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Gold & Precious Metals

Still in a Bullish Configuration (Updated post close)

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Posted by Mark Leibovit - VR Gold Letter

on Monday, 16 July 2012 08:34

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(scroll down for post close comments). FVOI stands for Futures Volume and Open Interest. It is computed like On Balance Volume with the only difference being that open interest (the number of open gold futures contracts) is added into the calculation. FVOI (the red line) is a great tool to tell if the price of gold has gotten ahead of itself or if there is latent strength during gold declines. As you can see in the weekly chart above, FVOI normally tracks very well with gold. It is during times of divergence that the real value of the FVOI is found.

The current divergence is continuing to show that there is positive action going on with regard to the accumulation of gold futures contracts as the FVOI remains just below its recent high while the price of gold tries to rebound off of its early June low. While gold has been chopping around in seemingly directionless trade, the FVOI is still in a tight range just below its high. This is still a bullish configuration that tells us that gold contracts are being accumulated here. Once this accumulation phase is completed, we expect gold prices to move sharply higher. 

Also from Mark Leibovit's VR Gold Letter's extensive Gold News Raw:

Gold will climb 22% to a record by yearend as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc. (SII)

“I just can’t imagine the demand for gold is going down,” he said in a July 9 interview at Bloomberg’s Toronto office. “I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.”

All the above comes from Mark's 24 page VR Gold Letter which you can read more about HERE

Post Close Comments

Ed Note: As you know Mark Leibovit is one of Michael Campbell's favorite analysts and here's a good reason why. I get all of Mark's services, and one thing stood out glaringly in his VR Trader Platinum service. Of the 31 recommended stocks that Mark has liquidated since June 4th/2012 81% of them were closed at a profit. The 6 that were closed at a loss, the losses were very smalll, specifically -.12 cents, -8 cents, -7 cents, -.30 cents , - 2 cents and a "big" -$1.25 on a $39 stock. Moreover of the 8 stocks Mark is currently long, only one is showing a loss at today's close of - 6 cents. 

Now for Mark's closing commens for today:

The stock market is trading modestly lower after retail sales disappointed and following reports that Democrats will let the US go over the "fiscal cliff" if Republicans refuse to raise taxes on the wealthy. But the market is being supported by a better than expected manufacturing survey and hopes for Fed stimulus. The Dow is down 32, S&P down 2, and NASDAQ down 4.

Financials are steady (XLF -0.1%) after Citigroup (C +1.2%) reported better than expected earnings.

Industrials are the biggest losers (XLI -0.7%) after General Electric (GE -1.1%) was downgraded by Morgan Stanley.

Natural resource stocks are also weak (XLB -0.6% and XLE unchanged) as the weak economic data hurt commodity demand.

Treasuries rallied to record highs after the disappointing retail sales report. The long bond future is up 1 2/32 to 152 8/3

The US Dollar Index is trading lower after the US's disappointing economic data and the possibility of new stimulus from the Fed. The US Dollar Index is down 0.198 to 83.151.

The European Central Bank wants to impose losses on owners of Spanish debt even though finance ministers agreed not to do so.

The Euro is up 0.13% against the Dollar.

Precious metals are getting support from a flight to safety, but industrial metals are down on those demand concerns. Gold is up 4.30 to 1593.70 and silver is up 0.03 to 27.37, but platinum is down 12 to 1416, palladium is down 6 to 578, and copper is down 0.0165 to 3.4875.

Oil is getting support from continued unrest in Syria and its political implications. Crude oil is up 0.36 to 87.46.

Retail sales fell 0.5% in June, well below forecasts for a 0.2% increase. It was the third consecutive decline in sales, the first time that has occurred since 2008.

The Empire State manufacturing index rose from 2.3 to 7.4 in July. Economists expected a smaller rebound to 5.0.

The International Monetary Fund reduced its forecast for global GDP growth by 0.1% this year and 0.2% next year. The IMF now expected GDP to expand 3.5% in 2012 and 3.9% in 2013.

------------------------------------------- 
CANADIAN NEWS:

The Canadian market is down modestly, just like the US market. The TSX is down 8 or less than 0.1% and the TSX Venture is down 5 or 0.4%.

The Canadian Dollar is down slightly as traders move to safer currencies. FXC is down 0.12 to 97.88.


 

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Gold & Precious Metals

Now is the perfect moment to Buy Gold says this indicator. It's spied 5 out of 6 bull markets in gold early...

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Posted by Adrian Ash: BullionVault

on Friday, 13 July 2012 08:12

The BULL MARKET in gold is back, reckons Dr. Steve Sjuggerud, writing in his Daily Wealth email.

Now is the perfect moment to Buy Gold. Sentiment is still negative; indeed, a growing section of the investment world hates gold. And we have a hint of an uptrend.

This is exactly what we wait for.
 
In short, things are getting "less bad" in gold. Based on history, I believe we could see enormous gains over the next few months. And our True Wealth Systems computers tell us it's time to Buy Gold.
 
As my True Wealth Systems subscribers know, we track gold two ways. Our first "Gold in Currencies" system tests gold versus four of the major world currencies. The idea is simple. We want to own gold in a bull market. But what is a gold bull market? 

You might hear people say, "It's not a bull market in gold... It's simply a bear market in the Dollar." You see, if the US Dollar is crashing against other currencies, it's likely also going down in terms of gold. So it looks like gold is in a bull market. But what if gold is falling in terms of the Euro or Yen while it's rising against the Dollar? That's not a gold bull market.

So what is a bull market in gold? 
 
One simple definition is: When gold is going up in terms of all the world's most important currencies, it's a bull market in gold. 
 
We used this definition to come up with a simple system for gold. We tested the idea on four major currencies – the US Dollar, Euro, British Pound, and Japanese Yen.

If the average price of gold is up in all four currencies versus the previous month...the Buy Gold. Repeat the next month. That's it.
 
I know it sounds too simple, but it works. We want to own gold when this system says "buy". We've tested the idea on 40-plus years of data. The results are astonishing.

Take a look at this chart from the most recent True Wealth Systems...

sjuggerud13vii

Based on history, buying a double-long gold fund when this system says "buy" is good for 41.4% annualized returns. 
 
Yes, that's right. This system returns over 41% a year when it flashes "buy". 
 
Importantly, these signals are somewhat rare. Our computers say "buy" less than one-third of the time. Meaning, on average, we'll only get about four buy signals every year.
 
And right now, the True Wealth Systems computers tell us now is the time to Buy Gold and ride it higher.

The thing is, we still don't have the uptrend, based on our "Gold Uptrend" system. I'm not concerned, though – that system is a bit slow to signal. Our "Gold in Currencies" signal can be a great "early sign" of a new uptrend in gold.

In short, based on our historical testing, we could be at the brink of a major breakout in gold, but without a confirmed uptrend as yet. Now, I pored over the data and found an incredible result...

In 40-plus years of testing, we've seen six MAJOR gold bull trades. (That doesn't sound like many. But remember, gold went down, consistently, between 1980 and 2000.) Our "Gold in Currencies" system said "buy" before our "Gold Uptrend" system did at the beginning of every trade except one. (In that case, they signaled at the same time.) 
 
In these five cases, our "Gold in Currencies" system signaled "buy" one to three months before the "official" uptrend kicked off. However, being a few months early can "juice" our long-term gains.

The average return on our five gold uptrend trades was 110%. That's an incredible return. However, by following our "Gold in Currencies" system into the trade a few months early, we're able to increase our average return to 133%.

Importantly, every one of these trades was MORE successful because of following the currency system in early.
 
Today, we could be on the verge of another major move in gold. Of course, we can't know if this is the case. But simply based on history, we want to own the yellow metal when our "Gold in Currencies" system says "Buy Gold". Historically, it's good for 41.4% annualized returns, regardless of predicting a new uptrend.

You get the idea – right now is a great time to Buy Gold. It is still a bit hated, and we could be on the brink of a major uptrend.

Get the safest gold at the lowest prices using world #1 for physical ownership – off-risk for anyone else's financial performance – BullionVault...

Steve Sjuggerud13 Jul '12
Former stock-broker, mutual-fund vice-president and hedge-fund advisor Dr. Steve Sjuggerud is the founder and editor of True Wealth. Launched in 2001 and now one of America's best-followed newsletters for private investors, True Wealth also provides free analysis and ideas in the Daily Wealth email service.


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Gold & Precious Metals

Gold Cycles Will Soon Forecast Where Prices Are Headed

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Posted by Chris Vermulen - GoldandOilGuy.com

on Thursday, 12 July 2012 00:00

 How to Buy Dips and Sell Rips in Gold Using Cycle Analysis

Gold and stock market forecaster have been using cycles in price that repeat every certain amount of trading days to help them spot key reversal areas in the financial market. Almost everything in life seems to go in cycles and commodity prices and the stock market are no different.

As we all know the market is very difficult to forecast when using only one set of analysis like cycles. Analyzing price action, volume, market sentiment, market breadth, trends and inter-market analysis are the other key areas which one must understand before they can be in the zone (ZEN) with the financial market and properly forecast future prices.

This report will show you just how well cycles work if applied and traded properly.

How to Buy Dips and Sell Rips in Gold Using Cycle Analysis

The chart below is of gold and shows its short term trading cycles. I will admit this chart is hard on the eyes and as ugly as they get to bear with me.

Three different cycles have been applied to the chart using a short, intermediate and long term cycle wave length. The general idea here is that you want to trade with the underlying trend, then use these short term cycles to profit from weekly price swings.

Gold has been in a down trend for a year so the focus should be on shorting the bounces. Focusing on selling short gold during a time with 2 or more cycles are topping as you stand a great chance of the price moving in your favor within 1-3 days.

Once the price starts to move in your favor you want to scalp to profits once the short term (green) cycle drops near a reversal level. Once this takes place I always tighten my stops to breakeven, lock in some profits and continue to wait for another cycle to reach the bottom at which point I take more profit off the table and tighten my protective stop once again.

As you can see this is not the perfect system but it makes money, and if you apply more analysis to the market you can lock in more of these moves using intraday charts, volume, and sentiment levels.

GoldCycles

How to Find Market Cycles

You must have an analysis tool that can read the market and find cycles within it. Once you know how many days the most frequent cycles are occurring you can then use a custom cycle indicator to overlay them on the charts as seen in the gold chart above. The visual overlay is the key to spotting market reversals and areas to add to a position or trim profits. Look at the chart below for a visual of how I find my cycles.

MarketForecastCycles

Gold Cycle Forecast Conclusion:

In short, gold overall remains in a down trend. But from looking at the gold chart and its short term cycles I have a feeling we will be seeing price trade sideways this week and a bounce next week.

The next week will be very interesting as these cycles will actually give us an early warning if the overall gold market is about to bounce or sell off. The question is what the cycles do in the next few days while gold flirts with support…

It does take some time/experience to read the cycles and get a feel for how they move so don’t worry about it if you don’t fully grasp the idea from this short article. Find out more on cycles and trading at www.GoldAndOilGuy.com

Chris Vermeulen

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Gold & Precious Metals

Special Report Gold 2012 – In GOLD we TRUST

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Posted by Ronald-Peter Stöferle via Peter Grandich

on Wednesday, 11 July 2012 06:31

Ronald-Peter Stöferle has again issued a superb report on gold. He notes:

The foundation for new all-time-highs is in place. As far as sentiment is concerned, we definitely see no euphoria with respect to gold. Skepticism, fear, and panic are never the final stop of a bull market. In the short run, seasonality seems to argue in favor of a continued sideways movement, but from August onwards gold should enter its seasonally best phase. USD 2,000 is our next 12M price target. We believe that the parabolic trend phase is still ahead of us, and that our long-term price target of USD 2,300/ounce could be on the conservative side.

The study Special Report Gold 2012 – In GOLD we TRUST is covering the following topics:

  • Central bank’s monetary inflation supports progressive remonetisation of gold
  • Inflation ≠ rising prices: confusing terminology with grave consequences
  • The chronology of a hyperinflation – Explanation based on Peter Bernholz’ “Monetary Regimes and Inflation”
  • Gold in an environment of a deflationary loss of confidence
  • The biggest misconception with regard to gold
  • High stock-to-flow ratio is the most important characteristic of gold
  • The advantages of a gold standard
  • Financial repression: the alleged magic formula
  • Why gold remains (dirt) cheap in India and China
  • Excursus on Interventionism – It is a fine line between manipulation and intervention
  • On the search for a “fair value” for Gold
  • Possible price targets for gold
  • Why gold is (still) no bubble
  • Gold improves portfolio characteristics The renaissance of gold in traditional finance
  • Why is gold such a highly emotional topic? Cognitive dissonance and normalcy bias as possible explanation
  • Challenges for the gold miners: Peak Gold and increasing resource nationalism
  • Gold shares (still) with historically low valuations

Super job again Ron!



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Gold & Precious Metals

The Gold Stocks Compared to Past Bull Markets

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Posted by Jordan Roy Byrne via Daily Gold

on Tuesday, 10 July 2012 08:46

In researching past equity bull markets, we’ve found numerous similarities between all. Each bull market has three clearly defined phases. The last phase of each bull market is driven by valuation expansion which is made possible through the wall of worry phase in which valuations contract and the weak hands give way to the strong hands. Though the gold stocks may have already bottomed, plenty of fear and despondency persists. However, when one compares the present bull market in the gold stocks to five previous equity bull markets, they should realize that things are on par with the past and the gold stocks are right on track.

The Barron’s Gold Mining index surged from 1960 to 1967. Its wall of worry period lasted from 1968 to the end of 1972. Note that at a bottom in late 1971, the market had made no progress over a six year period. Nevertheless, the gold stocks absolutely exploded thereafter, more than four-fold in only two years. After one final correction from 1974 to 1976, the sector surged higher once again, advancing more than six-fold in four years. We could not find valuation data.

july8edbgmi

....read the whole analysis HERE



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