched major lows in recent months. The Gold Vix which began trading in 2010 recently touched its lowest level ever at 9. ATR recently touched its lowest level since 2007. The 40-week and 80-week BBw’s recently hit their lowest levels since 2005 while the 160-week BBw recently touched its lowest level since 2002.

Like Gold, Silver is showing significantly low levels of long-term volatility. Its ATR recently touched its lowest point since 2006. The BBw for three time frames (40 week, 80-week and 160-week) recently touched 14 year lows. 

Although the gold stocks are one of the most naturally volatile markets, they too are showing significantly low long-term volatility. Below we plot the NYSE Gold Miners Index, which is the parent index of GDX along with similar volatility indicators. The ATR indicator recently touched a 15 year low. Interestingly, both the 40-week and 80-week BBw’s recently hit some of the lowest points of the past 25 years. The 40-week BBw recently tied 2007 for the lowest point in the past 25 years while the 80-week BBw recently touched a 6-year low and its 3rd lowest point of the past 25 years. 



Gold & Precious Metals

FREE TRIAL OFFER - Murenbeeld & Co

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Posted by MoneyTalks Editor

on Friday, 09 March 2018 14:57

The best of all possible introductory prices for Martin Murenbeeld & Co's research on gold - FREE! Take advantage of this MoneyTalks opportunity to read what one of the world's foremost precious metal experts thinks. CLICK HERE or on the image below and then select the Free Trial Offer button in the top right hand corner of Martin's home page. ~ Ed.

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Gold & Precious Metals

Silver Investment: The Lowest Risk, Highest Return Potential vs. Stocks & Real Estate

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Posted by Steve St. Angelo - SRSRocco Report

on Monday, 05 March 2018 06:28

One thing I really respect about this analyst, Steve St. Angelo, is that he makes a very clear argument using graphics and fundamentals. One look at the first chart certainly tells you which of Real Estate, the Dow Jones or Silver is in the "low risk" position. A well written, strong argument - Robert Zurrer for Money Talks

While silver is completely off the radar to most investors, it will turn out to be one of the best investments to own as the massive amount of leverage in the stock and real estate market evaporates.  Unfortunately, investors, today are no longer capable of recognizing when an asset displays a HIGH or LOW risk.  Thus, fundamental indicators are ignored as the investors continue the insane strategy of “Buying the Dip.”

A prudent investor is able to spot when an asset becomes a high risk and then has the sense to move his or her funds into one that is a lower risk.  However, the majority of investors do not follow this practice as they are caught by surprise when a Market Crash occurs… again and again and again.  Even worse, when investors are shown that the indicators are pointing to assets that are extremely risky, then ignore it and continue business as usual.

Today, complacency has turned investors’ brains into mush.  They are no longer able to discern RIGHT from WRONG.  So, when the market really starts to correction-crash, they will hold on to their stocks waiting for Wall Street’s next BUY THE DIP call.

Regardless, if we can understand the fundamentals, then we would be foolish to keep most of our investment funds in Stock and Real Estate assets.  The following chart follows the KISS Principle – Keep It Simple Stupid:


You don’t need to be a highly-trained financial or technical analyst to spot the HIGH vs. LOW-RISK assets in the chart above.  Hell, you don’t even need to see the figures in the chart.  If we understand that all markets behave in cycles, then it’s common sense that asset prices will peak and decline.  We can plainly see that both Real Estate and Stocks asset values are near their top while the silver price is closer to its bottom.

Thus, assets that are near a top are HIGH RISK, and those near a bottom are LOW RISK.  It’s really that simple.

Now, if we look at each chart separately, we can easily spot which assets will be the BIG LOSERS in the future.  According to the St. Louis Federal Reserve data (FRED), the U.S. Median Home Sales Price of $324,550 is nearly $100,000 higher than the bubble in 2007:



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