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Gold & Precious Metals

Gold’s Fundamentals Strengthen


Posted by Jordan Roy-Byrne - The Daily Gold

on Monday, 20 February 2017 08:46

The January headline consumer price index (CPI) came in at 2.5%, which is near a 5-year high. What happened to deflation? As a result, real interest rates declined deeper into negative territory or in the case of the 10-year yield, went from positive to negative. No this isn’t a commodity-driven story. The core CPI (ex food and energy) has been above 2% since the end of 2015 when commodities were in the dumps. Inflation is perking up and couple that with a Fed that pursues rate hikes at a glacial speed and that is very bullish for precious metals.   

The chart below is what I refer to as our master fundamental chart for Gold. It plots Gold along with the real fed funds rate and the real 5-year yield. In short, negative and/or declining real interest rates drive bull markets in Gold while rising real rates or strongly positive real rates (like in the 1980s and 1990s) drive bear markets in Gold. Since the middle of 2015 both the real fed funds rate and the real 5-year yield have declined by +2%. The real fed funds rate has declined from a fraction above 0% to now almost -2% (-1.88%). Meanwhile, the real 5-year yield has declined by roughly 2.5% in the past two years from nearly 2% to now -0.60%.

Feb172017realrates

Fundamental analysis can be backward looking and that is why it is so important to verify fundamentals through the lense of technical analysis. While there are numerous charts we could show we want to present a fresh look at some sector relationships which help confirm the strong fundamentals currently supporting the sector.

In the chart below we plot the gold stocks (both the seniors and juniors) against Gold and we plot the juniors against the seniors. During a healthy bull market in precious metals, the miners should show strength relative to the metals and secondarily, the riskier and more volatile stocks should also show relative strength. First, we note the GDX to Gold ratio appears poised to break its 10-year downtrend this year. Second, we see that the GDXJ to GDX ratio (juniors versus the seniors) is one month short of a 4-year high.



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Timing & trends

The 3 Top Articles Of The Week


Posted by Money Talks Editor

on Saturday, 18 February 2017 08:57

popping-champagne-cork1. Hang Onto Your Hat - Trump Rally Nowhere Near Over

Things are not good in Europe and investors there are flooding into the North American Stock Markets. Much higher numbers in the next 4-5 years. What about the Free Trade agreement with Europe?

...read more HERE

2. Is the Gold Silver Ratio Predictive?

Precious metals bear markets always hit silver hard, while bull markets always see Silver outperform gold.  As a result, the Gold Silver Ratio rises during bear markets and then falls during bull markets.

....continue HERE

3. Is This What They Mean By “Crack-Up Boom”?

In the past year, stock prices have risen from "near-record, overvalued-by-every-historical-measure" levels, to "new-record, grossly-overvalued" levels - and show no signs of slowing down

....continue reading HERE



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Personal Finance

Rising Geopolitical Risks and War Cycles


Posted by Larry Edelson - The Edelson Wave

on Friday, 17 February 2017 17:44

It’s happening on cue: Over the last few days, some of the world’s most volatile nations are provoking the Trump administration big-time. Consider what’s happened …

Test #1. North Korea test-launched a new ballistic missile into the East Sea. The U.N. Security Council and Japanese Prime Minister Abe strongly condemned the act. President Trump says the U.S. has Japan’s back — but we both know that’s not going to deter North Korea’s military ambitions. It failed to stop the previous four launches.

What we know: North Korea is making great strides in advancing their nuclear arsenal, with a new mobile launching system and the use of solid (nuclear) fuel. The ultimate goal: Attacking the U.S. and its allies. This new arsenal is harder to detect and increases its range — both providing a greater threat to national security.

Test #2. Russia spy ship spotted cruising along the Eastern U.S. seaboard. The ship is armed with surface-to-air missiles and is used to intercept communications.

Test #3. Four Russian jets fly within 200 yards of U.S. Navy destroyer USS Porter in the Black Sea. Interestingly, the Russian jets had transponders off and unable to acknowledge multiple radio calls from the American warship.

Test #4. There were reports this week that Russia deployed a new type of nuclear cruise missile that’s in direct conflict with the 1987 Intermediate-Range Nuclear Forces Treaty with the U.S.

Screen Shot 2017-02-17 at 4.24.55 PMJust Coincidence?

It’s interesting how all these events are developing like a carefully orchestrated mission – in line with my war cycle forecasts.

Perhaps that’s why U.S. Defense Chief “Mad dog” Mattis prodded NATO member countries to pony up more capital into the defense fund. In fact, he’s looked for 2% of their GDP.

Officials from Germany and the U.K. agree, seeing the writing on the wall: It’s going to cost more to defend Western values in a challenging global environment.

But that’s exactly what I’ve been warning about since debuting forecasts of my war cycle research in December 2013. I said back then that the world would experience an environment of rising domestic and international unrest until at least 2020.

And that’s coming true in spades.

This geo-political hotbed could cause all kinds of economic and financial repercussions that could strip you of your wealth in the months and years ahead OR present once-in-a-lifetime opportunities to protect you and yours.

But it all depends on the quality of your guidance — and your ability to think for yourself, especially in times like these.

I know which way I’m headed … and which way I’m taking my subscribers and members.

Do you?

Best wishes, Larry @ https://edelsonwave.com



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Personal Finance

Here's a Shocker! Exceptionally High CDN Mutual Fund Fees


Posted by Alex via Questrade

on Friday, 17 February 2017 12:07

  • 0576.featured large.png-550x0Canadians pay some of the highest mutual fund fees in the world
  • The opportunity cost of investment fees impact your portfolio
  • Small fee reductions can mean big portfolio growth

Cage match: how do your mutual funds perform?

Let’s look at two different funds invested in the same securities, returning an average of 6% per year before management fees. For the purposes of these calculations, we will be using the mutual fund fee calculator from GetSmarterAboutMoney.ca.

If you start with a portfolio of $100,000 and contribute $10,000 a year, how much does the higher fee fund cost you over 25 years?

Fund #1

Fund #2

Initial investment

$100,000

$100,000

Annual investment

$10,000

$10,000

Average return before management fee

6%

6%

Management fee

2.42% per year

0.77% per year

Average return after management fee

3.58% per year

5.23% per year

Total after 25 years

$624,603.50

$840,363.04


Investing in the fund with the lower fee means your portfolio is almost a quarter of a million dollars larger than it would be if it was invested with the fund with a larger fee. The same amount invested; the difference in returns is an incredible $215,759.54.

...read the whole article HERE



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Timing & trends

Gold, Silver, Dollar Cycles – Part III


Posted by Chris Vermeulen & John Winston: TheMarketTrendForecast.com

on Friday, 17 February 2017 10:11

atpperffeb-290x130Gold is setting up for a historic rally based on my analysis.  Recent news provides further evidence that the Precious Metals and Currencies are in for a wild ride.  Just this week, news that China’s reserves fell below $3 Trillion as well as the implications that the fall to near $2T in reserves could happen before the end of 2017.  Additionally, we have recent news that the EU may be under further strain with regards to Greece, the IMF and debt.  The accumulation of Precious Metals should be on everyone’s mind as well as the potential for a breakout rally.

Based on my analysis, I would estimate that near June or July 2017, Gold will be near $1315 ~ $1341 (+13% from recent lows).  This level correlates to a Fibonacci frequency that has been in place for over 3 years now.  A second Fibonacci frequency rate would put the project advancement levels, possibly closer to October/November 2017, near $1421 (+21% from recent lows).  After these levels are reached, I expect a pullback to near $1261 if the Gold rally ends near $1315~1341 or to near $1308~1309 if the Gold rally ends near $1421.  This pullback would setup a massive next wave rally to $1585 or $1731.  So, if you need confirmation of this move, just wait for any rally to end above $1315, then wait for a pullback below $1280 or $1315 and BUY.

Subscribers and followers of my work profited handsomely this month locking a 112% profit with NUGT ETF with my service at ActiveTradingPartners.

....continue reading HERE



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