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Gold & Precious Metals

Gold Somewhat Ignores Dollar Weakness

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Posted by Jordan Roy-Byrne - The Daily Gold

on Friday, 19 May 2017 20:20

The precious metals complex rebounded as expected after becoming very oversold just a few weeks ago. The rebound has been aided by weakness in the US Dollar, which plunged roughly 2% over several days. However, upon further inspection Gold’s rebound has been entirely dollar-centric. Gold has remained weak in real terms and strength in the gold stocks and Silver has been rather muted. In short, the lack of much stronger performance in the face of US Dollar weakness bodes for increasing downside risk over the near term. 

Gold’s recent strength has been driven entirely by Euro strength and not due to falling real interest rates, its primary fundamental driver. Macron’s win in France coupled with recent strength in European markets has supported what was an oversold and depressed Euro. This has supported Gold in US Dollar terms but only in those terms. As the chart below shows, Gold has been weak when measured against foreign currencies and equities.

May192017Goldvs

The above chart shows that Gold remains well below its spring high near $1300 despite the US Dollar breaking its spring lows to the downside. In addition, Gold remains rather weak relative to foreign currencies and equities. The one hope for Gold would be a falling stock market and sustained strength in the Gold/equities ratio. While I expect that eventually, I do not think it is in the cards yet.

Turning to the gold mining stocks, we see immediate downside risk as the miners appear to have completed their oversold bounce.



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Gold & Precious Metals

Gold Update…Shaking The Tree

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Posted by Rambus Chartology

on Friday, 19 May 2017 01:13

There is a pattern forming on gold which wasn’t there yesterday. With yesterday’s big move up and no follow through to the upside today there is a potential H&S top building out. Many times I will use a neckline symmetry line which is taken from the neckline and moved up to the top of the left shoulder to show the possible high for the right shoulder. There is another technique I use where I will use a horizontal line from the top of the left shoulder that can sometimes show the height for the right shoulder. Today’s high at 1265 matches the high for the left shoulder. I’ve been showing the possible neckline as a S&R line, but now after yesterday’s move it’s looking more like a possible neckline. The breakout will come into play around the 1220 area which will confirm the H&S top.

Click twice on chart for largest version

gold-1-1

There is another technique I’ve shown you in the past that has to do with a wedge pattern. I’ve been showing you that gold has broken out of a bearish rising wedge with a breakout gap and a backtest today to the underside of the bottom rail. This technique I use shows how the left shoulder and head form inside the wedge and the backtest to the underside of the rising wedge forms the right shoulder. It ‘s still very early yet, but these two techniques show a strong possibility that gold may well be forming a H&S top.



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Gold & Precious Metals

Silver: Train Leaving Station Soon!

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Posted by Gary Christenson - The Deviant InvestorInvestor

on Thursday, 18 May 2017 08:54

Silver prices are rising along the bottom of a 20 year log scale trend channel (shown later). There are no guarantees in a manipulated paper market, such as COMEX silver, but it is possible that silver prices will collapse further, or more likely, move substantially higher, sooner rather than later.Silver prices COULDfall from their current level of $16 – $17 to under $10. Other events that COULD occur include:

You could win the Powerball Lottery.

The U.S. congress could balance the budget and reduce debt.

The Federal Reserve could apologize for destroying the dollar.

President Putin and Hillary could sing “Kumbaya” together.

The Middle-East could ascend into a century of peace.

And it is possible that silver prices could drop under $10.

But realistically, we know:

  1. The Federal Reserve has devalued the dollar for over a century and is openly advocating for at least 2% inflation – more devaluation. Expect continuing declines in the purchasing power of the dollar.
  2. The U.S. congress, the President, the military, thousands of military contractors, the medical/health/sick care system, and millions of people collecting Social Security do NOT want spending decreased. Expect more spending, deficits, ever-increasing debt, and of course, more consumer price inflation. Silver prices will rise.
  3. Silver prices have risen exponentially for the past 90 years as the dollar has been consistently devalued. Expect continued silver price rises. See log scale graph below.

word-image-4

SILVER TO GOLD RATIO:



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Gold & Precious Metals

An Unexpected Change In Gold’s Seasonal Trading Pattern

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Posted by Frank Holmes - US Global Investorsrs

on Wednesday, 17 May 2017 03:37

Here at the outset, I want to share with you an interesting observation we made last week of gold’s seasonal trading pattern. As you can see in the chart below, based on data provided by Moore Research Center, the five-year pattern, represented by the orange line, is diverging from the longer-term trends. Note that the index on the left measures the greatest tendency for the asset to make a seasonal high (100) or low (0) at a given time.

holm1605A

(Click to enlarge)

The data show that lows are now reached late in the year, not in January (according to the 15-year period, represented by the dark blue line) or August (according to the 30-year pattern, represented by the light blue line). Historically, September has seen the highest returns on gold as Indians make huge purchases in preparation for Diwali and the fourth-quarter wedding season, but lately we’ve seen changes. When we calculate the average monthly returns of the past five years, from January 2012 to December 2016, we find that January is the strongest month, returning 5.3 percent, following by August with 2.3 percent. September actually returns negative 1.3 percent.

There could be a number of reasons why this is, but it’s important to recognize that the five-year period captures the bear market that dragged gold from its high of $1,900 an ounce in August 2011 to a recent low of $1,050 in December 2015. The years 2013, 2014 and 2015 all saw negative returns, so it’s little wonder why the orange line trends down from February-March to December.

Inflation Props Up Gold



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Gold & Precious Metals

Canary In The Silver Mine

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 16 May 2017 07:15

May 16, 2017

  1. The average gold market investor should be quite happy right now. If that’s not the case, the investor has likely used price projection analysis as a reason to “chase price”, and needs to deploy a new set of market tactics.
  2. Please  click here now. Double-click to enlarge this very nice looking daily gold chart. Gold has been in an uptrend since December. Note the consistent pattern of higher highs and higher lows on the chart.
  3. I use the 14,7,7 series Stochastics oscillator on key daily charts instead of the popular 14,3,3 series, because it smooths out a lot of false signals.
  4. As the oscillator reached the oversold area of about 10 in mid March, Indian dealer stocking for Akha Teej was ramping up, and the oscillator slowly became overbought in the 90 area.
  5. It’s important for investors to look at major fundamental events like Chindian festivals and US central bank policy changes. 
  6. When those events are in play with the 14,7,7 Stochastics oscillator in the oversold position at about 10, significant rallies can be expected to occur in the gold market.


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