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Gold & Precious Metals

The Next Phase in Gold’s Seasonality

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Posted by Ross Clark - Institutional Advisors

on Friday, 15 September 2017 06:22

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The Next Phase in Gold’s Seasonality

Once again gold is entering an important seasonal juncture. In the best of years gold picked up momentum coming out of August (1977, ’78, ’79, ’80, ’82, ’86, ’01, ’02, ’03, ’04, ’05, ’07, ’09, ’10 & ’12). The rallies generally took prices higher into October and occasionally beyond.

Every instance since 1975 that September exceeded the high of the last complete week of August (i.e. last week; Aug 21st-25th) it needed to hold that week’s low. Any breakout that reversed through that support went on to make lower lows (2000, 2006, 2011 & 2016). Last year is a prime example. Prices made new highs on the week of September 9th, violated the $1321 low on September 13th and then dropped to $1125 by December.

Although prices are through the resistance line from the all-time high, any movement through last week’s high means that it is time for traders to place tight stops below last Friday’s low. 

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CHARTWORKS – 8/27/2017 



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Gold & Precious Metals

Gold: Short Cycle Now in Play?

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Posted by Gary Savage - Smartmoneytracker

on Thursday, 14 September 2017 07:30

Cyclical developments in gold, the dollar and yen strongly suggest that gold is in a corrective phase that could last for 4-6 weeks.

 



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Gold & Precious Metals

Precious Metals Bull Analogs Update

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Posted by Jordan Roy-Byrne - The Daily Gold

on Wednesday, 13 September 2017 06:32

We started employing analog charts during the latter stages of the seemingly forever bear market in precious metals. Comparing current to past trends by using price data is not considered technical analysis but it is extremely valuable because history tends to repeat itself. It also helps us identify extremes as well as opportunities. For example, in 2015 it was clear the epic bear market in gold stocks was due for a major reversal. Today, precious metals appear to be in the early innings of a cyclical bull market and the analogs suggest there is plenty of room to run to the upside. 

The first chart compares the current recovery in Gold to past recoveries. In recent quarters we had anticipated a similar, explosive rebound like in 2008 and 1976. However, with 18 months of evidence we can now say the current rebound most resembles the rebounds that started in 1985 and 2001. Both of those rebounds imply Gold could reach $1700/oz by Q4 of 2018. However, if Gold cannot takeout the resistance around $1375 then it could end up following the path of the 1993 rebound. 

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Next we look at the large cap gold stocks. The data is from the Barron’s Gold Mining Index (BGMI) which is one of the few indices with a multi-decade history. If one were to look at the HUI or GDM (parent index of GDX) it would show the gold stocks are currently behind the rebound that began in the fourth quarters of 2000 and 2008. Data from the BGMI implies the rebound in gold stocks is ahead of schedule. In a broader sense, the BGMI certainly has plenty of room to run as many of its bull markets have achieved 7-fold returns. 



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Gold & Precious Metals

"Gold: Key Rebuy Prices"

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 12 September 2017 10:28

Sep 12, 2017

  1. It’s not easy to build wealth in any asset class.  It’s even more difficult to retain it.
  2. On that golden note, please click here now.  Double-click to enlarge this short term gold chart.
  3. Over the past week or two, my wealth building mantra has been, “Book profit now”.  From a technical standpoint, the world’s mightiest metal has begun to show signs of “head and shouldering”.
  4. Head and shoulders top patterns are negative for the price, and it’s normal for them to appear when gold reaches strong resistance.
  5. Strong resistance is not created out of thin air.  It’s created by major fundamental events.
  6. To view the ramifications of one of those events, please click here now. Double-click to enlarge.


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Gold & Precious Metals

Looks Like The COT Report Wins Again, As Gold And Silver Fall Sharply

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Posted by John Rubino - DollarCollapse.com

on Tuesday, 12 September 2017 06:02

Eventually physical demand for precious metals will swamp the games being played in the paper (i.e., futures contract) markets. So every time the commitment of traders report (COT), which tracks those paper games, turns bearish while gold and silver continue to rise, the precious metals community watches hopefully for signs that fundamentals are at long last about to ignite a massive bull run. 

The past couple of months followed this script (see Lightening-Fast COT Reversal: Now Fairly Bearish For Gold And Silver) as gold and silver kept rising for a while in the face of growing resistance in the paper market. 

Here’s a more detailed explanation from Hebba Investments via Seeking Alpha:

The latest Commitment of Traders (COT) report, showed another rise in speculative longs for the EIGHTH straight
week. This two-month streak with the net speculative position of gold traders rising every week, has just tied the record-longest gains streak achieved – in the history of the COT report (going back to 2006) it has never risen for NINE consecutive weeks. History for COT nerds (like myself) could be made next week if gold speculators continue their torrid streak.

About the COT Report

The COT report is issued by the CFTC every Friday, to provide market participants a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. In plain English, this is a report that shows what positions major traders are taking in a number of financial and commodity markets.

Though there is never one report or tool that can give you certainty about where prices are headed in the future, the COT report does allow the small investors a way to see what larger traders are doing and to possibly position their positions accordingly. For example, if there is a large managed money short interest in gold, that is often an indicator that a rally may be coming because the market is overly pessimistic and saturated with shorts – so you may want to take a long position.

There are many ways to read the COT report, and there are many analysts that focus specifically on this report (we are not one of them) so we won’t claim to be the exports on it. What we focus on in this report is the “Managed Money” positions and total open interest as it gives us an idea of how much interest there is in the gold market and how the short-term players are positioned.

Moving on, the net position of all gold traders can be seen below:

Gold-COT-Sept-17

Source: GoldChartsRUS

The red-line represents the net speculative gold positions of money managers (the biggest category of speculative trader), and as investors can see, we saw the net position of speculative traders increase by 18,000 contracts to 250,000 net speculative long contracts. We are now approaching some of the all-time highs in gross and net speculative positions – so gold investors need to be wary.

As for silver, the action week’s action looked like the following:



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