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Gold & Precious Metals

How Much Of A Pullback Can We Expect?

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Posted by Avi Gilburt - Elliottwavetrader.net

on Wednesday, 25 January 2017 08:06

First published Sat Jan 21 for members:  Bulls and bears in this complex probably need a Xanax by now.  This market has swung so dramatically over the last several years that many are probably so whipsawed that they don’t know which way is up.  But, for now, the market is setting up in a manner to take us up even further in 2017, and potentially even further than many believe. 

As I noted last weekend, silver has finally joined the party, and has completed quite a full 5 waves up off the lows, and potentially even more.  And, as stated last weekend, since everyone was looking for a pullback coming into this past week, the market did just the opposite and continued higher early in the week.  So, can we see more of a pullback in the coming week?



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Gold & Precious Metals

Trump Is Gold Rally Accelerant

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 24 January 2017 08:31

Jan 24, 2017

  1. The 2017 gold market rally continues nicely, with a current pause at light overhead resistance in the $1215 - $1220 area. 
  2. Please  click here now. Double-click to enlarge this daily bars gold chart.
  3. Note the flat lining action of the 14,7,7 Stochastics oscillator at the bottom of the chart. That’s quite positive, and opens the door to a further move towards my $1245 target price area.
  4. Please  click here now.  Donald Trump is likely to be a positive catalyst for higher gold prices, for many reasons.
  5. On the geopolitical front, the South Sea island building by China looks like it could quickly become a major gold price driver.
  6. Trump has also been very clear about his goal of slowing US corporate outsourcing of labour to foreign countries. 
  7. This is quite inflationary and could end up creating a bit of an earnings quagmire.
  8. Please  click here now. Double-click to enlarge this daily bars US dollar versus Japanese yen chart.
  9. It’s true that US bond market yields have risen a bit, but Trump’s dollar-negative statements are overwhelming the rise and putting downwards pressure on the dollar against both the yen and gold.
  10. Gold has stopped rising at $1215 - $1220 at the same time as the dollar has stopped falling at 112.50 against the yen. 
  11. All Western gold community eyes should be focused on that 112.50 dollar versus yen price. If the dollar falls below that support, it should send gold through $1220, and on towards $1245.
  12. Many gold analysts have been trying to call an end to the current rally, and have been negative since the December lows. In contrast, I would argue that the rally is poised to accelerate.
  13. I don’t think these analysts really grasp the tremendous influence that Trump and his team can have on the value of the dollar against key currencies like the yuan and the yen.
  14. Please  click here now.  Double-click to enlarge this daily bars chart of the dollar versus the Swiss franc.
  15. The dollar is beginning to look like a train wreck on this chart. It’s broken down from a head and shoulder top pattern just as Trump has been inaugurated!
  16. When push comes to shove, the US Treasury has vastly more power than the central bank wields, and the Treasury has legal authority to devalue the dollar. The Fed has no such authority.
  17. Janet Yellen’s recent negative statements about Trump’s stimulus policies will fall on deaf ears, and may create a backlash. 
  18. Janet would not fare very well in a confrontation with Trump. I expect future statements from her about US government policy to become quite timid as she begins to realize how determined Mr. Trump is to lower the value of the dollar.
  19. Please  click here now. GDX is breaking out of a small ascending triangle, and making a beeline towards my $25 target zone.
  20. Technically, GDX looks superb now. The green downtrend line is now support, as is the horizontal resistance at $22.50!
  21. The bottom line is that the traffic light is turning green for most gold stocks, while President Trump turns it red for the dollar.
  22. Please  click here now.  Double-click to enlarge this Kinross daily bars chart.
  23. It’s blasting upwards from an inverse head and shoulders pattern at a key support zone. Investors can book some light profits near the $4.22 price zone, and use my unique pyramid generator to do so systematically.
  24. Donald “The Golden Trumpster” Trump may or may not make debt-soaked America great (he likely won’t), but he’s almost certainly going to make gold ownership a great investment during his presidency. I will dare to suggest it’s time for the Western gold community to throw a bit of caution to the wind, and sit back and enjoy this gold price rally. This is a rally that seems poised to accelerate in quite a shocking way, as the Golden Trumpster makes one dollar-negative move after another!

Thanks! 

Cheers
st



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Gold & Precious Metals

Great Rotation and Gold

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Posted by Arkadiusz Sieron

on Friday, 20 January 2017 07:23

The performance of gold in 2017 depends largely on whether the Trump’s presidency will lead to lasting shift in the markets. What changes do we mean? Some analysts mention the reflation, others point out the ‘risk on’ sentiment and the ‘great rotation’ out of bonds and into stocks. Ray Dalio, the founder and chairman of Bridgewater, claims that the Trump’s victory was a turning point ending the period characterized by increasing globalization, free trade, and global connectedness; relatively innocuous fiscal policies; sluggishGDP growth, low inflation, and falling bond yields. The new period is believed to be characterized more by decreasing globalization, free trade, and global connectedness; aggressively stimulative fiscal policies; increased economic growth, higher inflation, and rising bond yields.

Indeed, the U.S. Treasury yields, stock prices and inflation expectations have increased since the U.S. presidential election, which may really signal that we had already made the secular low in bond prices and inflation. We do not argue with that. The million-dollar question is whether these changes will be permanent, or, in other words, whether the expectations of Trump’s pro-growth policies are realistic.

You see, the whole reasoning is based on three premises. First, the new president will inaugurate a heavy schedule of fiscal spending. Second, this fiscal stimulus will significantly contribute to the economic growth and force the Fed to accelerate its tightening cycle to prevent the economy from overheating. Third, the tax cuts and boosted government spending will lead to higher inflation and, thus, higher long-term interest rates. Fourth, Trump will trigger a new ‘Reagan revolution’.

However, there are serious problems with these assumptions. First, Trump’s proposals would take a lot of time and political negotiation to be implemented and it would take even more time to influence the U.S. corporations’ profits. If they are introduced at all, because Republicans may actually not support higher fiscal deficits. Similarly, infrastructure projects have never been high on the Republican’s agenda. Actually, Trump did not say anything about more government spending. Instead, he proposed tax incentives for private companies to invest in infrastructure. Second, assuming that the U.S. economy is close to full employment (as the Fed argues), the increased government spending (if it happens and if it is funded by direct or indirect money printing) may only increase inflation instead of accelerating real economic growth (by the way, government projects are often ineffective). Third, it is not clear how the mere redistribution of funds from the private sector to the government or vice versa should increase inflation. However, assuming that it will, the widely expected higher inflation would increase nominal interest rates, but not real interest rates, which are crucial for the gold market. Fourth, the macroeconomic situation is now completely different than under Reagan when interest rates and inflation were much higher, while the public debt was relatively low. Therefore, Reagan had fiscal room to increase indebtedness and had a major tailwind in the form of potentially lower interest rates, in contrast to Trump who will face rising interest rates and an already high debt-to-GDP ratio, as one can see in the chart below.

Chart 1: The U.S. public debt-to-GDP ratio (green line, left axis, in %) and the 10-year Treasury yield (red line, right axis, in %) from 1980 to 2016.

1-public-debt-to-gdp-interest-rates



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Gold & Precious Metals

BIG MOVEMENT AHEAD IN THE SILVER MARKET… Serious Trouble In The Paper Markets

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Posted by Steve St. Angelo - SRSrocco Report

on Wednesday, 18 January 2017 07:39

The Silver Market will experience a significant trend change in the future due the unraveling of the paper markets.  Already we are witnessing a lot of political turmoil and havoc as President-elect Donald Trump gets ready to take over the White House in the next few days.

It’s also logical to assume the policy changes President-elect Trump wants to make will cause serious ramifications to the highly leveraged debt-based fiat monetary system… whether he realizes it or not.

Craig over at TFMetalsReport.com recently interviewed Paul Myclhresstabout the huge problem the Chinese government is dealing with as they liquidate Dollars to prop up their banking and economic system.  I highly recommend listening to that interview if you haven’t.

Thus, the continued liquidation of U.S. Dollar Reserves by China and other countries is probably the reason for the ongoing decline in International Reserves covered in Hugo Salinas Price’s newest article, The Further Decline In International Reserves:

PLATA-International-Reserves-JAN-13-2017

Over the past 29 months, the decline in Reserves took place at a rate of about $42 billion dollars a month. At this rate, by the end of 2017 International Reserves will likely decline by another $504 billion dollars, to $10.31 Trillion, which will increase the decline from the peak in 2014 to 14.31%.

As we can see from Hugo’s chart above, countries continue to liquidate their official reserves (mostly U.S. Dollar reserves) to prop up their financial and economic systems.  This is a very BAD SIGN… likely to get much worse in the future.

The Silver Market Will Experience A Huge Trend Change In The Future



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Gold & Precious Metals

Gold Stocks: A Fabulous Rally Accelerates

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 17 January 2017 08:20

2017jan17gold1

Jan 17, 2017

  1. Rate hikes tend to be good for gold, and even better for gold stocks. On that note, please  click here or on the above image now. Double-click to enlarge this hourly bars gold chart.
  2. Since Janet Yellen hiked rates in December, gold has rallied almost $90. That’s good news, but the great news is that the US central bank plans more rate hikes this year.
  3. Gold has a rough historical tendency to decline ahead of rate hikes, and rally strongly after they happen.
  4. Please  click here now. Double-click to enlarge this daily bars gold chart.
  5. The 14,7,7 Stochastics oscillator is beginning to show signs of “flat lining” in the overbought position. That tends to happen during very strong rallies.


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