Markets typically bottom out when popular sentiment is negative. And a recent analysis by Bloomberg confirms that the public has all but given up on precious metals. Assets in exchange-traded products tied to metals prices fell to their lowest point since 2009.

While holders of coins and other physical bullion products tend to hang tight during adverse market conditions, holders of derivate instruments are more likely to move in and out of the market – usually at the wrong times.

Sentiment could conceivably go from bad to worse. But history shows that opportunists who buy when times are tough ultimately rewarded with an opportunity to sell when times are euphoric.

Time for Presidential Aspirants to Take a Stand on Sound Money

So, how many Republicans will announce a run for the White House this week?!

The most recent candidate to officially throw his hat into the crowded ring is Rick Perry, former governor of Texas. Perry had supported legislation to establish a Texas Bullion Depository in 2013. Just a few days ago, the Texas legislature finally approved a bill to that effect.

The Texas Bullion Depository will allow government agencies, private institutions, and individuals to hold gold with the backing of the state Comptroller’s Office.

Down the road, the first of its kind Bullion Depository could enable Texas to become more financially independent of the U.S. government and Federal Reserve System.

Monetary reform is an issue that could give Governor Perry traction. Though his shaky debate performances doomed his candidacy last time around, he is one of the few candidates who can viably run on a record of growing jobs.

In fact, without the 1.5 million job gains produced in Texas from 2008 through 2014, the U.S. would have suffered a net loss of 400,000 jobs.

The extent to which Governor Perry caused Texas’ private-sector hiring spree is debatable. What’s not debatable is that for the vast majority of Americans living outside Texas, the economy isn’t producing enough jobs.

Official reports may show unemployment steadily declining nationwide, but the “unemployment rate” is such a sham statistic that not even Federal Reserve officials give it much credence in assessing the state of the jobs market. They know that the actual rate of workforce participation has barely budged from multi-decade lows recorded at the onset of President Obama’s second term.

And privately, Fed officials must know that their policies are failing most Americans. The public by and large hasn’t participated in the Fed-fueled stock market advance.

Wall Street has been taken care of. The banks have been taken care of. The government has been taken care of. But Main Street still struggles.

Instead of getting a bailout, taxpayers are getting a massive bill. Thanks to the Fed’s trillion-dollar Quantitative Easing bond-buying campaign, Congress gets to borrow at artificially low rates.

The Fed-backed Congress feels no pressure to cut spending, and few members of Congress are willing to do so purely out of principle.

It’s politically easier just to saddle future taxpayers with unconscionable levels of debt.

When the debts become too large for taxpayers to service, the Fed gives Congress the ability to pull a stealth default through inflation. As Pippa Malmgen, former member of the President’s Working Group on Financial Markets, explained in an exclusive Money Metals podcast interview last week, “Inflation is a form of default. It’s a means by which a government ends up paying back less than they borrowed.”

That’s the road policymakers are taking us down.

It’s not our place here at Money Metals Exchange to endorse candidates for public office. However, we do view it as part of our mission to help educate the electorate about sound money. Toward that end, we hope the presidential candidates are asked – and asked until they give a straight answer – how they would rein in the Fed. 

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

Although the longer-term bullish case for gold could scarcely be stronger, over the short to medium-term the picture continues weak, with it looking vulnerable to breaking down into another downleg to the $1000 area and perhaps lower. In the last update you may recall that there was some optimism expressed that it might perk up on the dollar topping out, but such has not proved to be the case – instead it has performed miserably and now looks set to drop more steeply to new lows.

On its 8-year chart we can see that gold remains in the grip of the bearmarket in force from its bullmarket highs of 2011. 

.….continue reading and viewing charts HERE

Last week we reviewed the gold sector from a big picture perspective.  The view was one of an incomplete process that should lead to the next big trend trade beginning on a horizon of multiple months on the short end, up to 1-2 years on the longer end.  This week, we excerpt NFTRH 346’s fairly brief Precious Metals segment, which shows a more bearish short-term view.

Precious Metals

From NFTRH 345 with respect to this chart:  “If at any time you see gold drift below 1180, please consider having extreme caution if you are a ‘price’ player.  If you are a long-term holder like me… as you were, sleep well.”

I am going assume that price players are doing what they need to do in the event this situation worsens. 
 
As we have noted all through the bear market, speculators should not care about whether or not they miss the earliest parts of any new bull market.  That is because the next cyclical bull market will be an extended and profitable affair.  But in the here and now, there is risk.
 
Silver lost the short-term trend line noted last week and is now below the 50 day averages as well as the SMA 200.  This is non-actionable at best.

HUI has dropped to the key 160 support parameter.  That is lateral support as well as ‘higher lows’ (to November, December & March) support.  It had better hold or else.

Junior Miners ETF GDXJ dropped out of the uptrend channel noted last week and the exploration ETF (GLDX) continued downward after losing its channel.

Finally, the perspective chart on the Gold Miners (GDM) vs. S&P 500.  The time to favor the miners is coming.  But if past is a prologue, it could still be up to a year or more before the ratio bottoms.  A safe signal would be a moving average trigger as in 2001.

The best investment situation in the gold sector is going to be when gold bottoms vs. stock markets, out performs commodities and comes back into favor amidst a risk ‘OFF’ environment.  Don’t let them tell you that strong jobs = inflation = a panic for gold.  That is promotion.  Risk is still ‘ON’ in the financial markets, so gold is still ‘OFF’.

<end excerpt>

The above is just a small portion of NFTRH 346’s 33 pages, which included additional discussion and context on the precious metals, as well as a comprehensive overview of the the economic backdrop, interest rates (the key to most other markets), US and global stock markets and discussion about individual stocks and favored sectors.

I firmly believe that the gold sector should be kept in view as the next big trend trade, but not obsessed upon (to the exclusion of so many other long and short opportunities across several other asset classes) in the interim.

For consistent, high quality analysis (weekly report and in-week updates on markets and individual equities) that keeps subscribers on the right side of markets, consider an affordable premium subscription to NFTRH.

One (perhaps the only) bright spot in the past few years’ gold market has been Chinese and Indian demand for the metal. Here’s a chart, courtesy of Ed Steer’s Gold & Silver Daily, showing that the two countries have imported a cumulative 15,000 tonnes since 2008, which is not far from the total production of the world’s gold mines in that period.

But physical bullion is only part of the story, and may not be the biggest one going…..continue reading HERE