Gold & Precious Metals

Sep 13, 2016

  1. Good things come to those who wait, because patience is a virtue.
  2. Over the past few days, various Fed presidents and governors have made both hawkish and dovish statements. The US stock market and gold stocks have reacted violently to these statements. 
  3. It’s important for all gold stock investors to understand that anything can happen at next week’s critically important FOMC and BOJ meetings.
  4. Ahead of those meetings, it’s clearly a time for patience. Once the meetings have been completed, institutional investors will begin to apply large amounts of liquidity to the markets, and a new intermediate trend will be underway. 
  5. On that note, please  click here now. Double-click to enlarge this daily bars gold chart. I annotated this chart a week ago, predicting a rally to the trend line in the $1355 area, and then a pullback from there to $1325. 
  6. To view what actually occurred, please  click here now. Double-click to enlarge. Gold followed the exact trajectory I predicted.
  7. All that’s left now is for gold to stage an upside breakout from the drifting rectangle pattern, and begin the rally to my $1392 and $1432 target zones. 
  8. That is unlikely to occur until next week’s FOMC/BOJ meetings are completed.
  9. Please  click here now. Double-click to enlarge this monthly bars gold chart. Many technicians have noticed this bull wedge pattern, and they are predicting a kind of parabolic move to begin after an upside breakout. 
  10. While that sounds wonderful, these technicians may be quite disappointed by what actually transpires if there is a “breakout”. Please click here now. Double-click to enlarge this quarterly bars chart.
  11. Upon close inspection, it’s clear that gold could rise to $1432 over the next quarter, and still be contained within the bull wedge pattern on the quarterly bars chart. 
  12. Also, there is massive overhead resistance in the $1492 – $1523 price zone. Gold is extremely well supported by value-oriented institutional money managers, but most of the price appreciation is coming from the low relative cost of carry that gold is showcasing against major fiat currencies.
  13. It would take a huge fundamental catalyst like a US stock market crash, bond market crash, or a geopolitical black swan event to create a dramatic acceleration in gold’s current rate of price appreciation.
  14. On that note, please  click here now. Double-click to enlarge this daily bars T-bond chart. Despite the cheerleading speeches given by some Fed speakers, there is some clear technical damage occurring in the bond market.
  15. Whether that damage is foreshadowing something bigger or not will only be made clear by what happens at the FOMC/BOJ events. 
  16. Please  click here now.  Double-click to enlarge. This eight hour bars chart of the Dow presents a similar picture; the US stock market staged a partial recovery from Friday’s hammering, but if Janet Yellen actually does raise rates next week, the stock market may begin a horrific decline.
  17. A rate hike would only increase the relative cost of holding gold compared to fiat slightly, but it could create massive gold and yen safe haven buying if the US stock and bond markets crashed. Going into next week’s critically important central bank meetings, it’s win-win for gold.
  18. Most mainstream economists believe the odds of a September rate hike are about 30% or lower. Clearly, a shock announcement from Janet has the potential to create massive stock and bond market carnage.
  19. Many investors are perplexed because September is historically a very good month for gold price appreciation. That’s true, but the February to June period is seasonally week, and gold did well this year. 
  20. Also, the September strength is caused by Indian festival buying, and after two years of drought the farmers there have substantial debts. So, Indian gold demand is muted. 
  21. Please  click here now. Double-click to enlarge this GDX daily bars chart. The $27.50 – $29 area can be lightly sold, and the $25 – $26 area can be lightly bought until the central bank meetings are finished.
  22. If there is no rate hike next week, GDX should challenge the $32 area highs, and lead bullion higher. 
  23. If there is a rate hike, GDX and most gold stocks will likely spike lower while bullion soars higher, in a scenario similar to what happened when Janet hiked in December of 2015.
  24. The good news is that after a very brief decline when Janet hiked last year, gold stocks staged one of the biggest rallies in many years. If she hikes next week, I expect history to rhyme!

Thanks! 

Cheers
st

Sep 13, 2016
Stewart Thomson  
Graceland Updates
website: www.gracelandupdates.com

…related: How Gold Bugs can Have their cake and eat it too by Embracing the trend

How Gold Bugs can Have their cake and eat it too by Embracing the trend

Posted by Tactical Investor

on Tuesday, 13 September 2016 13:44

Executive ability is deciding quickly and getting somebody else to do the work.

John G. Pollard

Many individuals sit back and look wistfully at the 1st stage of the Gold Bull Market they missed. It is interesting that people focus on what they lost but not what they might miss. Since Gold topped out in 2011, many sectors took off; one could have deployed a portion of one’s funds in any of these sectors and walked away with healthy gains. Instead, the classic Gold bug clung to Gold and let all these opportunities slide away.

Never live in regret, life is much too valuable for that. There is always another bull market, why focus on one market only. Many people fixate on the precious metals markets because many hard money experts continue to come out with gloom or doom scenarios. Never listen to anyone giving you a script that is painted with strokes of Panic. No one can function properly once he or she succumbs to panic; reason goes out the window, and nonsense takes over.

There is a way that Gold bugs and hard money experts can have their cake and their pie, but that would entail a change in perspective. If you can do this then, the process is rather simple. We will provide these details shortly; please bear with us.

Precious metals will trend higher one day but why fixate on that day only, what about today, and all the other opportunities you might be sacrificing because you have restricted your vision. If you cling to a particular outlook, you have reduced your line of sight by a significant margin. This is why Gold bugs openly state that they will not support “Fiat”, and they will rather embrace Gold and Silver than the stock market which is funded by worthless paper. To which we respond “oh really” well then what are these bugs doing when they buy Gold; are they not hoping that Gold soars in value and what will it rise in value, oh yes, worthless dollars.

If you cling to one perspective, you cannot see the full picture. How about looking at the picture from every angle. You are Gold bug or hard money fan; here is how you can have your cake and your pie

Why not embrace the equities bull, use the worthless money to get more cheap money and then use some of this paper to buy the Gold and Silver you crave; this perspective is lost to the on many because all they see is Gold and nothing else. Had they embraced this point of view, they would have been embraced the equities bull and multiplied the worthless paper (money) they had. Then, they could have used some of this worthless money to buy real money (Gold), and maybe then they would not be so obsessed with the Gold Markets. The Gold they obtained would technically be free as they used paper profits generated by embracing assets they typically would not; this extra paper was used to bankroll the purchase of new bullion. In effect, they would be pulling a page out of the central banker’s books. A perception depends on the angle of observance; alter the angle and you modify the perception.  

SPX Vs GOLD

This chart illustrates how Gold performed vs. the SP500 over the past five years; in comparison, Gold has taken a beating and is now making a modest comeback. This took place in the face of the greatest money printing efforts from central bankers in the history of this planet. What happened to the hard money argument that Gold will rise as the money supply soared. Instead the opposite took place, the more money central bankers created, the more Gold fell.   

m2 money supply 2016

This chart clearly illustrates that since 1980, Gold has not fared as well as it should have. Look at how the money stock has increased. The price of Gold should have continued to trend upwards, and it should be north of $2500. Instead, it cannot even trade to $1400. There is a reason for this; central bankers have managed to recreate reality. By brainwashing the masses and creating new definitions for inflation, they have convinced the masses that Gold is an old relic not worth focusing on, but that is a story for another day.

This is why it is important not to be belong to any group and why it is more important to concentrate on the trend. Don’t fall in love with Gold; it is just another investment; it will trend up for some time, then pull back and correct firmly and then trend up again. Nothing trends up forever, well, stupidity being the only exception.

Once again, the point we are trying to make is that you should not live in regret; the 1stphase of the Gold bull is over, but the next phase will be even stronger. We have a high-end target of $5000 for Gold and to be honest with you, we hope it does not trade to $5000, and we are wrong. Inflation will be quite significant if Gold hits $5000, so those fools hoping for Gold $25,000 or $50,000 have no idea how terrible things would be if Gold traded to those targets. If, Gold ever trades to $50,000, the world as you know it will be over. Chaos will be the order of the day. We will be facing a situation that will be even worse than the Greate Depression. Luckily most of these guys are full of hot air, and it is more likely Central bankers will embrace Gold before Gold trades to those targets.

Conclusion

Forget the noise, focus on the trend. Experts are there to confuse and not enlighten one. We have never claimed to be experts, at most we will settle for the title of advanced students of the Market. The market is a complex beast, and there is always something new you can learn. Those that refuse to accept this are usually punished severely.

Moreover, don’t forget, you can have your cake and your pie. Use worthless paper to make more paper and then use some of this paper to buy (Real Money) Gold and or Silver bullion. In such crazy times, it would be prudent for everyone to have a portion of his or her funds in Gold and Silver bullion. If you have no position in bullion, use strong pullbacks to open new positions.

 

Ability is a poor man’s wealth.

M. Wren

….related: Gold and Gold Stocks Correction Continues

Gold and Gold Stocks Correction Continues

Posted by Jordan Roy-Byrne - The Daily Gold

on Monday, 12 September 2016 15:06

The failure of Gold and gold stocks to sustain recent gains coupled with a strong selloff to close the week dashes any hope that the correction ended last week. The charts and probabilities argue that the sector remains in a larger correction and perhaps has started the C portion of a typical A-B-C (down-up-down) correction.

This week started out strong for the miners but that strength faded and was completely reversed with Friday’s selloff. GDX and GDXJ closed down 3%-4% for the week and left nasty bearish candles on the weekly charts. GDXJ, which made a low of $41 last week could test at least $39 while GDX, which tested a low of $25 last week has downside potential to $22.

42486 a

Before I get to Gold, here is an important note on GDX. During bull market corrections, GDM, the parent index of GDX often found support at its 400-day exponential moving average. This happened seven times during 2002-2003, 2006 and 2009-2010. The 400-day exponential moving average for GDX is currently at $22 and rising slowly. Hence, I consider $22-$23 as a potential bottom for GDX.

Turning to Gold, we note that Gold failed at the $1355-$1360 resistance earlier in the week. That coupled with Friday’s decline increases the odds that Gold will head lower to the bottom of its channel near $1300. Gold closed at $1334. It has support at $1300-$1310 and $1275-$1280.

42486 b

The negative reversal in miners and metals at the end of this week (and their failure to hold the rebound) signals that a larger and longer correction is playing out and more downside potential is directly ahead. GDX closed at $26.41. It has a very strong confluence of support around $22 which includes its 200-day moving average, its 400-day exponential moving average (noted above) and the 50% retracement of the entire rebound. Do not be surprised if this target is reached quickly, such as in days and not weeks. Remember that fishing line type declines (think of the trajectory of a fishing line) are a buying opportunity.

TheDailyGold.com

…related:

Switzerland and Norway Begin to Massively Accumulate Precious Metals Mining Shares

Switzerland and Norway Begin to Massively Accumulate Precious Metals Mining Shares

Posted by Sprott Money

on Thursday, 8 September 2016 22:37

dd56df37c9d7b9bd837f806935ab6ae4Events are moving behind the scenes. For decades, Western Central bankers have told the masses that gold is a barbarous relic. They have encouraged us to shed its protection and move into the sanctity of their highly corrupt and highly manipulated fiat assets.

During this time period, our Western Central bankers have offloaded our countries’ hard earned wealth, shipping massive quantities of precious metals to far off lands in the East, never to be seen again – despite what they may think. Our wealth is being sold out from under our feet.

Yet, as I have reported on recently, a shift is occurring. Call it what you will – I call it panic. Many Western Central bankers are trying to accumulate metals in stealthy ways, behind the scenes and unbeknownst to the masses, whom they wish to keep trapped in fiat money.

.…read more HERE

….related:

Gold & Silver: Key Candlesticks In Play

Sep 6, 2016

  1. Gold has a rough general tendency to decline ahead of the monthly US jobs report, gyrate wildly when the report is released, and then rally modestly higher for another one to three weeks. The cycle tends to repeat itself with varying degrees of intensity.
  2. Please  click here now. Double click to enlarge this daily bars gold chart. 
  3. It’s clear that gold responded to the latest jobs report in “textbook” fashion. I suggested gold would decline to about $1310 ahead of the jobs report. It went to about $1306.
  4. Since then, gold has rallied to about $1335 and the technical situation is now very good. Note the 14,7,7 series Stochastics oscillator at the bottom of the chart. There’s a crossover buy signal in play.
  5. Even though Indian demand is currently soft, gold is very well supported by institutional money managers. At this point in time, it could be persuasively argued that neither the love trade nor the fear trade are the prime movers of the gold price.
  6. Instead, gold is being supported by the “competitive cost of carry” trade. Low rates and negative rates on most fiat currencies make gold very attractive as a currency.
  7. Please  click here now.  Double click to enlarge. Silver also looks well supported, and the chart “feels” solid.
  8. The cost of carry theme means that in the short to medium term, a big price spike higher is unlikely, and a big tumble lower is equally unlikely. Obviously, at some point the fear trade will come back into play, and it’s very late in the game for the US business cycle.
  9. The US stock market tends to lead the economy by about six months. A rollover to the downside could happen any time between now and 2018, with September, October, and January being the most likely months for a meltdown to commence.
  10. Please  click here now.  Double click to enlarge this daily bars dollar versus yen chart.
  11. Since tumbling to the 100 area on the Brexit event, the dollar has steadied and traded sideways between 100 and 107. The FOREX market is the largest market in the world, and price action of the dollar versus the yen has a huge effect on the gold price.
  12. Just as the dollar has rolled sideways against the yen since the Brexit, gold has drifted sideways in a rough $1370 to $1310 price range.
  13. In Japan, central bank chief Kuroda is likely to cut interest rates again at the upcoming September 21 meeting. He’s also likely to increase his QE program.
  14. Kuroda may also try to stimulate bank lending by targeting his bond purchases at different types of bonds. If he’s successful, bank lending is inflationary, and good for gold. 
  15. If he fails, gold will still benefit from the overall drop in interest rates. That’s because the drop in rates makes gold more competitive with fiat from a cost of carry perspective.
  16. The US central bank is also holding a key policy meeting on September 21. A rate hike should create a spike in fear trade demand for gold, because it would likely hit the stock market very hard.
  17. Amateur gold price enthusiasts should take note of the fact that gold is owned as a competitive currency by a myriad of unleveraged institutional money managers.
  18. In 2008, gold’s main owners were leveraged funds. Gold is in much stronger hands now than it was in 2008, and in the case of a stock market crash, gold may act quite a bit differently than it did in 2008.
  19. There’s a growing loss of confidence theme amongst institutional money managers, in regards to central banks around the world. Increasingly, gold is replacing T-bonds, and becoming the most favoured safe haven.
  20. Please  click here now. Double click to enlarge this daily bars oil chart.
  21. Yesterday was a very important day for the global oil market; Russia and Saudi Arabia announced a“cooperation pact”. Oil spiked about two dollars higher on the news, and it may put a new floor under the oil price. The door to production cuts from OPEC is now open.
  22. US jobs reports show that jobs growth is probably peaking out. A price floor and even modestly higher oil prices will cause more money managers to begin to utter the stagflation catch phrase. That’s good news for gold.
  23. Please  click here now. Double click to enlarge this key daily bars GDX chart. Both the $21 and $25 price zones are superb entry points for gold stock enthusiasts, and traders can be light sellers in the $27.50 and $32 area.
  24. Gold stocks are very well supported now, because gold is well supported by the competitive cost of carry trade. Against gold, gold stocks have been in a bear cycle since 1996. That cycle appears to be ending now, and its end will be confirmed by an upturn in bank loan profits, and money velocity. A rising oil price floor could be the catalyst that creates the upturn. For the Western gold community, good times are here, and great times are near!

Thanks! 

Cheers
st

Sep 6, 2016
Stewart Thomson  
Graceland Updates
website: www.gracelandupdates.com